<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
---------------------
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
---------------------
For Quarter Ended July 31, 1995 Commission File No. 0-18472
HEALTH MANAGEMENT, INC.
-----------------------
(Exact name of registrant as specified in charter)
Delaware 75-2096632
---------------------------- --------------------------------
(State or other jurisdiction (IRS Employer Identification No.)
at incorporation)
4250 Veterans Memorial Highway
Holbrook, New York 11741
------------------------------ ---------------------------------
Registrant's telephone number,
including area code: (516) 981-0034
---------------------------------
None
------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
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 August 15, 1995, there were outstanding 9,318,959 shares of common stock,
$.03 par value
This report consists of 18 pages.
<PAGE>
HEALTH MANAGEMENT, INC.
July 31, 1995
TABLE OF CONTENTS
Page No.
--------
Part I. FINANCIAL INFORMATION:
Item 1. Condensed Consolidated Financial Statements 3
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 3
Part II. OTHER INFORMATION:
Item 1. Legal Proceedings 15
Item 2. Changes in Securities 15
Item 3. Default Upon Senior Securities 15
Item 4. Submission of Matters to a Vote of
Security Holders 15
Item 5. Other Information 15
Item 6. Exhibits and Reports on Form 8-K 15-16
SIGNATURES
(2)
<PAGE>
Part I. FINANCIAL INFORMATION
Item 1. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Item 2. Financial Statements
RESULTS OF OPERATIONS
Item 1. Management's Discussion and Analysis of Financial Conditions and
Results of Operations
Three Months Ended July 31, 1995 vs. July 31, 1994
--------------------------------------------------
The Company's revenues were $39,801,779 for the quarter ended July 31, 1995, an
increase of $21,683,129 or 119.7%, over revenues of $18,118,650 for the quarter
ended July 31, 1994. Revenues generated through the Company's recent
acquisitions accounted for approximately $14,000,000 of the increased revenues.
The balance of the increase in revenues was derived from internal growth
resulting from the expansion of the Lifecare Program into new disease states,
ongoing patient referrals from existing referral sources, and the addition of
new referral sources over the course of the quarter.
Gross profit margins were 29.0% for the quarter ended July 31, 1995, as compared
to 33.9% for the quarter ended July 31, 1994. The decrease in gross profit
margin was primarily attributable to the following factors: increases in
multiple sclerosis revenues, which presently yield lower margins than have been
historically experienced by the Company in other disease management programs,
reductions in the fixed fee reimbursement rates from certain state Medicaid
programs, (principally New York, which lowered its reimbursement rate by 10%),
and reduction of reimbursement rates that occur when the drug benefit is carved
out from the major medical benefit and is switched to a drug card plan. In
addition, the Company has continued to experience an increase in the number of
transplant patients receiving immunosuppressant drug benefits under Medicare due
to the extension of Medicare coverage beyond the historical one year
post-transplant period. Medicare reimburses at lower rates than indemnity
insurance. The Company believes that these trends will continue to affect profit
margins in the near term but as the industry moves to HMO and managed care, or
back to a single payor, it may be in a position to negotiate for more favorable
reimbursement rates.
(3)
<PAGE>
Operating expenses as a percentage of revenues increased by 1.1% to 20.2% for
the quarter ended July 31, 1995, as compared to 19.1% for the quarter ended July
31, 1994. Total operating expenses were $8,045,823 for the quarter ended July
31, 1995, an increase of $4,594,248 over the quarter ended July 31, 1994. The
increase was due to the fact that during the last quarter of the fiscal year
ended April 30, 1995 the Company consummated two acquisitions, the principal one
being the acquisition of the Clozaril Patient Management Business ("CPMB") from
Caremark International, Inc. Operating expenses in connection with these
accounted for approximately $2,700,000 of expenses during the quarter ended July
31, 1995. Also, to support the Company's continued expansion payroll-related
expenses increased by approximately $550,000. The balance of the increase
occurred in distribution, selling and administration expenses.
Operating income was $3,503,345 for the quarter ended July 31, 1995, an increase
of $814,836 or 30.3%, compared to operating income of $2,688,509 for the quarter
ended July 31, 1994. This increase is a result of the Company's continued
revenue growth, offset by decreases in gross profit margins combined with an
increase in operating expenses.
