UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended: June 30, 1998
Commission file Number: 0-18259
AG-BAG INTERNATIONAL LIMITED
(Exact name of registrant as specified in its charter)
Delaware 93-1143627
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
2320 SE Ag-Bag Lane, Warrenton OR 97146
(Address of principal executive offices) (Zip Code)
(503)861-1644
(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, $.01 par value per share - 12,061,991 shares outstanding as of
July 10, 1998
1
<PAGE>
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
AG-BAG INTERNATIONAL LIMITED
CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS
June 30 December 31
(Unaudited)
1998 1997 1997
---------- ---------- ----------
<S> <C> <C> <C>
Current assets:
Cash and cash equivalents $ 656 $ 656 $ 656
Accounts receivable 6,004,442 6,671,815 2,191,682
Inventories 5,871,385 7,219,711 5,528,239
Other current assets 349,166 580,025 2,168,123
---------- ---------- ----------
Total current assets 12,225,649 14,472,207 9,888,700
Deferred income tax 638,666 2,000 638,666
Intangible assets, less
accumulated amortization 92,199 1,605,427 104,547
Property, plant and equipment
less accumulated depreciation 4,117,460 4,957,330 4,378,444
Long-term inventories - 1,344,334 -
Other assets 286,951 221,077 179,973
---------- ---------- ----------
Total assets $17,360,925 $22,602,375 $15,190,330
========== ========== ==========
(Continued)
2
<PAGE>
AG-BAG INTERNATIONAL LIMITED
CONDENSED BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' EQUITY
June 30 December 31
(Unaudited)
1998 1997 1997
---------- ---------- ----------
<S> <C> <C> <C>
Current liabilities:
Notes payable to bank $ 4,142,076 $ 1,717,263
Current portion of long term
debt and capital lease
obligations $ 368,681 434,058 444,985
Current portion of notes
payable to shareholders' 15,876 14,344 15,876
Accounts payable 1,739,130 2,118,732 949,373
Accrued expenses and other
current liabilities 1,215,088 992,034 1,040,471
Income tax payable 521,836 77,680 39,636
---------- ---------- ----------
Total current liabilities 3,860,611 7,778,924 4,207,604
Notes payable to bank 2,059,391 - -
Long term debt and capital
lease obligation, less
current portion 2,370,563 2,474,215 2,666,552
Notes payable to shareholders'
less current portion 16,347 32,743 23,884
---------- ---------- ----------
Total liabilities 8,306,912 10,285,882 6,898,040
---------- ---------- ----------
Commitments
Shareholders' equity:
Preferred stock, $4LV 8 1/2%
nonvoting 696,000 696,000 696,000
Common stock, $.01 par value 120,619 120,537 120,619
Additional paid-in capital 9,210,211 9,201,796 9,210,211
Retained earnings (deficit) (972,817) 2,304,042 (1,734,540)
Foreign currency translation - (5,882) -
---------- ---------- ----------
Total shareholders' equity 9,054,013 12,316,493 8,292,290
---------- ---------- ----------
Total liabilities and
shareholders' equity $17,360,925 $22,602,375 $15,190,330
========== ========== ==========
</TABLE>
See Notes to Condensed Financial Information
3
<PAGE>
AG-BAG INTERNATIONAL LIMITED
CONDENSED STATEMENT OF SHAREHOLDERS' EQUITY
(UNAUDITED)
<TABLE>
<CAPTION>
Preferred Stock Common Stock Paid-In Retained
Shares Amount Shares Amount Capital Earnings Total
------ ------ ------ ------ ------- -------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Balance December 31, 1997 174,000 $696,000 12,061,991 $120,619 $9,210,211 $(1,734,540) $8,292,290
Preferred stock dividends (14,790) (14,790)
Net income 25,003 25,003
------- ------- ---------- ------- --------- --------- ---------
Balance March 31, 1998 174,000 696,000 12,061,991 120,619 9,210,211 (1,724,331) 8,302,499
Preferred stock dividends (14,790) (14,790)
Net income 766,304 766,304
------- ------- ---------- ------- --------- --------- ---------
Balance June 30, 1998 174,000 696,000 12,061,991 120,619 9,210,211 (972,817) 9,054,013
======= ======= ========== ======= ========= ========= =========
</TABLE>
See Notes to Condensed Financial Information
4
<PAGE>
AG-BAG INTERNATIONAL LIMITED
CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months
Ended June 30
(Unaudited)
