SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
QUARTERLY REPORT UNDER SECTION 13 OR 15
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1998
Commission File Number: 0-10707
THERMODYNETICS, INC.
(Exact name of small business issuer as specified in its charter)
Delaware 06-1042505
(State or other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
651 Day Hill Road, Windsor, CT 06095 860-683-2005
(Address of Principal Executive Offices) (Zip Code) (Telephone Number)
(Former name, former address and former fiscal year,
if changed since last report.)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15 of the Exchange Act during the past 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 ___
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date.
Class Outstanding at Sept. 30, 1998
Common stock $.01 Par Value 12,665,276 Shares
<PAGE>
THERMODYNETICS, INC. AND SUBSIDIARIES
INDEX
Page Number
-----------
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheet
September 30, 1998 and March 31, 1998....................... 3
Consolidated Statements of Income and Comprehensive
Income Three Months Ended September 30,
1998 and 1997............................................... 4
Consolidated Statements of Income and Comprehensive
Income Six Months Ended September 30,
1998 and 1997... .................................... 5
Consolidated Statements of Cash Flows
Six Months Ended September 30,
1998 and 1997............................................... 6
Notes to Consolidated Financial Statements..................... 7-8
Item 2. Management's Discussion and Analysis .......................... 9-10
PART II OTHER INFORMATION
Item 1. Legal Proceedings.............................................. 11
Item 2. Changes in Securities.......................................... 11
Item 3. Defaults Upon Senior Securities................................ 11
Item 4. Submission of Matters to a Vote of Security Holders............ 11
Item 5. Other Information.............................................. 11
Item 6. Exhibits and Reports on Form 8-K............................... 11
SIGNATURE PAGE ............................................................ 12
Page 2
<PAGE>
THERMODYNETICS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, March 31,
1998 1998
(Unaudited) (Audited)
----------- -----------
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash $ 2,702 $ 2,023
Accounts Receivable, Net 1,243,449 1,039,078
Inventories 1,816,504 1,448,420
Prepaid Expenses and Other Current Assets 279,009 240,563
Deferred Income Taxes 100,000 100,000
----------- -----------
Total Current Assets 3,441,664 2,830,084
----------- -----------
PROPERTY , PLANT AND EQUIPMENT
Property, Plant and Equipment - At Cost 9,101,787 8,963,252
Less: Accumulated Depreciation 4,610,111 4,450,814
----------- -----------
Property, Plant, and Equipment - Net 4,491,675 4,512,438
----------- -----------
OTHER ASSETS
Undeveloped Land Held for Investment 118,109 116,593
Intangible Assets - Net of Amortization 121,653 127,623
Officers' Life Insurance 1,076,894 1,022,440
Deposits and other 5,750 12,726
Investment in Foreign Company 100,742 -0-
Marketable Equity Securities, at Market 138,000 392,000
----------- -----------
Total Other Assets 1,561,148 1,671,382
----------- -----------
TOTAL ASSETS $ 9,494,488 $ 9,013,904
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts Payable $ 808,605 $ 912,435
Accrued Taxes and Expenses 120,690 120,831
Current Portion of Long Term Debt 322,890 291,566
Notes Payable - Bank 1,668,242 1,061,747
----------- -----------
Total Current Liabilities 2,920,387 2,386,579
----------- -----------
LONG TERM DEBT 2,218,997 2,366,345
----------- -----------
STOCKHOLDERS' EQUITY
Common Stock, Par Value $.01/Share,
Authorized 25,000,000 shares, issued 12,665,276 shares
At 9/30/98 and 12,569,591 shares at 3/31/98 126,653 125,696
Additional Paid-in Capital 5,416,051 5,411,524
Less: Treasury Stock, at Cost 320,521 320,521
Less: Valuation Reserve for Long-Term Investments 276,000 196,000
Retained Earnings (Deficit) (591,079) (759,719)
----------- -----------
Total Stockholders' Equity 4,355,104 4,260,980
----------- -----------
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 9,494,488 $ 9,013,904
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements.
