U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended: Commission File Number:
September 30, 1996 0-17776
LEAK-X ENVIRONMENTAL CORPORATION
(Exact name of Registrant as specified in its charter)
Delaware 23-2823596
(State or other jurisdiction of (IRS Employer Identi-
incorporation or organization fication Number)
790 East Market Street, Suite 270, West Chester, PA 19382
(Address of Principal Executive Offices) (Zip Code)
(610) 344-3380
(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 filing requirements for
the past 90 days.
Yes X No
The number of shares of Common Stock, par value $.001 per share,
outstanding as of November 11, 1996 is 15,855,388 shares.
<TABLE>
<CAPTION>
CONSOLIDATED BALANCE SHEET
LEAK-X ENVIRONMENTAL CORPORATION AND SUBSIDIARIES
September 30, December 31,
1996 1995
(Unaudited)
<S> <C> <C>
ASSETS:
CURRENT ASSETS
Cash and cash equivalents $ 239,486 $ 442,946
Accounts receivable, net 1,999,952 2,363,769
Inventory 240,785 362,782
Subscription receivable -------- 225,000
Other current assets 213,812 175,492
Net assets of discontinued operations 499,234 528,107
TOTAL CURRENT ASSETS 3,193,269 4,098,096
PROPERTY AND EQUIPMENT, NET 195,131 211,471
OTHER ASSETS
Goodwill, net of accumulated amortization of
$60,533 in 1996 and $15,625 in 1995 1,755,458 1,799,770
Patents and other assets, net of accumulated
amortization of $2,876 in 1996 and $2,556 in 1995 38,386 15,118
TOTAL OTHER ASSETS 1,793,844 1,814,888
TOTAL ASSETS $ 5,182,244 $ 6,124,455
LIABILITIES AND STOCKHOLDERS' EQUITY:
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 2,034,725 $ 2,108,564
Unearned revenue 99,162 168,206
Line of credit 222,000 450,000
Note payable to directors -------- 161,770
Current portion of long term debt 52,000 52,348
Net liabilities of discontinued operations 502,178 533,324
TOTAL CURRENT LIABILITIES 2,910,065 3,474,212
LONG TERM DEBT 229,851 106,411
STOCKHOLDERS' EQUITY
Preferred stock $.01 par value:
5,000,000 shares authorized, 1,688,888 issued and
outstanding in 1995 -------- 1,900,000
Common stock $.001 par value: 30,000,000 shares
authorized, 15,855,388 and 14,354,154 issued
and outstanding in 1996 and 1995, respectively 15,856 14,355
Additional paid-in capital 8,259,629 6,354,541
Deficit (6,233,157) (5,725,064)
TOTAL STOCKHOLDERS' EQUITY 2,042,328 2,543,832
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $ 5,182,244 $ 6,124,455
See notes to consolidated financial statements
</TABLE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF OPERATIONS
LEAK-X ENVIRONMENTAL CORPORATION AND SUBSIDIARIES
(Unaudited)
Three Months Ended September 30,
1996 1995
<S> <C> <C>
Revenues:
Service $2,011,593 $1,807,235
Product 274,278 --------
2,285,871 1,807,235
Cost of Revenues:
Service 1,553,977 1,521,349
Product 272,995 --------
1,826,972 1,521,349
Selling, general and
administrative expenses 593,028 323,929
Operating loss (134,129) (38,043)
Other income (2,744) (1,987)
Interest expense 10,592 596
Loss from continuing operations before taxes (141,977) (36,652)
Income tax credit 452 --------
Loss from continuing operations (142,429) (36,652)
Discontinued Operation (Note 3 )
Loss on disposal of discontinued operations -------- (127,273)
Net Loss (142,429) (163,925)
Weighted average common
shares outstanding 15,855,388 8,886,763
Net loss per common share
Continuing operations (0.01) (0.00)
Discontinued operations 0.00 (0.02)
Net loss per share (0.01) (0.02)
See notes to consolidated financial statements.
