UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934
For the quarterly period ended September 30, 1998
Commission file number 1-6299
EMCEE Broadcast Products, Inc.
(Exact name of registrant as specified in its charter)
Delaware 13-1926296
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
Registrant's telephone number, including area code: 717-443-9575
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 practical date:
Common stock, $ .01-2/3 par value - 3,999,397 shares as of
November 4, 1998.
<PAGE> EMCEE BROADCAST PRODUCTS, INC. AND SUBSIDIARIES
I N D E X
PAGE(S)
PART I. FINANCIAL INFORMATION:
CONSOLIDATED BALANCE SHEETS
September 30, 1998 and March 31, 1998 3
CONSOLIDATED STATEMENTS OF INCOME
Six months and three months ended September 30, 1998 and 1997 4
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
Six months ended September 30, 1998 5
CONSOLIDATED STATEMENTS OF CASH FLOWS
Six months ended September 30, 1998 and 1997 6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 7
MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE
FINANCIAL CONDITION AND RESULTS OF OPERATIONS 8 - 11
PART II. OTHER INFORMATION:
SIGNATURES 12
NOTE: Any questions concerning this report should be addressed to
Mr. Allan J. Harding, Vice President-Finance.
<PAGE>
<TABLE>
<CAPTION> PART I. FINANCIAL INFORMATION
EMCEE BROADCAST PRODUCTS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
- SEPTEMBER 30, 1998 and MARCH 31, 1998 -
SEPT 30, 1998 MARCH 31,1998
Unaudited
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $1,336,858 $2,529,594
U. S. Treasury Bills 2,255,295 2,269,549
Accounts receivable, net of
allowance for doubtful accts
Sept-$60,000/March-$35,000 1,327,536 1,214,651
Inventories 3,708,094 3,438,599
Prepaid expenses 220,786 115,292
Deferred taxes 119,000 80,000
---------------------------------
TOTAL CURRENT ASSETS 8,967,569 9,647,685
----------------------------------
PROPERTY, PLANT & EQUIPMENT:
Land & land improvements 246,841 246,841
Building 617,670 618,686
Machinery & equipment 1,927,054 1,956,085
----------------------------------
2,791,565 2,821,612
Less accumulated depreciation 2,020,975 1,995,946
----------------------------------
NET PROPERTY, PLANT & EQUIPMENT 770,590 825,666
----------------------------------
OTHER ASSETS 290,663 211,450
----------------------------------
NOTE RECEIVABLE 500,000 500,000
Less deferred portion (500,000) (500,000)
----------------------------------
0 0
----------------------------------
TOTAL ASSETS $10,028,822 $10,684,801
LIABILITIES & SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $92,000 $117,000
Accounts payable 116,856 311,424
Accrued expenses 260,752 333,594
Deposits from customers 110,819 260,048
Accrued federal income taxes 0 61,857
----------------------------------
TOTAL CURRENT LIABILITIES 580,427 1,083,923
----------------------------------
LONG-TERM DEBT,net of current portion 724,269 746,888
----------------------------------
<PAGE>
SHAREHOLDERS' EQUITY:,
Common stock issued, $.01-2/3 par
authorized 9,000,000 shares 73,084 73,084
Additional paid-in capital 3,502,092 3,502,092
Retained earnings 6,984,075 6,927,987
---------------------------------
10,559,251 10,503,163
Less shares held in treasury at
cost:385,764 shares Sept '98;
320,764 shares Mar '98 1,835,125 1,649,173
---------------------------------
TOTAL SHAREHOLDERS' EQUITY 8,724,126 8,853,990
---------------------------------
TOTAL LIABILITIES &
SHAREHOLDERS' EQUITY $10,028,822 $10,684,801
=================================
<FN>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION> EMCEE BROADCAST PRODUCTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS AND SIX MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(Unaudited)
===================================================
THREE (3) MONTHS SIX (6) MONTHS
09/30/98 09/30/97 09/30/98 09/30/97
===================================================
