<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Judiciary Plaza, 450 Fifth Street, N.W.
Washington, D.C. 20549
FORM 10-Q
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR QUARTER ENDED DECEMBER 31, 1997 COMMISSION FILE NO. O-2655
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
DIXON TICONDEROGA COMPANY
- -----------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 23-0973760
- --------------------------------- ----------------------------------
(State or other jurisdiction I.R.S. Employer
of incorporation or organization) Identification No.
195 International Parkway, Heathrow, FL 32746
- ----------------------------------------------------------------------------
(Address of principal executive offices) Zip Code
(407) 829-9000
Registrant's telephone number, including area 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 [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the close of the period covered by this report.
Class Outstanding as of December 31, 1997
- ---------------------------- -----------------------------------------
Common Stock $1 par value 3,371,276
<PAGE>
DIXON TICONDEROGA COMPANY AND SUBSIDIARIES
------------------------------------------
INDEX
-----
Page
----
PART I. FINANCIAL INFORMATION
Item 1. Financial Information
Consolidated Balance Sheets --
December 31, 1997 and September 30, 1997 3-4
Consolidated Statements of Operations --
For The Three Months Ended December 31, 1997 and 1996 5
Consolidated Statements of Cash Flows --
For The Three Months Ended December 31, 1997 and 1996 6-7
Notes to Consolidated Financial Statements 8-10
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 11-14
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 15
Signatures 16
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. DIXON TICONDEROGA COMPANY AND SUBSIDIARIES
- ------- CONSOLIDATED BALANCE SHEETS
December 31, September 30,
1997 1997
------------ -------------
CURRENT ASSETS:
Cash and cash equivalents $ 3,389,046 $ 5,607,587
Receivables, less allowance for
doubtful accounts of $1,566,176
at December 31, 1997 and $1,004,537
at September 30, 1997 21,312,821 25,969,659
Inventories 37,870,540 31,580,175
Other current assets 3,602,044 3,225,881
----------- -----------
Total current assets 66,174,451 66,383,302
----------- -----------
PROPERTY, PLANT and EQUIPMENT:
Land and buildings 17,069,353 16,955,803
Machinery and equipment 20,271,902 17,130,035
Furniture and fixtures 1,228,339 944,267
----------- -----------
38,569,594 35,030,105
Less accumulated depreciation (20,094,330) (19,542,880)
----------- -----------
18,475,264 15,487,225
OTHER ASSETS 2,813,418 2,290,712
----------- -----------
$87,463,133 $84,161,239
=========== ===========
<PAGE>
December 31, September 30,
1997 1997
------------ -------------
CURRENT LIABILITIES:
Notes payable $20,680,705 $16,058,080
Current maturities of long-term debt 1,680,773 1,745,080
Accounts payable 5,637,912 7,077,955
Accrued liabilities 12,818,205 12,712,385
----------- -----------
Total current liabilities 40,817,595 37,593,500
----------- -----------
LONG-TERM DEBT 23,202,176 23,555,618
----------- -----------
DEFERRED INCOME TAXES AND OTHER 1,245,191 1,142,631
----------- -----------
MINORITY INTEREST 2,124,947 2,006,865
----------- -----------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Preferred stock, par $1, authorized
100,000 shares, none issued --- ---
Common stock, par $1, authorized
8,000,000 shares; issued 3,605,370
shares at December 31, 1997 and
3,591,681 at September 30, 1997 3,605,370 3,591,681
Capital in excess of par value 2,866,661 2,770,668
Retained earnings 17,433,015 17,127,698
Cumulative translation adjustment (2,973,256) (2,768,856)
----------- -----------
20,931,790 20,721,191
Less - treasury stock, at cost
(234,094 shares) (858,566) (858,566)
----------- -----------
20,073,224 19,862,625
----------- -----------
$87,463,133 $84,161,239
=========== ===========
The accompanying notes to consolidated financial statements
are an integral part of these statements.
<PAGE>
DIXON TICONDEROGA COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED
DECEMBER 31,
1997 1996
-------- --------
REVENUES $23,796,616 $22,307,880
----------- -----------
COST AND EXPENSES:
Cost of goods sold 15,318,844 14,660,470
Selling and administrative
expenses 7,189,793 6,354,592
----------- -----------
22,508,637 21,015,062
----------- -----------
OPERATING INCOME 1,287,979 1,292,818
INTEREST EXPENSE 790,762 799,622
----------- -----------
INCOME BEFORE INCOME TAXES
AND MINORITY INTEREST 497,217 493,196
INCOME TAXES 73,822 125,974
----------- -----------
423,395 367,222
MINORITY INTEREST 118,082 152,845
----------- -----------
NET INCOME $ 305,313 $ 214,377
=========== ===========
EARNINGS PER COMMON SHARE:
BASIC $ .09 $ .07
=========== ===========
DILUTED $ .08 $ .06
=========== ===========
WEIGHTED AVERAGE SHARES
OUTSTANDING:
BASIC 3,366,324 3,293,778
=========== ===========
DILUTED 3,738,206 3,301,644
=========== ===========
The accompanying notes to consolidated financial statements
are an integral part of these statements.
