<PAGE>
UNITED STATES
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 QUARTER ENDED JUNE 30, 1998
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER 1 - 5332
P & F INDUSTRIES, INC.
(Exact name of Registrant as specified in its charter)
DELAWARE 22-1657413
(State of incorporation) (I.R.S. Employer Identification Number)
300 SMITH STREET, FARMINGDALE, NEW YORK 11735
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (516) 694-1800
---------------
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, and (2) has been subject to such filing
requirements for the past 90 days.
YES ( X ) NO ( )
As of August 7, 1998, there were outstanding 3,239,345 shares of the
Registrant's Class A Common Stock, par value $1.00 per share.
<PAGE>
P & F INDUSTRIES, INC.
FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 1998
TABLE OF CONTENTS
PAGE
PART I ----
Item 1. Financial Statements
Consolidated Balance Sheets as of
June 30, 1998 and December 31, 1997 1 - 2
Consolidated Statements of Income for the
six months ended June 30, 1998 and 1997 3
Consolidated Statements of Cash Flows for
the six months ended June 30, 1998 and 1997 4 - 5
Notes to Consolidated Financial Statements 6 - 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9 - 11
PART II
Item 1. Legal Proceedings 12
Item 2. Changes in Securities 12
Item 3. Defaults Upon Senior Securities 12
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 12
Signatures 13
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
P & F INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
---------------------------------------
JUNE 30, DECEMBER 31,
1998 1997
------------ ------------
ASSETS
------
CURRENT:
Cash $ 1,614,934 $ 2,092,244
Accounts receivable, less allowance
for possible losses of $424,366
in 1998 and $421,014 in 1997 6,685,188 7,924,941
Inventories 17,014,295 13,382,480
Note receivable from officer 25,000 --
Deferred income taxes 365,000 365,000
Prepaid expenses and other assets 233,412 254,544
------------ ------------
TOTAL CURRENT ASSETS 25,937,829 24,019,209
------------ ------------
PROPERTY AND EQUIPMENT:
Land 846,939 846,939
Buildings and improvements 4,304,779 4,304,779
Machinery and equipment 6,397,380 5,763,749
------------ ------------
11,549,098 10,915,467
Less accumulated depreciation
and amortization 5,618,720 5,257,701
------------ ------------
NET PROPERTY AND EQUIPMENT 5,930,378 5,657,766
------------ ------------
GOODWILL, net of accumulated
amortization of $1,074,916 in
1998 and $1,025,722 in 1997 2,738,851 2,788,045
OTHER ASSETS, net of accumulated
amortization of $58,671 in 1998
and $50,667 in 1997 175,871 183,875
------------ ------------
TOTAL ASSETS $ 34,782,929 $ 32,648,895
------------ ------------
------------ ------------
1
<PAGE>
P & F INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
(CONTINUED)
---------------------------------------
JUNE 30, DECEMBER 31,
1998 1997
------------ ------------
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
CURRENT LIABILITIES:
Short-term borrowings $ 1,905,894 $ --
Accounts payable 4,355,336 4,040,125
Accruals:
Compensation 873,224 1,365,857
Other 1,286,444 1,396,217
Current maturities of long-term debt 159,745 157,140
------------ ------------
TOTAL CURRENT LIABILITIES 8,580,643 6,959,339
LONG-TERM DEBT, less current maturities 3,677,797 3,755,683
DEFERRED INCOME TAXES 444,000 444,000
SUBORDINATED DEBENTURES -- 1,369,200
------------ ------------
12,702,440 12,528,222
------------ ------------
SHAREHOLDERS' EQUITY:
Common stock:
Class A - $1 par; shares authorized
7,000,000; outstanding 3,239,345
and 3,101,845 3,239,345 3,101,845
Class B - $1 par; shares authorized
2,000,000 -- --
Additional paid-in capital 7,863,677 7,772,239
Retained earnings 10,977,467 9,246,589
------------ ------------
TOTAL SHAREHOLDERS' EQUITY 22,080,489 20,120,673
------------ ------------
TOTAL LIABILITIES AND
SHAREHOLDERS' EQUITY $ 34,782,929 $ 32,648,895
------------ ------------
------------ ------------
2
<PAGE>
P & F INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
---------------------------------------
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------ ------------------
1998 1997 1998 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
REVENUES:
Net sales $ 11,778,345 $ 10,533,536 $ 24,307,528 $ 19,722,224
Other 219,027 109,787 230,968 138,907
------------ ------------ ------------ ------------
11,997,372 10,643,323 24,538,496 19,861,131
