SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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 June 30, 1999
or
_ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
or the transition period from ____________ to ____________
Commission File Number 0-12362
Berger Holdings, Ltd.
(Exact Name of Registrant as Specified in its Charter)
Pennsylvania 23-2160077
(State or Other Jurisdiction (I.R.S. Employer
of Incorporation or Organization) Identification Number)
805 Pennsylvania Boulevard, Feasterville, PA 19053
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (215) 355-1200
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 ninety days.
YES X NO _____
Indicate by check mark whether the Registrant
has filed all documents and reports required to be
filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution
of securities under a plan confirmed by a court.
YES X NO _____
As of August 13, 1999, the Registrant had
outstanding 5,405,265 shares of its common stock, par
value $0.01 per share (the "Common Stock").
1
<PAGE>
BERGER HOLDINGS, LTD.
INDEX Page
PART I FINANCIAL INFORMATION
Item 1. Condensed Consolidated Balance
Sheets at June 30, 1999 and
December 31, 1998 3
Condensed Consolidated Statements of
Operations for the three month periods
ended June 30, 1999 and 1998 5
Condensed Consolidated Statements of
Operations for the six month periods
ended June 30, 1999 and 1998 6
Condensed Consolidated Statements
of Cash Flows for the six month periods
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 9
Item 3. Quantitative and Qualitative Disclosures
About Market Risk 13
PART II OTHER INFORMATION
Item 1. Legal Proceedings 13
Item 2. Changes in Securities and Use of Proceeds 13
Item 3. Defaults Upon Senior Securities 13
Item 4. Submission of Matters to a Vote of
Security Holders 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURES 14
2
<PAGE>
<TABLE>
BERGER HOLDINGS, LTD. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
<CAPTION>
ASSETS June 30, December 31,
1999 1998
(unaudited) (audited)
-------------------- --------------------
<S>
Current Assets
<C> <C>
Cash $ 93,690 $ 149,885
Trade accounts receivable, net of
allowance for doubtful accounts of
$30,000 in 1999 & 1998 4,900,757 3,928,858
Inventories (Note 2) 6,489,746 6,552,420
Prepaid and other assets 321,203 283,744
Deferred income taxes 484,000 484,000
-------------------- --------------------
Total current assets 12,289,396 11,398,907
Property and equipment, net 10,834,902 9,789,015
Deferred income taxes 1,473,105 1,731,201
Other assets, net 3,484,020 4,342,283
Goodwill, net 6,910,754 7,325,798
-------------------- --------------------
Total Assets $ 34,992,177 $ 34,587,204
=================== ===============
</TABLE>
3
<PAGE>
<TABLE>
BERGER HOLDINGS, LTD. AND SUBSIDIARY
CONDENSED CONSOLIDATED BALANCE SHEETS
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY June 30, December 31,
1999 1998
(unaudited) (audited)
-------------------- ---------------------
<S>
Current liabilities
<C> <C>
Current maturities of long term debt $ 1,678,672 $ 2,062,286
Accounts payable 1,972,005 960,953
Accrued expenses 1,400,757 1,141,933
-------------------- --------------------
Total current liabilities 5,051,433 4,165,172
Long term debt (Note 4) 17,678,988 14,560,307
Redeemable common stock, 125,000 shares 500,000 500,000
Commitments and contingencies -
-
Stockholders' Equity
Series A convertible preferred stock, $.01 par value
$4,000,000 liquidation value in 1998
Authorized 5,000,000 shares
Issued and outstanding 40,000 shares in 1998
- 400
Common stock $.01 par value
Authorized 20,000,000 shares
Issued and outstanding
5,405,265 shares in 1999
5,301,330 shares in 1998 54,053 53,013
Additional paid-in-capital 17,114,887 21,114,214
Deficit (4,864,422) (5,322,986)
Treasury stock at cost, 20,000 shares (Note 5) (59,846) -
-------------------- --------------------
12,244,672 15,844,641
Less common stock subscribed (482,916) (482,916)
-------------------- --------------------
Total shareholders' equity (Note 4) 11,761,756 15,361,725
-------------------- --------------------
Total liabilities and stockholders' equity $ 34,992,177 $ 34,587,203
=================== ===================
</TABLE>
4
<PAGE>
<TABLE>
