U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the Quarterly Period Ended JUNE 30, 1997
OR
[ ] Transition Report Under Section 13 or 15(d)
of the Exchange Act
For the Transition Period From ______ to _______
Commission File Number 1-10185
DOCUCON, INCORPORATED
(Exact name of small business issuer as specified in its charter)
Delaware 74-2418590
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
7461 Callaghan Road
San Antonio, Texas 78229
(Address of principal executive offices)
(210) 525-9221
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 [ ]
State the number of shares outstanding of each of the issuer's classes of
common equity as of July 31, 1997. 12,443,222
<PAGE>
DOCUCON, INCORPORATED
INDEX
Page
PART I. FINANCIAL INFORMATION (UNAUDITED)
Item 1: Balance Sheets - June 30, 1997, and December 31, 1996 3
Statements of Operations - For the Three and Six Months Ended
June 30, 1997 and 1996 5
Statements of Cash Flows - For the Six Months Ended June 30,
1997 and 1996 6
Notes to Financial Statements 7
Item 2: Management's Discussion and Analysis of Financial Condition
and Results of Operations
9
PART II. OTHER INFORMATION 11
SIGNATURES 12
-2-
<PAGE>
DOCUCON, INCORPORATED
BALANCE SHEETS
June 30,
1997 December 31,
ASSETS (UNAUDITED) 1996
----------- ------------
CURRENT ASSETS:
Cash and temporary cash investments ................ $ 38,961 $ 198,152
Accounts receivable-trade, net of allowance for
doubtful accounts of $4,444-
U.S. Government ................................. 469,639 1,492,509
Commercial ...................................... 990,907 1,054,288
Unbilled revenues ............................... 2,064,463 1,655,428
Other receivables ............................... 13,728 6,834
Prepaid expenses and other ...................... 101,897 185,302
----------- -----------
Total current assets ................ 3,679,595 4,592,513
----------- -----------
PROPERTY AND EQUIPMENT:
Conversion systems ............... 5,294,574 5,252,834
Building and improvements ........ 1,764,164 1,736,666
Land ............................. 230,000 230,000
Furniture and fixtures ........... 331,506 275,279
----------- -----------
Total property and equipment ........ 7,620,244 7,494,779
Less- Accumulated depreciation ................. (5,097,314) (4,798,200)
----------- -----------
Net property and equipment .......... 2,522,930 2,696,579
----------- -----------
SOFTWARE DEVELOPMENT COSTS AND OTHER, net ......... 584,896 527,926
----------- -----------
GOODWILL, net ..................................... 310,910 320,214
----------- -----------
Total assets ........................ $ 7,098,331 $ 8,137,232
=========== ===========
See Notes to Financial Statements.
-3-
<PAGE>
DOCUCON, INCORPORATED
BALANCE SHEETS (Continued)
June 30,
1997 December 31,
LIABILITIES AND STOCKHOLDERS' EQUITY (UNAUDITED) 1996
----------- -----------
CURRENT LIABILITIES:
Accounts payable ..................................... $ 624,049 $ 1,403,419
Accrued liabilities .................................. 693,876 885,659
Line of credit ....................................... 609,500 750,000
Current maturities of capital lease obligations ...... 15,076 11,820
Deferred revenues .................................... 618,077 561,355
Current maturities of long-term debt ................. 29,303 27,729
----------- -----------
Total current liabilities .................. 2,589,881 3,639,982
----------- -----------
LONG-TERM DEBT ....................................... 1,502,676 1,517,970
----------- -----------
CAPITAL LEASE OBLIGATIONS ............................ 55,448 51,211
----------- -----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, $1.00 par value, 10,000,000
shares authorized- Series A, 60 shares authorized,
17 and 19 shares outstanding as of June 30, 1997,
and December 31, 1996, respectively
17 19
Common Stock, $.01 par value, 25,000,000 shares
authorized; 12,443,222 and 12,032,559 shares
outstanding as of June 30, 1997, and December 31,
1996, respectively ............................... 124,432 120,326
Additional paid-in capital ........................... 9,640,190 9,640,036
Accumulated deficit ................................. (6,814,313) (6,832,312)
=========== ===========
Total stockholders' equity ................. 2,950,326 2,928,069
=========== ===========
Total liabilities and stockholders' equity . $ 7,098,331 $ 8,137,232
=========== ===========
See Notes to Financial Statements.