Page 3
<PAGE>
THERMODYNETICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME AND COMPREHENSIVE INCOME
FOR THE THREE MONTHS ENDED SEPTEMBER 30,
(UNAUDITED)
<TABLE>
<CAPTION>
1998 1997
------------ ------------
<S> <C> <C>
Net Sales $ 2,665,374 $ 2,200,210
Cost of Goods Sold 1,931,735 1,590,301
------------ ------------
Gross Profit 733,639 609,909
Selling, General & Administrative Expenses 480,157 438,709
------------ ------------
Income From Operations 253,482 171,200
------------ ------------
Other Income (Expense)
Interest Expense, Net (99,702) (93,832)
Realized Loss on Sale of Securities (126,580) -0-
Other - Net (4,785) (6,624)
------------ ------------
Total Other Income (Expense) (231,067) (100,456)
------------ ------------
Income Before Income Taxes 22,415 70,744
Provision for Income Taxes -0- -0-
------------ ------------
Net Income 22,415 70,744
Other Comprehensive Income (Loss),Net of tax
Unrealized holding gains during the period (5,750) 125,587
------------ ------------
(5,750) 125,587
------------ ------------
Comprehensive Income $ 16,665 $ 196,331
============ ============
Earnings per Share-Basic NIL $ .01
============ ============
Earnings per Share-Diluted NIL NIL
============ ============
Weighted Average Shares Outstanding- Basic 12,665,276 12,569,646
============ ============
Weighted Average Shares Outstanding- Diluted 15,227,015 15,737,388
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
Page 4
<PAGE>
THERMODYNETICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME AND COMPREHENSIVE INCOME
FOR THE SIX MONTHS ENDED SEPTEMBER 30,
(UNAUDITED)
<TABLE>
<CAPTION>
1998 1997
------------ ------------
<S> <C> <C>
Net Sales $ 5,297,829 $ 4,414,873
Cost of Goods Sold 3,809,317 3,169,461
------------ ------------
Gross Profit 1,488,512 1,245,412
Selling, General & Administrative Expenses 977,194 915,139
------------ ------------
Income From Operations 511,318 330,273
------------ ------------
Other Income (Expense)
Interest Expense, Net (196,530) (183,930)
Realized Loss on Sale of Securities (126,580) -0-
Other - Net (19,568) (13,250)
------------ ------------
Total Other Income (Expense) (342,678) (197,180)
------------ ------------
Income Before Income Taxes 168,640 133,093
Provision for Income Taxes -0- -0-
------------ ------------
Net Income 168,640 133,093
Other Comprehensive Income (Loss), net of tax
Unrealized holding gains during the period (80,000) 76,587
------------ ------------
(80,000) 76,587
------------ ------------
Comprehensive Income $ 88,640 $ 209,680
============ ============
Earnings per Share-Basic $ .01 $ .01
============ ============
Earnings per Share-Diluted $ .01 $ .01
============ ============
Weighted Average Shares Outstanding- Basic 12,633,381 12,557,778
============ ============
Weighted Average Shares Outstanding- Diluted 15,562,090 15,639,931
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
Page 5
<PAGE>
THERMODYNETICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED SEPTEMBER 30,
(UNAUDITED)
<TABLE>
<CAPTION>
1998 1997
--------- ---------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 168,640 $ 133,093
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization 165,267 176,288
Realized loss on sale of securities 126,580 -0-
Changes in operating assets and liabilities:
Increase (decrease) in accounts payable (103,830) (170,297)
Decrease (increase) in prepaid expenses (31,470) (50,890)
and other assets
Decrease (increase) in accounts receivable (204,371) 97,597
Decrease (increase) in inventories (368,084) (102,483)
Increase (decrease) in accrued expenses 5,303 (11,425)
--------- ---------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES
(241,965) 71,883
--------- ---------
INVESTING ACTIVITIES;
Purchases of property, plant and equipment (138,535) (86,447)
Increase in long-term investments (1,516) (1,482)
Investment in foreign company (100,742) -0-
Increase in life insurance premiums receivable (54,454) (81,681)
