<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended: Commission File Number:
August 31, 1997 0-15588
CANTERBURY INFORMATION TECHNOLOGY, INC.
FORMERLY CANTERBURY CORPORATE SERVICES, INC.
(Exact name of registrant as specified in its charter)
Pennsylvania 23-2170505
(State of Incorporation) (I.R.S. Employer
Identification No.)
1600 Medford Plaza
Route 70 & Hartford Road
Medford, New Jersey 08055
(Address of principal executive office)
Telephone Number: (609) 953-0044
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.
X Yes No
-------- --------
The number of shares outstanding of the registrant's common stock as of
the date of the filing of this report: 16,251,469 shares.
<PAGE>
FORM 10-Q
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements
CANTERBURY INFORMATION TECHNOLOGY, INC.
CONSOLIDATED BALANCE SHEET
ASSETS
- ------
August 31,
1997 November 30,
(Unaudited) 1996
----------- ------------
Current Assets:
Cash $ 1,077,971 $ 440,178
Accounts receivable net of
allowance for doubtful accounts
of $1,892,000 and $1,685,000 3,871,295 3,142,024
Notes receivable 869,753 978,582
Prepaid expenses and
other assets 895,386 641,645
Deferred income tax benefit 1,228,000 1,228,000
----------- -----------
Total Current Assets 7,942,405 6,430,429
Property and equipment
at cost, net of accumulated
depreciation and amortization
of $3,818,000 and $3,305,000 2,619,195 2,752,430
Goodwill net of accumulated amortization
of $1,483,000 and $1,178,000 8,943,596 8,914,086
Notes receivable 8,447,706 9,092,943
Other assets 349,660 275,131
----------- -----------
Total Assets $28,302,562 $27,465,019
=========== ===========
See Accompanying Notes
<PAGE>
FORM 10-Q
CANTERBURY INFORMATION TECHNOLOGY, INC.
CONSOLIDATED BALANCE SHEET
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
August 31, November 30,
1997 1996
(Unaudited)
----------- ------------
Current Liabilities:
Accounts payable - Trade $ 178,511 $ 230,000
Accrued expenses 306,033 374,859
Income taxes payable 586,550 424,845
Unearned tuition income 1,252,883 1,198,991
Current portion, long-term
debt 2,157,883 2,230,715
------------ -----------
Total Current Liabilities 4,481,860 4,459,410
Long-term debt 3,039,805 4,718,793
Deferred income tax liability 1,628,000 2,028,000
Shareholders' Equity:
Class D, 8%, convertible preferred
stock, no par value, authorized
1,000,000 shares, 1,000,000
shares issued and outstanding 766,000 -
Common stock, $.001 par value,
50,000,000 shares authorized;
16,251,000 and 15,054,000
issued outstanding 16,251 15,054
Additional paid in capital 15,969,210 14,840,642
Retained earnings 2,757,236 1,728,155
Treasury stock (355,800) (325,035)
------------ -----------
Total Shareholders' Equity 19,152,897 16,258,816
------------ -----------
Total Liabilities and
Shareholders' Equity $ 28,302,562 $ 27,465,019
============ ===========
See Accompanying Notes
<PAGE>
FORM 10-Q
CANTERBURY INFORMATION TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF INCOME
The following Consolidated Statements of Income for the three-month and
nine-month periods ended August 31, 1997, and August 31, 1996, are unaudited,
but the Company believes that all adjustments (which consist only of normal
recurring accruals) necessary for a fair presentation of the results of
operations for the respective periods have been included. Quarterly results of
operations are not necessarily indicative of results for the full year.
