U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
(Mark One)
|X| Quarterly report under Section 13 or 15(d) of the Securities Exchange Act
of 1934
For the quarterly period ended 9/30/99
-------------
|_| Transition report under Section 13 or 15(d) of the Exchange Act
For the transition period from ___________ to ______________
Commission file number 811-3584
----------------------------------------------------------
Levcor International, Inc.
- --------------------------------------------------------------------------------
(Exact Name of Small Business Issuer as Specified in Its Charter)
Delaware 06-0842701
- ------------------------------- ---------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
1071 Avenue of the Americas, New York, NY 10018
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices)
(203) 264-7428
- --------------------------------------------------------------------------------
(Issuer's Telephone Number, Including Area Code)
- --------------------------------------------------------------------------------
(Former Name, Former Address and Former Fiscal year,
if Changes Since Last Report)
Check whether the issuer; (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 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 November 22, 1999, 2,166,799 shares of the issuer's common stock, par
value $.56 per share, were outstanding.
Transitional Small Business Disclosure Format(check one): Yes |_| No |X|
<PAGE>
Table of Contents
Page
----
Part I........................................................................1
Item 1. Financial Statements
Balance Sheet as of September 30, 1999 (Unaudited)................1
Statements of Operations for the
Nine Months Ended September 30, 1999 and
September 30, 1998 (Unaudited)....................................2
Statements of Operations for the
Three Months Ended September 30, 1999 and
September 30, 1998 (Unaudited)....................................3
Statements of Cash Flows for the
Nine Months Ended September 30, 1999 and
September 30, 1998 (Unaudited)....................................4
Note to Financial Statements (Unaudited)..........................5
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operation......................7
Part II......................................................................11
Item 6. Exhibits and Reports on Form 8-K ................................11
Signatures...................................................................12
Exhibit 27...................................................................13
<PAGE>
PART I.
ITEM 1. FINANCIAL STATEMENTS
Levcor International, Inc.
BALANCE SHEET
September 30, 1999
(Unaudited)
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 49,732
Accounts receivable 111,893
Due from factor 1,231,098
Inventories 2,757,277
Prepaid expenses 60,619
-----------
Total current assets 4,210,619
PLANT AND EQUIPMENT, net of accumulated
depreciation of $8,881 14,739
OIL AND GAS PROPERTIES (using full cost method),
net of accumulated depletion and depreciation of $881,214 5,469
ASSETS HELD FOR RESALE 942,450
INTANGIBLE ASSETS, net of accumulated amortization of $6,843 15,378
-----------
$ 5,188,655
===========
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIENCY)
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 3,038,931
Current maturities of long-term debt 1,617,544
Due to officer/stockholder 190,000
-----------
Total current liabilities 4,846,475
LONG TERM DEBT, less current maturities 612,450
DUE TO OFFICER/STOCKHOLDER 1,170,000
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY (DEFICIENCY)
Common stock - par value $.56 per share;
authorized 15,000,000 shares,
outstanding 2,166,799 shares 1,213,407
Capital in excess of par value 5,277,115
Accumulated deficit (7,930,792)
-----------
(1,440,270)
-----------
$ 5,188,655
===========
The accompanying notes are an integral part of these statements.
1
<PAGE>
Levcor International, Inc.
STATEMENTS OF OPERATIONS
For the Nine Months Ended September 30,
(Unaudited)
1999 1998
------------ ------------
Sales - Woven Fabrics Division $ 10,706,682 $ 8,227,546
Less cost of sales 9,207,040 7,347,014
------------ ------------
Gross profit 1,499,642 880,532
------------ ------------
Sales - Oil and gas 23,881 24,229
Less cost of sales 12,968 26,046
------------ ------------
Gross profit (loss) 10,913 (1,817)
------------ ------------
Total gross profit 1,510,555 878,715
Expenses
Selling expenses - Woven Fabrics Division
Salaries, benefits and
payroll taxes 850,330 624,813
Commissions 30,417 103,130
Other selling expenses 105,975 153,224
------------ ------------
Total selling expenses 986,722 881,167
General and administrative expenses
Salaries, benefits and payroll taxes 114,074 41,909
Accounting and administrative fees 102,840 43,942
Audit fees 24,082 16,000
Directors' fees and expenses 3,750 (5,000)
Factor's fees 51,808 64,082
Insurance 9,991 10,556
Interest expense 182,210 216,605
Legal fees 26,760 14,990
Transfer agent fees 3,150 3,158
Shareholders' communications -- 22,262
Other business taxes 3,582 2,287
Other expenses 21,287 44,122
------------ ------------
Total general and administrative
expenses 543,534 474,913
------------ ------------
Total expenses 1,530,256 1,356,080
NET (LOSS) $ (19,701) $ (477,365)
============ ============
Accumulated deficit - beginning of year $ (7,911,091) $ (7,251,603)
------------
Accumulated deficit - end of third quarter $ (7,930,792) $ (7,728,968)
============ ============
Average number of shares outstanding 1,866,174 1,751,399
------------
Net (loss) per common share ($0.01) ($0.27)
====== ======
The accompanying notes are an integral part of these statements.
