<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[X] Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of
1934 for the Quarter Ended September 30, 1999
[ ] Transition Report Under Section 13 or 15(d) of the Exchange Act for the
transition period from _________________ to ____________________
Commission File Number 000-29032
CHAMPION COMMUNICATION SERVICES, INC.
(Exact name of small business issuer as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 76-0448005
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1610 WOODSTEAD COURT
SUITE 330
THE WOODLANDS, TEXAS 77380
(Address of Principal Executive Offices) (Zip Code)
</TABLE>
(281) 362-0144
(Issuer's Telephone Number, including area code.)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
periods 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 November 15, 1999, there were 6,150,622 shares of common stock, $0.01 par
value, of the registrant issued and outstanding.
Transitional Small Business Disclosure Format
(check one): Yes [ ] No [X]
<PAGE> 2
CHAMPION COMMUNICATION SERVICES, INC.
INDEX TO FORM 10-QSB
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets -
September 30, 1999 (unaudited) and December 31, 1998........... 1
Statements of Operations -
Three Months and Nine Months Ended September 30, 1999
and 1998 (unaudited)........................................... 2
Statements of Stockholders' Equity -
Nine Months Ended September 30, 1999 (unaudited) and
the Year Ended December 31, 1998............................... 3
Statements of Cash Flows -
Three Months and Nine Months Ended September 30, 1999
and 1998 (unaudited)........................................... 4
Notes to Financial Statements.................................. 5
Earnings Per Share Computations -
Three Months and Nine Months Ended September 30, 1999
and 1998 (unaudited)........................................... 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations......... 7
SIGNATURE........................................................................ 11
</TABLE>
<PAGE> 3
CHAMPION COMMUNICATION SERVICES, INC.
BALANCE SHEETS
September 30, 1999 and December 31, 1998
<TABLE>
<CAPTION>
ASSETS September 30, December 31,
1999 1998
------------ -----------
Unaudited
<S> <C> <C>
Current Assets
Cash and cash equivalents $ 218,078 $ 354,116
Accounts receivable, net of allowance of $21,115
at September 30, 1999 and $46,408 at December 31, 1998 1,040,650 779,582
Notes receivable 73,011 122,620
Inventories 479,362 526,665
Prepaid expenses and other 108,381 216,996
----------- -----------
Total Current Assets 1,919,482 1,999,979
----------- -----------
Communications equipment and related assets, net 3,426,222 4,355,347
Notes receivable, long-term 364,912 25,816
Other assets, net of amortization of $649,789 at September 30, 1999
and $213,467 at December 31, 1998 1,912,272 1,591,328
----------- -----------
$ 7,622,888 $ 7,972,470
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Note payable to bank $ 525,000 $ 50,000
Accounts payable 833,672 733,536
Accrued expenses 1,107,219 723,236
Deferred revenue 180,482 798,207
Current maturities of notes payable 263,609 238,364
----------- -----------
Total Current Liabilities 2,909,982 2,543,343
----------- -----------
Long-Term Liabilities
Notes payable 349,080 339,254
Customer deposits 2,850 2,238
----------- -----------
Total Long-Term Liabilities 351,930 341,492
----------- -----------
Stockholders' Equity
Common stock, $0.01 par value, 20,000,000 shares authorized, 6,150,622
shares issued and outstanding at September 30, 1999
and 6,119,712 shares issued and outstanding at December 31, 1998 61,506 61,197
Additional paid-in capital 5,201,211 5,179,265
Accumulated deficit (901,741) (152,827)
----------- -----------
Total Stockholders' Equity 4,360,976 5,087,635
----------- -----------
$ 7,622,888 $ 7,972,470
=========== ===========
</TABLE>
See accompanying notes to financial statements.
-1-
<PAGE> 4
CHAMPION COMMUNICATION SERVICES, INC.