BERGER HOLDINGS, LTD. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<CAPTION>
Three Months Ended June 30,
1999 1998
(unaudited) (unaudited)
------------------- ------------------
<S> <C> <C>
Net sales $ 11,091,149 $ 9,739,325
Cost of sales 8,503,553 7,781,199
------------------- ------------------
Gross profit 2,587,596 1,958,126
Selling, general and administrative expenses 1,341,410 1,085,288
------------------- ------------------
Income from operations 1,246,186 872,838
Other (expense) income
Interest expense (463,595) (321,051)
Interest income 6,566 1,336
------------------- ------------------
(457,029) (319,715)
------------------- ------------------
Income before provision for income tax
and preferred stock dividend 789,157 553,123
Provision for income tax (Note 3) 284,096 -
------------------- ------------------
Income before preferred stock dividend 505,061 553,123
Preferred stock dividend - 100,000
------------------- ------------------
Net income available to common stockholders $ 505,061 $ 453,123
=================== ==================
Basic earnings per share $ 0.09 $ 0.08
=================== ==================
Weighted average common shares outstanding 5,525,529 5,368,454
=================== ==================
Diluted earnings per share $ 0.08 $ 0.07
=================== ==================
Weighted average common shares outstanding 5,525,529 5,368,454
Add: effect of vested and non-vested dilutive securities 972,372 1,396,992
Add: effect of convertible debt and preferred stock 941,177 941,177
------------------- ------------------
Diluted weighted average common shares outstanding 7,439,078 7,706,623
=================== ==================
</TABLE>
5
<PAGE>
<TABLE>
BERGER HOLDINGS, LTD. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<CAPTION>
Six Months Ended June 30,
1999 1998
(unaudited) (unaudited)
------------------- ------------------
<S> <C>
Net sales $ 19,299,131 $ 16,753,779
Cost of sales 15,112,207 13,570,278
------------------- ------------------
Gross profit 4,186,924 3,183,501
Selling, general and administrative expenses 2,542,889 2,175,369
------------------- ------------------
Income from operations 1,644,035 1,008,132
Other (expense) income
Interest expense (937,368) (629,146)
Interest income 9,993 1,925
Proceeds from insurance recovery - 118,701
------------------- ------------------
(927,375) (508,520)
------------------- ------------------
Income before provision for income tax
and preferred stock dividend 716,660 499,612
Provision for income tax (Note 3) 258,096 -
------------------- ------------------
Income before preferred stock dividend 458,564 499,612
------------------- ------------------
Preferred stock dividend - 200,000
------------------- ------------------
Net income available to common stockholders $ 458,564 $ 299,612
=================== ==================
Basic earnings per share $ 0.08 $ 0.06
=================== ==================
Weighted average common shares outstanding 5,516,666 5,362,540
=================== ==================
Diluted earnings per share $ 0.08 $ 0.06
=================== ==================
Weighted average common shares outstanding 5,516,666 5,362,540
Add: effect of vested and non-vested dilutive securities 1,068,058 1,396,992
Add: effect of convertible debt and preferred stock 941,177 941,177
------------------- ------------------
Diluted weighted average common shares outstanding 7,525,901 7,700,709
=================== ==================
</TABLE>
-6-
<PAGE>
<TABLE>
BERGER HOLDINGS, LTD. AND SUBSIDIARY
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<CAPTION>
Six Months Ended June 30,
1999 1998
(unaudited) (unaudited)
------------------- ------------------
<S> <C>
Cash flows from operating activities
Net income $ 458,564 $ 499,612
Adjustments to reconcile net income to net cash
provided by operating activities
Depreciation and amortization 934,992 781,520
Decrease in accounts receivable allowance - (13,000)
Change in operating assets and liabilities, excluding acquisitions
Accounts receivable (971,899) (2,752,910)
Inventories 62,674 641,433
Other current and long-term assets (100,601) (132,562)
Accounts payable 1,011,052 1,325,150
Accrued expenses 258,824 907,321
------------------- ------------------