2
<PAGE>
Levcor International, Inc
STATEMENTS OF OPERATIONS
For the Three Months Ended September 30,
(Unaudited)
1999 1998
----------- -----------
Sales - Woven Fabrics Division $ 3,985,774 $ 1,084,192
Less cost of sales 3,464,657 1,053,348
----------- -----------
Gross profit 521,117 30,844
----------- -----------
Sales - Oil and gas 11,234 7,111
Less cost of sales 5,906 9,289
----------- -----------
Gross profit (loss) 5,328 (2,178)
----------- -----------
Total gross profit 526,445 28,666
Expenses
Selling expenses - Woven Fabrics Division
Salaries, benefits and payroll taxes 444,708 206,760
Commissions 10,886 24,548
Other selling expenses 27,794 32,959
----------- -----------
Total selling expenses 483,388 264,267
General and administrative expenses
Salaries, benefits and payroll taxes 36,337 13,980
Accounting and administrative fees 73,545 14,642
Audit fees 9,917 --
Directors' fees and expenses 1,250 1,250
Factor's fees 4,583 12,354
Insurance 3,518 4,027
Interest expense 62,903 74,830
Legal fees 11,760 7,427
Transfer agent fees 1,050 1,050
Shareholders communications -- 7,802
Other business taxes 295 7
Other expenses 11,794 18,695
----------- -----------
Total general and administrative
expenses 216,952 156,064
----------- -----------
Total expenses 700,340 420,331
NET (LOSS) $ (173,895) $ (391,665)
=========== ===========
Accumulated deficit - beginning of quarter $(7,756,897) $(7,337,303)
Accumulated deficit - end of quarter $(7,930,792) $(7,728,968)
=========== ===========
Average number of shares outstanding 1,966,799 1,764,299
----------- -----------
Net (loss) per common share ($0.09) ($0.22)
====== ======
The accompanying notes are an integral part of these statements.
3
<PAGE>
Levcor International, Inc.
STATEMENTS OF CASH FLOWS
For the Nine Months Ended September 30,
(Unaudited)
1999 1998
----------- -----------
Cash flows from operating activities
Net earnings (loss) $ (19,701) $ (477,365)
Adjustments to reconcile net earnings
(net loss) to net
cash used in operating activities
Depletion and depreciation 9,198 11,406
Services paid in common stock 5,000 5,000
Changes in operating assets and
liabilities, net of assets acquired
Accounts receivable (106,930) (7,456)
Due from factor (1,164,535) 141,354
Inventories (1,346,177) 456,117
Prepaid expenses (54,250) (6,138)
Accounts payable and accrued expenses 2,335,126 (224,887)
----------- -----------
Net cash (used in) operating activities (342,269) (101,969)
----------- -----------
Cash flows from investing activities
Purchase of assets for resale (942,450) --
Purchase of property and equipment and
intangible assets (9,317) (7,351)
Sale of oil and gas properties 3,800 --
----------- -----------
Net cash (used in) investing activities (947,967) (7,351)
----------- -----------
Cash flows from financing activities
Advances from shareholder 450,000 375,000
Exercise of stock options 500,000 7,562
Payment of long-term debt 329,650 (282,800)
----------- -----------
Net cash provided by financing activities 1,279,650 99,762
----------- -----------
NET (DECREASE) IN CASH AND CASH EQUIVALENTS (10,586) (9,558)
Cash and cash equivalents at beginning of year 60,318 42,043
----------- -----------
Cash and cash equivalents at end of quarter $ 49,732 $ 32,485
=========== ===========
Supplemental disclosures of cash flow
information:
Cash paid during the quarter for Interest $ 182,210 $ 216,605
The accompanying notes are an integral part of these statements.