<TABLE>
<CAPTION>
Three months ended Nine months ended
August 31, August 31,
------------------ -----------------
(Unaudited) (Unaudited)
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net revenues $3,801,358 $3,700,764 $11,164,490 $11,308,713
Costs and expenses 1,624,826 1,621,444 4,997,915 4,862,747
---------- --------- --------- ----------
Gross profit 2,176,532 2,079,320 6,166,575 6,445,966
Selling 491,532 607,768 1,456,848 1,585,954
General and
administrative 1,014,870 982,468 3,066,874 3,083,068
Provision for
doubtful accounts 52,631 54,248 207,199 230,560
---------- --------- --------- ----------
Total operating expenses 1,559,033 1,644,484 4,730,921 4,899,582
Other (income)/expenses
Interest income (183,999) (92,467) (492,095) (232,104)
Interest expense 60,679 141,270 309,200 509,243
Other (51,105) (9,767) (40,532) (25,061)
---------- --------- --------- ----------
Income before provision for
income taxes and
discontinue operation 791,924 395,800 1,659,081 1,294,306
Provision for income taxes 301,000 168,000 630,000 517,000
---------- --------- --------- ----------
Income from continuing
operations 490,924 227,800 1,029,081 777,306
Discontinued operation
Income from discontinued
operation net of income
taxes of $20,000 and $255,000 - 62,582 - 431,006
---------- --------- --------- ----------
Net income $ 490,924 $ 290,382 $1,029,081 $ 1,208,312
========== ========= ========= ==========
Net income per common
share and common share
equivalents:
Primary:
Income from continuing
operations $ .03 $ .02 $ .07 $ .06
Discontinued operation - - - .03
---------- --------- --------- --------
Net income per share $ .03 $ .02 $ .07 $ .09
========== ========= ========= ========
Common and common
share equivalents
(weighted average):
Primary 16,396,100 14,947,000 15,678,000 14,277,700
========== ========== ========== ==========
</TABLE>
See Accompanying Notes
<PAGE>
FORM 10-Q
CANTERBURY INFORMATION TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED AUGUST 31, 1997 AND AUGUST 31, 1996
August 31, August 31,
1997 1996
----------- -----------
(unaudited) (unaudited)
Cash flows from operating activities:
Cash received from
customers $10,281,912 $10,414,534
Cash paid to suppliers and
employees (9,653,781) (10,133,505)
Interest received 492,095 232,104
Interest paid (309,200) (509,243)
----------- ----------
Net cash provided by
operating activities $ 811,026 $ 3,890
Cash flows from investing activities:
Capital expenditures (379,997) (475,236)
Collection on notes receivable 754,066 475,170
----------- ----------
Net cash provided by/(used in)
investing activities 374,069 (66)
Cash flows from financing activities:
Principal payments on long-term debt (335,369) (377,783)
Proceeds from revolving credit facility - 425,000
Repayment of revolving
credit facility - (389,000)
Proceeds from long-term debt 219,533 422,145
Proceeds from issuance of
preferred stock, net 766,000 -
Proceeds from exercise of stock
options and warrants - 11,150
Proceeds from issuance of common
stock, net 438,034 1,683,691
Repayment on term loan ( 1,635,500) (1,556,250)
Payment of dividends on
preferred stock - (7,376)
Purchase of treasury stock - (13,000)
----------- ---------
Net cash provided by/(used in)
financing activities (547,302) 198,577
Net cash used in
discontinued operation - (806,832)
Net increase/(decrease) in cash 637,793 (604,431)
Cash at beginning of period 440,178 1,471,702
------------ -----------
Cash at end of period $ 1,077,971 $ 867,271
============ ===========
See Accompanying Notes
<PAGE>
FORM 10-Q
CANTERBURY INFORMATION TECHNOLOGY, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED AUGUST 31, 1997 AND AUGUST 31, 1996
<TABLE>
<CAPTION>
August 31, August 31,
1997 1996
(unaudited) (unaudited)
----------- -----------
<S> <C> <C> <C> <C>
Reconciliation of income from continuing operations
to net cash provided by operating activities:
Income from continuing operations $1,029,081 $ 777,306
Adjustments to reconcile to net cash
provided by operating activities:
Depreciation and amortization 818,650 724,635
Provision for doubtful accounts 207,199 230,560
Deferred income tax benefit (400,000) (506,479)
Change in operating assets
and liabilities:
Increase in accounts receivable (708,635) (919,540)
(Increase)/decrease in prepaid expenses (193,060) 137,943
Increase in other assets (74,529) (82,704)
Increase/(decrease) in accounts payable (19,331) 25,806
Decrease in accrued expenses (63,946) (300,784)
Increase/(decrease) in unearned tuition
income 53,892 (180,853)
Increase in income taxes payable 161,705 98,000
------- -------
Total adjustments (218,055) (773,416)
---------- ----------
Net cash provided by
operating activities $ 811,026 $ 3,890
========== ==========
</TABLE>
See Accompanying Notes
<PAGE>
FORM 10-Q
CANTERBURY INFORMATION TECHNOLOGY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Summary of Significant Accounting Policies
- ---------------------------------------------
Principles of Consolidation
---------------------------
The consolidated financial statements include the accounts of the Company
and all of its subsidiaries. All material intercompany transactions have been
eliminated.
