<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
( X ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 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 No. 0-9220
METATEC CORPORATION
(Exact name of Registrant as specified in its charter)
FLORIDA 59-1698890
(State of Incorporation) (IRS Employer Identification No.)
7001 Metatec Boulevard
Dublin, Ohio 43017
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code: (614) 761-2000
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, and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
Number of Common Shares outstanding as of November 6, 1998: 6,071,738
1 of 13
<PAGE> 2
METATEC CORPORATION
INDEX PAGE
----- ----
Part I : Financial Information
Item 1 - Financial Statements
Condensed Consolidated Balance Sheets as of September 30,
1998 (unaudited) and December 31, 1997 3
Condensed Consolidated Statements of Earnings
for the three months ended September 30, 1998
and 1997 (unaudited) 4
Condensed Consolidated Statements of Earnings
for the nine months ended September 30, 1998
and 1997 (unaudited) 5
Condensed Consolidated Statement of Shareholders'
Equity for the nine months ended
September 30, 1998 (unaudited) 6
Condensed Consolidated Statements of Cash Flows
for the nine months ended September 30,
1998 and 1997 (unaudited) 7
Notes to Condensed Consolidated Financial
Statements (unaudited) 8
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations 9-12
Item 3 - Quantitative and Qualitative Disclosures about
Market Risk 12
Part II: Other Information
Items 1-6 13
Signatures 13
2 of 13
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
METATEC CORPORATION (Unaudited)
CONDENSED CONSOLIDATED BALANCE SHEETS September 30, December 31,
1998 1997
- -------------------------------------------------------------------------- ------------- ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 428,324 $ 1,381,057
Accounts receivable, net of allowance for doubtful accounts
of $386,000 and $301,000 21,004,106 7,215,178
Inventory 3,389,731 1,155,519
Prepaid expenses 668,224 362,801
Current portion of long-term note receivable 14,087 364,087
Deferred income taxes 417,000 327,000
------------ -----------
Total current assets 25,921,472 10,805,642
Long-term note receivable, less current portion 77,273 186,562
Property, plant and equipment - net 53,859,878 38,629,006
Goodwill - net 20,868,916 3,250,683
------------ -----------
TOTAL ASSETS $100,727,539 $52,871,893
============ ===========
LIABILITIES & SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 8,038,192 $ 2,058,587
Accrued royalties 1,832,821 1,109,257
Accrued personal property taxes 710,418 809,399
Other accrued expenses 1,273,775 814,569
Accrued payroll 1,478,527 567,315
Accrued income taxes 109,141 249,747
Unearned income 32,415 73,778
Current maturities of long-term debt and capital lease obligations 6,420,536 101,778
------------ -----------
Total current liabilities 19,895,825 5,784,430
Long-term debt and capital lease obligations, less current maturities 38,025,067 4,578,410
Deferred income taxes 1,105,000 1,315,000
Other long-term liabilities 31,971 --
------------ -----------
Total liabilities 59,057,863 11,677,840
------------ -----------
Shareholders' equity:
Common stock, $.10 par value; authorized 10,083,500 shares;
issued 1998 - 7,148,479 shares; 1997 - 7,108,479 714,848 710,848
Additional paid-in capital 34,222,828 34,102,325
Foreign currency translation adjustments 979 --
Retained earnings 12,616,056 11,382,777
Treasury stock, at cost; 1998 - 1,081,741 shares; 1997 - 912,755 shares (5,885,035) (5,001,897)
------------ -----------
Total shareholders' equity 41,669,676 41,194,053
------------ -----------
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $100,727,539 $52,871,893
============ ===========
</TABLE>
Page 3 of 13
<PAGE> 4
METATEC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended September 30,
--------------------------------
1998 1997
- --------------------------------------------- ----------- -----------
<S> <C> <C>
NET SALES $18,981,471 $11,890,865
Cost of sales 13,491,223 8,488,793
----------- -----------
Gross profit 5,490,248 3,402,072
Selling, general and administrative expenses 4,701,184 3,291,893
Non-recurring expenses 330,917 0
----------- -----------
OPERATING EARNINGS 458,147 110,179
Other income and (expense):
Investment income 8,222 12,925
Other - net 108,600 67,344
Interest expense (256,435) (18,213)
----------- -----------
EARNINGS BEFORE INCOME TAXES 318,534 172,235
Income taxes 139,000 120,500
----------- -----------
NET EARNINGS $ 179,534 51,735
=========== ===========
NET EARNINGS PER COMMON SHARE
Basic $ 0.03 $ 0.01
=========== ===========
Diluted $ 0.03 $ 0.01
=========== ===========
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
Basic 6,053,315 6,773,821
=========== ===========
Diluted 6,064,334 6,773,821
=========== ===========
</TABLE>
See notes to condensed consolidated financial statements.