4
<PAGE>
Levcor International, Inc.
NOTES TO FINANCIAL STATEMENTS
Nine Months Ended September 30, 1999
(Unaudited)
NOTE 1. The accompanying financial statements of Levcor International, Inc.
(the "Company") have been prepared in accordance with the instructions
to Form 10-QSB and do not include all the information and footnote
disclosures required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all
adjustments (consisting of normal recurring accruals) necessary for a
fair presentation have been included. Operating results for the three
months and nine months ended September 30, 1999 are not necessarily
indicative of the results that may be expected for the year ending
December 31, 1999. These statements should be read in conjunction with
the financial statements and related notes included in the Company's
annual report on Form 10-KSB for the year ended December 31, 1998.
NOTE 2. The computation of basic loss per share of common stock is based upon
the weighted average number of common shares outstanding during the
period. Diluted earnings per share include basis shares plus (in
periods in which they have a dilutive effect) the effect of common
shares contingently issuable upon exercise of stock options. Diluted
loss per share is considered equal to basic loss per share for all
years presented, as the effect of other potentially dilutive securities
would be antidilutive.
NOTE 3. On September 2, 1999, the Company entered into an Asset Purchase
Agreement, dated September 2, 1999 (the "Purchase Agreement"), with
Andrex Industries Corp. ("Andrex"), pursuant to which the Company
purchased (1) Andrex's inventory (the "Inventory"); (2) Andrex's
machinery and equipment (the "Machinery and Equipment"); (3) Andrex's
furniture, fixtures and supplies located at 1071 Avenue of the
Americas, New York, New York 10018; (4) Andrex's sales orders; and (5)
Andrex's trade name "Andrex Knits".
The purchase price comprised: (1) cash in the amount of $660,000
(funded by The CIT Group/Commercial Services, Inc. ("CIT Group"));
(2) a promissory note ("Promissory Note 1"), in the principal amount
of $282,450; and (3) a promissory note ("Promissory Note 2"), in the
principal amount equal to the book value as of July 1, 1999 of the
Inventory transferred to the Registrant, which promissory note is to
be delivered to Andrex promptly following the valuation of the
Inventory. Promissory Note 1 and Promissory Note 2 will both bear
interest at 6% per annum and are due on April 1, 2001.
The Company funded the $660,000 cash payment with a promissory note due
to CIT Group with principal and interest payable in quarterly
installments at 8.5%. Promissory Note 1 is to be paid down with
proceeds from the sale of Machinery & Equipment, with interest accrued
on outstanding balances. Promissory Note 2 is to be paid down with
proceeds from the sale of the Inventory, with interest accrued on
outstanding balances.
5
<PAGE>
The following summarized unaudited pro forma financial information for
the nine month period ended September 30, 1999 and 1998 assumed the
purchase of assets of Andrex as if it occurred as of January 1 of each
year:
For the Nine Months Ended
September 30,
Pro forma information
1999 1998
--------- --------
Net Sales $22,677,000 $32,534,000
Net Loss $ 453,000 $ 905,000
Loss per share -- basic and diluted $ ($0.24) $ ($0.52)
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATION
Results of Operations:
Nine Months ended September 30, 1999 as compared to nine months ended
September 30, 1998.
The Company's sales for the Woven Fabrics Division for the nine months
ended September 30, 1999 were $10,706,682, an increase of $2,479,136 or 30%,
from $8,227,546 for the same period in 1998. The cost of sales of the Woven
Fabrics Division in the first nine months of 1999 was $9,207,040, an increase of
25% from $7,347,014 in 1998. The gross profits on sales for the Woven Fabrics
Division for the first nine months of 1999 was thus $1,499,642, an increase of
$619,110, or 70% from $880,532 for the same period in 1998. The acquisition (the
"Acquisition") by Levcor of the Knits Division of Andrex Industries Corp.
("Andrex"), effective September 2, 1999, contributed to the improved revenue
results in the nine month period ended September 30, 1999 compared to the same
period in 1998. Added to the Woven Fabrics Division increase in gross profits
for the nine months of 1999 was an increase of $12,730 in gross profits from oil
and gas operations as compared to 1998.