Use of Estimates
----------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities at
August 31, 1997, and revenues and expenses for the nine months ended August
31, 1997. The ultimate outcome and actual results could differ from the
estimates and assumptions used.
Revenue Recognition
-------------------
The Company records revenue at the time the training is delivered or
product is shipped to its clients. For training courses longer than one week
in duration, the Company recognizes revenues ratably over the term of the
courses.
Statement of Cash Flows
-----------------------
For purposes of the Statement of Cash Flows, cash refers solely to demand
deposits with banks and cash on hand.
Depreciation and Amortization
-----------------------------
The Company depreciates and amortizes its property and equipment for
financial statement purposes using the straight-line method over the estimated
useful lives of the property and equipment (useful lives of leases or lives of
leasehold improvements and leased property under capital leases, whichever is
shorter). For income tax purposes, the Company uses accelerated methods of
depreciation.
Amortization of Intangible Assets
---------------------------------
Goodwill is being amortized over twenty-five years using the straight-line
method.
Deferred Income Taxes
---------------------
The Company utilizes the liability method to account for income taxes.
This method gives consideration to the future tax consequences associated with
the differences between financial accounting and tax bases of assets and
liabilities.
<PAGE>
FORM 10-Q
CANTERBURY INFORMATION TECHNOLOGY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)
Earnings Per Share
------------------
Earnings per share is computed using the weighted average common shares
outstanding during the year and includes the dilutive effect of common stock
equivalents (options and warrants). Fully diluted earnings per share is based
on the assumed weighted average conversion of preferred stock. The assumed
conversion of preferred stock did not have a dilutive effect on earnings per
share and hence was not disclosed.
Accounting Changes
------------------
In October 1995, the Financial Accounting Standards Board ("FASB") issued
Statement of Financial Accounting Standards ("SFAS") 123, "Accounting for
Stock-Based Compensation." SFAS 123 is effective for fiscal years beginning
after December 15, 1995. SFAS 123 provides companies with a choice to follow
the provisions of SFAS 123 in determining stock based compensation expense or
to continue with the provisions of APB 25, "Accounting for Stock Issued to
Employees." The Company will continue APB 25 and will provide the pro forma
disclosures as required by SFAS 123 in the November 30, 1997 notes to the
consolidated financial statements. The Company does not expect that adoption
of SFAS 123 will have a material effect on its consolidated financial
statements.
2. Acquisition
- ----------------
On May 5, 1997, the Company acquired the business of ATM Technologies,
Inc. of Houston, Texas for $500,000 of Canterbury restricted common stock and
the opportunity to earn an additional $840,000 in Canterbury restricted common
stock after the first year based on achievement of certain pretax earnings
levels. Based on the market price of Canterbury stock as of the purchase
date, 457,143 shares were issued to the previous owners of ATM. The results
of operations are insignificant and do not materially change actual historical
reported results for the nine months ended August 31, 1997. Based on this
fact, no pro forma information is presented for that period.
3. Discontinued Operation
- --------------------------
On November 30, 1996 the Company sold Landscape Maintenance Services,
Inc., which comprised its business maintenance services segment. The
proceeds of the sale consisted of both cash and notes totalling $4,500,000.
The note bears interest at 8% per annum and is secured by substantially all
assets and business of the buyer.
The results of operations has been reported as a discontinued operation
and the financial statements for the quarter ended August 31, 1996 have been
restated to reflect the discontinuation of the business maintenance services
segment.