Net interest expense for the quarter ended July 31, 1995 was $610,936 an
increase of $699,240 compared to net interest income of $88,304 for the quarter
ended July 31, 1994. Approximately $590,000 of the increase was due to the
interest charges relating to the Company's $24,000,000 debt financing of the
CPMB acquisition. The balance of the increase was a result of interest charges
on the Company's outstanding line of credit.
Income before income taxes was $2,892,409 for the quarter ended July 31, 1995 an
increase of $115,596 or 4.2% compared to $2,776,813 for the quarter ended July
31, 1994.
Net income was $1,702,118 for the quarter ended July 31, 1995, compared to
$1,620,213 for the quarter ended July 31, 1994, an increase of $81,905 or 5.1%.
Primary and fully diluted earnings per common share for the quarter ended July
31, 1995, were $.18 compared to $.17 for the quarter ended July 31, 1994. The
weighted average number of shares outstanding used in the calculation of primary
and fully diluted earnings was 9,444,919 and 9,321,448 for the quarters ended
July 31, 1995 and 1994 respectfully.
(4)
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
-------------------------------
The net decrease of $107,958 in the Company's cash and cash equivalents to
$4,454,754 for the quarter ended July 31, 1995, was attributable to net cash
provided by operating activities offset by cash used in financing and investing
activities. Net cash provided by operating activities increased primarily from
net income, accounts payable, inventory, taxes payable, and non-cash adjustments
were offset primarily by increases in accounts receivable amounts due from
sellers, and decreases in accrued expenses.
Working capital at July 31, 1995, was $39,174,556 an increase of $2,144,701 from
April 30, 1995. The major components of the increase were accounts receivable
increases of $6,004,924, increase in amounts due from Caremark of $2,055,192
offset by increase in accounts payable of $4,799,873.
The Company borrowed $21,000,000 on a term loan of which $750,000 has been
repaid as of July 31, 1995. The term loan bears interest at a rate of .5% above
the Alternative Rate Base which approximated 9.0%. The principal is payable over
five years in quarterly installment payments of $750,000 through March 31, 1996;
$1,000,000 through March 31, 1997, $1,250,000 through March 31, 1999 and
$1,000,000 through March 21, 2000.
The Company also has a credit facility of up to $15,000,000 with the same
lending institutions which is due in March 1997. As of July 31, 1995 the Company
has borrowed $2,750,000 bearing interest at 9%, leaving an availability of
$12,250,000 under this line of credit.
In connection with the CPMB acquisition the Company is also obligated on a
$3,000,000 subordinated note bearing interest at an annual rate of 8% and
matures March 31, 2000.
As of July 31, 1995, days sales outstanding were 96 days down 28 days from 124
days at July 31, 1994. The days sales outstanding calculation was impacted
positively by approximately 20 days by the CPMB acquisition.
The company believes its cash flows, working capital, internally generated funds
and the funds available under its line of credit is sufficient to meet its
working capital needs.
(5)
<PAGE>
HEALTH MANAGEMENT, INC.
And Subsidiaries
Index to Condensed Consolidated Financial Statements
Page No.
--------
Balance Sheets as of July 31, 1995 (Unaudited)
and April 30, 1995 (Audited) 7 - 8
Statements of Income for the Three Months
Ended July 31, 1995 and July 31, 1994 (Unaudited) 9
Statements of Cash Flows for the Three Months Ended
July 31, 1995 and July 31, 1994 (Unaudited) 10 - 11
Statement of Changes in Stockholders' Equity for the
Three Months Ended July 31, 1995 (Unaudited) 12
Notes to Financial Statements 13 - 14
(6)
<PAGE>
HEALTH MANAGEMENT, INC.