Net cash provided by (used in) operating activities 1,653,606 1,256,564
------------------- ------------------
Cash flows from investing activities
Acquisition of companies, net of cash acquired - (10,000,000)
Acquisition of property and equipment (514,726) (2,151,510)
------------------- ------------------
Net cash used in investing activities (514,726) (12,151,510)
------------------- ------------------
Cash flows from financing activities
Dividends paid - (200,000)
Net proceeds (repayment) working capital line (181,741) 2,864,238
Net proceeds (repayment) equipment term loan (265,998) 550,668
Proceeds from long term debt 44,180 1,986,100
Loan and mortgage repayments (732,983) (36,574)
Net proceeds from issuance of stock 1,313 1,468,176
Proceeds from stock subscribed - 25,000
Repurchase of common stock (59,846) -
------------------- ------------------
Net cash provided by (used in) financing activities (1,195,075) 6,657,608
------------------- ------------------
Net increase (decrease) in cash (56,195) (4,237,338)
Cash, beginning of period 149,885 4,411,347
------------------- ------------------
Cash, end of period
$ 93,690 $ 174,009
=================== ==================
Supplemental Disclosure of Cash Flow Information
Cash paid during the period for interest $ 937,368 $ 629,146
=================== ==================
</TABLE>
7
<PAGE>
BERGER HOLDINGS, LTD. AND SUBSIDIARY
Notes to Condensed Consolidated Financial Statements
Note 1. Basis of Presentation:
The accompanying unaudited condensed consolidated financial statements
have been prepared in accordance with generally accepted accounting principles
for interim financial information and the instructions to Form 10-Q and Rule
10-01 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
solely of normal recurring accruals) considered necessary for a fair
presentation have been included.
Note 2. Inventories:
Inventories are valued at the lower of cost or market. Cost is
determined using the first-in, first-out method ("FIFO").
Components of inventories at June 30, 1999 and December 31, 1998
consisted of the following:
June 30, December 31,
1999 1998
---------------- ------------------
<TABLE>
<S> <C> <C>
Raw materials $ 3,579,514 $ 3,951,194
Finished goods 2,892,756 2,624,451
Packaging material and supplies 163,476 122,775
Less provision for obsolescence (146,000) (146,000)
-------------------- -------------------
Total inventories $ 6,489,746 $ 6,552,420
======================== =====================
</TABLE>
Note 3. Income Taxes:
Consolidated income tax for the six month periods ended June 30, 1999
and 1998 are $258,096 and zero, which result in an effective tax rate of 36% and
0%, respectively. The rate of tax in relation to pre-tax loss in 1999 is
consistent with the year end effective rate prior to the change in the valuation
allowance. The absence of a tax benefit in 1998 is due to the recognition of a
valuation allowance for the tax benefit related to the net operating loss.
During 1999, the Company is reporting a provision for income taxes, but is only
paying state taxes due to the availability of approximately $5,500,000 in
federal net operating loss carryforwards.
8
<PAGE>
Note 4. Long Term Debt:
During the first quarter of 1999, and effective as of January 1, 1999,
40,000 shares of the Company's Series A Convertible Preferred Stock (the "Series
A Preferred Stock") were exchanged for $4,000,000 principal amount of 10%
Subordinated Convertible Debentures due December 31, 2003 ("10% debentures").
The 10% debentures are convertible at any time into shares of the Company's
common stock, $0.01 par value, at $4.25 a share, or 23.53 shares of common stock
for each $100 principal amount of 10% debentures outstanding on the conversion
date, subject to specified anti-dilution adjustments.
The 12.25% subordinated debenture (12.25% debenture) matures on January
2, 2004. The interest rate on the 12.25% debenture will increase on January 2,
2002 for $2,000,000 of the 12.25% debenture from 12.25% to 20% until maturity;
and on January 2, 2002 for $500,000 of the 12.25% debenture from 12.25% to
19.25%. The interest rate will decrease on $500,000 of the 12.25% debenture on
January 3, 2003 to 14% until maturity. The 12.25% debentures are not convertible
into common shares.
