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, 1999
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 14, 1999
<PAGE>
PART 1 - FINANCIAL INFORMATION
Item 1. Financial Statements.
AG-BAG INTERNATIONAL LIMITED
CONDENSED BALANCE SHEETS
ASSETS
June 30 December 31
(Unaudited)
1999 1998 1998
---------- ---------- ----------
Current assets:
Cash and cash equivalents $ 656 $ 656 $ 361,614
Accounts receivable 4,650,025 6,004,442 2,333,912
Inventories 7,893,077 5,871,385 5,940,289
Other current assets 770,517 349,166 754,692
---------- ---------- ---------
Total current assets 13,314,275 12,225,649 9,390,507
Deferred income tax 41,000 638,666 41,000
Intangible assets, less
accumulated amortization 45,224 92,199 54,954
Property, plant and equipment
less accumulated depreciation 3,994,671 4,117,460 3,934,382
Other assets 451,416 286,951 399,425
--------- ---------- ---------
Total assets $17,846,586 $17,360,925 $13,820,268
========== ========== ==========
(Continued)
2
<PAGE>
AG-BAG INTERNATIONAL LIMITED
CONDENSED BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' EQUITY
June 30 December 31
(Unaudited)
1999 1998 1998
--------- ---------- ---------
Current liabilities:
Notes payable to bank $2,191,674 $ 2,059,391 $ -
Current portion of long term
debt and capital lease
obligations 340,054 368,681 365,688
Current portion of notes
payable to shareholders' 15,532 15,876 15,876
Accounts payable 2,072,778 1,739,126 831,922
Accrued expenses and other
current liabilities 1,369,999 1,215,088 1,320,010
Income tax payable 328,942 521,836 39,636
---------- ---------- ----------
Total current liabilities 6,318,979 5,919,998 2,573,132
Long term debt and capital
lease obligation, less
current portion 2,033,194 2,370,563 2,201,388
Notes payable to shareholders'
less current portion - 16,347 8,219
--------- ---------- ---------
Total liabilities 8,352,173 8,306,908 4,782,739
--------- ---------- ---------
Commitments
Shareholders' equity:
Preferred stock, $4LV 8 1/2%
nonvoting 696,000 696,000 696,000
Common stock, $.01 par value 120,619 120,619 120,619
Additional paid-in capital 9,210,211 9,210,211 9,210,211
Retained earnings(deficit) ( 532,417) (972,813) (989,301)
--------- ---------- ---------
Total shareholders' equity 9,494,413 9,054,017 9,037,529
--------- --------- ---------
Total liabilities and
shareholders' equity $17,846,586 $17,360,925 $13,820,268
========== ========== ==========
See Notes to Condensed Financial Information
3
<PAGE>
AG-BAG INTERNATIONAL LIMITED
CONDENSED STATEMENT OF SHAREHOLDERS' EQUITY
(Unaudited)
<TABLE>
<CAPTION>
Accumulated
Other
Preferred Stock Common Stock Paid-In Retained Comprehensive
Shares Amount Shares Amount Capital Earnings Income Total
------ ------ ------ ------ ------- ---------- ------- ----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance December 31, 1998 174,000 $696,000 12,061,991 $120,619 $9,210,211 $ (989,301) $ - $9,037,529
Preferred stock dividends (14,790) (14,790)
Net loss (180,083) ( 180,083)
Other comprehensive income,
Net of tax - -
------- ------- ---------- ------- --------- ----------- ---------- ----------
Balance March 31, 1999 174,000 696,000 12,061,991 120,619 9,210,211 (1,184,174) - 8,842,656
Preferred stock dividends (14,790) (14,790)
Net income 666,547 666,547
Other comprehensive income,
Net of tax - -
------- ------- ---------- ------- --------- ----------- ---------- ----------
Balance June 30, 1999 174,000 $696,000 12,061,991 $120,619 $9,210,211 $ (532,417) $ - $9,494,413
======= ======= ========== ======= ========= =========== ========== ==========
</TABLE>
See Notes to Condensed Financial Information
4
<PAGE>
AG-BAG INTERNATIONAL LIMITED
CONDENSED STATEMENTS OF OPERATIONS
Three Months
Ended June 30
(Unaudited)
----------------------
1999 1998
---- ----
Net sales $10,790,073 $ 9,723,185
Cost of sales 7,998,675 7,066,236
--------- ---------
Gross profit from operations 2,791,398 2,656,949
Selling expenses 865,583 792,305
Administrative expenses 707,218 621,888
Research and development expenses 74,918 19,941
--------- ---------
Income from operations 1,143,679 1,222,815
Other income (expense):
Interest income 5,099 24,408
Interest expense (108,349) (134,674)
Miscellaneous 44,118 123,955
--------- ---------
Income before provision for
income taxes 1,084,547 1,236,504
Provision for income taxes 418,000 470,200
--------- ---------
Net income $ 666,547 $ 766,304
