<PAGE>
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, 1998
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 0-7647
HAWKINS CHEMICAL, INC.
----------------------
(Exact name of registrant as specified in its charter)
MINNESOTA 41-0771293
--------- ----------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation of organization)
3100 East Hennepin Avenue, Minneapolis, Minnesota 55413
-------------------------------------------------------
(Address of principal executive offices) Zip Code
(612) 331-6910
--------------
Registrant's telephone number, including area code
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 the latest practicable date.
Class Outstanding at May 12, 1998
-------------------------------------- ---------------------------
Common Stock, par value $.05 per share 11,603,895
<PAGE>
HAWKINS CHEMICAL, INC. AND SUBSIDIARY
INDEX TO FORM 10-Q
Page No.
--------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated Condensed Balance Sheets - March 31, 1998
and September 28, 1997 . . . . . . . . . . . . . . . . . 3
Consolidated Condensed Statements of Income - Three Months
and Six Months Ended March 31, 1998 and 1997 . . . . . . . 4
Consolidated Condensed Statements of Cash Flows - Six
Months Ended March 31, 1998 and 1997 . . . . . . . . . . . 5
Notes to Consolidated Condensed Financial Statements . . . . 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . 7-8
PART II. OTHER INFORMATION
Item 1. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . 9
Item 4. Submission of Matters to a Vote of Securities Holders. . . . 9
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . . . . . 10
Exhibit Index. . . . . . . . . . . . . . . . . . . . . . . . 11
Financial Data Schedule. . . . . . . . . . . . . . . . . . . 12
2
<PAGE>
PART I. FINANCIAL INFORMATION
Item I. Financial Statements
HAWKINS CHEMICAL, INC. AND SUBSIDIARY
CONSOLIDATED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, 1998 September 28, 1997
-------------- ---------------------
(Unaudited) (Derived from audited
financial statements)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents. . . . . . . . . . . . . . . . . $ 6,318,576 $ 8,065,021
Investments available-for-sale . . . . . . . . . . . . . . 12,248,395 11,980,078
Trade receivables-net. . . . . . . . . . . . . . . . . . . 10,932,935 11,117,991
Notes receivable . . . . . . . . . . . . . . . . . . . . . 256,476 222,946
Inventories. . . . . . . . . . . . . . . . . . . . . . . . 7,187,955 8,580,705
Other current assets . . . . . . . . . . . . . . . . . . . 2,262,228 1,912,325
----------- -----------
Total current assets . . . . . . . . . . . . . . . . . 39,206,565 41,879,066
Property, plant and equipment-net. . . . . . . . . . . . . . 17,634,865 15,487,545
Notes receivable-non current . . . . . . . . . . . . . . . . 3,438,809 3,639,712
Other assets . . . . . . . . . . . . . . . . . . . . . . . . 2,670,219 2,646,293
----------- -----------
Total. . . . . . . . . . . . . . . . . . . . . . . . . . . $62,950,458 $63,652,616
----------- -----------
----------- -----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable-trade . . . . . . . . . . . . . . . . . . $ 5,101,676 $ 5,729,584
Current portion of long-term debt. . . . . . . . . . . . . 89,123 59,928
Dividends payable. . . . . . . . . . . . . . . . . . . . . 1,160,389 1,044,351
Other current liabilities. . . . . . . . . . . . . . . . . 3,793,930 6,381,454
----------- -----------
Total current liabilities. . . . . . . . . . . . . . . 10,145,118 13,215,317
----------- -----------
Long-term debt . . . . . . . . . . . . . . . . . . . . . . . 423,402 512,525
----------- -----------
Deferred income taxes. . . . . . . . . . . . . . . . . . . . 986,000 983,000
----------- -----------
Commitments and contingencies
----------- -----------
Shareholders' equity:
Common stock, par value $.05 per share; issued
and outstanding, 11,603,895 shares at both dates . . . 580,195 580,195
Additional paid-in capital . . . . . . . . . . . . . . . 42,517,455 42,517,455
Retained earnings. . . . . . . . . . . . . . . . . . . . 8,298,288 5,844,124
----------- -----------
Total shareholders' equity . . . . . . . . . . . . . . 51,395,938 48,941,774
----------- -----------
Total. . . . . . . . . . . . . . . . . . . . . . . . . $62,950,458 $63,652,616
----------- -----------
----------- -----------
</TABLE>
See accompanying Notes to Consolidated Condensed Financial Statements.
