<PAGE>
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended July 31, 1995
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File No. 0-14733
----------------
DELTA COMPUTEC INC.
(Exact name of registrant as specified in its charter)
New York 16-1146345
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification No.)
366 White Spruce Blvd, Rochester, NY 14623
(Address of Principal Executive Offices) (Zip Code)
201-440-8585
(Registrant's telephone number including area code)
----------------
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 July 31, 1995, there were 6,811,575 shares outstanding of the Registrant's
Common Stock $.01 par value.
================================================================================
1
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DELTA COMPUTEC, INC.
Form 10-Q
Quarter Ended July 31, 1994
INDEX
Part I: Financial Information Page
----
Consolidated balance sheets at July 31, 1995 and
October 31, 1994 3-4
Consolidated statements of operations for the three
months ended July 31, 1995 and 1994 and nine months
ended July 31, 1995 and 1994 5
Consolidated statement of cash flows for the nine months
July 31, 1995 and 1994 6
Notes to consolidated financial statements 7-10
Management's discussion and analysis of operations and
financial condition 11-13
Part II: Other Information
Exhibits and Reports on Form 8-K 14
Signatures 15
2
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DELTA COMPUTEC INC.
CONSOLIDATED BALANCE SHEETS
ASSETS
(Unaudited)
July 31, October 31,
1995 1994
----------- -----------
CURRENT ASSETS:
Cash $ 7,587 $ 12,809
Accounts receivable, less allowance for
doubtful accounts of $251,018 and $193,238
at July 31, 1995 and October 31, 1994,
respectively 6,521,591 5,462,556
Inventories 2,016,185 2,201,339
Prepaid expenses and other current assets 238,270 222,484
Deferred income taxes current 100,000 317,000
----------- -----------
Total current assets $ 8,883,633 $ 8,216,188
FIELD SPARE PARTS, net of accumulated
amortization $ 2,510,419 $ 2,378,698
PROPERTY AND EQUIPMENT, at cost:
Technical equipment $ 1,953,197 $ 1,311,900
Office furniture and equipment 990,111 1,296,557
Vehicles 154,661 150,461
Leasehold improvements 280,176 227,046
----------- -----------
$ 3,378,145 $ 2,985,964
Less: Accumulated depreciation 2,319,304 1,970,132
----------- -----------
$ 1,058,841 $ 1,015,832
INVESTMENT IN AFFILIATED COMPANY $ - $ 10,000
DEFERRED INCOME TAXES $ 1,010,236 $ 1,035,000
OTHER ASSETS:
Goodwill, net $ 791,380 $ 456,928
Customer lists, net 148,922 168,485
Other assets 184,063 240,154
----------- -----------
1,124,365 $ 865,567
----------- -----------
$14,587,494 $13,521,285
=========== ===========
See notes to consolidated financial statements.
3
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DELTA COMPUTEC INC.
CONSOLIDATED BALANCE SHEETS
(Unaudited)
July 31, October 31,
1995 1994
----------- -----------
CURRENT LIABILITIES:
Accounts payable $ 3,720,548 $ 3,142,204
Deferred service revenue 1,867,890 1,783,238
Accrued expenses
Payroll and payroll taxes $ 599,819 $ 404,791
Interest 38,285 30,376
Other 107,775 186,258
Due to Shareholder 444,741 -
Bank line of credit 4,330,223 -
----------- -----------
Total current liabilities $11,109,281 $ 5,546,867
LONG-TERM DEBT $ - $ 3,716,820
SUBORDINATED DEBENTURES $ 1,075,001 $ 1,087,501
STOCKHOLDERS' INVESTMENT
Common stock, $ .01 par value;
authorized 20,000,000 shares;
issued and outstanding 6,811,575 at
July 31, 1995 and October 31, 1994 $ 68,116 $ 68,116
Additional paid-in capital 4,916,093 4,916,093
Accumulated deficit ( 2,580,997) (1,814,112)
----------- -----------
Total stockholders' investment 2,403,212 $ 3,170,097
----------- -----------
$14,587,494 $13,521,285
=========== ===========
See notes to consolidated financial statements.