And Subsidiaries
Condensed Consolidated Balance Sheets
ASSETS
July 31, 1995 April 30, 1995
------------ --------------
(Unaudited) (Audited)
CURRENT ASSETS:
Cash and Cash Equivalents $ 4,454,754 $ 4,562,712
Accounts Receivable, Less Allowance
for Doubtful Accounts 41,888,278 35,883,354
Inventories 9,343,883 9,833,853
Due from Caremark 2,055,192 --
Deferred Taxes 1,638,469 1,575,300
Prepaid Expenses and Other 716,113 1,163,541
----------- ------------
Total Current Assets 60,096,689 53,018,760
IMPROVEMENTS and EQUIPMENT, Less
Accumulated Depreciation and
Amortization 2,425,927 2,488,307
EXCESS OF PURCHASE PRICE OVER NET
ASSETS ACQUIRED 35,146,280 35,464,260
OTHER 1,279,684 1,275,775
----------- ------------
$98,948,580 $92,247,102
=========== ===========
See Notes to Condensed Consolidated Financial Statements
(7)
<PAGE>
HEALTH MANAGEMENT, INC.
And Subsidiaries
Condensed Consolidated Balance Sheets
LIABILITIES AND STOCKHOLDERS' EQUITY
July 31, 1995 April 30, 1995
------------- --------------
(Unaudited) (Audited)
CURRENT LIABILITIES:
Accounts Payable $16,643,817 $11,843,944
Accrued Expenses 652,691 1,009,694
Taxes Payable 280,956 --
Current Maturities of Long Term Debt 3,344,669 3,135,267
----------- -----------
TOTAL CURRENT LIABILITIES 20,922,133 15,988,905
Deferred Taxes 306,848 --
Long Term Debt, Less Current Maturities 22,919,282 23,191,123
----------- -----------
TOTAL LIABILITIES 44,148,263 39,180,028
----------- -----------
COMMITMENTS and CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred Stock - $.01 Par Value:
Shares Authorized - 1,000,000:
Issued and Outstanding 0 -- --
Common Stock - $.03 Par Value:
Shares Authorized - 20,000,000:
Issued and Outstanding - 9,319,017
and 9,316,017 279,571 279,481
Additional Paid-In Capital 38,050,545 38,019,510
Retained Earnings 16,470,201 14,768,083
----------- -----------
TOTAL STOCKHOLDERS' EQUITY 54,800,317 53,067,074
----------- -----------
$98,948,580 $92,247,102
=========== ===========
See Notes to Condensed Consolidated Financial Statements
(8)
<PAGE>
HEALTH MANAGEMENT, INC.
And Subsidiaries
Condensed Consolidated Statements of Income
(Unaudited)
Three Months Ended July 31
--------------------------
1995 1994
---- ----
Revenue $ 39,801,779 $ 18,118,650
Cost of Sales 28,252,611 11,978,566
------------ ------------
Gross Profit 11,549,168 6,140,084
------------ ------------
Operating Expenses:
Selling 1,037,081 522,084
General and
Administrative 7,008,742 2,929,491
------------ ------------
8,045,823 3,451,575
------------ ------------
Income from Operations 3,503,345 2,688,509
Interest expense (Income) 610,936 (88,304)
------------ ------------
Income Before Taxes
on Income 2,892,409 2,776,813
Taxes on Income 1,190,291 1,156,600
------------ ------------
Net Income $ 1,702,118 $ 1,620,213
============ ============
Earnings Per Common Share:
Primary and Fully Diluted $ .18 $ .17
Weighted Average Shares
Outstanding
Primary and Fully Diluted 9,444,919 9,321,448
See Notes to Condensed Consolidated Financial Statements
(9)
<PAGE>
HEALTH MANAGEMENT, INC.
And Subsidiaries
Condensed Consolidated Statement of Cash Flow
Three Months Ended July 31
--------------------------
(Unaudited)
1995 1994
---- ----
Cash Flows From Operating
Activities:
Net Income $ 1,702,118 $ 1,620,213
Adjustments to Reconcile Net
Income to New Cash provided by
Operating Activities
Depreciation & Amortization 690,801 192,215
Provision for Doubtful Accounts 1,161,812 780,000
Deferred Taxes 243,679 (320,000)
Compensation Under Restricted Stock -- 14,265
Increase (Decrease) in Cash Flows
from Changes in Operating
Assets and Liabilities:
Accounts Receivable (7,166,736) (3,219,514)
Inventory 489,970 (351,697)
Other Receivables (2,055,192) 1,444,426
Prepaid Expenses and Other 316,553 7,081
Other Assets (86,773) 28,662
Accounts Payable 4,799,873 2,014,231
Accrued Expenses (357,003) (468,574)
Income Tax Payable 280,956 (558,608)
---------- ----------
Net Cash Provided by
Operating Activities 20,058 1,182,700
---------- ----------
Cash Flows from Investing Activities:
Cash Used in Acquisition of PMA -- (187,500)
Capital Expenditures (96,702) (325,448)
---------- ----------
Net Cash (Used in) Investing Activities (96,702) (512,948)
---------- ----------
See Notes to Condensed Consolidated Financial Statements
(10)
<PAGE>
HEALTH MANAGEMENT, INC.
