<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1998
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File Number 0-2000
METALCLAD CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 95-2368719
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2 Corporate Plaza, Suite 125
Newport Beach, CA 92660
(Address of Principal Executive Office) (Zip Code)
Registrant's telephone number, including area code (949) 719-1234
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 [ ]
As of June 30, 1998, the registrant had 30,450,622 shares outstanding
of its Common Stock, $.10 par value.<PAGE>
METALCLAD CORPORATION AND SUBSIDIARIES
TABLE OF CONTENTS
Page
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements:
Consolidated Balance Sheets at June 30, 1998
(unaudited) and December 31, 1997................................... 1
Consolidated Statements of Operations for the
six months ended June 30, 1998 (unaudited) and
June 30, 1997....................................................... 3
Consolidated Statements of Cash Flows for the
six months ended June 30, 1998 (unaudited) and
June 30, 1997....................................................... 4
Notes to Consolidated Financial Statements.......................... 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations................. 6
PART II. OTHER INFORMATION............................................ 10
SIGNATURES............................................................. 12
ART. 5 FDS FOR 2ND QUARTER 10.......................................... 13<PAGE>
PART I
FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
METALCLAD CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
June 30, December 31,
1998 1997
----------- -----------
(Unaudited)
CURRENT ASSETS:
Cash and cash equivalents $ 735,172 $1,643,521
Accounts receivable, less allowance
for doubtful accounts of $32,416 in
June 1998 and $82,026 in December 1997 2,639,724 2,890,681
Costs and estimated earnings in excess
of billings on uncompleted contracts 72,362 232,073
Inventories 267,719 181,172
Prepaid expenses and other current assets 55,666 159,581
Receivables from related parties 115,586 131,825
--------- ---------
TOTAL CURRENT ASSETS 3,886,229 5,238,853
Property, plant and equipment, net 6,501,049 6,106,938
Investment and capitalized costs in
unconsolidated affiliates 1,023,456 613,601
Deposits and other assets 415,269 432,087
Goodwill, less accumulated amortization
of $290,837 in June 1998 and $232,354
in December 1997 740,611 799,094
Real estate held for sale 25,000 25,000
--------- ---------
$12,591,614 $13,215,573
========== ==========
See Notes to Consolidated Financial Statements
1<PAGE>
METALCLAD CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Continued)
LIABILITIES AND SHAREHOLDERS' EQUITY
June 30, December 31,
1998 1997
----------- -----------
(Unaudited)
CURRENT LIABILITIES:
Accounts payable $1,938,610 $1,932,997
Accrued payroll, property and other taxes 954,230 622,379
Accrued expenses 994,879 940,511
Billings in excess of costs and estimated
earnings on uncompleted contracts 114,055 20,727
Current portion of convertible subordinated
debentures 259,533 19,533
---------- ----------
Total Current Liabilities 4,261,307 3,536,147
---------- ----------
Convertible long-term debt 1,570,000 1,500,000
---------- ----------
Shareholders equity:
Preferred stock, par value $10; 1,500,000
shares authorized; none issued - -
Common stock, par value $.10; 80,000,000
shares authorized, 30,450,622 and
30,063,870 issued and outstanding in
June 1998 and December 1997,
respectively 3,045,063 3,006,387
Additional paid-in capital 57,372,704 56,962,689
Accumulated deficit (50,985,658) (49,129,377)
Officers receivable collateralized by
stock (531,692) (520,163)
Cumulative foreign currency translation
adjustment (2,140,110) (2,140,110)
---------- ----------
6,760,307 8,179,426
---------- ----------
$12,591,614 $13,215,573
========== ==========
See Notes to Consolidated Financial Statements
2<PAGE>
METALCLAD CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE><S> <C> <C> <C> <C>
For Six Months Ended For Three Months Ended
June 30, June 30, June 30, June 30,
1998 1997 1998 1997
---------- ---------- ---------- ----------
INSULATION BUSINESS
Revenues
Contract revenues $ 5,300,537 $ 4,461,475 $ 2,721,209 $ 2,014,678
Material sales 21,648 132,709 16,466 46,127
Other 3,500 185,584 - 5,703
---------- ---------- ---------- ---------
5,325,685 4,779,768 2,737,695 2,066,508
---------- ---------- ---------- ----------
Operating costs and expenses