4
<PAGE>
DELTA COMPUTEC INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended Nine Months Ended
July 31, July 31,
---------------------- ------------------------
1995 1994 1995 1994
---- ---- ---- ----
REVENUES:
Service revenues $3,837,581 $2,356,873 $10,717,842 $ 7,075,406
Equipment sales 4,263,924 4,297,286 13,389,598 11,686,065
$8,101,505 $6,654,159 $24,107,440 $18,761,471
---------- ---------- ----------- -----------
COSTS AND EXPENSES:
Service costs $3,198,886 $1,781,130 $ 8,602,089 $ 5,116,935
Cost of equipment sold 3,426,948 3,421,758 10,559,234 9,307,006
Selling, general and
administrative 1,591,014 1,290,480 5,100,472 3,989,363
---------- ---------- ----------- -----------
$8,216,848 $6,493,368 $24,261,795 $18,413,304
OTHER EXPENSE, NET $ 119,739 $ 107,132 $ 369,766 $ 289,531
---------- ---------- ----------- -----------
EARNINGS (LOSS) BEFORE
INCOME TAXES $ (235,082) $ 53,659 $ (524,121) $ 58,636
INCOME TAXES $ 331,764 $ 14,000 $ 242,764 $ 15,000
---------- ---------- ----------- -----------
NET EARNINGS (LOSS) $ (566,846) $ 39,659 $ (766,885) $ 43,636
========== ========== =========== ===========
EARNINGS PER COMMON AND COMMON EQUIVALENT SHARE:
Net Earnings (Loss) $ (.08) $ .01 $ (.11) $ .01
EARNINGS PER COMMON SHARE - ASSUMING FULL DILUTION:
Net Earnings (Loss) $ (.08) $ .01 $ (.11) $ .01
See notes to consolidated financial statements.
5
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DELTA COMPUTEC INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
July 31,
--------------------------
1995 1994
------------ -----------
CASH FLOW FROM OPERATING ACTIVITIES:
Net earnings (loss) $ (766,885) $ 43,636
Adjustments to reconcile net earnings (loss)
to net cash provided by operating
activities:
Depreciation & amortization 1,311,702 922,441
Decrease (increase) in accounts receivable
inventories, prepaid expenses, deferred
income taxes, and other assets, net of
accounts payable and other accrued
expenses 4,274 (799,994)
Increase in deferred service revenue (273,351) 527,038
------------ -----------
Net cash flow from operating activities $ 275,740 $ 693,121
------------ -----------
CASH FLOW FROM INVESTING ACTIVITIES:
Additions to property and equipment $ (102,764) $ (113,216)
Additions to field spare parts (784,490) (538,560)
Acquisition of business (Note 2) (394,611) -
------------ -----------
Net cash flow from investing activities $ (1,281,865) $ (651,776)
------------ -----------
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from Shareholder's Loan $ 400,000 $ -
Net proceeds from bank borrowing 613,403 1,285
Principal repayments for long-term debt (12,500) (145,318)
------------ -----------
Net cash flow from financing activities $ 1,000,903 $ (144,033)
------------ -----------
NET INCREASE (DECREASE) CASH $ (5,222) $ (102,688)
CASH - beginning of year 12,809 102,688
------------ -----------
CASH - end of period $ 7,587 $ -
============ ===========
See notes to consolidated financial statements.
6
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DELTA COMPUTEC INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) Summary of Significant Accounting Policies
Description of Business
The Company provides a wide array of Data Communication and LAN/WAN
products and services as well as multi-vendor maintenance services for
computer systems and peripheral equipment.
Principles of Consolidation and Representation by Management
The consolidated financial statements include the accounts of the Company
and its wholly-owned subsidiaries R&M Associates Electronic Data Products
Service, Inc., Computer Support, Inc., Delta Data Net Inc., Intronet,
Inc. and SAI/Delta, Inc.. All significant intercompany accounts and
transactions have been eliminated in consolidation. The unaudited
interim financial statements included herein reflect all normal and
recurring adjustments that are, in the opinion of management, necessary
for fair presentation of the results for the interim periods.