</TABLE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF OPERATIONS
LEAK-X ENVIRONMENTAL CORPORATION AND SUBSIDIARIES
(Unaudited)
Nine Months Ended September 30,
1996 1995
<S> <C> <C>
Revenues:
Service $4,758,788 $3,574,527
Product 1,390,774 --------
6,149,562 3,574,527
Cost of Revenues:
Service 3,563,229 2,703,815
Product 1,224,685 --------
4,787,914 2,703,815
Selling, general and
administrative expenses 1,841,442 870,290
Operating income(loss) (479,794) 422
Other income (15,473) (1,987)
Interest expense 42,951 2,020
Income(loss) from continuing operations before taxes (507,272) 389
Income tax expense/(credit) 821 (1,029)
Income (loss) from continuing operations (508,093) 1,418
Discontinued Operation (Note 3 )
Loss on disposal of discontinued operations -------- (127,273)
Net Loss (508,093) (125,855)
Weighted average common
shares outstanding 14,858,218 8,812,572
Net income (loss) per common share
Continuing operations (0.03) 0.00
Discontinued operations 0.00 (0.01)
Net loss per share (0.03) (0.01)
See notes to consolidated financial statements
</TABLE>
<TABLE>
<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
LEAK-X ENVIRONMENTAL CORPORATION AND SUBSIDIARIES
(Unaudited)
Nine Months Ended September 30,
1996 1995
<S> <C> <C>
CASH FLOW FROM
OPERATING ACTIVITIES:
Net loss ($508,093) ($125,855)
Adjustments to reconcile net loss to
net cash used by operating activities:
Depreciation 52,221 23,149
Goodwill amortization 44,908 ----
Valuation of stock options 20,250 23,437
(Increase) decrease in accounts receivable 363,817 (568,693)
Increase in costs and estimated
earnings in excess of billings (17,925) (106,612)
Decrease in inventories 121,997 ----
Increase in other current assets (20,394) (73,959)
Increase in accounts payable 32,538 408,154
Increase (decrease) in billings in excess of cost (168,206) 77,770
Increase (decrease) in accrued
expenses and other liabilities 76,213 (31,696)
(Increase) decrease in net assets of
discontinued operation (2,274) 10,317
NET CASH USED BY OPERATIONS (4,948) (363,988)
CASH FLOWS FROM INVESTING ACTIVITIES
Merger with Groundwater Recovery Systems, Inc. (22,730) (264,045)
Capital expenditures (35,881) (32,548)
Increase in other assets, net (23,268) (4,795)
NET CASH USED BY INVESTING ACTIVITIES (81,879) (301,388)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings/(payments) on line of credit (228,000) 250,000
Payments on long-term debt (38,678) ----
Expenses related to raising of capital ---- (5,000)
Excercise of stock options ---- 1,380
Conversion of Preferred Stock Fee (3,477) ----
Proceeds from subscription receivable,
net of expenses 153,522 ----
NET CASH PROVIDED (USED) BY
FINANCING ACTIVITIES (116,633) 246,380
NET INCREASE/(DECREASE) IN CASH (203,460) (418,996)
CASH, beginning of the period 442,946 724,669
CASH, end of the period $239,486 $305,673
SUPPLEMENTAL CASH FLOW INFORMATION:
Merger with Groundwater Recovery Systems, Inc.
Non cash assets (liabilities)
Accounts receivable, net ----- 847,145
Inventory ----- 355,714
Other current assets ----- 53,554
Property, plant & equipment ----- 99,862
Other assets ----- 6,030
Accounts payable, accrued expenses and
other current liabilities ----- (585,485)
Line of credit ----- (430,000)
Current portion of long-term debt ----- (56,382)
Long-term debt ----- (114,862)
Net worth ----- (191,526)
Net cash acquired through acquisition ----- ($15,950)
See notes to consolidated financial statements
</TABLE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
LEAK-X ENVIRONMENTAL CORPORATION AND SUBSIDIARIES
(UNAUDITED)
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Note 1. Basis of Presentation
The accompanying unaudited consolidated financial statements
of Leak-X Environmental Corporation (the "Company") have been
prepared in accordance with generally accepted accounting
principles for interim financial information and with the
instructions to Form 10-QSB and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for
complete financial statements. In the opinion of management, all
adjustments considered necessary for a fair presentation
(consisting of normal recurring accruals) have been included. The
preparation of financial statements in conformity with generally
accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and
liabilities at the date of the financial statements and the
reported amounts of revenues and expenses during the reporting
period. Actual results could differ from those estimates.