Simultaneously with the conversion of the Series A Preferred Stock, the
Company extended the exercise date on 300,000 common stock warrants from January
2, 2003 to December 31, 2003; and extended the maturity date on its 12.25%
debentures from January 2, 2003 to December 31, 2003. The increase in interest
rates to 20% and 19.25%, respectively, on the 12.25% debentures were extended
from January 2, 2001 for $2,000,000 of the 12.25% debenture to January 2, 2002;
and were extended from January 3, 2001 for $500,000 of the 12.25% debenture to
January 2, 2002. The interest rate decrease from 19.25% to 14% on $500,000 of
the 12.25% debenture will be extended to January 2, 2003 from the original date
of January 3, 2002.
By making the conversion from preferred stock to debentures, the
Company saves approximately $144,000 due to the additional interest expense as
opposed to dividends.
Note 5. Treasury Stock:
On May 18, 1999 the Company's Board of Directors authorized the
repurchase of up to 540,000 shares, or approximately 10%, of the Company's
common stock. The repurchases will be made from time to time through open market
purchases or privately negotiated transactions at the discretion of the Company
and in accordance with the rules of the Securities and Exchange Commission. The
amount and timing of the repurchases will depend on market conditions and other
factors.
ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operation
Results of Operations
The financial statements include the accounts of the Company and its
wholly-owned subsidiary, Berger Financial Corporation ("Financial") and
Financial's wholly-owned subsidiary, Berger Bros Company. All intercompany
transactions and balances have been eliminated.
Sales for the three month period ended June 30, 1999 (the "Current
Quarter") were $11,091,149, an increase of 13.9%, or $1,351,824, as compared to
$9,739,325 for the three month period ended June 30, 1998 (the "Comparable
Quarter"). This increase was primarily due to the acquisition of the assets of
Sheet Metal Manufacturing Co., Inc. (the "Sheet Metal Acquisition") on December
7, 1998. This is the sixth consecutive quarter in which the Company has posted
an increase in sales as compared to the comparable quarter of the prior year.
9
<PAGE>
During the Current Quarter, the Company reported net income of $505,061
(which includes a provision for income tax of $284,096) on net sales of
$11,091,149, as compared to net income of $453,123 (which does not include a
provision for income tax) on net sales of $9,739,325 for the Comparable Quarter.
Excluding the 1999 provision for income tax of $284,096, the Company's net
income attributable to common stockholders actually increased over 74% (see Note
3).
Income from operations in the Current Quarter is $1,246,186 versus
$872,838 in the Comparable Quarter, an increase of 42.8%, which primarily can be
attributed to economies of scale realized from the Sheet Metal Acquisition and
the Company's concentration on more profitable product lines.
Cost of sales were $8,503,553 in the Current Quarter as compared to
$7,781,199 in the Comparable Quarter. As a percentage of net sales, Cost of
sales decreased to 76.7% in the Current Quarter from 79.9% in the Comparable
Quarter. This decrease is attributable to the change in product sales mix
generated by the Sheet Metal Acquisition.
Selling, general and administrative expenses were $1,341,410 in the
Current Quarter as compared to $1,085,288 in the Comparable Quarter. This
increase in expenses was primarily due to additional costs incurred to support
the business growth relating to the Sheet Metal Acquisition and building the
infrastructure for future acquisitions. As a percentage of net sales, selling,
general and administrative expenses increased to 12.1% in the Current Quarter,
compared to 11.1% in the Comparable Quarter.
Sales for the six month period ended June 30, 1999 (the "Current Half")
were $19,299,131, an increase of 15.2%, or $2,545,352, as compared to
$16,753,779 for the six month period ended June 30, 1998 (the "Comparable
Half"). This increase was primarily due to the Sheet Metal Acquisition.
