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: Commission File No.:
November 30, 1997 0-16442
FIRST TEAM SPORTS, INC.
(Exact name of Registrant as specified in its charter)
Minnesota 41-1545748
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
1201 Lund Boulevard
Anoka, Minnesota 55303
(Address of principal executive offices)
Registrant's telephone number, including area code:
(612) 576-3500
--------------------------------------
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: 5,792,240 shares of Common
Stock, $.01 par value per share, outstanding as of January 13, 1997.
<PAGE>
PART I
FINANCIAL INFORMATION
Item 1. Financial Statements
FIRST TEAM SPORTS, INC.
CONSOLIDATED BALANCE SHEETS
November 30, 1997 and February 28, 1997
<TABLE>
<CAPTION>
November 30, February 28,
ASSETS 1997 1997
--------------------- ---------------------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $736,491 $381,427
Receivables:
Trade, less allowance for
doubtful accounts of $505,000 at
November 30, 1997 and $565,000
at February 28, 1997 13,427,238 17,039,679
Refundable income taxes 677,162 258,492
Inventory 23,085,684 20,881,845
Prepaid expenses 341,327 612,880
Deferred income taxes 997,000 997,000
--------------------- ---------------------
Total current assets $39,264,902 $40,171,323
--------------------- ---------------------
PROPERTY AND EQUIPMENT, at cost
Land $600,000 $600,000
Building 4,988,680 4,988,680
Production equipment 5,294,048 4,715,979
Office furniture and equipment 2,046,050 1,754,017
Warehouse equipment 826,509 325,361
Vehicles 110,726 19,567
--------------------- ---------------------
$13,866,013 $12,403,604
Less accumulated depreciation 3,969,526 2,588,404
--------------------- ---------------------
$9,896,487 $9,815,200
--------------------- ---------------------
OTHER ASSETS
License agreements, less accumulated
amortization of $3,258,000 at November
30, 1997 and $3,039,000 at February
28, 1997 $1,846,623 $2,065,611
Other 2,046,445 291,367
--------------------- ---------------------
$3,893,068 $2,356,978
--------------------- ---------------------
$53,054,457 $52,343,501
===================== =====================
</TABLE>
See Notes to Consolidated Financial Statements
<PAGE>
FIRST TEAM SPORTS, INC.
CONSOLIDATED BALANCE SHEETS (CONTINUED)
November 30, 1997 and February 28, 1997
<TABLE>
<CAPTION>
November 30, February 28,
LIABILITIES AND SHAREHOLDERS' EQUITY 1997 1997
--------------------- ---------------------
(Unaudited)
<S> <C> <C>
CURRENT LIABILITIES
Notes payable to bank $7,880,000 $5,319,250
Current maturities of
long-term debt 1,001,650 662,414
Accounts payable, trade 2,193,934 4,852,459
Accrued expenses 1,589,719 1,415,511
Income taxes 70,924 -
--------------------- ---------------------
Total current liabilities $12,736,227 $12,249,634
--------------------- ---------------------
LONG-TERM DEBT,
less current maturities $6,278,112 $6,217,936
--------------------- ---------------------
DEFERRED INCOME TAXES $530,000 $530,000
--------------------- ---------------------
DEFERRED REVENUE $600,000 $600,000
--------------------- ---------------------
SHAREHOLDERS' EQUITY
Common Stock, par value $.01 per share;
authorized 10,000,000 shares; issued
and outstanding 5,789,542 shares at
November 30, 1997, 5,749,796 shares at
February 28, 1997 $57,895 $57,498
Additional paid-in capital 9,797,405 9,586,340
Retained earnings 23,082,448 23,102,093
Currency Translation (27,630) -
--------------------- ---------------------
$32,910,118 $32,745,931
--------------------- ---------------------
$53,054,457 $52,343,501
===================== =====================
</TABLE>
See Notes to Consolidated Financial Statements
<PAGE>
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three months ended Nine months ended
November 30, November 30,
1997 1996 1997 1996
------------------- -------------------- ------------------- --------------------
<S> <C> <C> <C> <C>