<S> <C> <C> <C> <C>
NET SALES $4,364,794 $4,069,092 $2,166,029 $2,245,852
COST OF PRODUCTS SOLD 2,995,766 2,752,413 1,453,429 1,428,079
--------------------------------------------------------
GROSS PROFIT 1,369,028 1,316,679 712,600 817,773
--------------------------------------------------------
OPERATING EXPENSES:
Selling 621,880 773,126 298,664 383,142
General& adminis. 559,758 562,135 297,250 279,261
Research and develop. 207,208 188,509 106,929 77,559
--------------------------------------------------------
TOTAL OPERATING EXPENSES
1,388,846 1,523,770 702,843 739,962
---------------------------------------------------------
INCOME (LOSS) FROM
OPERATIONS (19,818) (207,091) 9,757 77,811
--------------------------------------------------------
OTHER INCOME(EXPENSE),NET:
Interest expense (41,567) (43,724) (24,060) (21,656)
Interest income 127,931 123,552 66,496 70,247
Gain on sale of
investment securities 277,324
Other 5,542 11,803 (2,079) 8,771
-------------------------------------------------------
TOTAL OTHER INCOME, NET 91,906 368,955 40,357 57,362
-------------------------------------------------------
NET INCOME BEFORE INCOME
TAXES 72,088 161,864 50,114 135,173
INCOME TAXES 16,000 7,400 10,500 1,000
-------------------------------------------------------
NET INCOME $56,088 $154,464 $39,614 $134,173
=======================================================
COMMON SHARE AND COMMON
SHARE EQUIVALENT
OUTSTANDING
Basic 4,025,394 4,167,979 4,005,299 4,170,333
======================================================
Diluted 4,025,394 4,167,979 4,005,299 4,170,333
======================================================
EARNINGS PER COMMON AND
COMMON SHARE EQUIVALENT
Basic $.01 $.04 $.01 $.03
======================================================
Diluted $.01 $.04 $.01 $.03
======================================================
<FN>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
</FN>
</TABLE>
<PAGE>
<TABLE>
<CAPTION> EMCEE BROADCAST PRODUCTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
SIX MONTHS ENDED SEPTEMBER 30, 1998
(Unaudited)
===================================================================
ADDITIONAL
COMMON STOCK PAID-IN RETAINED TREASURY STOCK
SHARES AMT CAPITAL EARNINGS SHARES AMT TOTAL
====================================================================
<S>
BAL-
3/31/1998
<C> <C> <C> <C> <C> <C> <C>
4,384,161 $73,084 $3,502,092 $6,927,987 320,764 ($1,649,173)$8,853,990
TREASURY
STOCK
PURCHASED
65,000 (185,952) (185,952)
NET
INCOME
FOR THE
PERIOD $56,088 $56,088
-----------------------------------------------------------------------
BAL-
9/30/98
4,384,161 $73,084 $3,502,092 $6,984,075 385,764($1,835,125) $8,724,126
========================================================================
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
</TABLE>
<PAGE>
<TABLE>
<CAPTION> EMCEE BROADCAST PRODUCTS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX (6) MONTHS ENDED SEPTEMBER 30, 1998 AND 1997
(Unaudited)
==============================
SIX (6) MONTHS
09/30/98 09/30/97
=============================
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $56,088 $154,464
Adjustments:
Depreciation 145,020 137,250
Provision for doubtful accounts 26,775 20,000
(Increase) decrease in:
Accounts receivable (139,660) (663,483)
Inventory (269,495) 335,940
Prepaid expenses (105,494) 95,702
Deferred taxes (39,000)
Other assets (79,213) 106,360
Increase (decrease) in:
Accounts payable (194,568) (54,131)
Accrued expenses (72,842) (119,573)
Deposits from customers (149,229) 135,268
Accrued income taxes (61,857) (280,155)
--------------------------------
NET CASH USED IN OPERATING ACTIVITIES (883,475) (132,358)
--------------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Acquisition of property, plant & equip. (89,944) (12,513)
Purchase of U. S. Treasury Bills (2,285,746) (2,373,909)
Proceeds from maturities of U.S.