Page 4 of 13
<PAGE> 5
METATEC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
-------------------------------
1998 1997
- --------------------------------------------- ----------- -----------
<S> <C> <C>
NET SALES $47,783,587 $35,577,371
Cost of sales 32,519,761 24,557,702
----------- -----------
Gross profit 15,263,826 11,019,669
Selling, general and administrative expenses 12,586,587 10,371,528
Non-recurring expenses 330,917 206,000
----------- -----------
OPERATING EARNINGS 2,346,322 442,141
Other income and (expense):
Investment income 33,202 36,237
Other - net 257,957 23,725
Interest expense (395,202) (29,852)
----------- -----------
EARNINGS BEFORE INCOME TAXES 2,242,279 472,251
Income taxes 1,009,000 257,000
----------- -----------
NET EARNINGS $ 1,233,279 $ 215,251
=========== ===========
NET EARNINGS PER COMMON SHARE
Basic $ 0.20 $ 0.03
=========== ===========
Diluted $ 0.20 $ 0.03
=========== ===========
WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING
Basic 6,054,444 7,128,270
=========== ===========
Diluted 6,095,028 7,225,561
=========== ===========
</TABLE>
See notes to condensed consolidated financial statements.
Page 5 of 13
<PAGE> 6
METATEC CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY (UNAUDITED)
<TABLE>
<CAPTION>
Additional
Common Paid-in Retained Foreign Currency Treasury
Stock Capital Earnings Translation Adj Stock Total
- ---------------------------------------- -------- ----------- ----------- ---------------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
BALANCE AT DECEMBER 31, 1997 $710,848 $34,102,325 $11,382,777 $ $(5,001,897) $41,194,053
Net earnings 1,233,279 1,233,279
Stock options exercised 4,000 120,503 124,503
Treasury shares acquired (883,138) (883,138)
Foreign currency translation adjustments 979 979
-------- ----------- ----------- ---- ----------- -----------
BALANCE AT SEPTEMBER 30, 1998 $714,848 $34,222,828 $12,616,056 $979 $(5,885,035) $41,669,676
======== =========== =========== ==== =========== ===========
</TABLE>
See notes to condensed consolidated financial statements.
