FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________________________________________________
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For The Quarterly Period Ended December 31, 1999
_____________________________
Commission File Number 0-16251
GALAXY FOODS COMPANY
(Exact name of registrant as specified in its charter)
Delaware 25-1391475
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2441 Viscount Row
Orlando, Florida 32809
(Address of principal executive offices) (Zip Code)
(407) 855-5500
(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
On February 1, 2000, there were 9,184,302 shares of Common
Stock $.01 par value per share, outstanding.
<PAGE> 2
GALAXY FOODS COMPANY
Index to Form 10-Q
For Quarter Ended December 31, 1999
PAGE NO.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Balance Sheets 3
Statements of Income 4
Statements of Stockholders' Equity 5
Statements of Cash Flows 6
Notes to Financial Statements 7-8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9-12
Item 3. Quantitative and Qualitative Data Concerning
Market Risk 12
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURES 14
<PAGE> 3
PART I. FINANCIAL INFORMATION
BALANCE SHEETS
GALAXY FOODS COMPANY
December 31, MARCH 31,
1999 1999
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 1,548 $ 112
Trade receivables, net 7,189,939 4,428,778
Inventories 8,936,891 6,235,737
Prepaid expenses 1,466,026 856,267
Total current assets 17,594,404 11,520,894
PROPERTY & EQUIPMENT, NET 12,993,159 12,503,830
OTHER ASSETS 785,174 452,188
TOTAL $ 31,372,737 $24,476,912
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Book overdrafts $ 714,132 $ 502,942
Line of credit 4,853,261 3,912,917
Subordinated note payable 3,870,732 -
Accounts payable - trade 3,861,628 3,311,043
Accrued liabilities 298,048 468,513
Current portion of term note payable 432,000 432,000
Current portion of obligations under
capital leases 19,160 82,433
Total current liabilities 14,048,961 8,709,848
TERM NOTE PAYABLE, less current portion 2,086,847 2,374,847
OBLIGATIONS UNDER CAPITAL LEASES,
less current portion 2,531 289,711
Total liabilities 16,138,339 11,374,406
COMMITMENTS AND CONTINGENCIES - -
STOCKHOLDERS' EQUITY:
Common stock 91,839 91,830
Additional paid-in capital 47,500,841 47,497,322
Accumulated deficit (19,586,082) (21,714,446)
28,006,598 25,874,706
Less: Notes receivable arising from
the exercise of stock options and
sale of common stock 12,772,200 12,772,200
Total stockholders' equity 15,234,398 13,102,506
TOTAL $ 31,372,737 $ 24,476,912
See accompanying notes to financial statements.
<PAGE> 4
GALAXY FOODS COMPANY
STATEMENTS OF INCOME
NINE MONTHS ENDED THREE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
1999 1998 1999 1998
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
NET SALES $31,021,298 $21,362,621 $10,118,593 $8,016,245
COST OF GOODS SOLD 19,463,363 14,696,095 6,150,637 5,140,196
Gross margin 11,557,935 6,666,526 3,967,956 2,876,049
OPERATING EXPENSES:
Selling 4,347,732 2,554,464 1,399,308 1,099,558
Delivery 1,576,364 1,096,136 588,652 441,430
General and administrative 2,692,475 1,477,595 893,570 540,501
Research and development 167,250 136,785 71,935 48,913
Total operating expenses 8,783,822 5,264,980 2,953,466 2,130,402
INCOME FROM OPERATIONS 2,774,113 1,401,546 1,014,490 745,647
OTHER INCOME (EXPENSE):
Interest expense (580,498) (197,624) (254,982) (101,327)
Other income (expense) (5,252) 32,958 (1,549) (2,426)
Total (585,749) (164,666) (256,530) (103,753)
NET INCOME BEFORE TAXES $ 2,188,364 $ 1,236,880 $ 757,960 $ 641,894
INCOME TAX EXPENSE 60,000 - 30,000 -
NET INCOME APPLICABLE TO
COMMON STOCK $ 2,128,364 $ 1,236,880 $ 727,960 $ 641,894
BASIC NET EARNINGS PER
COMMON SHARE $ 0.23 $ 0.13 $ 0.08 $ 0.07
DILUTED NET EARNINGS PER
COMMON SHARE $ 0.23 $ 0.13 $ 0.08 $ 0.07
See accompanying notes to financial statements.
