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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended JUNE 30, 1996
------------------------------------------
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: 0-10355
COMMUNICATIONS SYSTEMS, INC.
...............................................................................
(Exact name of registrant as specified in its charter)
MINNESOTA 41-0957999
...............................................................................
(State or other jurisdiction of (Federal Employer
incorporation or organization) Identification No.)
213 South Main Street, Hector, MN 55342
...............................................................................
(Address of principal executive offices) (Zip Code)
(320) 848-6231
...............................................................................
Registrant's telephone number, including area code
...............................................................................
(Former name, address, and fiscal year, if changed since last report)
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 ___
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13, or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. YES ___ NO ___
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuers classes of
common stock, as of the latest practicable date.
CLASS Outstanding at July 31, 1996
Common Stock, par value 9,346,458
$.05 per share
Total Pages (11) Exhibit Index at (NO EXHIBITS)
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<PAGE>
COMMUNICATIONS SYSTEMS, INC. AND SUBSIDIARIES
INDEX
Page No.
Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets 3
Consolidated Statements of Income 4
Consolidated Statements of Stockholders' Equity 5
Consolidated Statements of Cash Flows 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
Part II. Other Information 11
2
<PAGE>
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION
COMMUNICATIONS SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(unaudited)
June 30 December 31
Assets: 1996 1995
____________ ____________
Current assets:
<S> <C> <C>
Cash $13,036,777 $12,198,455
Marketable securities 868,335 899,469
Receivables, net 12,323,056 10,931,382
Inventories - Note 2 18,612,946 19,522,963
Prepaid expenses 551,893 400,778
Deferred income taxes 1,409,000 1,188,000
____________ ____________
Total current assets 46,802,007 45,141,047
Property, plant and equipment 27,377,665 25,762,350
less accumulated depreciation (16,061,239) (14,847,042)
____________ ____________
Net property, plant and equipment 11,316,426 10,915,308
Other assets:
Investments in mortgage backed and other securities 4,899,126 5,398,316
Excess of cost over net assets acquired 3,415,606 839,229
Deferred income taxes 461,047 461,047
Other assets 370,217 532,285
____________ ____________
Total other assets 9,145,996 7,230,877
____________ ____________
Total Assets $67,264,429 $63,287,232
____________ ____________
____________ ____________
Liabilities and Stockholders' Equity:
Current liabilities:
Notes payable $92,675 $146,923
Accounts payable 3,504,429 4,104,349
Accrued expenses 2,808,800 2,296,996
Dividends payable 747,717 642,838
Income taxes payable 1,926,709 2,020,550
____________ ____________
Total current liabilities 9,080,330 9,211,656
Stockholders' Equity 58,184,099 54,075,576
____________ ____________
Total Liabilities and Stockholders' Equity $67,264,429 $63,287,232
____________ ____________
____________ ____________
See notes to consolidated financial statements.
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
COMMUNICATIONS SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(unaudited)
Three Months Ended March 31 Six Months Ended June 30
___________________________________ ____________________________________
1996 1995 1996 1995
____________ ____________ ____________ ____________
Revenues:
<S> <C> <C> <C> <C>
Sales $20,581,697 $21,866,017 $41,040,810 $46,671,964
Costs and expenses:
Cost of sales 15,959,764 17,003,442 31,176,575 35,760,644
Selling, general and
administrative expenses 3,273,913 2,149,999 6,137,463 5,166,773
____________ ____________ ____________ ____________
Total costs and expenses 19,233,677 19,153,441 37,314,038 40,927,417
Operating income 1,348,020 2,712,576 3,726,772 5,744,547
Other income and (expenses):
Investment income 181,221 216,353 328,597 521,063
Interest expense (5,627) (14,242) (12,080) (27,921)
____________ ____________ ____________ ____________
Other income, net 175,594 202,111 316,517 493,142
Income before income taxes 1,523,614 2,914,687 4,043,289 6,237,689
Income taxes (Note 3) 225,000 620,000 700,000 1,420,000
____________ ____________ ____________ ____________
Net income $1,298,614 $2,294,687 $3,343,289 $4,817,689
____________ ____________ ____________ ____________
____________ ____________ ____________ ____________
Net income per share $ .14 $ .25 $ .36 $ .53
____________ ____________ ____________ ____________
____________ ____________ ____________ ____________
Average common and common
equivalent shares outstanding 9,425,000 9,232,000 9,412,000 9,171,000
____________ ____________ ____________ ____________
____________ ____________ ____________ ____________
See notes to consolidated financial statements.