3
<PAGE>
HAWKINS CHEMICAL, INC. AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
(Unaudited)
Three Months Ended March 31 Six Months Ended March 31
1998 1997 1998 1997
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net sales $22,316,507 $20,673,498 $44,983,377 $40,609,556
----------- ----------- ----------- -----------
Costs and expenses:
Cost of sales 17,425,745 16,247,088 34,976,903 32,018,170
Selling, general and administrative 2,366,541 2,237,922 4,720,614 4,350,122
----------- ----------- ----------- -----------
Total costs and expenses 19,792,286 18,485,010 39,697,517 36,368,292
----------- ----------- ----------- -----------
Income from operations 2,524,221 2,188,488 5,285,860 4,241,264
----------- ----------- ----------- -----------
Other income (deductions):
Interest income 306,311 260,431 661,749 522,612
Interest expense (10,771) (11,819) (21,564) (23,662)
Miscellaneous 14,136 5,374 33,808 88,262
----------- ----------- ----------- -----------
Total other income (deductions) 309,676 253,986 673,993 587,212
----------- ----------- ----------- -----------
Income before income taxes 2,833,897 2,442,474 5,959,853 4,828,476
Provision for income taxes 1,116,800 964,700 2,345,300 1,895,200
----------- ----------- ----------- -----------
Net income $ 1,717,097 $ 1,477,774 $ 3,614,553 $ 2,933,276
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Weighted average number of common
shares outstanding 11,603,895 11,603,895 11,603,895 11,603,895
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Earnings per common share -
basic and diluted $0.15 $0.13 $0.31 $0.25
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
</TABLE>
See accompanying Notes to Consolidated Condensed Financial Statements.
4
<PAGE>
HAWKINS CHEMICAL, INC. AND SUBSIDIARY
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED MARCH 31
---------------------------
1998 1997
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income . . . . . . . . . . . . . . . . . . . . . . $ 3,614,553 $ 2,933,276
Depreciation and amortization. . . . . . . . . . . . . 851,709 770,480
Deferred income taxes. . . . . . . . . . . . . . . . . 78,000 38,500
Other. . . . . . . . . . . . . . . . . . . . . . . . . (55,475) (45,032)
Changes in certain current assets and liabilities. . . (2,062,529) (1,442,507)
----------- -----------
Net cash provided by operating activities. . . . . 2,426,258 2,254,717
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to property, plant and equipment . . . . . . (2,967,480) (1,294,403)
Purchases of investments . . . . . . . . . . . . . . . (268,317) (233,952)
Payments received on note receivable . . . . . . . . . 167,373 136,106
----------- -----------
Net cash used in investing activities. . . . . . . (3,068,424) (1,392,249)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash dividends paid. . . . . . . . . . . . . . . . . . (1,044,351) (884,135)
Debt repayment . . . . . . . . . . . . . . . . . . . . (59,928) (56,008)
----------- -----------
Net cash used in financing activities. . . . . . . (1,104,279) (940,143)
----------- -----------
DECREASE IN CASH AND CASH EQUIVALENTS. . . . . . . . . . . (1,746,445) (77,675)
CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR . . . . . . . 8,065,021 8,932,125
----------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD . . . . . . . . . $ 6,318,576 $ 8,854,450
----------- -----------
----------- -----------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
INFORMATION:
Cash paid for interest . . . . . . . . . . . . . . . . $ 45,092 $ 49,011
----------- -----------
----------- -----------
Cash paid for income taxes . . . . . . . . . . . . . . $ 3,189,000 $ 1,968,000
----------- -----------
----------- -----------
</TABLE>
See accompanying Notes to Consolidated Condensed Financial Statements.
5
<PAGE>
HAWKINS CHEMICAL, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1. The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with the instructions for Form 10-Q and,
accordingly, do not include all information and footnotes required by
generally accepted accounting principles for complete financial statements.
These statements should be read in conjunction with the financial
statements and footnotes included in the Company's Annual Report on Form
10-K for the year ended September 28, 1997, previously filed with the
Commission. In the opinion of management, the accompanying unaudited
consolidated condensed financial statements contain all adjustments
necessary to present fairly the Company's financial position and the
results of its operations and cash flows for the periods presented. All
adjustments made to the interim financial statements were of a normal
recurring nature.
Effective December 15, 1997, the Company adopted Statement of Financial
Accounting Standards No. 128, "Earnings per Share," (SFAS No. 128).
Earnings per common share presented for the three and six months ended
March 31, 1997 have been restated for the adoption of SFAS No. 128. The
effect of adopting SFAS No. 128 at December 15, 1997, on earnings per
common share for the three and six months ended March 31, 1997 was not
material.
