UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 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 0-2977
------
General Magnaplate Corporation
-----------------------------------------------------
(Exact name of registrant as specified in its charter)
New Jersey 22-1641813
------------------------------- ------------------
(State or other jurisdiction of IRS Employer
incorporation or organization) Identification No.
1331 U.S. Route 1, Linden, New Jersey 07036
------------------------------------- ---------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (908) 862-6200
--------------
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 [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of April 30, 1995:
Common Stock, No Par Value 2,792,653
- - - - -------------------------- ------------------
(Class) (Number of Shares)
<PAGE>
INDEX OF DOCUMENTS
PART I - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
Accountants' Report
Balance Sheet - End of Current Quarter
Balance Sheet - End of Prior Fiscal Year
Statement of Income
Statement of Changes in Financial Position
Notes to Consolidated Financial Statements
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL POSITION AND
RESULTS OF OPERATIONS
PART II - OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
In the registrant's Form 10-Q for the quarter ended 12/31/94 it was stated:
A. The California subsidiary was a party to a lawsuit filed by former owners of
an adjacent property who alleged damages arising from soil contamination to
their property by the Company and other parties. The lawsuit was settled on
October 20, 1992 by settlement conference, in order not to incur any
additional legal costs. The settlement, in the amount of $45,000, will be
paid by registrant in installments: $25,000 payable January 6, 1993, and the
remaining balance of $20,000 payable in three installments of $6,666 each to
be paid on January 6, 1994, January 6, 1995 and January 6, 1996.
B. In April, 1991, a claim was served on the Canadian subsidiary, General
Magnaplate Canada, Ltd., by Dynasurf International, Inc. for $170,000
representing the unpaid contract liability for the net assets acquired by the
Canadian subsidiary from the sellers, Carrigan Industries, Ltd. and Dynasurf
International, Inc. on January 2, 1990.
The Subsidiary has filed a counterclaim for environmental and other costs
which resulted from the seller not resolving certain environmental issues
warranted in the contract of purchase.
Further, a shareholder of Dynasurf International, Inc. has also filed a claim
for breach of oral contract of employment of $162,000 which the Company has
denied in their related statement of defense.
It is the opinion of management that the ultimate resolution of both claims
will not have a materially adverse effect on the Company's financial
statements.
ITEM 4 - Submission of Matters to a Vote of Security Holders - None
ITEM 5 - Other Information - Press Release - Enclosed
ITEM 6 - Exhibits and Reports on Form 8-K - None
<PAGE>
MAURIELLO, FRANKLIN & LoBRACE
A PROFESSIONAL CORPORATION
CERTIFIED PUBLIC ACCOUNTANTS
45 SPRINGFIELD AVENUE, SPRINGFIELD, NEW JERSEY 07081
TELEPHONE (201) 379-5400 FAX (201) 379-3696
ACCOUNTANTS' REVIEW REPORT
To The Board of Directors of
General Magnaplate Corporation:
We have reviewed the accompanying balance sheet of General Magnaplate
Corporation and Wholly-Owned Subsidiaries as of March 31, 1995 and the related
consolidated statement of stockholders' equity for the nine months ended March
31, 1995 and the related consolidated statements of income and cash flows for
the nine months ended March 31, 1995 and 1994, in accordance with Statements on
Standards for Accounting and Review Services issued by the American Institute of
Certified Public Accountants. All information included in these financial
statements is the representation of the management of General Magnaplate
Corporation.
A review consists principally of inquiries of Company personnel and
analytical procedures applied to financial data. It is substantially less in
scope than an audit in accordance with generally accepted auditing standards,
the objective of which is the expression of opinion regarding the financial
statements taken as a whole. Accordingly, we do not express such an opinion on
the March 31, 1995 and 1994 statements.
Based on our review, we are not aware of any material modifications that
should be made to the accompanying financial statements in order for them to be
in conformity with generally accepted accounting principles.
Our review was made for the purpose of expressing limited assurance that
there are no material modifications that should be made to the financial
statements in order for them to be in conformity with generally accepted
accounting principles. The supplementary information for the nine months ended
March 31, 1995 and 1994 included in the accompanying supplementary information
is presented for supplementary analysis purposes. Such information has been
subjected to the inquiry and analytical procedures applied in the review of the
basic financial statements, and we are not aware of any material modifications
that should be made thereto.
The balance sheet for the year ended June 30, 1994 was audited by us,
and we expressed an unqualified opinion on it in our report dated August 12,
1994. We have not performed any auditing procedures on the balance sheet since
August 12, 1994.