----------------------
1998 1997
---- ----
<S> <C> <C>
Net sales $ 9,649,103 $ 8,026,872
Cost of sales 7,013,712 5,965,929
---------- ----------
Gross profit from operations 2,635,391 2,060,943
Selling expenses 792,305 669,947
Administrative expenses 621,888 585,617
Research and development expenses 19,941 8,594
---------- ----------
Income from operations 1,201,257 796,785
Other income (expense):
Interest income 24,408 1,863
Interest expense (134,674) (138,631)
Miscellaneous 145,513 112,956
---------- ----------
Income from continuing
operations before provision for
income taxes 1,236,504 772,973
Provision for income taxes 470,200 286,000
---------- ----------
Income from continuing
operations 766,304 486,973
Discontinued operations
Income from operations of discontinued
Ag-Bag Europe PLC - 85,387
--------- ----------
Net income $ 766,304 $ 572,360
========= ==========
Basic and diluted net income
per common share
Continuing operations $ .06 $ .04
Discontinued operations $ .00 $ .01
--------- ----------
$ .06 $ .05
========= ==========
Basic and diluted weighted average
number of common shares outstanding 12,061,991 12,053,751
========== ==========
</TABLE>
See Notes to Condensed Financial Information
5
<PAGE>
AG-BAG INTERNATIONAL LIMITED
CONDENSED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Six Months
Ended June 30
(Unaudited)
----------------------
1998 1997
---- ----
<S> <C> <C>
Net sales $14,366,764 $10,784,058
Cost of sales 10,597,921 8,159,772
---------- ----------
Gross profit from operations 3,768,843 2,624,286
Selling expenses 1,450,021 1,224,782
Administrative expenses 1,039,790 1,088,310
Research and development expenses 46,934 36,657
---------- ----------
Income from operations 1,232,098 274,537
Other income (expense):
Interest income 46,869 8,931
Interest expense (233,918) (187,222)
Miscellaneous 228,458 172,551
---------- ----------
Income from continuing
operations before provision for
income taxes 1,273,507 268,797
Provision for income taxes 482,200 77,680
---------- ----------
Income from continuing
operations 791,307 191,117
Discontinued operations
Income from operations of discontinued
Ag-Bag Europe PLC - 2,766
---------- ----------
Net income $ 791,307 $ 193,883
========== ==========
Basic and diluted net income
per common share
Continuing operations $ .06 $ .02
Discontinued operations $ .00 $ .00
--------- ----------
$ .06 $ .02
========= ==========
Basic and diluted weighted average
number of common shares outstanding 12,061,991 12,053,751
========== ==========
</TABLE>
See Notes to Condensed Financial Information
6
<PAGE>
AG-BAG INTERNATIONAL LIMITED
CONDENSED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Six Months Ended June 30
(Unaudited)
------------------------
1998 1997
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income $ 791,307 $ 193,883
Adjustments to reconcile net income
to net cash used in operating activities:
Depreciation and amortization 299,428 535,528
Loss on disposition of fixed assets 769 1,443
Changes in assets and liabilities:
Accounts receivable (3,812,760) (3,709,215)
Inventories (148,405) (1,711,485)
Other current assets 1,818,957 (33,458)
Accounts payable 789,757 1,419,541
Accrued expenses and other current
liabilities 174,617 (24,106)
Income tax payable 482,200 77,680
Other assets (106,978) (17,423)
---------- ----------
Net cash provided (used) in operating
activities 288,892 (3,267,612)
---------- ----------
Cash flows from investing activities:
Capital expenditures (231,610) (656,034)
Proceeds from disposition of fixed assets 10,000 -
---------- ----------
Net cash used in investing activities (221,610) (656,034)
---------- ----------
Cash flows from financing activities:
Net proceeds from line of credit 342,128 3,762,870
Principal payments on debt (372,293) (99,567)
Proceeds from issuance of debt - 331,120
Payment of shareholders' notes (7,537) (6,990)
Payment of preferred dividends (29,580) (29,580)
---------- ----------
Net cash provided (used) in financing
activities (67,282) 3,957,853
---------- ----------
Effect of foreign currency translation - (34,207)
---------- ----------