And Subsidiaries
Condensed Consolidated Statement of Cash Flow (Concluded)
Three Months Ended July 31
--------------------------
(Unaudited)
1995 1994
---- ----
Cash Flows from Financing Activities:
Increase in Bank Loan,
Net of Repayments -- 300,000
Borrowing on credit facility 750,000 --
Principal Payments on Long-Term Debt (812,439) (84,225)
Proceeds from Exercise of Stock Options 31,125 --
Proceeds from Exercise of Warrants -- 145,800
---------- -----------
Net Cash Provided by (Used in)
Financing Activities (31,314) 361,575
---------- -----------
Net Increase (Decrease) in Cash and
Cash Equivalents (107,958) 1,031,327
Cash and Cash Equivalents, at Beginning
of Period 4,562,712 13,495,480
---------- -----------
Cash and Cash Equivalents,
at End of Period $4,454,754 $14,526,807
========== ===========
Supplemental Disclosures of Cash Flow Information:
Cash Paid for Interest $ 365,573 $ 20,000
Cash Paid for Taxes $ 395,880 $ 1,715,208
See Notes to Condensed Consolidated Financial Statements
(11)
<PAGE>
HEALTH MANAGEMENT, INC.
And Subsidiaries
Condensed Consolidated Statement of Stockholders' Equity
Three Months Ended July 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
Common Stock Additional
$.03 Par Value Paid-in Retained
Shares Amount Capital Earnings
------ ------ ---------- --------
<S> <C> <C> <C> <C>
Balance, May 1, 1995 9,316,017 $ 279,481 $ 38,019,510 $ 14,768,083
Common Stock Issued
Upon Exercise of
Stock Options 3,000 90 31,035 --
Net Income for the Three
Months Ended
July 31, 1995 -- -- -- 1,702,118
--------------------------------------------------------------------------
Balance, July 31, 1995 9,319,017 $ 279,571 $38,050,545 $16,470,201
==========================================================================
</TABLE>
See Notes to Condensed Consolidated Financial Statements
(12)
<PAGE>
HEALTH MANAGEMENT, INC.
And Subsidiaries
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 1: Basis of Presentation
The condensed consolidated financial statements include Health Management, Inc.,
(the "Company"), (A Delaware corporation) and its wholly-owned subsidiaries
Homecare Management, Inc., ("HMI - New York"), a New York corporation, HMI
Pennsylvania, Inc., HMI Retail Corp., Inc., HMI PMA, Inc., Health Reimbursement
Corp., HMI Maryland, Inc., and HMI Illinois, Inc. All intercompany accounts and
transactions have been eliminated in consolidation.
The condensed Consolidated Financial Statements included herein are unaudited
and include all adjustments which, in the opinion of management, are necessary
for a fair presentation of the results of operations of the interim period
pursuant to the rules and regulations of the Securities and Exchange Commission.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
have been condensed or omitted. These condensed financial statements should be
read in conjunction with the Company's form 10-K for the year ended April 30,
1995. The results of operations for periods for the interim periods are not
necessarily indicative of the operating results for the whole year.
Note 2: Capital Transactions
During the quarter ended July 31, 1995, two employees exercised 3,000 stock
options for a total exercise price of $31,125.
