<PAGE>
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 AUGUST 31, 1997
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 September 30, 1997, 3,555,708 shares of Meridian National Corporation
common stock were outstanding.
<PAGE>
MERIDIAN NATIONAL CORPORATION
PART I
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 six months ended August 31, 1997 may not
be indicative of the results of operations for the year ending February 28,
1998. 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, 1997.
2
<PAGE>
MERIDIAN NATIONAL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
AUGUST 31, FEBRUARY 28,
1997 1997
----------- -------------
<S> <C> <C>
ASSETS
Current assets:
Cash $ 17,549 $ 16,778
Accounts receivable - net 10,056,338 11,174,851
Inventories 12,861,658 12,083,532
Other current assets 760,224 678,504
------------ ------------
Total current assets 23,695,769 23,953,665
Property and equipment, at cost 12,468,283 11,963,239
Less accumulated depreciation and amortization 4,541,385 4,151,923
------------ ------------
7,926,898 7,811,316
Other assets 1,800,243 1,935,829
------------ ------------
$ 33,422,910 $ 33,700,810
------------ ------------
------------ ------------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable $ 12,829,639 $ 11,138,254
Accounts payable and accrued liabilities 11,862,765 13,132,857
Long-term debt due within one year:
Related parties -- --
Other 3,648,398 1,548,644
------------ ------------
Total current liabilities 28,340,802 25,819,755
Long-term debt due after one year:
Related parties 275,232 275,232
Other 3,873,810 6,311,061
Minority interests -- 96,600
Stockholders' equity:
Preferred stock, $.001 par value, 5,000,000 shares authorized:
$100 Series A, 5,000 shares authorized,
4,000 shares issued and outstanding 400,000 400,000
$3.75 Series B, 1,375,000 shares authorized,
206,752 shares issued and outstanding 775,320 775,320
Common stock, $.01 par value, 20,000,000 shares authorized,
3,555,708 shares outstanding (3,488,246 at February 28, 1997) 35,557 34,882
Capital in excess of stated value 10,895,575 10,818,545
Deficit (11,173,386) (10,830,585)
------------ ------------
Total stockholders' equity 933,066 1,198,162
------------ ------------
$ 33,422,910 $ 33,700,810
------------ ------------
------------ ------------
</TABLE>
SEE ACCOMPANYING NOTES.
3
<PAGE>
MERIDIAN NATIONAL CORPORATION
CONDENSED CONSOLIDATED INCOME STATEMENTS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
AUGUST 31, AUGUST 31,
---------------------------- ----------------------------
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Net sales $ 16,144,015 $ 16,774,302 $ 36,143,885 $ 31,469,022
Costs of sales 14,475,770 14,642,322 32,196,104 27,414,018
------------ ------------ ------------ ------------
Gross margin 1,668,245 2,131,980 3,947,781 4,055,004
Other costs and expenses (income):
Selling, general and administrative 1,804,922 1,817,731 3,591,002 3,579,567
Interest expense 487,703 387,469 916,342 783,737
Minority interests (52,310) -- (96,600) --
Miscellaneous - net (96,592) (77,191) (190,875) (152,731)
------------ ------------ ------------ ------------
2,143,723 2,128,009 4,219,869 4,210,573
------------ ------------ ------------ ------------
Income (loss) from continuing operations
before extraordinary gain (475,478) 3,971 (272,088) (155,569)
Discontinued operations:
Loss from operations -- (50,293) -- (13,619)
Gain from disposal -- 195,498 -- 195,498
------------ ------------ ------------ ------------
Income (loss) before extraordinary gain (475,478) 149,176 (272,088) 26,310
Extraordinary gain - extinguishment of debt -- 329,279 -- 329,279
------------ ------------ ------------ ------------
Net income (loss) $ (475,478) $ 478,455 $ (272,088) $ 355,589
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Earnings (loss) applicable to common stock $ (511,993) $ 443,322 $ (342,801) $ 286,217
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Earnings (loss) per common share -
primary and fully diluted:
Income (loss) before extraordianry gain:
Continuing operations ($0.15) ($0.01) ($0.10) ($0.07)
Discontinued operations -- 0.04 -- 0.05
Extraordinary gain -- 0.10 -- 0.10
------------ ------------ ------------ ------------
Net income (loss) ($0.15) $0.13 ($0.10) $0.08
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Weighted average common
shares outstanding 3,510,244 3,372,993 3,499,245 3,064,069
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
</TABLE>
SEE ACCOMPANYING NOTES.
