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: March 31, 1996
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
Commission file number: 0-10800
INSITUFORM EAST, INCORPORATED
(Exact name as specified in its charter)
Delaware 52-0905854
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
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 May 3, 1996, the following number of shares of the issuer's classes of
common stock were outstanding:
Common Stock $.04 Par Value 4,059,266
Class B Common Stock To$.04 Par Value 297,596
---------
Total 4,356,862<PAGE>
TABLE OF CONTENTS
Page
Reference
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Statements of Earnings
Three Months and Nine Months Ended
March 31, 1996 and 1995 (Unaudited) 3
Condensed Consolidated Balance Sheets
March 31, 1996 and June 30, 1995 (Unaudited) 4
Condensed Consolidated Statements of Cash Flows
Nine Months Ended March 31, 1996 and 1995 (Unaudited) 5
Notes to Condensed Consolidated Financial
Statements (Unaudited) 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 7
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 10
2<PAGE>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
INSITUFORM EAST, INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
(Unaudited)
<CAPTION>
Three Months Ended Nine Months Ended
March 31, March 31,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Sales $5,078,438 $5,316,915 $17,550,280 $15,535,981
Costs and Expenses:
Cost of sales 3,865,420 3,570,488 12,554,083 10,908,143
Selling, general and
administrative 1,154,300 1,082,257 3,272,534 2,971,649
---------- ---------- ----------- -----------
Total Costs and Expenses 5,019,720 4,652,745 15,826,617 13,879,792
---------- ---------- ----------- -----------
Earnings from Operations 58,718 664,170 1,723,663 1,656,189
Investment Income 32,188 8,064 66,118 23,746
Other Income 49,373 80,670 175,572 185,849
Equity in Earnings of
MIDSOUTH Partners 64,134 141,223 420,656 554,600
---------- ---------- ----------- -----------
Earnings Before Income Taxes
and Non-owned Interest 204,413 894,127 2,386,009 2,420,384
Provision for Income Taxes 80,000 365,000 932,000 971,000
---------- ---------- ----------- -----------
Earnings Before Non-owned
Interest 124,413 529,127 1,454,009 1,449,384
Non-owned Interest in
Earnings of
Consolidated Subsidiary 0 (3,860) 0 (7,458)
---------- ---------- ----------- -----------
Net Earnings $124,413 $525,267 $1,454,009 $1,441,926
========== ========== =========== ===========
Net Earnings Per Share 0.03 $0.12 $0.33 $0.33
========== ========== =========== ===========
See notes to condensed consolidated financial statements.
</TABLE>
3<PAGE>
<TABLE>
INSITUFORM EAST, INCORPORATED
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
<CAPTION>
March 31, 1996 June 30, 1995
ASSETS
Current Assets:
<S> <C> <C>
Cash and cash equivalents $3,384,360 $2,791,758
Accounts receivable - net of allowance for doubtful
accounts of $25,000 4,768,261 4,675,868
Inventories - raw materials 894,840 1,111,202
Prepaid and refundable income taxes 54,000 5,276
Prepaid expenses 268,508 200,926
----------- -----------
Total Current Assets 9,369,969 8,785,030
Investment in and Advances to MIDSOUTH Partners 1,630,382 1,481,726
Property, Plant and Equipment - at cost less
accumulated depreciation of $9,147,066 and
$8,406,817 9,506,103 9,142,211
Other Assets 59,000 71,000
----------- -----------
Total Assets $20,565,454 $19,479,967
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $669,389 $1,024,166
Accrued compensation and related expenses 2,230,459 1,627,034
Income taxes payable 249,890 460,648
Dividends payable 0 261,412
----------- -----------
Total Current Liabilities 3,149,738 3,373,260
Deferred Income Taxes 840,000 985,000
----------- -----------
Total Liabilities 3,989,738 4,358,260
----------- -----------
Commitments and Contingencies:
Stockholders' Equity:
Common stock - $.04 par value; 10,000,000 shares
authorized; 4,387,163 shares issues; 4,059,266
shares outstanding 175,486 175,486
Class B Common stock - $.04 par value; 800,000 shares
authorized; 297,596 shares issues and outstanding 11,904 11,904
Additional paid-in capital 4,000,424 4,000,424
Retained earnings 13,577,515 12,123,506
----------- -----------
17,765,329 16,311,320
Less cost of 327,897 shares of common stock
in treasury 1,189,613 1,189,613
----------- -----------
Total Stockholders' Equity 16,575,716 15,121,707
----------- -----------
Total Liabilities and Stockholders' Equity $20,565,454 $19,479,967
=========== ===========
See notes to condensed consolidated financial statements.