The Company's total expenses for the first nine months of 1999 were
$1,530,256, an increase of $174,176 or 13%, from $1,356,080 in the same period
in 1998. Such increase was due to the combined increases of: (i) selling
expenses of the Woven Fabrics Division of $105,555, or 12%, compared to the same
period in 1998; and (ii) an increase in general and administrative expenses of
$68,621 or 14%; both such increases were predominantly due to increases in
salaries, benefits and payroll taxes associated with the Acquisition.
As a result of the foregoing, the Company reflected a net loss of $19,701
in the first nine months of 1999 compared to a net loss of $477,365 for the same
period in 1998.
Three months ended September 30, 1999 as compared to three months ended
September 30, 1998.
The Company's sales for the Woven Fabrics Division for the three months
ended September 30, 1999 were $3,985,774 an increase of $2,901,582, or 268% from
$1,084,192 for the same period in 1998. The cost of sales of the Woven Fabrics
Division in the third quarter of 1999 was $3,464,657, an increase of 229% from
$1,053,438 in 1998. The gross profit on sales for the Woven Fabrics Division for
the three months ended September 30, 1999 was thus $521,117 an increase of
$490,273 or 1,590% from $30,844 for the same period in 1998. The third quarter
1999 Woven Fabrics Division's increase in sales and gross profit margin on sales
reflected the Acquisition. Added to the Woven Fabric Division increase in gross
profit for the three months ended September 30, 1999 was an increase of $7,506
in gross profit from oil and gas operations in the third quarter of 1999
compared to the same period in 1998.
The Company total expenses for the third quarter of 1999 were $700,340, an
increase of $280,009, or 67%, from $420,331 in the same period in 1998. Such
increase was due to the combined increase of: (i) selling expenses of the Woven
Fabrics Division of $219,221, or 83%,
7
<PAGE>
compared to the same period in 1998; and (ii) an increase in general and
administrative expenses in the third quarter of 1999 of $60,888, or 39% compared
to the same period in 1998; both predominate among such increases was increases
in salaries, benefits, payroll taxes and factor fees associated with the
Acquisition.
As a result of the foregoing, the Company reflected a net loss of $173,895
in the third quarter of 1999 compared to a net loss of $391,665 for the same
period in 1998.
Liquidity and Capital Resources
The Company entered into a Discount Factoring Agreement with Congress
Talcott Corporation ("Congress Talcott") as of November 14, 1997 (the "Congress
Talcott Factoring Agreement"). Pursuant to the terms of the Congress Talcott
Factoring Agreement, the Company, among other things: (i) assigned to Congress
Talcott its interest in all receivables derived from the sale of woven fabrics
produced by the Woven Fabrics Division, and paid Congress Talcott a monthly
commission of 0.6% of the gross amount on such receivables, with a minimum
commission of $4,000; and (ii) was entitled to request advances up to 90% of the
net purchase price of the receivables, and pay interest on such advances at the
rate of 0.5% above CoreStates Bank, N.A.'s prime rate for the term thereof. The
Congress Talcott Factoring Agreement expired pursuant to its terms on November
14, 1998.
The Company entered into a Factoring Agreement with The CIT
Group/Commercial Services, Inc. ("CIT Group") on September 17, 1998 (the "CIT
Group Factoring Agreement"). Pursuant to the terms of the CIT Group Factoring
Agreement, the Company, among other things: (i) assigned to CIT Group its
interest in all accounts receivable arising from the sale of inventory or
rendition of services (the "Accounts"), including those under any trade names,
through any divisions and through any selling agent, and pays CIT Group a
factoring fee of 0.6% of the gross face amount of the Accounts, with a minimum
commission of $3 per invoice and $48,000 per annum, an additional 1/4 of 1% of
the gross face amount of each Account for each 30-day period or part thereof by
which the longest terms of sale applicable to such Account exceed 90 days, and
an additional 1% of the gross face amount of all Accounts arising from sales to
customers located outside the United States; and (ii) may request advances
(which advances shall be made at the CIT Group's sole discretion) on the net
purchase price of the Accounts, and pay interest on such advances at the rate of
0.5% above The Chase Manhattan Bank's prime rate for the term thereof. The CIT
Group Factoring Agreement remains effective until termination by either party.