STATEMENTS OF OPERATIONS
For the three months and nine months ended September 30, 1999 and 1998
Unaudited
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenues $ 2,016,107 $ 2,286,730 $ 5,922,993 $ 6,460,707
----------- ----------- ----------- -----------
Operating expenses:
Cost of sales 924,780 1,219,632 3,202,296 3,689,421
Provision for doubtful accounts 18,000 18,000 54,000 54,000
Depreciation and amortization 265,766 232,794 758,151 672,123
General and administrative expenses 894,460 672,416 2,470,594 1,950,760
----------- ----------- ----------- -----------
Total Operating Expenses 2,103,006 2,142,842 6,485,041 6,366,304
----------- ----------- ----------- -----------
Operating Income (loss) (86,899) 143,888 (562,048) 94,403
----------- ----------- ----------- -----------
Other income (expenses):
Net gain (loss) on disposal of fixed assets (262,534) 23,746 (122,398) 55,538
Interest income 11,364 4,370 25,950 9,929
Interest expense (29,014) (12,333) (74,255) (31,193)
----------- ----------- ----------- -----------
Income (loss) before income taxes (367,083) 159,671 (732,751) 128,677
Income taxes 15,237 55,690 16,163 62,115
----------- ----------- ----------- -----------
Net income (loss) $ (382,320) $ 103,981 $ (748,914) $ 66,562
=========== =========== =========== ===========
Weighted average common shares and common
stock equivalents outstanding 6,150,622 6,119,712 6,137,035 6,114,637
=========== =========== =========== ===========
Basic and diluted net income (loss) per
common share $ (0.06) $ 0.02 $ (0.12) $ 0.01
=========== =========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
-2-
<PAGE> 5
CHAMPION COMMUNICATION SERVICES, INC.
STATEMENTS OF STOCKHOLDERS' EQUITY
For the nine months ended September 30, 1999 and
For the year ended December 31, 1998
<TABLE>
<CAPTION>
Common Additional Accumulated Total
stock Common paid-in earnings Stockholders'
shares stock capital (deficit) Equity
----------- ----------- ----------- ------------ -----------
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1997 6,103,412 $ 61,034 $ 5,166,184 $ (208,645) $ 5,018,573
Issuance of common stock for services 16,300 163 13,081 -- 13,244
Net income for 1998 -- -- -- 55,818 55,818
----------- ----------- ----------- ----------- -----------
Balance at December 31, 1998 6,119,712 61,197 5,179,265 (152,827) 5,087,635
Issuance of common stock for services
(unaudited) 30,910 309 21,946 -- 22,255
Net loss for 1999 (unaudited) -- -- -- (748,914) (748,914)
----------- ----------- ----------- ----------- -----------
Balance at September 30, 1999
(unaudited) 6,150,622 $ 61,506 $ 5,201,211 $ (901,741) $ 4,360,976
=========== =========== =========== =========== ===========
</TABLE>
See accompanying notes to financial statements.
-3-
<PAGE> 6
CHAMPION COMMUNICATION SERVICES, INC.
