FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1999
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 0-20979
INDUSTRIAL SERVICES OF AMERICA, INC.
------------------------------------
(Exact Name of Registrant as specified in its Charter)
Florida 59-0712746
------- ----------
(State or other jurisdiction of (IRS Employer
Incorporation or Organization) Identification No.)
7100 Grade Lane, PO Box 32428
Louisville, Kentucky 40232
(Address of principal executive offices)
(502) 368-1661
(Registrant's Telephone Number, Including Area Code)
Check 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 June 30, 1999: 1,929,600.
---------
INDUSTRIAL SERVICES OF AMERICA, INC.
INDEX
Page No.
Part I Financial Information
ITEM 1. Financial Statements
Condensed Consolidated Balance Sheets June
30, 1999 and December 31, 1998 3
Condensed Consolidated Statements of Income
Three months ended June 30, 1999 and 1998 5
Condensed Consolidated Statements of Income
Six months ended June 30, 1999 and 1998 6
Condensed Consolidated Statements of Cash
Flows Six months ended June 30, 1999 and
1998 7
Notes to Condensed Consolidated Financial
Statements 8
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 10
Part II Other Information
ITEM 4. Submission of Matters to a Vote of Security
Holders
ITEM 5. Other 11
Part I - FINANCIAL INFORMATION
ITEM 1: CONSOLIDATED FINANCIAL STATEMENTS
INDUSTRIAL SERVICES OF AMERICA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
ASSETS
------
<TABLE>
June 30, December 31,
-------- ------------
1999 1998
---- ----
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 975,018 $ 1,014,068
Accounts receivable - trade
(after allowance for doubtful
accounts of $139,060 in 1999
and $116,000 in 1998) 9,022,080 7,474,473
Accounts receivable - related
parties - 26,259
Income tax refund receivable 113,000 113,000
Net investment in sales-type leases 22,793 35,270
Inventories 1,612,467 2,515,352
Deferred income taxes 60,900 52,000
Other 265,991 309,692
---------- ----------
Total current assets 12,072,249 11,540,114
Net property and equipment 5,576,159 5,063,576
Other Assets
Non-compete agreements, net 709,426 810,604
Intangibles (net of accumulated
amortization of $106,665 and $80,000
in 1999 and 1998, respectively) 693,335 720,000
Deferred Income Taxes 211,200 359,800
Other Assets 112,632 153,439
---------- ----------
1,726,593 2,043,843
---------- ----------
$19,375,001 $18,647,533
========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
3
INDUSTRIAL SERVICES OF AMERICA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
CONTINUED
(UNAUDITED)
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
June 30, December 31,
-------- ------------
1999 1998
---- ----
<S> <C> <C>
CURRENT LIABILITIES
Notes payable to bank $ - $ 1,850,000
Current maturities of
long-term debt 480,554 460,654
Accounts payable 12,169,279 9,746,536
Affiliated companies payable - 22,000
Other current liabilities 254,309 120,921
---------- ----------
Total current liabilities 12,904,142 12,200,111
Long-term liabilities
Long-term debt 2,373,852 2,612,519
Deferred income taxes 413,000 411,800
---------- ----------
2,786,852 3,024,319
STOCKHOLDERS' EQUITY
Common stock, $.01 par value,
10,000,000 shares authorized
1,957,500 shares issued as of
March 31, 1999 19,575 19,575
Additional paid-in capital 1,629,559 1,589,155
Retained earnings 2,042,873 1,822,373
Treasury stock, at cost,
27,900 shares (8,000) (8,000)
---------- ----------
Total stockholders' equity 3,684,007 3,423,103
---------- ----------
$19,375,001 $18,647,533
========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
4
INDUSTRIAL SERVICES OF AMERICA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED JUNE 30, 1999 AND 1998
(UNAUDITED)
<TABLE>
1999 1998
---- ----
<S> <C> <C>
REVENUE
Recycling $ 4,689,890 $ 5,140,721
Equipment sales, service and
leasing 690,267 328,008
Management services 14,068,950 11,313,976
---------- ----------
Total revenue 19,449,107 16,782,705
Cost of goods sold
Recycling 4,101,479 4,659,418
Equipment sales, service and
leasing 473,397 183,373
Management services 13,397,830 10,738,421
---------- ----------
Total cost of sales 17,972,706 15,581,212
---------- ----------
GROSS MARGIN 1,476,401 1,201,493
Selling, general and administrative 1,279,002 918,151
---------- ----------
INCOME FROM OPERATIONS 197,399 283,342
Other income (expenses) (77,218) (41,788)
---------- ----------
Income before income taxes 120,181 241,554
Provision for income taxes 34,600 91,000
---------- ----------
NET INCOME $ 85,581 $ 150,554
========== ==========
Earnings per share $0.04 $0.08
===== =====
Earnings per share, assuming dilution $0.04 $0.08
===== =====
</TABLE>
See accompanying notes to consolidated financial statements.