Treasury Bills 2,300,000 1,800,000
Note receivable 2,500,000
--------------------------------
NET CASH PROVIDED BY (USED IN)
INVESTING ACTIVITIES (75,690) 1,913,578
--------------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Long Term Debt:
New borrowings 70,000
Payments (47,619) (74,025)
Stock award issued 39,441
Acquisition of company stock (185,952) (107,338)
----------------------------------
NET CASH USED IN FINANCING ACTIVITIES (233,571) (71,922)
----------------------------------
NET INCREASE (DECREASE) CASH (1,192,736) 1,709,298
CASH AND CASH EQUIVALENTS AT
BEGINNING OF YEAR 2,529,594 681,335
----------------------------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $1,336,858 $2,390,633
==================================
<PAGE>
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid during the period:
Interest Expense $41,514 $37,060
=============================
Income Taxes $242,560 $280,000
=============================
<FN>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
</FN>
</TABLE>
<PAGE> EMCEE BROADCAST PRODUCTS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The financial information presented as of any date other than March
31,has been prepared from the books and records of the Company without
audit. Financial information as of March 31 has been derived from the
audited financial statements of the Company, but does not include all
disclosures required by generally accepted accounting principles. In
the opinion of management, the accompanying unaudited consolidated
condensed financial statements contain all adjustments, consisting only
of normal recurring adjustments, necessary to present fairly EMCEE
Broadcast Products, Inc. and Subsidiaries' financial position, and the
results of their operations and changes in cash flow for the periods
presented.
2. The results of operations for the three month and six month periods
ended September 30, 1998 and 1997 are not necessarily indicative of the
results to be expected for the full year.
3. At September 30, 1998, cash equivalents included $1,328,934 invested
in a money market portfolio.
4. INVENTORIES consisted of the following:
Sept. 30,1998 March 31, 1998
(UNAUDITED)
FINISHED GOODS $275,000 $454,000
WORK-IN-PROCESS 675,000 777,000
RAW MATERIALS 1,584,000 1,323,000
MANUFACTURED COMPONENTS 1,174,094 884,599
----------------------------
$3,708,094 $3,438,599
============================
Inventories are stated at the lower of standard cost, which
approximates current actual cost (on a first-in, first-out basis) or
market (net realizable value).
5. EARNINGS PER SHARE. Basic income per share is computed by dividing
earnings applicable to common shareholders by the weighted average number
of common shares outstanding. Diluted income per share is similar to
basic income per share except that the weighted average of common shares
outstanding is increased to include the number of additional common shares
that would have been outstanding if the dilutive potential common shares
had been issued. There were no dilutive potential common shares in the
period ended September 30, 1998 and 1997 because the assumed exercise of
the options would be anti-dilutive.
EMCEE BROADCAST PRODUCTS, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF THE FINANCIAL CONDITION
Demand for the Company's product remains low in the Multichannel Multipoint
Distribution Services (MMDS) segment of the television transmitter industry
as domestic operators continue to hold off purchases until additional
funding is available and new technology is accepted.
Net sales for the quarter ended September 30, 1998 totaled $2,166,000 or 4%
less than the quarter ended September 30, 1997. Net sales for the first six
months ended September 30, 1998 totaled $4,365,000 a 7% increase over the
same period one year ago.
Foreign shipments accounted for $1,149,000 or 53% of total shipments for
the quarter ended September 30, 1998 and $2,022,000 or 46% of total
<PAGE>
shipments for the first six months of fiscal 1999. The latter was somewhat
of an anomaly as the highest single customer for the first two quarters
ended September 30, 1998, with approximately 14% of total sales, was a
military related contractor in the low power sector of the industry.