The following is a summary of the results of operations of the Company's
business maintenance services segment.
Nine Months ended
August 31, 1996
----------------
Revenue $10,658,297
Income from operations
(net of taxes of $255,000) 431,006
<PAGE>
FORM 10-Q
CANTERBURY INFORMATION TECHNOLOGY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)
Cost and expenses for this discontinued segment include approximately
$795,000 representing allocated costs from corporate for the nine months
ended August 31, 1997.
The net assets of discontinued operation were as follows:
August 31, 1996
---------------
Current Assets $2,567,913
Current liabilities (1,190,835)
Property, plant and equipment, net 1,070,029
Other, net (107,516)
----------
Total $2,339,591
==========
4. Property and Equipment
- --------------------------
Property and equipment consists of the following:
August 31, November 30,
1997 1996
---------- -----------
Land, buildings and improvements $ 725,910 $ 725,910
Equipment 3,924,696 3,262,009
Furniture and fixtures 1,193,327 1,184,741
Leased property under capital
leases and leasehold improvements 593,480 884,756
----------- ----------
6,437,413 6,057,416
Less: accumulated depreciation
and amortization (3,818,218) (3,304,986)
----------- ----------
Net property and equipment $ 2,619,195 $ 2,752,430
=========== ==========
5. Long-Term Debt
- -------------------
August 31, November 30,
1997 1996
---------- ------------
Long-term obligations consist of:
Term loan $1,995,750 $3,631,250
Revolving credit line 2,774,620 2,774,620
Capital lease obligations 427,318 543,638
---------- ---------
5,197,688 6,949,508
Less: Current maturities (2,157,883) (2,230,715)
---------- ---------
$ 3,039,805 $4,718,793
=========== ==========
<PAGE>
FORM 10-Q
CANTERBURY INFORMATION TECHNOLOGY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)
During 1996 the Company and its primary lender, Chase Manhattan Bank,
instituted litigation, each claiming that the other party violated the terms
of the credit agreement. As a result, the debt was declared in default. In
February, 1997, the litigation was settled and all outstandings with Chase were
restructured and become due on December 31, 1997. The Company and Chase agreed
that all alleged defaults under the previous agreements were permanently waived
and the Company would use its best efforts to replace Chase during 1997. The
Company is in the process of replacing Chase as its primary lender and is
confident that this refinancing should be completed before December, 1997.
Based on this assumption, the Company is continuing to classify a significant
portion of the bank debt as long term. The projected maturities of the debt
beyond December, 1997 cannot be readily determined at this time.
The Company agreed to make principal payments against the term loan
throughout 1997. The first payment of $919,000 was made in April, 1997;
$518,750 was paid in June; $198,000 was paid in August; and $419,750 was paid
during September, 1997. The revolving credit facility will remain at
$2,774,600 until December 31, 1997, with no additional borrowings or repayments
scheduled during Fiscal 1997. The capital leases will be paid as usual on a
monthly basis, with any remaining balance due on December 31, 1997.
Interest rates on all outstanding debt will remain at the same rate as
before the restructuring. The term loan interest rate is LIBOR plus 3% or the
Bank's prime rate plus 1/2%. The revolving credit facility carries an interest
rate of LIBOR plus 2 1/2% or the Bank's prime rate of interest. The Company has
the right to choose which rate is to be utilized on a periodic basis. The 30
day LIBOR rate at August 31, 1997 was 5.66%. As of August 31, 1997, the
Company was in compliance with or has received a waiver on all of the debt
covenants relating to both the term loan and the revolving credit facility.
The long-term debt is secured by substantially all of the assets of the
Company.
Aggregate maturities on long-term debt for the next five years, exclusive
of obligations under capital leases, are approximately $4,770,370, $0, $0, $0
and $0 respectively.
The carrying value of the long-term debt approximates its fair value.