Net decrease in cash - 0 - - 0 -
Cash and cash equivalents at beginning
of period 656 656
---------- ----------
Cash and cash equivalents at end of period $ 656 $ 656
========== ==========
</TABLE>
See Notes to Condensed Financial Information
7
<PAGE>
AG-BAG INTERNATIONAL LIMITED
Notes to Condensed Financial Information
(Unaudited)
Note 1 - Description of Business and Summary of Significant Accounting Policies
- -------------------------------------------------------------------------------
The Company's financial statements reflects all adjustments which, in the
opinion of management, are necessary for a fair statement of the results of
operations for the periods presented. Due to the seasonal nature of the
business, the operating results of the Company's quarterly financial information
should not be taken as indicative of the results of its operations for a full
year. The financial statements presented for the six-month period should be read
in conjunction with the financial statements and notes thereto for the year
ended December 31, 1997 included in the Company's annual report on Form 10-K
filed with the Securities and Exchange Commission on March 31, 1998.
Reclassifications
- -----------------
Certain reclassifications have been made to the financial statements for the
periods presented from amounts previously reported to conform with
classifications currently adopted. Such reclassifications had no effect on
previously reported shareholders' equity or results of operations.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
The information set forth below relating to matters that are not
historical facts are "forward-looking statements" within the meaning of Section
21E of the Securities Exchange Act of 1934 and involve risks and uncertainties
which could cause actual results to differ materially from those set forth
below.
Reference is made to Item 7 of "Management's Discussion and Analysis of
Financial Condition and Results of Operations" included in the Company's annual
report on Form 10-K for the year ended December 31, 1997, on file with the
Securities and Exchange Commission. The following discussion and analysis
pertains to the Company's results of operations for the three-month period ended
June 30, 1998, compared to the results of operations for the three-month period
ended June 30, 1997, and to the results of operations for the six-month period
ended June 30, 1998, compared to the results of operations for the six-month
period ended June 30, 1997, and to changes in the Company's financial condition
from December 31, 1997 to June 30, 1998.
On December 5, 1997, the Board of Directors approved the sale of the
Company's U.K. subsidiary which had not been performing at a profitable level
due to the BSE (Mad Cow) problem within the British farming industry. The U.K.
subsidiary sold several of its bagging machines in its rental fleet early in
1997 with the anticipation of improving the ongoing operations through increased
concentration on more profitable custom work. This proved unsuccessful due in
large part to the poor weather conditions experienced throughout the
traditionally busy spring and summer months in England and the continued
escalation during the year of the BSE problem within the British farming
industry depressing the custom work. The results of Ag-Bag Europe, PLC are shown
as discontinued operations for the quarter and six-month period ended June 30,
1997.
Sales for the quarter ended June 30, 1998 increased 20.21% to
$9,649,103 compared to $8,026,872 for the quarter ended June 30, 1997. Sales for
the six-month period ended June 30, 1998 increased 33.22% to $14,366,764
compared to $10,784,058 for the six-month period ended June 30, 1997. Sales for
the quarter were up as a result of the stabilizing milk prices and lower feed
costs (grain) which spurred capital expenditures for machinery and equipment.
Recent university research articles published on the benefits of bagging over
the use of bunkers has also helped to increase sales, as farmers are realizing
the benefits of bagging their feed instead of storing it in bunkers or silos.