Basis of Presentation
The accompanying consolidated financial statements have been prepared
assuming the Company will continue as a going concern. The Company
incurred an operating loss in fiscal 1993 and 1994 and was in default
under certain loan agreements as of July 31, 1995 (Note 3). In fiscal
1994, the Company executed a credit agreement to provide a long-term
credit facility which will expire April 30, 1997. On January 24, 1995,
certain debt covenants were amended based on the Company's business plan
for fiscal 1995. If certain measures that management has recently
implemented prove unsuccessful and defaults continue to occur under the
amended credit agreement, then the Company will need to seek additional
financing from outside sources (see Note 5).
Property and Equipment
Property and equipment are stated at cost and are depreciated using the
straight-line method based on estimated useful lives which are as
follows:
Estimated
Description Useful Life
----------- -----------
Technical equipment 5 - 7 years
Office furniture and equipment 5 - 7 years
Vehicles 2 - 3 years
Leasehold improvements 5 -10 years
Maintenance and repairs are charged to expense as incurred. The cost of
renewals or betterments that increase the useful lives of the assets is
capitalized in the appropriate asset account. The gain or loss on
property retired or otherwise disposed of is credited or charged to
operations and the cost and accumulated depreciation are removed from the
accounts.
7
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Inventories
Inventories represent computer equipment and peripherals held for resale
in the normal course of business and consumable field spare parts. These
inventories are recorded at the lower of cost(first-in, first-out) or
market.
Field Spare Parts
Field spare parts are stated at cost and are amortized using the
straight-line method over an estimated useful life of 5 years, beginning
in the year after acquisition.
Goodwill
Goodwill, representing the excess of the cost of acquired business over
the fair value of net assets acquired, is being amortized on a straight-
line basis over periods ranging from ten to twenty years.
Customer Lists
Customer lists, representing the fair market value of customer lists for
business acquired, are being amortized on a straight-line basis over a
ten-year period.
Deferred Service Revenue
Service revenue is recognized ratably over the contract period. Deferred
service revenue represents billings in advance of the service period.
Revenue Recognition
Service revenues: Contract service revenue is recognized ratably over
the contractual period or as services are provided. Revenue from service
rendered on a "time and materials" basis is recognized in the period the
work is performed.
Equipment sales: Revenue from equipment sales and the related cost of
sales are recognized when title to the equipment passes. Component
repair revenue and related costs are recognized upon completion of the
repair.
Income Taxes
Income taxes are recognized for the amount of taxes payable or refundable
for the current tax year, and deferred tax liabilities and assets for the
future tax consequence of events that have been recognized in the
Company's consolidated financial statements or tax returns.
At July 31, 1995 the Company had accumulated approximately $2,500,000 of
operating loss carryforward for tax purposes which was primarily the
result of losses generated by its newly acquired business units over the
prior two years. The Company had recognized the tax benefit of these
losses, in the form of deferred tax assets on its balance sheet, through
April 30, 1995. Generally accepted accounting principals (FAS 109)
establishes guidelines to be used in valuing deferred tax assets. The
Company has incorporated in the financial statements at July 31, 1995
8
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reserves for the valuation of previously recorded deferred tax assets in
the amount of $400,000. As discussed in Note 5, it is the Company's
intention to divest itself of certain non-strategic business units. The
Company will continue to assess, in future periods, the value of the
deferred tax assets. This assessment will include, but not be limited
to, the Company's ability to divest of non-strategic business units and
the ability to project adequate profits to utilize the operating loss
carryforward including that portion that has been reserved during the
period being reported.
Earnings Per Share
Earnings per common and common equivalent share are computed based upon
the weighted average of common shares outstanding during each year
adjusted for dilutive outstanding stock options using the Treasury Stock
Method. Earnings per common and common equivalent share assuming full
dilution are computed on the assumption that all outstanding convertible
debentures were exercised on the issue date.
(2) Acquisitions
On November 17, 1994, the Company acquired substantially all of the
operating assets of Intronet, Inc. Intronet designs, installs and
supports advanced computer networks with emphasis on large campus and
industrial facilities requiring network hubbing integrated with fiber and
copper cabling. These assets were acquired in exchange for $337,000 in
cash and assumption of approximately $588,000 in liabilities of the
seller. The Company accounted for the acquisition as a purchase and the
operating results of the acquisition from November 17, 1994 have been
included in the consolidated financial statements.
