UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
--- ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1997
OR
--- TRANSITION REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
FOR THE TRANSITION PERIOD FROM __________________ TO _______________.
COMMISSION FILE NUMBER 0-9385
BULL RUN CORPORATION
(Exact name of registrant as specified in its charter)
GEORGIA 91-1117599
(State of incorporation (I.R.S. Employer
or organization) Identification No.)
4370 PEACHTREE ROAD, N.E., ATLANTA, GA 30319
(Address of principal executive offices) (Zip Code)
(404) 266-8333
(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 latest practicable date: 21,270,217 shares of Common
Stock, par value $.01 per share, were outstanding as of July 31, 1997.
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
BULL RUN CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
June 30, December 31,
1997 1996
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents............................................ $ 319,458 $ 81,291
Accounts receivable.................................................. 4,133,831 4,074,357
Inventories.......................................................... 3,363,902 3,315,093
Other................................................................ 466,164 197,046
----------- -----------
Total current assets............................................ 8,283,355 7,667,787
Property and equipment, net............................................. 2,140,111 2,250,616
Investment in affiliated companies...................................... 53,681,745 53,752,467
Goodwill................................................................ 3,739,704 3,890,298
Other assets............................................................ 256,564 290,201
----------- -----------
$ 68,101,479 $ 67,851,369
========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Note payable and current portion of long-term debt................... $ 1,143,750 $ 500,000
Accounts payable..................................................... 1,949,827 2,116,087
Accrued and other liabilities:
Employee compensation and related taxes........................... 281,832 541,788
Interest.......................................................... 614,788 307,570
Other............................................................. 234,534 212,784
----------- -----------
Total current liabilities....................................... 4,224,731 3,678,229
----------- -----------
Long-term debt.......................................................... 33,106,045 31,363,795
----------- -----------
Deferred income taxes................................................... 4,401,248 4,491,248
----------- -----------
Stockholders' equity:
Common stock ($.01 par value, authorized 100,000,000 shares; issued
22,570,727 shares as of June 30, 1997 and 22,324,727 shares
as of December 31, 1996)................................................ 225,707 223,247
Additional paid-in capital........................................... 20,790,186 20,541,537
Retained earnings.................................................... 8,541,732 8,990,642
Treasury stock, at cost (1,306,510 shares as of
June 30, 1997 and 580,500 shares as of
December 31, 1996)................................................ (3,188,170) (1,437,329)
----------- -----------
Total stockholders' equity..................................... 26,369,455 28,318,097
----------- -----------
$ 68,101,479 $ 67,851,369
=========== ===========
See accompanying notes to condensed consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BULL RUN CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
AND RETAINED EARNINGS
(UNAUDITED)
Three Months Ended Six Months Ended
June 30 June 30
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Revenue from printer operations..................... $ 5,101,973 $ 5,810,464 $ 10,566,717 $ 11,854,785
Cost of goods sold.................................. 3,788,542 4,151,990 7,725,059 8,421,391
--------- --------- --------- ---------
Gross profit...................................... 1,313,431 1,658,474 2,841,658 3,433,394
--------- --------- --------- ---------
Consulting fee income............................... 8,995 1,674 607,276 369,380
-------- --------- --------- ---------
Operating expenses:
Research and development.......................... 610,494 382,338 1,094,530 836,999
Selling, general and administrative............... 1,146,703 1,096,481 2,255,687 2,422,408
--------- --------- --------- ----------
1,757,197 1,478,819 3,350,217 3,259,407
--------- --------- --------- ----------
Income (loss) from operations....................... (434,771) 181,329 98,717 543,367
Other income (expense):
Equity in earnings (losses) of affiliated
companies....................................... 36,429 693,939 (148,025) 709,809
Interest and dividend income...................... 275,764 200,245 551,081 393,787
Interest expense.................................. (658,292) (512,166) (1,249,459) (989,657)
-------- -------- ---------- --------
Income (loss) before income taxes and cumulative