<PAGE> 5
GALAXY FOODS COMPANY
STATEMENTS OF STOCKHOLDERS' EQUITY
<TABLE>
<C> <C> <C> <C> <C> <C> <C>
Common Stock Additional Notes Rec
Shares Par Value Paid-In Accumulated for Common
Capital Deficit Stock Total
Balance at 8,816,699 $88,167 $46,459,542 $(23,005,813) $(12,772,200) $10,769,696
March 31, 1998
Exercise of 1,144 11 3,989 - - 4,000
options
Issuance of 357,143 3,571 933,929 - - 937,500
common stock
under private
placement
Issuance of 8,046 81 31,362 - - 31,443
common stock
under employee
stock purchase
plan
Issuance of - - 68,500 - - 68,500
warrants
Net income - - - 1,291,367 - 1,291,367
Balance at 9,183,032 $91,830 $47,497,322 $(21,714,446) $(12,772,200) $13,102,506
March 31, 1999
Exercise of 875 9 3,519 - - 3,528
options
Net income - - - 2,128,364 - 2,128,364
Balance at 9,183,907 $91,839 $47,500,841 $(19,586,082) $(12,772,200) $15,234,398
December 31, 1999
(unaudited)
</TABLE>
See accompanying notes to condensed financial statements.
<PAGE> 6
GALAXY FOODS COMPANY
STATEMENTS OF CASH FLOWS
NINE MONTHS ENDED
DECEMBER 31,
1999 1998
(Unaudited) (Unaudited)
CASH FLOWS USED IN OPERATING
ACTIVITIES:
Net Income $ 2,128,364 $ 1,236,880
ADJUSTMENTS TO RECONCILE NET INCOME
TO NET CASH USED IN OPERATING ACTIVITIES:
Depreciation expense 663,150 517,901
Bad debt expense - 89,607
Consulting and director fee expense paid through
issuance of common stock warrants 21,468 15,440
(Increase) decrease in:
Trade receivables (2,761,161) (1,525,726)
Inventories (2,701,154) (4,287,891)
Prepaid expenses (609,759) (552,308)
Increase (decrease) in:
Accounts payable 550,585 1,422,242
Book overdrafts 211,190 (18,861)
Accrued liabilities (170,465) (130,685)
NET CASH USED IN
OPERATING ACTIVITIES (2,667,782) (3,233,401)
CASH FLOWS USED IN INVESTING ACTIVITIES:
Purchase of property and equipment (1,152,479) (1,213,521)
Increase in other assets (354,454) -
NET CASH USED IN INVESTING ACTIVITIES: (1,506,933) (1,213,521)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings on line of credit 940,344 1,981,671
Net proceeds from subordinated note payable 3,870,732 1,488,000
Net borrowings (payments) on note payable (288,000) -
Principal payments on capital lease obligations (350,453) (7,038)
Proceeds from issuance of common stock - 963,230
Proceeds from exercise of common stock options 3,528 1,500
NET CASH FROM FINANCING ACTIVITIES: 4,176,151 4,427,363
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 1,436 (19,559)
CASH AND CASH EQUIVALENTS, BEGINNING
OF PERIOD 112 20,069
CASH AND CASH EQUIVALENTS, END
OF PERIOD $ 1,548 $ 510
See accompanying notes to condensed financial statements.
<PAGE> 7
GALAXY FOODS COMPANY
NOTES TO FINANCIAL STATEMENTS
(1) Management Representation
In the opinion of Galaxy Foods Company (the "Company"), the
accompanying unaudited financial statements contain all
adjustments necessary to present fairly the Company's
financial position, results of operations and cash flows for
the periods presented. The results of operations for the
interim periods presented are not necessarily indicative of
the results to be expected for the full year.
The financial statements should be read in conjunction with
the financial statements and the related disclosures
contained in the Company's Form 10-K dated June 8, 1999,
filed with the Securities and Exchange Commission.
(2) Reclassifications
Certain items in the financial statements of prior periods
have been reclassified to conform to current period
presentation.
Segment Information
The Company does not identify separate operating segments
for management reporting purposes. The results of
operations are the basis on which management evaluates
operations and makes business decisions.
