================================================================================
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------
(mark one)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended October 31, 1996
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For transition period from ________________ to _________________
0-16438
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(Commission File Number)
NATIONAL TECHNICAL SYSTEMS, INC.
--------------------------------
(Exact name of registrant as specified in its charter)
Delaware 95-4134955
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(State of Incorporation) (IRS Employer
Identification number)
24007 Ventura Boulevard, Calabasas, California
----------------------------------------------
(Address of registrant's principal executive office)
(818) 591-0776 91302
-------------- -----
(Registrant's telephone number) (Zip code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. YES [x] NO [ ]
The number of shares of common stock, par value $.01 per share, outstanding as
of November 71, 1996 was 6,716,358.
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Exhibit Index on Page 16
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NATIONAL TECHNICAL SYSTEMS, INC. AND SUBSIDIARIES
INDEX
PART I. FINANCIAL INFORMATION Page No.
--------
Financial Statements:
Condensed Consolidated Balance Sheets
October 31, 1996 and January 31, 1996 3
Condensed Consolidated Statements of Income
Nine Months Ended October 31, 1996 and 1995 4
Condensed Consolidated Statements of Income
Three Months Ended October 31, 1996 and 1995 5
Condensed Consolidated Statements of Cash Flows
Nine Months Ended October 31, 1996 and 1995 6
Notes to the Condensed Consolidated Financial Statements 7
Management's Discussion and Analysis of Financial
Condition and Results of Operations 8
PART II. OTHER INFORMATION & SIGNATURE 15
Item 6. Exhibits and Reports on Form 8-K 15
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<PAGE>
PART I -- FINANCIAL INFORMATION
NATIONAL TECHNICAL SYSTEMS, INC. AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(unaudited)
October 31, January 31,
1996 1996
----------- -----------
Assets
Current assets:
Cash $ 1,519,000 $ 1,949,000
Receivables, less allowance for doubtful
accounts of $721,000 at October 31, 1996
and $595,000 at January 31, 1996 11,672,000 10,453,000
Income taxes receivable 98,000 33,000
Inventories 2,465,000 2,220,000
Deferred income taxes 447,000 435,000
Prepaid expenses 1,108,000 687,000
----------- -----------
Total current assets 17,309,000 15,777,000
Property, plant and equipment, at cost 44,135,000 41,955,000
Less: accumulated depreciation 26,802,000 25,398,000
----------- -----------
Net property, plant and equipment 17,333,000 16,557,000
Intangible assets 440,000 286,000
Property held for sale 544,000 544,000
Other assets 351,000 339,000
----------- -----------
Total Assets $35,977,000 $33,503,000
=========== ===========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 2,915,000 $ 3,197,000
Accrued expenses 2,919,000 2,081,000
Current installments of long-term debt 1,829,000 1,747,000
----------- -----------
Total current liabilities 7,663,000 7,025,000
Long-term debt, excluding current installments 9,764,000 9,090,000
Deferred income taxes 2,138,000 1,662,000
Minority interest 64,000 75,000
Stockholders' equity:
Common stock of $.01 par value. Authorized,
20,000,000; issued and outstanding
6,715,000 as of October 31, 1996 and
6,674,000 as of January 31, 1996 67,000 67,000
Additional paid-in capital 10,557,000 10,513,000
Retained earnings 5,724,000 5,071,000
----------- -----------
Total stockholders' equity 16,348,000 15,651,000
----------- -----------
Total Liabilities and Stockholders' Equity $35,977,000 $33,503,000
=========== ===========
See accompanying notes to Condensed Consolidated Financial Statements.