Other comprehensive income, net of tax: - -
---------- ---------
Total comprehensive income $ 666,547 $ 766,304
========== =========
Basic and diluted net income
per common share $ .05 $ .06
========== =========
Basic and diluted weighted average
number of common shares outstanding 12,061,991 12,061,991
========== ==========
See Notes to Condensed Financial Information
5
<PAGE>
AG-BAG INTERNATIONAL LIMITED
CONDENSED STATEMENTS OF OPERATIONS
Six Months
Ended June 30
(Unaudited)
----------------------
1999 1998
---- ----
Net sales $15,535,665 $14,493,481
Cost of sales 11,699,694 10,665,908
--------- ---------
Gross profit from operations 3,835,971 3,827,573
Selling expenses 1,619,155 1,450,021
Administrative expenses 1,295,434 1,039,790
Research and development expenses 98,404 46,934
--------- ---------
Income from operations 822,978 1,290,828
Other income (expense):
Interest income 2,039 46,869
Interest expense (158,942) (233,918)
Miscellaneous 111,389 169,728
--------- ---------
Income before provision for
income taxes 777,464 1,273,507
Provision for income taxes 291,000 482,200
--------- ---------
Net income $ 486,464 $ 791,307
Other Comprehensive Income, net of tax: - -
--------- --------
Total Comprehensive Income $ 486,464 $ 791,307
========= =========
Basic and diluted net income
per common share $ .04 $ .06
========= =========
Basic and diluted weighted average
number of common shares outstanding 12,061,991 12,061,991
========== ==========
See Notes to Condensed Financial Information
6
<PAGE>
AG-BAG INTERNATIONAL LIMITED
CONDENSED STATEMENTS OF CASH FLOWS
Six Months Ended June 30
(Unaudited)
--------------------------
1999 1998
---- ----
Cash flows from operating activities:
Net income $ 486,464 $ 791,307
Adjustments to reconcile net income
to net cash used in operating activities:
Depreciation and amortization 268,271 299,428
Inventory obsolescence reserves 51,000 15,000
Loss on disposition of fixed assets 643 769
Changes in assets and liabilities:
Accounts receivable (2,316,113) (3,812,760)
Inventories (2,123,597) (163,405)
Other current assets (15,825) 1,818,957
Accounts payable 1,240,856 789,757
Accrued expenses and other current
liabilities 49,989 174,617
Income tax payable 289,306 482,200
Other assets (51,991) (106,978)
---------- ----------
Net cash provided(used)in operating
activities (2,120,997) 288,892
---------- ----------
Cash flows from investing activities:
Capital expenditures (208,352) (231,610)
Proceeds from disposition of fixed assets 8,000 10,000
---------- ----------
Net cash used in investing activities (200,352) (221,610)
---------- ----------
Cash flows from financing activities:
Net proceeds from line of credit 2,191,674 342,128
Principal payments on debt (193,828) (372,293)
Payment of shareholders' notes (7,875) (7,537)
Payment of preferred dividends (29,580) (29,580)
---------- ----------
Net cash provided(used)in financing
activities 1,960,391 (67,282)
---------- ----------
Net decrease in cash (360,958) - 0 -
Cash and cash equivalents at beginning
of period 361,614 656
---------- ----------
Cash and cash equivalents at end of period $ 656 $ 656
========= ==========
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 reflect 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, 1998 included in the Company's annual report on Form 10-K filed
with the Securities and Exchange Commission on March 31, 1999.
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. Such risks and uncertainties include, but are not limited to, the
following:
o The economic health of the U.S. dairy industry including milk and grain
feed prices and the ability of the dairy farmers to make capital
expenditures
o Adverse weather conditions which affect farmers' crops and reduce
demand for the Company's products
o Market acceptance of the Company's composting system and technology
o Consolidations within the farming sector and reduction in the number of
dairy cows
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, 1998, 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, 1999, compared to the results of operations for the three-month period
ended June 30, 1998, and to the results of operations for the six-month period
ended June 30, 1999, compared to the results of operations for the six-month
period ended June 30, 1998, and to changes in the Company's financial condition
from December 31, 1998 to June 30, 1999.