Contract costs and expenses 4,578,025 3,984,028 2,347,784 1,787,499
Cost of material sales 15,313 103,573 11,745 33,891
Selling, general and administrative expenses 522,998 619,370 275,875 286,631
---------- ---------- ---------- ----------
5,116,346 4,706,971 2,635,404 2,108,021
---------- ---------- ---------- ----------
Operating income (loss) 209,339 72,797 102,271 (41,513)
---------- ---------- ---------- ----------
WASTE MANAGEMENT
Revenues
Collection, recycling and destruction 2,700,641 149,737 1,252,410 96,879
Operating costs and expenses
Collection, recycling and destruction 2,930,355 425,652 1,406,764 121,352
Landfill 294,457 194,042 110,109 100,508
---------- ---------- ---------- ---------
3,224,812 619,694 1,516,873 221,860
Other Income - 168,720 - 168,720
Equity in earnings of unconsolidated affiliates - (742,845) - (367,500)
---------- ---------- --------- ---------
Operating Loss (524,171) (1,044,082) (264,463) (323,761)
---------- ---------- --------- ---------
Corporate expense (1,364,488) (1,272,305) (802,748) (645,508)
---------- ---------- --------- ---------
Operating loss (1,679,320) (2,243,590) (964,940) (1,010,782)
Interest (expense) (192,647) (25,613) (89,891) (47,525)
Gain (loss) on foreign currency translation 15,686 (9,049) 32,405 29,585
---------- ---------- ---------- ----------
Net Loss $(1,856,281) $(2,278,252) $(1,022,426) $(1,028,722)
========== ========== ========== ==========
Weighted average number of common shares 30,240,062 29,135,673 30,413,501 29,147,970
Net loss per share of common stock:
Basic ($.06) ($.08) ($.03) ($.04)
Diluted ($.06) ($.08) ($.03) ($.04)
</TABLE>
See Notes to Consolidated Financial Statements
3<PAGE>
METALCLAD CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE> <C> <C>
For Six Months Ended
June 30, June 30,
1998 1997
---------- ----------
OPERATING ACTIVITIES
Net loss $(1,856,281) $(2,278,252)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 212,739 237,489
Loss in earnings of unconsolidated affiliates - 742,845
Other - -
Provision for losses on accounts receivable (49,610) 44,621
Issuance of stock for services and interest on convertible subordinated
debentures 8,440 324,008
Write down of real estate held for sale - -
Earnings in excess of distributions from Curtom-Metalclad - 6,218
Changes in operating assets and liabilities:
Decrease in accounts receivable 151,437 762,572
(Increase) decrease in unbilled receivables 159,711 72,248
Decrease in inventories (91,318) 80,859
(Increase) decrease in prepaid expenses and other assets 86,433 (61,959)
Decrease in receivables from related parties 16,239 105,193
(Decrease) in accounts payable and accrued expenses 916,269 (1,863,179)
(Decrease) in billings over costs 93,328 (23,148)
(Increase) in capitalized development costs (446,011) -
--------- ---------
NET CASH USED IN OPERATING ACTIVITIES (798,624) (2,065,743)
--------- ---------
INVESTING ACTIVITIES
Purchase of equipment (494,700) (111,466)
Investments and capitalized costs in unconsolidated affiliates - (712,971)
Restricted cash - 769,500
Other long-term assets 23,374 -
--------- ---------
NET CASH USED IN INVESTING ACTIVITIES (471,326) (54,937)
--------- ---------
FINANCING ACTIVITIES
Borrowings from offerings (11,529) -
Common stock issued under stock option plans and warrants 440,250 -
--------- ---------
NET CASH PROVIDED BY FINANCING ACTIVITIES 428,721 -
--------- ---------
See Notes to Consolidated Financial Statements
4<PAGE>
METALCLAD CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(continued)
For Six Months Ended
June 30, June 30,
1998 1997
---------- ----------
Effect of exchange rates on cash (67,120) (872)
--------- ---------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (908,349) (2,121,552)
Cash and cash equivalents at beginning of period 1,643,521 3,074,395
--------- ---------
Cash and cash equivalents at end of period $ 735,172 $ 952,843
========= =========
Supplemental disclosures of cash flow information:
Cash paid for interest $ 8,007 $ 18,115
========= =========
</TABLE>
See Notes to Consolidated Financial Statements
5<PAGE>
METALCLAD CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Period Ended June 30, 1998
(Unaudited)
1. The accompanying unaudited financial statements of Metalclad
Corporation and its subsidiaries (the "Company") have been prepared in
accordance with the instructions to Form 10-Q and do not include all of
the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of
management all adjustments (which consist only of normal recurring
adjustments) necessary for a fair presentation have been included.
