<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QT
(Mark One)
[ ] QUARTERLY REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended:
or
[X] TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
Commission File Number 0-16365
CHINA INDUSTRIAL GROUP, INC.
(Exact name of registrant as specified in its charter)
Colorado 84-0974043
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
21st Floor, Central Plaza
18 Harbour Road
Wanchai, Hong Kong
(Address of principal executive offices)
011-852-2877-3851
(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 (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 .
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: Common Stock -- 47,845,848
shares outstanding on December 31, 1995.
Page 1 of 18
1
<PAGE>
CHINA INDUSTRIAL GROUP, INC.
INDEX
PART I -- FINANCIAL INFORMATION
<TABLE>
<CAPTION>
Page No.
--------
<S> <C> <C>
Item 1. Consolidated Financial Statements:
Consolidated Balance Sheets at May 31, 1995 3-4
(unaudited) and December 31, 1994.
Unaudited Consolidated Statements of Income - 5
Five months ended May 31, 1995 and 1994
Unaudited Consolidated Statements of 6
Shareholders' Equity, Five months ended May
31, 1995
Unaudited Consolidated Statements of Cash 7-8
Flows Five months ended May 31, 1995 and 1994
Notes to Unaudited Consolidated Financial 9-12
Statements
Item 2 Management Discussion and Analysis of 13-16
Financial Condition and Result of Operations
PART II - OTHER INFORMATION
<CAPTION>
<S> <C> <C>
Item 6 Exhibits and Reports On Form 8-K 17
</TABLE>
2
<PAGE>
CHINA INDUSTRIAL GROUP, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(STATED IN UNITED STATES DOLLARS)
<TABLE>
<CAPTION>
May 31, December 31,
1995 1994
------------ ------------
(Unaudited)
ASSETS
<S> <C> <C>
Current assets:
Cash $ 6,224,243 $ 6,009,700
Short term investments 3,006,468 3,006,468
Accounts receivable 73,297,630 63,287,097
Inventories 11,687,930 21,838,540
Prepaid expenses 855,275 414,237
------------ ------------
Total current assets 95,071,546 94,556,042
------------ ------------
Property, plant and equipment:
Leasehold land and buildings 9,530,665 10,451,299
Plant and equipment 11,153,324 11,822,904
Furniture and fixtures 651,993 588,285
Motor vehicles 413,073 460,421
Construction in progress 385,757 83,403
------------ ------------
22,134,812 23,406,312
Less accumulated depreciation 2,780,391 2,524,150
------------ ------------
19,354,421 20,882,162
------------ ------------
Other assets
Pre-operating costs 885,556
Other fixed assets investment 3,369,631 23,529
------------ ------------
3,369,631 909,085
------------ ------------
$117,795,598 $116,347,289
============ ============
</TABLE>
(Continued)
3
<PAGE>
CHINA INDUSTRIAL GROUP, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS (CONTINUED)
(STATED IN UNITED STATES DOLLARS)
<TABLE>
<CAPTION>
May 31, December 31,
1995 1994
------------ ------------
(Unaudited)
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C>
Current liabilities
Current portion of long term loan $ 40,574 $ 40,574
Short term bank borrowings 9,854,996 9,107,042
Accounts payable - trade 16,248,716 23,636,664
Accounts payable - related parties 366,811 366,811
Customers deposit and others 996,220 5,072,997
Accrued expenses 1,211,300 1,210,146
------------ ------------
Total current liabilities 28,718,617 39,434,234
------------ ------------
Long term debts, net of current portion 13,045,774 10,382,252
------------ ------------
Minority interests 4,444,929 5,117,763
------------ ------------
Commitments and contingencies (Note 7)
Shareholders' equity (Note 8):
Preferred stock; authorized
10,000,000 shares
Series A convertible; issued and
outstanding 24,375 shares 24,375 24,375
Series C convertible; issued and
outstanding 295 shares (1994) 0 5,900,000
Common stock par value $0.001;
authorized 100,000,000 shares;
issued and outstanding 23,465,048
shares (1995) and 19,931,252 shares
(1994) 23,465 19,931
Capital in excess of par 15,161,460 9,264,994
Retained earnings 51,730,022 41,777,471
Cumulative foreign currency
translation adjustment 4,646,956 4,426,269
------------ ------------
71,586,278 61,413,040
------------ ------------
$117,795,598 $116,347,289
============ ============
</TABLE>
See notes to consolidated financial statements
4
<PAGE>
CHINA INDUSTRIAL GROUP, INC.