Page 6 of 13
<PAGE> 7
METATEC CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
For the nine months ended September 30, 1998 1997
- --------------------------------------------------------------- ------------ -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 1,233,279 $ 215,251
Adjustments to reconcile net earnings to net cash provided
by operating activities:
Depreciation and amortization 6,671,749 5,869,454
Net loss on sales of property, plant and equipment 70,170 49,191
Changes in assets and liabilities:
Accounts receivable (2,862,897) 697,238
Inventory 169,044 24,465
Prepaid expenses and other assets (395,418) 114,781
Accounts payable and accrued expenses 6,291,932 450,423
Unearned income (41,363) (90,114)
------------ -----------
Net cash provided by operating activities 11,136,496 7,330,689
------------ -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Decrease in long-term note receivable 459,289 (341,294)
Purchase of property, plant and equipment (9,442,050) (8,012,214)
Proceeds from the sales of property, plant and equipment 18,308 80,734
Net cash used for acquisition (42,132,532) 0
------------ -----------
Net cash used in investing activities (51,096,985) (8,272,774)
------------ -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in long-term debt 43,829,287 1,928,576
Payment of long-term debt and capital lease obligations (4,063,875) (85,974)
Stock options exercised 124,503 123,504
Treasury stock acquired (883,138) (3,080,724)
Stock awards for employees 0 26,975
------------ -----------
Net cash used in financing activities 39,006,777 (1,087,643)
------------ -----------
Effect of exchange rate on cash 979 0
Decrease in cash and cash equivalents (952,733) (2,029,728)
Cash and cash equivalents at beginning of period 1,381,057 2,214,755
------------ -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 428,324 $ 185,027
============ ===========
SUPPLEMENTAL CASH FLOW DISCLOSURES:
Interest paid $ 219,060 $ 24,736
============ ===========
Income taxes paid $ 1,548,607 $ 121,100
============ ===========
Assets purchased for the assumption of a liability $ 1,731,177 $ 147,480
============ ===========
</TABLE>
See notes to condensed consolidated financial statements.
Page 7 of 13
<PAGE> 8
METATEC CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. Basis of presentation - The consolidated balance sheet as of September 30,
1998, the consolidated statements of earnings for the three and nine months
ended September 30, 1998 and 1997, the consolidated statement of shareholders'
equity for the nine months ended September 30, 1998, and the consolidated
statements of cash flows for the nine month periods then ended have been
prepared by the Company, without audit. In the opinion of management, all
adjustments, which consist solely of normal recurring adjustments, necessary to
present fairly, in accordance with generally accepted accounting principles, the
financial position, results of operations and changes in cash flows for all
periods presented have been made.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. These consolidated financial statements should
be read in conjunction with the consolidated financial statements and notes
thereto included in the Company's December 31, 1997 annual report on Form 10-K.
The results of operations for the period ended September 30, 1998 are not
necessarily indicative of the results for the full year.
2. Property, Plant and Equipment Commitments - The Company has commitments under
contracts for the purchase of property, plant, and equipment. Portions of such
contracts not completed as of September 30, 1998 are not reflected in the
consolidated financial statements. The unrecorded commitments amounted to
approximately $2,829,487 at September 30, 1998. This amount represents
manufacturing equipment on order. The Company also has commitments under
contracts of approximately $7,000,000 for a 151,000 square foot warehouse.
3. Recently Issued Accounting Standard - In June 1997, the FASB issued Statement
of Financial Accounting Standards No. 130 ("SFAS 130") "Reporting Comprehensive
Income," which is effective for periods beginning after December 15, 1997. This
new statement defines comprehensive income as "all changes in equity during a
period, with the exception of stock issuances and dividends". Under SFAS 130,
comprehensive income for September 30, 1998 is $1,053,745 and $163,517 for the
nine months ended September 30, 1997.
In June 1997, the FASB also issued Statement of Financial Accounting Standards
No. 131 ("SFAS 131"), "Disclosures about Segments of an Enterprise and Related
Information", which will require adoption no later than December 31, 1998. SFAS
131 requires companies to report financial and descriptive information about its
reportable operating segments. It also establishes standards for related
disclosures about products and services, geographic areas, and major customers.
The Company is currently evalutating the effect this pronouncement will have on
the financial statements.
8 of 13
<PAGE> 9
METATEC CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RECENT ACQUISITION DEVELOPMENTS
On September 11, 1998, Metatec Corporation (the "Company" or "Metatec")
purchased the CD-ROM services business assets of Imation Corporation ("Imation")
for $39.8 million.
The asset purchase included Imation's plant operations in Fremont, California,
Breda, The Netherlands, and Menomonie, Wisconsin. The Menomonie plant operations
will be transferred to Metatec's Dublin, Ohio, manufacturing plant by the end of
the fourth quarter of 1998 after completion of a transitional operations period
in Menomonie. A client services center providing customer and technical support
will be maintained in Menomonie.