effect of accounting change....................... (780,870) 563,347 (747,686) 657,306
Income tax benefit (provision)...................... 312,050 (270,453) 298,776 (315,553)
--------- --------- --------- ---------
Income (loss) before cumulative effect of
accounting change................................. (468,820) 292,894 (448,910) 341,753
Cumulative effect of accounting change recognized
by affiliate (net of $141,280 tax benefit)........ (274,248)
---------- --------- ---------- ---------
Net income (loss)................................... (468,820) 292,894 (448,910) 67,505
Retained earnings, beginning of period.............. 9,010,552 3,457,701 8,990,642 3,683,090
--------- --------- ---------- ---------
Retained earnings, end of period.................... $ 8,541,732 $ 3,750,595 $ 8,541,732 $ 3,750,595
========= ========= ========== =========
Earnings (loss) per share:
Income (loss) before cumulative effect of
accounting change............................... $ (.02) $ .01 $ (.02) $ .01
Cumulative effect of accounting change............ (.01)
----- ---- ---- ----
Net income (loss)................................. $ (.02) $ .01 $ (.02) $ .00
==== ==== ==== ====
Weighted average number of common
shares outstanding................................ 22,018,459 23,083,978 22,138,718 23,099,180
See accompanying notes to condensed consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
BULL RUN CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Six Months Ended
June 30
1997 1996
<S> <C> <C>
Cash flows from operating activities:
Net income (loss)...................................................... $ (448,910) $ 67,505
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Cumulative effect of accounting change............................. 415,528
Depreciation and amortization...................................... 478,980 496,970
Equity in (earnings) losses of affiliated companies................ 148,025 (709,809)
Accrued preferred dividend income.................................. (150,000)
Change in operating assets and liabilities:
Accounts receivable............................................. (59,474) 150,294
Inventories..................................................... (48,809) 290,628
Other current assets............................................ (50,665) 2,558
Accounts payable and accrued expenses........................... (315,701) (245,065)
Deferred income taxes........................................... (90,000) 114,720
----------- -----------
Net cash provided by (used in) operating activities................ (536,554) 583,329
----------- -----------
Cash flows from investing activities:
Capital expenditures................................................... (184,243) (199,622)
Investment in affiliated companies..................................... (483,182)
Note purchased from affiliated company................................. (10,000,000)
Dividends received from affiliated company............................. 72,696 24,832
----------- -----------
Net cash used in investing activities.............................. (111,547) (10,657,972)
----------- -----------
Cash flows from financing activities:
Borrowings on revolving lines of credit ............................... 7,236,000 5,798,195
Borrowing on note payable.............................................. 500,000
Repayments on revolving lines of credit................................ (5,350,000) (5,268,000)
Proceeds from long-term debt........................................... 10,000,000
Loan commitment fee.................................................... (50,000)
Repurchase of common stock............................................. (1,750,841) (265,484)
Exercise of incentive stock options.................................... 251,109 26,251
---------- -----------
Net cash provided by financing activities........................... 886,268 10,240,962
---------- -----------
Net increase in cash and cash equivalents.............................. 238,167 166,319
Cash and cash equivalents, beginning of period......................... 81,291 145,867
---------- -----------
Cash and cash equivalents, end of period............................... $ 319,458 $ 312,186
========== ===========
Supplemental cash flow disclosures:
Interest paid....................................................... $ 943,311 $ 653,293
Income taxes paid................................................... 9,677 566,650
See accompanying notes to condensed consolidated financial statements.
</TABLE>
<PAGE>
BULL RUN CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. In management's opinion, the accompanying unaudited condensed consolidated
financial statements reflect all adjustments (consisting solely of normal,
recurring adjustments) necessary to present fairly the financial position and
results of operations for the interim periods reported. These condensed
consolidated financial statements should be read in conjunction with the
consolidated financial statements contained in the Annual Report on Form 10-KSB
of Bull Run Corporation for the year ended December 31, 1996.