<PAGE>
DIXON TICONDEROGA COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED DECEMBER 31, 1997 AND 1996
1997 1996
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 305,313 $ 214,377
Adjustment to reconcile net income to
net cash provided by (used in)
operating activities:
Depreciation and amortization 648,914 646,973
Deferred taxes 208,631 75,380
Provision for doubtful accounts receivable 31,026 94,292
(Income) loss attributable to currency
transactions 286,127 (36,164)
Income attributable to minority interest 118,082 152,844
Changes in assets and liabilities,
net of effects of acquisition:
Receivables 6,116,829 6,276,321
Inventories (5,232,734) (2,891,501)
Other current assets (379,324) (428,320)
Accounts payable and accrued liabilities (2,923,696) (1,699,027)
Other assets (239,759) 50,334
---------- ---------
Net cash provided by (used in) operations (1,050,591) 2,455,509
--------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of plant and equipment, net (458,031) (513,073)
Purchase of Vinci de Mexico, S.A. de C.V.,
net of cash acquired (3,289,200) --
Net cash provided by (used in) ---------- ----------
investing activities (3,747,231) (513,073)
<PAGE>
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from (principal
reductions of) notes payable 2,969,304 (2,293,508)
Principal reductions of long-term debt (634,611) (326,500)
Employee stock options 109,682 --
Other non-current liabilities -- (2,565)
----------- ----------
Net cash provided by (used in)
financing activities 2,444,375 (2,622,573)
----------- ----------
Effect of exchange rate changes on cash 134,906 (110,312)
----------- -----------
Net decrease in cash and
cash equivalents (2,218,541) (790,449)
Cash and cash equivalents,
beginning of period 5,607,587 2,597,032
---------- -----------
Cash and cash equivalents,
end of period $3,389,046 $ 1,806,583
========== ===========
Supplemental Disclosures:
Cash paid during the period:
Interest $ 673,788 $ 1,054,706
Income taxes 247,817 105,758
The accompanying notes to consolidated financial statements
are an integral part of these statements.
<PAGE>
DIXON TICONDEROGA COMPANY AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION:
The condensed consolidated financial statements included herein have been
prepared by the Registrant, without audit, 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, although the Registrant believes that
the disclosures are adequate to make the information presented not misleading.
It is suggested that these financial statements be read in conjunction with the
financial statements and the notes thereto included in the Registrant's latest
annual report on Form 10-K. In the opinion of the Registrant, all adjustments
(solely of a normal recurring nature) necessary to present fairly the financial
position of Dixon Ticonderoga Company and subsidiaries as of December 31, 1997,
and the results of their operations and cash flows for the three months ended
December 31, 1997 and 1996, have been included. The results of operations for
such interim periods are not necessarily indicative of the results for the
entire year.
Certain fiscal 1997 balances have been reclassified to conform to current year
presentation.
2. INVENTORIES:
Since amounts for inventories under the LIFO method are based on annual
determinations of quantities and costs as of the end of the fiscal year, the
inventories at December 31, 1997 (for which the LIFO method of accounting are
used) are based on certain estimates relating to quantities and costs as of
year end.
Inventories consist of (in thousands):
December 31, September 30,
1997 1997
------------ -------------
Raw materials $14,180 $11,760
Work in process 3,891 4,400
Finished goods 19,800 15,420
------- -------
$37,871 $31,580
======= =======
<PAGE>
3. EFFECT OF CERTAIN NEW ACCOUNTING PRONOUNCEMENTS:
In 1997, the Financial Accounting Standards Board (FASB) issued Statement No.
130 "Reporting Comprehensive Income" which is effective for the Company in
fiscal 1999. This statement requires the reporting of net income and all other
changes to equity during the period, except those resulting from investments by
owners and distributions to owners, in a separate statement that begins with
net income or in the consolidated statement of operations below net income.
The Company estimates that currently the only component of comprehensive
income that bypasses the statement of operations is foreign currency trans-
lation adjustments presently being reported in the Consolidate Statement of
Shareholders' Equity.