The purchase price for the Imation assets was $39.8 million, which price is
subject to a post-closing adjustment based upon the closing date working capital
statement related to working capital assets transferred by Imation. The Company
financed the asset purchase through a $30.0 million term loan facility and a
portion of a $25.0 million revolving loan facility. These credit facilities were
obtained through a participation arrangement between The Huntington National
Bank and Bank One, NA. See "Liquidity and Capital Resources" for a further
discussion of these credit facilities.
RESULTS OF OPERATIONS
Net sales for the three months ended September 30, 1998 were $18,981,000, an
increase of $7,091,000, or 60% over the same period of the prior year. This
increase resulted from the Manufacturing Services Group, which includes CD-ROM,
DVD, and Radio Syndication manufacturing, increasing $7,456,000 to $18,976,000
for the three months ended September 30, 1998, or 65% over the same period of
the prior year. Net sales for the Company's Access Services Group were $370,000
for the three months ended September 30, 1997. Because the Company exited this
business segment during 1997, there were no sales for this segment for the three
months ended September 30, 1998. The net sales increase was primarily as a
result of a continued growing CD-ROM manufacturing market which resulted in an
increase in volume. The net sales increase for the three months ended September
30, 1998 also included 19 days of revenues, or $3,883,000, from the Imation
CD-ROM services business acquired September 11, 1998. The Company continued its
focus on the business and information services CD-ROM and DVD market.
Net sales for the nine months ended September 30, 1998 were $47,784,000, an
increase of $12,206,000, or 34% over the same period of the prior year. This
increase resulted from the Manufacturing Services Group, which includes CD-ROM,
DVD, and Radio Syndication manufacturing, increasing $13,404,000 to $47,763,000
for the nine months ended September 30, 1998, or 39% over the same period of the
prior year. Net sales for the Company's Access Services Group were $1,218,000
for the nine months ended September 30, 1997. Because the Company exited this
business segment during 1997, there were no sales for this segment for the nine
months ended September 30, 1998. The net sales increase was primarily as a
result of a continued growing CD-ROM manufacturing market which resulted in an
increase in volume. Net sales increase for the nine months ended September 30,
1998 also included 19 days of revenues, or $3,883,000 from the Imation CD-ROM
services business acquired September 11, 1998. The Company continued its focus
on the business and information services CD-ROM and DVD market.
Page 9 of 13
<PAGE> 10
Gross profit was 29% of net sales for the three months ended September 30, 1998
as compared to 29% of net sales for the same period of the prior year. Gross
profit was 32% of net sales for the nine months ended September 30, 1998 as
compared to 31% of net sales for the same period of the prior year. Gross profit
for the nine months ended September 30, 1998 also reflected a $372,000 one-time
royalty credit to record an agreement reached with a disc technology licensor.
Selling, general and administrative ("SG&A") expenses were $4,701,000, or 25% of
net sales, for the three months ended September 30, 1998 as compared to
$3,292,000, or 28% of net sales, for same period of the prior year. SG&A
expenses were $12,587,000, or 26% of net sales, for the nine months ended
September 30, 1998 as compared to $10,372,000, or 29% of net sales, for same
period of the prior year. The improvements in SG&A expenses as a percentage of
net sales reflect the economies of scale associated with the Company's revenue
growth.
The three and nine months ended September 30, 1998 reflected non-recurring
expenses of $331,000, related to the acquisition and integration of Imation's
CD-ROM services business assets. The nine months ended September 30, 1997
included a restructuring charge of $206,000 related to continuing operations.
This charge related to a reorganization and downsizing of the Access Services
Group.
Investment income was $8,000 and $13,000 for the three month periods ended
September 30, 1998 and 1997, respectively. Investment income was $33,000 and
$36,000 for the nine month periods ended September 30, 1998 and 1997,
respectively.