Sale of marketable securities 47,420 -0-
--------- ---------
NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES
(247,827) (169,610)
--------- ---------
FINANCING ACTIVITIES
Principal payments on debt obligations (147,348) (168,402)
Net proceeds from revolving and term debt 637,819 266,116
--------- ---------
NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES
490,471 97,714
--------- ---------
INCREASE (DECREASE) IN CASH 679 (13)
CASH AT BEGINNING OF PERIOD 2,023 2,550
--------- ---------
CASH AT END OF PERIOD $ 2,702 $ 2,537
========= =========
</TABLE>
The accompanying notes are an integral part of these financial statements
Page 6
<PAGE>
THERMODYNETICS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1: BASIS OF PRESENTATION
The financial information included herein is unaudited; however, such
information reflects all adjustments (consisting solely of normal recurring
adjustments) which are, in the opinion of management, necessary for a fair
statement of results for the interim period. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted.
The results of operations for the three and six months ended September 30, 1998
and September 30, 1997 are not necessarily indicative of the results to be
expected for the full year.
NOTE 2: INVENTORIES
Inventories consist of the following at September 30:
1998 1997
---------- ----------
Raw materials $1,279,077 $ 768,902
Work-in-process 299,895 208,625
Finished goods 237,532 355,522
---------- ----------
$1,816,504 $1,333,049
========== ==========
NOTE 3: EARNINGS PER SHARE
The Company has adopted "Statement of Accounting Standards No. 128,
Earnings per Share" (SFAS 128). Earnings per share for the three and six months
ended September 30, 1998 and September 30, 1997 have been computed in accordance
with this pronouncement, based on the weighted average of outstanding shares
during the periods. The weighted average number of shares outstanding used in
the calculations are as follows:
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
Sept. 30 1998 Sept 30, 1997 Sept. 30, 1998 Sept 30, 1997
------------- ---- -------- -------------- -------------
<S> <C> <C> <C> <C>
Weighted Average Shares Outstanding
(Basic) 12,665,276 12,569,646 12,633,381 12,560,778
Assumed Conversion of Stock 2,561,739 3,167,742 2,928,709 3,079,153
---------- ---------- ---------- ----------
Weighted Average Shares Outstanding-
(Diluted) 15,277,015 15,737,388 15,562,090 15,639,931
---------- ---------- ---------- ----------
</TABLE>
NOTE 4: INCOME TAXES
The Company adopted "Statement of Accounting Standards No. 109, Accounting
For Income Taxes" (SFAS 109) effective April 1, 1994. The statement requires
that deferred income taxes reflect the future tax consequences of differences
between the tax bases of assets and liabilities and their bases for financial
reporting purposes. In addition, SFAS 109 requires the recognition of future tax
benefits, such as net operating loss carryforwards, to the extent that
realization of such benefits are more likely than not.
The primary components of the Company's deferred tax assets and liabilities
and the related valuation allowance are as follows:
Page 7
<PAGE>
Assets:
Uniform capitalization adjustment $ (1,243)
Net operating loss carryforward 419,265
Other 9,091
---------
427,113
---------
Liabilities:
Accelerated depreciation (5,069)
---------
(5,069)
---------
Net deferred tax asset before valuation allowance 432,182
Less: Valuation allowance (332,182)
---------
Net deferred tax asset $ 100,000
=========
The Company continually reviews the adequacy of the valuation allowance and
recognizes a benefit from income taxes only when reassessment indicates that it
is more likely than not that the benefits will be realized. In fiscal 1998 the
Company reduced the valuation allowance applied against the net operating loss
carryforwards, based upon reasonable and prudent tax planning strategies and
future income projections.