</TABLE>
4
<PAGE>
<TABLE>
<CAPTION>
COMMUNICATIONS SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
(unaudited)
Additional Cumulative
Common Stock Paid in Retained Advances Translation
Shares Amount Capital Earnings to ESOP Adjustment Tota
__________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C>
BALANCE at December 31, 1994 8,986,523 $449,326 $18,001,322 $27,519,954 ($72,000) ($332,161) $45,566,441
Net Income 9,084,153 9,084,153
Shareholder dividends (2,463,672) (2,463,672)
Issuance of common stock under
Employee Stock Option Plan 173,311 8,666 1,267,846 1,276,512
Tax benefit from nonqualified
employee stock options 243,000 243,000
Issuance of common stock under
Employee Stock Purchase Plan 23,567 1,178 193,957 195,135
Issuance of common stock to
Welsh Development Agency 20,142 1,007 219,325 220,332
Purchase of Communications Systems
Inc. common stock (20,142) (1,007) (219,325) (220,332)
Cumulative translation adjustment 102,007 102,007
Repayment of advances to ESOP 72,000 72,000
__________ ________ ___________ _____________ __________ ___________ _____________
BALANCE at December 31, 1995 9,183,401 459,170 19,706,125 34,140,435 0 (230,154) 54,075,576
Net Income 3,343,289 3,343,289
Shareholder dividends (1,399,292) (1,399,292)
Issuance of common stock under
Employee Stock Option Plan 50,381 2,519 449,652 452,171
Issuance of common stock to
acquire Automatic Tool and
Connector Co. 112,676 5,634 1,712,675 1,718,309
Cumulative translation adjustment (5,954) (5,954)
__________ ________ ___________ _____________ __________ ___________ _____________
BALANCE at June 30, 1996 9,346,458 $467,323 $21,868,452 $36,084,432 0 ($236,108) $58,184,099
__________ ________ ___________ _____________ __________ ___________ _____________
__________ ________ ___________ _____________ __________ ___________ _____________
See notes to consolidated financial statements.
</TABLE>
5
<PAGE>
<TABLE>
<CAPTION>
COMMUNICATIONS SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Six Months Ended June 30
_________________________________
1996 1995
____________ ____________
CASH FLOWS FROM OPERATING ACTIVITIES:
<S> <C> <C>
Net income $3,343,289 $4,817,689
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 1,502,722 1,275,066
Adjustment to marketable securities reserve 31,134 (120,922)
Changes in assets and liabilities:
Decrease in marketable securities 40,000
Increase in accounts receivable (896,895) (801,088)
Decrease (increase) in inventory 1,359,141 (131,123)
Decrease (increase) in prepaid expenses (138,557) 76,067
Increase in deferred taxes (221,000)
Decrease in accounts payable (1,345,504) (1,333,139)
Increase (decrease) in accrued expenses 517,031 (23,825)
Increase (decrease) in income taxes payable (93,733) (773,446)
____________ ____________
Net cash provided by (used in) operating activities 4,057,628 3,025,279
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (1,673,488) (2,431,295)
Decrease in mortgage backed and other investment securities 498,259 11,240
Decrease in other assets 162,185 133,393
Payment for purchase of Austin Taylor Communications, Ltd. (135,131)
Payment for purchase of Automatic Tool and Connector
Company, Inc., net of cash acquired (1,178,008)
____________ ____________
Net cash used in investing activities (2,326,183) (2,286,662)
CASH FLOWS FROM FINANCING ACTIVITIES:
Repayment of notes payable (53,637) (95,833)
Dividends paid (1,294,413) (1,080,641)
Proceeds from issuance of common stock 452,171 1,085,462
Purchases of Communications Systems, Inc. common stock (220,332)
____________ ____________
Net cash used in financing activities (895,879) (311,344)
____________ ____________
EFFECT OF FOREIGN EXCHANGE RATE CHANGES ON CASH 2,756 37,609
____________ ____________
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 838,322 464,882
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 12,198,455 8,829,776
____________ ____________
CASH AND CASH EQUIVALENTS AT END OF PERIOD $13,036,777 $9,294,658
____________ ____________
____________ ____________
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Income taxes paid $793,841 $2,193,520
Interest paid 12,080 27,921
See notes to consolidated financial statements.
</TABLE>
6
<PAGE>
COMMUNICATIONS SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - CONSOLIDATED FINANCIAL STATEMENTS
The balance sheet and statement of stockholders' equity as of June 30, 1996, the
statements of income for the three and six month periods ended June 30, 1996,
and 1995 and the statements of cash flows for the six month periods ended June
30, 1996 and 1995 have been prepared by the Company without audit. In the
opinion of management, all adjustments (which include only normal recurring
adjustments) necessary to present fairly the financial position, results of
operations, and cash flows at June 30, 1996 and 1995 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. It is suggested these condensed financial
statements be read in conjunction with the financial statements and notes
thereto included in the Company's December 31, 1995 Annual Report to
Shareholders. The results of operations for the periods ended June 30 are not
necessarily indicative of the operating results for the entire year.
