UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
( X ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended: December 31, 1995
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: 0-10800
INSITUFORM EAST, INCORPORATED
(Exact Name of Registrant as specified in its charter)
Delaware 52-0905854
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3421 Pennsy Drive 20785
Landover, Maryland (Zip Code)
(Address of principal executive offices)
Registrant's telephone and fax numbers, including area code:
301-386-4100 (tel)
301-386-2444 (fax)
301-773-4560 (24-hour public information Fax Vault System)
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 _____
As of February 5, 1996, the following number of shares of the
issuer's classes of common stock were outstanding:
<TABLE>
<S> <C>
Common Stock $.04 Par Value 4,059,266
Class B Common Stock $.04 Par Value 297,596
Total 4,356,862
/TABLE
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TABLE OF CONTENTS
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Page Reference
PART I - FINANCIAL INFORMATION
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Item 1. Financial Statements
Condensed Consolidated Statements of Earnings
Three Months and Six Months Ended December 31,
1995 and 1994 (Unaudited) 3
Condensed Consolidated Balance Sheets
December 31, 1995 and June 30, 1995 (Unaudited) 4
Condensed Consolidated Statements of Cash Flows
Six Months Ended December 31, 1995 and 1994
(Unaudited) 5
Notes to Condensed Consolidated Financial
Statements (Unaudited) 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 12
</TABLE>
2<PAGE>
<PAGE>
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
INSITUFORM EAST, INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
Three Months Ended Six Months Ended
December 31, December 31,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Sales $6,263,183 $5,324,205 $12,471,842 $10,219,066
Costs and Expenses:
Cost of sales 4,403,892 3,690,798 8,688,663 7,337,655
Selling, general and
administrative 995,598 1,025,400 2,118,234 1,889,392
Total Costs and
Expenses 5,399,490 4,716,198 10,806,897 9,227,047
Earnings from
Operations 863,693 608,007 1,664,945 992,019
Investment Income 8,489 10,438 33,930 15,682
Other Income 53,541 56,546 126,199 105,179
Equity in Earnings of
MIDSOUTH Partners 170,571 239,732 356,522 413,377
Earnings Before Income
Taxes and Non-owned
Interest 1,096,294 914,723 2,181,596 1,526,257
Provision for Income
Taxes 428,000 367,000 852,000 606,000
Earnings Before Non-
owned Interest 668,294 547,723 1,329,596 920,257
Non-owned Interest in
Earnings of Con-
solidated Subsidiary - (3,202) - (3,598)
Net Earnings $ 668,294 $ 544,521 $ 1,329,596 $ 916,659
Net Earnings
Per Share $ 0.15 $ 0.12 $ 0.30 $ 0.21
</TABLE>
See notes to condensed consolidated financial statements.
3<PAGE>
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<TABLE>
<CAPTION>
INSITUFORM EAST, INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
December 31, June 30,
1995 1995
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 1,401,836 $ 2,791,758
Accounts receivable - net of allowance
for doubtful accounts of $25,000 6,531,225 4,675,868
Inventories - raw materials 910,027 1,111,202
Prepaid and refundable income taxes 39,671 5,276
Prepaid expenses 288,303 200,926
Total Current Assets 9,171,062 8,785,030
Investment in and Advances to MIDSOUTH
Partners 1,838,248 1,481,726
Property, Plant and Equipment - at cost
less accumulated depreciation of
$8,874,106 and $8,406,817 9,303,574 9,142,211
Other Assets 63,000 71,000
Total Assets $20,375,884 $19,479,967
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 1,113,563 $ 1,024,166
Accrued compensation and related expenses 1,728,251 1,627,034
Income taxes payable 182,767 460,648
Dividends payable - 261,412
Total Current Liabilities 3,024,581 3,373,260
Deferred Income Taxes 900,000 985,000
Total Liabilities 3,924,581 4,358,260
Commitments and Contingencies:
Stockholders' Equity:
Common stock - $.04 par value; 10,000,000
shares authorized; 4,387,163 shares
issued; 4,059,266 shares outstanding 175,486 175,486
Class B Common stock - $.04 par value;
800,000 shares authorized; 297,596 shares
issued and outstanding 11,904 11,904
Additional paid-in capital 4,000,424 4,000,424
Retained earnings 13,453,102 12,123,506
17,640,916 16,311,320
Less cost of 327,897 shares of common
stock in treasury 1,189,613 1,189,613
Total Stockholders' Equity 16,451,303 15,121,707
Total Liabilities and
Stockholders' Equity $20,375,884 $19,479,967
</TABLE>
See notes to condensed consolidated financial statements.