Operating results for the nine month period ended September 30,
1996 are not necessarily indicative of the results that may be
expected for the year ending December 31, 1996. For further
information, refer to the consolidated financial statements and
footnotes thereto included in the Company's Annual Report on Form
10-KSB for the year ended December 31, 1995.
Per share data for the periods are based upon the weighted
average number of common shares outstanding during such periods,
plus net additional shares issued upon exercise of options and
warrants. Outstanding options and warrants have not been included
in the computation of per share data in the three and nine month
periods ended September 30, 1996 or September 30, 1995 as they
would be immaterial or anti-dilutive, respectively.
Note 2. Financial Matters
Total interest expense for the nine months ended September 30,
1996 and September 30, 1995 was $42,951 and $2,020, respectively.
Note 3. Discontinued Operations
Net assets of discontinued operations at September 30, 1996
consist of accounts receivable of $499,234. Net liabilities of
discontinued operations at September 30, 1996 include accounts
payable and accrued expenses of $346,314 and $155,864,
respectively.
Note 4. Notes Payable to Directors
On September 29,1996, the Company converted two Notes Payable
to Directors (the "Old Notes") in the aggregate of $161,770 into
long-term debt (the "New Notes"). The only changes in the terms of
the New Notes as compared to the terms of the Old Notes are:
extension of the maturity to March 31, 1998; addition of the
requirement of quarterly interest payments commencing December 31,
1996 (at the same interest rate of ten percent (10%) per annum
provided in the Old Notes); and subordination of the New Notes, as
to principal, to the Revolving Credit Agreement with the Bank. In
November 1996, the Company paid $16,177 in accrued interest through
September 29, 1996 on the Old Notes.
Note 5. Line of Credit
On November 12, 1996, First Union National Bank (the "Bank")
waived certain provisions of the financial covenants contained in
the Revolving Credit Agreement and Term Loan Agreement (the
"Agreements") with the Company. The waiver was granted in
connection with (i) the agreement of certain Directors to
subordinate the principal amount due under their Notes Payable to
the Revolving Credit Agreement (see Note 4) and (ii) the pending
amendments to the financial covenants contained in the Agreements.
Currently, the Revolving Credit Agreement permits the Company to
borrow up to $750,000. Borrowings under the Revolving Credit
Agreement are limited to 60% of eligible accounts receivable, as
defined, and bear interest at the prime rate plus three-quarters of
one percent (.0075). At Septemeber 30, 1996, the Company had
borrowings outstanding under the Revolving Credit Agreement of
$222,000, leaving an available balance of $528,000.
Note 6. Subsequent Events
The Company was notified by Nasdaq that the Company's Warrants
(LEAKW) were delisted from the Nasdaq SmallCap Market, effective
with the close of business on November 6, 1996, due to the Nasdaq
requirement to maintain a minimum of two active market makers in
the Company's warrants.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations
Quarter ended September 30, 1996 compared to the Quarter ended
September 30, 1995
Net revenue increased 26% to $2,285,871 for the quarter ended
September 30, 1996 (the "1996 Quarter") compared to $1,807,235 for
the quarter ended September 30, 1995 (the "1995 Quarter"). The
increase in revenues is attributable to an 11% increase in
environmental consulting services and the addition of the Company's
groundwater remediation business which the Company acquired in
September 1995. In the 1996 Quarter, the Company's environmental
consulting business attained its highest quarterly sales volume in
its seven year history.
The Company had a higher gross margin of 20% for the 1996
Quarter as compared to a gross margin of 16% in the 1995 Quarter.