NOTE 2 - INVENTORIES
Inventories summarized below are priced at the lower of first-in, first-out cost
or market:
<TABLE>
<CAPTION>
June 30 December 31
1996 1995
<S> <C> <C>
Finished Goods $5,130,893 $5,475,458
Raw Materials 13,482,053 14,047,505
------------ --------------
Total $18,612,946 $19,522,963
============ ==============
</TABLE>
NOTE 3 - INCOME TAXES
Income taxes are computed based upon the estimated effective rate applicable to
operating results for the full fiscal year. For the periods ended June 30, 1996
and 1995 income taxes do not bear a normal relationship to income before income
taxes, primarily because income from Puerto Rico operations are taxed at rates
lower than the U.S. rate.
NOTE 4 - NET INCOME PER COMMON SHARE
Net income per share is based on the weighted average number of common and
common equivalent shares outstanding during the periods. Common equivalent
shares reflect the dilutive effect of outstanding stock options. Primary and
fully diluted earnings per share are substantially the same.
NOTE 5 - ACQUISITION OF AUTOMATIC TOOL AND CONNECTOR CO., INC.
Effective January 4, 1996, the Company acquired Automatic Tool and Connector
Co., Inc., a Union, New Jersey based manufacturer of fiber optic connectors, in
exchange for $1,373,000 in cash and 112,676 shares of Communications Systems,
Inc. common stock. The acquisition was accounted for as a purchase and the
purchase price was allocated to the assets acquired. Excess of cost over net
assets acquired was $2,760,000, which is being amortized over ten years on a
straight line basis. Results of Automatic Tool, which were not material to the
Company's financial results, were included in Company operations beginning
January 4, 1996.
7
<PAGE>
COMMUNICATIONS SYSTEMS, INC. AND SUBSIDIARIES
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Six Months Ended June 30, 1996 Compared to
Six Months Ended June 30, 1995
Consolidated revenues decreased $5,631,000 or 12% from the 1995 period.
Telephone station apparatus revenue decreased $2,389,000 or 7%. Apparatus sales
to domestic (U.S. and Puerto Rico) customers decreased $35,000. The domestic
sales decrease was due to lower sales to the Big 8 telephone companies (the
seven Regional Bell Operating Companies and GTE) which fell $1,707,000 or 11%.
Reduced shipments to this market segment were attributed to customer inventory
overstocks and reduced construction activity in the first quarter of 1996. Sales
to electrical distributors and original equipment manufacturers decreased
$794,000 or 24%. Sales to retailers decreased $650,000 or 22%. Lower sales to
these segments were offset by increased sales to other customers (up 1,232,000
or 33%) and by sales of fiber optic connectors by Automatic Tool and Connector
Co.($2,081,000 in the first six months of 1996), which the Company acquired in
January, 1996.
Sales of telephone station apparatus to international customers decreased
$2,353,000 or 27%. Sales by Austin Taylor, the Company's United Kingdom based
subsidiary, decreased $1,957,000 or 27% due to the phase-out of certain products
previously sold to British Telecom. Shipments of new products intended to
replace this business have been delayed into the third and fourth quarters of
1996. U.S. export sales decreased $462,000 or 42%. Sales in Canada increased
$65,000 or 13%.
Contract manufacturing sales decreased $3,243,000 or 27%. Sales to Thermo-King,
which was the segment's principal customer, declined $3,236,000 or 62%, due to
Thermo-King's decision to move more of its manufacturing process to a plant it
owns in Puerto Rico. Sales to Thermo-King accounted for 22% of contract
manufacturing sales in the 1996 period compared to 43% of sales in the 1995
period. Sales of multi-function display units used by a major watercraft
manufacturer increased $207,000 or 9%. Sales of electronic fishing products
decreased $428,000 or 47%.
Gross margin as a percentage of apparatus sales was 29% compared to 27% in the
first half of 1995. Margin percentages improved in U.S. plants due to reduction
in manufacturing overheads, freight charges and payroll overtime premiums.
Margins earned on Austin Taylor products declined to 17% from 19% in the 1995
period due to increased raw material costs and unfavorable overhead absorption
caused by reduced production volume. Gross margin on contract manufacturing
sales, before inventory reserve adjustments, was 14% unchanged from the 1995
period. During the 1996 period, the Company established a $650,000 reserve
against slow-moving electronic fishing products inventory held by its contract
manufacturing business.