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NATIONAL TECHNICAL SYSTEMS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income (unaudited)
for Nine Months Ended October 31, 1996 and 1995
1996 1995
------------ ------------
Revenues $ 36,218,000 $ 33,364,000
Cost of sales 27,866,000 26,177,000
------------ ------------
Gross profit 8,352,000 7,187,000
Selling, general and administrative expense 5,732,000 5,090,000
------------ ------------
Operating income 2,620,000 2,097,000
Other income (expense):
Interest expense, net (778,000) (889,000)
Other 28,000 25,000
------------ ------------
Total other expense (750,000) (864,000)
------------ ------------
Income before income taxes and minority 1,870,000 1,233,000
interest
Income taxes 842,000 555,000
------------ ------------
Income before minority interest 1,028,000 678,000
Minority interest (11,000) 33,000
------------ ------------
Net income $ 1,039,000 $ 645,000
============ ============
Primary and fully diluted net income
per common share $ 0.16 $ 0.10
============ ============
Weighted average number of common shares and
common stock equivalents outstanding 6,697,000 6,656,000
============ ============
See accompanying notes to Condensed Consolidated Financial Statements.
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<PAGE>
NATIONAL TECHNICAL SYSTEMS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Income (unaudited)
for Three Months Ended October 31, 1996 and 1995
1996 1995
------------ ------------
Revenues $ 12,809,000 $ 12,876,000
Cost of sales 9,889,000 10,227,000
------------ ------------
Gross profit 2,920,000 2,649,000
Selling, general and administrative expense 2,019,000 1,713,000
------------ ------------
Operating income 901,000 936,000
Other income (expense):
Interest expense, net (261,000) (287,000)
Other 2,000 12,000
------------ ------------
Total other expense (259,000) (275,000)
------------ ------------
Income before income taxes and minority
interest 642,000 661,000
Income taxes 289,000 297,000
------------ ------------
Income before minority interest 353,000 364,000
Minority interest (2,000) 21,000
------------ ------------
Net income $ 355,000 $ 343,000
============ ============
Primary and fully diluted net income per
common share $ 0.05 $ 0.05
============ ============
Weighted average number of common shares and
common stock equivalents outstanding 6,710,000 6,661,000
============ ============
See accompanying notes to Condensed Consolidated Financial Statements.
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<PAGE>
NATIONAL TECHNICAL SYSTEMS, INC. AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows (unaudited)
for Nine Months Ending October 31, 1996 and 1995
1996 1995
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,039,000 $ 645,000
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 1,689,000 1,748,000
Provision for losses on receivables 126,000 69,000
Deferred income taxes 464,000 283,000
Gain on sale of assets 1,000 (20,000)
Net changes in assets and liabilities:
Accounts receivable (1,345,000) (3,075,000)
Inventories (245,000) (76,000)
Prepaid expenses (421,000) (432,000)
Other assets (12,000) 78,000
Accounts payable (282,000) 1,147,000
Accrued expenses 838,000 715,000
Income taxes (65,000) (171,000)
Distributed earnings of affiliate (51,000) 0
Undistributed earnings of affiliate (11,000) 33,000
----------- -----------
Net cash provided by operating activities 1,725,000 944,000
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment (2,371,000) (1,094,000)
Investment in new subsidiary (253,000) 0
Proceeds on sale of fixed assets 4,000 25,000
----------- -----------
Net cash used for investing activities (2,620,000) (1,069,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from long-term debt 2,375,000 1,085,000
Repayments of current and long-term debt (1,619,000) (1,324,000)
Stock issued in lieu of compensation 0 19,000
Cash dividends paid (335,000) (133,000)
Proceeds from stock options exercised 44,000 14,000
----------- -----------
Net cash provided by (used for)
financing activities 465,000 (339,000)
----------- -----------
Net decrease in cash (430,000) (464,000)
Beginning cash balance 1,949,000 1,696,000
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ENDING CASH BALANCE $ 1,519,000 $ 1,232,000
=========== ===========
See accompanying notes to Condensed Consolidated Financial Statements
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NATIONAL TECHNICAL SYSTEMS, INC. AND SUBSIDIARIES
Notes to the Condensed Consolidated Financial Statements
1. In accordance with instructions to Form 10-Q the accompanying financial
statements and notes have been condensed and, therefore, do not contain all
disclosures required by generally accepted accounting principles. These
statements should be read in conjunction with the financial statements and
notes thereto included in the Registrant's Form 10-K for the year ended
January 31, 1996.