At September 30, 1998, the Company had net operating loss carryforwards of
$1,391,000 expiring from 2001 to 2007. In addition, unused tax credits of
$144,000 expire from 1999 to 2001 and are also being carried forward.
NOTE 5: CASH FLOW INFORMATION AND NON CASH INVESTING ACTIVITIES
The following supplemental information is disclosed pursuant to the
requirements of Financial Accounting Standards Board's "Statement of Accounting
Standards No 95, Statement of Cash Flows".
6 Months Ended
9/30/98 9/30/97
------- -------
Cash payments for interest $ 196,530 $ 183,930
Issuance of common stock to 401(k) plan $ 5,483 $ 8,423
Valuation reserve to reflect long-term equity
securities at market) $ (80,000) $ 76,587
NOTE 6: ACCUMULATED OTHER COMPREHENSIVE INCOME (LOSS)
The Company has adopted "Statement of Accounting Standards No. 130,
"Reporting Comprehensive Income" (SFAS 130), which establishes standards for
reporting and display of comprehensive income and its components (i.e. revenues,
expenses, gains and losses) in a complete set of financial statements. All prior
periods have been restated to conform to the provisions of this statement.
NOTE 7: INVESTMENT IN FOREIGN COMPANY
In August 1998 the Company advanced $100,000 to Conforma, n.v., a Belgian
company engaged in the processing of pharmaceutical related products. It is
anticipated that this advance will be subsequently converted into a long-term
equity investment. The advance was financed with funds generated by use of a
margin account with a financial services company
The margined securities suffered declines in market value in concert with
the general stock market resulting in margin calls made on the Company in
September 1998. In order to meet these obligations, the Company made a cash
payment of $22,000 and sold some of its holdings. The net proceeds from the
liquidations of the securities were $47,420, resulting in a realized loss of
$126,580, which is included in other expense. As of September 30, 1998, the
margin obligation has been reduced to approximately $31,000.
Page 8
<PAGE>
THERMODYNETICS, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
RESULTS OF OPERATIONS
Net sales for the three months ended September 30, 1998, $2,665,374, set a new
record for the Company, eclipsing the record mark established in the previous
quarter. Consequently, year to date sales of $5,297,829 is the highest level
recorded in any six-month period in the Company's history. For comparative
purposes, as recently as the fiscal year ended March 1995, sales for that entire
twelve-month period totaled $5.7 million. With regard to the prior year, current
quarter sales represent an increase of $465,164, or 21%, over the second quarter
of fiscal 1998. For the six-month period, sales increased by $882,956 or 20%
over the first two quarters of the prior year.
The large increase in sales continues the trend begun towards the end of the
last fiscal year. Several factors are prominently intertwined resulting in this
growth including a return to more seasonal temperature patterns and the
successful introduction of new product applications. The Company has now
completed the design and qualification phases for a line of coaxial coils
serving the ice machine and commercial refrigerator market. These products are
generating significant sales in fiscal 1999, compared to only a small amount of
start-up shipments in the prior year. The Company has also increased shipments
of coils for chiller-related marine applications in fiscal 1999, representing
the continuing development of a specialty line begun in 1998. Further, the
Company is expanding its offerings in flexible heat transfer tubing and has
experienced growth in this product line both in the U.S. and abroad.
The core business of supplying coaxial coils to OEM water-source heat pump
manufacturers has continued to grow as a result of both strong levels of
domestic commercial and residential construction and increased market share
garnered by the Company's larger customers. This market historically slows down
in the third calendar quarter with rebounding volumes occurring in the
January-March period anticipating the spring building season. Indications
currently suggest that through the third quarter (period ending 12/31/98) total
shipments should approach $7.5 million.