On December 1, 1994, the Company exercised an option to acquire the
remaining shares of SAI/Delta, Inc. The Company accounted for the
acquisition as a purchase and the operating results of the acquisition
from December 1, 1994 have been included in the consolidated financial
statements.
(3) Long-Term Debt
On April 1, 1994, the Company executed a credit agreement to provide a
long-term credit facility. This facility will expire on April 30, 1997
and bears interest at 1.5% above the bank's prime lending rate (8.75% at
July 31, 1995). Proceeds from this facility were utilized to refinance
existing credit facilities and provide on going working capital. This
facility was amended in November, 1994 to complete the acquisition of the
assets of Intronet, Inc. (see note 2). Availability of funds under this
facility is limited to the lesser of $4,500,000 or a percentage of
eligible accounts receivable and inventory. The credit agreement
contains restrictive covenants, the more significant of which require
maintenance of minimum net working capital, minimum tangible net worth,
maximum debt-to-tangible net worth, pretax income and a restriction on
capital expenditures and prohibition of dividend payments. The Company
was not in compliance with certain of these restrictive covenants due to
lower than projected earnings for the period. The Company has requested
a waiver of noncompliance from the bank as of July 31, 1995. As of the
date of this report, the Company is awaiting the bank's response and has
classified this debt as current until the waiver is confirmed.
On May 1, 1995, Delta Computec Inc. reached an agreement with its
commercial lender for an additional $700,000 lending facility. Mr.
Joseph M. Lobozzo II, Delta's controlling shareholder, Secretary and a
director, agreed with Delta to provide funding for $400,000 of the
$700,000 additional lending facility. In return, Delta agreed to issue
to Mr. Lobozzo an option to purchase 11,440,475 common shares, the
9
<PAGE>
balance of its available authorized but unissued common shares for a four
year period between May 20, 1995 and May 20, 1999 for nominal
consideration. If Mr. Lobozzo exercises the option, Mr Lobozzo and
affiliated parties will hold or control 78 percent of the authorized
common shares of Delta. The option is cancelable under certain
circumstances if Delta's computer service business is sold within 1 year.
(4) Subordinated Debentures
As of July 31, 1995, the Company had issued an 8% subordinated debenture
in the face amount of $475,000 due November 4, 1997 to the seller of Data
Net.
As of July 31, 1995, the Company had issued an 8% subordinated debenture
in the face amount of $600,001 due to Mr Lobozzo, a director of Delta
Computec Inc. Principal payments are due in three annual installments of
$200,000, commencing January 31, 1996 subject to meeting bank loan
covenants.
(5) Other Matters
On June 1, 1995, the Company signed preliminary letters of intent to sell
certain of its business units to a private investment group. Although
the term of these letters has expired, the Company is continuing
discussions with this group and other parties in order to divest itself
of non-performing operations in a timely manner.
10
<PAGE>
Item 2. Management's Discussion and Analysis of Financial
Conditions and Results of Operations
Results of Operations
Operating results for the nine months ended July 31, 1995 reflected a net
loss of $766,885 or $.11 per share compared to net earnings of $43,636 or
$.01 per share for the nine months ended July 31, 1994.
Operating results for the three months ended July 31, 1995 reflected a
net loss of $566,846 or $.08 per share compared to net earnings of
$39,659 or $.01 per share for the three months ended July 31 1994.
Operating results for the three and nine months ended July 31, 1995 were
negatively impacted by the continued restructuring and integration of its
Data Net subsidiary purchased in November 1992 and its Intronet division
purchased in November 1994.
Revenues
Revenues were $24,107,440 for the nine months ended July 31, 1995
compared with $18,761,471 for the nine months ended July 31, 1994.
Revenues increased $5,345,969 or 28.5% for the nine months ended July 31,
1995 compared with the nine months ended July 31, 1994. Service revenues
increased $3,642,436 or 51.5% for the nine months ended July 31, 1995
compared with the nine months ended July 31, 1994. Revenues
increased primarily as a result of the acquisition of Intronet in
November, 1994.
Revenues were $8,101,505 for the three months ended July 31, 1995
compared with $6,654,159 for the three months ended July 31, 1994.