The higher gross margin in the 1996 Quarter is primarily
attributable to higher margins in both environmental consulting
services and manufacturing operations.
The Company's selling, general, and administrative ("SG&A")
expenses for the 1996 Quarter increased $269,100, as compared to
the 1995 Quarter. This increase is primarily attributed to the
addition of the Company's groundwater remediation business in
September 1995. Excluding the SG&A expenses attributable to the
Company's groundwater remediation business, the Company's SG&A
expenses would have increased only $57,488, or 18%, primarily as a
result of new employment contracts with two of the Company's
officers effective July 1, 1996.
The Company reported a net loss of $142,429 in the 1996
Quarter as compared to a net loss of $163,925 in the 1995 Quarter.
The loss in the 1996 Quarter is primarily attributable to low sales
in the groundwater remediation business in the 1996 Quarter.
Revenues for groundwater remediation services were lower than
anticipated for the 1996 Quarter due to lower demand for the
Company's products caused by continued environmental regulatory
uncertainties. The 1995 Period includes a loss on the disposal of
discontinued operations of $127,273.
Nine Months ended September 30, 1996 compared to the Nine Months
ended September 30, 1995
Net revenue increased 72% to $6,149,562 for the nine months
ended September 30, 1996 (the "1996 Period") compared to $3,574,527
for the nine months ended September 30, 1995 (the "1995 Period").
The increase in revenues is attributable to a 33% increase in
environmental consulting services and the addition of the Company's
groundwater remediation business which the Company acquired in
September 1995.
The Company had a slightly lower gross margin of 22% for the
1996 Period as compared to a gross margin of 24% in the 1995
Period. The lower gross margin is primarily attributable to the
low gross margin from the Company's groundwater remediation
business which was adversely affected by a decline in sales volume
in the 1996 Period.
The Company's SG&A expenses increased $971,152 in the 1996
Period as compared to the 1995 Period. This increase is primarily
attributable to the addition of the groundwater remediation
business. Other factors contributing to the increase include: new
employment contracts with two of the Company's officers; the
opening of a new office in New England; and, the Company's purchase
of Directors and Officers Liability Insurance.
The Company reported a loss of $508,093 in the 1996 Period as
compared to a loss of $125,855 in the 1995 Period. The loss in the
1996 Period is primarily due to low sales volume and the resultant
low gross margin in the groundwater remediation business. Even
though the Company's environmental consulting business attained its
highest nine month sales volume in its seven year history, revenues
for groundwater remediation services were lower than anticipated
for the 1996 Period, primarily attributable to lower demand for the
Company's products caused by continued environmental regulatory
uncertainties. Excluding the loss attributable to the Company's
groundwater remediation business, the Company would have reported
net income of $108,985 in the 1996 Period. The Company anticipates
improvement in the groundwater remediation business in the fourth
quarter of 1996. The 1995 Period includes a loss on the disposal
of discontinued operations of $127,273.
Liquidity and Capital Resources
The Company used $4,948 in cash from operating activities in
the 1996 Period as compared to utilizing $363,988 in the 1995
Period. The primary source of change in the utilization of cash
was a decrease of $388,040 in working capital requirements in the
1996 Period compared to an increase of $295,036 in working capital
requirements in the 1995 Period. This change was primarily a
result of lower sales at the Company's groundwater remediation
business in the 1996 Period. The lower working capital
requirements were in part offset by the Company's increased net
loss of $508,093 in the 1996 period as compared to the net loss of
$125,855 in the 1995 Period.
Net cash used by investing activities in the 1996 Period was
$81,879 as compared to $301,388 net cash used in the 1995 Period.
The Company paid $22,730 of net cash during the 1996 Period, as
compared to $264,045 of net cash in the 1995 Period for acquisition
related expenses associated with the GRS acqusition completed in
September 1995. The Company expended cash of approximately $18,000
in the 1996 Period on the investment in its New York Metro office
which opened in November 1996. Capital expenditures of $35,881 and
$32,548 in the 1996 Period and the 1995 Period, respectively, were
primarily for computer equipment.