2. The statements presented as of and for the nine-month and three-month
periods ended October 31, 1996 and 1995 are unaudited. In Management's
opinion, all adjustments have been made to present fairly the results of
such unaudited interim periods. All such adjustments are of a normal
recurring nature.
3. While the Registrant's business is not materially seasonal, the quarterly
results of operations should not be construed as representing pro rata
results of the Registrant's fiscal year.
4. Income taxes for the interim periods are computed using the effective tax
rates estimated to be applicable for the full fiscal year. The Registrant
expects to pay state and federal income taxes for the fiscal year ended
January 31, 1997.
5. Net income per share for the nine-month and three-month periods ended
October 31, 1996 and 1995 was computed by dividing net income by the
weighted average number of common shares outstanding during the periods.
Common stock equivalents were excluded because their effect was immaterial
or antidilutive.
6. The consolidated financial statements include the accounts of the
Registrant and its wholly owned and financially controlled subsidiaries.
All significant intercompany balances and transactions have been eliminated
in consolidation.
7. Inventories consist of accumulated costs applicable to uncompleted
contracts and are stated at actual cost which is not in excess of estimated
net realizable value.
8. Cash paid for interest and taxes for the nine months ended October 31, 1996
was $ 846,000 and $ 582,000 respectively. Cash paid for interest and taxes
for the nine months ended October 31, 1995 was $904,000 and $527,000
respectively.
9. On June 30, 1996, the Registrant declared a five cents per share ($0.05)
special dividend payable on August 5, 1996 to shareholders of record on
July 20, 1996.
10. Minority interest in the Registrant's NQA-USA, Inc. subsidiary is a result
of 50% of the stock of NQA-USA, Inc. being issued to National Quality
Assurance, Ltd. in December 1995. Profits are allocated 65% to NQA-USA,
Inc. and 35% to National Quality Assurance, Ltd.
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
The following discussion should be read in conjunction with the consolidated
quarterly financial statements and notes thereto. All information is based upon
operating results of National Technical Systems, Inc. for the nine months ended
October 31.
(TABULAR HEADER INFORMATION: DOLLARS IN THOUSANDS)
RESULTS OF OPERATIONS
REVENUES
Nine months ended October 31 1996 %Change 1995
============================
Technical services $28,065 8.2% $25,930
Environmental services 1,361 (41.5%) 2,328
Registration services 1,692 3.5% 1,635
Contract labor services 5,100 46.9% 3,471
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Total net revenue $36,218 8.6% $33,364
======= =======
For the nine months ended October 31, 1996, consolidated revenues increased by
$2,854,000 or 8.6% when compared to the same period in 1995. In 1996, the
technical services segment revenues increased as a result of increases in its
traditional defense and aerospace related business. The Registrant's
environmental services segment revenues decreased by $967,000 as a result of
increased competition in this line of business. The contract labor segment
revenues increased by $1,629,000, reflecting the effect of its expanding staff
augmentation business and the success of its strategic alliances.
It is anticipated by the Registrant that revenues in the technical services
segment will continue at their current levels through the end of fiscal 1997,
while revenues in the environmental services segment are expected to remain the
same or decline slightly through the end of fiscal 1997. It is further
anticipated that revenues in the contract labor services segment will continue
at current levels through the end of the fiscal year. In addition, revenues in
the registration services segment should continue to increase at a moderate rate
for the remainder of fiscal 1997.
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<PAGE>
GROSS PROFIT
Nine months ended October 31 1996 % Change 1995
==================================
Technical services $ 6,893 16.8% $ 5,901
% to segment revenue 24.6% 22.8%
Environmental services (215) (1,533.3%) 15
% to segment revenue (15.8%) 0.6%
Registration services 460 (13.0%) 529
% to segment revenue 27.2% 32.4%
Contract labor services 1,214 63.6% 742
% to segment revenue 23.8% 21.4%
Total $ 8,352 16.2% $ 7,187
% to total net revenue 23.1% 21.5%
Gross profit as a percentage of net revenues increased in the nine months ended
October 31, 1996 when compared to the same quarter in 1995. This increase was
due primarily to higher gross margins on the traditional testing business in the
Registrant's technical services segment as a result of increased operating
efficiencies and higher prices and higher gross margins on staff augmentation
business in the Registrant's contract labor services segment. The Registrant
continues to pursue an aggressive cost containment program. Therefore, barring
any unforeseen circumstances, gross profits are expected to continue at current
levels for the remainder of fiscal 1997. The decrease in gross profit in the
environmental services segment resulted from a deterioration of margins due to
cost overruns on fixed price contracts.