------------ ------------ ------------ ------------
COSTS AND EXPENSES:
Cost of sales 7,063,917 6,768,469 14,821,150 12,602,683
Selling, administrative and general 3,107,918 2,759,245 6,342,622 5,238,760
Interest - net 128,018 152,803 243,827 293,641
Depreciation 180,510 169,768 361,019 339,535
------------ ------------ ------------ ------------
10,480,363 9,850,285 21,768,618 18,474,619
------------ ------------ ------------ ------------
INCOME BEFORE TAXES ON INCOME 1,517,009 793,038 2,769,878 1,386,512
TAXES ON INCOME 567,000 306,000 1,039,000 538,000
------------ ------------ ------------ ------------
NET INCOME $ 950,009 $ 487,038 $ 1,730,878 $ 848,512
------------ ------------ ------------ ------------
------------ ------------ ------------ ------------
Preferred dividends $ -- $ -- $ -- $ 21,857
Net income available to
common shareholders $ 950,009 $ 487,038 $ 1,730,878 $ 826,655
Weighted average common
shares outstanding:
Basic 3,222,392 2,979,991 3,175,359 2,968,113
Diluted 3,741,153 3,545,880 3,670,594 3,510,042
Earnings per share of common stock:
Basic $ .29 $ .16 $ .54 $ .28
Diluted $ .25 $ .14 $ .47 $ .24
</TABLE>
3
<PAGE>
P & F INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
---------------------------------------
SIX MONTHS ENDED
JUNE 30,
------------------
1998 1997
------------ ------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,730,878 $ 848,512
------------ ------------
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Depreciation and amortization 431,307 414,533
Provision for losses on
accounts receivable 12,518 41,391
Decrease (increase):
Accounts receivable 1,227,235 (90,351)
Inventories (3,631,815) (3,143,145)
Note receivable from officer (25,000) 40,000
Prepaid expenses and other assets 8,042 137,782
Increase (decrease):
Accounts payable 315,211 1,226,220
Accruals and other (602,406) (332,016)
------------ ------------
Total adjustments (2,264,908) (1,705,586)
------------ ------------
Net cash provided by (used in)
operating activities (534,030) (857,074)
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (633,631) (194,724)
------------ ------------
Net cash used in
investing activities (633,631) (194,724)
------------ ------------
4
<PAGE>
P & F INDUSTRIES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(CONTINUED)
(UNAUDITED)
---------------------------------------
SIX MONTHS ENDED
JUNE 30,
------------------
1998 1997
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from short-term borrowings 10,511,170 6,609,726
Repayments of short-term borrowings (8,605,276) (6,609,726)
Principal payments on long-term debt (75,281) (91,915)
Proceeds from exercise of stock options 228,938 75,000
Dividends paid on preferred stock -- (21,857)
Redemption of subordinated debentures (1,369,200) --
Redemption of preferred stock -- (2,633,450)
------------ ------------
Net cash provided by (used in)
financing activities 690,351 (2,672,222)
------------ ------------
NET (DECREASE) INCREASE IN CASH (477,310) (3,724,020)
CASH AT BEGINNING OF PERIOD 2,092,244 4,558,135
------------ ------------
CASH AT END OF PERIOD $ 1,614,934 $ 834,115
------------ ------------
------------ ------------
SUPPLEMENTAL DISCLOSURE OF CASH FLOW
INFORMATION:
Cash paid during the period for:
Income taxes $ 1,090,650 $ 594,908
------------ ------------
------------ ------------
Interest $ 249,340 $ 384,902
------------ ------------
------------ ------------
5
<PAGE>
P & F INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
---------------------------------------
NOTE 1 - SUMMARY OF ACCOUNTING POLICIES
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements contained herein include the accounts
of P & F Industries, Inc. and its subsidiaries (the "Company"). All significant
intercompany balances and transactions have been eliminated.
The consolidated financial statements for the periods ended June 30, 1998
and 1997 are presented as unaudited but, in the opinion of the Company, they
include all adjustments necessary for a fair statement of the results of
operations for those periods. All such adjustments are of a normal recurring
nature. The consolidated balance sheet information for December 31, 1997 was
derived from audited financial statements included in the Company's Annual
Report on Form 10-K for the year ended December 31, 1997. These interim
financial statements should be read in conjunction with that report.