2. The accompanying condensed consolidated financial statements include the
accounts of Bull Run Corporation and its wholly-owned subsidiary, Datasouth
Computer Corporation ("Datasouth", and collectively, unless the context
otherwise requires, the "Company"), after elimination of intercompany accounts
and transactions.
3. The Company accounts for its investments in Gray Communications Systems, Inc.
("Gray"), Host Communications, Inc. ("HCI") and Capital Sports Properties, Inc.
("CSP") using the equity method. The excess of the Company's investments in
Gray, HCI and CSP over the underlying equity thereof is being amortized over
forty years, with such amortization (totaling $305,000 and $214,000 in the six
months ended June 30, 1997 and 1996, respectively) reported as a reduction in
the Company's equity in earnings (losses) of affiliated companies.
The Company provides consulting services to Gray from time to time in
connection with Gray's acquisitions and acquisition financing. Income on a
portion of such fees is deferred and recognized over forty years as a result of
the Company's 15.3% equity investment position in Gray as of June 30, 1997 (with
such position representing a 24.7% voting interest in Gray). Gray is a Southeast
United States communications company located in Albany, Georgia which operates
eight television stations, three daily newspapers, two advertising weekly
shoppers, satellite uplink and production businesses, and a communications and
paging business.
The Company's direct common equity ownership in HCI, combined with the
Company's indirect common equity ownership in HCI through its investment in CSP,
was 29.7% as of June 30, 1997. Additionally, the Company owns indirectly,
through CSP, 51.5% of HCI's 8% series B preferred stock having a liquidation
value of $5 million as of June 30, 1997. HCI, based in Lexington, Kentucky, and
its 33.8% affiliate, Universal Sports America, Inc. ("USA"), provide media and
marketing services to universities, athletic conferences and various
associations representing collegiate sports and, in addition, market and operate
amateur participatory sporting events.
The Company recognizes its equity in earnings of HCI on a six month lag
basis, in order to align HCI's fiscal year ending June 30 with the Company's
fiscal year. Effective July 1, 1995 (the first day of HCI's 1996 fiscal year),
HCI adopted a new accounting policy for the recognition of corporate sponsor
license fee revenue and guaranteed rights fee expenses. As a result of such
adoption, HCI recognized a $4.6 million charge against its first quarter
earnings, representing the after-tax cumulative effect of the accounting change.
The Company reported 9.1% of such charge, or $415,000, less a $141,000 deferred
tax benefit, as a charge against its first quarter 1996 earnings.
<PAGE>
Aggregate operating results of affiliated companies (reflecting Gray and CSP
for the three months and six months ended June 30, 1997 and 1996, combined with
HCI for the three months and six months ended December 31, 1996 and 1995) were
as follows:
Three Months Ended Three Months Ended
June 30, 1997 June 30, 1996
------------------ ------------------
Operating revenue $ 34,552,000 $ 26,242,000
Income from operations 6,999,000 5,654,000
Net income 1,107,000 6,053,000
Six Months Ended Six Months Ended
June 30, 1997 June 30, 1996
---------------- ----------------
Operating revenue $ 63,912,000 $ 52,564,000
Income from operations 11,374,000 7,343,000
Income before cumulative effect
of accounting change 830,000 5,642,000
Net income 830,000 1,083,000
4. Inventories associated with Datasouth's printer manufacturing operations
consisted of the following:
June 30, 1997 December 31, 1996
------------- -----------------
Raw materials $ 2,430,918 $ 2,356,086
Work-in-process 613,459 673,208
Finished goods 319,525 285,799
--------- ---------
$ 3,363,902 $ 3,315,093
========= =========
5. In connection with the repurchase by the Company of 500,000 shares of its
common stock in January 1997 for $1,250,000, the Company modified a revolving
bank credit facility to increase the available borrowings under such facility
from $2 million to $3.5 million. This facility, which has been extended through
May 1999, had an outstanding balance of $2,748,795 on June 30, 1997. The Company
also has a second bank credit facility for revolving loans of up to $3 million,
on which $2,501,000 was outstanding as of June 30, 1997. This second bank credit
facility expires in April 1999. In addition, the Company had an outstanding
demand note payable to a bank in the amount of $500,000 as of June 30, 1997.