Net sales $10,350,148 $16,656,582 $46,459,022 $62,878,324
Cost of goods sold 8,326,845 12,930,350 35,321,334 45,909,026
------------------- -------------------- ------------------- --------------------
Gross profit $2,023,303 $3,726,232 $11,137,688 $16,969,298
------------------- -------------------- ------------------- --------------------
Operating expenses:
Selling $1,112,682 $1,519,682 $4,368,598 $5,865,148
General and
administrative 2,269,461 1,587,956 6,031,022 5,009,314
------------------- -------------------- ------------------- --------------------
$3,382,143 $3,107,638 $10,399,620 $10,874,462
------------------- -------------------- ------------------- --------------------
Operating income ($1,358,840) $618,594 $738,068 $6,094,836
Other income
(expense):
Interest expense (237,394) (334,757) (760,684) (1,060,938)
Other - - - 3,254
------------------- -------------------- ------------------- --------------------
Income/(loss) before
income taxes ($1,596,234) $283,837 ($22,616) $5,037,152
Income taxes (548,972) 100,000 (2,671) 1,787,000
------------------- -------------------- ------------------- --------------------
Net income/(loss) for
the period ($1,047,262) $183,837 ($19,945) $3,250,152
=================== ==================== =================== ====================
Net income/(loss) per
common share: ($0.18) $0.03 ($0.00) $0.55
=================== ==================== =================== ====================
Weighted average
number of common
shares outstanding
including Common
Share equivalents 5,872,910 5,832,643 5,764,680 5,903,226
=================== ==================== =================== ====================
</TABLE>
See Notes to Consolidated Financial Statements
<PAGE>
FIRST TEAM SPORTS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
For Nine Months Ended November 30, 1997 and 1996
(Unaudited)
<TABLE>
<CAPTION>
November 30, November 30,
CASH FLOWS FROM OPERATING ACTIVITIES 1997 1996
------------------- -------------------
<S> <C> <C>
Net Income/(Loss)
Adjustments required to reconcile net ($19,645) $3,250,152
income/(loss) to net cash provided by
(used in) operating activities:
Depreciation
Amortization 1,360,256 1,054,500
Deferred income taxes 309,634 475,348
Changes in assets and liabilities: - -
Receivables
Inventories 4,669,733 (2,349,710)
Prepaid expenses (1,760,749) 1,528,114
Accounts payable 273,115 548,620
Accrued expenses (2,884,381) (6,939,813)
Income taxes 174,208 (785,516)
(17,188) 237,550
------------------- -------------------
Net cash provided by
(used in) operating activities $2,104,983 ($2,980,755)
------------------- -------------------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchase of property and equipment
Purchase of Hespeler Hockey Company ($1,384,465) ($1,244,473)
Purchase of Mothership Distribution, Inc. (1,632,482) -
Other (285,460) -
(217,066) (34,893)
------------------- -------------------
Net cash used in investing activities ($3,519,473) ($1,279,366)
------------------- -------------------
CASH FLOWS FROM FINANCING ACTIVITIES
Net proceeds on short-term borrowings $1,319,422 $3,491,250
Proceeds on long-term borrowings 1,125,301
Principal payments on long-term
borrowings (725,888) (739,437)
Net proceeds from
issuances of common stock 1997;
10,169 shares, 1996; 17,750 shares 56,683 176,494
------------------- -------------------
Net cash provided by
financing activities $1,775,518 $2,928,307
------------------- -------------------
Effect of foreign currency exchange rate changes
on cash and cash equivalents ($5,964) -
------------------- -------------------
Increase (decrease) in cash and
cash equivalents $355,064 ($1,331,814)
Cash and cash equivalents:
Beginning $381,427 $2,166,863
------------------- -------------------
Ending $736,491 $835,049
=================== ===================
</TABLE>
See Notes to Consolidated Financial Statements
<PAGE>
FIRST TEAM SPORTS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1.
