----------------------------------------------------------------------
U.S. Securities and Exchange Commission
Washington, D.C. 20549
--------------------------
Form 10-Q
(Mark One)
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [Fee Required] For the
quarterly period ended September 30, 1999.
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [No Fee Required] For the
transition period from ____________ to ____________
Commission File No. 0-10634
---------------------------
Mining Services International Corporation
(Exact Name of Registrant as Specified in Its Charter)
Utah 87-0351702
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
8805 South Sandy Parkway
Sandy, Utah 84070-6408
(Address of principal executive offices, zip code)
Issuers telephone number: (801) 233-6000
---------------------------
Check whether the Issuer (1) filed all reports required to be filed by
Section 13 or 15(d) 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 ___
The number of shares outstanding of the registrant's par value $0.001
Common Stock as of November 4, 1999 was 7,319,760.
-------------------------------------------------------------------------
<PAGE>
Mining Services International Corporation
Index
Page No.
Part I Financial Information
Item 1. Consolidated Balance Sheet (Condensed)
September 30, 1999 and December 31, 1998. 1
Consolidated Statement of Operations
(Condensed) for the three months ended
September 30, 1999 and September 30, 1998. 2
Consolidated Statement of Operations (Condensed) for the
nine months ended September 30, 1999 and September 30, 1998. 3
Consolidated Statement of Cash Flows (Condensed) for the
nine months ended September 30, 1999 and September 30, 1998. 4
Condensed Notes to the consolidated financial statements 5
Item 2. Management's Discussion and Analysis of Financial Condition 7
and Results of Operations
Part II Other Information
Item 6. Exhibits and Reports on Form 8-K 10
<PAGE>
PART I. FINANCIAL INFORMATION
Financial Statements
<TABLE>
<CAPTION>
MINING SERVICES INTERNATIONAL CORPORATION
Consolidated Balance Sheet (Condensed)
September 30, 1999 December 31,1998
ASSETS (Unaudited)
------------------------ ----------------------
Current assets:
<S> <C> <C>
Cash $ 840,000 $ 314,000
Receivables, net 5,604,000 6,050,000
Inventories 1,662,000 1,721,000
Prepaid expenses 60,000 126,000
Deposits 819,000 -
Current portion of related party notes receivable 435,000 435,000
------------------------ ----------------------
Total current assets 9,420,000 8,646,000
Investments in and advances to joint ventures 13,140,000 13,371,000
Property, plant and equipment, net 8,400,000 6,248,000
Goodwill 2,074,000 2,243,000
Related party notes receivable 1,148,000 1,190,000
Other assets 112,000 221,000
------------------------ ----------------------
$ 34,294,000 $ 31,919,000
======================== ======================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 2,872,000 $ 2,943,000
Current portion of long-term debt 399,000 1,154,000
------------------------ ----------------------
Total current liabilities 3,271,000 4,097,000
Long-term debt 3,321,000 1,213,000
Deferred income taxes 2,809,000 2,532,000
------------------------ ----------------------
Total liabilities 9,401,000 7,842,000
------------------------ ----------------------
Minority interest 461,000 -
Commitments and contingencies - -
Stockholders' equity:
Common stock 7,000 7,000
Capital in excess of par value 5,312,000 5,443,000
Cumulative foreign currency translation adjustments (387,000) (242,000)
Retained earnings 19,500,000 18,869,000
------------------------ ----------------------
Total stockholders' equity 24,432,000 24,077,000
------------------------ ----------------------
$ 34,294,000 $ 31,919,000
======================== ======================
</TABLE>
See accompanying notes to financial statements
Page 1
<PAGE>
<TABLE>
<CAPTION>
MINING SERVICES INTERNATIONAL CORPORATION
Consolidated Statement of Operations (Condensed)
(Unaudited)
3 months ended 3 months ended
9/30/99 9/30/98
------------------------ ----------------------
Revenues:
<S> <C> <C>
Net sales $ 6,567,000 $ 6,312,000
Royalties 217,000 283,000
Equity in earnings from joint ventures 460,000 1,463,000
------------------------ ----------------------
7,244,000 8,058,000
------------------------ ----------------------
Costs and expenses:
Cost of sales 6,172,000 5,771,000
General administrative 785,000 281,000
Research and development 230,000 206,000
------------------------ ----------------------
7,187,000 6,258,000
------------------------ ----------------------
Income from operations 57,000 1,800,000
Other income (expense), net (44,000) 26,000
------------------------- ----------------------
Income before provision for income taxes and minority interest 13,000 1,826,000
Benefit (Provision) for income taxes 52,000 (652,000)
------------------------ -----------------------
Income before minority interest 65,000 1,174,000
Minority interest share of loss 11,000 -
------------------------ ----------------------