Results for interim periods are not necessarily indicative of results to be
expected for a full year, since the operations of some of the Company's
subsidiaries are seasonal in nature.
The Company conducts its business operations through two wholly-owned
subsidiaries. Florida Pneumatic Manufacturing Corporation ("Florida Pneumatic")
is engaged in the importation, manufacture and sale of pneumatic hand tools for
the industrial and retail markets and the importation and sale of compressor air
filters. Florida Pneumatic also markets, through its Berkley Tool Division
("Berkley"), a line of pipe cutting and threading tools, wrenches and
replacement electrical components for a widely used brand of pipe cutting and
threading machines. Embassy Industries, Inc. ("Embassy") is engaged in the
manufacture and sale of baseboard heating products and the importation and sale
of radiant heating systems. Embassy also imports a line of door and window
hardware items through its Franklin Hardware division ("Franklin").
BASIS OF FINANCIAL STATEMENT PRESENTATION
In preparing financial statements in conformity with generally accepted
accounting principles, management is required to make estimates and assumptions
that affect the reported amounts of assets and liabilities and the disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.
6
<PAGE>
P & F INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
---------------------------------------
NOTE 1 - SUMMARY OF ACCOUNTING POLICIES (CONTINUED)
EARNINGS PER SHARE
In June 1997, the Financial Accounting Standards Board issued Statement No.
128, "Earnings per Share", which provides for the calculation of basic and
diluted earnings per share. Basic and diluted earnings per share replace the
previously reported primary and fully diluted earnings per share. Unlike primary
earnings per share, basic earnings per share is based only on the average number
of common shares outstanding for the period. Diluted earnings per share
reflects, in periods for which they have a dilutive effect, the effect of common
shares issuable upon the exercise of options, warrants and convertible
securities and is very similar to fully diluted earnings per share. Earnings per
share amounts for all periods have been presented and the amounts for prior
periods have been restated to comply with the provisions of Statement No. 128.
Diluted earnings per share is computed using the treasury stock method.
Under this method, the aggregate number of shares outstanding reflects the
assumed use of proceeds from the hypothetical exercise of any outstanding
options or warrants to repurchase shares of common stock. The average market
value for the period is used to calculate the repurchase price.
Net income or loss is adjusted for preferred dividends in computing the net
income or loss attributable to the common stock.
NOTE 2 - INVENTORIES
Major classes of inventory were as follows:
JUNE 30, DECEMBER 31,
1998 1997
------------ ------------
Finished goods $ 13,281,294 $ 9,632,361
Work in process 339,692 211,368
Raw materials and supplies 3,393,309 3,538,751
------------ ------------
$ 17,014,295 $ 13,382,480
------------ ------------
------------ ------------
7
<PAGE>
P & F INDUSTRIES, INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
(CONTINUED)
---------------------------------------
NOTE 3 - EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted
earnings per common share:
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------- -------------------
1998 1997 1998 1997
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Numerator:
Net income $ 950,009 $ 487,038 $ 1,730,878 $ 848,512
Dividends on preferred stock -- -- -- 21,857
----------- ----------- ----------- -----------
Numerator for basic and diluted
earnings per common share -
income available to common
shareholders $ 950,009 $ 487,038 $ 1,730,878 $ 826,655
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Denominator:
Denominator for basic earnings
per share - weighted average
common shares outstanding 3,222,392 2,979,991 3,175,359 2,968,113
Effect of dilutive securities:
Common stock options 518,761 565,889 495,235 541,929
----------- ----------- ----------- -----------
Denominator for diluted earnings
per share - adjusted weighted
average common shares and
assumed conversions 3,741,153 3,545,880 3,670,594 3,510,042
----------- ----------- ----------- -----------
----------- ----------- ----------- -----------
Earnings per common share:
Basic $ .29 $ .16 $ .54 $ .28
----- ----- ----- -----
----- ----- ----- -----
Diluted $ .25 $ .14 $ .47 $ .24
----- ----- ----- -----
----- ----- ----- -----
</TABLE>
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
SECOND QUARTER ENDED JUNE 30, 1998 COMPARED WITH SECOND QUARTER ENDED
JUNE 30, 1997
Consolidated revenues increased 12.7%, from $10,643,323 to $11,997,372.