SELLING, GENERAL & ADMINISTRATIVE
Nine months ended October 31 1996 % Change 1995
===============================
Technical services $4,037 9.8% $3,677
% to segment revenue 14.4% 14.2%
Environmental services 166 17.7% 141
% to segment revenue 12.2% 6.1%
Registration services 559 25.9% 444
% to segment revenue 33.0% 27.2%
Contract labor services 881 18.3% 745
% to segment revenue 17.3% 21.5%
Corporate 89 7.2% 83
Total S G & A $5,732 12.6% $5,090
% to total net revenue 15.8% 15.3%
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<PAGE>
Selling, general and administrative expenses as a percentage of net revenues
increased in the nine months ending October 31, 1996 compared to the same period
in 1995, due to accruals for profit sharing and incentive compensation in 1996
which were not present in 1995. In addition, allowances for doubtful accounts in
the environmental services segment increased and administration costs in the
registration services segment increased resulting from the acquisition of a new
subsidiary. The Registrant continues to look for ways to reduce costs but remain
effective in these areas.
INTEREST EXPENSE
Net interest expense decreased $111,000 in the nine months ended October 31,
1996 when compared to the same period in 1995. This decrease was principally due
to lower term loan and line of credit balances for the majority of 1996 in
addition to lower interest rates.
INCOME TAXES
The income tax provisional rate for the first six months of 1996 and 1995
reflects a rate in excess of the U.S. federal statutory rate primarily due to
the inclusion of state income taxes. The Registrant's provision for the nine
months ending October 31, 1996 increased over the same period in 1995 due to the
higher income before taxes in 1996. Management has determined that it is more
likely than not that the deferred tax asset will be realized on the basis of
offsetting it against deferred tax liabilities. It is the Registrant's intention
to evaluate the realizability of the deferred tax asset quarterly by assessing
the need for a valuation account.
NET INCOME
The increase in net income in the nine months ended October 31, 1996 compared to
the same period in 1995 was due to increased revenues and higher gross profit
margins partially offset by higher selling, general and administration costs.
The following information is based upon results for National Technical Systems,
Inc. for the three months ended October 31.
REVENUES
Quarter ended October 31 1996 % Change 1995
==============================
Technical services $ 9,759 2.1% $ 9,561
Environmental services 501 (62.8%) 1,348
Registration services 653 5.8% 617
Contract labor services 1,896 40.4% 1,350
------- --------
Total net revenue $12,809 (0.5%) $12,876
======= =======
For the three months ended October 31, 1996, consolidated revenues decreased by
$67,000 or 0.5% when compared to the same period in 1995. In 1996, the technical
services segment revenues increased as a result of increases in its traditional
defense and aerospace related business. Revenues in the Registrant's
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<PAGE>
environmental services segment decreased $847,000 as a result of increased
competition in this line of business. Further, the revenues in the registration
services segment increased by $36,000, primarily due to the addition of a new
subsidiary in this segment. The contract labor segment revenues increased by
$546,000, reflecting the effect of its expanding staff augmentation business and
the success of its strategic alliances.
It is anticipated by the Registrant that revenues in the technical services
segment will continue at their current levels through the end of fiscal 1997. In
addition, revenues in the registration services segment should return to a
moderate rate of increase for the remainder of fiscal 1997, while revenues in
the environmental services segment may continue to decline. It is further
anticipated that revenues in the contract labor services segment will continue
at current levels through the end of the fiscal year.