4
<PAGE>
MERIDIAN NATIONAL CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
AUGUST 31,
--------------------------------
1997 1996
------------ ------------
<S> <C> <C>
OPERATING ACTIVITIES
Loss from continuing operations before extraordinary gain $ (272,088) $ (155,569)
Adjustments to reconcile loss to net cash
used in continuing operating activities:
Depreciation and amortization 454,580 424,511
Minority interests (96,600) --
Gain on disposal of assets -- (24,316)
Changes in operating assets and liabilities:
Accounts receivable 1,118,513 (2,039,135)
Inventories (778,126) (702,723)
Other current assets (67,970) (19,348)
Accounts payable and accrued liabilities (1,270,092) 303,175
------------ ------------
Net cash used in continuing operating activities (911,783) (2,213,405)
Net cash provided by discontinued operating activities -- 12,506
------------ ------------
Net cash used in operating activities (911,783) (2,200,899)
INVESTING ACTIVITIES
Additions to property and equipment (390,672) (359,812)
Proceeds from disposal of assets -- 524,559
Changes in other assets (100,782) (210,249)
------------ ------------
Net cash used in investing activities (491,454) (45,502)
FINANCING ACTIVITIES
Changes in notes payable 1,691,385 3,000,146
Payments on long-term debt (544,369) (900,963)
Proceeds from bridge note and bridge warrants 275,000 --
Cash dividends paid (18,008) (18,060)
------------ ------------
Net cash provided by financing activities 1,404,008 2,081,123
------------ ------------
Increase (decrease) in cash 771 (165,278)
Cash at beginning of period 16,778 176,667
------------ ------------
Cash at end of period $ 17,549 $ 11,389
------------ ------------
------------ ------------
</TABLE>
SEE ACCOMPANYING NOTES.
5
<PAGE>
MERIDIAN NATIONAL CORPORATION
NOTES TO CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(Unaudited)
1. PROPOSED PUBLIC OFFERING OF SUBSIDIARY
A registration statement has been filed with the Securities and Exchange
Commission on October 2, 1997 by EPI Technologies, Inc., an 80%-owned
subsidiary. The registration statement relates to a proposed public offering of
1.25 million shares of common stock and 1.25 million redeemable common stock
purchase warrants of EPI Technologies. Subsequent to the completion of the
offering, the Company's beneficial ownership of EPI Technologies' common stock
will be reduced to approximately 40%, representing 1 million shares of EPI
Technologies' common stock.
The net proceeds from the offering of these newly-issued securities,
estimated to be $5.2 million, will principally be used to expand EPI
Technologies' paint waste recycling business and facilities, repay certain
indebtedness of EPI Technologies and for working capital and general corporate
purposes of EPI Technologies. If the proposed public offering is successfully
completed, the Company does not intend to continue to provide financial support
to EPI Technologies, except for the guarantee of a mortgage note to trustee bank
and the guarantee of EPI Technologies' obligation pursuant to an employment
agreement with a senior executive of EPI Technologies.
2. BRIDGE FINANCING
In August 1997, EPI Technologies raised $275,000 through a private
placement of a $250,000 bridge note and 500,000 bridge warrants. The bridge
note is unsecured , bears interest at 10% per annum and is due upon completion
of the proposed offering. The bridge warrants, sold for an aggregate $25,000,
entitle the holder to purchase shares of EPI Technologies' common stock. The
bridge warrants automatically convert to warrants with the same terms as the
warrants offered pursuant to the proposed offering, upon completion of the
proposed offering.
