<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 1999
Commission File Number: 1-13327
June 24, 1999
<TABLE>
<CAPTION>
CENTURY INDUSTRIES, INC.
- -------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
District of Columbia 54-1666769
- -------------------------------------------------------------------------------
<S> <C>
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
45034 Underwood Lane
Sterling, Va. 20166
(Mail) P.O. Box 319
Sterling, Va. 20167
- -------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
</TABLE>
Registrant's telephone number, including area code: (703) 471-7606.
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 of 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.
(1) Yes X___ No___
(2) Yes X___ No___
At March 31, 1999, 3,783,000 shares of the Registrant's $.001 par value Class A
common stock were issued and outstanding, and 5,167,000 shares of the
Registrant's $.001 par value Class B common stock were issued and outstanding.
<PAGE> 2
CENTURY INDUSTRIES, INC. AND SUBSIDIARIES
<TABLE>
<CAPTION>
Page
<S> <C>
PART 1. FINANCIAL INFORMATION
Item 1 Consolidated Financial Statements F1
Consolidated Balance Sheets as of March 31, 1999
and December 31, 1998 F2-3
Consolidated Statements of Operations for the three
months ended March 31, 1999 and December 31, 1998 F4
Consolidated Statement of Changes in Stockholders'
Equity for the three months ended March 31, 1999 F5
Consolidated Statements of Cash Flows for the three months
ended March 31, 1999 and 1998 F6-7
Notes to Consolidated Financial Statements F8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
</TABLE>
<PAGE> 3
FINANCIAL STATEMENTS
In the opinion of the management of Century Industries, Inc. and subsidiaries
(the Company), the accompanying unaudited interim consolidated financial
statements contain all adjustments necessary of a fair presentation of the
Company's financial condition as of March 31, 1999 and December 31, 1998, and
the results of its operations and cash flows for the three month periods ended
March 31, 1999 and 1998.
The accompanying unaudited consolidated financial statements have been prepared
pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and note disclosures normally included in
annual financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to those rules
and regulations, although the Company's management believes that the
disclosures and information presented are adequate and not misleading.
Reference is made to the detailed financial statement disclosures which should
be read in conjunction with this report and are contained in the notes to
consolidated financial statements included in the Company's Annual Report Form
10-KSB for the year ended December 31, 1998. Certain items in prior period
consolidated financial statements have been reclassified, where appropriate, to
conform with the March 31, 1999 presentation.
F-1
<PAGE> 4
CENTURY INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1999 AND DECEMBER 31, 1998
(Unaudited)
ASSETS
<TABLE>
<CAPTION>
CURRENT ASSETS 3/31/99 12/31/98
-------------- ------- --------
<S> <C> <C>
Cash and Cash Equivalents $ 142,122 $ 497,341
Accounts Receivable-Trade (Net of allowance
for doubtful accounts of
$52,000 and $283,000 respectively) 2,149,957 1,923,084
Inventory 105,862 154,798
Marketable Securities 126,441 116,925
Other Current Assets 194,673 572,462
---------- ----------
Total Current Assets 2,719,056 2,737,036
---------- ----------
Property and Equipment
Land and Building 378,269 378,270
Software and Computer Equipment 2,258,106 2,245,067
Furniture and Fixtures 825,754 824,186
Machinery and Equipment 62,670 65,139
Transportation Equipment 206,229 215,429
Leasehold Improvements 159,251 159,251
---------- ----------
3,890,279 3,887,342
Less: Accumulated Depreciation (1,535,037) (1,382,951)
---------- ----------
Net Property and Equipment 2,355,242 2,077,423
---------- ----------
Other Assets
Investments 707,666 707,666
Security Deposits 105,653 105,653
Goodwill, Net 1,828,326 1,828,326
Due from Related Parties 618,513 496,171
Other Assets 319,084 1,317,340
---------- ----------
Total Other Assets 3,579,242 4,455,156
---------- ----------
Total Assets $8,653,540 $9,696,583
========== ==========
</TABLE>
See accompanying notes to consolidated financial statements
F-2
<PAGE> 5
CENTURY INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
MARCH 31, 1999 AND DECEMBER 31, 1998
(Unaudited)
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
3/31/99 12/31/98
------- --------
Current Liabilities
- -------------------
<S> <C> <C>
Accounts Payable - Trade $ 1,175,113 $ 1,521,587
Current Maturities - Long Term Debt and Mortgages 567,692 878,149
Capital Lease Obligations 103,325 104,349