Interest expense for the three months ended September 30, 1998 was $256,000 as
compared to $18,000 for the same period of the prior year. Interest expense for
the nine months ended September 30, 1998 was $395,000 as compared to $30,000 for
the same period of the prior year. The increase in interest expense was due to
borrowing related to the acquisition of Imation's CD-ROM services business
assets.
The income tax expense was $139,000 for the three months ended September 30,
1998, or an effective tax rate of 44%, as compared to a tax expense of $121,000
for the same period of the prior year, or an effective tax rate of 70%. The
income tax expense was $1,009,000 for the nine months ended September 30, 1998,
as compared to a tax expense of $257,000 for the same period of the prior year.
Net earnings for the three months ended September 30, 1998 were $180,000, or net
earnings per common share of $.03, as compared to net earnings in the same
period of the prior year of $52,000, or net earnings per common share of $.01.
Net earnings for the nine months ended September 30, 1998 were $1,233,000, or
net earnings per common share of $.20, as compared to net earnings in the same
period of the prior year of $215,000, or net earnings per common share of $.03.
The net earnings increase was primarily a result of improved profit margins
because of exiting the Access Services Group business segment during 1997,
strong revenue growth in the core Manufacturing Services Group, the acquisition
of Imation's CD-ROM services business, and the $372,000 royalty credit utilized
during the nine months ended September 30, 1998.
FINANCIAL CONDITION - LIQUIDITY AND CAPITAL RESOURCES
The Company financed its business during the nine months ended September 30,
1998 through cash generated from operations and available cash balances and
through the use of debt. Cash flow from operating activities was $11,136,000 for
the nine months ended September 30, 1998, as compared to $7,331,000 for the nine
months ended September 30, 1997.
The Company, in the nine month period ended September 30, 1998, continued to
increase its manufacturing capacity over the 1997 level. The capacity increase
along with recurring capital needs
Page 10 of 13
<PAGE> 11
resulted in the purchase of $9,442,000 in property, plant and equipment during
the nine months ended September 30, 1998.
The Company has commitments under contracts for the purchase of manufacturing
equipment on order. The unrecorded equipment commitments amounted to
approximately $2,829,487 at September 30, 1998. The Company plans to finance the
purchase of this manufacturing equipment from funds available under the
Company's new $25,000,000 revolving loan facility, discussed below. The Company
also has commitments under contracts of approximately $7,000,000 for a 151,000
square foot warehouse. The Company began construction of the warehouse in
October 1998. The Company is currently financing the construction through cash
generated through operations and funds available under the Company's new
$25,000,000 revolving loan facility, discussed below. The Company is currently
negotiating a constuction loan for this warehouse, and is evaluating additional
long term financing options.
On September 11, 1998, the Company purchased the CD-ROM services business assets
of Imation for $39.8 million, which price is subject to a post-closing
adjustment based upon the closing date working capital statement related to
working capital assets transferred by Imation. See "Recent Acquisition
Developments." The Company financed this asset purchase through a $30,000,000
term loan facility and a portion of a $25,000,000 revolving loan facility,
discussed below.
The Company had cash and cash equivalents of $428,000 as of September 30, 1998.
Additionally, the Company has a $25,000,000 revolving line of credit available
to it, of which $11,000,000 was outstanding as of September 30, 1998.
The Huntington National Bank and Bank One, NA have provided a $30,000,000 term
loan facility and a $25,000,000 revolving loan facility to the Company (the
"Credit Facilities"). The following is a summary of the terms of the Credit
Facilities. The revolving loan facility is available for five years and replaced
the Company's prior $15,000,000 line of credit. The term loan facility is
payable over five years in quarterly principal payments which escalate over the
term of the loan. The term loan facility and a portion of the revolving loan
facility were used to finance the Imation asset purchase. The remaining portion
of the revolving loan facility is available for general corporate purposes.