CONSOLIDATED STATEMENTS OF INCOME
(STATED IN UNITED STATES DOLLARS)
FIVE MONTHS ENDED MAY 31, 1995 AND 1994
(UNAUDITED)
<TABLE>
<CAPTION>
1995 1994
------------- -------------
<S> <C> <C>
Revenues $128,369,233 $116,764,145
Cost of goods sold 109,592,646 98,724,622
------------ ------------
Gross profit 18,776,587 18,039,523
------------ ------------
Operating expenses:
General & administrative 6,110,222 5,547,466
Selling 1,137,628 830,033
------------ ------------
7,247,850 6,377,499
------------ ------------
Income from operations 11,528,737 11,662,024
------------ ------------
Other income/(expenses):
Interest expenses:
Related party 0 (24,081)
Other (901,878) (900,852)
Other expenses (154,498) 0
------------ ------------
(1,056,376) (924,933)
------------ ------------
Income before income taxes and
minority interest 10,472,361 10,737,091
Income tax expense 204,688 98,400
------------ ------------
10,267,673 10,638,691
Minority interest in the earnings
of subsidiaries 315,122 1,206,516
------------ ------------
Net income $ 9,952,551 $ 9,432,175
============ ============
Earnings per share:
Primary $ 0.21 $ 0.23
============ ============
Fully diluted N/A $ 0.22
============ ============
Weighted average number of
shares outstanding:
Primary 48,371,000 41,852,000
============ ============
Fully diluted N/A 42,136,000
============ ============
</TABLE>
See notes to consolidated financial statements
5
<PAGE>
CHINA INDUSTRIAL GROUP, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(STATED IN UNITED STATES DOLLARS)
FIVE MONTHS ENDED MAY 31, 1995 (UNAUDITED)
<TABLE>
<CAPTION>
Series A Series C
preferred preferred Common
stock stock stock
----------------------- ---------------------- ----------------------
Share Amount Share Amount Share Amount
--------- ----------- --------- ---------- ----------- --------
<S> <C> <C> <C> <C> <C> <C>
Balances, January 1, 1995 24,375 $ 24,375 295 $5,900,000 19,931,252 $19,931
Conversion of preferred
stock to common stock (295) (5,900,000) 3,533,796 3,534
Net income
Translation adjustments
--------- ----------- --------- ---------- ----------- --------
Balances, May 31, 1995 24,375 $ 24,375 0 0 23,465,048 $23,465
========= =========== ======== ========== =========== ========
<CAPTION>
Capital currency Total
in excess Retained translation shareholders
of par earnings adjustment equity
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Balances, January 1, 1995 $ 9,264,994 $41,777,471 $4,426,269 $61,413,040
Conversion of preferred
stock to common stock 5,896,466
Net income 9,952,551 9,952,551
Translation adjustments 220,687 220,687
----------- ----------- ----------- -----------
Balances, May 31, 1995 $15,161,460 $51,730,022 $4,646,956 $71,586,278
=========== =========== =========== ===========
</TABLE>
6
<PAGE>
CHINA INDUSTRIAL GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(STATED IN UNITED STATES DOLLARS)
FIVE MONTHS ENDED MAY 31, 1995 AND 1994
(UNAUDITED)
<TABLE>
<CAPTION>
1995 1994
------------- -------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 9,952,551 $ 9,432,175
------------ ------------
Adjustment to reconcile net income
to net cash provided by (used in)
operating activities
Depreciation and amortization 256,241 254,124
Minority interest (672,834) (1,279,569)
Translation adjustment 220,687
Decrease (increase) in assets:
Accounts receivable (10,010,533) (15,875,042)
Inventories 10,150,610 3,045,072
Prepaid expenses (441,038) (225,564)
Other assets 357,219
Increase in accounts payable and
accrued expenses (11,463,571) 3,960,657
------------ ------------
Total adjustments (11,960,438) (9,763,103)
------------ ------------
Net cash used in operating activities (2,007,887) (330,928)
------------ ------------
Cash flows from investing activities,
Capital expenditures
Payments for securities and other
assets (1,985,844)
Disposal of subsidiary 1,271,500
Fixed Assets investments (2,460,546) 1,952,243
Acquisition of property, plant
and equipment (493,572)
Pre-operating costs (255,955)
------------ ------------