STATEMENTS OF CASH FLOWS
For the three months and nine months ended September 30, 1999 and 1998
Unaudited
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
1999 1998 1999 1998
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Cash flows from operating activities:
Net income (loss) ($382,320) $ 103,981 ($748,914) $ 66,562
Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating activities:
Depreciation and amortization 265,766 232,794 758,151 672,123
Bad debt expense 18,000 18,000 54,000 54,000
Common stock issued for services -- -- 22,255 13,244
Loss (gain) on disposal/sale of fixed assets 262,534 (23,746) 122,398 (55,538)
Change in assets and liabilities:
Accounts receivable (60,755) 294,888 (235,775) 232,189
Inventories 3,050 88,226 47,303 153,956
Prepaid expenses 33,024 28,541 108,615 (27,461)
Notes receivable 38,297 7,222 (289,487) 21,216
Accounts payable 204,179 (35,536) 100,136 (37,380)
Accrued expenses 236,997 (242,560) 383,983 64,019
Deferred revenue (162,697) (278,198) (617,725) (719,174)
--------- --------- --------- ---------
Net cash provided by (used in) operating
activities 456,075 193,612 (295,060) 437,756
--------- --------- --------- ---------
Cash flows from investing activities:
Additions to property and equipment (347,577) (84,640) (689,888) (526,862)
Proceeds from sale of fixed assets 45,850 35,266 796,678 283,891
Dispositions (additions) from/to other assets 75,504 (120,273) (204,478) (624,926)
--------- --------- --------- ---------
Net cash used in investing
activities (226,223) (169,647) (97,688) (867,897)
--------- --------- --------- ---------
Cash flows from financing activities:
Proceeds from issuance of notes payable 50,000 38,001 615,000 179,477
Repayment of notes payable (158,755) (53,027) (358,290) (221,197)
--------- --------- --------- ---------
Net cash provided by (used in) financing
activities (108,755) (15,026) 256,710 (41,720)
--------- --------- --------- ---------
Net decrease in cash and cash equivalents 121,097 8,939 (136,038) (471,861)
Cash and cash equivalents at beginning of period 96,981 137,535 354,116 618,335
--------- --------- --------- ---------
Cash and cash equivalents at end of period $ 218,078 $ 146,474 $ 218,078 $ 146,474
========= ========= ========= =========
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Taxes $ 14,715 $ 55,690 $ 15,641 $ 62,115
========= ========= ========= =========
Interest $ 27,389 $ 10,930 $ 76,579 $ 20,990
========= ========= ========= =========
</TABLE>
See accompanying notes to financial statements.
-4-
<PAGE> 7
CHAMPION COMMUNICATION SERVICES, INC.
NOTES TO FINANCIAL STATEMENTS
NINE MONTHS ENDED SEPTEMBER 30, 1999
(Unaudited)
1. Basis of Presentation
The accompanying unaudited financial statements have been prepared
pursuant to the rules and regulations of the Securities and Exchange Commission.
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. The
financial statements for the three months and nine months ended September 30,
1999 and 1998 are unaudited and, in the opinion of management, reflect all
adjustments which are necessary for a fair statement of the financial position,
results of operations and cash flows as of and for the interim periods. Such
adjustments consist of only items of a normal recurring nature. The results of
operations for the interim periods are not necessarily indicative of the
financial position or results of operations expected for the full fiscal year or
for any other future periods. These financial statements should be read in
conjunction with the financial statements and the notes thereto included in the
Company's annual report and Form 10-KSB for the year ended December 31, 1998.
The differences between accounting principles generally accepted in the
United States and Canada would not have a material impact on the accompanying
financial statements.
2. Non-cash Transactions
During the first nine months ended September 30, 1999, radio rental
inventory and service equipment were acquired in exchange for $236,000 of
indebtedness.
3. Champion has a $700,000 line of credit with Chase Bank, N.A. The amount
drawn on the line of credit as of September 30, 1999 is $525,000. The note
contains a covenant that states the Company will maintain a tangible adjusted
net worth in excess of $5,000,000. As of September 30, 1999, the Company is not
in compliance; however, the bank has waived this covenant violation for the
third quarter.
-5-
<PAGE> 8
CHAMPION COMMUNICATION SERVICES, INC.