April 28, 1995
<PAGE>
GENERAL MAGNAPLATE CORPORATION
AND
WHOLLY-OWNED SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, June 30,
ASSETS 1995 1994
------ ----------- -----------
<S> <C> <C>
Current assets:
Cash and cash equivalents .................... $ 403,236 $ 1,332,266
Marketable securities (Notes 1 and 2) ........ 3,871,935 2,741,331
Accounts receivable--trade, net of
allowance for doubtful accounts of
$127,000 (June 30, 1994-$111,000) .......... 1,272,908 1,311,496
Inventories (Note 1) ......................... 274,973 275,250
Prepaid expenses ............................. 126,544 150,116
Other current assets ......................... 35,336 171,583
----------- -----------
Total current assets ..................... $ 5,984,932 $ 5,982,042
Property, plant, and equipment, at
cost, net of accumulated
depreciation (Notes 1 and 3) ................. 5,552,913 5,773,515
Cash surrender value of officers' life
insurance, net ............................... 487,052 511,818
Other assets (Note 4) .......................... 540,348 515,248
----------- -----------
Total assets ............................... $12,565,245 $12,782,623
=========== ===========
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<PAGE>
GENERAL MAGNAPLATE CORPORATION
AND
WHOLLY-OWNED SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, June 30,
1995 1994
------------ ------------
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
- - - - ------------------------------------
Current liabilities:
Current maturities of long-term debt
(Note 6) ...................................... $ 452,253 $ 335,662
Accounts payable ............................... 204,624 190,413
Accrued liabilities (Note 8) ................... 526,044 522,315
Corporate income taxes payable ................. 51,824 26,398
------------ ------------
Total current liabilities .............. $ 1,234,745 $ 1,074,788
------------ ------------
Long-term liabilities:
Long-term debt (Note 6) ........................ $ 0 $ 175,682
Accrued deferred compensation (Note 9) ......... 783,000 702,000
Rent security deposit payable .................. 7,875 0
------------ ------------
Total long-term liabilities ............ $ 790,875 $ 877,682
------------ ------------
Total liabilities ...................... $ 2,025,620 $ 1,952,470
------------ ------------
Contingencies (Note 10)
Stockholders' equity:
Common stock--no par value
Authorized--5,000,000 shares
Issued and outstanding--2,794,500 shares
(June 30, 1994--2,956,194 shares) ............. $ 223,180 $ 223,180
Retained earnings .............................. 10,446,274 10,727,996
Foreign currency translation adjustment
(Note 1) ...................................... (129,829) (121,023)
------------ ------------
Total stockholders' equity ............. $ 10,539,625 $ 10,830,153
------------ ------------
Total liabilities and
stockholders' equity .............. $ 12,565,245 $ 12,782,623
============ ============
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<PAGE>
GENERAL MAGNAPLATE CORPORATION
AND
WHOLLY-OWNED SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
NINE MONTHS ENDED MARCH 31, 1995
<TABLE>
<CAPTION>
Foreign
Currency
Common Retained Translation
Stock Earnings Adjustment
----------- ----------- -----------
<S> <C> <C> <C>
Balance,
July 1, 1994 .................. $ 223,180 $10,727,996 $ (121,023)
Add--net income .................... 751,251
Add--foreign currency
translation adjustment ........ (8,806)
Less--purchase and retirement
of 161,694 treasury shares .... (887,883)
Less--dividends paid ............... (145,090)
----------- ----------- -----------
Balance,
March 31, 1995 ................ $ 223,180 $10,446,274 $ (129,829)
=========== =========== ===========
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<PAGE>
GENERAL MAGNAPLATE CORPORATION
AND
WHOLLY-OWNED SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
March 31, March 31,
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Gross revenue:
Sales ............... $ 7,105,351 $ 7,140,957 $ 2,471,900 $ 2,403,995
Royalty income ...... 136,226 152,335 56,226 41,586
Investment and other
income, net ....... (7,855) 121,025 5,923 (89,020)
----------- ----------- ----------- -----------
$ 7,233,722 $ 7,414,317 $ 2,534,049 $ 2,356,561
----------- ----------- ----------- -----------
Costs and expenses:
Cost of sales ....... $ 2,920,997 $ 2,890,660 $ 999,757 $ 914,850
Selling and
administration .... 2,572,480 2,575,299 831,326 822,150
Depreciation and
amortization ...... 461,549 462,281 154,207 154,942
Interest ............ 32,445 32,955 11,171 9,357
----------- ----------- ----------- -----------
$ 5,987,471 $ 5,961,195 $ 1,996,461 $ 1,901,299
----------- ----------- ----------- -----------
Income before corporate
income taxes ........ $ 1,246,251 $ 1,453,122 $ 537,588 $ 455,262
Corporate income taxes
(Notes 1 and 6) ..... 495,000 538,500 224,000 173,600
----------- ----------- ----------- -----------
Net income ............ $ 751,251 $ 914,622 $ 313,588 $ 281,662
=========== =========== =========== ===========
Earnings per share
(Note 1) ............ $ .26 $ .30 $ .11 $ .09
=========== =========== =========== ===========
Weighted average shares
outstanding ......... 2,921,910 3,051,694 2,869,153 3,051,694
=========== =========== =========== ===========
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<PAGE>
GENERAL MAGNAPLATE CORPORATION
AND
WHOLLY-OWNED SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED MARCH 31, 1995 AND 1994
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income ................................. $ 751,251 $ 914,622
----------- -----------
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and amortization .......... $ 461,549 $ 462,281
Deferred taxes ......................... (26,700) (38,300)
Accrued deferred compensation .......... 81,000 81,000
Foreign currency translation
adjustment ........................... (8,806) (64,932)
Allowance for doubtful accounts ........ 16,000 34,000
Change in current assets
and liabilities:
Accounts receivable ................. 22,588 (33,032)
Inventories ......................... 277 2,351
Other current assets ................ 159,819 65,824
Accounts payable and accrued
liabilities ....................... 17,940 (74,592)
Corporate income taxes payable ...... 25,426 (140,121)
Rent security deposit ............... 7,875 (23,250)
----------- -----------
Total adjustments ................... $ 756,968 $ 271,229
----------- -----------
Net cash provided by
operating activities ................... $ 1,508,219 $ 1,185,851
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of marketable securities .......... $(1,130,604) $ (849,586)
Additions to property,
plant, and equipment ..................... (237,104) (110,650)
Additions to patent costs
and other assets ......................... (2,243) (3,106)
Cash surrender value--life insurance ....... 24,766 (61,000)
----------- -----------
Net cash used in
investing activities .................... $(1,345,185) $(1,024,342)
----------- -----------
<PAGE>
GENERAL MAGNAPLATE CORPORATION
AND
WHOLLY-OWNED SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED MARCH 31, 1995 AND 1994
(Continued)
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase and retirement of
treasury stock ........................... $ (887,883) $ -0-
Dividends paid ............................... (145,090) (122,068)
Reduction in long-term debt ................ (59,091) (60,381)
----------- -----------
Net cash used in
financing activities ................... $(1,092,064) $ (182,449)
----------- -----------
Increase (decrease) in cash and cash
equivalents ................................ $ (929,030) $ (20,940)
Cash and cash equivalents, beginning of
period ..................................... 1,332,266 622,174
----------- -----------
Cash and cash equivalents, end of period ..... $ 403,236 $ 601,234
=========== ===========
Supplementary cash flow data:
Income taxes paid .......................... $ 496,274 $ 756,396
Interest paid .............................. $ 32,445 $ 32,955
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<PAGE>
GENERAL MAGNAPLATE CORPORATION
AND
WHOLLY-OWNED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note l--Summary of Significant Accounting Policies
- - - - --------------------------------------------------
Principles of Consolidation
---------------------------
The consolidated financial statements include the accounts of
General Magnaplate Corporation and its wholly-owned subsidiaries;
accordingly all intercompany transactions and balances have been
eliminated in consolidation.
