<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
-----------------------
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended NOVEMBER 30, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-14203
MERIDIAN NATIONAL CORPORATION
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 34-1470518
(State of Incorporation) (I.R.S. Employer
Identification Number)
805 CHICAGO STREET, TOLEDO, OH 43611
(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number: (419) 729-3918
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 ____
As of January 9, 1996, 2,714,506 shares of Meridian National
Corporation common stock were outstanding.
<PAGE> 2
MERIDIAN NATIONAL CORPORATION
PART 1
FINANCIAL INFORMATION
---------------------
ITEM 1. FINANCIAL STATEMENTS
- ------ --------------------
The accompanying condensed consolidated financial statements of Meridian
National Corporation are unaudited but, in the opinion of management, reflect
all adjustments (including only normal recurring accruals) necessary to present
fairly such information for the periods and at the dates indicated. The results
of operations for the three months and nine months ended November 30, 1995 may
not be indicative of the results of operations for the year ending February 29,
1996. Since the accompanying condensed consolidated financial statements have
been prepared in accordance with Article 10 of Regulation S-X, they do not
contain all information and footnotes normally contained in annual consolidated
financial statements; accordingly, they should be read in conjunction with the
consolidated financial statements and notes thereto appearing in the Company's
Annual Report on Form 10-K for fiscal year ended February 28, 1995.
2
<PAGE> 3
MERIDIAN NATIONAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
NOVEMBER 30, February 28,
1995 1995
----------- -----------
<S> <C> <C>
ASSETS
- -----
Current assets:
Cash and cash equivalents $ 222,875 $ 655,373
Accounts receivable - net 8,346,463 9,103,949
Inventories 7,926,222 9,308,691
Other current assets 242,985 191,876
----------- -----------
Total current assets 16,738,545 19,259,889
Property and equipment, at cost 12,181,279 9,642,984
Less accumulated depreciation and amortization 5,167,720 4,772,164
----------- -----------
7,013,559 4,870,820
Other assets 803,537 929,271
----------- -----------
$24,555,641 $25,059,980
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current liabilities:
Notes payable $ 9,711,644 $ 9,525,341
Accounts payable and accrued liabilities 6,349,764 7,590,476
Long-term debt due within one year:
Related parties 223,809 349,325
Other 796,658 540,104
----------- -----------
Total current liabilities 17,081,875 18,005,246
Long-term debt due after one year:
Related parties 596,822 895,233
Other 5,084,840 4,034,059
Stockholders' equity:
Preferred stock, $.001 par value, 5,000,000 shares authorized:
$100 Series A, 5,000 shares authorized,
4,000 shares outstanding 400,000 400,000
$3.75 Series B, 1,375,000 shares authorized,
206,752 shares outstanding 775,320 775,320
Common stock, $.01 par value, 20,000,000 shares authorized,
2,714,506 shares outstanding (2,534,639 at February 28, 27,145 25,346
1995)
Capital in excess of stated value 9,994,474 9,785,677
Deficit (9,404,835) (8,860,901)
----------- -----------
Total stockholders' equity 1,792,104 2,125,442
----------- -----------
$24,555,641 $25,059,980
=========== ===========
</TABLE>
See accompanying notes.