Machine and bag sales for the second quarter were up over 15% compared to the
second quarter of 1997. Additionally, the environmental division of the Company
sold several composting systems during the second quarter of 1998(generating
over $300,000 in revenue) where as none were sold in the second quarter of 1997.
This reflects what the company believes,
9
<PAGE>
is a growing interest in Ag-Bag's composting system and technology coupled with
continued successes in pilot projects.
Sales for the six-month period were up as a result of the above
mentioned factors coupled with the Company's introduction of its next generation
(hydraulic finger controlled) silage Bagger during the first quarter of 1998.
Machine sales for the six-month period were up over 33% compared to the same
period in 1997 and bag sales were up over 22% compared to the same period in
1997. Additionally, environmental division sales of composting systems for the
six-month period were over $450,000 compared to $10,000 for the same period in
1997.
Gross profit from sales for the quarter ended June 30, 1998 increased
27.87% to $2,635,391 compared to $2,060,943 for the quarter ended June 30, 1997.
Gross profit from sales for the six-month period ended June 30, 1998 increased
43.61% to $3,768,843 compared to $2,624,286 for the six-month period ended June
30, 1997. The increase for the quarter and six-month period were the result of
increased sales volumes and improved margins.
Selling expenses for the quarter ended June 30, 1998 increased 18.26%
to $792,305 compared to $669,947 for the quarter ended June 30, 1997. Selling
expenses for the six-month period ended June 30, 1998 increased 18.39% to
$1,450,021 compared to $1,224,782 for the six-month period ended June 30, 1997.
The increase for the quarter and six-month period were the result of increased
meeting and travel expenses, coupled with increased commissions from higher
sales volumes and increased advertising expenses related to the Company's new
image and product advertising campaign.
Administrative expenses for the quarter ended June 30, 1998 increased
6.19% to $621,888 compared to $585,617 for the period ended June 30, 1997.
Administrative expenses for the six-month period ended June 30, 1998 increased
4.45% to $1,039,790 in comparison to $1,088,310 for the six-month period ended
June 30, 1997. The increase for the quarter and six-month period were the result
of slightly higher personnel costs and general administrative overheads, which
were offset by lower amortization expense as a result of the fourth quarter 1997
strategic realignment.
Interest expense for the quarter ended June 30, 1998 decreased 2.85% to
$134,674 in comparison to $138,631 for the period ended June 30, 1997. Interest
expense for the six-month period ended June 30, 1998 increased 24.94% to
$233,918 compared to $187,222 for the six-month period ended June 30, 1997. The
decrease for the quarter was the result of reduced usage of the Company's line
of credit which were was offset by additional interest expense from the new
long-term construction and equipment loans taken out in July, 1997 to finance
the Company's new Blair, Nebraska facilities. The increase for the six-month
period was the result of the Company utilizing a larger portion of its credit
facilities during the first quarter of the year as a result of extended term
sales offered during the fourth quarter
10
<PAGE>
of 1997. Additionally, the Company added a long-term construction and equipment
loan in July, 1997 to finance its new Blair, Nebraska facilities.
Net income for the quarter ended June 30, 1998 increased 33.88% to
$766,304 compared to $572,360 for the period ended June 30, 1997. Net income for
the six-month period ended June 30, 1998 increased 408.13% to $791,307 compared
to $193,883 for the six-month period ended June 30, 1997. The increase for the
quarter was the result of increased sales and improving margins, which were
offset by higher selling and administrative costs. The increase for the
six-month period was the result of increased sales and improving margins, which
were offset by higher selling and interest costs. The Company recorded income
from discontinued operations of its U.K. subsidiary, Ag-Bag Europe, PLC, in the
amount of $85,387 during the second quarter of 1997 and $2,766 for the six-month
period ended June 30, 1997. As part of the strategic realignment in December,
1997, the Company sold Ag-Bag Europe, PLC.