Marketable Securities
---------------------
Effective July 1, 1994 marketable securities are all considered
trading securities and are valued at fair market value in accordance
with Financial Accounting Standard 115 issued by the Financial
Accounting Standards Board of the American Institute of Certified Public
Accountants.
In prior years marketable securities were valued at the lower of
cost or market. There is no effect on retained earnings from the change
in accounting principle.
Inventories
-----------
Inventories consist principally of industrial supplies and
plating solutions which are valued at the lower of FIFO cost or market
and are included in Cost of Sales.
Depreciation and Amortization
-----------------------------
Property, plant and equipment are stated at cost and
depreciation is provided on a straight line basis using estimated
service lives of 3-5 years for transportation equipment, 5-10 years for
factory machinery and office equipment, and 10-39 years for buildings
and building improvements. Expenditures for renewals and betterments are
capitalized. Items of identifiable property which are sold, retired, or
otherwise disposed of are removed from the asset accounts, and any gains
or losses thereon are reflected in income.
Patents and trademarks are amortized on a straight line basis
over 17 years, as the reasonable period of benefit.
Mortgage financing costs are amortized over the period of the
first mortgages, 5 years, as the reasonable period of benefit.
<PAGE>
GENERAL MAGNAPLATE CORPORATION
AND
WHOLLY-OWNED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note l--Summary of Significant Accounting Policies (Cont'd)
Corporate Income Taxes
----------------------
Taxes are provided based on income reported for financial
statement purposes, including deferred taxes which are principally
provided due to temporary differences between financial and tax
reporting of depreciation of property, plant, and equipment, bad debts,
vacation pay, deferred compensation, and unrealized investment losses.
Company Earnings Per Share
--------------------------
Earnings per share of common stock have been computed based on
the weighted average number of shares outstanding during the period.
Statement of Cash Flows
-----------------------
For purposes of the statement of cash flows, the Company
considers all highly liquid debt instruments purchased with a maturity
of three months or less to be cash equivalents.
Foreign Currency Translation Adjustment
---------------------------------------
Assets and liabilities of the subsidiary operating in Canada
are translated into U.S. dollars using the exchange rate in effect at
the balance sheet date. Results of operations are translated using the
average exchange rate prevailing throughout the period. The effects of
exchange rate fluctuations on translating foreign currency assets and
liabilities into U.S. dollars are included as part of the Foreign
Currency Translation Adjustment component of shareholders' equity,
while gains and losses resulting from foreign currency transactions are
generally included in income.
Segment Information
-------------------
The Company is in one line of business. It provides
synergistic coatings and other related services to its customers'
products.
Note 2--Marketable Securities
- - - - -----------------------------
As of March 31, 1995 marketable securities were comprised as follows:
U.S. corporate and tax-exempt bonds (53%); preferred and common stocks (13%);
and stock mutual funds (34%).
The Company reported realized and unrealized losses of $64,849 and
$106,803 for the nine months ended March 31, 1995 and 1994 respectively.
<PAGE>
GENERAL MAGNAPLATE CORPORATION
AND
WHOLLY-OWNED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 3--Property, Plant and Equipment
- - - - -------------------------------------
Property, plant and equipment is as follows:
<TABLE>
<CAPTION>
March 31, June 30,
1995 1994
------------ ------------
<S> <C> <C>
Land ..................................... $ 805,350 $ 805,350
Buildings ................................ 3,366,208 3,366,208
Building improvements .................... 3,007,227 2,898,335
Factory machinery ........................ 5,032,785 4,961,642
Office equipment ......................... 819,980 805,340
Transportation equipment ................. 239,905 232,399
------------ ------------
Total .................................... $ 13,271,455 $ 13,069,274
Less--accumulated depreciation ........... 7,718,542 7,295,759
------------ ------------
Net ...................................... $ 5,552,913 $ 5,773,515
============ ============
</TABLE>
Note 4--Other Assets
- - - - --------------------
Other assets are as follows:
<TABLE>
<CAPTION>
March 31, June 30,
1995 1994
--------- ---------
<S> <C> <C>
Patents and trademarks, at cost,
net of accumulated amortization .............. $ 28,802 $ 28,295
Unamortized deferred mortgage fees ............. 1,505 3,612
Deferred income taxes .......................... 225,041 198,341
Investment in unimproved land .................. 285,000 285,000
--------- ---------
$ 540,348 $ 515,248
========= =========
</TABLE>
Note 5--Note Payable - Bank
- - - - ---------------------------
The Company maintains an unsecured line of credit of $500,000 with Bank
One, Racine, NA which expires October 31, 1995. As of March 31, 1995 and June
30, 1994 the Company owed $-0- against the line. Interest is charged at the
prevailing prime business rate.