Borrowings under the Credit Facilities bear interest, at the Company's option,
at either the federal funds rate plus 50 basis points or prime rate (whichever
of the two are higher) or the LIBOR rate plus a margin based upon the Company's
debt coverage ratio (which ranges from not less than 75 basis points to not more
than 150 basis points). The Credit Facilities are secured by a first lien on all
non-real estate business assets of the Company and a pledge of the stock of the
Company's subsidiaries. The Company is required to comply with certain financial
and other covenants.
Management believes that the current cash balances, plus the funds available
under its current credit facilities, plus cash generated from operations, should
provide sufficient capital to meet the current business needs of the Company.
YEAR 2000
The Year 2000 issue is the result of computer programs being written using two
digits rather than four to define the year. Any of the Company's computer
programs that have date-sensitive software may recognize a date using "00" as
the year 1900 rather than 2000. This could result in a system failure or
miscalculations causing disruptions of uncertain duration in operations
including, among other things, a temporary inability to process transactions, or
engage in similar normal business activities.
Page 11 of 13
<PAGE> 12
The Company created a task force during 1997 to address the Year 2000 issues. As
of December 31, 1997, all of the Company's in-house developed systems and
applications are Year 2000 compliant. The Company's task force is working with
third party vendors to verify that they are also Year 2000 compliant, and
currently believes that all issues will be resolved. The Company currently
believes that all systems will be Year 2000 compliant by December 31, 1998.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
Except for the historical information in this report, this report includes
forward-looking statements that involve risks and uncertainties, including, but
not limited to, economic and competitive uncertanties affecting the Company's
operations, markets, products, prices, technological changes, and manufacturing
efficiencies. Certain factors that might cause such a difference include, among
others, the Company's product concentration, competition, pricing, technological
change, dependence on key personnel, and single site manufacturing facility.
These and other risk factors are discussed from time to time in the Company's
Security and Exchange Commission filings, including the Company's Form 10-K for
the year ended December 31, 1997. The Company's actual results could differ
materially from those set forth in the forward-looking statements.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK. Disclosure
not currently required.
Page 12 of 13
<PAGE> 13
PART II - OTHER INFORMATION
---------------------------
Items 1-5. Inapplicable.
-------------
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits
The exhibit index for this report begins following the signature page.
(b) The Company filed a Form 8-K on July 7, 1998, under Item 5 to disclose
the execution of a letter of intent for the Company's purchase of Imation's
CD-ROM services business assets.
The Company filed a Form 8-K on September 25, 1998, under Item 2 to disclose the
completion of the Company's purchase of Imation's CD-ROM services business
assets.
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.
Metatec Corporation
/s/ Julia A. Pollner
BY: Julia A. Pollner
Date: November 6, 1998 Vice President, Finance
and Treasurer
(authorized signatory-
principal financial and
accounting officer)
13 of 13
<PAGE> 14
Form 10-Q
Exhibit Index
Exhibit Number Exhibit Description Page Number
- -------------- ------------------- -----------
27 Financial Data Schedule --
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 428,324
<SECURITIES> 0
<RECEIVABLES> 21,390,106
<ALLOWANCES> 386,000
<INVENTORY> 3,389,731
<CURRENT-ASSETS> 25,921,472
<PP&E> 79,914,974
<DEPRECIATION> (26,055,096)
<TOTAL-ASSETS> 100,727,539
<CURRENT-LIABILITIES> 19,895,825
<BONDS> 39,162,038
0
0
<COMMON> 714,848
<OTHER-SE> 40,954,828
<TOTAL-LIABILITY-AND-EQUITY> 100,727,539
<SALES> 47,783,587
<TOTAL-REVENUES> 47,783,587
<CGS> 32,519,761
<TOTAL-COSTS> 45,437,265
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 155,000
<INTEREST-EXPENSE> 395,202
<INCOME-PRETAX> 2,242,279
<INCOME-TAX> 1,009,000
<INCOME-CONTINUING> 1,233,279
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,233,279
<EPS-PRIMARY> 0.20
<EPS-DILUTED> 0.20
</TABLE>