Notwithstanding the economics and currency problems now being experienced
in the foreign market, management believes that foreign sales will dominate
for the next six months.
Gross profit of $713,000 for the quarter ended September 30, 1998 was
$105,000 less than the quarter ended September 30, 1997 however, gross
profit for the six months ended September 30, 1998 of $1,369,000 was
$52,000 more than the like period one year ago. Both changes in the
comparisons are directly related to the sales volumes for the respective
periods.
Total operating expenses for the quarter ended September 30, 1998 totaled
$703,000 and increased the year to date total to $1,389,000. The total for
the quarter and six months ended September 30, 1998 are 5% and 9% less than
the corresponding periods one year ago.
Selling expense of $299,000 for the quarter ended September 30, 1998 was
22% less than the amount of $383,000 for the quarter ended September 30,
1997 primarily due to salary and salary related reductions, reduction in
travel expenses and reduced outlays for trade shows as the Company
continues its cost reduction program initiated last year.
General and administrative expenses totaled $297,000 for the quarter ended
September 30, 1998 and $560,000 for the six months ended September 30,
1998. The amount for the quarter was 6% over the amount of the
corresponding quarter one year ago, however, the year to date ending
September 30, 1998 was slightly less than the amount of $562,000 for the
six months ended September 30, 1997. Increases for general and
administrative expenses for the quarter occurred in salaries, computer
supplies, maintenance and costs related to possible new ventures. For the
six months ended September 30, 1998 costs compared to the year earlier
increased in computer related expenses, an increase in bad debt reserve and
depreciation while offsetting decreases occurred in legal and collection
expense and Board of Director's expense (an additional Board meeting was
held in the prior quarter.)
An exception to the costs reduction program is the Research and Development
segment of total operating expenses in which expenses totaled $107,000 for
the quarter ended September 30, 1998 compared to $78,000 for the quarter
ended one year earlier and expense totaled $207,000 for the first half of
fiscal 1999 compared to $189,000 for the same period one year earlier. The
Company is expanding development for high speed Internet service, local
loop telephony and high definition television (HDTV) protocol while
continuing on-going programs in analog and digital applications. The
Company also received a payment in the first quarter of fiscal 1999 of
$10,000 for non-recurring engineering (NRE) charged to a customer and
credited to R&D expenses.
Income from operations totaled $10,000 for the quarter ended September 30,
1998 compared to income from operations of $78,000 for the second quarter
one year ago. This income reduced the first quarter loss from operations
to a loss of $20,000 for the six months ended September 30, 1998, a vast
improvement over the loss from operations of $207,000 experienced the first
six months ended September 30, 1997.
Interest expense totaled $24,000 for the quarter and $42,000 for the six
months ended September 30, 1998 compared to $22,000 and $44,000 for the
quarter and six months respectively, ended September 30, 1997. The
differences are due to timing of structured payments and are not
significant.
<PAGE>
Interest income of $66,000 for the second quarter and $128,000 for the
first two quarters ended September 30, 1998 compared to $70,000 and
$124,000 for the same two periods one year ago. The differences are due to
availability of cash and interest rates. The majority of interest is
received from U.S. Treasury Bills and money market funds.
Other income (expense) for the quarter ended September 30, 1998 was an
expense of $2,000 compared to income of $9,000 for the quarter ended
September 30, 1997; the latter included a fee for a canceled order. Other
income totaled $6,000 for the six months ended September 30, 1998 compared
to $12,000 for the same period in the previous year. For the six months
ended September 30, 1997, the Company realized a gain on the sale of an
investment in a wireless cable operator of $277,000 shown as a separate
line item.