GROSS PROFIT
Quarter ended October 31 1996 % Change 1995
=================================
Technical services $ 2,515 13.3% $ 2,219
% to segment revenue 25.8% 23.2%
Environmental services (126) 4.5% (132)
% to segment revenue (25.1%) (9.8%)
Registration services 66 (60.0%) 165
% to segment revenue 10.1% 26.7%
Contract labor services 465 17.1% 397
% to segment revenue 24.5% 29.4%
Total $ 2,920 10.2% $ 2,649
% to total net revenue 22.8% 20.6%
Gross profit as a percentage of net revenues increased in the quarter ended
October 31, 1996 when compared to the same quarter in 1995. This increase was
due primarily to higher gross profit on the traditional testing business in the
Registrant's technical services segment offset slightly by lower margins in the
Registrant's other segments. Gross profits in the Registrant's registration
services segment decreased by $99,000 due to an increase in the cost of
obtaining the certificates required for ISO 9000 registration. In addition, the
$68,000 increase in gross profits in the Registrant's contract labor segment was
due mainly to higher margins on its staff augmentation business. The Registrant
continues to pursue an aggressive cost containment program. Therefore, barring
any unforeseen circumstances, gross profits are expected to continue at current
levels for the remainder of fiscal 1997.
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<PAGE>
SELLING, GENERAL & ADMINISTRATIVE
Quarter ended October 31 1996 % Change 1995
==============================
Technical services $1,278 8.4% $1,179
% to segment revenue 13.1% 12.3%
Environmental services 137 218.6% 43
% to segment revenue 27.3% 3.2%
Registration services 251 23.0% 204
% to segment revenue 38.4% 33.1%
Contract labor services 324 26.1% 257
% to segment revenue 17.1% 19.0%
Corporate 29 (3.3%) 30
Total S G & A $2,019 17.9% $1,713
% to total net revenue 15.8% 13.3%
Selling, general and administrative expenses as a percentage of net revenues
increased in the three months ending October 31, 1996 compared to the same
period in 1995 due to accruals for profit sharing and incentive compensation in
1996 which were not present in 1995, together with increases in allowances for
doubtful accounts in the environmental services segment and higher
administration costs in the registration services segment resulting from the
acquisition of a new subsidiary. The Registrant continues to look for ways to
reduce costs but remain effective in these areas.
INTEREST EXPENSE
Net interest expense decreased $47,000 in the quarter ending October 31, 1996
when compared to the same period in 1995. This decrease was principally due to
lower term loan and line of credit balances for the majority of the quarter in
1996 in addition to lower interest rates.
INCOME TAXES
The income tax provisional rate for the third quarters of 1996 and 1995 reflects
a rate in excess of the U.S. federal statutory rate primarily due to the
inclusion of state income taxes. The Registrant's provision for the quarter
ending October 31, 1996 was higher than the same period in 1995 due to the
increase in income before taxes and minority interest. Management has determined
that it is more likely than not that the deferred tax asset will be realized on
the basis of offsetting it against deferred tax liabilities. It is the
Registrant's intention to evaluate the realizability of the deferred tax asset
quarterly by assessing the need for a valuation account.
NET INCOME
The increase in net income in the quarter ending October 31, 1996 compared to
the same period in 1995 was due to increased revenues and higher gross profit
margins, partially offset by increased selling, general and administrative
costs.
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<PAGE>
BUSINESS ENVIRONMENT
During the course of the last fiscal year, the business climate in the aerospace
and defense industry, which in the past had shown signs of uncertainty, began to
stabilize. In response to this uncertainty the Registrant developed a strategy
of growth through diversification and taking advantage of opportunities created
by the aerospace and defense industry downsizing. As a part of this strategy,
the Registrant consolidated two of its testing facilities and, as a result of
this re-allocation of resources, is now positioned to more effectively serve its
customers and enhance revenue growth in the technical services segment. The
Registrant continues to pursue ISO registration business through its
registration services segment and remediaton business through its environmental
services segment. Because of the foregoing, as well as other factors affecting
the Registrant's operating results, past financial performance should not be
considered to be a reliable indicator of future performance and investors should
not use historical trends to anticipate results or trends in future periods.