3. 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
6
<PAGE>
3. RELATED PARTY TRANSACTIONS (CONTINUED)
the three months and six months ended August 31, 1997 approximated $64,000 and
$128,000, respectively. During the three months and six months ended August 31,
1996, the lease payments amounted to $75,000 and $151,000, 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.
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The discussions which follow contain forward-looking statements including
statements regarding, among other things, anticipated trends in the Company's
business and the industries in which it operates and the Company's business
strategy. The words "believe," "expect," "anticipate," "intends," "forecasts,"
"project," and similar expressions identify forward-looking statements. Such
forward-looking statements are based upon the Company's expectations and are
subject to a number of risks and uncertainties, many of which are beyond the
Company's control. Actual results could differ materially from such forward-
looking statements, as a result of such factors, including among others,
regulatory or economic influences. In light of these risks and uncertainties,
there can be no assurance that any forward-looking information contained herein
will in fact transpire or prove to be accurate. All subsequent written and oral
forward-looking statements attributable to the Company or persons acting on its
behalf are expressly qualified in their entirety by this section.
RESULTS OF OPERATIONS
In July 1996 the Company sold all of the property and equipment of its
waste acid recycling and disposal business. Accordingly, operating results have
been restated for all periods presented to separately report the operating
results of this discontinued operation. This business had been declining and
was substantially dependent on one major customer, which had shut down its
operations in March 1996. The discussion of results of operations which follow
pertain only to continuing operations.
SECOND QUARTER ENDED AUGUST 31, 1997
COMPARED TO
SECOND QUARTER ENDED AUGUST 31, 1996
STEEL DISTRIBUTION AND PROCESSING SEGMENT Net sales for the second quarter of
fiscal 1998 amounted to $15.2 million, a decrease of 4% from the second quarter
of the prior fiscal year. Sales slowed from the first quarter record volume due
in part to the traditional summer slowdown of the automotive industry, a major
consumer of steel products. Also, second quarter sales, particularly of the
steel distribution business, were affected by a modest softening of demand in
the steel markets.
Operating profits for this segment amounted to $318,000 for the second
quarter, a decrease of $363,000 from the same period of the prior year. Gross
margin (net sales less cost of sales) as a percentage of net sales was 9.4% in
the second quarter compared to 11.2% for the same quarter in the prior year.
Gross margin percentages have decreased due to pricing pressures resulting
8
<PAGE>
from the softening of the steel markets, as evidenced by the announcements of
price decreases by several steel producers. Management believes the current
market for steel products will not soften significantly further and will remain
relatively strong as overall economic growth in the U.S. is expected to continue
near its current levels during the remaining six months of the Company's fiscal
year.
WASTE MANAGEMENT SEGMENT Net sales for the Company's paint waste recycling
business during the second quarter amounted to $940,000, a decrease of $34,000
or 3% compared to the same period in the prior year. The decrease is
attributable to a decrease in revenue associated with paint waste processed at
third party facilities. Overall, sales volume fluctuates very little as the
Company has for the last several years operated its existing paint waste
recycling facility at or near full capacity. A $2.3 million expansion, which
incorporates a new paint waste recycling technology, has recently been completed
at the Toledo, Ohio facility. The Polymeric Recovery System, as it is known,
will provide a 50% capacity increase to the existing operations. This system is
now in a start-up period and has not yet processed significant volumes of paint
waste.
The paint waste recycling operation reported a $131,000 operating loss for
the second quarter compared to a $62,000 operating loss for the second quarter
of the prior year. The operating results for this operation include costs
incurred in the development and implementation of the new paint waste recycling
technology and, in the second quarter of fiscal 1998, by the commencement of the
start-up period for the Polymeric Recovery System in May 1997.