Notes Payable -- 200,000
Advances from Stockholders 93,408 58,524
Accrued Expenses 1,288,525 1,485,883
Dividends Payable 16,389 16,389
----------- -----------
Total Current Liabilities 3,244,451 4,264,881
Long Term Notes and Mortgages Payable, Less Current Portion 639,432 749,066
Capital Lease Obligations, Less Current Portion 18,098 59,195
----------- -----------
Total Liabilities 3,901,981 5,073,142
----------- -----------
Minority Interest 14,207 12,719
----------- -----------
Stockholders' Equity
Preferred Stock, Convertible, $.001 par value, 1,200,000
shares authorized, 1,000,000 issued and outstanding 1,000 1,000
Common Stock, Class A, $.001 par value, 25,000,000 shares
authorized, 3,783,000 and 3,783,000 issued 3,783 3,783
CommonStock, Class B, $.001 par value, 25,000,000
shares authorized, 5,167,000 and 5,167,000 issued and outstanding 5,167 5,167
Additional Paid in Capital 8,080,396 8,080,396
Retained Deficit (2,453,251) (2,579,880)
----------- -----------
5,383,838 5,510,466
Less: Class A common stock in treasury, 269,202
shares in 1998 and 1997 (899,744) (899,744)
----------- -----------
Total Stockholders' Equity 4,737,352 4,610,722
----------- -----------
Total Liabilities and Stockholders' Equity $ 8,653,540 $ 9,696,583
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements
F-3
<PAGE> 6
CENTURY INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998
(Unaudited)
<TABLE>
<CAPTION>
1999 1998
----------- -----------
<S> <C> <C>
Sales $ 3,067,017 $ 3,070,052
Cost of Sales 1,651,083 1,934,499
----------- -----------
Gross Profit on Sales 1,415,933 1,135,553
----------- -----------
Operating Costs
Payroll Expense 482,336 543,180
Professional Fees 94,097 86,444
Auto, Travel and Entertainment 58,175 49,622
Amortization and Depreciation 68,135 138,957
Other 431,544 451,408
----------- -----------
Total Operating Costs 1,134,286 1,269,611
----------- -----------
Income (Loss) From Operations 281,647 (134,058)
----------- -----------
Other Income (Expense)
Other (Income) Expense (120,983) --
Interest Expense (34,035) (35,977)
Other Income (Expense)-Net -- (5,567)
----------- -----------
Total Other Income (Expense) - Net (155,018) (41,544)
----------- -----------
Income (Loss) Before Taxes 126,629 (175,602)
Income Tax Provision (Benefit) -- (14,520)
-----------
Net Income (Loss) $ 126,629 $ (161,082)
Net Income (Loss) Available for Common Stockholders $ 126,629 $ (161,082)
=========== ===========
Earnings (Loss) Per Share:
Basic and Diluted Earnings (Loss) Per Share $ .01 $ (0.02)
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements
F-4
<PAGE> 7
CENTURY INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED MARCH 31,1999
(Unaudited)
<TABLE>
<CAPTION>
COMMON COMMON ADDITIONAL RETAINED TOTAL
PREFERRED STOCK STOCK PAID-IN EARNINGS TREASURY STOCKHOLDERS'
STOCK CLASS A CLASS B CAPITAL (DEFICIT) STOCK EQUITY
-------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance December 31, 1998 $ 1,000 $ 3,783 $ 5,167 $ 8,080,396 $ (2,579,509) $ (899,744) $ 4,610,722
Net Income for three months
ended 3/31/99 126,629 (126,629)
------- ------- ------- ----------- ------------- ---------- ------------
Balance March 31,1999 $ 1,000 $ 3,783 $ 5,167 $ 8,080,396 $ (2,453,251) $ (899,744) $ 4,737,351
======= ======= ======= =========== ============= ========== ============
</TABLE>
See accompanying notes to consolidated financial statements
F-5
<PAGE> 8
CENTURY INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998
(Unaudited)
<TABLE>
<CAPTION>
3/31/99 3/31/98
------- -------
<S> <C> <C>
Cash Flows from Operating Activities:
Cash received from customers $ 2,840,143 $ 2,955,753
Cash paid to suppliers and employees (2,399,204) (3,127,547)
Interest received -- 943
Interest paid (34,035) (35,977)
Income taxes paid -- ------
----------- -----------
Net cash used for operating activities 406,904 (206,828)
-----------
Cash Flows from Investing Activities:
Purchases of fixed assets (2,937) (457,612)
Purchases of marketable securities and investments (9,516) 158,215)
----------- -----------
Net cash used for investing activities (12,452) (615,827)
----------- -----------
Cash Flows from Financing Activities:
Proceeds from issuance of equity securities -- 30,014
Receipts of (payments on) notes (662,212) 409,463
Net advances from affiliates-stockholders (87,458) (179,601)
----------- -----------
Net cash provided by financing activities (749,671) 659,876
----------- -----------
Net (Decrease) Increase In Cash and Cash Equivalents (355,219) (162,779)
Cash and Cash Equivalents - January 1 $ 497,341 $ 282,009
----------- -----------
Cash and Cash Equivalents - March 31 $ 142,122 $ 119,230
=========== ===========
Net (Loss) Income $ 126,629 (161,082)