The other accounting policies followed by the Company are set forth in Note
1 to the Company's financial statements in the 1997 Hawkins Chemical, Inc.
Annual Report which is incorporated by reference to Form 10-K filed with
the Commission on December 29, 1997.
2. The results of operations for the period ended March 31, 1998 are not
necessarily indicative of the results that may be expected for the full
year.
3. Inventories, principally valued by the LIFO method, are less than current
cost by approximately $779,900 at March 31, 1998. Inventory consists
principally of finished goods. Inventory quantities fluctuate during the
year. No material amounts of interim liquidation of inventory quantities
have occurred that are not expected to be replaced by year-end.
4. On May 29, 1997, the Company sold the inventory and operations of The Lynde
Company, a wholly owned subsidiary that specialized in swimming pool
chemicals, effective March 1, 1997. Lynde had revenues of $260,830 and a
net loss of $23,800, and revenues of $708,200 and a net loss of $36,600 for
the three and six-month periods ended March 31, 1997, respectively.
5. During 1995, the Company had a fire in the office/warehouse of The Lynde
Company, a former wholly owned subsidiary. Through March 31, 1998, the
Company has expensed approximately $2,550,000 ($20,000 in the six months
ended March 31, 1998) to cover estimated costs incurred by the Company in
connection with a lawsuit filed against the Company as a result of the
fire, of which approximately $2,400,000 has been paid. Based upon the
settlement agreement, the Company will incur additional future obligations
relating to the settlement of this lawsuit pursuant to a matrix and plan of
distribution which is a part of the settlement. The Company is not able to
estimate the extent of this potential exposure at this time, but it
believes the final disposition of this matter will not have a material
adverse effect on the Company's financial position, results of operations,
or cash flows. Based on two favorable lower court rulings, management
believes that all or a portion of such litigation expenses may be
recoverable from the Company's insurers. The Company's insurers have
appealed the lower court's decisions to the U.S. Eighth Circuit Court of
Appeals. It is not possible, therefore, to determine at this time what
recovery, if any, may be obtained by the Company, and no amount has been
recorded at March 31, 1998.
6. On February 11, 1998, the Board of Directors declared a semi-annual cash
dividend of $.10 per share, payable April 3, 1998 to shareholders of record
at the close of business March 20, 1998.
6
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
CONTINUING OPERATIONS
Net sales increased $1,643,009 (7.9%) in the second quarter of this fiscal year
as compared to the same quarter a year ago, and increased $4,373,821 (10.8%) in
the first six months of fiscal 1998 as compared to the same period in fiscal
1997. These increases were due to increased sales of pharmaceutical chemicals,
food grade product chemicals and high purity electroplating products; an
increase in the selling price of a single, large-volume product (caustic soda);
and increased volumes in most product lines.
Gross margin, as a percentage of net sales, for the second quarter of this
fiscal year was 21.9% compared to 21.4% for the same quarter one year ago, and
22.2% for the first six months of this fiscal year, compared to 21.2% for the
first six months of fiscal 1997. These increases were mainly due to the sales
increases mentioned above, as there are some costs in cost of sales that do not
fluctuate with volume changes. The Company has generally been able to and
expects to continue to adjust its selling prices as the cost of materials and
other expenses change, thereby maintaining relatively stable dollar gross
margins.
Selling, general and administrative expenses, as a percentage of net sales, for
the second quarter of fiscal 1998 were 10.6% compared to 10.8% for the same
quarter one year ago, and 10.5% for the first six months of fiscal 1998 as
compared to 10.7% for the first six months of fiscal 1997. Stated as a
percentage of the same period one year ago, the second quarter increase in such
expenses was 5.7%, or $128,619, and the six month increase was 8.5%, or
$370,492. These increases were mainly due to increased employee compensation
and benefits, which make up the majority of the selling, general and
administrative expenditures. Of the remaining expenses in this category, no
single item is more than 6% of the total. Most of these expenses fluctuate only
slightly with sales.
Income from operations increased $335,733, or 15.3%, in the second quarter and
$1,044,596, or 24.6%, in the first six months of fiscal 1998 as compared to the
same periods one year ago. These increases are primarily attributable to the
net sales increase.
Interest income increased $45,880 in the second quarter of fiscal 1998 as
compared to the same quarter one year ago and $139,137 for the first six months
of this fiscal year as compared to the same period one year ago. These
increases are due to an increase in the amount of cash available for investments
and to a higher rate of return earned on cash equivalents and investments.