Net income $ 76,000 $ 1,174,000
======================== ======================
Weighted average number of shares outstanding
Basic 7,331,000 7,368,000
======================== ======================
Diluted 7,395,000 7,534,000
======================== ======================
Earnings per common share
Basic $ .01 $ .16
======================== ======================
Diluted $ .01 $ .16
======================== ======================
</TABLE>
See accompanying notes to financial statements
Page 2
<PAGE>
<TABLE>
<CAPTION>
MINING SERVICES INTERNATIONAL CORPORATION
Consolidated Statement of Operations (Condensed)
(Unaudited)
9 months ended 9 months ended
9/30/99 9/30/98
------------------------ ----------------------
Revenues:
<S> <C> <C>
Net sales $ 19,593,000 $ 17,219,000
Royalties 721,000 1,039,000
Equity in earnings from joint ventures 1,958,000 4,124,000
------------------------- ----------------------
22,272,000 22,382,000
------------------------- ----------------------
Costs and expenses:
Cost of sales 18,684,000 16,541,000
General administrative 2,052,000 901,000
Research and development 586,000 438,000
------------------------ ----------------------
21,322,000 17,880,000
------------------------ ----------------------
Income from operations 950,000 4,502,000
Other income (expense), net (96,000) 75,000
------------------------ ----------------------
Income before provision for income taxes and minority interest 854,000 4,577,000
Provision for income taxes (234,000) (1,482,000)
------------------------- -----------------------
Income before minority interest 620,000 3,095,000
Minority interest share of loss 11,000 -
------------------------ ----------------------
Net income $ 631,000 $ 3,095,000
======================== ======================
Weighted average number of shares outstanding
Basic 7,331,000 7,368,000
======================== ======================
Diluted 7,395,000 7,534,000
======================== ======================
Earnings per common share
Basic $ .09 $ .42
======================== ======================
Diluted $ .09 $ .41
======================== ======================
</TABLE>
See accompanying notes to financial statements
Page 3
<PAGE>
<TABLE>
<CAPTION>
MINING SERVICES INTERNATIONAL CORPORATION
Consolidated Statement of Cash Flows (Condensed)
(Unaudited)
9 months ended 9 months ended
9/30/99 9/30/98
------------------------ ----------------------
Cash flows from operating activities:
<S> <C> <C>
Net income $ 631,000 $ 3,095,000
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 936,000 581,000
Stock compensation expense - 3,000
Loss (Gain) on disposal of equipment (1,000) 1,000
Distributed/(undistributed) earnings in joint ventures 1,187,000 (87,000)
Deferred income taxes 277,000 215,000
Change in assets and liabilities:
(Increase) decrease in accounts receivable 446,000 (937,000)
(Increase) decrease in inventories 59,000 (32,000)
(Increase) decrease in prepaid expenses 66,000 22,000
(Increase) decrease in deposits (819,000) -
(Increase) decrease in other assets 109,000 185,000
Increase (decrease) in minority interest 461,000 -
Increase (decrease) in accounts payable and accrued expenses (71,000) 669,000
------------------------- ----------------------
3,281,000 3,715,000
------------------------ -----------------------
Cash flows from investing activities:
Proceeds from sale of plant and equipment 51,000 33,000
Payments received on notes receivable 100,000 -
Purchase of plant and equipment (2,970,000) (608,000)
Increase in notes receivable (58,000) -
Investment in joint ventures (1,100,000) (1,471,000)
------------------------- ----------------------
Net cash used in investing activities (3,977,000) (2,046,000)
------------------------- ----------------------
Cash flows from financing activities:
Issuance of common stock - 84,000
Retirement of common stock (131,000) -
Net proceeds from operating line of credit 795,000 -
Proceeds from issuance of long-term debt 1,000,000 -
Payments on long-term debt (442,000) -
------------------------- ----------------------
Net cash provided by financing activities 1,222,000 84,000
------------------------ ----------------------
Net increase in cash 526,000 1,753,000
Cash and cash equivalents, beginning of period 314,000 1,160,000
------------------------ ----------------------
Cash and cash equivalents, end of period $ 840,000 $ 2,913,000
======================== ======================
</TABLE>
See accompanying notes to financial statements
Page 4
<PAGE>
Mining Services International
Notes to Consolidated Financial Statements
(Unaudited)
NOTE 1: BASIS OF PRESENTATION
The interim financial information for the three months ended September
30, 1999 and the nine-months ended September 30, 1999 included herein is
unaudited and the December 31,1998 Balance Sheet is derived from audited
financial statements; however, such information reflects all adjustments, which
are, in the opinion of management, necessary for a fair statement of results for
the interim periods.