Amortization and depreciation 68,135 138,957
Minority interest 1,488 (7,000)
Increase in accounts receivable (226,873) (114,299)
(Increase) decrease in inventory 48,936 22,488
(Increase) decrease in other current assets and other assets 679,164 29,182
Decrease in accounts payable (93,216) (343,005)
Increase in accrued expenses (197,358) 227,931
----------- -----------
Net cash used for operating activities $ 406,904 $ (206,828)
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements
F-6
<PAGE> 9
CENTURY INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED MARCH 31, 1999 AND 1998
(Unaudited)
For the purpose of the statements of cash flows, the Company considers all
highly liquid debt instruments purchased with a maturity of three months or less
to be cash equivalents.
Non-cash investing and financing activities:
During the quarters ended March 31, 1999 and 1998, the Company recognized an
unrealized gain of $0.00 and an unrealized gain of $10,802, respectively, on
marketable securities available for sale. In accordance with Statement of
Financial Accounting Standards No. 115, Accounting for Certain Investments in
Debt and Equity Securities, the investment and retained earnings accounts was
not adjusted and increased by $10,802 for the quarters ended March 31, 1999 and
1998, respectively.
See accompanying notes to consolidated financial statements
F-7
<PAGE> 10
CENTURY INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1-BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements of Century
Industries, Inc. and Subsidiaries (the Company) have been prepared pursuant to
the rules and regulations of the Securities and Exchange Commission. Certain
information and note disclosures normally included in annual financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted pursuant to those rules and regulations, although
the Company's management believes that disclosures and information presented are
adequate and not misleading. Reference is made to the detailed financial
statement disclosures which should be read in conjunction with this report and
are contained in the notes to consolidated financial statements included in the
Company's Annual Report on Form 10-KSB for the year ended December 31, 1998.
Certain items in prior period consolidated financial statements have been
reclassified, where appropriate, to conform with the March 31, 1999
presentation. The December 31, 1998 balance sheet was derived from audited
consolidated financial statements, but does not include all disclosures required
by generally accepted accounting principles.
NOTE 2- INTERIM PERIODS
In the opinion of the management of the Company, the accompanying unaudited
interim consolidated financial statements contain all adjustments (which are of
a normal recurring nature) necessary for a fair presentation of the Company's
financial condition as of a March 31, 1999 and December 31, 1998, and the
results of its operations and cash flows for the three month periods ended March
31, 1999 and 1998. The results of operations for the three months ended March
31,1999 are not necessarily indicative of the results to be expected for the
full year.
NOTE 3-PER SHARE DATA
Per share data was computed by dividing net income (loss) by the weighted
average number of shares outstanding during the period.
NOTE 4- BUILDING AND RELATED MORTGAGES
The Company closed on an office condo building located in Reston, Virginia
during the first quarter of 1998. This facility, which cost approximately
$360,000, will house the Company's corporate office and USIB and USIB Holdings
insurance operations.
The facility was financed with a $281,250 first trust mortgage loan from a bank.
The first trust mortgage loan bears a 9% interest rate and has a three year
maturity with monthly principal and interest payments based on a fifteen year
amortization. Additional financing of $37,500 was provided through a second
trust mortgage loan from a financial institution. The second trust mortgage
bears interest at 13% and has a term of three years. The second trust loan
carries monthly interest payments only until the loan is paid in full. Monthly
interest will be adjusted accordingly for any partial repayments of principal.
F-8
<PAGE> 11
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
Century Industries, Inc. in Consolidation
with its Subsidiaries
The first quarter 1999 results reflect the Company's continuing success at the
operational level for both the Century Steel subsidiary and the Scibal
Associates, but reflect a small consolidated net loss due to the costs of a
failed underwriting effort to create a new subsidiary. During the first quarter
the Company was successful in reducing parent overhead costs in an ongoing
effort to do so.