Operating results for the three months ended March 31, 1998 are not
necessarily indicative of what results will be for the year ending
December 31, 1998. These statements should be read in conjunction with
the consolidated financial statements and notes thereto and the report
of independent public accountants which was modified due to substantial
doubt about the Company s ability to continue as a going concern
included in the Company's Form 10-K for the year ended December 31,
1997.
2. The Company has completed all design, pre-development and
permitting necessary to build and operate an industrial waste landfill
in Aguascalientes, Mexico. Construction was originally announced in
February 1998 with completion expected in August 1998. Because the
anticipated financing in Mexico did not materialize, construction was
slowed consistent with available resources and in order to test the
Company s ability to open a new facility while still litigating its
rights with the first one. First phase construction is nearly complete
and limited commercial operations are expected to begin within
approximately seven weeks. Expansion of the project will require
additional resources which the Company has identified, but will not
expend until initial commercial operations have proven to be successful.
3. As part of the Company s warrant exchange program initiated in
August 1997, an unintended clause in the warrants issued as part of
financings in 1994 and 1996 has been identified. Each warrant issued in
these financings contained a provision for anti-dilution protection
related to exercise price. This clause entitled the holder to
effectively have the exercise price reduced to the lower of market or
subsequent equity transaction pricing ( ratchet event). The unintended
provision further provided that the number of shares underlying each
warrant would increase upon a ratchet event, resulting in the same net
proceeds to the Company upon exercise, but creating an increase in the
number of shares.
The Company believes this unintended provision to be an oversight
but has initiated actions to exchange the old warrants for new warrants,
correcting the language, on the following terms:
6<PAGE>
* Original 1994 Warrants -- exchange ratio 1.5:1.0
* Original 1996 Warrants -- exchange ratio 2.0:1.0
* All replacement warrants will have an expiration date of five
years from the exchange date and registration rights.
The Company believes this proposal to be fair, although the total
proceeds ultimately received by the Company will be less, so as to
correct the warrants. As a result of the Company s proposal, additional
warrants in the amount of 3,728,000 would be issued. Should the warrant
holders reject the Company s proposal, the potential additional shares
underlying the old warrants could be in excess of 12,500,000. The
Company has received some acceptances of its proposal, but cannot be
assured that all the holders will accept its offer. The Company intends
to continue to address this issue until resolved.
4. Effective January 1, 1998 the Company adopted the provisions of
SFAS No. 130, Reporting Comprehensive Income which establishes
standards for reporting and display of comprehensive income and its
components in a full set of general-purpose financial statements.
Comprehensive income is defined as the total of net income and all non-
owner changes in equity. For the periods ending June 30, 1998 and 1997,
there were no adjustments which would materially affect the net income
as reported.
5. The loss per share amounts for the six and three months ended
June 30, 1998 and June 30, 1997 were computed by dividing the net loss
by the weighted average shares outstanding during the applicable
quarter.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATION
All statements, other than statements of historical fact, included
in this Form 10-Q, including without limitation the statements under
Management s Discussion and Analysis of Financial Condition and Results
of Operations are, or may be deemed to be, 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. Such
forward-looking statements involve assumptions, known and unknown risks,
uncertainties, and other factors which may cause the actual results,
performance or achievements of Metalclad Corporation (the Company ) to
be materially different from any future results, performance or
achievements expressed or implied by such forward-looking statements
contained in this Form 10-Q. Such potential risks and uncertainties
include, without limitation, the ability to commence operations at the
Company s hazardous waste treatment sites under development, competitive
pricing and other pressures from other businesses in the Company s
markets, economic conditions generally and in the Company s primary
markets, availability of capital, cost of labor, and other risk factors
detailed herein and in other of the Company s filings with the
7<PAGE>
Securities and Exchange Commission. The forward-looking statements are
made as of the date of this Form 10-Q and the Company assumes no
obligation to update the forward-looking statements or to update the
reasons actual results could differ from those projected in such
forward-looking statements. Therefore, readers are cautioned not to
place undue reliance on these forward-looking statements.
Results of Operations
General. The Company s revenues were generated primarily by (i)
revenues in the United States from insulation and asbestos abatement
services; and (ii) revenues in Mexico from the collection of waste oils
and solvents for recycling, placement and servicing of parts washing
machines, brokering the disposal of waste and remediation services.