<PAGE>
GENERAL MAGNAPLATE CORPORATION
AND
WHOLLY-OWNED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 6--Long-Term Debt
- - - - ----------------------
Long-term debt is as follows:
<TABLE>
<CAPTION>
March 31, June 30,
1995 1994
-------- --------
<S> <C> <C>
Note payable Nations Bank in original amount
of $650,000 secured by deed of trust on Arlington,
Texas real estate and payable in equal monthly
principal installments of $5,000 together with
interest calculated at the bank's prevailing prime
business rate + 3/4% per annum commencing May 31,
1990 and continuing until April 30, 1995 at which
time the unpaid note shall be due in full. $270,000 $315,000
Note payable Bank One, Racine, NA in the
original amount of $260,000 secured by a first
mortgage on Racine, Wisconsin real estate and
payable in equal monthly installments of $2,955
commencing November 1, 1990 and continuing until
October 1, 1995 at which time the note balance is
due in full. Interest is computed at the bank's base
lending rate plus .4% per annum subject to a floor
of 7% and a ceiling of 13% per annum. 182,253 196,344
-------- --------
$452,253 $511,344
Less--debt due within one year 452,253 335,662
-------- --------
Total long-term debt $ -0- $175,682
======== ========
</TABLE>
Current maturities of long-term debt at June 30, 1994 for the five
years ending June 30, 1999 are as follows: 1995 - $335,662; 1996 $175,682; 1997
- - - - - $-0-; 1998 - $-0-, and 1999 - $-0-.
<PAGE>
GENERAL MAGNAPLATE CORPORATION
AND
WHOLLY-OWNED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
Note 7--Corporate Income Taxes
- - - - ------------------------------
Components of corporate income taxes are as follows:
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
March 31, March 31,
1995 1994 1995 1994
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Current:
Federal ...... $ 460,700 $ 500,900 $ 218,800 $ 155,000
State ........ 61,000 75,900 16,800 31,300
Foreign ...... -- -- -- --
---------- ---------- ---------- ----------
$ 521,700 $ 576,800 $ 235,600 $ 186,300
---------- ---------- ---------- ----------
Deferred:
Federal ...... $ (20,700) $ (29,700) $ (9,000) $ (9,900)
State ........ (6,000) (8,600) (2,600) (2,800)
Foreign ...... -- -- -- --
---------- ---------- ---------- ----------
$ (26,700) $ (38,300) $ (11,600) $ (12,700)
---------- ---------- ---------- ----------
Total .......... $ 495,000 $ 538,500 $ 224,000 $ 173,600
========== ========== ========== ==========
</TABLE>
A reconciliation of the provision for corporate income taxes compared
with amounts computed at the US statutory tax rate is as follows:
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
March 31, March 31,
1995 1994 1995 1994
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Based on U.S.
statutory federal
tax rate ........... $ 423,725 $ 494,100 $ 182,825 $ 154,900
Increase (decrease)
in taxes resulting
from:
State taxes, net of
federal tax benefit 36,300 44,400 11,600 18,700
Non-deductible
expenses ......... 34,975 -- 29,575 --
--------- --------- --------- ---------
Total .......... $ 495,000 $ 538,500 $ 224,000 $ 173,600
========= ========= ========= =========
Effective tax rate .. 39.7% 37.1% 42.2% 38.1%
</TABLE>
The Canadian subsidiary has available unused tax benefits in the form of
operating loss carryforwards of $175,000 to reduce future Canadian taxable
income. These carryforwards principally expire in 1998 and 1999. Due to their
uncertainty of realization, these tax benefits have been reflected net of a 100%
valuation allowance.
<PAGE>
GENERAL MAGNAPLATE CORPORATION
AND
WHOLLY-OWNED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 8--Accrued Liabilities
- - - - ---------------------------
Accrued liabilities are as follows:
<TABLE>
<CAPTION>
March 31, June 30,
1995 1994
-------- ---------
<S> <C> <C>
Compensation ............................... $ 234,721 $ 216,368
Payroll, sales, and property taxes ......... 114,428 101,408
401-K plan contribution .................... 38,201 57,705
Environmental and other costs .............. 138,694 146,834
--------- ---------
$ 526,044 $ 522,315
========= =========
</TABLE>
Note 9--Employee Benefits
- - - - -------------------------
The Company maintains a 401(k) savings plan which covers all full time
U.S. employees. The Company matches 50% of voluntary pre-tax employee
participant contributions up to 4% of compensation as well as providing
discretionary contributions based on compensation for all employees. Employer
discretionary contributions, which are forfeited due to employee termination
prior to the full seven year vesting period, revert back to the Company. Total
expense under the plan was $38,207 in 1995 and $40,063 in 1994.
Pursuant to employment contracts and letter agreements with officers and
key employees, the Company maintains non-qualified incentive compensation plans
which are based on the realization of pre-tax income and royalty income. Total
expense under these plans was $251,924 in 1995 and $272,210 in 1994.
In addition the Company is obligated to provide a non-qualified
retirement pension to its chief executive officer. Such obligation provides a
monthly benefit dependent on the date of retirement and is payable for a period
of fifteen years to the officer or to his wife in the event of his death. The
Company is accruing the present value of its obligation over the active term of
employment of the officer.
<PAGE>
GENERAL MAGNAPLATE CORPORATION
AND
WHOLLY-OWNED SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 10--Contingencies
- - - - ----------------------
Litigation
----------
In April, 1991, a claim was served on the Canadian subsidiary, General
Magnaplate Canada, Ltd., by Dynasurf International, Inc. for $170,000
representing the unpaid contract liability for the net assets acquired by the
Canadian subsidiary from the sellers, Carrigan Industries, Ltd. and Dynasurf
International, Inc. on January 2, 1990.
The Subsidiary has filed a counterclaim for environmental and other
costs incurred which resulted from the seller not resolving certain
environmental issues warranted in the contract of purchase.
Further, a shareholder of Dynasurf International, Inc. has also filed a
claim for breach of oral contract of employment for $162,000 which the Company
has denied in their related statement of defense.
It is the opinion of management that the ultimate resolution of both
claims will not have a materially adverse effect on the Company's financial
statements.