5
INDUSTRIAL SERVICES OF AMERICA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
SIX MONTHS ENDED JUNE 30, 1999 AND 1998
(UNAUDITED)
<TABLE>
1999 1998
---- ----
<S> <C> <C>
REVENUE
Recycling $ 9,005,552 $10,008,914
Equipment sales, service and
leasing 1,220,122 751,860
Management services 26,290,165 20,181,055
---------- ----------
Total revenue 36,515,839 30,941,829
Cost of goods sold
Recycling 7,739,163 9,104,648
Equipment sales, service and
leasing 831,592 412,065
Management services 24,824,011 19,115,929
---------- ----------
Total cost of sales 33,394,766 28,632,642
---------- ----------
GROSS MARGIN 3,121,073 2,309,187
Selling, general and administrative 2,623,470 1,798,361
---------- ----------
INCOME FROM OPERATIONS 497,603 510,826
Other income (expenses) (136,203) (22,666)
---------- ----------
Income before income taxes 361,400 488,160
Provision for income taxes 140,900 185,000
---------- ----------
NET INCOME $ 220,500 $ 303,160
========== ==========
Earnings per share $0.11 $0.16
===== =====
Earnings per share, assuming dilution $0.11 $0.15
===== =====
</TABLE>
See accompanying notes to consolidated financial statements.
6
INDUSTRIAL SERVICES OF AMERICA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOW
SIX MONTHS ENDED JUNE 30, 1999 AND 1998
(UNAUDITED)
<TABLE>
1999 1998
---- ----
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 220,500 $ 303,160
Adjustments to reconcile net
income to net cash from
operating activities:
Provision for doubtful accounts 23,060 -
Deferred income tax 140,900 -
Depreciation and amortization 690,799 401,713
Stock options granted for services 40,404 -
Change in assets and liabilities
Receivables (1,544,408) (1,629,886)
Inventories 902,885 (106,783)
Other assets 96,985 4,001
Accounts payable 2,400,743 2,493,441
Other current liabilities 133,388 170,129
---------- ----------
Net cash from operating
activities 3,105,256 1,635,775
INVESTING ACTIVITIES
Payments/deposits for property
and equipment (1,075,539) (1,721,140)
---------- ----------
Net cash from investing
activities (1,075,539) (1,721,140)
FINANCING ACTIVITIES
(Payments)/borrowings on note
payable to bank (1,850,000) 50,000
Payments on long-term debt (218,767) 61,889
---------- ----------
Net cash from financing
activities (2,068,767) 111,889
Net change in cash (39,050) 26,524
Cash beginning of period 1,014,068 495,834
---------- ----------
CASH AT END OF PERIOD $ 975,018 $ 522,358
========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
7
INDUSTRIAL SERVICES OF AMERICA, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
---------------------
The accompanying unaudited consolidated financial statements have
been prepared in accordance with generally accepted accounting
principles for interim financial reporting. They do not include
all information and footnotes required by generally accepted
accounting principles for complete consolidated financial
statements. The information furnished includes all adjustments
which are, in the opinion of management necessary to present
fairly the Registrant's financial position as of June 30, 1999
and the results of its operations and changes in cash flows for
the periods ended June 30, 1999 and 1998. Results of operations
for the period ended June 30, 1999 are not necessarily indicative
of the results that may be expected for the entire year.