INTEREST EXPENSE Interest expense increased $100,000 or 26% in the second
quarter as compared to the second quarter of the prior year. A significant
portion of the increase is due to increased borrowings necessary to finance the
expansion of the paint waste recycling business with the installation of the
Polymeric Recovery System, as further discussed in the Liquidity and Capital
Resources section following. Additionally, the Company's average outstanding
borrowings under its revolving credit line rose as a result of an increase in
working capital requirements, mainly associated with costs of implementing the
Polymeric Recovery System.
SIX MONTHS ENDED AUGUST 31, 1997
COMPARED TO
SIX MONTHS ENDED AUGUST 31, 1996
STEEL DISTRIBUTION AND PROCESSING SEGMENT For the six month period ended
August 31, 1997, net sales amounted to $34.3 million, an increase of $4.6
million compared the same period of the prior year. The six month period ended
August 31, 1997 included record sales volume recorded in the first quarter of
the fiscal year.
9
<PAGE>
Operating profits for the six month period ended August 31, 1997 amounted
to $1,218,000, a decrease of $30,000 from the six month period ended August 31,
1996. Gross margin as a percentage of net sales was 10.0% for the six month
period compared to 11.5% for the same period last year. Margins have been hurt
by price pressures for steel products and a recent softening of demand in the
steel markets.
WASTE MANAGEMENT SEGMENT Net sales for the paint waste recycling business for
the six month period ended August 31, 1997 amounted to $1.8 million, an increase
of $22,000 or 1% over the same period of the prior year. This operation
generated an operating loss of $222,000 for the six month period compared to
$161,000 for the six month period of the prior fiscal year. As discussed
earlier, operations for the six months ended August 31, 1997 reflect additional
costs associated with the commencement of the start-up period for the Polymeric
Recovery System in May 1997.
INTEREST EXPENSE Interest expense for the six month period ended August 31,
1997 increased $133,000 or 17% compared to the six month period of the prior
fiscal year due to increased borrowings necessary to finance the expansion of
the Toledo paint waste recycling operations. Interest costs of $36,000 in the
six months ended August 31, 1997 were capitalized as part of the Toledo plant
expansion. Additional borrowings under the Company's revolving credit line,
mainly as a result of costs associated with the implementation of the Polymeric
Recovery System, have also contributed to increased interest expense.
LIQUIDITY AND CAPITAL RESOURCES
The Company had a $4,645,000 working capital deficit at August 31, 1997,
reflecting a $2,779,000 decrease in working capital from February 28, 1997.
This decrease is primarily a result of the classification as a current liability
at August 31, 1997 of the balloon payment of $2,305,000 due in March 1998 on the
borrowings to finance the Polymeric Recovery System expansion of the Company's
paint waste recycling business, as further discussed below. Additionally, the
funding of losses generated by the paint waste recycling operations, as well as
additional capital expenditures of $288,000 in the six months ended August 31,
1997 related to the start-up of the Polymeric Recovery System have also
contributed to the decrease in working capital. Certain components of working
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 source of liquidity is a $13.5 million revolving
credit line with a bank. Borrowing availability under the revolving credit line
is
10
<PAGE>
determined using a formula based upon eligible accounts receivable and
inventories. Violations in the second quarter of fiscal 1998 of certain
covenants contained in the line of credit agreement have been waived by the
bank. As of August 31, 1997, the outstanding balance of the revolving credit
line amounted to $12,830,000 and unused availability amounted to $630,000. 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.
On October 2, 1997, a registration statement was filed with the Securities
and Exchange Commission by EPI Technologies, Inc., an 80%-owned subsidiary which
operates the Company's paint waste recycling business. The registration
statement relates to a proposed public offering of 1.25 million shares of common
stock and 1.25 million redeemable common stock purchase warrants of EPI
Technologies. If the offering is successfully completed, the Company's
beneficial ownership of EPI Technologies' common stock will be reduced to
approximately 40%, representing 1 million shares of EPI Technologies' common
stock.