The consolidated condensed balance sheet as of November 30, 1997, and
the consolidated statements of operations for the three-month and nine-month
periods ended November 30, 1997 and November 30, 1996 and the consolidated
statements of cash flows for the nine-month periods then ended have been
prepared by the Company without audit. In the opinion of management, all
adjustments (consisting only of normal recurring accruals) necessary to present
fairly the consolidated financial position, results of operations and cash flows
at November 30, 1997 and November 30, 1996 and for all periods presented have
been made. The operating results for the period ended November 30, 1997 are not
necessarily indicative of the operating results to be expected for the full
fiscal year.
Certain information and footnote disclosures normally included in
consolidated financial statements in accordance with generally accepted
accounting principles have been condensed or omitted.
PER SHARE DATA
In February 1997, the Financial Accounting Standards Board issued
Statement No. 128, Earnings per Share, which is required to be adopted at our
fiscal year end. At that time we will calculate "basic" and "diluted" earnings
per share and restate prior periods. The changes from primary and fully diluted
earnings per share are expected to be negligible.
ACQUISITIONS
In September 1997, the Company acquired substantially all of the assets
and liabilities of Hespeler Hockey Company, and Mothership Distribution, Inc.
for approximately $1.9 million in cash and $150,000 of the Company's common
stock. The transactions were accounted for as purchases and, accordingly, the
net assets and operation results are included in the Company's financial
statements since the date of acquisition. The pro forma impact of the
acquisitions on the Company's results of operation for all periods presented was
not material.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
RESULTS OF OPERATIONS
Net Sales. Net sales were $10.4 million in the third quarter of fiscal
1998, a decrease of 38% over sales of $16.7 million in the comparable quarter of
fiscal 1997. Net sales for the first nine months of fiscal 1998 were $46.5
million, compared to $62.9 million for the first nine months of fiscal 1997, a
decrease of 26%. In-line skate sales volume decreases, combined with a decrease
in the average selling price of both the Company's Skate Attack(TM) and
UltraWheels(TM) lines, were the principal factors in the Company's net sales
decline in the third quarter and nine-month period of fiscal 1998. The Company
experienced continued pricing pressures from all areas of the in-line skate
marketplace due primarily to excess inventory levels held by retailers and
subsequent competitive price cutting.
The Company's product groups consist of in-line skates, ice skates,
accessories and parts (primarily protective wear and replacement wheels and
bearings) and roller hockey products. Within the product groups, the Company
maintains an UltraWheels(TM) and Skate Attack(TM) line of products. The
UltraWheels(TM) line consists of higher quality and higher priced products that
are targeted for specialty and sporting goods chain store customers, and the
Skate Attack(TM) line consists of lower priced products for mass merchant
customers. During the third quarter the Company acquired Hespeler Hockey
Company, a Canadian based company which markets and distributes ice hockey
sticks and accessories (gloves and protective wear) and Mothership Distribution
Inc., which markets and distributes aggressive in-line skate wheels, accessories
and apparel. Sales in the quarter for both Hespeler and Mothership were
negligible.
In-line skates and parts and accessory sales decreased 38% and 36%,
respectively, from the third quarter of fiscal 1997 to fiscal 1998 and have
decreased 24% and 30%, respectively, from the nine month period of fiscal 1997
to fiscal 1998. Sales of in-line skates accounted for approximately 85% of total
sales in the third quarter and for the nine month period of fiscal 1998,
compared to 88% and 85%, respectively, in the third quarter and for the nine
month period of fiscal 1997. Sales of parts and accessories accounted for
approximately 12% and 14%, respectively, of total sales in the third quarter and
for the nine month period of fiscal 1998, compared to 12% and 15%, respectively,
in the third quarter and for the nine month period of fiscal 1997.