Selling, general and administrative expenses increased $971,000 or 19% from the
1995 period. The increase was due to selling and administrative expenses
associated with the newly acquired Automatic Tool and Connector Co. operations
and increased international sales expenses in the Company's telephone station
apparatus business.
Consolidated operating income decreased $2,018,000 or 35%. Net other income
decreased $177,000 from the 1995 period due to fluctuations in the value of the
Company's marketable securities portfolio. The Company's effective income tax
rate was 17% compared to 23% in the 1995 period. The Company's tax rate is lower
than the full U.S. rate due to tax exemptions and benefits received by the
Company's Puerto Rico operations. The Company's tax rate was higher in 1995 due
to limitations on the possessions tax credit the Company receives against U.S.
income taxes on the earnings of its Puerto Rico subsidiary. Net income decreased
$1,474,000, or 31%.
8
<PAGE>
COMMUNICATIONS SYSTEMS, INC. AND SUBSIDIARIES
Three Months Ended June 30, 1996 Compared to
Three Months Ended June 30, 1995
Consolidated revenues decreased $1,284,000 or 6% from the 1995 period. Telephone
station apparatus revenue decreased $160,000 or 1%. Apparatus sales to domestic
(U.S. and Puerto Rico) customers increased $1,448,000 or 12%. The domestic sales
increase was due to the acquisition of Automatic Tool and Connector Co., (which
added $1,001,000 to sales during the 1996 period) and sales to other customers
(principally distributors serving non-RBOC customers) which increased $1,077,000
or 57%.. Sales to the Big 8 telephone companies (the seven Regional Bell
Operating Companies and GTE) increased $97,000 or 1%. Sales to electrical
distributors and original equipment manufacturers decreased $452,000 or 29%.
Sales to retailers decreased $273,000 or 18%.
Sales of telephone station apparatus to international customers decreased
$1,608,000 or 35%. Sales by Austin Taylor, the Company's United Kingdom based
subsidiary, decreased $1,109,000 or 32% due to the phase-out of certain products
previously sold to British Telecom. U.S. export sales decreased $570,000 or 69%.
Sales in Canada increased $71,000 or 29%.
Contract manufacturing sales decreased $1,124,000 or 21%. Sales to Thermo-King,
which was the segment's principal customer, declined $994,000 or 56%, due to
Thermo-King's decision to move more of its manufacturing process to a plant it
owns in Puerto Rico. Sales to Thermo-King accounted for 19% of contract
manufacturing sales in the 1996 period compared to 34% of sales in the 1995
period. Sales of multi-function display units used by a major watercraft
manufacturer increased $12,000 or 1%. Sales of electronic fishing products
decreased $266,000 or 59%.
Gross margin as a percentage of apparatus sales was 28% compared to 24% in the
second quarter of 1995. Margin percentages improved in U.S. plants due to
reduction in manufacturing overheads, freight charges and payroll overtime
premiums. Margins earned on Austin Taylor products declined to 12% in the 1996
period due to increased raw material costs and unfavorable overhead absorption
caused by reduced production volume. Gross margin on contract manufacturing
sales, before inventory reserve adjustments, was 16% unchanged from the 1995
period. During the 1996 period, the Company established a $650,000 reserve
against slow-moving electronic fishing products inventory held by its contract
manufacturing business.
Selling, general and administrative expenses increased $1,126,000 or 52% from
the 1995 period. The increase was due to selling and administrative expenses
associated with the newly acquired Automatic Tool and Connector Co. operations
and increased international sales expenses in the Company's telephone station
apparatus business.
Consolidated operating income decreased $1,367,000 or 50%. Net other income
decreased $27,000 from the 1995 period due to fluctuations in the value of the
Company's marketable securities portfolio. The Company's effective income tax
rate was 15% compared to 21% in the 1995 period. The Company's tax rate is lower
than the full U.S. rate due to tax exemptions and benefits received by the
Company's Puerto Rico operations. The Company's tax rate was higher in 1995 due
to limitations on the possessions tax credit the Company receives against U.S.
income taxes on the earnings of its Puerto Rico subsidiary. Net income decreased
$998,000, or 43%.
9
<PAGE>
COMMUNICATIONS SYSTEMS, INC. AND SUBSIDIARIES
Liquidity and Capital Commitments
At June 30, 1996 the Company had approximately $13,037,000 in cash compared to
$12,198,000 at December 31, 1995. Working capital was $37,722,000 compared to
$35,929,000 at December 31, 1995. The Company's current ratio was 5.2 to 1,
compared to 4.9 to 1 at year end 1995.