The net proceeds from the offering of these newly-issued securities,
estimated to be $5.2 million, will principally be used to expand EPI
Technologies' paint waste recycling business and facilities, repay certain
indebtedness of EPI Technologies and for working capital and general corporate
purposes of EPI Technologies. If the proposed public offering is successfully
completed, the Company does not intend to continue to provide financial support
to EPI Technologies, except for the guarantee of a mortgage note to trustee bank
and the guarantee of EPI Technologies' obligation pursuant to an employment
agreement with a senior executive of EPI Technologies.
The Company has recently installed the Polymeric Recovery System, a process
which incorporates a new paint waste recycling technology. During fiscal 1997,
EPI Technologies completed financing totaling $2,350,000 with the lender that
provides the Company's revolving credit line. The proceeds have been used
primarily to finance the construction of the Polymeric Recovery System. The
debt requires monthly principal payments of $21,000. A final payment of
$2,035,000 is due in March 1998. The Company is co-signer on the debt. In
addition, $750,000 of the debt is guaranteed by a corporation which is a
stockholder in the Company and EPI Technologies. One of the Company's directors
has a majority ownership position in this guarantor. Additionally, an officer
and stockholder of the Company has personally guaranteed the Company's entire
borrowings from this lender.
Upon the completion of the public offering of securities of EPI
Technologies, the bank has agreed to refinance the debt upon receiving a
11
<PAGE>
$500,000 principal payment and a $50,000 loan closing fee from the offering
proceeds. In connection with this refinancing, (i) the Company would no longer
be required to be a co-signer, (ii) the officer and shareholder of the Company
will be released from his personal guaranty of this debt and (iii) the corporate
shareholder of the Company and EPI Technologies will be released from its
guaranty of $750,000 of the debt. Management anticipates the completion of the
proposed offering will occur prior to the due date of the balloon payment in
March 1998. In the event the offering has not been completed by March 1998, the
Company would seek other sources of long term financing.
The paint waste recycling technology incorporated in the Polymeric Recovery
System is licensed from Aster, Inc. The license agreement grants an exclusive,
worldwide (except Mexico) perpetual license for the use of the Aster technology.
The license agreement requires payment of royalty fees to Aster based on pounds
of paint waste processed with the new technology and pounds of the recycled
product ("EPI-MER-TM-") sold. These fees commence upon successful startup of
the new equipment and the sale of EPI-MER-TM-. Technical and manufacturing
services provided by Aster are paid for based on an hourly rate. Total payments
to Aster may not fall below a minimum of $20,000 per month unless Aster is
provided with six months advance notice. At the end of the six month notice
period, the license for the use of this technology would become non-exclusive.
In August 1997, EPI Technologies raised $275,000 through a private
placement of a $250,000 bridge note and 500,000 bridge warrants. The bridge
note is unsecured, bears interest at 10% per annum and is due upon the
completion of the proposed offering of EPI Technologies' securities. The bridge
warrants entitle the holder to purchase 500,000 shares of common stock of EPI
Technologies. The bridge warrants automatically convert upon the completion of
the offering to warrants with the same terms as the warrants to be issued as
part of the offering.
The Company currently estimates that it will incur expenses of
approximately $40,000 when the U.S. EPA reviews and approves the Company's plan
to comply with a consent decree entered into between the Company's paint waste
recycling business and the U.S. EPA. Additionally, the Company estimates that
the testing requirements necessary to demonstrate compliance with the U. S.
EPA's standards for approval of a "Part B" permit, for which the paint waste
recycling business has filed an application, will cost approximately $250,000.