Interest expense decreased slightly due mainly to the decline in long term debt.
LIQUIDITY AND CAPITAL RESOURCES
For the six-month period ended March 31, 1998, cash flows from operations were
$2,426,258. This amount was $171,541 higher than cash provided by operations
during the same period one year ago, due mainly to an increase in net income
partially offset by the changes in certain current assets and liability accounts
discussed below. During the six-month period ended March 31, 1998, the Company
invested $2,967,480 in property and equipment additions and added $268,317 to
investments.
Accounts receivable, inventories and accounts payable decreased during the first
six months of fiscal 1998. These decreases are typical for the first six months
of our fiscal year. The reason for the large decrease in inventories was due to
the sale of the Lynde Company subsidiary, which accounted for $1.2 million of
the March 31, 1997 inventories. Other current assets increased due to payments
of prepaid
7
<PAGE>
expenses that will be charged to the remaining quarters of this fiscal year.
Other current liabilities decreased as a result of the payment of benefit plan
accruals that existed at fiscal year end. The Company did not issue any
securities during the six-month period ended March 31, 1998.
The cash flows from operations, coupled with the Company's strong cash position,
puts the Company in a position to fund both short and long-term working capital
and capital investment needs with internally generated funds. Management does
not, therefore, anticipate the need to engage in significant financing
activities in either the short or long-term. If the need to obtain additional
capital does arise, however, management is confident that the Company's total
debt to capital ratio puts it in a position to issue either debt or equity
securities on favorable terms.
Although management continually reviews opportunities to enhance the value of
the Company through strategic acquisitions, other capital investments and
strategic divestitures, no material commitments for such investments or
divestitures currently exist. Until appropriate investment opportunities are
identified, the Company will continue to invest excess cash in conservative
investments pursuant to a revised investment policy recently adopted by the
Board of Directors. The policy directs investment in short-term and mid-term
fixed income instruments earning a market rate of interest without assuming
undue risk of principal. Primary objectives are preservation of principal,
maintenance of liquidity, and rate of return. Cash equivalents consist of
short-term certificates of deposit and investments consist of relatively
low-risk investment and annuity contracts with highly rated, stable insurance
companies, and marketable securities consisting of investment grade municipal
securities, all of which are carried at cost which approximates fair value. All
cash equivalents are highly liquid and are available upon demand. There are
some penalties associated with the early liquidation of the Company's investment
and annuity contracts.
Other than as discussed above, management is not aware of any matters that have
materially affected the first six months of fiscal 1998, but are not expected to
materially affect future periods, nor is management aware of other matters not
affecting this period that are expected to materially affect future periods.
FORWARD-LOOKING STATEMENTS
THE INFORMATION CONTAINED IN THIS FORM 10-Q INCLUDES FORWARD-LOOKING STATEMENTS
AS DEFINED IN SECTION 21E OF THE SECURITIES EXCHANGE ACT OF 1934, AS AMENDED.
THESE FORWARD-LOOKING STATEMENTS INVOLVE A NUMBER OF RISKS AND UNCERTAINTIES,
INCLUDING DEMAND FROM MAJOR CUSTOMERS, COMPETITION, CHANGES IN PRODUCT OR
CUSTOMER MIX OR REVENUES, CHANGES IN PRODUCT COSTS AND OPERATING EXPENSES AND
OTHER FACTORS DISCLOSED THROUGHOUT THIS REPORT. THE ACTUAL RESULTS THAT THE
COMPANY ACHIEVES MAY DIFFER MATERIALLY FROM ANY FORWARD-LOOKING STATEMENTS DUE
TO SUCH RISKS AND UNCERTAINTIES. THE COMPANY UNDERTAKES NO OBLIGATION TO REVISE
ANY FORWARD-LOOKING STATEMENTS IN ORDER TO REFLECT EVENTS OR CIRCUMSTANCES THAT
MAY ARISE AFTER THE DATE OF THIS REPORT. READERS ARE URGED TO CAREFULLY REVIEW
AND CONSIDER THE VARIOUS DISCLOSURES MADE BY THE COMPANY IN THIS REPORT AND IN
THE COMPANY'S OTHER REPORTS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION
THAT ATTEMPT TO ADVISE INTERESTED PARTIES OF THE RISKS AND UNCERTAINTIES THAT
MAY AFFECT THE COMPANY'S FINANCIAL CONDITION AND RESULTS OF OPERATION.