These consolidated financial statements are presented in accordance
with the requirements for Form 10-Q and consequently may not include all the
disclosures normally required by generally accepted accounting principles or
those normally made in the annual 10-K filing. Financial information relating to
depreciation contained in the Management's Discussion and Analysis of Financial
Condition and Results of Operations are incorporated by reference into these
notes.
The results of operations for the three-month period ended September
30, 1999 and the nine month period ended September 30, 1999 are not necessarily
indicative of the results to be expected for the full year.
NOTE 2: SIGNIFICANT ACCOUNTING POLICIES
Because of the significance of the investment of the Company in joint
ventures ("JV" or "JV's") which are not consolidated, but accounted for under
the equity method, the following comparative schedule is prepared to clarify and
demonstrate the Consolidated Revenue of the Company during the three-month and
nine-month periods ending September 30, 1999 and 1998. As demonstrated in the
schedule, the Company's Consolidated Revenue includes its share of equity in
earnings from JV's:
<TABLE>
<CAPTION>
Non Consolidated Amount MSI's MSI's
Joint Venture Joint Venture Equity Included in Non-JV Consolidated
Sales Net Income MSI MSI Revenue Revenue Revenue
<S> <C> <C> <C> <C> <C> <C>
9 Months 1999..........$18,502,000 $3,916,000 50% $1,958,000 $20,314,000 $22,272,000
9 Months 1998..........$26,755,000 $8,248,000 50% $4,124,000 $18,258,000 $22,382,000
3 Months 1999..........$ 6,566,000 $ 920,000 50% $ 460,000 $ 6,784,000 $ 7,244,000
3 Months 1998..........$ 9,395,000 $2,926,000 50% $1,463,000 $ 6,595,000 $ 8,058,000
</TABLE>
Note: MSI does not consolidate revenues from 50% or less controlled joint
ventures
Page 5
<PAGE>
NOTE 3: INVENTORIES
Inventories at September 30, 1999 and December 31, 1998 have been
recorded at the lower of cost or market, cost being determined on the first in
first out (FIFO) method. The composition of inventories at September 30, 1999
and December 31, 1998 are as follows:
<TABLE>
September 30, 1999 December 31, 1998
------------------- -----------------
<S> <C> <C>
Raw Materials $ 609,000 $ 707,000
Finished Goods 1,053,000 1,014,000
--------------------- -------------------
$1,662,000 $1,721,000
===================== ===================
</TABLE>
NOTE 4: MINORITY INTEREST
Effective September 1, 1999, the Company entered into a JV
agreement with five individuals for the purpose of establishing Tennessee
Blasting Services, L.L.C. (TBS), a limited liability company organized under the
laws of the state of Utah. TBS will provide drilling, blasting and explosives
resale services centered in Tennessee. Through investment of cash and other
assets, the Company acquired 51% of the JV and the individuals acquired the
minority interest of 49%. Due to the Company's 51% ownership, the accounts of
TBS are included in the consolidated financial statements, including the
accounts which represent the minority interest. This differs from the equity
method used by the Company to account for its unconsolidated JV's.