Net cash provided by (used in)
investing activities (1,189,046) (783,128)
------------ ------------
</TABLE>
(Continued)
7
<PAGE>
CHINA INDUSTRIAL GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(STATED IN UNITED STATES DOLLARS)
FIVE MONTHS ENDED MAY 31, 1995 AND 1994
(UNAUDITED)
<TABLE>
<CAPTION>
1995 1994
---------- -----------
<S> <C> <C>
Cash flows from financing activities:
Net increase (decrease) in
short-term bank borrowings $ 747,954 $ 5,135,182
Proceeds from long-term loans 2,680,000
Repayment of shareholders' loans (4,215,950)
Repayment of long-term loans (16,478)
---------- -----------
Net cash provided by financing
activities 3,411,476 919,232
---------- -----------
Net increase in cash 214,543 (194,824)
Cash, beginning $6,009,700 $ 948,408
---------- -----------
Cash, ending $6,224,243 $ 753,584
========== ===========
Cash paid for Interest $ 901,878 $ 924,934
========== ===========
Non cash investing and
financing activities:
Conversion of 295 shares of
Series C preferred stock into
3,533,796 shares of common stock $5,900,000
==========
</TABLE>
See notes to consolidated financial statements
8
<PAGE>
CHINA INDUSTRIAL GROUP, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED
FIVE MONTHS ENDED MAY 31, 1995 AND 1994
(UNAUDITED)
1. Business and organization of the Company:
Business of the Company:
The Company's operations consist of distribution and manufacturing
activities performed by its operating subsidiaries. Distribution activities
primarily involve the purchase of wool products for sales within the Peoples
Republic of China (China) and the purchase of chemicals and pharmaceuticals
within China for export and sale outside of China. Manufacturing activities
primarily involve the manufacture and sale of woolen products through two joint
venture companies in China. The company's subsidiaries are:
<TABLE>
<CAPTION>
Name of Percent Place of Principal
Subsidiary Ownership Incorporation Activities
- ---------- ------------ -------------- ---------------
<S> <C> <C> <C>
Nova Industrial 100% British Virgin Holding Company
Holdings Limited Islands
Eyemouth Limited 100% British Virgin Marketing and
Islands distribution
M.S. Enterprise 100% Hong Kong Marketing and
Company Limited distribution
Eastern Assets 100% British Virgin Holding Company
Management Limited Islands
M.S. (Ping Yuan) 70% by M.S. China Manufacturing
Industrial
Development Limited
(joint venture) (Note 9)
Suzhou Nimrod Woolen 55% by China Manufacturing
Textile Company Eastern
Limited (joint Assets
venture)
Harrington Worldwide 100% British Virgin Holding Company
Holdings Limited Islands
Ascot Holdings Group 100% British Virgin Holding Company
Limited Islands
</TABLE>
9
<PAGE>
2. Transition period consolidated financial statements:
The transition period consolidated financial statements have been
prepared by the Company and, in the opinion of the management, reflect all
material adjustments which are necessary to fair statements of results for the
periods presented. Certain information and footnote disclosure made in the last
annual report on Form 10-K have been condensed or omitted for the consolidated
statements. Certain costs are estimated for the full year and allocated to
transition period based on activity associated with the period. It is the
Company's opinion that, when the interim consolidated statements are read in
conjunction with the December 31, 1994 annual report on Form 10-K, the
disclosures are adequate to make information presented not misleading. The
transition period consolidated financial statements include the accounts of the
Company and its subsidiaries except for the joint venture interest disposed of
after the balance sheet date, which was accounted for as an investment and was
stated at its net realizable value after full provision of loss on disposal. All
significant intercompany accounts and transactions have been eliminated, and
assets and liabilities of the disposed subsidiary (joint venture) were excluded
from the consolidated financial statements.