EARNINGS PER SHARE COMPUTATIONS
For the three months and nine months ended September 30, 1999 and 1998
Unaudited
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
September 30, September 30,
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
BASIC EARNINGS PER SHARE
Net income (loss) applicable to common stock ($ 382,320) $ 103,981 ($ 748,914) $ 66,562
Shares used in earnings per share computations 6,150,622 6,119,712 6,137,035 6,114,637
Net income (loss) per weighted average common share ($ 0.06) $ 0.02 ($ 0.12) $ 0.01
=========== =========== =========== ===========
DILUTED EARNINGS PER SHARE
Net income (loss) applicable to common stock ($ 382,320) $ 103,981 ($ 748,914) $ 66,562
----------- ----------- ----------- -----------
Shares used in earnings per share computation 6,150,622 6,119,712 6,137,035 6,114,637
Net income (loss) per weighted average common share ($ 0.06) $ 0.02 ($ 0.12) $ 0.01
=========== =========== =========== ===========
COMPUTATION OF SHARES USED IN EARNINGS PER SHARE
COMPUTATIONS - BASIC
Outstanding common shares at beginning of period 6,150,622 6,119,712 6,119,712 6,103,412
Weighted average common shares issued during period -- -- 17,323 11,225
----------- ----------- ----------- -----------
Weighted average common shares used in earnings
per share computation 6,150,622 6,119,712 6,137,035 6,114,637
=========== =========== =========== ===========
COMPUTATION OF SHARES USED IN EARNINGS PER SHARE
COMPUTATIONS - DILUTED
Outstanding common shares at beginning of period 6,150,622 6,119,712 6,119,712 6,103,412
Weighted average common shares issued during period -- -- 17,323 11,255
----------- ----------- ----------- -----------
Weighted average common shares used in earnings
per share computation 6,150,622 6,119,712 6,137,035 6,114,667
=========== =========== =========== ===========
</TABLE>
-6-
<PAGE> 9
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
Results of Operations - Quarters ended September 30, 1999 and 1998
Total revenues in the third quarter of 1999 decreased $271,000 from
$2,287,000 in 1998 to $2,016,000 in 1999. Cost of sales for the same periods
decreased $295,000 from $1,220,000 in 1998 to $925,000 in 1999. Depreciation and
amortization increased from $233,000 for the third quarter 1998 to $266,000 for
the third quarter 1999. General and administrative expenses increased $222,000
from $672,000 in the third quarter 1998 to $894,000 in the third quarter 1999.
The third quarter operating loss for the third quarter 1999 was $87,000 as
compared with an operating income of $144,000 for the third quarter 1998.
The decrease in revenues for the third quarter is comprised of differences
reported by the various segments. The third quarter 1999 reflects $60,000 in
spectrum sales, or $433,000 less than recorded in the same quarter 1998.
Dispatch revenues decreased $143,000 to $1,340,000 for the quarter ended
September 30, 1999 from $1,483,000 in the same quarter 1998. This decrease
resulted from the sale of community repeaters. Equipment sales, service and
rental revenues increased $312,000 to $610,000, or 105%, for the third quarter
1999 as compared with third quarter 1998.
The decrease in cost of sales is attributed to changes in the various
segments. The cost of dispatch revenue decreased $434,000 for the quarter ended
September 30, 1999 from the quarter ended September 30, 1998, due to reduced
tower rent and maintenance costs as a result of the sale of community repeaters.
The costs of equipment sales, service and rental increased $223,000 or 146% from
$152,000 for the third quarter 1998 to $375,000 for the third quarter 1999,
primarily due to increased equipment sales during the quarter. The remaining
decrease of $84,000 in cost of sales for the third quarter resulted from fewer
spectrum sales being closed during the period.
Depreciation and amortization for the quarter ended September 30, 1999 was
$266,000, an increase of $33,000 or 14% from $233,000 reported for the quarter
ended September 30, 1998, due to the disposition of various community repeaters
netted with new installation and acquisition of licenses.
General and administrative expenses increased $222,000 to $894,000 from
$672,000. The increase is primarily attributable to relocating the Woodlands
sales, service, and rental offices and growth in the regional offices.
The net loss for the quarter ended September 30, 1999 was $382,000 as
compared with a net income of $104,000 for the quarter ended September 30, 1998.
Although there were fewer spectrum sales during the quarter, the Company has
executed contracts for several spectrum sales which will be reflected in future
quarters as more fully discussed below. However, there can be no assurance that
such sales will continue, and factors which could limit the Company's ability to
derive revenue from spectrum sales include the Company's inability to acquire
spectrum on favorable terms, reduced demand for spectrum, regulatory restraints,
competition, and the Company's inability to negotiate sales of spectrum on
favorable terms.