Page 6
<PAGE>
Item 2 Management's Discussion and Analysis of Financial Condition and Results
of Operations
Three-months ended September 30, 1999 vs. 1998
Net income from operations decreased 97% from $1,800,000 in the three
months ended September 30, 1998 to $57,000 in the three months ended September
30, 1999. Approxmately 56% of this decrease consists primarily of the decrease
in equity in earnings from unconsolidated JV's (see Note 2). Equity in earnings
from JV's decreased $1,003,000 or 69% for the three-month period ended September
30, 1999 compared to the three-month period ended September 30, 1998 due
primarily to a decrease in contribution from the Company's JV's in Nevada,
Colombia, Uzbekistan and Ghana. General and administrative expenses increased
$504,000 for the quarter ended September 30, 1999 compared to the quarter ended
September 30, 1998 representing 28% of the decrease in net income from
operations for the period. Most of the increase in general and administrative
expenses for the period is the result of the consolidation of Green Mountain
Explosives, Inc. (GME) in December 1998 and TBS in September of 1999. Gross
margin, or the difference between net sales and cost of sales, decreased
$146,000 or 27% for the three-month period ended September 30, 1999 compared to
the three-month period ended September 30, 1998, representing 8% of the decrease
in net income from operations for the period. While it is likely that the
conditions that have negatively impacted net income from operations relative to
the Company's unconsolidated JV's will improve in the long-term with an industry
turn-around, the Company expects the acquisitions of GME, TBS and O'Brien Design
Associates, Inc. (ODA) to provide growth in net income from operations
currently. The investment by the Company in TBS is a continuation of its
interest in niche markets in the commercial explosives industry. Not only will
the Company share in the profits of the JV, but the Company will also benefit
from strong demand by TBS for its packaged emulsion product being manufactured
at its West Virginia plant, as well as its accessory product line soon to be
available from ODA.
Cyanco's contribution to equity in earnings from non-consolidated joint
ventures decreased $652,000 or 52% compared to the same 3-month period in 1998
due to a decrease in both sales volume and gross margin per unit of sales. The
decrease in Cyanco's sales volume and margin compared to the third quarter of
1998 correlate to worsening gold bullion prices during the second and third
quarters of 1999. The price of gold reached 20 year lows by the middle of
September 1999 and production at the Nevada gold mines responded accordingly.
However, low gold prices are expected to allow Cyanco to increase market share
as the low-cost producer in the area of the Nevada gold mines and to position
itself well as gold prices recover in the long-term. Although gold prices
recovered at the end of September 1999 and have remained steady at approximately
$300 per ounce, mine production is not likely to resume to previous levels in
the short term and consolidation of the market will continue the downward
pressure on prices.
Page 7
<PAGE>
Similarly, the Company's JV in Colombia experienced a drop in sales
volumes due to the Company's major coal mine customer curtailing production
while it builds railroad and port facilities to better compete in the current
market for export coal. The decrease in revenue resulted in a decrease in equity
in earnings of $190,000, a decrease of 114%. Again, results are expected to
improve as mine production in Colombia strengthens in the year 2000 now that
more cost-effective infrastructure is being put in place. In spite of the fact
that the operations of the Company's JV in Uzbekistan have been profitable,
highly inflationary conditions in Uzbekistan have required a remeasurement of
the financial statements. This remeasurement has resulted in a decrease of
equity in earnings from the JV of $166,000 or 291% for the three-month period
ended September 30, 1999 as compared to the three-month period ended September
30, 1998. Although the JV has recently developed strong support from government
officials and is hopeful that hard currency conversion can occur soon, without
hard currency, the JV's current inability to import needed raw materials and
supplies will curtail operations and would likely impair the long-term value of
the Company's investment. The JV in Ghana continues to struggle to gain market
share due to low gold prices, and though prospects for long-term growth remain
positive, the Company expects continuing problems into the year 2000.
During the quarter ended September 30, 1999, the Company was a net
borrower of funds and incurred interest expense of $37,000. Conversely, during
the quarter ended September 30, 1998, the Company was a net investor of funds
and earned interest income of $28,000. This $65,000 swing in the use of the
Company's capital resources represents 93% of the decrease in other income and
expense for three month period ended September 30, 1999 as compared to the same
period in 1998.
While net sales increased $255,000 or 4% for the three months ended
September 30, 1999 as compared to the three months ended September 30, 1998, the
margin between net sales and cost of sales decreased $146,000 or 27% for the
same three month period of 1999 and 1998. This decrease in margin is largely the
result of reduced sales in the Company's western division due to the anticipated
completion of a major dam project in California. When comparing the third
quarter of 1999 to the third quarter of 1998, the erosion in gross margin caused
by the winding down of the dam project was softened by the gross margin
contribution added by GME. As referred to above in Note 4, the Company entered
into a JV agreement to establish TBS effective September 1, 1999. Accordingly,
due to the Company's 51% ownership, principles of consolidation require the
effect of the minority-interest share of the JV's $22,000 loss during start-up
operations of $11,000 be eliminated to arrive at net income. The Company expects
TBS to make a contribution to income during the fourth quarter of 1999 with
annual revenues for the year 2000 expected to reach at least $7 million.