Net income after estimated Federal tax liability of $10,500 for the quarter
and $16,000 for the six months ended September 30, 1998 ($1,000 and $7,400
for the comparable periods ended September 30, 1997), was $40,000 for the
quarter and $56,000 for the six months ended September 30, 1998, ($134,000
and $154,000 for the comparable periods ended September 30, 1997). Federal
tax liability for all periods under discussion are less than the "expected
percent" due to additional tax credits, including amounts from a Foreign
Sales Corporation (FSC) formed in April 1995. There are no state tax
liabilities for these periods since all profitable companies in this
consolidated group are domiciled in states which do not impose income
taxes.
Net income for the quarter and first two quarters ended September 30, 1998
equals one cent per share compared to three cents per share for the quarter
and four cents for the first two quarters ended September 30, 1997.
Cash and cash equivalents (primarily money market funds) decreased by
$1,193,000 as of September 30, 1998 compared to March 31, 1998. These
funds were used primarily to increase inventories from $3,439,000 at March
31, 1998 to $3,708,000 as of September 30, 1998; to pay anticipated taxes
of $160,000; to reduce accounts payable $195,000 and decreased accrued
expenses from $334,000 as of March 31, 1998 to $261,000 as of September 30,
1998.
Accounts receivable increased from $1,215,000 as of March 31, 1998 to
$1,328,000 as of September 30, 1998 due primarily to the increase in sales
volume during the second quarter of the current fiscal year. Allowance for
doubtful accounts was increased from $35,000 as of March 31, 1998 to
$60,000 as of September 30, 1998.
Deposits from customers decreased from $260,000 as of March 31, 1998 to
$111,000 as of September 30, 1998 as payments were applied and additional
orders were delayed (see discussion on backlog below).
Prepaid expense increased $105,000 during the period from March 31, 1998 to
September 30, 1998 due primarily to the aforementioned payment for federal
income taxes, offset somewhat by expensed prepaid insurance.
During the six months ended September 30, 1998, the Registrant acquired
$90,000 of property, plant and equipment. Depreciation expense for the
same period totaled $145,000 resulting in a net decrease of fixed assets of
$55,000.
Long-term debt, including the current portion decreased $48,000 during the
period March 31, 1998 to September 30, 1998 as structured payments were
made. There were no new borrowings during this period and the $2,000,000
available line of credit was not utilized.
The Registrant believes its existing working capital, coupled with cash
flows from operations, will be sufficient to fund anticipated working
capital and debt payment requirements for fiscal 1999.
Other assets as of March 31, 1998 consisted primarily of an investment in a
new venture
involved with a high-speed Internet operation. This investment amount was
<PAGE>
reduced by approximately $35,000 during the period ended September 30,
1998. A note receivable from a principal of the entity of $100,000 plus
interest is included in the balance as of September 30, 1998.
Deferred taxes increased $39,000 from March 31, 1998 and accrued federal
income taxes decreased $62,000 during the same period in recognition of
timing differences between current and future tax liabilities.
The Company, through a subsidiary, purchased 65,000 shares on the open
market during the period. This transaction is treated as a Treasury Stock
purchase and increased the balance from $1,649,000 as of March 31, 1998 to
$1,836,000 as of September 30, 1998.
In addition to relatively low shipments for the six months ended September
30, 1998, approximately $250,000 of orders have been canceled. The backlog
of unsold orders totaled $553,000 as of September 30, 1998 compared to
$2,421,000 as of March 31, 1998 and $1,846,000 September 30, 1997.
Although management is optimistic for the future growth of the Company in
the LPTV and MMDS markets, including digital and high speed Internet
services, there is concern that during the remainder of fiscal 1999, the
Company will continue to experience low shipments until additional funding
is provided in these markets. The Registrant continues to monitor the
export market in regard to currency fluctuations in order to be competitive
with domestic and foreign suppliers of MMDS equipment. Management is
confidant that there are adequate resources to sustain the Company,
including additional development costs, until the demand for its products
improves.
The Company had a total of 65 employees as of September 30, 1998, the same
as at the end of the prior quarter and one less than at March 31, 1998.