3
<PAGE> 4
MERIDIAN NATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
NOVEMBER 30, NOVEMBER 30,
--------------------------------- ---------------------------------
1995 1994 1995 1994
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Net sales $ 14,269,788 $ 14,124,410 $ 42,486,337 $ 37,697,648
Costs of sales 12,662,534 12,186,614 37,512,259 31,765,411
-------------- -------------- -------------- --------------
Gross margin 1,607,254 1,937,796 4,974,078 5,932,237
Other costs and expenses:
Selling, general and administrative 1,518,658 1,463,719 4,627,828 4,215,847
Interest expense 351,889 276,119 1,100,514 743,797
Miscellaneous - net (77,904) (25,447) (133,629) (68,965)
-------------- -------------- -------------- --------------
1,792,643 1,714,391 5,594,713 4,890,679
-------------- -------------- -------------- --------------
Income (loss) before income taxes and
extraordinary gain (185,389) 223,405 (620,635) 1,041,558
Provision for federal income taxes - current - 10,000 - 35,000
-------------- -------------- -------------- --------------
Income (loss) before extraordinary gain (185,389) 213,405 (620,635) 1,006,558
Extraordinary gain - extinguishment of debt - - 149,206 226,276
-------------- -------------- -------------- --------------
Net income (loss) $ (185,389) $ 213,405 $ (471,429) $ 1,232,834
============== ============== ============== ==============
Earnings (loss) applicable to common stock $ (219,587) $ 181,907 $ (569,130) $ 1,129,019
============== ============== ============== ==============
Earnings (loss) per common and
comon equivalent share:
Income (loss) before extraordinary gain ($0.08) $0.07 ($0.26) $0.34
Extraordinary gain - - 0.05 0.09
-------------- -------------- -------------- --------------
Net Income (loss) ($0.08) $0.07 ($0.21) $0.43
============== ============== ============== ==============
Weighted average common
shares outstanding 2,714,506 2,601,459 2,639,576 2,614,131
============== ============== ============== ==============
</TABLE>
See accompanying notes.
4
<PAGE> 5
MERIDIAN NATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
NINE MONTHS ENDED NOVEMBER 30, 1995
(Unaudited)
<TABLE>
<CAPTION>
$100 $3.75 CAPITAL IN
SERIES A SERIES B EXCESS OF
PREFERRED PREFERRED COMMON STATED
STOCK STOCK STOCK VALUE DEFICIT TOTAL
--------- -------- ------- ---------- ----------- ----------
<S> <C> <C> <C> <C> <C> <C>
Balance at February 28, 1995 $400,000 $775,320 $25,346 $9,785,677 ($8,860,901) $2,125,442
Net income (471,429) (471,429)
Exchange of 156,415 warrants to purchase
common stock for 156,415 units, each
consisting of one share of common stock and
one warrant to purchase common stock 1,564 163,593 165,157
Dividends:
Cash dividends on Series A preferred stock (27,000) (27,000)
Cash dividends on Series B preferred stock (66) (66)
23,452 shares of common stock issued
to holders of Series B preferred stock 235 45,204 (45,439) -
--------- -------- ------- ---------- ----------- ----------
Balance at November 30, 1995 $400,000 $775,320 $27,145 $9,994,474 ($9,404,835) $1,792,104
========= ======== ======= =========== =========== ==========
</TABLE>
See accompanying notes.
5
<PAGE> 6
MERIDIAN NATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
NOVEMBER 30,
--------------------------
1995 1994
----------- -----------
<S> <C> <C>
OPERATING ACTIVITIES
Net income (loss) $ (471,429) $ 1,232,834
Adjustments to reconcile net income to net cash
provided by operating activities:
Extraordinary gain on extinguishment of debt (149,206) (226,276)
Depreciation and amortization 414,885 539,164
Amortization of intangible assets 4,611 361,017
Gain on disposal of assets - (3,973)
Changes in operating assets and liabilities:
Accounts receivable 757,486 (1,343,129)
Inventories 1,382,469 (3,526,180)
Other current assets (51,109) (81,903)
Accounts payable and accrued liabilities (1,240,711) 2,071,773
----------- -----------
Net cash provided by (used in)
operating activities 646,996 (976,673)
INVESTING ACTIVITIES
Additions to property and equipment (826,146) (326,237)
Changes in other assets (31,434) (205,522)
Proceeds from disposal of assets - 28,308
----------- -----------
Net cash used in investing activities (857,580) (503,451)
FINANCING ACTIVITIES
Payments on long-term debt (685,286) (902,690)
Proceeds from exchange of warrants 304,134 -
Changes in notes payable 186,303 2,416,009
Cash dividends paid (27,065) (18,943)
----------- -----------
Net cash provided by (used in) financing
activities (221,914) 1,494,376
----------- -----------
Increase (decrease) in cash and cash equivalents (432,498) 14,252
Cash and cash equivalents at beginning of period 655,373 307,077
----------- -----------
Cash and cash equivalents at end of period $ 222,875 $ 321,329
=========== ===========
</TABLE>
See accompanying notes.