4<PAGE>
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<TABLE>
<CAPTION>
INSITUFORM EAST, INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
December 31,
1995 1994
<S> <C> <C>
Cash Flows from Operating Activities:
Net Earnings $ 1,329,596 $ 916,659
Adjustments for noncash items
included in net earnings:
Depreciation and amortization 576,466 502,075
Undistributed earnings of MIDSOUTH
Partners (356,522) (413,377)
Deferred income taxes (85,000) 47,000
Non-owned interest in earnings
of consolidated subsidiary - 3,598
Cash effect of changes in:
Receivables (1,855,357) (391,762)
Inventories 201,175 (288,478)
Other current assets (121,773) 50,588
Payables and accruals (87,266) 11,011
Net cash provided by (used in)
operating activities (398,681) 437,314
Cash Flows from Investing Activities:
Capital expenditures, net (729,829) (575,732)
Net cash used in investing activities (729,829) (575,732)
Cash Flows from Financing Activities:
Dividends paid (261,412) (217,843)
Net cash used in financing activities (261,412) (217,843)
Net increase (decrease) in cash and
short-term investments (1,389,922) (356,261)
Cash and short-term investments at
beginning of period 2,791,758 788,402
Cash and short-term investments at
end of period $ 1,401,836 $ 432,141
Supplemental disclosure of cash flow information:
Income taxes paid $ 1,249,276 $ 256,573
</TABLE>
See notes to condensed consolidated financial statements.
5<PAGE>
<PAGE>
INSITUFORM EAST, INCORPORATED
Notes to Condensed Consolidated Financial Statements
(Unaudited)
1. Condensed Consolidated Financial Statements
The Condensed Consolidated Balance Sheet as of December 31,
1995, the Condensed Consolidated Statements of Earnings for the
three months and six months ended December 31, 1995 and 1994, and
the Condensed Consolidated Statements of Cash Flows for the six
months ended December 31, 1995 and 1994 have been prepared by the
Company without audit. The Condensed Consolidated Balance Sheet as
of June 30, 1995 (unaudited) has been derived from the Company's
June 30, 1995 audited financial statements. 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 December 31, 1995 and for
all periods presented have been made.
Certain information and footnote disclosures normally included
in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted. It
is suggested that these condensed financial statements be read in
conjunction with the financial statements and notes thereto
included in the Company's June 30, 1995 Annual Report on Form 10-K.
The results of operations for the periods ended December 31, 1995
are not necessarily indicative of full year operating results.
2. Computation of Net Earnings Per Share
Net earnings per share was computed by dividing net earnings
by the weighted average number of common shares outstanding during
the period including common stock equivalents from dilutive stock
options. Weighted average number of shares of 4,425,988 and
4,360,698 were used in computing net earnings per share for the
three months ended December 31, 1995 and 1994, respectively;
4,427,903 and 4,359,772 shares were used in computing net earnings
per share for the six months ended December 31, 1995 and 1994,
respectively.
3. MIDSOUTH Partners
MIDSOUTH Partners, a Tennessee general partnership organized
in December 1985, is the licensee for the Insituform and NuPipe
processes in Tennessee, most of Kentucky and Northern Mississippi.