3. Basis of accounting:
The financial statements are expressed in United States dollars and
are in conformity with United States generally accepted accounting principles.
United States dollars was adopted as the reporting currency for the
following reasons:
a. the majority of the Company's purchase and sales
transactions are quoted in United States dollars.
b. the majority of the expenses incurred by the Company
are denominated in Hong Kong dollars and the exchange rate between Hong Kong
dollars and United States dollars has been fixed at HK$7.9 to US$1.00; as a
result, exchange differences on translating from Hong Kong dollars to United
States dollars are minimal.
4. Change in fiscal year:
The Company changed its accounting year from December 31 to May 31 to
reflect a natural business cycle.
5. Earnings per share:
The computation of earnings per share is based on the weighted average
number of common shares outstanding. When dilutive, stock options and warrants
are included as common stock equivalents using the treasury stock method. The
shares issued in connection with
10
<PAGE>
the reverse acquisition in 1994, including the common stock equivalent of the
Series A preferred stock, have been treated as being outstanding effective
January 1, 1993. Shares issued in connection with the convertible debentures
and Series C preferred stock have been included in weighted average shares as if
the conversions had occurred at the date the securities were issued. Shares
issuable under the conversion provisions of the Series C preferred stock have
been considered common stock equivalents. Fully diluted earnings per share uses
the period-end share price when higher than the average share price for the
period.
6. Inventories
The components of inventories are as follows:
<TABLE>
<CAPTION>
May 31, December 31,
1995 1994
----------- ------------
<S> <C> <C>
Raw materials $ 973,569 $ 1,096,326
Work-in-process 665,793 1,089,665
Finished goods 10,048,568 19,652,549
----------- -----------
$11,687,930 $21,838,540
=========== ===========
</TABLE>
7. Commitments and contingencies:
Letter of credit:
At May 31, 1995, the Company had approximately $14,540,519 in letters of
credit outstanding.
8. Shareholders' equity
Series A preferred stock:
The 24,375 shares of Series A preferred stock were issued in
connection with the reverse acquisition in 1994. Each share of Series A
preferred stock is convertible into 1,000 shares of common stock.
Series C preferred stock:
During August 1994, the Company sold 465 shares of Series C
convertible preferred stock, and warrants to purchase 309,997 shares of common
stock at $5.50 per share for $9,300,000. The warrants are exercisable through
August 1996. No warrants have been exercised through May 31, 1995.
During the year ended December 31, 1994, 170 shares of Series C
convertible preferred stock were converted into 1,236,358 shares of common
stock.
11
<PAGE>
During the five months ended May 31, 1995, 295 shares of Series C
convertible preferred stock were converted into 3,533,796 shares of common
stock. As of May 31,1995 all the shares of Series C convertible preferred stock
had been converted.
9. Events after balance sheet date:
On June 2, 1995, the Company entered into a settlement agreement with
an entity that provided services to the Company related to the reverse
acquisition which occurred in January 1994. Under the terms of the settlement,
the Company agreed to issue 363,169 shares of common stock. The issuance was
valued at the market price of the Company's common stock at the date of the
agreement and the amount of $726,388 was charged to shareholders' equity in June
1995.
Due to problems with the transportation system leading to the factory
and revised projections as to profitability, M.S. Enterprise Company Limited
disposed of its joint venture interest in M.S, (Ping Yuan) Industry Development
Company Limited to an unrelated company in China. As a result, the Company's
interest in M.S. (Ping Yuan) Industry Development Limited was accounted for as
an investment. Provision for loss on disposal of approximately $154,000 is
included in net income.
12
<PAGE>
Item 2. Management Discussion and Analysis of Financial Condition and Results
of Operations.
OVERVIEW OF PRINCIPAL ACTIVITIES
China Industrial Group, Inc. (the Group) consists of Nova Industrial
Holdings Limited, a British Virgin Islands corporation, which is a holding
company for four operating entities. The operations of the Group are divided
into distribution and manufacturing.