Revenues increased $1,447,346 or 21.8% for the three months ended July
31, 1995 compared with the three months ended July 31, 1994. Service
revenues increased $1,480,708 or 62.8% for the three months ended July
31, 1995 compared with the three months ended July 31, 1994. Revenues
increased primarily as a result of the acquisition of Intronet in
November, 1994.
Costs and Expenses
Service costs were $8,602,089 for the nine months ended July 31, 1995
compared with $5,116,935 for the nine months ended July 31, 1994.
Service costs increased $3,485,154 or 68.1% for the nine months ended
July 31, 1995 compared with the nine months ended July 31, 1994. Service
costs as a percentage of service revenue increased from 72.3% for the
nine months ended July 31, 1994 to 80.3% for the nine months ended July
31, 1995. These increases are primarily due to the inclusion of the
Intronet division and its inherently lower margins.
Service costs were $3,198,886 for the three months ended July 31, 1995
compared with $1,781,130 for the three months ended July 31, 1994.
Service costs increased $1,417,756 or 79.6% for the three months ended
July 31, 1995 compared with the three months ended July 31, 1994. Service
costs as a percentage of service revenue increased from 75.6% for the
three months ended July 31, 1994 to 83.4% for the three months ended July
31, 1995. These increases are primarily due to the Intronet division and
its inherently lower margins.
11
<PAGE>
Costs of equipment sold was $10,559,234 for the nine months ended July
31, 1995 compared with $9,307,006 for the nine months ended July 31,
1994. The increase in cost of equipment sold was primarily due to the
incremental increase in equipment sales as a result of the Intronet
acquisition in November, 1994. Cost of equipment sold as a percentage of
equipment sales decreased from 79.6% for the nine months ended July 31,
1994 to 78.9% for the nine months ended July 31, 1995.
Cost of equipment sold was $3,426,948 for the three months ended July 31,
1995 compared with $3,421,758 for the three months ended July 31, 1994.
Cost of equipment sold as a percentage of equipment sales increased from
79.6% for the three months ended July 31, 1994 to 80.4% for the three
months ended July 31, 1995.
Selling, general and administrative expenses were $5,100,472 for the nine
months ended July 31, 1995 compared with $3,989,363 for the nine months
ended July 31, 1994. Selling general and administrative expenses
increased $1,111,109 or 27.9% for the nine months ended July 31, 1995
compared with the nine months ended July 31, 1994. This increase was
primarily due to the acquisition of Intronet in November, 1994.
Selling, general and administrative expenses were $1,591,014 for the
three months ended July 31, 1995 compared with $1,290,480 for the three
months ended July 31, 1994. Selling, general and administrative expenses
increased $300,534 or 23.3% for the three months ended July 31, 1995
compared with the three months ended July 31, 1994. This increase was
primarily due to the acquisition of Intronet in November, 1994 and
offset, somewhat, by the cost reduction plan instituted by management in
April, 1995.
Other expense was $369,766 for the nine months ended July 31, 1995
compared with $289,531 for the nine months ended July 31, 1994. Other
expense increased $80,235 or 27.7% for the nine months ended July 31,
1995 compared with the nine months ended July 31, 1994. The increase was
due to the increase in bank borrowing and higher interest rates for the
period.
Other expense was $119,739 for the three months ended July 31, 1995
compared with $107,132 for the three months ended July 31, 1994. Other
expense increased $12,607 or 11.8% for the three months ended July 31,
1995 compared with the three months ended July 31, 1994. The increase
was due to the increase in bank borrowing and higher interest rates for
the period.
Income tax expense was $242,764 for the nine months ended July 31,
1995 compared with $15,000 for the nine months ended July 31, 1994.
Income tax expense was $331,764 for the three months ended July 31,
1995 compared with $14,000 for the three months ended July 31, 1995
Liquidity and Capital Resources
The Company has experienced significant sales growth and related working
capital requirements as a result of the Intronet acquisition in November,
1994. In November 1994, the Company obtained an amendment to its long-
term credit facility to fund the acquisition of the assets of Intronet
and to finance ongoing working capital requirements. This long-term
12
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credit facility expires on April 30, 1997 and bears interest at 1.5%
above the bank's prime lending rate. Availability of funds under this
facility is limited to the lesser of $4,500,000 or a percentage of
eligible accounts receivable and inventory.