The Company currently distributes products to more then 60 countries
worldwide. Domestic sales were $8.3 million, or 80% of total sales, in the third
quarter and $32.2 million, or 70% of total sales for the first nine months of
fiscal 1998, compared to $13.5 million, or 81% in the third quarter and $42.8
million or 68% for the nine month period of fiscal 1997. Sales in Canada were
$200,000, or 2%, and $5.7 million, or 12%, respectively, of total sales in the
third quarter and for the nine month period of fiscal 1998 compared to $400,000,
or 2%, and $4.1 million, or 7%, respectively, in fiscal 1997. Sales in Europe
<PAGE>
were $400,000, or 4%, and $5.6 million, or 12%, respectively, of total sales in
the third quarter and for the nine month period of fiscal 1998 compared to $1.9
million, or 11%, and $10.5 million, or 17%, respectively, in fiscal 1997. Other
international sales were $1.2 million, or 11%, and $2.7 million, or 6%,
respectively, of total sales in the third quarter and for the nine month period
of fiscal 1998, compared to $900,000, or 5%, and $5.5 million, or 9%,
respectively, in fiscal 1997.
Several factors contributed to the Company's sales performance in the
third quarter of fiscal 1998. The decrease in domestic sales is the result of
continued excess inventory levels at retail and competitive price cutting which
continues to plague the in-line skate industry. The decrease in European sales
is primarily the result of a slow spring and summer retail environment caused by
inclement weather conditions, which has resulted in excess retail inventory
levels. The increase in other international sales is primarily the result of
sales to some new key accounts in Australia. The decrease in the sales for the
nine month period is primarily the result of the continued excess inventory
situation in the in-line skate industry both in the United States and worldwide.
Gross Margin As a percentage of net sales, the gross margin was 19.6%
in the third quarter of fiscal 1998 compared to 22% in the third quarter of
fiscal 1997. The gross margin as a percentage of net sales for the nine month
period of fiscal 1998 was 24%, compared to 27% for fiscal 1997. The decrease in
the gross margin in the third quarter and for the nine month period is primarily
due to competitive close-out sales, continued pricing pressures at all retail
price points and fluctuations in certain foreign currency rates, principally
Canada.
The Company's UltraWheels(TM) brand of in-line skates accounted for
approximately 51% and 62%, respectively, of total in-line skate sales in the
third quarter and for the nine month period of fiscal 1998 compared to 38% and
51%, respectively, in fiscal 1997, while the Company's Skate Attack(TM) brand
accounted for 49% and 38%, respectively, of total in-line skate sales in the
third quarter and for the nine month period of fiscal 1998 compared to 61% and
47%, respectively, in fiscal 1997.
Operating Expenses. Selling expenses were $1.1 million, or 10.8% , of
total net sales in the third quarter and $4.4 million, or 9.4%, of total net
sales for the nine month period of fiscal 1998 compared to $1.5 million, or
9.1%, in the third quarter and $5.9 million, or 9.3%, for the nine month period
of fiscal 1997. The decrease in selling expenses for the third quarter and the
nine month period was primarily the result of a reduction in commissions,
royalties and co-op advertising costs associated with the decreased sales volume
and management's efforts to closely monitor and control its expenditures.
General and administrative expenses were $2.3 million, or 21.9%, of
total net sales in the third quarter and $6 million, or 13%, of total net sales
for the nine month period of fiscal 1998, compared to $1.6 million, or 9.5 %, in
the third quarter and $5 million, or 8%, for the nine month period of fiscal
1997. The increase in general and administrative expenses in the third quarter
of fiscal 1998 was primarily due to expenses associated with the purchases of
<PAGE>
the Company's two new subsidiaries, (Hespeler Hockey Company and Mothership
Distribution Inc.), costs associated with the Company's new European office and
increases required in the bad debt reserve allowance. The increase in general
and administrative expenses in the nine month period of fiscal 1998 was
primarily due to an increase in expenses associated with the Company's computer
systems, an increase in the real estate taxes associated with the Company's
facility and the expenses related to and associated with the purchases of the
Company's two new subsidiaries and the opening of the Company's new European
office.
In fiscal 1997 the Company purchased a new software system and
appropriate computer hardware. As part of the Company's selection process the
ability to recognize the year 2000 was a major requirement and thus the Company
believes it is prepared for the change and should incur minimal costs related to
this event.