Liquidity and Capital Resources
- -------------------------------
The seasonal nature of the northern hemisphere farming industry, the
production time for equipment and the time required to prepare bags for use
requires the Company to manufacture and carry high inventories to meet rapid
delivery requirements. In particular, the Company must maintain a significant
level of bags during the spring and early summer to meet the sales demands
during the harvest season. The Company uses working capital and trade credit to
increase its inventory so that it has sufficient inventory available to meet its
sales demands through the spring and summer months.
The Company relies on its suppliers to provide trade credit to enable
the Company to build its inventory. The Company's suppliers have provided
sufficient trade credit to meet the demand to date and management believes this
will continue. No assurance can be given that suppliers will continue to provide
sufficient trade credit in the future.
Accounts receivable decreased 10.00% as of June 30, 1998 to $6,004,442
from the June 30, 1997 level of $6,671,815. The decrease in accounts receivable
was the result of increased collection efforts coupled with tighter credit
terms.
Inventory at June 30, 1998 was $5,871,385, which was 31.44% lower than
inventory at June 30, 1997 of $8,564,045. The decrease in inventory resulted
from increased sales volumes. In addition, certain noncore, long-term inventory
was written down to fair market value or abandoned as part of the strategic
realignment of the Company in December of 1997.
The Company entered into a new long-term $5,000,000 operating line of
credit on April 20, 1998. The new line of credit, which is with a new lender,
replaced the old line of credit and is secured by
11
<PAGE>
accounts receivable, inventory and other assets of the Company. As of June 30,
1998, the outstanding balance under the line of credit was $2,059,391.
Management believes that, along with funds generated from operations and its
credit facility, it will be able to meet the Company's cash requirements through
1998.
In 1997, the Nasdaq listing requirements were substantially expanded. The
Company does not currently qualify under the more stringent requirements because
the price at which its Common Stock is trading is below the $1 per share
minimum. The Company was formally notified on February 27, 1998 that its Common
Stock will be removed from quotation on the Nasdaq inter-dealer quotation system
on May 28, 1998 if the Company continues to not qualify under the new Nasdaq
listing requirements. On May 29, 1998 the Company was formally notified that its
stock would be delisted within 5 days unless it submitted a formal plan and
written request for exemption from the new listing requirements. On June 4, 1998
the Company submitted information to Nasdaq requesting an exemption from this $1
per share minimum bid price listing requirement and has been informed that its
request will be reviewed. On July 13, 1998 the Company received notification
that its request for exemption had been denied. The Company has appealed this
decision and has requested a written hearing on the matter. The Company is
currently awaiting a response to its written appeal for exemption.
In the event the Company's common Stock is removed from quotation on the
Nasdaq, the Company anticipates the Common Stock would be traded in the
over-the-counter market (bulletin board system). The removal from quotation on
Nasdaq could have a material adverse effect on the Company's ability to raise
additional equity capital in a public stock offering should that become
necessary.
12
<PAGE>
Financial Accounting Standards Not Yet Adopted
- ----------------------------------------------
In June 1997, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Accounting Standards (SFAS) No. 130, "Reporting
Comprehensive Income", which establishes standards for reporting and display of
comprehensive income and its components (revenue, expenses, gains and losses) in
a full set of general-purpose financial statements. The Company has adopted SFAS
No. 130 for its current fiscal year.
In June 1997, the FASB issued SFAS No. 131, "Disclosure about Segments of
an Enterprise and Related Information", which changes the way public companies
report information about operating segments. SFAS No. 131, which is based on the
management approach to segment reporting, establishes requirements to report
selected segment information quarterly and to report entity-wide disclosures
about products and services, major customers and the material countries in which
the entity holds assets and reports revenue. Management has not yet evaluated
the effects of this change on its reporting of segment information. The Company
has adopted SFAS No. 131 for its current fiscal year.