The Company's 42.5% investment in MIDSOUTH Partners is accounted
for using the equity method. Summarized results of operations for
MIDSOUTH Partners are as follows:
6<PAGE>
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<CAPTION>
Three Months Ended Six Months Ended
December 31, December 31,
1995 1994 1995 1994
<S> <C> <C> <C> <C>
Revenues $2,226,906 $2,577,465 $4,695,545 $4,382,757
Gross Profit $ 696,231 $ 842,876 $1,397,372 $1,473,744
Partnership Net
Earnings $ 401,343 $ 564,076 $ 838,875 $ 972,651
</TABLE>
On April 18, 1995, Insituform Mid-America, Inc. ("IMA")
acquired the pipeline rehabilitation business of ENVIROQ
Corporation ("Enviroq"), including Enviroq's 42.5% interest in
MIDSOUTH Partners which is held through Enviroq's special purpose
subsidiary, E-Midsouth, Inc. Under the MIDSOUTH Partners'
Partnership Agreement, it is an event of default, if, among other
things, a change in the control of any partner occurs without the
prior written consent of all the other partners. The IMA
acquisition of Enviroq, which resulted in a change in the control
of Enviroq and E-Midsouth, Inc., was made without prior written
consent of the Partnership's two other partners, special purpose
subsidiaries of the Company and Insituform Technologies, Inc.
("ITI").
The Partnership Agreement grants non-defaulting partners the
right to require compliance with the agreement, enjoin any breach,
seek dissolution of the partnership, replace Management Committee
appointees of the defaulting partner, or exercise any combination
of these rights and other remedies. As previously reported, the
Company has filed with the American Arbitration Association a
demand for arbitration alleging a breach of the Partnership
Agreement by E-Midsouth, Inc. and intends to seek one or more of
the foregoing remedies, including replacement of a management
appointee of E-Midsouth, Inc.
Separately, on April 4, 1995, ITI affiliated companies
initiated action against Enviroq and IMA in Tennessee Chancery
Court regarding ITI's rights as licensor to withhold consent to the
assignment of Insituform and NuPipe license agreements.
Simultaneously with the initiation of its suit, ITI entered into
agreements with IMA and Enviroq to postpone, through April 30, 1995
(subsequently extended), the Tennessee court proceedings as well as
any other assertion by ITI of its rights under Insituform and
NuPipe license agreements and its rights under the MIDSOUTH
Partners' Partnership Agreement. Concurrently, representatives of
ITI and IMA were engaged in discussions and negotiations regarding
a potential merger of these two companies.
7<PAGE>
<PAGE>
On May 24, 1995, ITI and IMA jointly announced that they had
entered into a definitive agreement providing for the combination
of ITI and IMA which, when completed on October 25, 1995, resulted
in IMA becoming a wholly-owned subsidiary of ITI. the ITI
acquisition of IMA, which resulted in a second change of the
control of Enviroq and E-Midsouth, Inc., was made without the prior
written consent of one of the Partnership's partners, the special
purpose subsidiary of the Company.
On November 17, 1995, the Company sought to amend its demand
for arbitration alleging, among other things, a breach of the
Partnership Agreement by ITI's special purpose subsidiary,
Insituform California, Inc. ("ICI"), in connection with ICI's
wrongfully seeking to deny the Company's special purpose subsidiary
the rights and remedies to which it is entitled as a non-defaulting
partner under the Partnership Agreement. On November 27, 1995, the
arbitrators granted the Company's request to amend and added ICI as
a respondent party. The evidentiary hearings are currently
scheduled for March 4-6, 1996.
Although the Company cannot, at this time, predict the outcome
of the matters described herein, any potential outcome that
resulted in the loss by the Company of its ability to recognize its
share of the results of operations of MIDSOUTH Partners could have
a material adverse effect on the future earnings of the Company.