Its consolidated assets were $8,653,540, in comparison to $9,696,583 at
12-31-98, Consolidated capital has increased from $4,610,722 at 12-31-98 to
$4,737,352 at the end of the first quarter 1999.
Consolidated first quarter sales were $3,067,017, in comparison to $3,070,052 at
the same period in 1998. Consolidated operating costs decreased to $1,134,286 in
first quarter 1999 from $1,269,611 in first quarter 1998. The consolidated
operating income from operations was ($134,058) in 1998, whereas in first
quarter 1999 it was $281,647. Century, as the parent holding company, has no
operations of its own. Further delineation of sales and earnings is described
later herein under each subsidiaries' results of operations section.
The earnings per share was $.01 for the first quarter of 1999, a $.03 increase
over the ($.02) earned in the first quarter 1998. There was no additional share
issuance in the first quarter from that indicated at December 31, 1998.
The Company and its subsidiaries have more than sufficient cash on hand, and
liquidity from the cash flow of their accounts receivable, to continue to grow
the profitability of their operations.
SUBSIDIARIES' FIRST QUARTER RESULTS OF OPERATIONS
Century Steel Products, Inc. (CSP)
CSP's sales of $1,154,773 in 1999 were greater than the $1,104,575 for the first
quarter 1998 sales. CSP contributes this increase to its new, and anticipated to
be ongoing, relationship with a customer who is expanding its line of stores
into the Northern Virginia area.
CSP's trade debt was $731,169 in 1998 as compared to $872,114 in the first
quarter of 1999. CSP considers this debt increase as a seasonal increase and
anticipatory for an active second and third quarter of 1999.
CSP's first quarter 1999 operating income was $160,643, whereas its 1998
operating loss was ($63,527). CSP continues to reduce overhead costs while
trying to develop a new and profitable customer base.
-2-
<PAGE> 12
U.S. Insurance Brokers, Inc.
USIB was organized in April 1995 under the laws of the District of Columbia, has
its domiciliary offices at 700 13th St., NW, Suite 950, Washington, DC 20007,
and it has administrative offices at 11708 Bowman Green Drive, Reston, VA 20190.
To date, none of USIB's efforts to market group insurance plans to membership
based groups have succeeded. Management is in discussion with regards to USIB's
future, the disposal of USIB's assets, and a go-forward business plan for USIB.
Results of Operations
USIB's first quarter 1999 operating loss was ($39,256), and its 1998 operating
loss was ($40,554). USIB helped defray some of the parent public company
overhead expenses, including the 1998 audit expense.
Scibal Associates, Inc.
In 1996, the Company acquired DC Partners, Ltd. (DCP), with a home office
situated in Somers Point, NJ, and branch offices in Edison, NJ, West Chester,
PA, Livonia, MI, and Jacksonville, FL. Scibal Associates, Inc. (Scibal),
formerly the wholly owned subsidiary of DC Partners, Ltd., is a Third Party
Claim Administrator, investigating, adjusting and administering liability,
workers' compensation and property claims on behalf of self-insureds and
insurance companies. Scibal adjusts in excess of $65,000,000 worth of claims
annually.
Scibal began operations in 1953. The Company offers its customers a complete
range of services, including claim administration, adjusting, investigation and
risk management, as well as a full complement of computer reporting required for
program management.
Scibal presently employs over 100 personnel. None of the employees are
represented by labor unions, so Scibal is not vulnerable to union demands or the
threat of strike. Employee turnover is at a rate consistent with or lower than
industry average, with the majority of the employees having been with the
Company for many years.
While competition in the third party administration industry is substantial, it
has evolved in the 90's into an industry where the TPA must be hardware and
software intensive. Scibal's unique software, which was developed internally and
is therefore proprietary, allows for an extremely flexible delivery of reporting
systems to its clientele. This software is supported by an experienced staff of
computer programmers, who are continually improving and enhancing the
proprietary claims handling software. Additionally, through its computer
programmers, Scibal continues to write "next generation" software, which will
take advantage of Internet access, electronic claims reporting, electronic
medical payment processing, data warehousing, as well as various other
value-added programs. This will enable the Company's personnel to increase
production, thereby increasing profit margins while maintaining competitive
pricing. The features and functionality offered are singular, which should
provide Scibal with a substantial sales advantage in the future. Many of the new
functions will be available for delivery in early
-3-
<PAGE> 13
1999. Additionally, internal computer staff has commenced re-mapping of Scibal's
software to ensure Year 2000 compliance, which will be completed prior in June
of 1999.