The Year 2000 issue is the result of computer programs written using two
digits rather than four to designate the applicable year. The Registrant
has a single source for its mainframe software programming. It has
received upgrades and has installed these upgrades that have been certified
by the vendor to be year 2000 compliant. Tests have been conducted on the
existing network and personal computers and the Company believes that the
Year 2000 issue will neither pose significant operational problems for its
computer systems nor will it have a material impact on the results of
operations of the Company. While the Registrant is unaware of any Year
2000 problems with any significant suppliers or customers, there can be no
guarantee that the systems of other companies, if not compliant, will not
have an adverse effect on the Registrant.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995
Any statements contained in this report which are not historical facts are
forward looking statements; and, therefore, many important factors could
cause actual results to differ materially from those in the forward looking
statements. Such factors include, but are not limited to, changes
(legislative, regulatory and otherwise) in the MMDS or LPTV industry,
demand for the Company's products (both domestically and internationally),
the development of competitive products, competitive pricing, the timing of
foreign shipments, market acceptance of new product introductions
(including, but not limited to, the Company's digital, high speed Internet,
telephony and HDTV products), technological changes, economic conditions,
litigation and other factors, risks and uncertainties identified in the
Company's Securities and Exchange Commission filings.
PART II. OTHER INFORMATION
ITEM 1 LEGAL PROCEEDINGS
In prior years an individual who was an officer, director and shareholder
and the Company were named as defendants in various lawsuits instituted by
certain shareholders based on incidents alleged to have occurred in the
early-to-mid 1980's. Of these lawsuits, all were either settled or were
<PAGE>
dismissed with prejudice and the appeal periods have expired.
On July 7, 1995, one of the prior litigants initiated another claim against
the Company and another individual who is a shareholder seeking actual
damages of $700,000. In September 1995, the presiding judge in the Circuit
Court of Cook County, Illinois ruled in favor of the Company to dismiss
plaintiff's complaint with prejudice. It is unknown at this time whether an
appeal will be taken.
On January 16, 1997, the Registrant initiated a claim against a partnership
and an individual seeking judgment in the principal amount of $2,100,000
plus interest and attorneys fees. On March 27, 1997, the parties agreed to
a settlement of $2,500,000 to be paid (and which was paid) on April 3, 1997
and an additional $500,000 to be paid to the Company upon the occurrence of
certain events, including a sale or material change in ownership of the
obligor.
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.
EMCEE BROADCAST PRODUCTS, INC.
Date: November 9, 1998
/s/ JAMES L. DeSTEFANO
JAMES L. DeSTEFANO
President/CEO
Date: November 9, 1998 /s/ ALLAN J. HARDING
ALLAN J. HARDING
Vice President-Finance
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000032312
<NAME> EMCEE BROADCAST PRODUCTS INC
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-START> APR-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 7,924
<SECURITIES> 3,584,229
<RECEIVABLES> 1,387,536
<ALLOWANCES> 60,000
<INVENTORY> 3,708,094
<CURRENT-ASSETS> 8,967,569
<PP&E> 2,791,565
<DEPRECIATION> 2,020,975
<TOTAL-ASSETS> 10,028,822
<CURRENT-LIABILITIES> 580,427
<BONDS> 0
<COMMON> 73,084
0
0
<OTHER-SE> 8,651,042
<TOTAL-LIABILITY-AND-EQUITY> 10,028,822
<SALES> 4,364,794
<TOTAL-REVENUES> 4,364,794
<CGS> 2,995,766
<TOTAL-COSTS> 4,384,612
<OTHER-EXPENSES> (91,906)
<LOSS-PROVISION> 26,776
<INTEREST-EXPENSE> 41,567
<INCOME-PRETAX> 72,088
<INCOME-TAX> 16,000
<INCOME-CONTINUING> 56,088
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 56,088
<EPS-PRIMARY> .01
<EPS-DILUTED> .01
</TABLE>