CIT Group may terminate the CIT Group Factoring Agreement at any time, upon 60
days' prior written notice or immediately without prior written notice, upon the
occurrence of an Event of Default (as such term is defined in the CIT Group
Factoring Agreement). The Company may terminate the CIT Group Factoring
Agreement on any September 30th, upon 60 days' prior written notice.
In connection with the purchase in 1996 of the woven fabric inventory from
Andrex, the Company issued a promissory note to Andrex, which bears interest at
the rate of 6% per annum, pursuant to which the Company, commencing on May 1,
1996 and continuing through May 1, 2000, was required to make five annual
payments of $282,800 to Andrex. In order to meet the $282,800 payments that were
due on May 1, 1996, May 1, 1997 and May 1, 1998, Robert A. Levinson, the Chief
Executive Officer of the Company, made loans to the Company on such
8
<PAGE>
dates of $370,000, $300,000 and $50,000, respectively, which loans bear interest
at a rate of 6% per annum. On May 1, 1999, the Company from its own resources,
made the required payment of $282,800; and on July 1, 1999, the Company prepaid
the final installment of $282,800 due May 1, 2000, utilizing a portion of an
additional loan given by Mr. Levinson on July 1, 1999 of $500,000.
On July 26, 1999, Mr. Levinson and the Company entered into an agreement
whereby Mr. Levinson agreed to accept 400,000 shares of the Common Stock of the
Company, in full and final satisfaction of the loan made to the Company in July
of 1999 in the principal amount of $500,000.
In addition to the such loans by Mr. Levinson totaling $720,000 noted
above, Mr. Levinson has also made loans to the Company in each of 1998 and 1999
in an aggregate amount of $225,000 and $415,000 respectively, to supplement its
cash requirements. The total outstanding debt of the Company to Mr. Levinson is
thus $1,360,000, which loans bear interest at a rate of 6% per annum. No
repayment date has yet been set for these loans, except that $190,000 thereof
are considered to be payable within one year.
Mr. Levinson has also agreed to continue to personally support the
Company's cash requirements to enable it to meet its current obligations through
December 31, 1999.
On September 2, 1999, the Company entered into an Asset Purchase
Agreement, dated September 2, 1999 (the "Purchase Agreement"), with Andrex
Industries Corp. ("Andrex"), pursuant to which the Company purchased (1)
Andrex's inventory (the "Inventory"); (2) Andrex's machinery and equipment (the
"Machinery and Equipment"); (3) Andrex's furniture, fixtures and supplies
located at 1071 Avenue of the Americas, New York, New York 10018; (4) Andrex's
sales orders; and (5) Andrex's trade name "Andrex Knits".
The purchase price comprised: (1) cash in the amount of $660,000 (funded
by The CIT Group/Commercial Services, Inc. ("CIT Group")); (2) a promissory note
("Promissory Note 1"), in the principal amount of $282,450; and (3) a promissory
note ("Promissory Note 2"), in the principal amount equal to the book value as
of July 1, 1999 of the Inventory transferred to the Registrant, which promissory
note is to be delivered to Andrex promptly following the valuation of the
Inventory. Promissory Note 1 and Promissory Note 2 will both bear interest at 6%
per annum and are due on April 1, 2001.
The Company funded the $660,000 cash payment with a promissory note due to
CIT Group with principal and interest payable in quarterly installments at 8.5%.
Promissory Note 1 is to be paid down with proceeds from the sale of Machinery &
Equipment, with interest accrued on outstanding balances. Promissory Note 2 is
to be paid down with proceeds from the sale of the Inventory, with interest
accrued on outstanding balances.
The Company believes that cash generated from the Company's sale of woven
fabrics produced by the Company's Woven Fabrics Division, the sale of knit
fabrics produced by the Company's newly acquired Knit Fabrics Division, the
advances under the CIT Group Factoring Agreement, loans from Mr. Levinson (if
needed) and, to a lesser extent, the proceeds from the sale of oil and gas from
the Company's ownership interest in oil and gas wells will be sufficient to fund
the Company's operations for 1999. The Company's unrestricted cash and cash
9
<PAGE>
equivalents at September 30, 1999 was $49,732, a decrease of $10,586 from
$60,318 at December 31, 1998.