6. Capital Leases
- -------------------
Capital lease obligations are certain equipment leases which expire from
October, 1998 to June, 2001. Future payments under capitalized leases together
with the present value, calculated at the respective leases' implicit interest
rate of approximately 10.5% to 11% at their inception, are as follows:
Year ending November 30, 1997 $ 50,272
Year ending November 30, 1998 207,907
Year ending November 30, 1999 191,552
Year ending November 30, 2000 39,729
---------
Total minimum lease payments 489,460
Less amount representing interest (62,142)
---------
Present value of long-term obligations
under capital leases $427,318
=========
<PAGE>
FORM 10-Q
CANTERBURY INFORMATION TECHNOLOGY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)
7. Stockholders' Equity
- -------------------------
From June to August, 1997, the Company completed a private placement of
1,000,000 shares of Class D, 8% Convertible Preferred Stock at a price of $1.00
per share. The Preferred Stock is convertible into Common Stock of the Company
at a 20% discount to the market price. The first one-third conversion into
Common Stock will occur five days after the effective date of a registration
statement filed with the Securities and Exchange Commission during October,
1997. The remaining conversion will occur within the following sixty days. An
investment banking firm that arranged this private placement received 500,000
warrants as partial consideration. The warrants are exercisable at $.98 and
expire in 2002. None of the warrants have been exercised.
The Preferred Shares will pay a dividend of 8% per annum, payable in its
entirely upon conversion, either in cash or Common Stock at the Company's
option.
Item 2. Management's Discussion of Financial Condition and Results of Operations
- --------------------------------------------------------------------------------
Liquidity and Capital Resources
- -------------------------------
Working capital at August 31, 1997 was $3,460,000. During 1996 the
Company and its primary lender, Chase Manhattan Bank, instituted litigation,
each claiming that the other party violated the terms of the credit agreement.
As a result, the debt was declared in default. In February, 1997, the
litigation was settled and all outstandings with Chase were restructured and
become due on December 31, 1997. The Company and Chase agreed that all alleged
defaults under the previous agreements were permanently waived and the Company
would use its best efforts to replace Chase during 1997. The Company is in
the process of replacing Chase as its primary lender and is confident that
this refinancing should be completed before December, 1997.
Management believes that positive cash flow contributions from the
Company's operating segments will be sufficient to cover cash flow requirements
for Fiscal 1997. There was no material commitment for capital expenditures as
of August 31, 1997. Inflation was not a significant factor in the Company's
financial statements.
Cash flow from continuing operations for the nine months ended August 31,
1997 was $811,000, an increase of $807,000 over the previous year. This
increase was attributed to higher earnings from continuing operations due to
lower interest expense and higher interest income.
In February, 1997, the Company raised $434,782, net of applicable costs,
through a Regulation D Private Placement of its common stock to one accredited
investor at a price of $1.00 per share. This equity was used for general
working capital purposes.
From June to August 1997, the Company received $766,000, net of applicable
costs through the private placement of 1,000,000 shares of Class D, 8%
Convertible Preferred Stock at a price of $1.00 per share.
<PAGE>
FORM 10-Q
CANTERBURY INFORMATION TECHNOLOGY, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(continued)
Results of Operations
- ---------------------
Revenues
--------
Revenues for the three months ended August 31, 1997 increased by $101,000
(3%) to $3,801,000 from the same period last year. For the nine months ended
August 31, 1997, revenues decreased by $144,000 (1%). This decrease was
attributable to reduction in the vocation training segment, offset by the
addition of revenues from the software development segment in 1997 due to the
acquisition of ATM Technologies in May, 1997.
Costs and Expenses
------------------
For the nine month period ending August 31, 1997, costs and expenses
increased by $135,000 (3%), due to higher expenses in the first quarter of
the year associated with the computer training segment in the form of
additional facilities and personnel costs.
Selling expense for the three-month period ended August 31, 1997 decreased
by $116,000 (19%) over the previous year due to a reduction in total sales
force and territorial realignment for the computer training segment. This
reduction is also represented in the nine month comparison of 1997 versus 1996.
Interest income for the quarter ended August 31, 1997 increased by $91,000
(99%) over the same period in 1996. This increase is due to the note
receivable income generated by the sale of the discontinued operation (business
maintenance services). For the nine-month period, the increase was $260,000
(112%) for the same reason.