(3) Inventories
Inventories are summarized as follows:
DECEMBER 31, MARCH 31,
1999 1999
(unaudited)
Raw materials $ 4,385,156 $ 2,750,781
Finished goods 4,551,735 3,484,956
Total $ 8,936,891 $ 6,235,737
(4) Earnings per Share
The following is a reconciliation of basic net earnings per
share to diluted net earnings per share for the three month
and nine month periods ended December 31:
NINE MONTHS ENDED THREE MONTHS ENDED
DECEMBER 31, DECEMBER 31,
1999 1998 1999 1998
(unaudited)(unaudited) (unaudited)(unaudited)
Basic net earnings per share $0.23 $0.13 $0.08 $0.07
Weighted average shares
outstanding - basic 9,183,726 9,186,283 9,180,752 9,179,324
Potential shares exercisable
under stock option plans 1,176,702 159,178 1,629,035 159,178
Potential shares exercisable under warrant
agreements 919,137 1,214,693 1,529,137 1,431,653
Less: Shares assumed repurchased under
Treasury stock method (1,954,099)(1,163,928) (2,908,354) (1,311,150)
Average shares outstanding
- diluted 9,325,466 9,396,226 9,430,570 9,459,005
Diluted earnings per share $0.23 $0.13 $0.08 $0.07
<PAGE> 8
GALAXY FOODS COMPANY
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Continued)
(5) Supplemental Cash Flow Information
For purposes of the statement of cash flows, all highly
liquid investments with a maturity date of three months or
less are considered to be cash equivalents. Cash and cash
equivalents include checking accounts, money market funds
and certificates of deposits.
For the nine months ended December 31, 1999 1998
(unaudited) (unaudited)
Cash paid for:
Interest $ 580,498 $ 197,624
(6) Subordinated Note Payable
On September 30, 1999, the Company closed on a $4,000,000
subordinated note payable to Finova Mezzanine Capital. The
subordinated note bears interest at a rate of 13.5% and is
secured by a secondary lien on the Company's assets. The
note matures on September 30, 2004.
<PAGE> 9
GALAXY FOODS COMPANY
Management's Discussion and Analysis of
Financial Condition and Results of Operations
The following discussion and analysis should be read in
conjunction with the Financial Statements and Notes thereto
appearing elsewhere in this report.
The following discussion contains certain forward-looking
statements, within the meaning of the "safe-harbor" provisions of
the Private Securities Reform Act of 1995, the attainment of
which involves various risks and uncertainties. Forward-looking
statements may be identified by the use of forward-looking
terminology such as "may", "will", "expect", "believe",
"estimate", "anticipate", "continue", or similar terms,
variations of these terms or the negative of those terms. The
Company's actual results may differ materially from those
described in these forward-looking statements due to among other
factors, competition in the Company's product markets, dependence
on suppliers, the Company's manufacturing experience, and
production delays or inefficiencies.
Galaxy Foods Company (the "Company") is principally engaged in
the development, manufacturing and marketing of a variety of
healthy cheese and dairy related products, as well as other
cheese alternatives. These healthy cheese and dairy related
products include low or no fat, low or no cholesterol and lactose-
free varieties. These products are sold throughout the United
States and internationally to customers in the retail, food
service and industrial markets. The Company's headquarters,
manufacturing and warehouse facilities are located in Orlando,
Florida.
Results of Operations
Net Sales were $10,118,593 in the quarter ended December 31,
1999, compared to net sales of
$8,016,245 for the quarter ended December 31, 1998, an increase
of 26%. Net sales were $31,021,298 for the nine months ended
December 31, 1999 as compared to $21,362,621 for the same period
one year ago, an increase of 45%. The increase in sales has been
a trend for the company over the last three fiscal years. The
Company commenced targeted advertising campaigns for its flagship
brand of Veggie products, including print, television and radio
advertising in key markets across the country. This has resulted
in an upward trend in sales volume for the Veggie line of
products. The Company expects this trend in sales volume to
continue throughout fiscal 2000.
Cost of Goods Sold were $6,150,637 representing 61% of net sales
for the quarter ended December 31, 1999, compared with $5,140,196
or 64% of net sales for the same period ended December 31, 1998.