Cash flow from operations for the nine months ended July 31, 1995 was
$275,740 compared with $693,121 for the nine months ended July 31, 1994.
Capital expenditures for spare parts and property, plant and equipment
were $887,254 for the nine months ended July 31, 1995 compared with
$651,776 for the nine months ended July 31, 1994.
Depreciation and amortization expense was $911,702 for the nine months
ended July 31, 1995 compared with $922,441 for the nine months ended July
31, 1994.
13
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DELTA COMPUTEC, INC.
PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit 11 - Statement regarding computation of earnings per share
(b) Reports on Form 8-K - None
(1) On March 24, 1995, the Registrant filed Form 8-K concerning the
resignation of Mr. L. Rodger Loomis, Chief Executive Officer
and Mr. Peter D. Smith, Chief Financial Officer.
(2) On May 4, 1995, the Registrant filed Form 8-K concerning an
agreement with its commercial lender and its controlling
shareholder to provide for an additional $700,000 lending
facility and to issue an option to a director and controlling
shareholder to purchase an additional 11,440,475 Common Shares
(See Note 3).
(3) On June 1, 1995, the Registrant filed Form 8-K concerning
signing a letter of intent to sell certain of the Registrant's
business units to a private investment group.
14
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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 thereto duly authorized.
Dated: September 28, 1995 DELTA COMPUTEC INC.
By: John DeVito
------------------------
John DeVito, President
By: Walter Struble
------------------------
Walter Struble
Controller and
Chief Accounting Officer
15
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Exhibit 11
DELTA COMPUTEC INC.
CALCULATION OF EARNINGS PER SHARE
Three Months Ended Nine Months Ended
July 31, July 31,
---------------------- ----------------------
1995 1994 1995 1994
---- ---- ---- ----
Primary
- -------
Net earnings (loss) $ (566,846) $ 39,659 $ (766,885) $ 43,636
---------- ---------- ---------- ----------
Average Common
Shares Outstanding 6,811,575 6,811,325 6,811,575 6,811,325
Dilutive Effect of
Stock Options - 599,520 - 600,076
---------- ---------- ---------- ----------
Weighted Average
Shares Outstanding 6,811,575 7,410,845 6,811,575 7,411,401
---------- ---------- ---------- ----------
Earnings (Loss) Per
Common and Common
Equivalent Shares $ (.08) $ .01 $ (.11) $ .01
========== ========== ========== ==========
Assuming Full
Dilution
- -------------
Net Earnings (loss) $ (566,846) $ 39,659 $ (766,885) $ 43,636
Weighted Average
Shares Outstanding 6,811,575 7,410,845 6,811,575 7,411,401
Additional
Dilutive Effect
Of Stock Options - 57,694 - 19,232
---------- ---------- ---------- ----------
Weighted Average
Shares Outstanding 6,811,575 7,468,539 6,811,575 7,430,633
Earnings (Loss)
Per Common Share
Assuming Full Dilution $ (.08) $ .01 $ (.11) $ .01
========== ========== ========== ==========
16
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> OCT-31-1995
<PERIOD-END> JUL-31-1995
<CASH> 7,587
<SECURITIES> 0
<RECEIVABLES> 6,772,609
<ALLOWANCES> 251,013
<INVENTORY> 2,016,185
<CURRENT-ASSETS> 8,883,633
<PP&E> 3,378,145
<DEPRECIATION> 2,319,304
<TOTAL-ASSETS> 14,537,494
<CURRENT-LIABILITIES> 11,159,281
<BONDS> 1,075,001
<COMMON> 68,116
0
0
<OTHER-SE> (2,335,096)
<TOTAL-LIABILITY-AND-EQUITY> 14,587,494
<SALES> 24,107,440
<TOTAL-REVENUES> 24,107,440
<CGS> 19,161,323
<TOTAL-COSTS> 19,161,323
<OTHER-EXPENSES> 5,100,472
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 369,766
<INCOME-PRETAX> (524,121)
<INCOME-TAX> 242,764
<INCOME-CONTINUING> (766,885)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (766,885)
<EPS-PRIMARY> (.11)
<EPS-DILUTED> (.11)
</TABLE>