6
<PAGE> 7
MERIDIAN NATIONAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(Unaudited)
1. ACQUISITION
On November 17, 1995 the Company acquired the business and assets of a
steel processing operation located in Gary, Indiana. The assets acquired
included inventory, supplies and equipment. The purchase price was $2,520,000,
subject to adjustment based on the results of a physical inventory. The
acquisition of assets was funded through an $800,000 equipment loan and a
$900,000 sale and leaseback arrangement for certain other equipment included in
the acquisition. The remainder of the purchase price was funded through the
Company's existing revolving credit facility. Financial statements for the
acquired business and pro forma financial statements of the combined operations
of the Company and the acquired business will be filed as an amendment to a
Form 8-K filed with the Securities and Exchange Commission not later than
February 2, 1996.
2. EXTINGUISHMENT OF DEBT
In March 1995, the Company negotiated an agreement with a stockholder
who holds less than 5% of the outstanding voting stock, whereby a convertible
note payable in an amount of $596,822 was settled, subject to certain
conditions, for $447,600 payable in 18 monthly payments commencing in March
1995, without interest. The early retirement of this obligation resulted in the
recording of an extraordinary gain of $149,000 or $.05 per share in the nine
months ended November 30, 1995.
3. CAPITAL STOCK
The Company issued 1,265,000 common stock purchase warrants in 1989
(the "Original Warrants"). Each Original Warrant entitled the holder to
purchase one-tenth share of common stock at a per share exercise price of
$17.50, subject to adjustment under certain circumstances. The terms of the
Original Warrants were modified by the Company during a special exercise period
which commenced January 20, 1995 and extended through September 29, 1995, at
which time the Original Warrants expired. During this period holders of the
Original Warrants were able to purchase, at a purchase price of $2.25, a unit
consisting of one share of common stock and one common stock purchase warrant
("1998 Warrant"). The 1998 Warrants entitle the holder to
7
<PAGE> 8
purchase one share of common stock at any time commencing on May 1, 1996 and
ending May 31, 1998, at a per share exercise price of $2.75. During the
special exercise period, 240,415 Original Warrants were exercised.
4. RELATED PARTY TRANSACTIONS
The Company leases property and equipment from affiliates of certain
officers and directors of the Company. Lease payments to these affiliates
during the three months and nine months ended November 30, 1995 and 1994
approximated $63,000 and $188,000 respectively. The Company's management
believes the terms of the leases are at least as favorable as those that could
have been obtained from unrelated parties. One of these leases is a capital
lease and is included in property and equipment at $363,000 (net of accumulated
depreciation of $189,000) at November 30, 1995.
5. BUSINESS COMBINATIONS
In fiscal 1986, the Company acquired all of the common stock of
certain subsidiaries for $4,600,000 (exclusive of acquisition costs of
$215,000), made up of $2,000,000 in cash and $2,600,000 in promissory notes.
The controlling interests in the subsidiaries were purchased from certain
present and former members of management who were also principal stockholders
of the Company. The acquisitions have been accounted for as purchases. The
SEC staff questioned the Company's accounting for the acquisitions and
indicated that the accounting differs from the staff's position on accounting
for similar transactions. Under the staff position, the transfer of assets and
liabilities to the Company would have been accounted for at historical cost,
i.e., at the carryover basis of the acquired companies. In the fourth quarter
of fiscal 1995, the Company wrote off, as part of a $2,286,000 pretax charge,
the majority of the goodwill and increased bases in other assets which had been
recorded under the purchase accounting method. As a result of the write-off,
for periods subsequent to February 28, 1995, the effect on net income due to
the difference in methods of accounting for the acquisitions is immaterial. If
the Company had applied the SEC staff's preferred accounting prior to March 1,
1995, the accompanying condensed consolidated statements of operations for the
three and nine month periods ended November 30, 1994 would reflect a reduction
of costs of sales and other costs and expenses aggregating $106,000 and
$319,000, respectively. This reduction reflects the elimination of charges to
amortize the goodwill and increased bases in other assets which would not have
been recorded under the staff position. As a result, net income for the three
month and nine month periods ended November 30, 1994 would increase to $320,000
($0.12 per share) and $1,552,000 ($0.55 per share), respectively.