Cost of Goods Sold were $19,463,363 for the nine months ended
December 31, 1999, representing 63% of net sales as compared to
$14,696,095 or 69% of net sales for the nine months ended
December 31, 1998. The decrease in the cost of goods sold as a
percentage of net sales was due to improvements in the Company's
gross margins primarily resulting from increased production
efficiencies, longer production runs, and changes in the product
mix to focus on sales of higher margin, branded products.
Selling expenses were $1,399,308 for the quarter ended December
31, 1999, compared with $1,099,558 for the same period ended
December 31, 1998, an increase of 27%. For the nine months ended
December 31, 1999, selling expenses were $4,347,732 as compared
to $2,554,464 for the same period one year ago, an increase of
70%. The increase in expenses over the same period a year ago is
mainly attributed to a new advertising campaign to promote the
Company's flagship line of Veggie products. The increase in
selling expenses also correlates to an increase in sales, as
approximately 31% of selling expenses, such as brokerage
commissions, are variable in nature and increase as sales
increase.
Delivery expenses were $588,652 for the quarter ended December
31, 1999, compared with $441,430 for the same period ended
December 31, 1998, a 33% increase. Delivery expenses were
$1,576,364 for the nine months ended December 31, 1999 as
compared to $1,096,136 for the nine months ended December 31,
1998. The increase in delivery costs is a result of the increase
in sales shipments to customers for the periods ended December
31, 1999 as compared with the same periods in the prior year.
In addition, there was an increase in shipping rates during the
third quarter of fiscal 2000.
<PAGE> 10
General and Administrative expenses were $893,570 for the quarter
ended December 31, 1999, compared with $540,501 for the same
period ended December 31, 1998, a 65% increase. General and
administrative expenses increased 82% to $2,692,475 for the nine
months ended December 31, 1999 as compared to $1,477,595 for the
same period one year ago. This change is primarily attributed to
additional employees hired during the first two quarters in
connection with the Company's growth and to increased expenses
for consulting services for conversion to a new network server to
accommodate additional users.
Research and Development expenses were $71,935 for the quarter
ended December 31, 1999, compared with $48,913 for the quarter
ended December 31, 1998. These expenses were $167,250 for the
nine months ended December 31, 1999 as compared to $136,785 for
the same period one year ago. The increase is due to the
addition of a second food scientist during the first quarter of
fiscal 2000.
Other Income and Expenses netted to $254,982 in expense for the
quarter ended December 31, 1999 as compared to $101,327 in
expense for the quarter ended December 31, 1998. These expenses
netted to $580,498 for the nine months ended December 31, 1999 as
compared to $197,624 for the same period in fiscal 1999.
Interest expense increased due to additional draws on the line of
credit during fiscal 2000, the addition of $4 million in
subordinated debt financing on September 30, 1999 and the
capitalization of certain interest expense to the construction in
progress during fiscal 1999.
Liquidity and Capital Resources
Operating Activities -- Net cash used by operating activities was
$2,667,782 for the nine months ended December 31, 1999 compared
to net cash used of $3,233,401 for the same period in fiscal
1999. In the nine months ended December 31, 1999, the increase
in cash used in operating activities was a result of an increase
in trade receivables in connection with the Company's growth in
sales. In addition, the Company had an increase in inventory
levels accommodated by the new warehouse facility leased by the
Company in November 1999. During the same period in fiscal 1999,
cash was used in connection with the build-up of inventories to
manage the shift from distributor to direct sales for some large
customers. Direct shipping requires larger inventory on hand
balances and a reduced lead time on orders but reduces the costs
associated with the sale.
Investing Activities -- Net cash used in investing activities
totaled $1,506,933 for the nine month period ended December 31,
1999 compared to net cash used of $1,213,521 for the same period
in fiscal 1999. Cash used for investing activities during
fiscal 2000 resulted from purchases of racking and cooling
equipment and the construction of a new Culinary School for
foodservice customers during the first three quarters in fiscal
2000.
Financing Activities -- Net cash flows provided by financing
activities were $4,176,151 for the nine months ended December 31,
1999 compared to $4,427,363 for the nine months ended December
31, 1998. The large cash flows from financing activities during
fiscal 2000 is primarily attributable to the Company closing on a
$4,000,000 subordinated note payable to Finova Mezzanine
Corporation on September 30, 1999. The subordinated note bears
interest at a rate of 13.5% and is secured by a secondary lien on
the Company's assets.