Since November 1991, the Company has pursued the development of
integrated waste treatment and disposal facilities in several Mexican
states. The Company has completed construction of a hazardous waste
landfill in San Luis Potosi which is not yet open; and the subject of
arbitration proceedings under the North American Free Trade Agreement
( NAFTA ). The Company is also active in the development of additional
projects in Mexico, pursuing development opportunities near the
industrial heart of Mexico. These opportunities include industrial
waste landfill facilities and hazardous waste treatment facilities which
will include neutralization, solidification and evaporation processes to
handle a variety of waste streams. These development activities include
s i ting, permitting, social and political support, and community
awareness. The development process typically can take up to two years
to obtain the necessary support and permitting to build a facility. The
actual construction time necessary to complete these facilities is
approximately six months. However, there can be no assurances that the
Company will be successful in these efforts. The Company s results of
operations include the costs of development of all such future waste
treatment facilities in Mexico.
Insulation Business. Total revenues from the insulation business
for the six months ended June 30, 1998 were $5,326,000 as compared to
$4,780,000 for the comparable period ended June 30, 1997, an increase of
11%.
Contract revenues for the six months ended June 30, 1998 were
$5,301,000 as compared to $4,461,000 for the six months ended June 30,
1997, an increase of 18%. This increase is attributed to the Company s
efforts to diversify its client base, including its entry into the
commercial insulation market.
Material sales were $22,000 for the period as compared to $133,000
for the comparable period, a decrease of 83% as the Company places less
emphasis on this market.
Total expenses for the six months ended June 30, 1998 were
$5,116,000 as compared to $4,707,000 for the comparable period ended
8<PAGE>
June 30, 1997, an increase of 9%.
Contract costs and expenses were $4,578,000 for the period as
compared to $3,984,000 for the six months ended June 30, 1997, an
increase of 15%. This increase is consistent with the Company s
increase in revenues.
Cost of material sales was $15,000 for the period as compared to
$104,000, a decrease of 86%, coinciding with the decrease in sales in
this area.
Selling, general and administrative costs for the six months ended
June 30, 1998 were $523,000 as compared to $619,000 for the comparable
period ended June 30, 1997, a decrease of 16%.
Other income was $4,000 for the period as compared to $186,000 for
the comparable period, a decrease of 98% as the comparable period
contained certain one-time collections associated with the settlement of
a collection claim against a previous customer and return premiums for
prior years insurance coverages.
Waste Management Services. Revenues for the six months ended June
30, 1998 were $2,701,000 as compared to $150,000 for the comparable
period ended June 30, 1997. This increase is associated with the
Company s change in accounting for these operations from the equity
method of accounting to full consolidation of ARI due to the Company
acquiring 100% ownership of ARI in 1997. Were the revenues for 1997
consolidated, the comparative results would be $2,701,000 and $2,376,000
for the period ended June 30, 1998 and 1997, respectively, an increase
of 25%.
Operating costs and expenses, associated with revenues, were
$2,930,000 as compared to $426,000 for the comparable period ended June
30, 1997, with this increase related to the increase in revenues and,
again, reflective of the accounting change between the periods.
Landfill development costs were $294,000 for the six months ended
June 30, 1998 compared to $194,000 for the comparable period in 1997, an
increase of 51%, associated with the Company s continuing activities in
the development of additional waste treatment facilities.
Equity in earnings of unconsolidated affiliates was $0.00 for the
current period compared to ($743,000), representing 100% of the loss of
ARI, for the quarter ended June 30, 1997, due to the change in
accounting for ARI.
Corporate Expense. Corporate expenses were $1,364,000 for the six
months ended June 30, 1998 as compared to $1,272,000 for the comparable
period of 1997, an increase of 7%. This increase is due to the
increasing costs associated with the Company s pursuit of its claim
under NAFTA.
9<PAGE>
Interest Income (Expense). Interest expense for the period ended
June 30, 1998 was ($193,000) as compared to ($26,000) for the comparable
period.
Loss on Foreign Currency Translation. This loss of ($16,000) is
due to the accounting treatment associated with Mexico s highly
inflationary economy. During the comparable period, this loss was
($9,000).
Consolidated Results
The Company experienced a net loss of ($1,856,000) for the six
months ended June 30, 1998 as compared to a net loss of ($2,278,000) for
the comparable period ended June 30, 1997, an improvement of 19%.
Liquidity and Capital Resources
Working capital at June 30, 1998 was ($375,000) as compared to
$1,702,000 as of December 31, 1997. The Company had cash and cash
equivalents of $735,000 at June 30, 1998 as compared to $1,644,000 at
December 31, 1997. Cash used in operations was ($799,000) as compared
to ($2,066,000) for the comparable period ending June 30, 1997.