The core business of the Company is historically seasonal due to the
harvest seasons in North America and Europe. The Company's machinery tends to be
purchased in anticipation of the next harvest season, so most of the sales of
machinery occur in the spring and summer. This requires the Company to carry
significant amounts of inventory to meet rapid delivery requirements of
customers. Bag sales tend to occur as the harvest season approaches in the
summer, and during the harvest season in the fall.
9
<PAGE>
Approximately 95% of the Company's business is concentrated in the Northern
Hemisphere resulting in between 66-75% of the Company's revenue being generated
during the spring and summer (2nd and 3rd Quarters). The following table
outlines the percentage of revenue over the past three years by quarter:
Quarter 1996 1997* 1998
------- ---- ---- ----
1st 17% 14% 17%
2nd 30% 40% 35%
3rd 36% 35% 35%
4th 17% 11% 13%
* In addition to seasonal factors, revenues which normally would have occurred
in the first quarter of 1997 were not earned until the second quarter due to the
delay in the start up of the Company's new production facility in Blair,
Nebraska.
Sales for the quarter ended June 30, 1999 increased 10.97% to
$10,790,073 compared to $9,723,185 for the quarter ended June 30, 1998. Sales
for the six-month period ended June 30, 1999 increased 7.19% to $15,535,665
compared to $14,493,481 for the six-month period ended June 30, 1998. Sales for
the quarter and six month period ended June 30, 1999 were up as a result of the
slightly higher U.S. BFP (Basic Formula Price) for milk over the first quarter's
sharp decline in BFP. In addition, continued low supplemental feed costs (grain)
have spurred capital expenditures for machinery and equipment. Recent university
research articles published on the benefits of bagging over the use of bunkers
continued to help increase sales, as farmers are realizing the benefits of
bagging their feed instead of storing it in bunkers or silos. Machine sales for
the second quarter were up over 28% compared to the second quarter of 1998 and
bag sales were up 8% over the same quarter of last year. Machine and bag sales
for the six-month period were up over 13% compared to the same period in 1998.
The Company sells its product primarily through a worldwide dealer
network, however, some sales are made directly to large volume customers because
a dealer is not present in the customer's geographic market. For each of the
last 2 years, the Company estimates direct sales at between 30-33% of total
sales and the Company expects this historical sales mix to continue in the
future. The gross margin realized on the Company's direct sales are typically
within 2 to 3 percent of those sales realized through the Company's dealer
network. However, various economic, volume and market factors in the geographic
area impact the ultimate margin.
Gross profit from sales for the quarter ended June 30, 1999 increased
5.06% to $2,791,398 compared to $2,656,949 for the quarter ended June 30, 1998
due to increased sales volumes. Gross profit from sales for the six-month period
ended June 30, 1999 was flat at $3,835,971 compared to $3,827,573 for the
six-month period ended June 30, 1998. Gross profit as a percentage of sales
declined for the
10
<PAGE>
quarter and six-month period ended June 30, 1999 compared to the same periods in
1998. The decline resulted from lower margins on bags in certain geographic,
highly competitive, volume areas of the U.S. market during the first six months
of 1999 compared to 1998. The decline was also the result of lower margins on
machines during the first quarter of 1999 which were offset by slightly improved
margins on machinery due to production efficiencies being realized on the
seasonal machine production ramp-up during the second quarter of 1999.
Selling expenses for the quarter ended June 30, 1999 increased 9.25% to
$865,583 compared to $792,305 for the quarter ended June 30, 1998. Selling
expenses for the six-month period ended June 30, 1999 increased 11.66% to
$1,619,155 compared to $1,450,021 for the six-month period ended June 30, 1998.
The increase for the quarter and six-month period was the result of increased
sales personnel costs, commissions and related benefits from higher sales
volumes, coupled with increased travel and meeting expenses.
Administrative expenses for the quarter ended June 30, 1999 increased
13.72% to $707,218 compared to $621,888 for the period ended June 30, 1998.