Net cash used by financing activities was $116,633 in the 1996
Period as compared to $246,380 provided in the 1995 Period. In the
1996 Period, the Company completed a private placement of its
Common Stock and Warrants which commenced in December 1995 and
which resulted in net cash of $153,522. In addition, in the 1996
Period, the Company repaid $228,000 on its line of credit and made
scheduled payments of $38,678 on its long-term debt. The Company
borrowed $250,000 on its line of credit in the 1995 Period to
finance the acquisition of GRS. The Company also received $1,380
in proceeds from the exercise of stock options and expended $5,000
on capital raising activities in the 1995 Period.
The Company's working capital decreased 55% at September 30,
1996 to $283,204 as compared to $623,884 at December 31, 1995. The
change in working capital was primarily the result of a decrease in
accounts receivable and inventory at the Company's groundwater
remediation business. The Company utilized working capital to
manage accounts payable, fund ongoing operations and pay down its
line of credit.
Backlog at September 30, 1996 of $3,950,000 is lower than the
level of backlog at December 31, 1995 of $5,000,000 primarily due
to an industry-wide slowdown in equipment purchases and slightly
lower amount of booked construction management services. The
Company believes that approximately 40% of the current backlog will
be completed in 1996, although, no assurance of this can be given.
Much of the Company's backlog is subject to termination at will by
customers and rescheduling without significant penalty to
customers.
On September 29,1996, the Company converted two Notes Payable
to Directors (the "Old Notes") in the aggregate of $161,770 into
long-term debt (the "New Notes"). The only changes in the terms of
the New Notes as compared to the terms of the Old Notes are:
extension of the maturity to March 31, 1998; addition of the
requirement of quarterly interest payments commencing December 31,
1996 (at the same interest rate of ten percent (10%) per annum
provided in the Old Notes); and subordination of the New Notes, as
to principal, to the Revolving Credit Agreement with the Bank. In
November 1996, the Company paid $16,177 in accrued interest through
September 29, 1996 on the Old Notes.
On November 12, 1996, First Union National Bank (the "Bank")
waived certain provisions of the financial covenants contained in
the Revolving Credit Agreement and Term Loan Agreement (the
"Agreements") with the Company. The waiver was granted in
connection with (i) the agreement of certain Directors to
subordinate the principal amount due under their Notes Payable to
the Revolving Credit Agreement (see Note 4) and (ii) the pending
amendments to the financial covenants contained in the Agreements.
Currently, the Revolving Credit Agreement permits the Company to
borrow up to $750,000. Borrowings under the Revolving Credit
Agreement are limited to 60% of eligible accounts receivable, as
defined, and bear interest at the prime rate plus three-quarters of
one percent (.0075). At Septemeber 30, 1996, the Company had
borrowings outstanding under the Revolving Credit Agreement of
$222,000, leaving an available balance of $528,000.
The Company was notified by Nasdaq that the Company's warrants
(LEAKW) were delisted from the Nasdaq SmallCap Market, effective
with the close of business on November 6, 1996, due to the Nasdaq
requirement to maintain a minimum of two active market makers in
the Company's warrants.
The Company deems its present facilities and equipment
adequate for its immediate needs and it has no material commitments
for capital expenditures. The Company believes its present
liquidity and cash flow are adequate for its current needs. There
can be no assurances, however, that additional financing will not
be required, and if required, will be available, whether from debt
or equity, to the Company when needed on commercially reasonable
terms, or at all.
Management believes that inflation has not had a significant
impact on the Company's business during the past three years.