Net income for the Current Half was $458,564 (which includes a
provision for income tax of $258,096) as compared to $299,612 (which included a
one-time insurance recovery of $118,701) in the Comparable Half. Excluding the
taxes in 1999, net income was $716,660 and excluding the insurance recovery in
1998, net income was $380,911, for an improvement of $335,749, or 88.1%.
Income from operations in the Current Half was $1,644,035 versus
$1,008,132 in the Comparable Half, an increase of 63.1%, which primarily can be
attributed to the accretive economies of scale realized by the Company from
prior acquisitions.
Cost of Sales were $15,112,207 in the Current Half as compared to
$13,570,278 in the Comparable Half. As a percentage of net sales, Cost of Sales
decreased to 78.3% in the Current Half from 81.0% in the Comparable Half. This
decrease is primarily attributable to the change in product sales mix generated
by the Sheet Metal Acquisition.
Selling, general and administrative expenses in the Current Half were
$2,542,889, or 13.2% of sales, as compared to $2,175,369, or 13.0% of sales, in
the Comparable Half. This increase in expenses was primarily due to additional
costs incurred to support the business growth relating to the Sheet Metal
Acquisition and building the infrastructure for future acquisitions.
Liquidity and Capital Resources
At June 30, 1999, the Company had long-term debt consisted of a working
capital and term loan of $8,044,558, 10% Convertible Debentures of $4,000,000,
notes payable and leases of $2,872,840 and a Mortgage for $2,761,590 for a total
of $17,678,988. See Note 4 for a description of the 10% Convertible Debentures.
10
<PAGE>
At June 30, 1999, working capital was $7,237,963, resulting in a ratio
of current assets to current liabilities of 2.43 to 1, as compared to working
capital of $7,233,735 and a ratio of 2.74 to 1 at December 31, 1998.
Current liabilities at June 30, 1999 totaled $5,051,433, consisting
primarily of $3,372,762 in accounts payable and accrued expenses and $1,678,672
in current maturities of long-term debt. At December 31, 1998, total current
liabilities were $4,165,172, consisting primarily of $2,102,886 in accounts
payable and accrued expenses and $2,062,286 in current maturities of long-term
debt. The increase is primarily due to the seasonality of the business.
At June 30, 1999, the Company had shareholders' equity of $11,761,756,
as compared to $15,844,641 at December 31, 1998. This decrease is primarily
attributable to the conversion of 40,000 shares of Series A Preferred Stock into
subordinated convertible debentures.
Cash provided by operating activities for the Current Half was
$1,653,606 as compared to $1,256,564 in the Comparable Half. This increase is
due to the additional cash flow provided by the acquisition of the roof drainage
division of Benjamin Obdyke, Inc. and SheetMetal Mfg. Co.
Net cash used in investing activities totaled $514,726 in the Current
Half, as compared to $12,151,510 used in the Comparable Half. This difference is
due to the acquisition of the roof drainage division of Benjamin Obdyke, Inc.
and the construction of new office space in 1998.
Net cash used in financing activities was $1,195,075 in the Current
Half, as compared to $6,657,608 provided in the Comparable Half. This difference
is due to the financing required to complete the above mentioned acquisition in
1998 and the Company's ability to paydown debt by approximately $1,250,000 in
1999. Availability under the Working Capital Loan as of June 30, 1999 was
$3,057,448.
YEAR 2000 READINESS DISCLOSURE
The Company is aware of Year 2000 Issues. "Year 2000" Issues relate to
whether computer hardware, software and equipment will properly recognize date
sensitive information referring to the Year 2000. Potential computer system and
equipment failures arising from years beginning with "20' rather than "19" are a
known risk.
The Company currently has a program underway to remediate by the end of
the third quarter of 1999 all of the Company's significant computer systems that
are not Year 2000 compliant. The program to ensure its Year 2000 readiness
includes the following: identifying all systems which may not be Year 2000
compliant; correcting or replacing those systems which are not Year 2000 ready;
testing the new or corrected systems to make sure they will operate according to
Year 2000 requirements; and inquiring of vendors and customers of the Company to
assess their Year 2000 readiness. The Company has identified certain critical
software and hardware systems that need to be replaced or updated in order to be
Year 2000 compliant. The Company has replaced or is in the process of replacing
such systems and intends to complete the replacement during the third quarter of
1999.