In addition, on November 1, 1996, the Company secured a $2
million line of credit with Finova Capital Corporation with
interest at the prime rate plus two percent. The availability
under this line of credit arrangement is calculated on a
borrowing base of eligible inventory and accounts receivable.
This line of credit was increased to $3 million during February
1997. During June 1998, the Company amended the line of credit
availability to $3.5 million. The amendment also reduced the
interest on the line of credit to prime plus one half of a
percent. During December 1998, the Company further amended the
line of credit to increase borrowing availability to $5.5
million.
<PAGE> 11
On June 27, 1997, the Company secured a $1.5 million term note
payable with Finova Capital Corporation to finance the
acquisition of certain production equipment. The agreement calls
for interest at the prime rate plus two percent. During June
1998, the Company signed an amendment to the note which expanded
the term note payable to $3 million. The amendment also reduced
the interest on the term note to prime plus one percent.
On October 16, 1998, the Company sold 357,143 shares of its
common stock to a private investor at an aggregate price of
$937,500.
Recent Accounting Pronouncements
In June 1998, the FASB issued SFAS No. 133, "Accounting for
Derivative Instruments and Hedging Activities" ("FAS 133"). FAS
133 requires companies to recognize all derivative contracts as
either assets or liabilities in the balance sheet and to measure
them at fair value. If certain conditions are met, a derivative
may specifically be designated as a hedge, the objective of which
is to match the timing of gain or loss recognition of: (i) the
changes in the fair value of the hedged asset or liability that
are attributable to the hedged risk; or (ii) the earnings effect
of the hedged transaction. For a derivative not designated as a
hedging instrument, the gain or loss is recognized as income in
the period of change. FAS 133, as amended by SFAS 137, is
effective for all fiscal year quarters of fiscal years beginning
after June 15, 2000. Historically, the Company has not entered
into any derivative contracts either to hedge existing risks or
for speculative purposes. Accordingly, the Company does not
expect adoption of the new standard on April 1, 2001 to affect
its financial statements.
Year 2000 Compliance
The Year 2000 problem is the result of information technology
systems and embedded systems (products that are made with
microprocessor (computer) chips) using a two-digit format, as
opposed to four digits, to indicate the year. Such information
technology and embedded systems may be unable to properly
recognize and process date-sensitive information beginning
January 1, 2000.
The Company had undertaken an assessment of the potential impact
of the Year 2000 issue to its internal operations. Such
assessment included a review of the impact primarily in the
following areas: production and manufacturing systems, business
systems, including sales and marketing, billing, and
infrastructure. The Company's infrastructure consists of a
network of personal computers and servers that were obtained from
major suppliers. The Company also utilizes various business,
administrative and financial software applications on the
infrastructure to perform the business functions of the Company.
The Company tested and upgraded its information technology
systems and embedded systems, which would have been affected by
the Year 2000 issue. To date, the Company has incurred
approximately $135,000 to upgrade its systems for compliance with
Year 2000 issues. These upgrades were also undertaken to improve
the functionality of the Company's production and accounting
systems. The Company did not experience any significant
problems associated with the Company's Year 2000 compliance.
<PAGE> 12
The Company has material third party relationships with its
customers, suppliers, shippers, utilities, financial
institutions, and transfer agent. If the operations of any of
these third parties are adversely impacted by Year 2000
deficiencies, it may have a material impact on the Company.
Accordingly, the Company requested information and documentation
from the Company's significant customers and suppliers, shippers,
utilities, financial institutions, and
transfer agent relating to their Year 2000 compliance plans in
the form of a survey. The Company's financial institutions and
transfer agent have certified Year 2000 compliance.
The Company received approximately 90% of its certifications from
customers. With respect to the responses received, no customers
indicated or displayed significant problems which could result in
a material loss.
The Company received approximately 95% of its certifications from
material suppliers. Of the 5% who have not responded, there are
no sole source suppliers for the Company. For each of the non-
respondents, the Company regularly does business with an
alternate supplier who has certified Year 2000 compliance to the
Company.