</TABLE>
5<PAGE>
<TABLE>
INSITUFORM EAST, INCORPORATED
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
Nine Months Ended
March 31,
1996 1995
Cash Flows from Operating Activities:
<S> <C> <C>
Net Earnings $1,454,009$ 1,441,926
Adjustments for noncash items included
in net earnings:
Depreciation and amortization 873,848 763,325
Undistributed earnings of MIDSOUTH
Partners (420,656) (554,600)
Deferred income taxes (145,000) 119,000
Non-owned interest in earnings of
consolidated subsidiary 0 7,458
Cash effect of changes in:
Receivables (92,393) 462,616
Inventories 216,362 (221,096)
Other current assets (116,306) 263,568
Payables and accruals 37,890 (191,576)
---------- ----------
Net cash provided by operating activities 1,807,754 2,090,621
---------- ----------
Cash Flows from Investing Activities:
Capital expenditures, net (1,225,740) (1,039,457)
Cash distributions from MIDSOUTH Partners 272,000 123,250
Acquisition of non-owned interest in
consolidated subsidiary 0 (18,816)
---------- ----------
Net cash used in investing activities (953,740) (935,023)
---------- ----------
Cash Flows from Financing Activities:
Dividends Paid (261,412) (217,843)
---------- ----------
Net cash used in financing activities (261,412) (217,843)
---------- ----------
Net increase in cash and cash equivalents 592,602 937,755
Cash and cash equivalents at beginning of period 2,791,758 788,402
---------- ----------
Cash and cash equivalents at end of period $3,384,360 $1,726,157
========== ==========
Supplemental disclosure of cash flow information:
Income taxes paid $ 1,336,482 $ 12,647
See notes to condensed consolidated financial statements.
</TABLE>
6<PAGE>
INSITUFORM EAST, INCORPORATED
Notes to Condensed Consolidated Financial Statements
(Unaudited)
1. Condensed Consolidated Financial Statements
The Condensed Consolidated Balance Sheet as of March 31, 1996, the
Condensed Consolidated Statements of Operations for the three months and nine
months ended March 31, 1996 and 1995, and the Condensed Consolidated Statements
of Cash Flows for the nine months ended March 31, 1996 and 1995 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
March 31, 1996 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 March 31, 1996 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 4,415,283 and 4,377,221 were used in computing net earnings per
share for the three months ended March 31, 1996 and 1995, respectively;
4,423,696 and 4,365,588 shares were used in computing net earnings per share for
the nine months ended March 31, 1996 and 1995, 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:
Three Months Ended Nine Months Ended
March 31, March 31,
1996 1995 1996 1995
Revenues $1,834,760 $2,132,577 $6,530,305 $6,515,334
Gross Profit $ 342,021 $ 585,736 $1,739,393 $2,059,480
Partnership Net Earnings $ 150,905 $ 332,291 $ 989,780 $1,304,942
On April 18, 1995, Insituform Mid-America, Inc. ("IMA") acquired the
pipeline rehabilitation business of ENVIROQ Corporation ("Enviroq"), including
7<PAGE>
Enviroq's 42.5% interest in MIDSOUTH Partners which is held through Enviroq's
wholly-owned 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 was made without prior
written consent of either of the Partnership's two other partners, Insitu, Inc.
("Insitu"), a wholly-owned subsidiary of the Company, and Insituform California,
Inc. ("ICI"), a wholly-owned subsidiary of Insituform Technologies, Inc.
("ITI").
The Partnership Agreement grants a non-defaulting partner 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. Insitu
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.
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 was made without the prior
written consent of Insitu.
On November 17, 1995, Insitu sought to amend its demand for arbitration
alleging, among other things, a breach of the Partnership Agreement by ICI in
connection with ICI, through ITI, engaging in a series of actions designed to
achieve control over MIDSOUTH Partners and ICI wrongfully seeking to deny Insitu
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
Insitu's request to amend and added ICI as a respondent party. In their answer
filed in January 1996, respondents (ICI and E-Midsouth, Inc.) admitted two
events of default by E-Midsouth, Inc. with respect to consummation of the
Enviroq/IMA and IMA/ITI mergers. Respondents denied all of the remaining
claims. An evidentiary hearing before the American Arbitration Association
panel of arbitrators was held March 4-6, 1996. Post-hearing briefs are
scheduled for completion in May, 1996, after which a decision from the
arbitration panel is expected to be rendered.