The third party administration industry is directly affected by the current
"soft" insurance market. This is an industry-wide issue which has, historically,
had a tendency to run in cycles. Although many medium and large public entities
and private corporations have opted to discontinue participation in
self-insured/loss sensitive programs due to substantially reduced insurance
costs, many believe that the market will begin to tighten throughout 1999, which
will encourage both small and large entities to once again revisit insurance
programs involving alternative risk financing, including either self-insurance,
deductibles or retrospective ratings.
Scibal's customer base consists of organizations that participate in either
self-insurance or alternative risk financing programs. A representative list of
Scibal's clients includes hundreds of public entities, as well as many colleges,
universities, health care institutions, real estate holding companies, electric
authorities, various associations and entertainment related business.
In early 1999, Scibal was informed that a customer which generated approximately
$400,000 per year in revenue would be utilizing their own "in-house" program
during the second quarter of 1999. Additionally, Scibal believes that it will
win two new contracts, both effective July 1, 1999, which will replace this lost
revenue. All other contracts which expired through the first quarter of 1999
have been renewed. The great majority of Scibal's revenue is generated from long
standing customers, only one of which amounts to more than 5% of revenues for
Scibal.
Being a service provider, there exists no dependence on any major supplier.
Further, it is anticipated that salary and other costs totaling over $200,000
will be eliminated in view of the above "in-house" move by the one customer
described above herein. If the new contracts discussed above are in fact awarded
to Scibal, the incremental payroll cost to service the contracts is anticipated
to be less than $100,000.
Results of Operations
Scibal's revenues of $1,911,268 for the 1999 first quarter were 5.5% lower than
the first quarter of 1998 revenues of $2,022,316. This reduction was a result of
one of Scibal's substantial clients electing to administer its own claims.
Scibal's trade debt was $812,600 in 1999 as compared to $750,168 in the first
quarter of 1998. Scibal's trade receivables were $658,260 in 1999, as compared
to $758,700 for the same period of 1998.
Scibal's first quarter 1998 operating income of $195,605 was 42% lower than the
1998 first quarter's operating income of $339,380.
-4-
<PAGE> 14
USIB Holdings Limited Partnership
USIB Holdings LP was formed in 1997 for the purpose of acting as an acquisition
entity for insurance related entities.
This entity was formed as a Limited Partnership, with USIB as its General
Partner, in order that the Company could utilize David Scibal's 727,273 Class B
warrants, which he contributed as capital to the LP, as consideration for the
proposed formation of the new insurance subsidiary, as capital. This was
anticipated to reduce the potential dilution of the Company's shares after the
securities underwriting which was planned for financing the new Florida
insurance subsidiary. As this underwriting has failed, the Company is
considering "folding up" this limited partnership. Mr. Scibal, in effect, was
willing to participate in the go forward profits as a 20% investor rather than
exercise and sell the Class B shares underlying his warrant based upon his
demand registration rights which originally attached to his warrants.
The USIB Holdings, LP is managed and operated by USIB as its General Partner,
and thus the information regarding USIB as explained herein will again satisfy
the informational requirements of the USIB Holdings, LP.
Results of Operations
USIB Holdings, LP had a first quarter 1999 development stage operating loss of
($40,399). This is over $100,000 less than the same period in 1998, and this is
due to the continued efforts by management to lower overhead parent public
company costs.
This operating earnings loss is attributed to the failed formation of the
proposed Florida property & casualty insurance company and the assumption of
legal and accounting expenses associated with running the parent public company.
CONSOLIDATED LIQUIDITY AND CAPITAL RESOURCES
The Company's and its subsidiaries' primary sources of capital are their
accounts receivable, their bank credit lines, and their private placement of
convertible securities from time to time.
Consolidated accounts receivable were $2,149,957 at March 31, 1999, an increase
over its accounts receivable of $1,923,084 at March 31, 1998.
PART II - Other Information
ITEM 1. Legal Proceedings
NONE
ITEM 2. Changes in Securities
NONE
-5-
<PAGE> 15
ITEM 3. Defaults
NONE
ITEM 4. Submission of Matters to a Vote of Security Holders
NONE
ITEM 5. Other Information
NONE
ITEM 6. Exhibits and Reports on Form 8-K
NONE
SIGNATURE
In accordance with the requirements of the Exchange Act, the Registrant
has caused this report to be signed on its behalf by the undersigned, thereunto
duly authorized.