Administrative expenses for the six-month period ended June 30, 1999 increased
24.59% to $1,295,434 compared to $1,039,790 for the six-month period ended June
30, 1998. The increase for the quarter and six-month period was the result of
increased general and administrative operating overhead coupled with higher
professional fees relating to ongoing litigation.
Research and development expenses for the quarter ended June 30, 1999
increased 275.69% to $74,918 compared to $19,941 for the quarter ended June 30,
1998. Research and development expenses for the six-month period ended June 30,
1999 increased 109.66% to $98,404 compared to $46,934 for the six-month period
ended June 30, 1998. The increase for the quarter and six-month period was the
result of increased research costs related to new silage and environmental
machine development, coupled with new silage and nutritional studies of bagged
feed and their effects on animal production.
Interest expense for the quarter ended June 30, 1999 decreased 19.55%
to $108,349 compared to $134,674 for the period ended June 30, 1998. Interest
expense for the six-month period ended June 30, 1999 decreased 32.05% to
$158,942 compared to $233,918 for the six-month period ended June 30, 1998. The
decrease for the quarter and six- month period was the result of the Company
utilizing a smaller portion of its credit facilities due to increased
collections of accounts receivable.
Net income for the quarter ended June 30, 1999 decreased 13.02% to
$666,547 compared to $766,304 for the period ended June 30, 1998. Net income for
the six-month period ended June 30, 1999 decreased 38.52% to $486,464 compared
to $791,307 for the six-month period ended June 30, 1998. The decrease for the
quarter was the result of lower bag margins in certain high volume areas coupled
with increased
11
<PAGE>
selling and administrative expenses, which were offset by slightly improved
machine margins and lower interest costs. The decrease for the six-month period
was the result of the above mentioned factors, coupled with lower machine
margins and volume during the first quarter caused by the sharp decline in the
U.S. BFP (Basic Formula Price) for milk.
Year 2000
- ---------
The Year 2000 issue exists because many computer programs use two digit
date fields to define the applicable year rather than four digit date fields.
Because of this, computer equipment and software (sometimes referred to as
"information technology" or "IT") and devices with embedded technology
(sometimes referred to as "non-IT") that are time-sensitive may recognize a date
using "00" as the year 1900 rather than the year 2000. This could result in a
system failure or miscalculations causing disruptions of operations, including,
among other things, production delays or breakdowns, a temporary inability to
process transactions, send invoices, or engage in other normal business
activity. Incomplete or untimely resolution of the Year 2000 issue by the
Company or important suppliers or customers of the Company could have a
materially adverse effect on the Company's business, financial condition or
results of operations.
The Company's approach to the Year 2000 issue is discussed below. In discussing
the Year 2000 issue, the Company necessarily makes certain forward looking
statements. There can be no assurance that actual results will not differ
materially from the projections contained in the forward looking statements.
Factors which may cause actual results to differ materially include, but are not
limited to:
o failure of Company personnel and outside consultants to properly assess and
address the Company's Year 2000 issues,
o inaccurate or incomplete responses to questionnaires sent to third parties or
inaccurate disclosure by third parties regarding the Year 2000 issue,
o failure to address the Year 2000 issue with all vendors, including utility
vendors, and customers,
o infrastructure failures, such as disruptions in the supply of electricity,
gas, water or communications services, or major institutions, such as the
government and banking systems, and
o failure of the Company to accurately predict the costs to address the Year
2000 issue or the lost revenues related to interruption in the Company's or
its customers' businesses.
State of Readiness. The Company, in conjunction with outside consultants, has
made an assessment of the effect of the Year 2000 issue on its IT and non-IT
systems. The Company has identified certain modifications to its IT systems
which are necessary to address the Year 2000 issue and has fully implemented
those
12
<PAGE>
modifications. The Company has determined there are no necessary modifications
to its non-IT systems. Based on this assessment and implementation of the
modifications discussed above, the Company believes its IT systems and non-IT
systems will properly recognize calendar dates beginning in the year 2000.
In addition, the Company has evaluated, through conversations and questionnaires
sent to its critical vendors and customers, the IT systems of most of its
outside vendors and customers. The Company has not evaluated its vendors and
customers non-IT systems. The Company has received responses from approximately
95% of its vendors and 90% of its customers. The Company has, however, received
replies from what the Company considers to be its critical vendors and
customers. Based on the responses received to date, the Company does not believe
the Year 2000 issue will have a material adverse effect.