Cost of sales aggregated 72% of net sales for both the quarter and six-month
periods of the current year as well as in fiscal 1998. As a large portion of the
cost of manufactured product is concentrated in copper and copper alloy tubing,
the stability of the cost of these raw materials helped maintain gross margins
at this level. Cost increases for conversion costs, including direct labor were
offset by increased efficiencies resulting from refinements in the use of
cellular manufacturing processes on the production floor.
Selling, general and administrative expenses increased by $41,448 (9%) for the
three months and $62,055 (6%) for the six-month period and compared to the prior
year results. Cost increases for personnel and related benefits, coupled with
additions to staffing of support services accounted for the higher levels in the
current year periods. The Company is planning to further supplement these areas
during the balance of the year, to support product line additions under
development and other applied engineering research activities.
Operating income increased by $82,282 and $181,045 for the three and six month
periods of 1999, compared to the same periods of the prior year. Higher levels
of sales for all periods generated increases in gross margin dollars that
absorbed the additional investments in engineering and administrative areas.
Interest expense was slightly higher for the current year periods as a result of
carrying increased levels of operating assets compared to fiscal 1998. For all
periods presented, interest costs ranged between 3-4% of net sales. Higher
average levels of outstanding debt in 1999 were offset by a lower effective
borrowing rate, resulting from a reduction in the prime interest rate during the
year.
In September 1998 the Company liquidated certain marketable equity securities
that were subject to a margin agreement with a financial services company.
Consequently, a loss of $126,580 was charged to operations during the current
quarter, representing the difference between the proceeds of the sales and the
cost basis of the securities.
Other comprehensive income (loss) adjustments for the periods represents
unrealized holding gains (losses) for marketable equity securities that are held
by the Company as long-term investments.
Page 9
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Working capital at September 30, 1998 was $521,277 compared to $443,505 at March
31, 1998 and $266,093 at September 30, 1997. During the current six month
period, current assets increased by $611,580, largely due to increases in
accounts receivable and inventories needed to support higher production levels.
Concurrently, current liabilities increased by $533,808 consisting primarily of
additional borrowings under the revolving line of credit. These advances were
used to finance the additional investments in operating assets and capital
expenditures during the quarter.
As a result of the increases in current assets, net cash used in operating
activities totaled $241,965 for the current period compared to net cash
generated of $71,883 in 1997. Inventories and accounts receivable increased by
$368,084 and $204,371, respectively, for the current six months, reflecting the
substantial increase in shipments over the prior year. Net income from operating
activities totaled $295,220 in 1999, an increase of more than 120% above the
September 1997 level of $133,093. Cash generated from operations was used to
fund a portion of the increase in current assets, with the balance financed
through the revolving debt facility.
Cash used in investing activities increased from $169,610 in fiscal 1997 to
$247,827 for the six months ended September 1998. In August 1998 the Company
advanced $100,000 to Conforma, n.v., a Belgian company engaged in the processing
of pharmaceutical related products. The advance was financed with funds
generated by use of a margin account with a financial services company. The
margined securities suffered declines in market value in concert with the
general stock market decline resulting in margin calls made on the Company in
September 1998. To meet these obligations, the Company made a cash payment of
$22,000 and sold a portion of its holdings. The net proceeds from the
liquidations of the security were $47,420, resulting in a realized loss of
$126,580, which was recorded as a period expense. As of September 30, 1998, the
margin obligation has been reduced to approximately $31,000.
Capital expenditures increased by $52,088 compared to the prior year period.
Anticipated purchases of production equipment are expected to run slightly
higher than the prior year due to the need to add production capacity to support
higher sales and shipping levels.
Cash provided by financing activities totaled $490,471 for the current six
months compared to $97,714 in the prior year. The revolving debt facility was
used to finance additions to inventories, accounts receivable, capital projects
and other equipment purchases during the quarter. In October 1998 the Company's
bank increased the maximum borrowings available under the revolving line of
credit and also authorized a new facility to finance capital expenditures. The
revised debt structure is expected to provide sufficient resources to fund the
Company's requirements for the foreseeable future.