Note 3: Contingency
On April 3, 1995, American Preferred Prescription, Inc. ("APP") filed a
complaint against the Registrant, Preferred Rx, Inc., Community Prescription
Services and Sean Strub in the New York Supreme Court for tortious interference
with existing and prospective contractual relationships, for lost customers and
business opportunities resulting from allegedly slanderous statements and for
allegedly false advertising and promotion. Four separate causes of action are
alleged, each for up to $10 million in damages. APP had previously filed a
similar suit in the United States Bankruptcy Court of the Eastern District of
New York, which was dismissed and the court abstained from exercising
jurisdiction. The Company has answered the complaint and counterclaimed for
libel and slander predicated upon a false press release issued by APP and added
as defendants the principals of APP. On or about April 14, 1995, APP commenced
an adversary proceeding in the United States Bankruptcy Court, Eastern District
of New York against the Company and a former employee of APP who is now an
employee of the Company (the "Employee"). In its complaint APP claims that the
Company offered the Employee employment in order to obtain confidential
information from her, that the Company's employment of the Employee constituted
interference with APP's contractual relations with its employee and that the
Company intends to interfere with other contractual agreements between APP and
(13)
<PAGE>
its employees. Damages in excess of $10 million and injunctive relief are sought
against the Company. On May 4, 1995, APP sought, and the Court granted, a
temporary restraining order against the Employee from divulging confidential or
proprietary information regarding APP. On June 7, 1995, a hearing was held at
APP's request to enjoin the Employee from disclosing such proprietary
information, as well as from becoming employed by or working for the Company.
Management believes APP's suits against it to be without merit, intends to
defend the proceedings vigorously and believes the outcomes will not have a
material adverse effect on the Company's results of operations or financial
position.
(14)
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
On April 3, 1995, American Preferred Prescription, Inc. ("APP") filed a
complaint against the Registrant, Preferred Rx, Inc., Community
Prescription Services and Sean Strub in the New York Supreme Court for
tortious interference with existing and prospective contractual
relationships, for lost customers and business opportunities resulting
from allegedly slanderous statements and for allegedly false
advertising and promotion. Four separate causes of action are alleged,
each for up to $10 million in damages. APP had previously filed a
similar suit in the United States Bankruptcy Court of the Eastern
District of New York, which was dismissed and the court abstained from
exercising jurisdiction. The Company has answered the complaint and
counterclaimed for libel and slander predicated upon a false press
release issued by APP and added as defendants the principals of APP. On
or about April 14, 1995, APP commenced an adversary proceeding in the
United States Bankruptcy Court, Eastern District of New York against
the Company and a former employee of APP who is now an employee of the
Company (the "Employee"). In its complaint APP claims that the Company
offered the Employee employment in order to obtain confidential
information from her, that the Company's employment of the Employee
constituted interference with APP's contractual relations with its
employee and that the Company intends to interfere with other
contractual agreements between APP and its employees. Damages in excess
of $10 million and injunctive relief are sought against the Company. On
May 4, 1995, APP sought, and the Court granted, a temporary restraining
order against the Employee from divulging confidential or proprietary
information regarding APP. On June 7, 1995, a hearing was held at APP's
request to enjoin the Employee from disclosing such proprietary
information, as well as from becoming employed by or working for the
Company. Management believes APP's suits against it to be without
merit, intends to defend the proceedings vigorously and believes the
outcomes will not have a material adverse effect on the Company's
results of operations or financial position.
Item 2. Change in Securities- None
Item 3. Default Upon Senior Securities - Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders - Not Applicable
Item 5. Other Information - None
Item 6. Exhibits and Reports of Form 8-K
(a) Exhibits
601 (c) - Financial Data Schedule
(15)
<PAGE>
(b) Reports on Form 8-K
Amendment No. 1 on Form 8-K/A, dated July 18, 1995, to the Company's
Current Report on Form 8-K, dated April 14, 1994, was filed with the
Commission on July 24, 1995,
(i) Items Reported
Item 7 - Financial Statements, Pro Forma Financial Statements
and Exhibits.
(ii) Financial Statements Filed
Pro Forma Condensed combined Balance Sheet of the Company and its Subsidiaries
as at January 31, 1995 and Pro Forma Condensed Combined Statements of Operations
of the Company and its Subsidiaries for the year ended April 13, 1994 and for
the nine months ended January 31, 1995.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Quarterly Report to be signed on its behalf by
the undersigned, thereunto duly authorized, in the County of Suffolk, State of
New York, on the 5th of September 1995.