The Company believes that the insulation business will generate
adequate cash flows from continuing operations to meet its future
obligations and expenses relating to such operations. The Company will
require substantial additional financing to construct and operate
Aguascalientes as well as additional waste treatment facilities in
Mexico and to support the continuing growth of ARI operations.
Furthermore, to the extent that the Company is required to expend
additional efforts to pursue its NAFTA claim, additional general and
administrative expenses without revenues to offset such expenses are
anticipated until the landfill is opened. The Company is aware of its
ongoing cash requirements and has completed a $1 million private
p l a c e ment of 7% convertible subordinated debentures in July.
Additionally, the company has a commitment for $5 million in 7%
convertible subordinated debentures in the form of $2 million initial
funding and a $3 million equity credit facility, which the Company has
the option to draw upon. This financing will close in August, 1998.
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Given the Company s long history in the insulation business and in
the sale of insulation materials, it is subject to various claims
related to prior asbestos related business as well as its current
business. The number of these claims is over 100, the Company believes
it has adequate insurance in place and had adequate insurance in prior
10<PAGE>
years and is vigorously defending all claims. The Company does not
believe that these claims, individually or in the aggregate, will have a
material adverse effect on its financial condition.
On October 2, 1996, having completed a long period of negotiation
with the Mexican government on the opening of its hazardous waste
landfill in San Luis Potosi, Mexico, the Company filed a Notice of Claim
under the provision of the North American Free Trade Agreement. The
notice was filed with the International Center for the Settlement of
Investment Disputes (ICSID) in Washington, D.C. pursuant to the
provisions of the NAFTA. On January 2, 1997, the Company filed its
actual claim with the Tribunal, after which a three-member Tribunal was
impaneled which includes one arbitrator from Mexico, one from the United
States and a third, chosen jointly by the parties, from Great Britain.
The first hearing was held in Washington, D.C. on July 15, 1997 and a
number of matters were agreed upon by the parties and a significant
amount of direction was given by the Tribunal to the proceedings that
would move forward.
Pursuant to those understandings, the Company, on October 13, 1997,
filed its Memorial which included the Claim and evidence supporting the
Claim, including expert witness studies and the like. The basis of the
Company s claim against Mexico is one likened to expropriation. The
Company s position is since it is not being allowed to operate a legally
authorized project, it has in essence been taken by the Mexican
government and they should, therefore, be responsible for paying fair
compensation under the provision of the NAFTA. A fair market valuation
was done on behalf of the Company by an outside expert which indicated
the fair market value of this business was $90,000,000.
On February 17, 1998, the United Mexican States ( Mexico )
responded to the Company s claim to the Tribunal. The Company is now
preparing a reply brief, which is scheduled for submittal on August 21,
to be followed by a rejoinder brief from Mexico and then a hearing will
be scheduled prior to the final determination of the case. It is
believed that this process could take six months or more to complete.
In May 1997 a jury found Texaco oil refinery, a client of the
Company 55% liable for injuries and damages sustained by a Metalclad
I n sulation employee while working at the Wilmington, California
refinery. The jury determined that Texaco s portion of the damages
amounted to $5.5 million. Under terms of the Company s contract with
Texaco, certain indemnities may be applied. The Company had project
specific, as well as other insurance policies in effect at the time of
the injury. This award has been appealed and the ultimate outcome
cannot be predicted; however, the Company believes its insurance
programs are adequate to address any potential exposure.
ITEM 2. CHANGES IN SECURITIES
Not Applicable
11<PAGE>
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not Applicable
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not Applicable
ITEM 5. OTHER INFORMATION
Not Applicable
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
Not Applicable
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
METALCLAD CORPORATION
Date: August 12, 1998 By: /s/ Anthony C. Dabbene
-------------------------------
Anthony C. Dabbene
Chief Financial Officer
(Principal Accounting Officer)
12<PAGE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<PERIOD-TYPE) 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> APR-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 735
<SECURITIES> 0
<RECEIVABLES> 2640
<ALLOWANCES> 0
<INVENTORY> 268
<CURRENT-ASSETS> 3886
<PP&E> 6501
<DEPRECIATION> 0
<TOTAL-ASSETS> 12592
<CURRENT-LIABILITIES> 4261
<BONDS> 0
<COMMON> 3045
0
0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 12592
<SALES> 8001
<TOTAL-REVENUES> 8026
<CGS> 7508
<TOTAL-COSTS> 9705
<OTHER-EXPENSES> (16)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 193
<INCOME-PRETAX> (1856)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1856)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