Other Income and Expense. Interest expense was $237,000 in the third
quarter and $761,000 for the nine month period of fiscal 1998, compared to
$335,000 in the third quarter and $1,061,000 for the nine month period of fiscal
1997. The decrease in interest expense for the both the third quarter and the
nine month period is primarily due to a reduction of the interest expense
related to the Company's line of credit facility. This interest expense
reduction is the result of management's continued control over the Company's
expenditures and cash management procedures, which has resulted in a decrease in
the average outstanding balance on the Company's line of credit facility during
the third quarter and for the nine month period of fiscal 1998 as compared to
the same periods of fiscal 1997.
Net Income/(Loss). The Company had a net loss of ($1,047,000), or
($.18) per share, in the third quarter of fiscal 1998, compared to net income of
$184,000, or $.03 per share, in fiscal 1997. The Company had a net loss of
($20,000) for the nine month period of fiscal 1998, compared to net income of
$3,250,000, or $.55 per share, in fiscal 1997. The decrease for the both the
third quarter and the nine month period can be attributed to the decrease in
both the sales volume and the gross margins, along with the increase in
operating expenses as discussed above.
LIQUIDITY AND CAPITAL RESOURCES
Total cash and cash equivalents were $736,491 as of November 30, 1997,
compared to $835,049 as of November 30, 1996. Net cash provided by operating
activities was $2,104,983 for the nine month period ended November 30, 1997,
compared to net cash used in operating activities of ($2,980,755) for the nine
month period ended November 30,1996. Net cash used in investing activities was
($3,519,473) for the nine month period ended November 30,1997, compared to
($1,279,366) for the nine month period ended November 30,1996. Net cash provided
by financing activities was $1,775,518 for the nine month period ended November
30, 1997, compared to $2,928,307 for the nine month period ended November 30,
1996.
<PAGE>
The net cash provided by operating activities for the nine month period
ended November 30, 1997 was primarily from a decrease in accounts receivable and
depreciation and amortization being offset by an increase in inventory and a
decrease in accounts payable. The decrease in accounts receivable was the result
of continued collections and a decrease in sales activities. The increase in
inventory was due to the decreased sales activity. The decrease in accounts
payable was the result of the Company paying certain larger suppliers on shorter
terms to receive discounts and the reduced overall inventory purchases related
to the decreased sales volume. The net cash used in operating activities for the
nine month period ended November 30, 1996 was primarily from an increase in
accounts receivable and a decrease in accounts payable being offset by net
income, depreciation and amortization and a decrease in inventory. The increase
in accounts receivable was the result of very strong sales in the month of
November 1996. The decrease in accounts payable was the result of reduced
purchases due to declining sales volume and the seasonally of the inventory
purchases. The decrease in inventory was primarily due to delays in the receipt
of the Company's new skate models.
The net cash used in investing activities for the nine month period
ended November 30, 1997 was primarily for capital expenditures relating to new
production tooling and warehousing equipment and the purchase of the Company's
new subsidiaries Hespeler Hockey Company and Mothership Distribution, Inc. The
net cash used in investing activities for the nine month period ended November
30, 1996 was primarily for capital expenditures relating to new production
tooling and new computer hardware and software.
The net cash provided by financing activities for the nine month period
ended November 30, 1997 was primarily from proceeds from the Company's line of
credit facility and a new term note being offset by payments on the Company's
long-term debt obligations. The proceeds on the line of credit facility was
primarily for the purchase of the Company's new subsidiaries and the new term
note was for the financing of new production tooling costs. The net cash
provided by financing activities for the nine month period ended November 30,
1996 was primarily from proceeds on the Company's line of credit facility. The
proceeds were required to finance the cash required from operating activities.