To date, management has not been advised that any of its
significant customers, suppliers, shippers, utilities, financial
institutions, or transfer agent has suffered any Year 2000
problem that could have a material adverse effect on the Company,
its operations or its performance.
Item 3. Quantitative and Qualitative Data Concerning Market Risk
Not applicable.
<PAGE> 13
PART II. OTHER INFORMATION
GALAXY FOODS COMPANY
ITEM 6. Exhibits and Reports on Form 8-K
The following exhibits are filed as part of this Form 10-Q.
Exhibit No Exhibit Description
*3.1 Certificate of Incorporation of the Company, as
amended (Filed as Exhibit 3.1 to the Company's
Registration Statement on Form S-18, No. 33-15893-NY,
incorporated herein by reference.)
*3.2 Amendment to Certificate of Incorporation of the
Company, filed on February 24, 1992 (Filed as Exhibit
4(b) to the Company's Registration Statement on Form S-
8, No. 33-46167, incorporated herein by reference.)
*3.3 By-laws of the Company, as amended (Filed as
Exhibit 3.2 to the Company's Registration Statement on
Form S-18, No. 33-15893-NY, incorporated herein by
reference.)
*3.4 Amendment to Certificate of Incorporation of the
Company, filed on January 19, 1994 (Filed as Exhibit
3.4 to the Company's Registration Statement on Form SB-
2, No. 33-80418, and incorporated herein by reference.)
*3.5 Amendment to Certificate of Incorporation of the
Company, filed on July 11, 1995 (Filed as Exhibit 3.5
on Form 10-KSB for fiscal year ended March 31, 1996,
and incorporated herein by reference.)
*3.6 Amendment to Certificate of Incorporation of the
Company, filed on January 31, 1996 (Filed as Exhibit
3.6 on Form 10-KSB for fiscal year ended March 31,
1996, and incorporated herein by reference.)
*10.1 Second Amendment to the Security Agreement with
Finova Financial Services dated June 1998 (Filed as
Exhibit 10.1 on Form 10-K for fiscal year ended March
31, 1999, and incorporated herein by reference.)
*10.2 Third Amendment to the Security Agreement with
Finova Financial Services dated December 1998 (Filed as
Exhibit 10.2 on Form 10-K for fiscal year ended March
31, 1999, and incorporated herein by reference.)
27 Financial Data Schedule (Filed herewith.)
Reports on Form 8-K
No reports on Form 8-K were filed during the last quarter of the
period covered by this report.
<PAGE> 14
SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
GALAXY FOODS COMPANY
Date: February 10, 2000 /s/Angelo S. Morini
Angelo S. Morini
Chairman and President
(Principal Executive Officer)
Date: February 10, 2000 /s/Cynthia L. Hunter
Cynthia L. Hunter, CPA
Chief Financial Officer
(Principal Financial and
Accounting Officer)
[ARTICLE] 5
<TABLE>
<S> <C>
[PERIOD-TYPE] 3-MOS
[FISCAL-YEAR-END] MAR-31-1999
[PERIOD-END] DEC-31-1999
[CASH] 1548
[SECURITIES] 0
[RECEIVABLES] 7189939
[ALLOWANCES] 0
[INVENTORY] 8936891
[CURRENT-ASSETS] 1466026
[PP&E] 12993159
[DEPRECIATION] 0
[TOTAL-ASSETS] 31372737
[CURRENT-LIABILITIES] 14048961
[BONDS] 0
[COMMON] 91839
[PREFERRED-MANDATORY] 0
[PREFERRED] 0
[OTHER-SE] 15234398
[TOTAL-LIABILITY-AND-EQUITY] 31372737
[SALES] 7583838
[TOTAL-REVENUES] 10118593
[CGS] 6150637
[TOTAL-COSTS] 2953466
[OTHER-EXPENSES] 0
[LOSS-PROVISION] 0
[INTEREST-EXPENSE] 254982
[INCOME-PRETAX] 757960
[INCOME-TAX] 30000
[INCOME-CONTINUING] 0
[DISCONTINUED] 0
[EXTRAORDINARY] 0
[CHANGES] 0
[NET-INCOME] 727960
[EPS-BASIC] .08
[EPS-DILUTED] .08
</TABLE>