8
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
---------------------------------------
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
RESULTS OF OPERATIONS
---------------------
THIRD QUARTER ENDED NOVEMBER 30, 1995
COMPARED TO
THIRD QUARTER ENDED NOVEMBER 30, 1994
Third quarter sales of $14.3 million represented a 1% increase over sales
reported in the same quarter in the prior year. The Company reported a net
loss of $185,000 in the third quarter compared to net income of $213,000 in the
same quarter last year. The Company's earnings decline in the third quarter of
fiscal 1996 results from a number of factors, including the shutdown of the
automotive bumper stock pickling business in March 1995, a decrease in Steel
Segment gross margins as a percentage of net sales and a 27% increase in
interest expense. These factors are further discussed below.
STEEL DISTRIBUTION AND PROCESSING SEGMENT The Company's steel distribution
and processing operations reported net sales of $12.9 million for the third
quarter of fiscal 1996, a 2% increase over the third quarter of the prior year.
Operating profits for this segment amounted to $222,000, a decrease of $381,000
from the third quarter of the prior year. This decline in operating profits is
attributable to the shutdown of the bumper stock pickling business in March
1995 and a decrease in gross margins as a percentage of net sales. The Company
converted the bumper stock pickling operation to bar coil pickling in the
second quarter of fiscal 1996 and the Company is now developing a revenue base
to support the new pickling operation. Excluding the effects of the shutdown
of the bumper stock pickling business, steel segment gross margin (net sales
less cost of operations) as a percentage of net sales was 9.0% in the third
quarter of fiscal 1996 compared to 10.1% in the comparable quarter of the prior
year. This gross margin decrease is attributable to an increase in the
availability of steel coupled with a decreasing demand for steel products.
WASTE MANAGEMENT SEGMENT Net sales for this segment decreased to $1,434,000
in the third quarter of fiscal 1996 from $1,554,000 in the third quarter of the
prior year. The segment's paint waste recycling operation reported net sales
of $927,000 in the third quarter of fiscal 1996, paralleling net sales reported
in the comparable period last year; however, the segment's waste acid recycling
and disposal operation reported a $108,000 net sales decrease in the third
quarter of fiscal 1996. This sales decrease was due to reduced sales volume
with a nearby primary steel producer (McLouth Steel), which, for the quarter
comprised about 60% of this operation's sales volume or about 21% of the
segment's sales. Recent discussions with this customer have revealed that
9
<PAGE> 10
it is constructing its own acid waste recycling operation, the details of which
are unknown to the Company at this time. On September 29, 1995, this customer
filed a voluntary petition seeking reorganization under Chapter 11 of the U.S.
Bankruptcy Code. The Company continues to conduct business with this customer,
at slightly lower volume levels, subsequent to the bankruptcy petition. If
such business ceases or substantially declines, the Company believes that it
could successfully replace a portion, but probably not all, of this customer's
business and therefore, the loss of this customer's business would not have a
material adverse effect on the Company's consolidated operations. No
substantial write-off of any assets would result from a loss of this customer's
business.
This segment reported a $184,000 operating profit in the third quarter of
fiscal 1996 representing a $56,000 increase compared to the same quarter last
year. The operating profit increase principally resulted from reduced
operational costs at the segment's waste acid recycling and disposal
operations.
INTEREST EXPENSE Interest expense increased $76,000 (or 27%) in the third
quarter of fiscal 1996. The Company's average outstanding borrowings rose as a
result of the increase in working capital requirements associated with the
expansion and growth of the business in fiscal 1996.
INCOME TAXES The Company has, as of February 28, 1995, net operating loss,
business credit and alternative minimum tax credit carryforwards for federal
tax purposes of approximately $3,863,000, $26,000 and $18,000, respectively,
available for the reduction of future federal income tax. Net operating loss
carryforwards begin expiring in fiscal 2005. As a result of taxable losses and
valuation allowances, no provision for income taxes has been made in the
financial statements.