ITI has separately asserted that should Insitu prevail in the above-
described arbitration and achieve management control of MIDSOUTH Partners, ITI
may take action to withdraw from the Partnership and may take action to
terminate the Insituform process license of MIDSOUTH Partners. The Company has
asserted that ITI does not have the right to terminate the Insituform process
license to MIDSOUTH Partners under these circumstances. 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.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Overview and Outlook
8<PAGE>
The Company recognized net earnings of $124,413 ($0.03 per share) on $5.1
million in sales for the third quarter of its current fiscal year ended March
31, 1996. For the first nine months of fiscal 1996, the Company recorded
cumulative net earnings of $1,454,009 ($0.33 per share) on sales of $17.6
million. In the previous year, the Company recognized net earnings of $525,267
($0.12 per share) on $5.3 million in sales for the third quarter and, for the
first nine months, cumulative net earnings of $1,441,926 ($0.33 per share) on
sales of $15.5 million. The Company experienced depressed current third quarter
results primarily as a result of unusually harsh and extended winter weather
conditions that significantly impeded installation performance. The Company's
superior performance during the first six months of the current year mitigated
the impact of the depressed third quarter on cumulative nine-month earnings,
yielding a modest (1%) improvement over the nine-month period of the previous
year.
While there can be no assurances regarding future operating performance,
as forward-looking information based both on unfavorable April weather
conditions and on the volume and mix of the Company's present and expected
backlog of customer orders, the Company currently anticipates a moderate
improvement in closing fourth quarter results over the preceding quarter ended
March 31, 1996. Because fourth quarter earnings of the previous year were a
period record, and current nine-month results are substantially at parity with
the previous year, the Company anticipates projected full year fiscal 1996
earnings to remain favorable but below the exceptional results of the previous
year.
The principal factor affecting the Company's future performance is 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, increases in period sales, at normal margins, can typically leverage
positive earnings significantly. Conversely, earnings can, at times, be
severely reduced or eliminated during extended periods of harsh weather or
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. The substantial parity in nine-month earnings,
notwithstanding a 13% increase in sales revenues, reflects increased semi-fixed
costs to support expanded production capacity and decreased earnings from
MIDSOUTH Partners.
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, a 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.
9<PAGE>
Results of Operations
Three Months Ended March 31, 1996 Compared with Three Months Ended March 31,
1995
The Company recognized net earnings of $124,413 ($0.03 per share) for the
third quarter of fiscal 1996 ended March 31, 1996, as compared to net earnings
of $525,267 ($0.12 per share) for the third quarter of fiscal 1995 ended March
31, 1995. The Company's depressed comparable period operating results are
primarily a result of severe winter weather conditions that significantly
impeded third quarter fiscal 1996 installation performance.
Sales decreased 4% from $5.3 million for the three months ended March 31,
1995 to $5.1 million for the three months ended March 31, 1996. Cost of sales
increased 8% in the third quarter of fiscal 1996 as compared to the third
quarter of fiscal 1995. As a result, the Company's gross profit margin as a
percentage of sales decreased from 33% of sales for the third quarter of fiscal
1995 to a gross profit margin of 24% of sales for the third quarter of fiscal
1996. The decrease in comparable period gross profit margins is primarily a
result of increased semi-fixed operating costs associated with expanded
production capabilities in fiscal 1996.
Selling, general and administrative expenses increased $72,043 (7%) for
the third quarter of fiscal 1996 as compared to the third quarter of fiscal 1995
primarily as a result of increased legal costs advanced in connection with the
MIDSOUTH Partners arbitration.
The Company's equity in the operating results of MIDSOUTH Partners
decreased 55% from pretax earnings of $141,223 for the third quarter of fiscal
1995 to pretax earnings of $64,134 for the third quarter of fiscal 1996
primarily as a result of reduced comparable period sales and reduced gross
profit margins. The Partnership's sales decreased 14% from $2.1 million for the
three months ended March 31, 1995 to $1.8 million for the three months ended
March 31, 1996 primarily as a result of harsh winter weather conditions
experienced in January and February 1996. The Partnership's gross margin
declined from 27% of sales during the third quarter of fiscal 1995 to 19% of
sales for the third quarter of fiscal 1996 primarily as a result of reduced
Insituform process installation revenues, reduced margins on Insituform process
revenues and increased revenues from lower margin collateral services during the
third quarter of fiscal 1996.
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 subsequent acquisition of this 42.5% interest in MIDSOUTH Partners by
Insituform Technologies, Inc. ("ITI") on October 25, 1995 and related actions
taken by Insituform California, Inc., ITI's wholly-owned 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.