The statements contained herein include forward looking
statements that involve a number of risks and uncertainties. In
addition to the facts discussed, among the other factors that could
cause actual results to differ materially are the following:
business conditions and growth in the industry and general economy;
competitive factors, such as rival products and prices; inventory
risks due to shifts in market demand; changes in sales mix; and the
risk factors listed from time to time in the Company's SEC reports.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Pursuant to two third party complaints served on Gaservice
Maintenance Corporation ("Gaservice"), a wholly-owned subsidiary of
the Company, in August 1996, Exxon Corporation and Gordon Supply
Company brought Gaservice into an action captioned Martino
Ricciardi and Mary Ricciardi, Plaintiffs against Gordon's Supply
Company, Inc., Cord Meyer Development Company and Exxon
Corporation, Defendants, Supreme Court of the State of New York,
County of Queens. The plaintiff in this action seeks $2.1 million
in damages for injuries allegedly sustained as a result of
materials falling on him while working on an Exxon construction
site as an employee of Gaservice. Responsibility for the defense
of this lawsuit has been assumed by the Company's insurance
carrier. The Company discontinued the operations of Gaservice in
March 1995.
Item 4. Submission of Matters to a Vote of Security Holders
The matters set forth were submitted to a vote of the
Company's Security Holders in connection with its Annual meeting of
Stockholders held September 20, 1996:
1. Election of five (5) Directors.
A. Name of Nominees
John S. Gelles
Joyce A. Rizzo
William H. Gelles, Jr.
George A. Nolan
James G. Warburton
The above nominees were elected by the Stockholders of
the Company to serve for the ensuing year and until their
successors are elected and qualified.
B. The votes for the nominees were as follows:
<TABLE>
<CAPTION>
% of
Nominee For Outstanding Withheld Abstain
<S> <C> <C> <C> <C>
John S. Gelles 9,891,343 68.9% 105,259 0
Joyce A. Rizzo 9,896,343 68.9% 100,259 0
William H. Gelles, Jr. 9,891,343 68.9% 105,259 0
George A. Nolan 9,896,343 68.9% 100,259 0
James G. Warburton 9,896,343 68.9% 100,259 0
</TABLE>
2. Approval of the Company's 1996 Stock Option Plan: For,
9,697,842 shares (67% of outstanding shares); Against, 245,910
shares; Abstain, 52,850 shares; Broker non-votes, 0 shares. The
Company's 1996 Stock Option Plan was approved by the affirmative
vote of the holders of a majority of the outstanding shares of the
Company.
3. Ratification of Mazars and Company LLP as independent
auditors of the Company's 1996 financial statements: For, 9,859,202
shares (68% of outstanding shares); Against, 81,300 shares;
Abstain, 56,100 shares; Broker non-votes, 0 shares. The
ratification of Mazars and Company LLP was approved by the
affirmative vote of the holders of a majority of the outstanding
shares of the Company.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
(27) Financial Data Schedule
(b) Reports on Form 8-K:
None.
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.
Dated: November 13, 1996
LEAK-X ENVIRONMENTAL CORPORATION
by: /s/ Joyce A. Rizzo
Joyce A. Rizzo
Chief Executive Officer
by: /s/ Eileen E. Bartoli
Eileen E. Bartoli
Controller and
Chief Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE LEAK-X
ENVIRONMENTAL CORPORATION CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 30, 1996,
AND THE RELATED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED
SEPTEMBER 30, 1996, AND THE ACCOMPANYING NOTES, AND IS QUALIFIED IN ITS ENTIRETY
BY REFERNCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 239486
<SECURITIES> 0
<RECEIVABLES> 2008366
<ALLOWANCES> 8414
<INVENTORY> 240785
<CURRENT-ASSETS> 713046
<PP&E> 434555
<DEPRECIATION> 239424
<TOTAL-ASSETS> 5182244
<CURRENT-LIABILITIES> 2910065
<BONDS> 229851
0
0
<COMMON> 15856
<OTHER-SE> 2026472
<TOTAL-LIABILITY-AND-EQUITY> 5182244
<SALES> 6149562
<TOTAL-REVENUES> 6149562
<CGS> 4787914
<TOTAL-COSTS> 4787914
<OTHER-EXPENSES> 1841442
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 42951
<INCOME-PRETAX> (507272)
<INCOME-TAX> 821
<INCOME-CONTINUING> (508093)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (508093)
<EPS-PRIMARY> (0.03)
<EPS-DILUTED> (0.03)
</TABLE>