Net cash provided by operating activities was $4,058,000 compared to $3,025,000
in the first half of 1995. The Company expects its operating cash flows for the
full year to approximate the results of 1995, which produced cash from
operations of $6,983,000. Cash was utilized during the period to pay current
liabilities, purchase new plant and equipment, pay dividends and acquire
Automatic Tool and Connector Co., Inc.
The Company's balance sheet remains strong, with stockholders' equity of
$58,184,000 and no long-term debt. The Company has available a $2,000,000 bank
line of credit. Management believes, based on the Company's current financial
position and projected future expenditures, that sufficient funds are available
to meet the Company's anticipated needs.
On August 5, 1996, the Company's Board of Directors authorized the purchase and
retirement, from time to time, of up to 500,000 shares of the Company's common
stock on the open market, or in private transactions consistent with overall
market and financial conditions. The Company's cash reserves will be utilized to
make the purchases. If all 500,000 shares are purchased and retired, it would
reduce the number of the Company's currently outstanding shares by 5%.
On January 4, 1996, the Company acquired Automatic Tool and Connector Co., Inc.
of Union, New Jersey, in exchange for $1,373,000 in cash and 112,676 shares of
common stock. Automatic Tool and Connector Co. (ATC) is a manufacturer of high
performance fiber optic connectors, interconnect devices and coaxial cable
assemblies for the telecommunications, medical electronics, computer and other
markets. The acquisition represents the Company's entrance into the market for
fiber optic connectors, which is the fastest growing segment in the
telecommunications connector market. ATC's sales for its 1995 fiscal year were
approximately $3,200,000.
This acquisition, as well as other acquisitions and dispositions the Company has
made over the past several years (including the 1992 acquisition of Austin
Taylor Communications, Ltd.), have served to expand the Company's product
offerings and customer base in both U.S. and international markets. The Company
is seeking to position itself in the marketplace as a growth oriented
manufacturer of telecommunications connecting devices. The Company is continuing
to search for acquisition candidates which fit the Company's target markets.
10
<PAGE>
PART II. OTHER INFORMATION
Items 1 - 3. Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of the Shareholders of the Registrant was held on May 14,
1996 in Minneapolis, MN. The total number of shares outstanding and entitled to
vote at the meeting was 9,311,210 of which 8,627,266 were present either in
person or by proxy. By a vote of 8,612,288 in favor, 14,978 abstaining,
shareholders reelected Board Members Edwin C. Freeman, Edward E. Strickland and
John C. Ortman to three year terms expiring at the 1999 Annual Meeting of
Shareholders.
The Board of Directors appointed Fredrick Green to fill the unexpired term of
Board Member C.A. Anderson, who passed away in February, 1996. Mr. Green's term
will expire at the 1997 Annual Meeting of Shareholders.
Other Board Members continuing in office are Paul J. Anderson and Wayne E.
Sampson (whose terms expire at the 1997 Annual Meeting of Shareholders) and
Curtis A. Sampson and Joseph W. Parris (whose terms expire at the 1998 Annual
Meeting of Shareholders).
Items 5 - 6. 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 thereto duly authorized.
Communications Systems, Inc.
By Paul N. Hanson
Paul N. Hanson
Vice President and
Chief Financial Officer
Date: August 14, 1996
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
</LEGEND>
<CIK> 0000022701
<NAME> COMMUNICATIONS SYSTEMS, INC.
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<EXCHANGE-RATE> 1
<CASH> 13,036,777
<SECURITIES> 868,335
<RECEIVABLES> 12,679,056
<ALLOWANCES> 356,000
<INVENTORY> 18,612,946
<CURRENT-ASSETS> 46,802,007
<PP&E> 27,377,665
<DEPRECIATION> 16,061,239
<TOTAL-ASSETS> 67,264,429
<CURRENT-LIABILITIES> 9,080,330
<BONDS> 0
0
0
<COMMON> 467,323
<OTHER-SE> 57,716,776
<TOTAL-LIABILITY-AND-EQUITY> 67,264,429
<SALES> 41,040,810
<TOTAL-REVENUES> 41,040,810
<CGS> 31,176,575
<TOTAL-COSTS> 31,176,575
<OTHER-EXPENSES> 6,137,463
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 12,080
<INCOME-PRETAX> 4,043,289
<INCOME-TAX> 700,000
<INCOME-CONTINUING> 3,343,289
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,343,289
<EPS-PRIMARY> 0.36
<EPS-DILUTED> 0.36
</TABLE>