10<PAGE>
The total value of all uncompleted and multi-year contract awards from
customers was approximately $5.1 million at March 31, 1996 as compared to $13.8
million at March 31, 1995. The twelve month backlog at March 31, 1996 was
approximately $4.9 million as compared to $11.4 million at March 31, 1995. The
total value of all uncompleted and multi-year contracts at March 31, 1996 and
1995 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 $1.5 million and $3.5 million at March 31,
1996 and 1995, 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.
Nine Months Ended March 31, 1996 Compared with Nine Months Ended March 31, 1995
The Company realized net earnings of $1,454,009 ($0.33 per share) for the
first nine months of fiscal 1996 as compared to net earnings of $1,441,926
($0.33 per share) for the first nine months of fiscal 1995. The Company's
modest 1% improvement in comparable nine month operating results is primarily a
result of improved results recognized during the first six months of fiscal 1996
mitigating the weather-impaired results for the third quarter of fiscal 1996.
Sales increased 13% for the first nine months of fiscal 1996 compared with
the first nine months of fiscal 1995. Cost of sales increased 15% for the nine
months ended March 31, 1996 as compared to the nine months ended March 31, 1995.
This resulted in a gross profit margin of 28% for the first nine months of
fiscal 1996 as compared to a gross profit margin of 30% for the first nine
months of fiscal 1995. This decrease in gross profit as a percentage of sales
is due primarily to increased semi-fixed operating costs associated with
expanded production capabilities during fiscal 1996.
Selling, general and administrative expenses increased $300,885 (10%) in
the nine months ended March 31, 1996 as compared to the nine months ended March
31, 1995 primarily as a result of increased costs to support expanded production
capacity and increased legal costs advanced in connection with the MIDSOUTH
Partners arbitration.
The Company's equity in the earnings of MIDSOUTH Partners decreased from
pretax earnings of $554,600 for the first nine months of fiscal 1995 to pretax
earnings of $420,656 for the first nine months of fiscal 1996 primarily as the
result of reduced gross profit margins. Although nine-month sales revenues were
$6.5 million for both fiscal years, the Partnership's gross profit as a
percentage of sales decreased from 32% of sales for the first nine months of
fiscal 1995 to 27% of sales for the first nine months of fiscal 1996 largely as
a result of an increase in collateral services performed in addition to
Insituform process installations. These collateral services, principally
manhole rehabilitation and lateral reconstruction services, are generally
performed at gross profit margins lower than margins realized for Insituform
process installations.
Financial Condition
The Company's operating activities provided $1.8 million in cash during
the nine months ended March 31, 1996, primarily as a result of nine month net
11<PAGE>
earnings of $1,454,009 plus $873,848 in depreciation and amortization expenses
included in net earnings that did not require the outlay of cash.
During the first nine months of fiscal 1996, the Company expended
$1,225,740 for equipment purchases and other capital improvements, paid $261,412
in dividends to shareholders and received a $272,000 cash distribution from
MIDSOUTH Partners.
The Company's financial liquidity remained strong as the Company's cash
position improved almost $600,000 to $3.38 million during the nine months ended
March 31, 1996. In addition, working capital improved $800,000 from $5.4
million to $6.2 million and the Company's current ratio improved from 2.6 to 1
to 3.0 to 1 during the first nine months of fiscal 1996.
The Company anticipates that maintaining 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
27 - Financial Data Schedule for the nine months ended March 31, 1996
(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.
INSITUFORM EAST, INCORPORATED
(Registrant)
Date May 14, 1996 Robert W. Erikson
President
Date May 14, 1996 Raymond T. Verrey
Chief Financial Officer
12<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S UNAUDITED BALANCE SHEET AS OF MARCH 31, 1996, AND THE COMPANY'S
UNAUDITED STATEMENT OF EARNINGS FOR THE NINE MONTHS ENDED MARCH 31, 1996 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> MAR-31-1996
<CASH> 3,384,360
<SECURITIES> 0
<RECEIVABLES> 4,793,261
<ALLOWANCES> 25,000
<INVENTORY> 894,840
<CURRENT-ASSETS> 9,369,969
<PP&E> 18,653,169
<DEPRECIATION> 9,147,066
<TOTAL-ASSETS> 20,565,454
<CURRENT-LIABILITIES> 3,149,738
<BONDS> 0
187,390
0
<COMMON> 0
<OTHER-SE> 16,388,326
<TOTAL-LIABILITY-AND-EQUITY> 20,565,454
<SALES> 17,550,280
<TOTAL-REVENUES> 17,550,280
<CGS> 12,554,083
<TOTAL-COSTS> 12,554,083
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 2,386,009
<INCOME-TAX> 932,000
<INCOME-CONTINUING> 1,454,009
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,454,009
<EPS-PRIMARY> 0.33
<EPS-DILUTED> 0.33
</TABLE>