Additional information, including the audited 1998 Consolidated
Financial Statements and the Summary of Significant Accounting
Policies, is included in the Registrant's Annual Report on Form
10-K for the year ended December 31, 1998 on file with the
Securities and Exchange Commission.
2. Acquisition
-----------
During the second quarter of 1999, the Registrant signed a Letter
of Intent to acquire 100% of the capital stock of two waste
management services companies. The combined annual revenue of
the target companies is approximately $48,000,000. The
Registrant anticipates financing the purchase using an
undisclosed amount of stock and cash. The Letter of Intent is
subject to the completion of due diligence, signing of a
definitive agreement, shareholder approval, the receipt of all
regulatory approvals and the expiration of all statutory waiting
periods.
3. Segment Information
-------------------
The Company's operations include three primary segments: ISA
Recycling, Computerized Waste Systems (CWS), and Waste Equipment
Sales & Service (WESSCO). ISA recycling provides products and
services to meet the needs of its customers related to ferrous,
non-ferrous and fiber recycling at two locations in the Midwest.
CWS provides waste disposal services including contract
negotiations with vendors, centralized billing, invoice auditing,
and centralized dispatching. WESSCO sells, leases, and services
waste handling and recycling equipment.
The Company's three reportable segments are determined by the
products and services that each offers. The recycling segment
generates its revenues based on buying and selling of ferrous and
non-ferrous scrap, CWS's revenues consist of management fees
charged to customers at a percentage of the total service
provided, and WESSCO sales and lease income comprise the primary
source of revenue for this segment.
8
The Company evaluates segment performance based on profit or loss
before income taxes and the evaluation process for each segment
includes only direct expenses omitting any selling, general and
administrative costs.
<TABLE>
WASTE
COMPUTERIZED EQUIPMENT
FOR THE SIX MONTHS ISA WASTE SALES & SEGMENT
ENDING JUNE 30, 1999 RECYCLING SYSTEMS SERVICES TOTALS
- ------------- --------- ------- -------- ------
<S> <C> <C> <C> <C>
Recycling revenues $ 9,005,552 $ - $ - $ 9,005,552
Equipment sales,
service and
leasing revenues - 1,220,122 1,220,122
Management fees - 26,290,165 - 26,290,165
Cost of goods sold (7,739,163) (24,824,011) (831,592) (33,394,766)
---------- ---------- --------- ----------
SEGMENT PROFIT $ 1,266,389 $ 1,466,154 $ 388,530 $ 3,121,073
========== ========== ========= ==========
WASTE
COMPUTERIZED EQUIPMENT
FOR THE SIX MONTHS ISA WASTE SALES & SEGMENT
ENDING JUNE 30, 1999 RECYCLING SYSTEMS SERVICES TOTALS
- ------------- --------- ------- -------- ------
Recycling revenues $10,008,914 $ - $ - $10,008,914
Equipment sales,
service and
leasing revenues - 751,860 751,860
Management fees - 20,181,055 - 20,181,055
Cost of goods sold (9,104,648) (19,115,929) (412,065) (28,632,642)
---------- ---------- --------- ----------
SEGMENT PROFIT $ 904,266 $ 1,065,126 $ 339,795 $ 2,309,187
========== ========== ========= ==========
</TABLE>
4. Inventories
-----------
Inventories consist of the following:
June 30, December 31,
-------- ------------
1999 1998
---- ----
Equipment and parts $ 68,683 $ 761,780
Ferrous materials 977,625 1,131,045
Non-ferrous materials 566,159 622,527
---------- ----------
Total inventories $ 1,612,467 $ 2,515,352
========== ==========
9
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS.