Seasonality
The Company's Woven Fabrics Division business is seasonal, and typically
realizes higher revenues and operating income in the first and fourth calendar
quarters. Such seasonality, taking into account the standard lead time required
by the fashion industry to manufacture apparel, corresponds respectively to the
autumn and spring retail selling seasons. Andrex is a leading converter of knit
fabrics, also for the apparel industry. The Acquisition is intended to lesson
the seasonality of Levcor's business.
The Company's oil and gas business is not seasonal, except that sales of
natural gas peak during the winter heating season.
Year 2000 Issue
Computer programmers and other designers of equipment that use
microprocessors have long abbreviated dates by eliminating the first two digits
of the year. The "Year 2000 Issue" stems from the concern that as the year 2000
approaches, many computer and equipment systems may be unable to distinguish
those years which begin with the numerals "20" from those years which begin with
the numerals "19," and, as a result, may not accurately process certain
date-based information. This inaccuracy could cause a variety of significant
operational problems for businesses.
As of December 31, 1998, the Company's internal Year 2000 compliance plan
was fully implemented at a cost of $1,100. The Company had utilized both
internal and external resources to modify or replace the affected portions of
its computer and equipment systems and test the new and modified systems for
Year 2000 compliance. The Company has determined that its computer and equipment
systems do not interface with the computer and equipment systems of any of its
major suppliers, customers or financial institutions. However, the inability of
the Company's principal suppliers, customers or financial institutions to become
Year 2000 compliant in a timely manner could have a material adverse effect on
the Company's results of operation, liquidity or financial condition. The
Company does not have a contingency plan in place to specifically cover the
possibility that the Company's major suppliers, customers or financial
institutions will not achieve Year 2000 compliance in a timely manner.
10
<PAGE>
PART II.
ITEM 6. Exhibits and Reports on Form 8 - K.
(a) The following exhibits are included herein:
2.2 Asset Purchase Agreement (the "Purchase Agreement"), dated September
2, 1999, between the Company and Andrex Industries Corp. ("Andrex"),
incorporated herein by reference to the Company's Current Annual
Report on Form 8-K filed on September 17, 1999.
27 Financial Data Schedule (Article 5), included for Electronic Data
Gathering, Analysis, and Retrieval (EDGAR) purposes only. This
Schedule contains summary financial information extracted from the
balance sheets, statements of operations and statements of cash flow
as of and for the Nine Months ended September 30, 1999, and is
qualified in its entirety by reference to such financial statements.
(b) 1. Company's Current Annual Report on Form 8-K regarding the
September 2, 1999 acquisition of Andrex by the Company filed on
September 17, 1999.
2. An amendment to the Company's Current Annual Report on Form 8-K,
filed on November 16, 1999, filing the Financial Statements of
Andrex and the Pro Forma Financial Information.
11
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of
1934, the registrant has caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
LEVCOR INTERNATIONAL, INC.
Date November 22, 1999 Robert A. Levinson
---------------------- ----------------------------
Robert A. Levinson
Chairman of the Board,
President and Secretary
Date November 22, 1999 Rudolph E. Bremser
---------------------- ----------------------------
Rudolph E. Bremser
Treasurer
12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Form 10-QSB
for the Quarterly Period Ended September 30, 1999, and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-Mos
<FISCAL-YEAR-END> Dec-31-1999
<PERIOD-START> Jan-01-1999
<PERIOD-END> Sep-30-1999
<CASH> 49,732
<SECURITIES> 0
<RECEIVABLES> 1,342,991
<ALLOWANCES> 0
<INVENTORY> 2,757,277
<CURRENT-ASSETS> 4,210,619
<PP&E> 932,524
<DEPRECIATION> 896,938
<TOTAL-ASSETS> 5,188,655
<CURRENT-LIABILITIES> 4,846,475
<BONDS> 1,782,450
0
0
<COMMON> 1,213,407
<OTHER-SE> (2,653,677)
<TOTAL-LIABILITY-AND-EQUITY> 5,188,655
<SALES> 10,730,563
<TOTAL-REVENUES> 10,730,563
<CGS> 9,220,009
<TOTAL-COSTS> 10,750,265
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 182,210
<INCOME-PRETAX> (19,701)
<INCOME-TAX> 0
<INCOME-CONTINUING> (19,701)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (19,701)
<EPS-BASIC> (0.01)
<EPS-DILUTED> (0.01)
</TABLE>