June 24, 1999
Century Industries, Inc.
/s/ Ted L. Schwartzbeck
-------------------------------------------
Ted L. Schwartzbeck, President
/s/ A. Jay Pignatello
-------------------------------------------
Jay Pignatello, Director
-6-
<PAGE> 16
INDEX TO EXHIBITS
(l) UNDERWRITING AGREEMENT. NOT APPLICABLE.
(2) PLAN OF ACQUISITION, REORGANIZATION, ARRANGEMENT, LIQUIDATION OR
SUCCESSION. NOT APPLICABLE.
(3) ARTICLES OF INCORPORATION AND BYLAWS. INCORPORATED BY REFERENCE THROUGH
PREVIOUSLY FILED 10-K'S.
(4) INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS, INCLUDING
INDENTURES. INCORPORATED BY REFERENCE THROUGH PREVIOUSLY FILED 10-K'S.
(5) OPINION: RE: LEGALITY. NOT APPLICABLE.
(6) NO EXHIBIT REQUIRED.
(7) OPINION: RE: LIQUIDATION PREFERENCE. NOT APPLICABLE.
(8) OPINION: RE: TAX MATTERS. NOT APPLICABLE.
(9) VOTING TRUST AGREEMENT AND AMENDMENTS. NOT APPLICABLE.
(10) MATERIAL CONTRACTS. NOT APPLICABLE.
(11) STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS. NOT APPLICABLE.
(12) NO EXHIBIT REQUIRED.
(13) ANNUAL REPORT TO SECURITIES HOLDERS. NOT APPLICABLE.
(14) MATERIAL FOREIGN PATENTS. NOT APPLICABLE.
(15) LETTER RE: UNAUDITED INTERIM, FINANCIAL INFORMATION. NOT APPLICABLE.
(16) LETTER ON CHANGE IN CERTIFYING ACCOUNTANT. NOT APPLICABLE.
(17) LETTER RE DIRECTOR RESIGNATION. NOT APPLICABLE.
(18) LETTER RE: CHANGE IN ACCOUNTING PRINCIPLES. NOT APPLICABLE.
(19) REPORT FURNISHED TO SECURITY HOLDERS. NOT APPLICABLE.
-7-
<PAGE> 17
INDEX TO EXHIBITS - CONT'D
(20) OTHER DOCUMENTS FURNISHED TO SECURITY HOLDERS. NOT APPLICABLE.
(21) SUBSIDIARIES OF THE REGISTRANT. INCORPORATED BY REFERENCE
(22) PUBLISHED REPORT REGARDING MATTERS SUBMITTED TO SECURITIES HOLDERS. NOT
APPLICABLE.
(23) CONSENTS OF EXPERTS AND COUNSEL. NOT APPLICABLE
(24) POWER OF ATTORNEY. NOT APPLICABLE.
(25) STATEMENT OF ELIGIBILITY OF TRUSTEE. NOT APPLICABLE.
(26) INVITATIONS FOR COMPETITIVE BIDS. NOT APPLICABLE.
(27) FINANCIAL DATA SCHEDULE. SEE ATTACHED EXHIBIT 27.
(28) INFORMATION FROM REPORTS FURNISHED TO STATE INSURANCE REGULATORY
AUTHORITIES. NOT APPLICABLE.
(29) ADDITIONAL EXHIBITS. NOT APPLICABLE.
-8-
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 142,122
<SECURITIES> 126,441
<RECEIVABLES> 2,149,957
<ALLOWANCES> 52,000
<INVENTORY> 105,862
<CURRENT-ASSETS> 2,719,056
<PP&E> 3,890,279
<DEPRECIATION> (1,535,037)
<TOTAL-ASSETS> 8,653,540
<CURRENT-LIABILITIES> 3,244,451
<BONDS> 0
0
1,000
<COMMON> 8,950
<OTHER-SE> 5,383,838
<TOTAL-LIABILITY-AND-EQUITY> 8,653,540
<SALES> 3,067,017
<TOTAL-REVENUES> 3,067,017
<CGS> 1,651,083
<TOTAL-COSTS> 1,134,286
<OTHER-EXPENSES> (155,018)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (34,035)
<INCOME-PRETAX> 126,629
<INCOME-TAX> 0
<INCOME-CONTINUING> 126,629
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 126,629
<EPS-BASIC> .01
<EPS-DILUTED> .01
</TABLE>