Revenues from pneumatic tools and related equipment increased 13.0%, from
$7,894,762 to $8,922,122. This was primarily due to a 34% increase in sales to
the industrial sector. Selling prices of pneumatic tools and related equipment
were virtually unchanged from the prior year.
Revenues from heating equipment increased 20.0%, from $1,707,685 to
$2,049,799. This increase was due to the addition of two very large accounts in
the late first quarter and early second quarter. Revenues from hardware
decreased 1.5%, from $1,040,454 to $1,025,205. This was due to two very large
stocking orders taken by the largest customer in the first quarter and the
resulting drawing down on inventories in the second quarter. Selling prices of
both heating equipment and hardware were unchanged from the prior year.
Consolidated gross profit, as a percentage of revenues, rose from 36.4% to
41.1%. Gross profit from pneumatic tools and related equipment rose from 37.5%
to 43.9%, due to a more profitable product mix and an increase in the value of
the U.S. dollar as compared to the Japanese yen, which lowered the cost of
imported product. Gross profit from heating equipment was unchanged at 33.7% and
gross profit from hardware decreased from 28.9% to 27.7%, due to a less
profitable product mix.
Consolidated selling, general and administrative expenses increased 12.6%,
from $2,759,245 to $3,107,918, primarily due to increases in advertising,
commissions and salaries. Interest expense fell from $152,803 to $128,018,
primarily as a result of the redemption of the Company's 13.75% Subordinated
Debentures on January 30, 1998.
SIX MONTHS ENDED JUNE 30, 1998 COMPARED WITH SIX MONTHS ENDED
JUNE 30, 1997
Consolidated revenues increased 23.6%, from $19,861,131 to $24,538,496.
Revenues from pneumatic tools and related equipment increased 27.7%, from
$14,489,677 to $18,506,292. Selling prices of pneumatic tools and related
equipment were virtually unchanged from the prior year.
Revenues from heating equipment increased 16.5%, from $3,368,627 to
$3,922,857. Revenues from hardware increased 5.4%, from $2,001,653 to
$2,108,911. Selling prices of both heating equipment and hardware were unchanged
from the prior year.
9
<PAGE>
SIX MONTHS ENDED JUNE 30, 1998 COMPARED WITH SIX MONTHS ENDED
JUNE 30, 1997 (CONTINUED)
Consolidated gross profit, as a percentage of revenues, rose from 36.6% to
39.6%. Gross profit from pneumatic tools and related equipment rose from 37.9%
to 41.8%, due to a more profitable product mix and an increase in the value of
the U.S. dollar as compared to the Japanese yen, which lowered the cost of
imported product. Gross profit from heating equipment was virtually unchanged,
rising from 34.0% to 34.1%, and gross profit from hardware was unchanged at
26.9%.
Consolidated selling, general and administrative expenses increased 21.1%,
from $5,238,760 to $6,342,622, primarily due to increases in advertising,
commissions and salaries. Interest expense fell from $293,641 to $243,827,
primarily as a result of the redemption of the Company's 13.75% Subordinated
Debentures on January 30, 1998.
LIQUIDITY AND CAPITAL RESOURCES
The Company gauges its liquidity and financial stability by the
measurements shown in the following table (dollar amounts in thousands):
JUNE 30, DECEMBER 31, JUNE 30,
1998 1997 1997
--------- ------------ ---------
Working Capital $ 17,357 $ 17,060 $ 14,085
Current Ratio 3.02 to 1 3.45 to 1 2.87 to 1
Shareholders' Equity $ 22,080 $ 20,121 $ 17,650
During the six months ended June 30, 1998, accounts receivable decreased by
approximately $1,240,000 and inventories increased by approximately $3,632,000.
The increase in inventories was primarily the result of preparation for fall
promotions and to a lesser extent stocking product for a significant new
customer, both pertaining to Florida Pneumatic Manufacturing Corporation.
Short-term borrowings increased by approximately $1,906,000 and accounts payable
increased by approximately $315,000, both primarily due to the increase in
inventories.
On January 30, 1998, the Company redeemed all of its outstanding 13.75%
Subordinated Debentures, due January 1, 2017, at 100% of the principal amount of
the Debentures, plus accrued and unpaid interest to the redemption date. The
funds used for this redemption, totalling $1,384,686, were derived from working
capital.