6. The principal differences between the federal statutory tax rate of 34% and
the effective tax rates are nondeductible goodwill amortization and state income
taxes.
7. Earnings (loss) per share is based on the weighted average number of shares
of the Company's common stock and common stock equivalents (i.e., stock options)
outstanding during the period, computed in accordance with the treasury stock
method. In February 1997, the Financial Accounting Standards Board ("FASB")
issued Statement No. 128, "Earnings per Share", which is required to be adopted
on December 31, 1997. At that time, the Company will be required to change the
method currently used to compute earnings per share and to restate all prior
periods. Under the new requirements for calculating primary earnings per share,
the dilutive effect of stock options will be excluded. The impact is not
expected to result in any change in primary earnings per share as reported
herein for the three months or six months ended June 30, 1997 or 1996. Likewise,
the impact of Statement No. 128 on the calculations of fully diluted earnings
per share for these periods is not expected to result in any change.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Total revenue for the three months and six months ended June 30, 1997,
primarily from the printer manufacturing operations of Datasouth Computer
Corporation ("Datasouth"), a wholly-owned subsidiary of Bull Run Corporation
(collectively, with Datasouth, unless the context otherwise requires, the
"Company"), was $5,111,000 and $11,174,000, respectively, compared to $5,812,000
and $12,224,000 for the same respective periods in 1996. Gross profit from
printer operations of 25.7% and 26.9% for the three months and six months ended
June 30, 1997, respectively, decreased from 28.5% and 29.0% during the same
respective periods in 1996 primarily due to a different mix of products sold and
greater manufacturing overhead efficiencies gained in 1996 as a result of higher
unit volumes.
Printer sales to the Company's largest customer were approximately $1.7
million and $3.6 million for the three months and six months ended June 30,
1997, respectively, as compared to approximately $1.6 and $3.7 million for the
same respective periods in 1996. Short term revenue trends in the Company's
printer business fluctuate due to variable ordering patterns of large customers.
As anticipated, the Company's 1997 printer sales have been adversely affected by
a lack of new product revenue, which was a result of the concentration of
research and development resources on a project to design a new airline ticket
printer on behalf of the Company's largest customer. Initial shipments of the
new printer are expected by late 1997, although no meaningful revenue
contribution is expected from this product until 1998. The Company expects that
from its largest customer alone, the new printer will generate revenue in excess
of $25 million over a five year period.
The Company provides consulting services to Gray Communications Systems, Inc.
("Gray") in connection with Gray's acquisitions and acquisition financing. The
Company invoiced Gray for fees totaling $708,000 during the six months ended
June 30, 1997 in connection with Gray's completed and pending acquisitions, of
which $108,000 was deferred for future period revenue recognition. Income on
approximately 15.3% of such fees is deferred and recognized over forty years as
a result of the Company's equity investment position in Gray. Deferred
consulting fees were $373,000 as of June 30, 1997. Consulting fee income of
$607,000 and $369,000 was recognized during the six months ended June 30, 1997
and 1996, respectively. There can be no assurance that the Company will
recognize any consulting fees in the future.
Research and development expenses of $610,000 and $1,094,000 for the three
months and six months ended June 30, 1997, respectively, represented a $228,000
and $258,000 increase over the same respective periods last year, due to the
airline ticket printer project discussed above. Selling, general and
administrative expenses of $1,147,000 and $2,256,000 for the three months and
six months ended June 30, 1997, respectively, represented a 4.6% increase and a
6.9% decrease over the same respective periods in 1996. Operating expenses
included goodwill amortization of $75,000 for each of the three month periods
and $151,000 for each of the six month periods ended June 30, 1997 and 1996.
Equity in earnings (losses) of affiliated companies, totaling $36,000 and
$694,000 for the three months ended June 30, 1997 and 1996, respectively, and
$(148,000) and $710,000 for the six months ended June 30, 1997 and 1996,
respectively, included the Company's proportionate share of the earnings of
Gray, Host Communications, Inc. ("HCI") and Capital Sports Properties, Inc.