Liquidity and Capital Resources
- -------------------------------
As of June 30, 1999, the Registrant held cash and cash
equivalents of $975,018.
The Registrant derives its revenues from several sources,
including management services, equipment sales and leasing and
from its recycling operations. Management services comprised
approximately 72.0% and 65.2% of the Registrant's total revenues
for the six months ended June 30, 1999 and 1998, respectively.
The Registrant currently maintains a working capital line of
credit with the Mid-America Bank of Louisville and Trust Company
(the "Bank") in the amount of $2,000,000. Outstanding principal
under this credit facility bears interest at the Bank's prime
rate and the line matures in June 2000. As of June 30, 1999,
there was no outstanding balance under this credit facility.
Results of Operations
- ---------------------
The following table presents, for the periods indicated, the
percentage relationship which certain captioned items in the
Registrant's Condensed Consolidated Statements of Income bear to
total revenues and other pertinent data:
Six Months ended June 30,
-------------------------
1999 1998
---- ----
Statements of Operations Data:
Total Revenue......................... 100.0% 100.0%
Cost of goods sold.................... 91.4% 92.5%
Selling, general and
administrative expenses............. 7.2% 5.8%
Income from operations................ 1.4% 1.7%
Six months ended June 30, 1999 compared to six months ended
- -----------------------------------------------------------
June 30, 1998
- -------------
Total revenue increased 18.0% from $30,941,829 in 1998 to
$36,515,839 in 1999. This increase in total revenue is the
result of (i) management services sales increasing 30.3% from
$20,181,055 in 1998 to $26,290,165 in 1999 and (ii) an increase
of 62.2% related to the equipment sales, service and leasing
operations of $1,220,122 in 1999 as compared to $751,860 in 1998.
Revenue gains in these two segments were somewhat offset by a
decline in recycling revenues of 10.0% as 1999 revenue was
$9,005,552 compared to $10,008,914 in 1998. Commodity prices of
the ferrous and non-ferrous markets began to decline during the
second half of 1998 and remained at a lower level (although
stabilizing) during most of the first half of 1999. In the
ferrous market, more gross tons were shipped during the first six
months of 1999 compared to the same period last year, but
generated 7.0% less revenue due to the decline in average selling
prices. Non-ferrous pounds shipped in the first two quarters of
this year declined approximately
10
11.0% and combined with a minimal average selling price erosion
yielded revenues at 12.2% less than the same time period last
year.
The first half of 1999 total cost of sales was $33,394,766
increasing $4,762,124 or 16.6% compared to 1998. The cost of
goods sold in management services increased 29.9% which directly
reflects the revenue increase of 30.3%. Cost of sales in the
recycling operations was 85.9% during the first six months of
1999 whereas it was 91.0% last year for the first six months.
Cost of sales in the equipment leasing and sales segment
increased from 54.8% to 68.2% as the mix of equipment sales
versus rentals increased over last year.
The gross margin was $3,121,073 representing an increase of
$811,886 or a 35.2% increase from 1998. The gross margin was
8.5% or a 1.0% increase above the first six months of last year.
The gross margin in management services was 5.6% during the first
two quarters of 1999 versus 5.3% in 1998. Gross profit in the
recycling segment climbed to 14.1% in the first half versus 9.0%
in the first half of 1998. This is due primarily to the
commodity price stabilization in the first half of 1999 following
a period of declining ferrous and non-ferrous prices. Commodity
purchase prices leveled during the first half of 1999 and selling
prices recovered slightly resulting in a favorable gross margin
as a percentage of sales.
Selling, general and administrative expenses increased 45.9%
from $1,798,361 in the first half of 1998 to $2,623,470 in 1999,
and as a percentage of sales, increased from 5.8% to 7.2%. The
primary reason is that expenses were recorded in the first two
quarters for ISA Indiana, Inc. which did not begin operations
until the second half of 1998. Accrual adjustments also had an
impact on the first two quarters of 1999. The Registrant's
comparable operating expenses in the first two quarters of 1999
were up 5.5% over the first two quarters of 1998.