NINE MONTHS ENDED NOVEMBER 30, 1995
COMPARED TO
NINE MONTHS ENDED NOVEMBER 30, 1994
STEEL DISTRIBUTION AND PROCESSING SEGMENT The Company's steel distribution
and processing operations reported net sales of $38.5 million for the first
nine months of fiscal 1996, an increase of $5.3 million or 16% over the same
period of the prior year. The Company's acquisition of the assets of the
Detroit, Michigan steel service center and the development of this operation in
the latter half of fiscal 1995 and the first half of fiscal 1996, principally
contributed to this sales increase. Operating profits for this segment
amounted to $991,000, a decrease of $976,000 from the first nine months of the
prior year. This decline in operating profits is attributable to the shutdown
of the bumper stock pickling business in March 1995 and a decrease in gross
margins as a percentage of net
10
<PAGE> 11
sales. As previously described, the Company converted the bumper stock
pickling operation to bar coil pickling effective at the end of the second
quarter of fiscal 1996. Excluding the effects of the bumper stock pickling
business, steel segment gross margin (net sales less costs of operations) as a
percentage of net sales was 9.6% in the first nine months of fiscal 1996
compared to 11.5% in the comparable period of the prior year. This decrease in
gross margin is attributable to an increase in the availability of the supply
of steel coupled with a decreasing demand for steel products.
WASTE MANAGEMENT SEGMENT Net sales for this segment decreased to $4.0 million
in the first nine months of fiscal 1996 from $4.6 million in the same period of
the prior year. The segment's paint waste recycling operation reported net
sales of $2.6 million in the first nine months of fiscal 1996 representing a
$100,000 increase over the comparable period last year; however, the segment's
waste acid recycling and disposal operation reported a $700,000 net sales
decrease in the first nine months of fiscal 1996. The waste acid recycling and
disposal operation's net sales decreased due to declining sales to McLouth
Steel, which comprised for the nine months ended November 30, 1995 about 62% of
this operation's sales volume or 21% of the segment's sales. Refer to Results
of Operations for the Third Quarters Ended November 30, 1995 and 1994 for
further discussion of the waste acid recycling and disposal operations.
This segment reported a $319,000 operating profit in the first nine months of
fiscal 1996 compared to $509,000 in the comparable period of the prior year.
This decline in operating profits is principally attributable to the segment's
net sales decrease.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES The $412,000 (or 10%) increase
in selling, general and administrative expenses is principally attributable to
the development of the Company's Detroit, Michigan steel service center as
previously described.
INTEREST EXPENSE Interest expense increased $357,000 (or 48%) in the first
nine months of fiscal 1996. The Company's average outstanding borrowings rose
as a result of the increase in working capital requirements associated with the
expansion and growth of the business in fiscal 1996.
LIQUIDITY AND CAPITAL RESOURCES
The Company had a $343,000 working capital deficit at November 30, 1995
reflecting a $1,598,000 working capital decrease from February 28, 1995. This
decrease is primarily a result of capital expenditures, payment of long-term
debt and funding of net losses during the period offset by net proceeds from
the exchange of common stock purchase warrants. Certain components of working
11
<PAGE> 12
capital, including accounts receivable, inventories, notes payable and accounts
payable, historically may fluctuate significantly based upon market conditions,
sales volume and steel purchasing strategies of the Company's steel operations.
The Company's primary sources of liquidity are its cash balances and a $12.0
million revolving credit line with a bank. The revolving credit line was
increased in May 1995 from $10.75 million to $12.0 million. Borrowing
availability under the revolving credit line is determined using a formula
based upon eligible accounts receivable and inventories. As of November 30,
1995, the outstanding balance of the revolving credit line amounted to
$9,712,000 and unused availability amounted to $491,000.
The revolving credit line agreement prohibits the payment of cash dividends on
the Company's common stock and allows the payment of cash dividends on the
Company's preferred stock issues only if the Company is not in default of any
provisions in the loan agreement and payment of such dividend would not result
in any defaults.
Violations of certain financial covenants contained in the revolving credit
line agreement during the first three quarters of fiscal 1996 have been waived
by the bank. The Company currently projects it may be unable to meet certain
financial covenants during the fourth quarter of fiscal 1996. Management
believes waivers, modification of the covenants, or both, as necessary, will be
negotiated with the bank.