Inflation and other cost increases continue to play a minor role in the
Company's day to day operations. Improvements to manufacturing processes and
procedures, coupled with small increases in purchased goods and services have
enabled the Company to maintain its current cost structure. Stability in the
precious metals markets has also enabled the Company to continue to purchase raw
materials at competitive prices for conversion into products shipped to
customers. As the Company continues its conversion to cellular manufacturing,
further cost reductions are anticipated which should offset future effects of
inflation for the balance of the fiscal year.
FORWARD LOOKING STATEMENTS
This quarterly report contains certain forward-looking statements regarding the
Company, its business prospects and results of operations that are subject to
certain risks and uncertainties posed by many factors and events that could
cause the Company's actual business, prospects and results of operations to
differ materially from those that may be anticipated by such forward-looking
statements. Factors that may affect such forward-looking statements include,
without limitation: the Company's ability to successfully and timely develop and
finance new projects, the impact of competition on the Company's revenues, and
changes in unit prices, supply and demand for the Company's tubing products
especially in applications serving the commercial, industrial and residential
construction industries.
When used words such as "believes," "anticipates," "expects," "intends" and
similar expressions are intended to identify forward-looking statements, but are
not the exclusive means of identifying forward-looking statements. Readers are
cautioned not to place undue reliance on these forward-looking statements, which
speak only as of the date of this report. The Company undertakes no obligation
to revise any forward-looking statements in order to reflect events or
circumstances that may subsequently arise. Readers are urged to carefully review
and consider the various disclosures made by the Company in this report, news
releases, and other reports filed with the Securities and Exchange Commission
that attempt to advise interested parties of the risks and factors that may
affect the Company's business.
Page 10
<PAGE>
THERMODYNETICS, INC. AND SUBSIDIARIES
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
There are no material legal proceedings known or threatened against the
Company.
Item 2. Change in Securities.
No class of registered securities of the Company have been materially
modified, and no class of registered securities have been materially limited or
qualified by the issuance or modification of any other class of securities of
the Company.
Item 3. Defaults Upon Senior Securities.
There have been no defaults of any terms of the Company's securities.
Item 4. Submission of Matters to a Vote of Security Holders.
No matters were submitted to a vote of the Securities Holders of the
Company during the quarterly period for which this report is filed.
Item 5. Other Information.
None
Item 6. Exhibits and Reports on Form 8-K.
(a) No Exhibits have been submitted with this report
(b) No reports on Form 8-K were filed during the quarter for which this
report is filed.
Page 11
<PAGE>
THERMODYNETICS, INC. AND SUBSIDIARIES
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
THERMODYNETICS, INC.
Date: November 11, 1998 By: /s/ Robert A. Lerman
-------------------------------------
Robert A. Lerman
President
Date: November 11, 1998 By: /s/ Robert I. Lieberman
-------------------------------------
Robert I. Lieberman
Treasurer and Chief Financial Officer
Page 12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Company's Form 10-QSB for the period ended as stated below and is qualified in
its entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000351902
<NAME> Thermodynetics, Inc.
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-START> JUL-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 2,702
<SECURITIES> 0
<RECEIVABLES> 1,243,449
<ALLOWANCES> 0
<INVENTORY> 1,816,504
<CURRENT-ASSETS> 3,441,664
<PP&E> 9,101,787
<DEPRECIATION> 4,610,111
<TOTAL-ASSETS> 9,494,488
<CURRENT-LIABILITIES> 2,920,387
<BONDS> 0
0
0
<COMMON> 126,653
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 9,494,488
<SALES> 2,665,374
<TOTAL-REVENUES> 2,665,374
<CGS> 1,931,735
<TOTAL-COSTS> 480,157
<OTHER-EXPENSES> 131,365
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 99,702
<INCOME-PRETAX> 22,415
<INCOME-TAX> 0
<INCOME-CONTINUING> 22,415
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 22,415
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