The Company has been inquiring of certain key suppliers and business
partners about their Year 2000 readiness. While no assurances can be given that
key suppliers and business partners will remedy their own Year 2000 issues, the
Company to date has not identified any material impact on its ability to
continue normal business operations with suppliers or other third parties who
fail to address the Year 2000 issue.
Actual costs associated with implementation of the Company's Year 2000
program are not expected to be material to the Company's operations and
financial condition. Costs of approximately $350,000, primarily for software
have been or are expected to be incurred and capitalized. As of June 30, 1999,
approximately $300,000 of costs have been expended.
11
<PAGE>
The Company will continue to monitor and evaluate the impact of the
Year 2000 issue on its operations. Until the Company has completed the final
testing part of its program, the risks from potential Year 2000 failures cannot
be fully assessed. Due to this situation, the Company has not begun final
contingency plans. These plans will be developed as potential Year 2000 failures
are identified in the final testing stages. Nevertheless, if remediation is not
accomplished successfully in a timely fashion and successful contingency plans
are not implemented, the Company believes the Year 2000 issue could have a
material adverse effect on the Company.
12
<PAGE>
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk.
For information regarding the company's exposure to certain market
risks, see Item 7A, Quantitative and Qualitative Disclosures About Market Risk,
in the Company's Annual Report on Form 10-K for the year ended December 31,
1998. There have been no significant changes since December 31, 1998 in the
Company's portfolio of financial instruments or market risk exposures.
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 Securities Holders.
The Company's 1999 Annual Meeting of Shareholders (the "Meeting") was
held on June 30, 1999 at the Company's headquarters in Feasterville,
Pennsylvania. At the Meeting, Joseph F. Weiderman, Jacob I. Haft, M.D. and John
P. Kirwin, III were re-elected as directors of the Company, with terms to expire
in the year 2002 or until their successors in office have been duly elected and
qualified. With regard to Mr. Weiderman, 4,633,706 votes were cast in favor of
his election, 388 against and 55,514 abstained. With regard to Mr. Haft,
4,634,026 votes were cast in favor of his election, 68 against and 55,514
abstained. With regard to Mr. Kirwin, 4,633,744 votes were cast in favor of his
election, 350 against and 55,514 abstained.
The following directors have terms of office that continued after the
Meeting: Theodore A. Schwartz, Paul L. Spiese, III, Dr. Irving Kraut,
Larry Falcon and Jay Seid.
Item 5 - Other Information.
Not applicable.
Item 6 - Exhibits and Reports on Form 8-K.
None.
13
<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.
BERGER HOLDINGS, LTD.
By:/s/ JOSEPH F. WEIDERMAN
Joseph F. Weiderman
President and
Chief Operating Officer
By:/s/ FRANCIS E. WELLOCK, JR.
Francis E. Wellock, Jr.
Chief Financial Officer
Date: August 13, 1999
14
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1999
<CASH> 93,690
<SECURITIES> 0
<RECEIVABLES> 4,930,757
<ALLOWANCES> 30,000
<INVENTORY> 6,489,746
<CURRENT-ASSETS> 12,289,396
<PP&E> 18,528,426
<DEPRECIATION> 7,693,524
<TOTAL-ASSETS> 34,992,177
<CURRENT-LIABILITIES> 5,051,433
<BONDS> 0
0
0
<COMMON> 54,053
<OTHER-SE> 11,707,703
<TOTAL-LIABILITY-AND-EQUITY> 34,992,177
<SALES> 19,299,131
<TOTAL-REVENUES> 19,299,131
<CGS> 15,112,207
<TOTAL-COSTS> 15,112,207
<OTHER-EXPENSES> 1,644,035
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 937,368
<INCOME-PRETAX> 716,660
<INCOME-TAX> 258,096
<INCOME-CONTINUING> 458,564
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 458,564
<EPS-BASIC> .08
<EPS-DILUTED> .08
</TABLE>