4. TRANSLATION OF FOREIGN CURRENCIES:
As of January 1, 1997, Mexico is considered as a highly inflationary economy
for the purpose of applying FASB Statement No. 52, "Foreign Currency
Translation." Translation gains and losses therefore impact the results of
operations. Foreign currency transaction gains (losses) included in net
income were approximately ($286,000) and $36,000 for the periods ended
December 31, 1997 and 1996, respectively.
5. ACCOUNTING FOR INCOME TAXES:
The difference between income taxes calculated at the U.S. statutory federal
income tax rate and the provision in the consolidated financial statements is
primarily due to lower effective foreign tax rates, state income taxes and
other permanent items.
6. CONTINGENCIES:
The Company, in the normal course of business, is party in certain litigation.
In April 1996, a decision was rendered by the Superior Court of New Jersey in
Hudson County finding the Company responsible for $1.94 million plus prejudge-
ment interest. All company appeals have been denied and in January 1998 the
Company paid $3.6 million to satisfy this claim in full, including all accrued
interest. The Company continues to pursue other responsible parties for
indemnification and/or contribution to the payment of this claim (including
its insurance carriers and a legal malpractice action against its former
attorney.
The Company has evaluated the merits of other litigation and believes their
outcome will not have a further material effect on the Company's future results
of operations or financial position. The Company is aware of several
environmental matters related to certain facilities purchased or to be sold.
The Registrant assesses the extent of these matters on an ongoing basis. In
the opinion of management (after taking into account accruals of
<PAGE>
approximately $400,000 as of December 31, 1997), the resolution of these
matters will not materially affect the Company's future results of operations
or financial position.
7. ACQUISITION:
In December 1997, the Company's subsidiary, Dixon Ticonderoga de Mexico, S.A. de
C.V., acquired all of the capital stock of Vinci de Mexico, S.A. de C.V.
("Vinci"), and certain assets of a related entity for a final total purchase
price of approximately 28.3 million pesos (approximately $3.5 million) in cash.
Vinci is a well-known manufacturer of tempera and oil paints, chalk and modeling
clay in Mexico. The company also manufactures plastic products (such as
rulers and geometric sets), water colors and crayons. The acquisition was
accounted for under the "purchase" method of accounting and the balance sheet
herein includes the fair value of Vinci's specific assets and liabilities,
including goodwill approximating $425,000. Goodwill is amortized over the
estimated period of benefit of 20 years. The results of Vinci's operations
have been included in the consolidated results of operations since the date
of acquisition.
The following shows pro forma, unaudited data that would have resulted had the
acquisition been consummated as of October 1, 1996:
Three Months Ended
December 31, December 31,
1997 1996
(in thousands, except per share data)
_____________ _____________
Revenues $ 24,728 $ 23,421
Net income (loss) 358 (367)
Earnings (loss) per share:
Basic .11 (.11)
Diluted .10 (.11)
<PAGE>
Item 2.
- -------
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
REVENUES for the quarter ended December 31, 1997, increased $1,489,000 from the
same quarter last year. The changes by segment are as follows:
Increase % Increase (Decrease)
(Decrease) ---------------------
(in thousands) Total Volume Price/Mix
------------ ----- ------ ---------
Consumer U.S. $ 594 5 7 (2)
Consumer Foreign 867 25 32 (7)
Industrial 28 -- -- --
Consumer U.S. revenues increased primarily in the educational market due to
aggressive promotions and a restructured sales force. Foreign Consumer revenue
increases were primarily in the Mexican mass market. Revenues reflect a
decrease of $91,000 in Mexico and $74,000 in Canada due to the decline of their
respective currencies when compared to the U.S. dollar.
While the Company has operations in Canada, Mexico and the U.K., historically
only the operating results in Mexico have been materially impacted by currency
fluctuations. There has been a significant devaluation of the Mexican peso
once in each of the last three decades, the last one being in December 1994.
In the short term after such a devaluation, consumer confidence has been
shaken, leading to an immediate reduction in revenues in the months following
the devaluation. Then, after the immediate shock, and as the peso stabilizes,
revenues tend to grow. Selling prices tend to rise over the long term to
offset any inflationary increases in costs. The peso, as well as any
currency value, depends on many factors including international trade, investor
confidence, and government policy, to name a few. These factors are
impossible for the Company to predict, and thus, an estimate of potential
effect on results of operations for the future cannot be made. The Company's
Mexico subsidiary purchased a peso currency option to protect against
devaluation in excess of approximately 10%. In the quarter ended December
1997, the Mexican peso devalued approximately 4% as compared with the U.S.
dollar. This currency risk in Mexico is also managed through local currency
financing and by export sales to the U.S. denominated in U.S. dollars.