The Company's debt to worth ratio was .6 to 1 as of November 30, 1997,
February 28, 1997 and November 30, 1996. As of November 30, 1997, the Company's
long-term debt, which consists primarily of a mortgage note on the Company's
facility and obligations under endorsement license agreements, less current
maturities, was $6,342,147. As of November 30,1997, the Company had a revolving
line of credit with a bank that provides for borrowings of up to $15,000,000, of
which $7,880,000 was outstanding. In addition, the Company had a line of credit
established with the bank providing for borrowings of up to $1,000,000 for the
purchase of equipment and improvements. As of November 30, 1997 there was a
$700,000 balance outstanding on this credit facility.
The Company believes its current cash position, funds available under
existing bank arrangements and cash generated from operations will be sufficient
to finance the Company's operating requirements through fiscal 1998.
<PAGE>
PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits. See Exhibit Index immediately following the signature
page of this Form 10-Q.
(b) Reports on Form 8-K. No reports on Form 8-K were filed by the
Registrant during the quarter to which this Form 10-Q relates.
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
FIRST TEAM SPORTS, INC.
By: /s/ John J. Egart
John J. Egart
President and CEO
and By: /s/ Robert L. Lenius, Jr.
Robert L. Lenius, Jr.
Vice President and CFO
Dated: January 13, 1998
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
EXHIBIT INDEX TO FORM 10-Q
For Quarter Ended: Commission File No.: 0-16422
November 30, 1997
-------------------------------------------------------------------
FIRST TEAM SPORTS, INC.
-------------------------------------------------------------------
Exhibit
Number Description
- ------- -----------
3.1 Restated Articles of Incorporation -- incorporated by reference
to Exhibit 3.1 to the Company's Form 10-K for the year ended
February 28, 1997
3.2 Bylaws -- incorporated by reference to Exhibit 3.2
to the Company's Registration Statement on Form S-18 Reg. No.
33-16345C
4.1 Specimen of Common Stock Certificate -- incorporated
by reference to 4.1 to the Registrant's Annual Report on Form
10-K for the fiscal year ended February 28, 1991
4.2 Certificate of Designations of Series A Preferred Stock(included
in Restated Articles of Incorporation -- see Exhibit 3.1)
4.3 Rights Agreement dated as of March 15, 1996 between the
Company and Norwest Bank Minnesota, N.A. as Rights Agent --
incorporated by reference to Exhibit 2.1 to the Company's
Registration Statement on Form 8-A, Reg. No. 0-16422
4.4 Form of Right Certificate -- incorporated by
reference to Exhibit 2.2 to the Company's
Registration Statement on Form 8-A, Reg.
No. 0-16422
4.5 Summary of Rights to Purchase Share of Series A Preferred Stock-
incorporated by reference to Exhibit 2.3 to the Company's
Registration Statement of Form 8-A, Reg. No. 0-16422
27 Financial Data Schedule (included in electronic version only)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S FORM 10-Q FOR THE QUARTER ENDED NOVEMBER 30, 1997, AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> FEB-28-1998
<PERIOD-START> MAR-01-1997
<PERIOD-END> NOV-30-1998
<EXCHANGE-RATE> 1
<CASH> 736,491
<SECURITIES> 0
<RECEIVABLES> 13,932,238
<ALLOWANCES> 505,000
<INVENTORY> 23,085,684
<CURRENT-ASSETS> 39,264,902
<PP&E> 13,866,013
<DEPRECIATION> 3,969,526
<TOTAL-ASSETS> 53,054,457
<CURRENT-LIABILITIES> 12,736,227
<BONDS> 6,278,112
0
0
<COMMON> 57,895
<OTHER-SE> 32,852,223
<TOTAL-LIABILITY-AND-EQUITY> 32,910,118
<SALES> 46,459,022
<TOTAL-REVENUES> 46,459,022
<CGS> 35,321,334
<TOTAL-COSTS> 35,321,334
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 760,684
<INCOME-PRETAX> (22,616)
<INCOME-TAX> (2,671)
<INCOME-CONTINUING> (19,945)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (19,945)
<EPS-PRIMARY> .00
<EPS-DILUTED> .00
</TABLE>