("CSP"), net of goodwill amortization totaling $152,000 for each quarter in 1997
and $107,000 for each quarter in 1996. In addition to the increased goodwill
amortization expense in 1997, the decrease in 1997 equity in earnings (losses)
compared to 1996 was primarily due to a significant gain in 1996 recognized by
an affiliate
<PAGE>
on the sale of certain operating assets.
Interest expense, net of interest earned on an 8% Subordinated Note due from
Gray in the principal amount of $10 million (the "8% Note") and dividends
accrued on the Company's investment in Gray's series A and series B preferred
stock, totaling $382,000 and $699,000 for the three months and six months ended
June 30, 1997, respectively, and $312,000 and $596,000 for the same respective
periods in 1996, was attributable to bank term loans and borrowings on the
Company's revolving credit facilities. The 8% Note was exchanged for 1,000
shares of Gray's series A preferred stock in September 1996.
The principal differences between the federal statutory tax rate of 34% and the
effective tax rates for each period are nondeductible goodwill amortization and
state income taxes.
LIQUIDITY AND CAPITAL RESOURCES
In January 1996, the Company purchased the 8% Note issued by Gray for $10.0
million. In September 1996, the Company exchanged the 8% Note for 1,000 shares
of Gray's series A preferred stock, which entitles the Company to cash dividends
at an annual rate of $800 per share. At that same time, the Company acquired,
for $5.0 million, 500 shares of Gray's series B preferred stock. Dividends on
such series B preferred stock are payable in cash at an annual rate of $600 per
share or, at Gray's option, payable in additional shares of series B preferred
stock. The Company anticipates that dividends on the series B preferred stock
will continue to be paid in additional shares of series B preferred stock for
the foreseeable future.
The Company modified its Loan Agreement in connection with the purchase of
the 8% Note and the acquisition of Gray's series B preferred stock in order to
increase its outstanding bank term loan borrowings by $10.0 million in January
1996 and an additional $5.0 million in September 1996. The bank term loans,
totaling $28.5 million as of June 30, 1997, are payable in monthly installments
of $250,000 beginning February 1999, and currently bear interest at the London
Interbank Offered Rate ("LIBOR"), plus 1.75% (7.56% for the 120-day period
including June 30, 1997).
Borrowings under a $3.5 million bank credit facility of $2,749,000 as of June
30, 1997 bear interest at the bank's prime rate (currently 8.5%). Subsequent to
June 30, 1997, this facility was extended through May 1999. The Company also has
a bank credit facility for revolving loans of up to $3.0 million through April
1999, bearing interest principally at LIBOR plus 2.25% (8.06% for the 90-day
period including June 30, 1997), on which $2,501,000 was outstanding as of June
30, 1997. In addition, the Company has a $500,000 demand note payable to a bank
outstanding as of June 30, 1997 bearing interest at the prime rate. There exists
no commitment to repay any amounts outstanding on the revolving credit
facilities during the next twelve months. An estimate of the aggregate amount
that the revolving credit facilities will be reduced during that period was
recorded as a short-term obligation as of June 30, 1997.
The Company's total working capital of $4.1 million as of June 30, 1997
approximated total working capital of $4.0 million as of December 31, 1996. In
April 1997, the Company announced that its Board of Directors had authorized a
new Stock Repurchase Program for the repurchase of up to 2,000,000 shares of its
common stock. Repurchases may be made from time to time in the open market or
directly from shareholders at prevailing market prices, and may be discontinued
at any time. During the three months and six months ended June 30, 1997, 165,000
and 726,010 shares were repurchased under this and a previous repurchase program
at a total cost of $345,000 and $1,751,000, respectively.
<PAGE>
Through June 30, 1997, the Company had repurchased a total of 1,306,510 shares
at an average cost of $2.44 per share since the initial repurchase program was
authorized in November 1994.