In this regard, ITI has informed the Company that should the
Company achieve management control of MIDSOUTH Partners, ITI will
terminate the Partnership and contemporaneously terminate the
licenses to MIDSOUTH Partners from ITI's subsidiaries. The Company
has asserted that ITI does not have the right to terminate the
licenses to MIDSOUTH Partners under these circumstances.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Overview and Outlook
The Company recognized net earnings of $668,294 ($0.15 per
share) from $6.3 million in sales (up 18%) for the second quarter
of fiscal 1996 ended December 31, 1995, and net earnings of
$1,329,596 ($0.30 per share) from record sales of $12.5 million (up
22%) for the first six months of fiscal 1996. During the prior
year, the Company recognized net earnings of $544,521 ($0.12 per
share) from $5.3 million in sales for the second quarter ended
December 31, 1994, and net earnings of $916,659 ($0.21 per share)
from sales of $10.2 million for the first six months. The Company
attributed its significant 45% improvement in comparable six month
operating results to the combined impact of increased demand met
with expanded production capabilities, sales awards obtained at
normal margins and continuing installation performance in line with
cost estimates.
8<PAGE>
<PAGE>
While there can be no assurances regarding future operating
performance, based on the volume and mix of the Company's present
and expected backlog of customer orders, the favorable results
experienced for the previous fiscal year are presently anticipated
for fiscal 1996. The Company has expanded its production
capabilities during the current year both to increase its
Insituform installation capacity and to further expand its ability
to provide complimentary products and services to its trenchless
rehabilitation customers. Severe winter weather conditions
significantly impeded January and early February 1996 operations,
and additional severe weather could further impede final third
quarter fiscal 1996 installation performance. Accordingly,
depressed operating results for the three months ending March 31,
1996 are presently expected. The Company nevertheless continues to
anticipate favorable full year operating results for the fiscal
year ending June 30, 1996, in line with full year operating results
realized for the previous fiscal year.
The Company believes the trenchless pipeline reconstruction
marketplace is continuing to expand, thereby enticing, however, the
entry of ever more imitations and substitute products hoping that
cheap price alone may permit them to succeed in a market otherwise
dominated by Insituform. In those limited markets where the
cheapest priced products may be deemed technically "good enough,"
Insituform is at a disadvantage. However, the vast majority of the
Company's customers already use or are implementing improved
procurement specifications and contract award evaluation criteria
emphasizing technical value over simply low price. In a value and
quality based market, Insituform remains at a distinct advantage.
As customers and consulting engineers increasingly rely on quality
based purchasing criteria to help ensure long term solutions to
their infrastructure needs, they help clearly differentiate proven
products such as Insituform from cheaply priced trenchless
substitutes with technical, performance and installation risks not
equally tested by time or independent third parties.
The principal factor affecting the Company's future
performance remains the volatility of earnings as a function of
sales volume at normal margins. Accordingly, because a substantial
portion of the Company's costs are semi-fixed in nature, earnings
can, at times, be severely reduced or eliminated during extended
periods of harsh weather and during periods of either depressed
sales at normal margins or material increases in discounted sales,
even where total revenues may experience an apparent buoyancy or
growth from the addition of discounted sales undertaken from time
to time for strategic reasons. Conversely, at normal margins,
increases in period sales typically leverage positive earnings
significantly.
9<PAGE>
<PAGE>
Results of Operations
Three Months Ended December 31, 1995 Compared with Three Months
Ended December 31, 1994
The Company recognized net earnings of $668,294 ($0.15 per
share) for the second quarter of fiscal 1996 ended December 31,
1995, as compared to net earnings of $544,521 ($0.12 per share) for
the second quarter of fiscal 1995 ended December 31, 1994. The
Company's improved comparable period operating results are
primarily a result of increased demand met with expanded production
capabilities, sales awards obtained at normal margins and
continuing installation performance in line with cost estimates.
Sales increased 18% from $5.3 million for the three months
ended December 31, 1994 to $6.3 million for the three months ended
December 31, 1995. This increase is due primarily to increased
demand met with expanded production capabilities and a strong
workable backlog of customer orders throughout the second quarter
of fiscal 1996.