<PAGE>
Revenues decreased $10,713,000 from the prior quarter as follows:
Increase % Increase (Decrease)
(Decrease) ---------------------
(in thousands) Total Volume Price/Mix
------------ ----- ------ ---------
Consumer U.S. $(6,700) (34) (34) --
Consumer Foreign (3,753) (46) (40) (6)
Industrial (260) (4) (5) 1
U.S. and Foreign Consumer reflects the seasonality of demand for their
products. Historically, this quarter represents approximately 20% of annual
revenues being shipped, while the prior quarter represents 30%. The higher
percentage in the prior quarter represents seasonal school and mass market
sales.
OPERATING INCOME decreased $4,000 from the same quarter last year. Foreign
Consumer increased $220,000, primarily in Mexico despite $280,000 in trans-
lation losses due to the aforementioned devaluation of the Mexican peso. The
acquisition of Vinci (see Note 7 to Consolidated Financial Statements) and
continuing growth of revenues in the mass market were the primary reasons for
the increase. U.S. Consumer operating income decreased $340,000 primarily
due to marketing and selling cost increases in the educational and mass
market segments. The Industrial segment increased $100,000 primarily due
to manufacturing cost savings in graphite products. The aforementioned
Mexico translation losses largely contributed to the increase in total
selling and administrative expenses (30.2% of sales as compared with 28.5%
last year).
Operating income decreased $2,788,000 from the prior quarter primarily due to
the U.S. and Foreign Consumer aforementioned seasonality that generates higher
revenue and related operating income in the final fiscal quarter.
INTEREST EXPENSE decreased $9,000 from the same quarter last year. Interest
expense decreased $277,000 from the prior quarter due to lower cyclical
borrowing levels.
INCOME TAXES decreased $52,000 from the same quarter last year due to lower
effective foreign tax rates. The decrease of $1,190,000 from the prior
quarter was primarily due to lower before tax income and the effect of lower
foreign tax rates.
<PAGE>
MINORITY INTEREST in December 1997 and December 1996 represents 20% and 49.9%,
respectively, of the net income of the consolidated subsidiary, Dixon
Ticonderoga de Mexico, S.A. de C.V. In February 1997, the Company increased
its ownership, thus reducing minority interest.
LIQUIDITY AND CAPITAL RESOURCES
The Company's financial condition has benefited from its recent operating
success and the completion of major financing initiatives. Cash flows from
operating activities in the first quarter of fiscal 1997 decreased however, by
approximately $3.5 million over the same quarter last year, due principally to
higher Mexico inventory levels. Mexico accelerated inventory purchases in
the current quarter to take advantage of certain tax benefits and discounts.
Investing activities included approximately $3.3 million (net of cash
acquired) related to the acquisition of Vinci (see Note 7 to Consolidated
Financial Statements). Total other capital expenditures are expected to
approximate $2.2 million in fiscal 1998. Such expenditures approximated
$458,000 in the first quarter. Generally, all other major capital projects
are discretionary in nature and thus no material purchase commitments exist.
Other capital expenditures will continue to be funded from operations and
existing financing arrangements.
In July 1996, the Company entered into financing arrangements with a consort-
ium of lenders to provide additional working capital. The loan and security
agreement provides for a total of $48 million in financing. This includes a
revolving line of credit facility in the amount of $40 million which bears
interest at either the prime rate, plus 0.5%, or the prevailing LIBOR rate plus
2.5%. Borrowings under the revolving credit facility are based upon eligible
accounts receivable and inventories of the Company's U.S. and Canada
operations, as defined. The financing agreement also includes a term loan
in the original amount of $7.75 million. The term loan bears interest at
the same rate, and is payable in varying monthly installments through 2001.
The Company previously executed certain interest rate "swap" agreements which
effectively fix the rate of interest on approximately $13 million of this
debt at 8.75% to 8.87%.
The financing arrangements are collateralized by the tangible and intangible
assets of the U.S. and Canada operations (including accounts receivable,
inventories, property, plant and equipment, patents and trademarks) and a
pledge of the capital stock of the Company's subsidiaries. The loan and
security agreement contains provisions pertaining to the maintenance of
certain financial ratios and annual capital expenditure levels, as well
as restrictions as to payment of cash dividends. The Company is presently
in compliance with all such provisions. At December 31, 1997, the Company
had approximately $20 million of unused lines of credit available under
this new financing arrangement.