The California subsidiary was assessed and accepted a charge of $75,000
in 1992 by the County of Ventura, California relating to environmental issues at
its Ventura plant site. The Company has reserved $45,000 as an estimate of its
likely cost to remediate the site and is awaiting a formal site survey report.
Concentrations of Credit Risk
-----------------------------
The Company's financial instruments that are exposed to concentrations
of credit risk consist primarily of its cash, marketable securities and trade
receivables.
The Company's cash and marketable securities are in high-quality
securities placed with a wide array of institutions with high credit and
investment ratings. This investment policy limits the Company's exposure to
concentrations of credit risk. Cash balances fluctuate in excess of the FDIC
insurance limit of $100,000.
The trade receivable balances, reflecting the Company's diversified
sources of revenue, are dispersed across many different geographic areas. As a
consequence, concentrations of credit risk are limited. The Company routinely
assesses the financial strength of its customers and generally does not require
collateral to support its credit sales.
Note 11--Related Party Transactions
- - - - -----------------------------------
The Company was charged legal and computer consulting services by two
outside directors of the Company in the ordinary course of business as follows:
1995 - $41,234 and 1994 - $52,003.
<PAGE>
MAURIELLO, FRANKLIN & LoBRACE
A PROFESSIONAL CORPORATION
CERTIFIED PUBLIC ACCOUNTANTS
45 SPRINGFIELD AVENUE, SPRINGFIELD, NEW JERSEY 07081
TELEPHONE (201) 379-5400 FAX (201) 379-3696
ACCOUNTANTS' REVIEW REPORT ON SUPPLEMENTARY INFORMATION
To the Board of Directors of
General Magnaplate Corporation:
Our report on our review of the basic financial statements of General
Magnaplate Corporation for the nine months ended March 31, 1995 appears on Page
1. The review was made for the purpose of expressing limited assurance that
there are no material modifications that should be made to the financial
statements in order for them to be in conformity with generally accepted
accounting principles. The information included in the accompanying schedules
are presented only for supplementary analysis purposes. Such information has not
been subjected to the inquiry and analytical procedures applied in the review of
basic financial statements, and we are not aware of any material modifications
that should be made thereto.
April 27, 1995
<PAGE>
General Magnaplate Corporation
Consolidating Statement of Income (Loss)
Nine Months vs. Nine Months
<TABLE>
<CAPTION>
GMC GMC GMC GMC GMC
(CORP) (NJ) (TEX) (CA) (WISC) (CAN)
---------- ---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C> <C>
March 31, 1995
Gross Revenue:
Sales .................................. $ 0 $2,569,979 $2,089,669 $1,129,083 $ 857,314 $ 459,305
Royalty Income ......................... 136,226 0 0 0 0 0
Investment and Other Income ............ 13,798 1,000 1,153 3,765 1 (56,501)
Intercompany Rentals & Fees ............ 1,275,633 0 0 0 0 0
---------- ---------- ---------- ---------- ---------- ----------
Total Revenue .......................... 1,425,657 2,570,979 2,090,822 1,132,848 857,315 402,804
---------- ---------- ---------- ---------- ---------- ----------
Costs and Expenses:
Cost of Sales .......................... 0 994,670 844,242 472,809 255,126 264,909
Selling and Administration ............. 1,170,616 519,557 351,135 275,198 129,247 122,980
Depreciation & Amortization ............ 1,737 116,720 100,845 40,146 45,953 35,441
Interest Expense ....................... 0 0 0 0 0 0
Intercompany Rentals & Fees ............ 16,415 607,578 535,710 270,718 189,761 83,088
---------- ---------- ---------- ---------- ---------- ----------
Total Cost and Expenses ................ 1,188,768 2,238,525 1,831,932 1,058,871 620,087 506,418
---------- ---------- ---------- ---------- ---------- ----------
Income (Loss) before Taxes .............. $ 236,889 $ 332,454 $ 258,890 $ 73,977 $ 237,228 ($ 103,614)
========== ========== ========== ========== ========== ==========
March 31, 1994
Gross Revenue:
Sales .................................. $ 0 $2,565,297 $2,129,072 $1,158,562 $ 685,701 $ 610,650
Royalty Income ......................... 152,335 0 0 0 0 0
Investment and Other Income ............ 45,652 0 2,026 2,775 1 405
Intercompany Rentals & Fees ............ 1,295,164 0 0 0 0 0
---------- ---------- ---------- ---------- ---------- ----------
Total Revenue .......................... 1,493,151 2,565,297 2,131,098 1,161,337 685,702 611,055
---------- ---------- ---------- ---------- ---------- ----------
Costs and Expenses:
Cost of Sales .......................... 0 1,008,448 848,445 462,801 210,188 259,889
Selling and Administration ............. 1,155,339 500,992 388,214 258,740 150,079 116,914
Depreciation & Amortization ............ 2,376 116,895 101,880 41,153 44,320 36,655
Interest Expense ....................... 3,513 0 0 0 0 0
Intercompany Rentals & Fees ............ 15,000 621,087 539,103 273,413 159,973 110,382
---------- ---------- ---------- ---------- ---------- ----------
Total Costs and Expenses ............... 1,176,228 2,247,422 1,877,642 1,036,107 564,560 523,840
---------- ---------- ---------- ---------- ---------- ----------
Income (Loss) before Taxes .............. $ 316,923 $ 317,875 $ 253,456 $ 125,230 $ 121,142 $ 87,215