-7-
<PAGE> 10
Results of Operations - Nine months ended September 30, 1999 and 1998
Total revenues in the first nine months of 1999 decreased $538,000 from
$6,461,000 in 1998 to $5,923,000 in 1999. Cost of sales for the same periods
decreased $487,000 from $3,689,000 in 1998 to $3,202,000 in 1999. Depreciation
and amortization increased from $672,000 for the first nine months of 1998 to
$758,000 for the first nine months of 1999. General and administrative expenses
increased $520,000 from $1,951,000 in the first nine months of 1998 to
$2,471,000 in the first nine months of 1999. The operating loss for the nine
months ended September 1999 was $562,000 as compared with an operating income of
$94,000 for the nine months ended September 1998.
The decrease in revenues for the first nine months of 1999 is comprised of
differences reported by the various segments. Spectrum sales during the first
nine months of 1999 were $60,000 compared to $1,093,000 recorded in the same
period 1998. Dispatch revenues increased $15,000 to $4,170,000 for the nine
months ended September 30, 1999 from $4,155,000 in the same period 1998.
Equipment sales, service and rental revenues increased 43%, or $502,000 for the
nine months of 1999 as compared with the same period of 1998 due to establishing
and acquiring sales and service offices in metro markets.
The decrease in cost of sales is attributed to changes in the various
divisions. The cost of dispatch revenue decreased $421,000 for the nine months
while cost of spectrum sales decreased $286,000 corresponding to reduced
spectrum sales during this period. The costs of equipment sales, service and
rental increased $220,000 from $688,000 for the nine months of 1998 to $908,000
for the same period 1999.
Depreciation and amortization for the nine months ended September 30, 1999
was $758,000, an increase of $86,000 from $672,000 reported for the nine months
ended September 30, 1998.
General and administrative expenses were up $520,000 to $2,471,000 from
$1,951,000. This increase is primarily attributable to the expansion of sales
and service in The Woodlands and other regions.
The net loss for the period ended September 30, 1999 was $749,000 as
compared with net income of $67,000 for the period ended September 30, 1998 as a
result of fewer spectrum sales to date. The Company has executed a contract for
the sale of the Arizona licenses, systems and customers which will result in a
capital gain of approximately $500,000 before income tax. The Company also has
entered into contracts for the sale of spectrum with projected gross margin
before income tax to be in excess of $500,000 which will be reflected in future
quarters. These transactions are pending the required FCC consents and
subsequent issuance of the licenses in the transferee's name. However, there can
be no assurance that spectrum sales will continue, and factors which could
reduce the Company's ability to generate revenue through spectrum sales include
the Company's inability to acquire spectrum on favorable terms, demand for
spectrum, regulatory restraints, competition, and the Company's inability to
negotiate sales of spectrum on favorable terms.
-8-
<PAGE> 11
Financial Condition and Liquidity
The Company had $218,000 in cash and cash equivalents at September 30,
1999 as compared with $354,000 at December 31, 1998. The working capital of the
Company at September 30, 1999 was a negative $990,000 as compared with a
negative $543,000 at December 31, 1998. The decrease is attributable to regional
expansion and fewer spectrum sales.
Cash flows from operating activities were a positive $456,000 and $194,000
for the quarters ended September 30, 1999 and 1998, respectively, and a negative
$295,000 and a positive $438,000 for the nine months ended September 30, 1999
and 1998, respectively. The cash flows from operating activities in 1998
included the closing of several spectrum sales.
During the first nine months of 1999, the Company made draws on its line
of credit totaling $575,000 and repaid $100,000 bearing interest at prime plus
one percent per annum.
Champion has a $700,000 line of credit with Chase Bank, N.A. The amount
drawn on the line of credit as of September 30, 1999 is $525,000 which is
classified as a current note payable in the accompanying balance sheet. The note
contains a covenant that states the Company will maintain a tangible adjusted
net worth in excess of $5,000,000. As of September 30, 1999, the Company is not
in compliance; however, the bank has waived this covenant violation for the
third quarter.
Year 2000
The Company, like many companies, faces the Year 2000 Issue. This is a
result of computer programs being written using two digits rather than four (for
example, "99" for 1999) to define the applicable year. Any of the Company's
programs that have time-sensitive software may recognize a date using "00" as
the year 1900 rather than the year 2000. In some cases, the new date will cause
computers to stop operating. The Company recognizes that it must take action to
ensure that its operations will be not adversely impacted by Year 2000 software
failures.