Quarter ended June, 30 1999 compared to quarter ended June 30,
- --------------------------------------------------------------
1998
- ----
Total revenue increased 15.9% from $16,782,705 in 1998 to
$19,449,107. This increase in total revenue is the result of (i)
management services increasing 24.4% from $11,313,976 in 1998 to
$14,068,950 in 1999 and (ii) an increase in the equipment sales
and leasing segment of 110.4% or from $328,008 to $690,267.
Revenues in the recycling segment declined $450,831 or 9.1% in
the second quarter versus the second quarter of 1998.
The second quarter total cost of sales was $17,972,706
increasing $2,391,494 or 15.3% compared to the second quarter of
1998. Cost of sales in the management services segment increased
24.8% which is in almost direct proportion to the percentage
increase in revenue. Cost of sales in the recycling segment
decreased 12.0% as a result of the 9.1% revenue decrease in this
segment.
Total gross margin for the second quarter at $1,476,401
represents 7.6% of revenue in 1999 while the gross margin at
$1,201,493 in 1998 represents 7.2% of revenue.
11
Selling, general and administrative expenses remained
consistent in 1999 compared to 1998. Allowing for accounting
reclassifications and expense accruals, comparable expenses were
approximately $55,000 higher in the second quarter of 1999 versus
the second quarter of 1998 or an increase of 2.9%.
Financial Condition at June 30, 1999 Compared to December 31,
- -------------------------------------------------------------
1998
- ----
Accounts receivable-trade before allowances for bad debt
increased 20.7% or $1,544,408 during the first half of 1999.
This increase is due mainly due to the high sales levels in the
management services segment.
Accounts payable-trade increased $2,400,743 or 24.6% as a
result of additional expenses incurred to generate higher revenue
as noted above.
From December 31, 1998 to June 30, 1999, the Registrant's
working capital decreased by $171,896 to a deficit of $831,893
from the deficit of $659,997. The primary reasons for the
decrease are due to accounts payable increasing at a slightly
higher rate than accounts receivable, combined with the reduction
of inventory due to the reclassification of a major piece of
equipment from inventory to fixed assets. The Registrant's
management is focused on working capital during the remainder of
the fiscal year. Surplus inventories will be shipped to take
advantage of the stable commodity prices. The Registrant intends
to examine its purchases carefully to ensure a program of
inventory reduction by the end of the year. Working capital will
be increased due to additional gross margin dollars. The
Registrant has also established a plan to identify and sell any
equipment identified as surplus or idle. The Registrant
continues to improve upon all expense controls to provide the
highest possible levels of operational efficiencies and customer
service.
Year 2000 Risk Factors
- ----------------------
The Registrant implemented its "Year 2000 Project" in
February 1997 to address the potential problem with which
substantially all users of automated data processing and
information systems must deal.
The Registrant uses primarily "Microsoft" software, which is
already year 2000 compliant. The Registrant's financial
accounting system has already been upgraded and certified as
compliant. The Registrant's management services operations
utilize a DOS based system which was potentially identified as a
problem. In its endeavor to alleviate this DOS-based problem,
the Registrant has contracted with a programmer to write software
to prevent this potential problem. The software upgrade has been
completed and all testing is expected to be completed by the end
of the third quarter of 1999. The recycling operations utilize a
database that will complete all testing by August 30, 1999.
The Registrant currently has no reason to believe and does
not anticipate the cost of Year 2000 compliance to be a
significant expense or problem. Notwithstanding the foregoing,
the Registrant will bear some minimal risk due to customers who
fail to address the issues appropriately. Presently, the
Registrant has no reason to believe that any of its customers are
failing to take appropriate action to effect Year 2000 compliance
12
or that its software will be unable to perform as before with the
upgrades. The Registrant believes that the "worst case" risk is
a loss of its power source due to local utility Year 2000
problems resulting in computer malfunctions. However, as a
matter of corporate policy, the Registrant nightly backs up all
information systems. Historical records are maintained in hard
copy and current and future transactions could be manually
undertaken until restoration of the information systems occurs.