========== ========== ========== ========== ========== ==========
</TABLE>
SEE ACCOMPANYING ACCOUNTANTS' REVIEW REPORT ON SUPPLEMENTARY INFORMATION
<PAGE>
General Magnaplate Corporation
Consolidating Statement of Income (Loss)
Nine Months vs. Nine Months
(Continued)
<TABLE>
<CAPTION>
TRI CRC CR CR CR Adjust. &
(NJ) (NJ) (TEX) (CA) (WISC) Elimin. Consolidated
------- -------- ------- ------- ------ ---------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
March 31, 1995
Gross Revenue:
Sales ........................ $0 $0 $0 $0 $0 $1 $7,105,351
Royalty Income ............... 0 0 0 0 0 0 $136,226
Investment and Other Income .. 0 28,927 0 0 0 2 ($7,855)
Intercompany Rentals & Fees .. 0 164,155 159,469 67,416 37,247 (1,703,920) $0
------- -------- ------- ------- ------ ---------- ----------
Total Revenue ................ 0 193,082 159,469 67,416 37,247 (1,703,917) 7,233,722
------- -------- ------- ------- ------ ---------- ----------
Costs and Expenses:
Cost of Sales ................ 34 46,461 23,258 9,445 10,040 3 $2,920,997
Selling and Administration ... 0 0 4,395 0 0 (648) $2,572,480
Depreciation & Amortization .. 0 54,924 23,513 28,813 13,458 (1) $461,549
Interest Expense ............. 0 0 19,940 0 12,506 (1) $32,445
Intercompany Rentals & Fees .. 0 0 0 0 0 (1,703,270) $0
------- -------- ------- ------- ------ ---------- ----------
Total Cost and Expenses ...... 34 101,385 71,106 38,258 36,004 (1,703,917) 5,987,471
------- -------- ------- ------- ------ ---------- ----------
Income (Loss) before Taxes .... ($34) $91,697 $88,363 $29,158 $1,243 $0 $1,246,251
======= ======== ======= ======= ====== ========== ==========
March 31, 1994
Gross Revenue:
Sales ......................... $0 $0 $0 $0 $0 ($8,325) $7,140,957
Royalty Income ............... 0 0 0 0 0 0 $152,335
Investment and Other Income .. 0 61,566 0 7,500 1,800 (700) $121,025
Intercompany Rentals & Fees .. 0 173,241 155,863 65,643 36,519 (1,726,430) $0
------- -------- ------- ------- ------ ---------- ----------
Total Revenue ................ 0 234,807 155,863 73,143 38,319 (1,735,455) 7,414,317
------- -------- ------- ------- ------ ---------- ----------
Costs and Expenses:
Cost of Sales ................ 19,858 49,618 19,670 9,252 10,827 (8,336) $2,890,660
Selling and Administration ... (45) 2,470 4,653 0 25 (2,082) $2,575,299
Depreciation & Amortization .. 0 53,932 22,938 28,813 13,320 (1) $462,281
Interest Expense ............. 0 0 18,226 0 11,216 0 $32,955
Intercompany Rentals & Fees .. 0 6,078 0 0 0 (1,725,036) $0
------- -------- ------- ------- ------ ---------- ----------
Total Costs and Expenses ..... 19,813 112,098 65,487 38,065 35,388 (1,735,455) 5,961,195
------- -------- ------- ------- ------ ---------- ----------
Income (Loss) before Taxes .... ($19,813) $122,709 $90,376 $35,078 $2,931 $0 $1,453,122
======= ======== ======= ======= ====== ========== ==========
</TABLE>
SEE ACCOMPANYING ACCOUNTANTS' REVIEW REPORT ON SUPPLEMENTARY INFORMATION
<PAGE>
General Magnaplate Corporation
Consolidating Statement of Income (Loss)
Third Quarter vs. Third Quarter
<TABLE>
<CAPTION>
GMC GMC GMC GMC GMC
(CORP) (NJ) (TEX) (CA) (WISC) (CAN)
--------- --------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
March 31, 1995
Gross Revenue:
Sales ................................. $ 0 $ 913,951 $ 720,054 $ 383,510 $ 311,458 $ 142,926
Royalty Income ........................ 56,226 0 0 0 0 0
Investment and Other Income ........... 39,625 1,000 1,153 1,018 0 (65,801)
Intercompany Rentals & Fees ........... 445,788 0 0 0 0 0
--------- --------- --------- --------- --------- ---------
Total Revenue ......................... 541,639 914,951 721,207 384,528 311,458 77,125
--------- --------- --------- --------- --------- ---------
Costs and Expenses:
Cost of Sales ......................... 0 339,365 285,367 165,140 93,692 89,789
Selling and Administration ............ 365,856 163,093 117,568 103,457 37,590 44,185
Depreciation & Amortization ........... 591 38,330 34,196 13,527 15,652 11,481
Interest Expense ...................... 0 0 0 0 0 0
Intercompany Rentals & Fees ........... 5,471 213,940 182,767 91,503 68,478 25,973
--------- --------- --------- --------- --------- ---------
Total Costs and Expenses .............. 371,918 754,728 619,898 373,627 215,412 171,428
--------- --------- --------- --------- --------- ---------
Income (Loss) before Taxes ............. $ 169,721 $ 160,223 $ 101,309 $ 10,901 $ 96,046 ($ 94,303)
========= ========= ========= ========= ========= =========
March 31, 1994
Gross Revenue:
Sales ................................. $ 0 $ 914,420 $ 723,979 $ 336,664 $ 276,372 $ 156,756
Royalty Income ........................ 41,586 0 0 0 0 0
Investment and Other Income ........... (90,894) 0 21 759 0 (2,511)
Intercompany Rentals & Fees ........... 434,464 0 0 0 0 0
--------- --------- --------- --------- --------- ---------
Total Revenue ......................... 385,156 914,420 724,000 337,423 276,372 154,245
--------- --------- --------- --------- --------- ---------
Costs and Expenses:
Cost of Sales .......................... 0 348,213 282,659 118,628 73,397 76,743
Selling and Administration ............. 330,884 168,090 132,306 82,989 64,123 39,751
Depreciation & Amortization ............ 520 39,353 34,249 14,035 14,896 12,188
Interest Expense ....................... 0 0 0 0 0 0
Intercompany Rentals & Fees ............ 5,000 217,599 182,271 82,481 61,919 28,301
--------- --------- --------- --------- --------- ---------