<PAGE>
In September 1996, the Company also completed the private placement of $16.5
million of 12% Senior Subordinated Notes, due 2003. In connection with the
private placement, the Company issued to noteholders warrants to purchase
300,000 shares of Company stock at $7.24 per share. The note agreement
contains provisions which limit the payment of dividends and requires the
maintenance of certain financial covenants and ratios, with which the
Company is presently in compliance. In January 1998, the Company canceled a
reverse interest rate "swap" agreement covering $10 million of the notes,
resulting in a deferred gain of approximately $375,000, to be recognized over
the remaining original term of the notes.
YEAR 2000 COMPUTER ISSUES
The Company is in process of assessing and addressing the impact of the year
2000 on its computer hardware and software. The Company's principal operating
and application software is believed to be year 2000 compliant, although
peripheral applications and/or personal computer systems may not be.
Management and its outside management information consultants are in the
process of developing a plan to assure full compliance by 1999. Accordingly,
the Company does not expect this matter to materially impact how it conducts
business nor its future results of operations or financial position.
FORWARD-LOOKING STATEMENTS
Any "forward-looking statements" contained in this Quarterly Report on Form
10-Q involve known and unknown risks (including, but not limited to certain
foreign currency risk), uncertainties and other factors that could cause
the actual results to differ materially from those expressed or implied
by such forward-looking statements.
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
- ------- ---------------------------------
(a) Exhibits
- --- --------
The following exhibits are required to be filed as part of this quarterly
report on Form 10-Q:
(3) (i) Restated Certificate of Incorporation *
(3) (ii) Amended and Restated Bylaws **
(4) (a) Specimen Certificate of Company Common Stock *
(4) (b) Amended and Restated Stock Option Plan ***
(27) Financial Data Schedule ****
* Incorporated by reference to the Company's quarterly report on Form 10-Q for
the period ended March 31, 1997, file number 0-2655, filed in Washington, D.C.
** Incorporated by reference to the Company Annual Report on Form 10-K for the
year ended September 30, 1996, file number 0-2655, filed in Washington, D.C.
*** Incorporated by reference to Appendix 3 to the Company's Proxy Statement
dated January 27, 1997, filed in Washington, D.C.
**** Filed electronically via EDGAR.
(b) Reports on Form 8-K
- --- -------------------
On December 12, 1997, the Company filed a current report on Form 8-K regarding
its acquisition of Vinci de Mexico, S.A. de C.V., and certain assets of a
related entity. In February 1998, the Company will file an amendment on Form
8-K/A, to include certain required historical and pro forma financial
statements related to this acquisition.
<PAGE>
SIGNATURES
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.
DIXON TICONDEROGA COMPANY
Dated: February 13, 1998 By: /s/ Gino N. Pala
----------------------------
Gino N. Pala
Chairman of the Board,
President, Chief Executive
Officer and Director
Dated: February 13, 1998 By: /s/ Richard A. Asta
----------------------------
Richard A. Asta
Executive Vice President of
Finance and Chief Financial
Officer
Dated: February 13, 1998 By: /s/ John Adornetto
----------------------------
John Adornetto
Vice President/Corporate
Controller and Chief
Accounting Officer
<PAGE>
SIGNATURES
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.
DIXON TICONDEROGA COMPANY
Dated: February 13, 1998 By:
----------------------------
Gino N. Pala
Chairman of the Board,
President, Chief Executive
Officer and Director
Dated: February 13, 1998 By:
----------------------------
Richard A. Asta
Executive Vice President of
Finance and Chief Financial
Officer
Dated: February 13, 1998 By:
----------------------------
John Adornetto
Vice President/Corporate
Controller and Chief
Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Balance Sheets, the Consolidated Statement of Operations and the
Consolidated Statement of Cash Flows, and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-END> DEC-31-1997
<CASH> 3,389,046
<SECURITIES> 0
<RECEIVABLES> 22,878,997
<ALLOWANCES> 1,566,176
<INVENTORY> 37,870,540
<CURRENT-ASSETS> 66,174,451
<PP&E> 38,569,594
<DEPRECIATION> 20,094,330
<TOTAL-ASSETS> 87,463,133
<CURRENT-LIABILITIES> 40,817,595
<BONDS> 0
<COMMON> 3,605,370
0
0
<OTHER-SE> 16,467,904
<TOTAL-LIABILITY-AND-EQUITY> 87,463,133
<SALES> 23,796,616
<TOTAL-REVENUES> 23,796,616
<CGS> 15,318,844
<TOTAL-COSTS> 15,318,844
<OTHER-EXPENSES> 7,189,793
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 790,762
<INCOME-PRETAX> 497,217
<INCOME-TAX> 73,822
<INCOME-CONTINUING> 305,313
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 305,313
<EPS-PRIMARY> .09
<EPS-DILUTED> .08
</TABLE>