The Company's JV project with Norsk Hydro in Kovdor, Russia is
progressing as planned with plant and specialized mobile equipment now being
shipped to the Russian mine site. ODA is currently testing its accessories
production line and production is expected to begin early in the year 2000. ODA
has recently completed negotiations with a widely respected manufacturer of
detonation devices for integration into its accessory product line. It is
expected that in future periods these operations will continue to add
significantly to revenues and income from operations.
Nine-months ended September 30, 1999 vs. 1998
For the nine months ended September 30, 1999, net sales increased
$2,374,000 or 14% as compared to the nine months ended September 30, 1998
primarily due to the December 1998 acquisition of GME. Gross margin increased
$231,000 or 34% for the nine-month period ended September 30. 1999 as compared
to the nine-month period ended September 30, 1998. Gross margin results for the
nine-month period differ from the experience of the three-month period ended
September 30, 1999 because sales to the California dam project did not begin to
decline until the third quarter 1999. Equity in earnings from joint ventures
decreased $2,166,000 for the nine-month period ended September 30, 1999 as
compared to the nine-month period ended September 30, 1998. The causes for the
decrease in equity in earnings from JV's for the nine-month period are similar
to those of the three-month period referred to above. Of the $1,151,000 or 128%
increase in general and administrative expenses for the nine months ended
September 30, 1999 compared to the nine months ended September 30, 1998,
$830,000 or 72% of the increase is represented by the general administrative
expenses of GME which was acquired in December 1998. Additionally, during the
nine month period ended September 30, 1999, the Board directed the expenditure
of approximately $150,000 for legal and other expenses to improve the overall
position of stockholders. Other expenses increased $171,000 or 228% for the
nine-months ended September 30, 1999 as compared to the same period in 1998.
Similar to the results of the three-month period ended September 30, 1999, the
Company's change from net investor to net borrower represented $160,000 or 94%
of the change in other expenses from the prior nine-month period.
Page 8
<PAGE>
Liquidity and Capital Resources
The Company maintains a strong balance sheet with a current ratio of
2.9 to 1 as of September 30, 1999 compared to 2.1 to 1 as of December 31, 1998.
The Company had a ratio of total liabilities to stockholders' equity of .38 to 1
as of September 30, 1999 and .33 to 1 as of December 31, 1998. On September 1,
1999, the Company entered into a credit agreement with a major U.S. bank for a
$4.5 million line of credit facility with sub-features that allow for borrowings
for equipment of up to $1.25 million and for letters of credit of up to $1
million. This new line of credit carries an interest rate of prime minus 1.
Because this credit facility matures August 31, 2001, it has been classified as
long-term debt which is the primary cause of the reduction in the Company's
current portion of long-term debt of $755,000 from December 31, 1998 to
September 30, 1999. The Company also reclassified $250,000 of a short-term
construction loan for a GME facility to a long-term mortgage note.
Of the $526,000 increase in cash, $215,000 or 41% of the increase
results from the consolidation of the accounts of GME, while $153,000 or 29% of
the increase results from income generated through international trade sales by
the Company's wholly owned subsidiary, MSI Chemicals (MSIC), which maintains
bank accounts outside the U.S. for reinvestment into international ventures.