Total Costs and Expenses ............... 336,404 773,255 631,485 298,133 214,335 156,983
--------- --------- --------- --------- --------- ---------
Income (Loss) before Taxes ............. $ 48,752 $ 141,165 $ 92,515 $ 39,290 $ 62,037 ($ 2,738)
========= ========= ========= ========= ========= =========
</TABLE>
SEE ACCOMPANYING ACCOUNTANTS' REVIEW REPORT ON SUPPLEMENTARY INFORMATION
<PAGE>
General Magnaplate Corporation
Consolidating Statement of Income (Loss)
Third Quarter vs. Third Quarter
(Continued)
<TABLE>
<CAPTION>
TRI CRC CR CR CR Adjust. &
(NJ) (NJ) (TEX) (CA) (WISC) Elimin. Consolidated
--- ------- ------- ------- ------ ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C>
March 31, 1995
Gross Revenue:
Sales ....................... $0 $0 $0 $0 $0 $1 $2,471,900
Royalty Income .............. 0 0 0 0 0 0 $56,226
Investment and Other Income . 0 28,927 0 0 0 1 $5,923
Intercompany Rentals & Fees . 0 54,718 53,156 22,472 12,416 (588,550) $0
--- ------- ------- ------- ------ ------- ----------
Total Revenue ............... 0 83,645 53,156 22,472 12,416 (588,548) 2,534,049
--- ------- ------- ------- ------ ------- ----------
Costs and Expenses:
Cost of Sales ............... 24 14,361 6,067 3,147 2,797 8 $999,757
Selling and Administration .. 0 0 0 0 0 (423) $831,326
Depreciation & Amortization . 0 18,460 7,861 9,604 4,505 0 $154,207
Interest Expense ............ 0 0 6,747 0 4,425 (1) $11,171
Intercompany Rentals & Fees . 0 0 0 0 0 (588,132) $0
--- ------- ------- ------- ------ ------- ----------
Total Costs and Expenses .... 24 32,821 20,675 12,751 11,727 (588,548) 1,996,461
--- ------- ------- ------- ------ ------- ----------
Income (Loss) before Taxes ... ($24) $50,824 $32,481 $9,721 $689 $0 $537,588
=== ======= ======= ======= ====== ======= ==========
March 31, 1994
Gross Revenue:
Sales ....................... $0 $0 $0 $0 $0 ($4,196) $2,403,995
Royalty Income .............. 0 0 0 0 0 0 $41,586
Investment and Other Income . 0 0 0 3,000 600 5 ($89,020)
Intercompany Rentals & Fees . 0 57,747 51,954 21,881 12,173 (578,219) $0
--- ------- ------- ------- ------ ------- ----------
Total Revenue ............... 0 57,747 51,954 24,881 12,773 (582,410) 2,356,561
--- ------- ------- ------- ------ ------- ----------
Costs and Expenses:
Cost of Sales ................ (9) 15,599 (2,846) 3,050 3,609 (4,193) $914,850
Selling and Administration ... 0 0 4,653 0 0 (646) $822,150
Depreciation & Amortization .. 0 18,011 7,646 9,604 4,441 (1) $154,942
Interest Expense ............. 0 0 5,759 0 3,597 1 $9,357
Intercompany Rentals & Fees .. 0 0 0 0 0 (577,571) $0
--- ------- ------- ------- ------ ------- ----------
Total Costs and Expenses ..... (9) 33,610 15,212 12,654 11,647 (582,410) 1,901,299
--- ------- ------- ------- ------ ------- ----------
Income (Loss) before Taxes ... $9 $24,137 $36,742 $12,227 $1,126 $0 $455,262
=== ======= ======= ======= ====== ======= ==========
</TABLE>
SEE ACCOMPANYING ACCOUNTANTS' REVIEW REPORT ON SUPPLEMENTARY INFORMATION
<PAGE>
Item 2A - Management's Discussion and Analysis of Financial Position:
---------------------------------------------------------------------
As of March 31, 1995, our cash position of $403,236 decreased $929,030 from
June 30, 1994, reflecting $1,508,219 net cash provided by the operating
activities for the first nine months, $1,345,185 used for investing activities
and $1,092,064 used for financing activities. During the nine months, the
registrant's investment activities were comprised of -- $237,104 used for
additions to property, plant and equipment -- $2,243 used for additions to
patent costs and other assets -- $1,130,604 used for additions to marketable
securities -- $24,766 provided by proceeds from the cash value of officer's life
insurance. The $1,092,064 used for financing activities was made up of a
reduction of long-term debt in the amount of $59,091 -- $145,090 in dividend
payments -- and $887,883 used for the purchase and retirement of treasury stock.
Working capital of $4,750,187 decreased $ 157,067 or 3.29% during the nine
months and the working capital ratio decreased to 4.85 to 1 from 5.57 to 1 at
June 30, 1994.
Stockholders' equity per share at March 31, 1995 increased 3.0% to $3.77 per
share compared with $3.66 per share at June 30, 1994.
Item 2B - Management's Discussion and Analysis of Results of Operations
Quarter --- March 31, 1995 compared with March 31, 1994:
-----------------------------------------------------------------------
Sales increased this quarter, as reflected in the current period sales of
$2,471,900, by $67,905 or 2.8% from the same quarter last year. Management
expects positive trends to continue at all U.S. locations. This has already
begun to be reflected in increased sales volume for the upcoming period. As
stated in previous reports the addition of sales and technical support staff has
continued to play an integral role in the continuing stability in sales.
Royalty and investment and other income for the quarter were $56,226 and
$5,923 compared with $41,586 and $(89,020) from last year's third quarter. The
$14,640 or 35.2% increase in royalty income is directly attributed to an
increase in sales volume from our licensees throughout the world. The $94,943
increase in investment and other income is directly associated with an
adjustment of investments to market value and the addition of fixed income
investments to our portfolio.