13
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
- ---------------------------
None
Item 2. Changes in Securities and Use of Proceeds
- ---------------------------------------------------
None
Item 3. Defaults upon Senior Securities
- -----------------------------------------
None
Item 4. Submission of Matters to a Vote of Security Holders
- -------------------------------------------------------------
(a) At the Annual Meeting of Shareholders held on May
27, 1999, the following proposals were adopted by
the margins indicated:
(b) Proposal 1: The annual election of the Directors,
Harry Kletter, Sean Garber, Joe Cohen, Barry Naft
and Ted Cox.
Broker Non-Votes
For Against & Abstentions
--- ------- ----------------
1,705,449 - 224,151
(c) Proposal 2: To amend the Industrial Services of
America, Inc. 1997 Employee Stock Option Plan to
(i) increase the number of shares reserved under
the plan from 100,000 to 400,000; (ii) allow for
grant of non-qualified stock options to non-
employee directors of Company under the plan;
(iii) change the name of the plan to the
"Industrial Services of America, Inc. 1997 Stock
Option Plan;" and (iv) effect certain technical or
administrative changes to the plan.
Broker Non-Votes
For Against & Abstentions
--- ------- ----------------
1,150,483 29,250 749,867
(d) Proposal 3: To approve a non-qualified (non-Plan)
stock option to purchase 500,000 shares of Capital
Common Stock (defined herein) at $5.00 per share
granted to Harry Kletter , the Companies Chairman
of the Board and Chief Executive Officer.
Broker Non-Votes
For Against & Abstentions
--- ------- ----------------
161,858 1,011,150 756,592
(e) Proposal 4: Confirmation of Crowe, Chizek &
Company LLP as the Company's independent auditors.
Broker Non-Votes
For Against & Abstentions
--- ------- ----------------
1,705,449 3,700 220,451
14
Item 5. Other Information
- ---------------------------
Subsequent to March 31, 1999, the Registrant signed a
Letter of Intent to acquire 100% of the capital stock
of two waste management services companies. The
combined annual revenues of the target companies are
approximately $48,000,000. The Registrant anticipates
financing the purchasing using an undisclosed amount of
stock and cash. The Letter of Intent is subject to the
completion of due diligence, signing of a definitive
agreement, shareholder approval, the receipt of all
regulatory approvals and the expiration of all
statutory waiting periods.
Item 6. Exhibits and Reports on Form 8-K
- ------------------------------------------
None
15
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.
INDUSTRIAL SERVICES OF AMERICA, INC.
DATE: August 13, 1999 /s/ Harry Kletter
------------------------------------
Chairman and Chief Executive Officer
(Principal Executive and Financial
Officer)
14
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 975,018
<SECURITIES> 0
<RECEIVABLES> 9,296,933
<ALLOWANCES> 139,060
<INVENTORY> 1,612,467
<CURRENT-ASSETS> 12,072,249
<PP&E> 8,703,983
<DEPRECIATION> 3,127,824
<TOTAL-ASSETS> 19,375,001
<CURRENT-LIABILITIES> 12,904,142
<BONDS> 0
0
0
<COMMON> 19,575
<OTHER-SE> 3,664,432
<TOTAL-LIABILITY-AND-EQUITY> 19,375,001
<SALES> 36,515,839
<TOTAL-REVENUES> 36,515,839
<CGS> 33,394,766
<TOTAL-COSTS> 33,394,766
<OTHER-EXPENSES> 2,569,213
<LOSS-PROVISION> 80,000
<INTEREST-EXPENSE> 110,460
<INCOME-PRETAX> 361,400
<INCOME-TAX> 140,900
<INCOME-CONTINUING> 220,500
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 220,500
<EPS-BASIC> 0.11
<EPS-DILUTED> 0.11
</TABLE>