Cost of sales increased 19% in the second quarter of fiscal
1996 as compared to the second quarter of fiscal 1995. The
Company's gross profit margin as a percentage of sales was 30% of
sales for the second quarter of fiscal 1996 as compared to a gross
profit margin of 31% of sales for the second quarter of fiscal
1995. The Company's revenues consisted primarily of normal margin
Insituform work during both quarters.
Selling, general and administrative expenses decreased $29,802
(3%) for the second quarter of fiscal 1996 as compared to the
second quarter of fiscal 1995. As a result of decreased costs and
increased sales, selling, general and administrative expenses
decreased from 19% of second quarter fiscal 1995 sales to 16% of
second quarter fiscal 1996 sales.
The Company's equity in the operating results of MIDSOUTH
Partners decreased 29% from pretax earnings of $239,732 for the
second quarter of fiscal 1995 to pretax earnings of $170,571 for
the second quarter of fiscal 1996 primarily as a result of reduced
comparable period sales and gross profit margins. The
Partnership's sales decreased 14% from $2.6 million for the three
months ended December 31, 1994 to $2.2 million for the three months
ended December 31, 1995. The Partnership's gross margin declined
from 33% of sales during the second quarter of fiscal 1995 to 31%
of sales for the second quarter of fiscal 1996 primarily as a
result of the mix of work performed.
As discussed further in Note 3 to the Financial Statements
enclosed herein, the Company has filed a demand for arbitration in
connection with the acquisition of control of a 42.5% interest in
MIDSOUTH Partners by Insituform Mid-America, Inc. ("IMA") on April
18, 1995. On November 27, 1995, the arbitrators granted the
Company's request to amend this demand in connection with the
10<PAGE>
<PAGE>
October 25, 1995 acquisition of this 42.5% interest in MIDSOUTH
Partners by Insituform Technologies, Inc. ("ITI") and related
actions taken by Insituform California, Inc., ITI's special purpose
subsidiary. Although the Company cannot, at this time, predict the
eventual outcome of these matters and their impact on the Company's
interest in the Partnership, any potential outcome that resulted in
the loss by the Company of its ability to recognize its share of
the results of operations of MIDSOUTH Partners could have a
material adverse effect on the future earnings of the Company.
The total value of all uncompleted and multi-year contract
awards from customers was approximately $8.8 million at December
31, 1995 as compared to $12.7 million at December 31, 1994. The
twelve-month backlog at December 31, 1995 was approximately $8.6
million as compared to $10 million at December 31, 1994. The total
value of all uncompleted and multi-year contracts at December 31,
1995 and 1994 includes work not estimated to be released and
installed within twelve months as well as potential work included
in term contract awards which may or may not be fully ordered by
contract expiration. Twelve-month backlog for MIDSOUTH Partners
was approximately $2.6 million and $4.8 million at December 31,
1995 and 1994, respectively. Backlog figures at specific dates are
not necessarily indicative of sales and earnings for future periods
due to the irregular timing and receipt of annual term contract
renewals and other large project awards.
Six Months Ended December 31, 1995 Compared with Six Months Ended
December 31, 1994
The Company realized net earnings of $1,329,596 ($0.30 per
share) for the first six months of fiscal 1996 as compared to net
earnings of $916,659 ($0.21 per share) for the first six months of
fiscal 1995. The Company's 45% improvement in comparable six month
operating results is primarily a result of increased demand met
with expanded production capabilities, sales awards obtained at
normal margins and continuing installation performance in line with
cost estimates.
Sales increased 22% for the first six months of fiscal 1996
compared with the first six months of fiscal 1995. Cost of sales
increased 18% for the six months ended December 31, 1995 as
compared to the six months ended December 31, 1994. This resulted
in a gross profit margin of 31% for the first six months of fiscal
1996 as compared to a gross profit margin of 28% for the first six
months of fiscal 1995. This increase in gross profit margin as a
percentage of sales is due primarily to the mix of work performed.