The Group's distribution activities involve wool, industrial chemicals
and pharmaceutical products. The Group purchases wool from unrelated persons
mainly in New Zealand and Australia principally for US dollars and, in turn,
sells the wool through its sales representative offices to its customers in the
People's Republic of China (China).
The Group is responsible for all aspects of delivery of wool to the
factory, including customs clearance and transportation. To support its
distribution, the Group leases a number of bonded warehouses in China which take
delivery of the wool and arrange for shipment directly to the factories.
The Group receives payment for wool in Renminbi, the Chinese currency
(RMB). The Group then uses RMB to purchase industrial chemicals and
pharmaceutical products from manufacturers located in China. The pharmaceutical
products are principally generic products in powder form, and are used by
pharmaceutical manufacturers which convert the powder into tablets or capsules.
The chemical products are mainly industrial raw materials used for various types
of basic industries. Both the chemical and pharmaceutical products are exported
from China and sold to customers located in India, Africa, Europe and Southeast
Asia. Sales of these products in turn generate U.S. dollars, which are then
used to purchase wool in Australia and New Zealand.
Although the Group bears the risk of non-payment from its customers,
the Group generally purchases products pursuant to outstanding orders. Thus,
the Group's exposure to currency risk and inventory problems is minimized.
The Group is also engaged in the manufacture of woolen products
through its interest in its joint venture company in China. This company
produces a variety of wool products ranging from scoured wool (washed and comb
wool), wool top (washed and comb wool that has been processed into a spool of
rope), yarns, and rolls of wool fabric mainly for the Chinese consumer market.
In September 1995, the Group sold its joint venture interest in its subsidiary;
M.S. (Ping Yuan) Industry Development Limited, to an unrelated party in order to
rationalize its operation. As a result, the financial statements for the five
months ended May 31, 1995 reflect only the results of the
13
<PAGE>
operating subsidiaries, and the investment in M.S. (Ping Yuan) Industry
Development has been accounted for as an investment and stated at net realizable
value. Assets and liabilities of the disposed subsidiary were included from the
consolidated financial statements.
FIVE MONTHS ENDED MAY 31, 1995 COMPARED TO FIVE MONTHS ENDED MAY 31, 1994
- -------------------------------------------------------------------------
REVENUES. Revenues for the five months ended May 31, 1995 increased
--------
by $11.6 million or approximately 10% compared to the five months ended May 31,
1994. Revenues from distribution activities for the five months ended May 31,
1995 increased by $14.3 million or approximately 13.4% compared to the five
months ended May 31, 1994. This increase was attributable to the increase in
sales of wool during the five month period due to the natural growth of its
market as a result of a change in consumer behavior.
Revenues from manufacturing of woolen products decreased by $2.7
million or approximately 25.9% from 1995 to 1994. This decrease was primarily
due to the government policy of 'cooling down' the overheated economy. In
addition, the Group has tightened its credit policy to its domestic customers in
China.
GROSS PROFIT. Gross profit increased by 4.1% or $0.7 million in the
------------
1995 period as compared to the 1994 period. Gross profit as a percent of
revenues remains the same as compared to the 1994 period.
GENERAL AND ADMINISTRATIVE EXPENSES. General and administrative
-----------------------------------
expenses increased by $0.6 million or approximately 10.1% during the 1995 period
compared to the 1994 period as a result of the increase in sales activities and
the expenses incurred in establishing the Group's New York Office.
SELLING EXPENSES. During the 1995 period, revenues and marketing
----------------
expenses increased by $0.3 million compared to the 1994 period. The primary
reason for the increase was the increase in volume of sales.
OTHER INCOME (EXPENSES). Interest expense during the 1995 and 1994
-----------------------
periods was approximately $0.9 million. The disposal of the joint venture
interest in M.S. (Ping Yuan) Industry Development Company Limited resulted in a
loss of $154,498 and was accrued as other expenses in this period.
INCOME TAXES. Income taxes of $204,688 were incurred during the 1995
------------
period and $98,400 during the 1994 period. The increase is primarily due to
income taxes provision for the Company's China operations and the increase in
earnings from the Company's Hong Kong distribution subsidiary.