Capital spending for the six months ended June 30, 1998 was approximately
$634,000. The total amount was provided from working capital. Capital
expenditures for the rest of 1998 are expected to total approximately
$1,100,000, some of which may be financed. Included in the expected total for
1998 are capital expenditures relating to new products, expansion of existing
product lines and replacement of old equipment.
10
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
On July 27, 1998, the Company signed a new credit facility agreement with
European American Bank. This multi-part facility provides up to $12,000,000 for
letters of credit, bankers' acceptances, import loans and working capital loans.
Also included in the agreement is the availability of up to $10,000,000 in
foreign currency forward contracts. These contracts fix the exchange rate on
future purchases of Japanese yen needed for payments to foreign suppliers.
Finally, the facility includes a commitment of $15,000,000 to finance
acquisitions subject to the lending bank's approval.
As of June 30, 1998, the Company's financing needs were provided by the
incumbent bank, Hong Kong and Shanghai Banking Corporation. At June 30, 1998,
there were no loans outstanding against this line of credit. There was a
commitment at June 30, 1998 of approximately $916,000 for open letters of
credit. In addition, at June 30, 1998, approximately $489,000 of the Company's
credit facility was used to secure accounts payable. The total amount of foreign
currency forward contracts outstanding at June 30, 1998 was approximately
$1,892,000.
The Company's expiring credit facility agreement is subject to annual
review by the lending bank. Under this agreement, the Company is required to
adhere to certain financial covenants. At June 30, 1998, and for the six months
then ended, the Company satisfied all of these covenants.
The Company continues to conduct an extensive acquisition search. The funds
for an acquisition will be provided by working capital and existing credit
facilities, including the $15,000,000 credit facility earmarked for acquisitions
referred to above.
The Company, through Florida Pneumatic, imports a significant amount of its
purchases from Japan, with payment due in Japanese yen. As a result, the Company
is subject to the effects of foreign currency exchange fluctuations. The Company
uses a variety of techniques to protect itself from any adverse effects from
these fluctuations, including increasing its selling prices, obtaining price
reductions from its overseas suppliers, using alternative supplier sources and
entering into foreign currency forward contracts. Because of these steps taken
by the Company, foreign currency exchange rate fluctuations have not had a
significant negative effect on the Company's results of operations or its
financial position. Any future weakness of the dollar would again, however,
present a problem and there can be no certainty that the Company will continue
to be successful in its efforts to counter this problem.
The Company is currently determining the modifications required to ensure
that its management and information systems will be able to make the transition
to the year 2000. At this time, management expects that all such modifications
will be completed on a timely basis and that the costs of these modifications
will not have a material adverse effect on the Company's results of operations,
financial position or liquidity.
11
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Registrant is not a party to any litigation that is
expected to have a material adverse effect on its business.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
The following exhibit has been filed as part of this
report:
Exhibit 27 - Financial Data Schedule (submitted to the
Securities and Exchange Commission in electronic format)
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Registrant during
the quarter ended June 30, 1998.
12
<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.
P & F INDUSTRIES, INC.
(Registrant)
By /s/ Joseph A. Molino, Jr.
-------------------------------
Joseph A. Molino, Jr.
Vice President
Dated: August 7, 1998 (Principal Financial Officer)
13
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This financial data schedule contains summary financial information extracted
from the consolidated financial statements included in P & F Industries, Inc.'s
quarterly report on Form 10-Q for the quarter ended March 31, 1998 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 1,614,934
<SECURITIES> 0
<RECEIVABLES> 6,685,188
<ALLOWANCES> 0
<INVENTORY> 17,014,295
<CURRENT-ASSETS> 25,937,829
<PP&E> 11,549,098
<DEPRECIATION> 5,618,720
<TOTAL-ASSETS> 34,782,929
<CURRENT-LIABILITIES> 8,580,643
<BONDS> 3,677,797
3,239,345
0
<COMMON> 0
<OTHER-SE> 18,841,144
<TOTAL-LIABILITY-AND-EQUITY> 34,782,929
<SALES> 24,307,528
<TOTAL-REVENUES> 24,538,496
<CGS> 14,821,150
<TOTAL-COSTS> 14,821,150
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 243,827
<INCOME-PRETAX> 2,769,787
<INCOME-TAX> 1,039,000
<INCOME-CONTINUING> 1,730,878
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,730,878
<EPS-PRIMARY> .54
<EPS-DILUTED> .47
</TABLE>