During the first quarter of fiscal 1995, the Company provided
additional collateral services to customers at gross profit margins
lower than margins realized for Insituform installations.
Selling, general and administrative expenses increased
$228,842 (12%) in the six months ended December 31, 1995 as
compared to the six months ended December 31, 1994 primarily as a
result of increased costs to support expanded production
activities.
11<PAGE>
<PAGE>
The Company's equity in the earnings of MIDSOUTH Partners
decreased from pretax earnings of $413,377 for the first six months
of fiscal 1995 to pretax earnings of $356,522 for the first six
months of fiscal 1996 primarily as the result of reduced gross
profit margins. Although comparable period sales increased 7% from
$4.4 million to $4.7 million, the Partnership's gross profit as a
percentage of sales decreased from 34% of sales for the first six
months of fiscal 1995 to 30% of sales for the first six months of
fiscal 1996 primarily as a result of an increase in collateral
services performed in addition to Insituform process installations,
principally manhole rehabilitation and lateral reconstruction
services. These collateral services are generally performed at
gross profit margins lower than margins realized for Insituform
process installations.
Financial Condition
During the six months ended December 31, 1995, the Company
used $398,681 in cash in operating activities as cash provided from
net earnings of $1.3 million was more than offset by a $1.9 million
increase in Accounts Receivable. The increase in Accounts
Receivable is primarily the result of increased sales and temporary
delays in billings and collections for several larger projects
performed during fiscal 1996.
During the first six months of fiscal 1996, the Company
expended $729,829 for equipment purchases and other capital
improvements and paid $261,412 in dividends to shareholders.
Although the Company experienced a $1.4 million decrease in cash
during the first six months of fiscal 1996, the Company's financial
liquidity remained strong as working capital increased $700,000 to
$6.1 million with a current ratio of 3.0 at December 31, 1995.
The Company anticipates that expanding production capabilities
and improving operational performance in the future will require
additional capital expenditures. Management believes that cash
flow from future operations, existing working capital, the
available line of credit and the unencumbered real and personal
property owned by the Company provide adequate resources to finance
the cash requirements of future capital expenditures.
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 27. Financial Data Schedule
(b) Reports on Form 8-K
None.
12<PAGE>
<PAGE>
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.
INSITUFORM EAST, INCORPORATED
(Registrant)
Date February 13, 1996 /s/ Robert W. Erikson
Robert W. Erikson
President
Date February 13, 1996 /s/ Raymond T. Verrey
Raymond T. Verrey
Chief Financial Officer
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE COMPANY'S UNAUDITED BALANCE SHEET AS OF DECEMBER 31, 1995, AND
THE COMPANY'S UNAUDITED STATEMENT OF EARNINGS FOR THE SIX MONTHS
ENDED DECEMBER 31, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> DEC-31-1995
<CASH> 1,401,836
<SECURITIES> 0
<RECEIVABLES> 6,556,225
<ALLOWANCES> 25,000
<INVENTORY> 910,027
<CURRENT-ASSETS> 9,171,062
<PP&E> 18,177,680
<DEPRECIATION> 8,874,106
<TOTAL-ASSETS> 20,375,884
<CURRENT-LIABILITIES> 3,024,581
<BONDS> 0
<COMMON> 187,380
0
0
<OTHER-SE> 16,263,923
<TOTAL-LIABILITY-AND-EQUITY> 20,375,884
<SALES> 12,471,842
<TOTAL-REVENUES> 12,471,842
<CGS> 8,688,663
<TOTAL-COSTS> 8,688,663
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 2,181,596
<INCOME-TAX> 852,000
<INCOME-CONTINUING> 1,329,596
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,329,596
<EPS-PRIMARY> 0.30
<EPS-DILUTED> 0.30
</TABLE>