Interest expense deceased by $81,000 (57%) for the quarter ended August
31, 1997, and $200,000 (39%) for the nine months ended August 31, 1997 versus
the comparable periods in Fiscal 1996 due to a reduction in the principal
balance of the Company's term loan. As of the date of this report the term
loan balance has been reduced by over $6,700,000 since its inception in June,
1994.
The Company expects to invest heavily in the fourth quarter in marketing,
sales and administrative personnel, research and development, software,
equipment and facilities enhancement for all of its subsidiaries except
vocational training which is being downsized. The Company believes that major
trends in the information technology sector such as outsourcing, one-stop
shopping, and consolidation provide an excellent opportunity to increase
revenues and profit margins in 1998 and beyond. The Company does not intend
to limit its business planning to short term goals, which may maximize any
given quarter but not properly position the Company toward extended,
long-term growth.
<PAGE>
PART II - OTHER INFORMATION
Item 1 Legal Proceedings
- ------
See Footnote 5 to the Financial Statements
Item 2 Changes in Securities
- ------
None
Item 3 Defaults Upon Senior Securities
- ------
None
Item 4 Submission of Matters to a Vote of Security Holders
- ------
The Company held its Annual Meeting of Stockholders on June 12,
1997, wherein the shareholders voted for the following Directors: Stanton M.
Pikus, Kevin J. McAndrew, Jean Z. Pikus, Alan Manin, Stephen Vineberg, Paul
Shapiro and Frank A. Cappiello by at least 96.88% of the vote. The
shareholders also ratified Ernst & Young, LLP as the Company's Independent
Public Auditors (98.78%). 98.78% of the shareholders voted to approve the
name change of the Company to Canterbury Information Technology, Inc. by
amending its Certificate of Incorporation.
Item 5 Other Information
- ------
None
Item 6 Exhibits and Reports on Form 8-K
- ------
(a) Exhibits: None
(b) Reports on Form 8-K:
A Form 8-K was filed on June 20, 1997 to report the Amendment
to the Certificate of Incorporation to change the Company's name
to Canterbury Information Technology, Inc.
<PAGE>
FORM 10-Q
CANTERBURY INFORMATION TECHNOLOGY, INC.
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.
CANTERBURY INFORMATION TECHNOLOGY, INC.
(Registrant)
By:/s/ Stanton M. Pikus
----------------------
Stanton M. Pikus, President
(Chief Executive Officer and
duly authorized signer)
By:/s/Kevin J. McAndrew
----------------------
Kevin J. McAndrew, C.P.A.
Chief Operating Officer, Executive Vice President
(Chief Financial Officer and
duly authorized signer)
October 15, 1997
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000794927
<NAME> CANTERBURY INFORMATION TECHNOLOGY, INC.
<MULTIPLIER> 1
<S> <C>
<FISCAL-YEAR-END> NOV-30-1997
<PERIOD-START> JUN-01-1997
<PERIOD-END> AUG-31-1997
<PERIOD-TYPE> 9-MOS
<CASH> 1,077,971
<SECURITIES> 0
<RECEIVABLES> 5,763,295
<ALLOWANCES> 1,892,000
<INVENTORY> 0
<CURRENT-ASSETS> 7,942,405
<PP&E> 6,437,413
<DEPRECIATION> 3,818,218
<TOTAL-ASSETS> 28,302,562
<CURRENT-LIABILITIES> 4,481,860
<BONDS> 0
0
766,000
<COMMON> 16,251
<OTHER-SE> 18,370,646
<TOTAL-LIABILITY-AND-EQUITY> 28,302,562
<SALES> 11,164,490
<TOTAL-REVENUES> 11,164,490
<CGS> 4,997,915
<TOTAL-COSTS> 4,523,722
<OTHER-EXPENSES> (532,627)
<LOSS-PROVISION> 207,199
<INTEREST-EXPENSE> 309,200
<INCOME-PRETAX> 1,659,081
<INCOME-TAX> 630,000
<INCOME-CONTINUING> 1,029,081
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,029,081
<EPS-PRIMARY> .07
<EPS-DILUTED> .07
</TABLE>