The Part B Permit allows a company to handle hazardous waste at a specific
facility. In the event that the U.S. EPA rejects the Company's application for
a Part B permit, or if the Company decides to modify its facility to eliminate
the need for a Part B permit, the Company estimates that it will incur
approximately $250,000 in capital expenditures to design and implement necessary
modifications. The Company expects to incur both the $40,000 expense related to
compliance with the consent decree and the $250,000
12
<PAGE>
expenditure in connection with the application for a Part B permit or
modifications of its facility within the next two years. The Company does not
currently project that it will incur any other material capital expenditures
related to compliance with environmental regulations.
The Company's current steel operations have historically operated
profitably. The paint waste recycling business has generated increasing
operating losses during fiscal 1997 and through the first six months of fiscal
1998. The increasing losses of the paint waste recycling business are largely
due to the increased costs associated with the licensing of the technology and
other costs related to the implementation of the Polymeric Recovery System.
Management believes the future profitability of the paint waste recycling
business is substantially dependent on the sale of EPI-MER-TM-. To date, only
nominal revenues have been generated from the Polymeric Recycling System and no
EPI-MER-TM- has been sold. The Company is currently marketing EPI-MER-TM- to
approximately ten potential customers in the sealant, coating and adhesive
industries. The Company's current business strategy is to grow the business by
(i) developing a market for and selling EPI-MER-TM- for use as a lower cost
replacement for traditional, virgin materials used in formulated products, (ii)
the construction, ownership and operation of up to five customized Polymeric
Recovery Systems on-site at large automotive assembly plants in the United
States, and (iii) the construction of a second facility using the Polymeric
Recovery System in the Southeast region of the United States to serve the market
of small and medium size automotive assembly plants which individually generate
lesser amounts of paint waste. To meet the financing needs of this business
strategy, EPI Technologies is pursuing the completion of a public offering of
securities. In the event the proposed public offering is not completed, EPI
Technologies may be required to curtail its expansion activities or seek
additional financing from banks or other sources.
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. Subject to completion of the proposed offering of
securities of EPI Technologies, 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 the remainder of fiscal 1998.
13
<PAGE>
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
No reports on Form 8-K were filed during the quarter ended August 31,
1997.
14
<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.
MERIDIAN NATIONAL CORPORATION
(Registrant)
Date: October 20, 1997 By /s/ William D. Feniger
-------------------------------------
William D. Feniger
Chairman of the Board of Directors,
President and Chief Executive Officer
Date: October 20, 1997 By /s/ James L. Rosino
-------------------------------------
James L. Rosino
Vice President - Finance and
Chief Financial Officer
15
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED FINANCIAL STATEMENTS OF MERIDIAN NATIONAL
CORPORATION FOR THE SIX MONTHS ENDED AUGUST 31, 1997 AND IS QUALIFIED IN
ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> FEB-28-1998
<PERIOD-START> MAR-01-1997
<PERIOD-END> AUG-31-1997
<CASH> 17,549
<SECURITIES> 0
<RECEIVABLES> 10,056,338
<ALLOWANCES> 0
<INVENTORY> 12,861,658
<CURRENT-ASSETS> 23,695,769
<PP&E> 12,468,283
<DEPRECIATION> 4,541,385
<TOTAL-ASSETS> 33,422,910
<CURRENT-LIABILITIES> 28,340,802
<BONDS> 4,149,042
0
1,175,320
<COMMON> 35,557
<OTHER-SE> (277,811)
<TOTAL-LIABILITY-AND-EQUITY> 33,422,910
<SALES> 36,143,885
<TOTAL-REVENUES> 36,143,885
<CGS> 32,196,104
<TOTAL-COSTS> 32,196,104
<OTHER-EXPENSES> (287,475)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 916,342
<INCOME-PRETAX> (272,088)
<INCOME-TAX> 0
<INCOME-CONTINUING> (272,088)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (272,088)
<EPS-PRIMARY> (.10)
<EPS-DILUTED> (.10)
</TABLE>