Year 2000
- ---------
The Company has made an assessment of the effect of the Year 2000 issue on
its systems, equipment and software. Based on this assessment and consultation
with outside consultants, the Company believes its systems, equipment and
software will properly recognize calendar dates beginning in the year 2000,
without any significant changes. The Company intends to evaluate the information
systems and software of its outside vendors in connection with the Year 2000
issue, but anticipates any potential modification to its systems and software
will not materially effect the Company's future financial results. Accordingly,
the Company expects the Year 2000 issue will not have a material adverse
financial impact on the Company.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK.
Not Applicable.
13
<PAGE>
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
(a) An Annual Meeting of Stockholders was held on June 1, 1998.
(b) Larry R. Inman, Lemuel E. Cunningham and Robert N. Thurston
were elected as directors of the Company. Michael B. Leahy,
Arthur P. Schuette, Rolf E. Soderstrom, Michael W. Foster and
Roy I. Anderson continued as directors of the Company after
the Annual Meeting of Stockholders.
(c) The only matter voted upon at the Annual Meeting of
Stockholders was the election of Larry R. Inman, Lemuel E.
Cunningham and Robert N. Thurston. The results of the election
were as follows:
<TABLE>
<CAPTION>
Votes
Against or Broker
Nominee Votes For Withheld Abstentions Nonvotes
<S> <C> <C> <C> <C>
Larry R. 9,342,887 0 536,893 0
Inman
Lemuel E. 9,342,887 0 536,893 0
Cunningham
Robert N. 9,312,710 0 567,010 0
Thurston
</TABLE>
(d) None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibit 27, Financial Data Schedule (Edgar Only)
(b) A report on Form 8-K dated June 12, 1998 was filed with
respect to a change in the Company's certifying accountant.
Effective June 8, 1998, the Company engaged Yergen & Meyer,
LLP as its new independent accountants and dismissed KPMG Peat
Marwick, LLP as its independent accountants.
14
<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.
AG-BAG INTERNATIONAL LIMITED,
a Delaware corporation
(Registrant)
Date: July 21, 1998 By: /s/ Michael R. Wallis
-----------------------------------
Michael R. Wallis
Chief Financial Officer and
Vice President, Finance
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S REPORT ON FORM 10-Q FOR THE PERIOD ENDED JUNE 30, 1998, AND RESTATED
FORM 10-Q FOR THE PERIOD ENDED JUNE 30, 1997, AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<CIK> 0000842289
<NAME> AG-BAG INTERNATIONAL LIMITED
<MULTIPLIER> 1
<CURRENCY> USD
<S> <C> <C>
<PERIOD-TYPE> 6-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1997
<PERIOD-START> APR-01-1998 APR-01-1997
<PERIOD-END> JUN-30-1998 JUN-30-1997
<EXCHANGE-RATE> 1 1
<CASH> 0 0
<SECURITIES> 656 656
<RECEIVABLES> 6,231,735 6,902,058
<ALLOWANCES> 227,293 230,243
<INVENTORY> 5,871,385 8,564,045
<CURRENT-ASSETS> 12,225,649 14,472,207
<PP&E> 7,901,127 9,091,762
<DEPRECIATION> 3,783,667 4,134,432
<TOTAL-ASSETS> 17,360,925 22,602,375
<CURRENT-LIABILITIES> 3,860,611 7,778,924
<BONDS> 0 0
0 0
696,000 696,000
<COMMON> 120,619 120,537
<OTHER-SE> 8,237,394 11,499,956
<TOTAL-LIABILITY-AND-EQUITY> 17,360,925 22,602,375
<SALES> 14,366,764 10,784,058
<TOTAL-REVENUES> 14,642,091 10,965,540
<CGS> 10,597,921 8,159,772
<TOTAL-COSTS> 13,134,666 10,509,521
<OTHER-EXPENSES> 0 0
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 233,918 187,222
<INCOME-PRETAX> 1,273,507 268,797
<INCOME-TAX> 482,200 77,680
<INCOME-CONTINUING> 791,307 191,117
<DISCONTINUED> 0 2,766
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 791,307 193,883
<EPS-PRIMARY> .06 .02
<EPS-DILUTED> .06 .02
</TABLE>