Reflecting the above, gross revenue for the latest quarter of this year of
$2,534,049 increased $177,488 or 7.5% from the same quarter last year.
Total costs and expenses were $1,996,461 in the third quarter, an increase
of $95,162 or 5.0% from the same quarter of last year. Cost controls have proven
effective and will continue throughout the remainder of the year.
Reflecting the above, income before corporate income taxes was $537,588 for
the current quarter, an increase of $82,326 or 18.1% from the $455,262 achieved
in the same quarter last year
Corporate income taxes and the effective tax rate in this year's third
quarter were $224,000 and 42.2% respectively, compared with $ 173,600 and 38.1 %
in the third quarter of last year.
As a result of the above, net income in the third quarter of this year of
$313,588 increased $31,926 or 11.3% from the same quarter last year.
Earnings per share were $.11 in this year's third quarter compared to $.09
in last year's third quarter, an increase of $.02 or 22.2%. Weighted average
shares outstanding were 2,869,153 compared to 3,051,694 for the same period last
year.
Nine Months ------- March 31, 1995 compared with March 31, 1994:
-----------------------------------------------------------------
Gross revenue for this year's first nine months of $7,233,722 decreased
$180,595 from last year, reflecting a decrease in sales of $35,606 or .5%, a
decrease in royalty income of $ 16,109 or 10.6% and a decrease in investment and
other income of $128,880 or 106.5%.
Total costs and expenses for the current nine month period were $5,987,471
an increase of $26,276 or .4% from last year. As a percentage of gross revenue,
total costs and expenses in 1995 were 82.8% compared to 80.4% in 1994. Cost of
Sales as a percentage of gross revenue for the latest nine months increased to
40.4% from 39.0% in the same period of last year. Selling and administration
increased to 35.6% of gross revenue in the latest period compared to 34.7% last
year. Depreciation and amortization increased to 6.4% of gross revenue this year
compared with 6.2% in 1994. Interest expense in the current year remained at
.44% of gross revenue.
As a result of the above, income before corporate income taxes for the first
nine months of this year was $1,246,251, a decrease of $206,871 or 14.2% from
last year.
Corporate income taxes in this year's first nine months were $495,000,
compared with $538,500 for the same period of last year, a decrease of $43,500
or 8.1%. As detailed in Note 7, this year's effective tax rate was 39.7%
compared with 37.1% in 1994.
As a result of the above, net income of $751,251 this year was $163,371 or
17.8% less than the $914,622 achieved last year. Earnings per share were $.26
this year, a $.04 or 13.3% decrease from the $.30 earned last year. Weighted
shares outstanding this year were 2,921,910 compared with 3,051,694 in 1994.
Management believes the existing legal matters as detailed in note 10 to the
consolidated financial statements, will have no significant impact on future
earnings.
The Russian joint venture is on hold pending financing from World Banking
sources which are under investigation at this time.
No other significant financial matters are expected in future months which
will have an adverse impact on earnings.
<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.
GENERAL MAGNAPLATE CORPORATION
------------------------------
(Registrant)
DATE 5/5/95
---------------
/s/ Candida C. Aversenti
- - - - ------------------------------
Candida C. Aversenti
President
DATE 5/5/95
---------------
/s/ Susan E. DeFalco
- - - - ------------------------------
Susan E. DeFalco
Chief Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1995
<PERIOD-END> MAR-31-1995
<CASH> 403,236
<SECURITIES> 3,871,935
<RECEIVABLES> 1,399,908
<ALLOWANCES> 127,000
<INVENTORY> 274,973
<CURRENT-ASSETS> 5,984,932
<PP&E> 13,271,455
<DEPRECIATION> 7,718,542
<TOTAL-ASSETS> 12,565,245
<CURRENT-LIABILITIES> 1,234,745
<BONDS> 0
<COMMON> 223,180
0
0
<OTHER-SE> 10,316,445
<TOTAL-LIABILITY-AND-EQUITY> 12,565,245
<SALES> 7,105,351
<TOTAL-REVENUES> 7,233,722
<CGS> 2,920,997
<TOTAL-COSTS> 2,920,997
<OTHER-EXPENSES> 3,026,257
<LOSS-PROVISION> 7,772
<INTEREST-EXPENSE> 32,445
<INCOME-PRETAX> 1,246,251
<INCOME-TAX> 495,000
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 751,251
<EPS-PRIMARY> 0.26
<EPS-DILUTED> 0
</TABLE>
May 10, 1995
GENERAL MAGNAPLATE CORPORATION (GMCC)
EARNINGS PER SHARE INCREASE FOR THIRD QUARTER
General Magnaplate experienced growth during the third quarter as reflected
by an increase of 7.5% in gross revenue in comparison to the same quarter last
year. Net income increased 11.3% for the quarter and earnings per share were up
22.2%.
The global demand for General Magnaplate's proprietary surface enhancements
continues to show steady growth as reflected in the quarter's 35.2% increase in
royalty income, a direct result of our licensees additional sales volume.
CONDENSED STATEMENT OF INCOME
NINE MONTHS ENDING MARCH 31
<TABLE>
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
Gross Revenue ............................ $7,233,722 $7,414,317
Income Before Taxes ...................... 1,246,251 1,453,122
Net Income ............................... 751,251 914,622
Earnings Per Share ....................... $ .26 $ .30
Avg. Shares Outstanding .................. 2,921,910 3,051,694
********************************************************************************
CONDENSED STATEMENT OF INCOME
THREE MONTHS ENDING MARCH 31
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
Gross Revenue ............................ $2,534,049 $2,356,561
Income Before Taxes ...................... 537,588 455,262
Net Income ............................... 313,588 281,662
Earnings Per Share ....................... $ .11 $ .09
Avg. Shares Outstanding .................. 2,869,153 3,051,694
</TABLE>