HEALTH MANAGEMENT, INC.
(Registrant)
By:/s/ Clifford E. Hotte
---------------------------------
Clifford E. Hotte, President
Principal Executive Officer
By:/s/ Drew Bergman
----------------------------------
Drew Bergman, Treasurer
Principal Financial Officer
(16)
<PAGE>
HEALTH MANAGEMENT INC.
IEM 601(C) OF REGULATION S-K
APPENDIX A
ITEM NUMBER ITEM DESCRIPTION AMOUNT
----------- ---------------- ------
5-02 (1) Cash and cash items $ 4,454,754
5-02 (2) Marketable securities 0
5-02 (3)(a)(1) Notes and accounts receivable trade 45,884,543
5-02 (4) Allowance for doubtful accounts 3,996,265
5-02 (6) Inventory 9,343,883
5-02 (9) Total current assets 60,096,689
5-02 (13) Property, plant and equipment 3,992,950
5-02 (14) Accumulated depreciation 1,567,023
5-02 (18) Total assets 98,948,580
5-02 (21) Total current liabilities 20,922,133
5-02 (22) Bonds, mortgages and similar debt 22,919,282
5-02 (28) Preferred stock--mandatory redemption 0
5-02 (29) Preferred stock--no mandatory redemption 0
5-02 (30) Common stock 279,571
5-02 (31) Other stockholders equity 54,520,746
5-02 (32) Total liabilities and stockholders' equity 98,948,580
5-03 (b)1(a) Net sales of tangible property 39,699,884
5-03 (b)1 Total revenue 39,801,779
5-03 (b)2(a) Cost of tangible goods sold 28,252,611
5-03 (b)2 Total cost and expenses applicable to sales
and revenues 36,298,434
5-03 (b)3 Other cost and expenses 0
5-03 (b)5 Provision for doubtful accounts and notes 1,161,812
5-03 (b)8 Interest and amortization of debt discount 610,936
5-03 (b)10 Income before taxes and other items 2,892,409
5-03 (b)11 Income tax expense 1,190,291
5-03 (b)14 Income/loss continuing operations 1,702,118
5-03 (b)15 Discontinued operations 0
5-03 (b)17 Extraordinary items 0
5-03 (b)18 Cumulative effect--changes in
accounting principles 0
5-03 (b)19 Net income or loss 1,702,118
5-03 (b)20 Earnings per share--primary 0.18
5-03 (b)20 Earnings per share--fully diluted 0.18
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Quarterly Report to be signed on its behalf by
the undersigned, thereunto duly authorized, in the County of Suffolk, State of
New York, on the 5th of September 1995.
Health Management, Inc.
(Registrant)
By: /s/ Clifford E. Hotte
-------------------------------------
Clifford E. Hotte, Ph. D.
Principal Executive Officer
By: /s/ Drew Bergman
--------------------------------------
Drew Bergman
Principal Financial Officer
(17)
<TABLE> <S> <C>
<ARTICLE> 5
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> APR-30-1995
<PERIOD-END> APR-30-1995
<CASH> 4,454,754
<SECURITIES> 0
<RECEIVABLES> 45,884,543
<ALLOWANCES> 3,996,265
<INVENTORY> 9,343,883
<CURRENT-ASSETS> 60,096,689
<PP&E> 3,992,950
<DEPRECIATION> 1,567,023
<TOTAL-ASSETS> 98,948,580
<CURRENT-LIABILITIES> 20,922,133
<BONDS> 22,919,282
<COMMON> 279,571
0
0
<OTHER-SE> 54,520,746
<TOTAL-LIABILITY-AND-EQUITY> 98,948,580
<SALES> 39,699,884
<TOTAL-REVENUES> 39,801,779
<CGS> 28,252,611
<TOTAL-COSTS> 36,298,434
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 1,161,812
<INTEREST-EXPENSE> 610,936
<INCOME-PRETAX> 2,892,409
<INCOME-TAX> 1,190,291
<INCOME-CONTINUING> 1,702,118
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,702,118
<EPS-PRIMARY> .18
<EPS-DILUTED> .18
</TABLE>