LIQUIDITY AND CAPITAL RESOURCES
In the nine months ended October 31, 1996, cash provided by operations increased
by $781,000 when compared to the same period in 1995. Major items contributing
to this increase were an increase in net income along with significant increases
in accrued expenses, partially offset by increases in accounts receivable and
inventory balances.
Net cash used in investing activities in the nine-month period ended October 31,
1996 increased $1,551,000 when compared to the same period in 1995 due to
increased purchases of capital equipment and the purchase of a new subsidiary in
the Registrant's registration services segment. The Registrant anticipates that
its capital spending in fiscal 1997 for equipment will continue at its current
rate for the remainder of the year. The actual level of spending will be
dependent on a variety of factors, including general economic conditions, bank
covenants and the Registrant's operating requirements.
In the nine-month period ended October 31, 1996, net cash provided by financing
activities consisted of increases in the bank term loans and lines of credit of
$2,375,000 and proceeds from the exercise of stock options of $44,000, partially
offset by debt reduction on short term and long term debt of $1,619,000. In
April 1996, the Registrant's revolving lines of credit were extended to August
1997 and increased from an aggregate availability of $5,000,000 to $6,000,000.
In October 1996, the Registrant's revolving lines of credit were further
extended to August 1998. The Registrant also has a term loan agreement with Bank
of America NT & SA and Sanwa Bank California for an aggregate amount of
$5,000,000 payable in monthly installments of $83,000 through August 31, 1998
and an additional $1,000,000 loan with Sanwa Bank California entered into in
January 1995 with payments of $16,667 through January 31, 2000.
Management is not aware of any significant demands for capital funds that may
materially affect the short or long-term liquidity in the form of large fixed
asset acquisitions, unusual working capital commitments or contingent
liabilities. The Registrant's future working capital will be provided from
operations, supplemented by its bank credit lines. The Registrant's bank
revolving lines of credit, which currently aggregate $6,000,000 for short-term
liquidity needs had $500,000 available at October 31, 1996.
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<PAGE>
FORWARD-LOOKING INFORMATION
Certain statements or assumptions in Management's Discussion and Analysis
contain or are based on "forward-looking" information (as defined in the Private
Securities Litigation and Reform Act of 1995) that involves risk and
uncertainties inherent in the Registrant's business. Actual outcomes are
dependent upon the Registrant's successful performance of internal plans,
customer changes in short range and long range plans, competition in the
Registrant's services areas and pricing, continued acceptance of new services,
performance issues with key customers, and general economic risks and
uncertainties.
-14-
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 27 - Financial Data Schedule
(b) During the quarter ended October 31, 1996 the registrant did not
file a current report on Form 8-K.
SIGNATURE
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.
NATIONAL TECHNICAL SYSTEMS, INC.
Date: December 3, 1996 By: /s/ Lloyd Blonder
---------------- ---------------------------------
Lloyd Blonder
Senior Vice President
Chief Financial Officer
Signing on behalf of the
registrant and as principal
financial officer)
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<PAGE>
EXHIBIT INDEX
-------------
Exhibit No. Description Page No.
- --------------------------------------------------------------------------------
27 Financial Data Schedule 17
-16-
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JAN-31-1997
<PERIOD-END> OCT-31-1996
<CASH> 1,519
<SECURITIES> 0
<RECEIVABLES> 11,672
<ALLOWANCES> 721
<INVENTORY> 2,465
<CURRENT-ASSETS> 17,309
<PP&E> 44,135
<DEPRECIATION> 26,802
<TOTAL-ASSETS> 35,977
<CURRENT-LIABILITIES> 7,663
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 35,977
<SALES> 36,218
<TOTAL-REVENUES> 36,218
<CGS> 27,866
<TOTAL-COSTS> 27,866
<OTHER-EXPENSES> 5,732
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 778
<INCOME-PRETAX> 1,870
<INCOME-TAX> 842
<INCOME-CONTINUING> 1,039
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,039
<EPS-PRIMARY> 0.16
<EPS-DILUTED> 0.16
</TABLE>