Costs to Address Year 2000 Issue. To date, the Company has incurred costs of
approximately $40,000 and the Company estimates its total cost to become Year
2000 compliant will be approximately $45,000. Accordingly, the Company expects
the costs to address the Year 2000 issue will not have a material adverse
financial impact on the Company's financial condition or results of operations.
However, there can be no assurance that additional remediation and costs will
not be identified, especially since the Company has not received responses from
all third parties.
Risks of the Company's Year 2000 Issue. The most reasonably likely worst case
scenario for the Company would involve an extended shutdown in production and/or
lost revenue caused by interruption in the Company's customers' businesses. The
Company is unable to quantify the effect of such a scenario. However, the
Company has identified its critical vendors and customers and does not believe
that any such vendors or customers represent a significant risk. In addition,
the first month of the fiscal year is not a critical production period or period
of customer demand and therefore the Company believes it would be able to
recover from a temporary interruption without a material adverse effect on the
Company's operations.
Company's Contingency Plan. Based on the Company's assessment of the Year 2000
issue, the Company has not developed and does not intend to develop a
contingency plan to address the reasonably likely worst case scenario.
13
<PAGE>
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 package 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 22.56% as of June 30, 1999 to $4,650,025 from
the June 30, 1998 level of $6,004,442. The decrease in accounts receivable was
the result of strong collections during the quarter.
Inventory at June 30, 1999 was $7,893,077, which was 34.43% higher than
inventory at June 30, 1998 of $5,871,385. The increase in inventory resulted
from increased production during the quarter in order to meet the seasonal
backlog and new seasonal ordering programs.
Other current assets at June 30, 1999 increased to $770,517 compared to
$349,166 at June 30, 1998. The increase was the result of increased deposits and
current deferred taxes.
Intangible assets at June 30, 1999 decreased to $45,224 compared to $92,199
at June 30, 1998. The decrease was the result the of the Company's
implementation of SOP (Statement of Position) 98-5 requiring unamortized
start-up costs to be written-off at December 31, 1998, coupled with normal
amortization expense for the quarter.
The Company has a domestic operating line of credit with a limit of
$5,000,000, secured by accounts receivable and inventory. As of June 30, 1999,
$2,191,674 had been drawn under the credit line. Management believes that, along
with funds generated from operations and its operating line of credit, it will
be able to meet the Company's cash requirements through 1999.
14
<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 7, 1999.
(b) Michael W. Foster and Stan Vinson were elected as directors of the
Company. Michael B. Leahy, Arthur P. Schuette, Rolf E. Soderstrom,
Larry R. Inman, Lemuel E. Cunningham and Robert N. Thurston 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 Michael W. Foster and Stan Vinson. The results of the
election were as follows:
Votes
Against or Broker
Nominee Votes For Withheld Abstentions Nonvotes
------- --------- -------- ----------- --------
Michael W. 8,599,968 0 210,620 0
Foster
Stan Vinson 8,599,768 0 210,820 0
(d) None.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibit 27, Financial Data Schedule (Edgar Only)
(b) No reports on Form 8-K were filed by the Company during the quarter
ended June 30, 1999.
15
<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 20, 1999 By: /s/ Michael R. Wallis
----------------------
Michael R. Wallis
Chief Financial Officer and
Vice President, Finance
16
<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, 1999, and is
qualified in its entirety by reference
to such financial information.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> JUN-30-1999
<CASH> 0
<SECURITIES> 656
<RECEIVABLES> 4,933,024
<ALLOWANCES> 282,999
<INVENTORY> 7,893,077
<CURRENT-ASSETS> 13,314,275
<PP&E> 8,177,248
<DEPRECIATION> 4,182,577
<TOTAL-ASSETS> 17,846,586
<CURRENT-LIABILITIES> 6,318,979
<BONDS> 2,033,194
0
696,000
<COMMON> 120,619
<OTHER-SE> 8,677,794
<TOTAL-LIABILITY-AND-EQUITY> 17,846,586
<SALES> 15,535,665
<TOTAL-REVENUES> 15,649,093
<CGS> 11,699,694
<TOTAL-COSTS> 14,614,283
<OTHER-EXPENSES> 98,404
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 158,942
<INCOME-PRETAX> 777,464
<INCOME-TAX> 291,000
<INCOME-CONTINUING> 486,464
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 486,464
<EPS-BASIC> .04
<EPS-DILUTED> .04
</TABLE>