The Company has completed an evaluation of the impact of Year 2000 issues,
which identified only minor Year 2000 problems and is addressing these issues.
The Company does not expect the costs associated with the remediation plan to
have a material impact on the Company's operations.
The Company is continuing its evaluation of the effect of the Year 2000
problem on the Company's most significant customers and suppliers, and thus
indirectly on the Company. At this time, the Company does not expect any adverse
effect, if any, on the Company with respect to its customers and suppliers. The
Company is working to obtain assurances from major suppliers and customers
regarding their compliance with the Year 2000 issue.
In addition to reviewing the Company's information technology systems, the
Company has reviewed its non-information technology and systems that may include
embedded chips for the Year 2000 compliance. The Company's assessment indicates
that, due to the nature of the Company's operations, these technology systems do
not represent an area of risk relative to Year 2000 readiness.
-9-
<PAGE> 12
The Company has begun, but not yet completed, a comprehensive analysis of
the operational problems and costs (including loss of revenues) that would be
reasonably likely to result from the failure by the Company and certain third
parties to complete efforts necessary to achieve Year 2000 compliance on a
timely basis. A contingency plan has not been developed for dealing with the
most reasonably likely worst case scenario, and such scenario has not yet been
clearly identified. The Company plans to complete such analysis and contingency
planning by December 31, 1999.
Forward-Looking Information
This Quarterly Report on Form 10-QSB includes "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. All statements
other than statement of historical information provided herein are
forward-looking and may contain information about financial results, economic
conditions, trends and known uncertainties. The Company cautions the reader that
actual results could differ materially from those expected by the Company
depending on the outcome of certain factors, including without limitation
fluctuations in the Company's tower rental expenses, inventory and loan
balances, competition, operating risk, acquisition and expansion risk, liquidity
and capital requirements, and the effect of government regulations, adverse
changes in the market for the Company's equipment sales, services and rentals,
and the Company's ability to acquire and sell spectrum on favorable terms.
Readers are cautioned not to place undue reliance on these forward-looking
statements, which speak only as of the date hereof. The Company undertakes no
obligations to release publicly the results of any revisions to these
forward-looking statements which may be made to reflect events or circumstances
after the date hereon, including without limitation, changes in the Company's
business strategy or planned capital expenditures, or to reflect the occurrence
of unanticipated events.
-10-
<PAGE> 13
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, thereto duly authorized.
CHAMPION COMMUNICATION SERVICES, INC.
By: /s/ PAMELA R. COOPER
-------------------------------------------------
Pamela R. Cooper
Chief Financial Officer, Treasurer and Controller
Date: November 15, 1999
-11-
<PAGE> 14
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
27 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 218,078
<SECURITIES> 0
<RECEIVABLES> 1,134,776
<ALLOWANCES> 21,115
<INVENTORY> 479,362
<CURRENT-ASSETS> 1,919,482
<PP&E> 5,609,128
<DEPRECIATION> 2,182,906
<TOTAL-ASSETS> 7,622,888
<CURRENT-LIABILITIES> 2,909,982
<BONDS> 0
0
0
<COMMON> 61,506
<OTHER-SE> 4,299,470
<TOTAL-LIABILITY-AND-EQUITY> 7,622,888
<SALES> 0
<TOTAL-REVENUES> 5,922,993
<CGS> 0
<TOTAL-COSTS> 3,202,296
<OTHER-EXPENSES> 3,228,745
<LOSS-PROVISION> 54,000
<INTEREST-EXPENSE> 74,255
<INCOME-PRETAX> (562,048)
<INCOME-TAX> 16,163
<INCOME-CONTINUING> (610,353)
<DISCONTINUED> 0
<EXTRAORDINARY> (122,398)
<CHANGES> 0
<NET-INCOME> (748,914)
<EPS-BASIC> (.12)
<EPS-DILUTED> (.12)
</TABLE>