14
<PAGE>
NET INCOME. The net income during the 1995 period was $9.95 million
----------
compared to net income of $9.43 million for the prior period. This represents
an approximately 5.5% increase in net income.
EARNINGS PER SHARE. Primary earnings per share for the five months
------------------
period ended May 31, 1995 was $0.21 compared with $0.23 for the same period in
1994. Even though net income increased by 5.5% compared with the prior period,
the difference in earnings per share was the result of an increase in the
weighted average number of shares outstanding.
INVENTORY. Inventory as at May 31, 1995 amounted to $11,687,930 as a
---------
result of seasonal fluctuation.
CUSTOMER DEPOSITS AND OTHERS. Customer deposits and others
----------------------------
represented amounts received in advance from customers. The amount at May 31,
1995 was $996,220 which reflected seasonal fluctuation.
MINORITY INTEREST. Minority interest represents the minority share of
-----------------
net assets in the operating subsidiary. No account has been taken for the
minority share of the net assets in M.S. (Ping Yuan) Industry Development
Limited, the subsidiary which was sold in September, 1995.
CUMULATIVE FOREIGN CURRENCY TRANSLATION ADJUSTMENT. This item
--------------------------------------------------
reflects the net adjustment to the consolidated financial statements after the
exclusion of the adjustment resulting in the translation of the disposed
subsidiary.
LIQUIDITY AND CAPITAL RESOURCES
The Group's principal source of liquidity during the five months ended
May 31, 1995 was from operations and an increase in bank borrowings.
As of May 31, 1995, the Group had a working capital excess of
approximately $66 million compared to $55 million as of December 31, 1994
primarily as a result of an increase in revenues during this period.
Net cash used in operating activities was $2.0 million and $0.3
million in the five months ended May 31, 1995 and 1994, respectively.
The Group believes the cash provided by operations will be sufficient
to meet its cash requirements for the next 12 months.
FOREIGN EXCHANGE
The financial statements of the Company's subsidiaries operating in
China are generally measured using the local currency, Renminbi (RMB), as the
functional currency. The exchange rates
15
<PAGE>
adopted in the translation of RMB to the United States dollar are the applicable
Bank of China Official rate which would be settled at by the Chinese Government.
For the Group's other subsidiaries, the United States dollar is the functional
currency.
EFFECT OF INFLATION
Inflation has little impact on the operations of the Group. The price
of products the Group distributes is determined by the open market. Any
increase in cost is generally reflected in the selling price. However the
'cooling down' of China's overheated economy does have a negative effect on the
amount of sales for products manufactured in China. In addition, inflation
causes an increase in the general and administrative expenses.
16
<PAGE>
PART II -- OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits:
27 Financial Data Schedule
(b) Reports on Form 8-K:
A report was filed on December 29, 1995 changing the Company's
fiscal year of December 31 to May 31.
17
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CHINA INDUSTRIAL GROUP, INC.
By: /s/ Benthony Ip
------------------------------
Benthony Ip, Chief Financial
Officer (Chief financial officer and
accounting officer and duly authorized
officer)
Dated: January 29, 1996
18
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 5-MOS
<FISCAL-YEAR-END> MAY-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAY-31-1995
<CASH> 6,224,243
<SECURITIES> 3,006,468
<RECEIVABLES> 73,297,630
<ALLOWANCES> 0
<INVENTORY> 11,687,930
<CURRENT-ASSETS> 95,071,546
<PP&E> 9,530,665
<DEPRECIATION> 0
<TOTAL-ASSETS> 117,795,598
<CURRENT-LIABILITIES> 28,718,617
<BONDS> 0
0
24,375
<COMMON> 23,465
<OTHER-SE> 71,586,278
<TOTAL-LIABILITY-AND-EQUITY> 117,795,598
<SALES> 128,369,233
<TOTAL-REVENUES> 128,369,233
<CGS> 109,592,646
<TOTAL-COSTS> 7,247,850
<OTHER-EXPENSES> 154,498
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 901,878
<INCOME-PRETAX> 10,472,361
<INCOME-TAX> 204,688
<INCOME-CONTINUING> 10,267,675
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 9,952,551
<EPS-PRIMARY> .21
<EPS-DILUTED> 0
</TABLE>