The Company anticipates that its current working capital, funds available
under its revolving credit facilities, quarterly cash dividends on the Gray
Series A preferred stock and cash flow from operations will be sufficient to
fund its debt service, working capital requirements and capital spending
requirements for at least the next twelve months. Any capital required for
potential additional business acquisitions would have to be funded by issuing
additional securities or by entering into other financial arrangements.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit 11 - Computation of Earnings Per Share
Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K
None
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.
BULL RUN CORPORATION
Date: August 14, 1997 By: /s/ FREDERICK J. ERICKSON
------------------------------------
Frederick J. Erickson
Vice President-Finance, Treasurer
and Assistant Secretary
(Mr. Erickson is the Chief Financial Officer and has been
duly authorized to sign on behalf of the registrant.)
<PAGE>
EXHIBIT 11
BULL RUN CORPORATION
COMPUTATION OF EARNINGS PER SHARE
(Dollars and shares in thousands, except per share amounts)
<TABLE>
<CAPTION>
SIX MONTHS ENDED THREE MONTHS ENDED
JUNE 30 JUNE 30
------------ ----------
1997 1996 1997 1996
---- ---- ---- ----
PRIMARY:
<S> <C> <C> <C> <C>
Income (loss) before cumulative effect
of accounting change $ (469) $ 293 $ (449) $ 342
Cumulative effect of accounting change (274)
---- --- ---- ----
Net income (loss) $ (469) $ 293 $ (449) $ 68
==== === ==== ====
Primary shares:
Weighted average number of shares
outstanding 21,245 22,101 21,305 22,101
Assuming exercise of options 773 998 834 998
------- ------- ------- -------
Weighted average number of shares
outstanding, as adjusted 22,018 23,084 22,139 23,099
====== ====== ====== ======
Primary earnings (loss) per share:
Income (loss) before cumulative effect
of accounting change $ (.02) $ .01 $ (.02) $ .01
Cumulative effect of accounting change (.01)
---- --- ---- ----
Net income (loss) $ (.02) $ .01 $ (.02) $ .00
==== === ==== ====
ASSUMING FULL DILUTION:
Income (loss) before cumulative effect
of accounting change $ (469) $ 293 $ (449) $ 342
Cumulative effect of accounting change (274)
---- --- ---- ----
Net income (loss) $ (469) $ 293 $ (449) $ 68
==== === ==== ====
Fully diluted shares:
Weighted average number of shares
outstanding 21,245 22,079 21,305 22,101
Assuming exercise of options 835 1,005 850 998
------- ------- ------- -------
Weighted average number of shares
outstanding, as adjusted 22,080 23,084 22,155 23,099
====== ====== ======= =======
Fully diluted earnings (loss) per share:
Income (loss) before cumulative effect
of accounting change $ (.02) $ .01 $ (.02) $ .01
Cumulative effect of accounting change (.01)
---- --- ---- ----
Net income (loss) $ (.02) $ .01 $ (.02) $ .00
==== === ==== ====
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 319,458
<SECURITIES> 0
<RECEIVABLES> 4,173,831
<ALLOWANCES> 40,000
<INVENTORY> 3,363,902
<CURRENT-ASSETS> 8,283,355
<PP&E> 3,829,613
<DEPRECIATION> 1,689,502
<TOTAL-ASSETS> 68,101,479
<CURRENT-LIABILITIES> 4,224,731
<BONDS> 33,106,045
0
0
<COMMON> 225,707
<OTHER-SE> 26,143,748
<TOTAL-LIABILITY-AND-EQUITY> 68,101,479
<SALES> 5,101,973
<TOTAL-REVENUES> 5,110,968
<CGS> 3,788,542
<TOTAL-COSTS> 3,788,542
<OTHER-EXPENSES> 610,494
<LOSS-PROVISION> 13,339
<INTEREST-EXPENSE> 658,292
<INCOME-PRETAX> (817,299)
<INCOME-TAX> (312,050)
<INCOME-CONTINUING> (468,820)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (468,820)
<EPS-PRIMARY> (.02)
<EPS-DILUTED> (.02)
</TABLE>