In March 1995, the Company negotiated an agreement with a stockholder whereby a
convertible note payable in an amount of $597,000 was settled, subject to
certain conditions, for $448,000 payable in eighteen monthly payments
commencing March 1995, without interest. The early retirement of this
obligation resulted in the recording of an extraordinary gain of $149,000 in
the first quarter of fiscal 1996.
As a result of federal environmental regulations issued in 1991, Environmental
Purification Industries Company ("EPI"), the Company's paint waste recycling
operation is required to and has submitted to the U.S. EPA an operating permit
application under the Resources Conservation Recovery Act of 1980. The final
approval for such a permit may take several years and require additional
outlays of funds. During the application and review process, EPI's operations
continue on interim status and are unaffected. EPI may be required to make
modifications to its operating procedures or equipment in the future, although
EPI's management believes its operations meet the requirements without
modification.
12
<PAGE> 13
The former partner of EPI retained the right to receive 10% of the proceeds by
the Company from any sale, refinancing or similar transactions relative to the
Company's interests in EPI. The agreement specifically permits, without
payments to the former partner, the repayment of certain loans or distribution
of profits to the Company from the ordinary business operations of EPI. The
Company believes the likelihood of any such distribution to the former partner
is remote. Accordingly, the Company has not recorded any liability for the
contingent interest of the former partner in the Company's balance sheet.
The Company does not have any material capital expenditure commitments at this
time. Capital expenditures are limited under its loan agreement with the bank.
Historically, the Company's operations have been funded with cash generated
from operations and bank financing. The Company has also raised funds through
sale of equity securities and has used the proceeds to fund its investments in
EPI, among other items. Management believes its existing resources, including
available cash, cash provided by operating activities and the Company's credit
facilities will be sufficient to satisfy its working capital and other capital
requirements for fiscal 1996, except for any significant business acquisitions
which would require additional external financing.
13
<PAGE> 14
MERIDIAN NATIONAL CORPORATION
PART II
OTHER INFORMATION
-----------------
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- ------- --------------------------------
(a) Exhibits
27. Financial Data Schedule
(b) Reports on Form 8-K
One report on Form 8-K was filed during the quarter ended November 30,
1995. A September 18, 1995 report was filed to disclose under Item 5,
Other Events, the planned public offering of approximately 50% of its
Environmental Unit, which includes EPI.
14
<PAGE> 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.
MERIDIAN NATIONAL CORPORATION
(Registrant)
Date: January 19, 1996 By /s/ William D. Feniger
-----------------------------
William D. Feniger
Chairman of the Board of Directors,
President and Chief Executive Officer
Date: January 19, 1996 By /s/ Joseph Klobuchar, Jr.
-------------------------
Joseph Klobuchar, Jr.
Vice President - Finance and
Chief Financial Officer
15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS OF MERIDIAN NATIONAL CORPORATION
AS OF NOVEMBER 30, 1995 AND RELATED UNAUDITED CONDENSED CONSOLIDATED STATEMENT
OF OPERATIONS FOR THE NINE MONTHS ENDED NOVEMBER 30, 1995, AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> FEB-29-1996
<PERIOD-START> MAR-01-1995
<PERIOD-END> NOV-30-1995
<CASH> 222,875
<SECURITIES> 0
<RECEIVABLES> 8,346,463
<ALLOWANCES> 0
<INVENTORY> 7,926,222
<CURRENT-ASSETS> 16,738,545
<PP&E> 12,181,279
<DEPRECIATION> 5,167,720
<TOTAL-ASSETS> 24,555,641
<CURRENT-LIABILITIES> 17,081,875
<BONDS> 5,084,840
<COMMON> 27,145
0
1,175,320
<OTHER-SE> 589,639
<TOTAL-LIABILITY-AND-EQUITY> 24,555,641
<SALES> 42,486,337
<TOTAL-REVENUES> 42,486,337
<CGS> 37,512,259
<TOTAL-COSTS> 37,512,259
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,100,514
<INCOME-PRETAX> (620,635)
<INCOME-TAX> 0
<INCOME-CONTINUING> (620,635)
<DISCONTINUED> 0
<EXTRAORDINARY> 149,206
<CHANGES> 0
<NET-INCOME> (471,429)
<EPS-PRIMARY> (.21)
<EPS-DILUTED> (.21)
</TABLE>