Accounts receivable decreased $446,000 or 7% from December 31, 1998 to September
30, 1999. The decrease was expected due to decreased activity during 1999;
however, the decrease would have been greater had it not been for the
consolidation of the accounts receivable of GME, ODA and TBS for the nine months
ended September 30, 1999. The $819,000 increase in deposits consists principally
of tax refunds due from taxing authorities and other tax deposits. Again, due to
the Company's 51% ownership, principles of consolidation require the effect of
the minority-interest share of TBS's equity of $461,000 be eliminated from the
Company's balance sheet. The Company increased its investment in JV's by
$1,100,000, with 75% or $818,000 of the increase related to the Company's
projects in Kovdor, Russia and in Ghana. However, funds were provided to the
Company through distributed earnings from JV's in the amount of $1,187,000 from
Cyanco. The Company's use of cash for the purchase of plant and equipment of
$2,970,000 consisted primarily of the initial consolidation of TBS assets of
$1,235,000, investment in the production facility at ODA of $687,000, fixed
asset purchases by GME (principally delivery trucks) of $261,000, the purchase
of two specialized emulsion vehicles for explosives operations for $391,000, and
the purchase of transport trailers and production line equipment for the
Company's West Virginia plant of $232,000. Together these purchases represent
94% of the total purchases of plant and equipment from December 31, 1998 to
September 30, 1999. Depreciation expense increased $355,000 or 61% to $936,000
for the nine months ended September 30, 1999 compared to the nine months ended
September 30, 1998. Long-term debt increased for the nine month period ended
September 31, 1999 primarily due to a $795,000 increase in the line of credit,
the reclassification of $662,000 of the line of credit from current to long-term
status, the initial consolidation of $750,000 of TBS debt, and the
reclassification of the $250,000 mortgage at GME referred to above.
In management's opinion, the capital resources of the Company are
adequate to finance its business activity assuming that the political,
financial, and economic environment continue favorable to the mining industry at
large. The effect of recent falling gold prices have weakened the cash flow
expectations from Cyanco in the short-term and weak export coal prices have
weakened near-term cash flow expectations for the Colombian and Canadian
operations. Due to weak commodity prices world-wide, some of the underdeveloped
countries in which the Company operates may continue having problems maintaining
hard currency reserves, such as in Uzbekistan and Ghana, which rely heavily on
hard currency inflow from gold exports. Furthermore, as the Company ramps up its
JV in TBS, the ODA accessories plant and continues to acquire niche market
opportunities, cash flow in the short-term will have to be partially funded
through the use of credit facilities. Consequently, the Company has had to rely
on lines of credit more than it has in the past few years. In the long term, the
results of operations should fund the capital needs of the Company as the mining
industry rebounds; however, the Company could continue being impacted by factors
such as political risks, capital availability, emerging markets, changes in
taxation, inflation, and foreign exchange fluctuations. Consequently, the
Company cannot determine the ultimate effect that current products and
strategies will have on long-term net sales, earnings, or stock price.
Page 9
<PAGE>
PART II. OTHER INFORMATION
Item 6: Exhibits and Reports on Form 8-K
On May 19, 1999 the Board of Directors declared a dividend of common
stock purchase rights; as a result, a Form 8-K was filed on July 21, 1999
disclosing the Board action. No additional exhibits have been filed as part of
this report.
Page 10
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned thereunto duly
authorized.
MINING SERVICES INTERNATIONAL CORPORATION
-----------------------------------------
(Registrant)
November 12,1999 /s/ Lex L. Udy
---------------- ----------------------------
(Date) Lex L. Udy
Vice Chairman and Secretary
/s/ Duane W. Moss
----------------------------
Duane W. Moss
Chief Financial Officer
Page 11
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE FINANCIAL STATEMENTS OF THE COMPANY AS FILED IN ITS 10-Q (ITEM 8)
FOR THE QUARTER ENDED SEPTEMBER 30, 1999 AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> SEP-30-1999
<CASH> 840,000
<SECURITIES> 0
<RECEIVABLES> 5,641,000
<ALLOWANCES> 37,000
<INVENTORY> 1,662,000
<CURRENT-ASSETS> 9,420,000
<PP&E> 15,509,000
<DEPRECIATION> 7,109,000
<TOTAL-ASSETS> 34,294,000
<CURRENT-LIABILITIES> 3,271,000
<BONDS> 3,321,000
0
0
<COMMON> 7,000
<OTHER-SE> 24,425,000
<TOTAL-LIABILITY-AND-EQUITY> 34,294,000
<SALES> 19,593,000
<TOTAL-REVENUES> 22,272,000
<CGS> 18,684,000
<TOTAL-COSTS> 21,322,000
<OTHER-EXPENSES> (75,000)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 160,000
<INCOME-PRETAX> 854,000
<INCOME-TAX> 234,000
<INCOME-CONTINUING> 631,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 631,000
<EPS-BASIC> 0.09
<EPS-DILUTED> 0.09
</TABLE>