8
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
As of the date of this filing, neither the Registrant nor any of its
subsidiaries were involved in any pending legal proceedings to which the
Registrant or its subsidiaries was a party or of which any property of the
Registrant or its subsidiaries were the subject other than ordinary routine
litigation incidental to their business, except as follows:
LYNDE COMPANY WAREHOUSE FIRE. On March 1, 1995, the Company and its former
subsidiary, The Lynde Company, were named as defendants in an action
entitled DONNA M. COOKSEY, ET AL. V. HAWKINS CHEMICAL, INC. AND THE LYNDE
COMPANY ("COOKSEY"). This action was certified as a partial class action
in 1997. The Registrant has entered into a class settlement agreement with
the class, pursuant to which the Registrant has agreed to pay certain costs
and expenses of the class, as well as certain compensation to the class
pursuant to a Matrix and Plan of Distribution which form a part of the
settlement agreement.
The district court approved the settlement on January 30, 1998.
Pursuant to the settlement, in early February 1998 the Company paid
$850,000 to attorneys for the class, and $5,000 to each of the four
class representatives. It is not possible at this time to quantify
the probable additional settlement costs which may be payable by the
Registrant pursuant to the Matrix and Plan of Distribution which form
a part of the settlement agreement. The Registrant reasonably
expects, however, that such settlement costs will be estimable by the
end of 1998.
Item 4. Submission of matter to a vote of Security Holders.
a. The annual meeting of the shareholders of the Company was held on
February 11, 1998.
c. The following is a tabulation of the results of votes cast on the
matters noted upon at the annual meeting of the shareholders:
Election of Directors:
<TABLE>
<CAPTION>
Broker
For Against Withheld Abstain Non-Votes
--------- ------- -------- ------- ---------
<S> <C> <C> <C> <C> <C>
Howard J. Hawkins 8,889,872 0 108,840 0 0
Dean L. Hahn 8,806,097 0 192,615 0 0
Carl J. Ahlgren 8,788,272 0 210,440 0 0
Howard M. Hawkins 8,761,861 0 236,851 0 0
Norman P. Anderson 8,793,555 0 205,157 0 0
Donald L. Shipp 8,679,348 0 319,364 0 0
John S. McKeon 8,798,537 0 200,175 0 0
John R. Hawkins 8,887,728 0 110,984 0 0
Duane Jergenson 8,888,610 0 110,102 0 0
</TABLE>
9
<PAGE>
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
The following exhibits are included with this Quarterly Report on Form 10-Q
(or incorporated by reference) as required by Item 601 of Regulation S-K.
Exhibit No. Description of Exhibit
------------ -------------------------------------------------
27 Financial Data Schedule
(b) Reports on Form 8-K.
No reports on Form 8-K have been filed during the fiscal quarter ended
March 31, 1998.
SIGNATURE
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.
HAWKINS CHEMICAL, INC.
BY
----------------------------------------------
Howard M. Hawkins, Treasurer
(Chief Financial and Accounting Officer)
Dated: May 12, 1998
10
<PAGE>
EXHIBIT INDEX
The following exhibits are included with this Quarterly Report on Form 10-Q (or
incorporated by reference) as required by Item 601 of Regulation S-K.
<TABLE>
<CAPTION>
Exhibit No. Description of Exhibit Page No.
------------- ------------------------------------------ ----------
<S> <C> <C>
27 Financial Data Schedule 12
</TABLE>
11
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-27-1998
<PERIOD-START> SEP-29-1997
<PERIOD-END> MAR-31-1998
<CASH> 6,318,576
<SECURITIES> 12,248,395
<RECEIVABLES> 11,284,854
<ALLOWANCES> 351,919
<INVENTORY> 7,187,955
<CURRENT-ASSETS> 39,206,565
<PP&E> 31,002,562
<DEPRECIATION> 13,367,697
<TOTAL-ASSETS> 62,950,458
<CURRENT-LIABILITIES> 10,145,118
<BONDS> 423,402
0
0
<COMMON> 580,195
<OTHER-SE> 50,815,743
<TOTAL-LIABILITY-AND-EQUITY> 62,950,458
<SALES> 44,983,377
<TOTAL-REVENUES> 44,983,377
<CGS> 34,976,903
<TOTAL-COSTS> 34,976,903
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 21,564
<INCOME-PRETAX> 5,959,853
<INCOME-TAX> 2,345,300
<INCOME-CONTINUING> 3,614,553
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,614,553
<EPS-PRIMARY> .31
<EPS-DILUTED> .31
</TABLE>