-4-
<PAGE>
DOCUCON, INCORPORATED
STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Six Months
ENDED JUNE 30 Ended June 30
--------------------------- ---------------------------
1997 1996 1997 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
OPERATING REVENUES $ 2,688,577 $ 3,351,968 $ 5,885,611 $ 5,685,621
------------ ------------ ------------ ------------
COSTS AND EXPENSES:
Production 1,392,224 1,845,870 3,369,337 3,121,663
Research and development 144,679 210,981 324,519 320,882
General and administrative 269,247 305,663 501,079 557,817
Marketing 595,379 562,387 1,206,575 1,007,066
Depreciation and amortization 185,105 176,523 384,184 374,510
------------ ------------ ------------ ------------
2,586,634 3,101,424 5,785,694 5,381,938
------------ ------------ ------------ ------------
OPERATING INCOME 101,943 250,544 99,917 303,683
OTHER INCOME (EXPENSE):
Interest expense (51,284) (37,477) (99,196) (77,316)
Other, net 20,440 336 29,278 6,298
------------ ------------ ------------ ------------
INCOME BEFORE INCOME TAXES 71,099 213,403 29,999 232,665
INCOME TAX EXPENSE 9,000 -- 12,000 --
------------ ------------ ------------ ------------
NET INCOME 62,099 213,403 17,999 232,665
PREFERRED STOCK DIVIDEND REQUIREMENTS 11,688 14,438 24,751 28,876
------------ ------------ ------------ ------------
NET INCOME (LOSS) APPLICABLE TO COMMON
STOCKHOLDERS $ 50,411 $ 198,965 $ (6,752) $ 203,789
============ ============ ============ ============
PRIMARY INCOME (LOSS) PER COMMON SHARE AND
COMMON SHARE EQUIVALENTS
$ -- $ .02 $ -- $ .02
============ ============ ============ ============
WEIGHTED AVERAGE COMMON SHARES AND COMMON
SHARE EQUIVALENTS
12,819,024 12,599,885 12,381,009 12,471,998
============ ============ ============ ============
</TABLE>
See Notes to Financial Statements.
-5-
<PAGE>
DOCUCON, INCORPORATED
STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months
Ended June 30
-----------------------
1997 1996
----------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 17,999 $ 232,665
Adjustments to reconcile net income to net cash
provided by operating activities-
Depreciation and amortization 384,184 374,510
Other noncash expenses -- 7,787
Changes in current assets and current liabilities-
(Increase) decrease in receivables and unbilled
revenues 670,322 (262,932)
(Increase) decrease in prepaid expenses and other 83,405 (191,151)
Increase (decrease) in accounts payable and accrued
liabiliies (971,153) 562,177
Increase in deferred revenues 56,722 82,022
----------- ---------
Net cash provided by operating activities 241,479 805,078
----------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (116,024) (432,406)
Capitalized software development costs (125,938) (120,532)
----------- ---------
Net cash used in investing activities (241,962) (552,938)
----------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Advances under line of credit 1,344,500 --
Payments under line of credit (1,485,000) (175,000)
Principal payments under capital lease obligations (8,747) (2,577)
Net proceeds from exercise of stock options 4,259 12,669
Proceeds from issuing note payable -- 87,054
Principal payments on notes payable (13,720) (37,976)
----------- ---------
Net cash used in financing activities (158,708) (115,830)
----------- ---------
NET INCREASE (DECREASE) IN CASH AND TEMPORARY
CASH INVESTMENTS
(159,191) 136,310
CASH AND TEMPORARY CASH INVESTMENTS, beginning
of period 198,152 139,167
----------- ---------
CASH AND TEMPORARY CASH INVESTMENTS, end
of period $ 38,961 $ 275,477
=========== =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for-
Interest $ 100,118 $ 47,329
=========== =========
Income taxes 19,868 --
=========== =========
</TABLE>
See Notes to Financial Statements.
-6-
<PAGE>
DOCUCON, INCORPORATED
NOTES TO FINANCIAL STATEMENTS
NOTE 1
The financial statements included herein have been prepared by Docucon,
Incorporated (the Company), without audit, pursuant to the rules and regulations
of the Securities and Exchange Commission. However, all adjustments have been
made which are, in the opinion of the Company, necessary for a fair presentation
of the results of operations for the periods covered. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to such rules and regulations, although the Company believes
that the disclosures are adequate to make the information presented not
misleading. It is recommended that these financial statements be read in
conjunction with the financial statements and the notes thereto included in the
Company's Annual Report on Form 10-KSB for the fiscal year ended December 31,
1996.
Since its inception, the Company has incurred cumulative net losses of
approximately $6.8 million. The cumulative net losses have been funded primarily
through the Company's public offering of common stock, issuances of preferred
stock, the exercise of warrants and debt financing. The Company has taken steps
to improve its operating results including exiting the litigation support
services market and focusing on the Company's core higher margined businesses.
In October 1996, the Company also refinanced its $1.5 million note payable which
was originally due in December 1996. The Company's management believes that it
is likely that the Company's operating results for the remainder of 1997 will
continue to improve and will generate sufficient working capital to sustain its
operations throughout the year. However, if improved operating results are not
sustained, the Company will be unable to ensure its continuing operations
independent of additional capital infusions.
NOTE 2
Organization and description of the Company-
Docucon, Incorporated, was incorporated in June 1986 to engage in the business
of providing technical services to its customers for the conversion of paper and
microform documents to computer-accessible media. Paper or microform documents
are scanned by sophisticated computer equipment and stored and indexed on
optical disks or magnetic media. The Company also sells software products to the
legal market. Substantially all of the Company's customers are located in the
U.S.
NOTE 3
Summary of significant accounting policies-
Property and equipment-
Property and equipment are recorded at original cost or the present value of the
capital lease payments for assets under capital lease arrangements. Maintenance
and repairs are charged to expense as incurred and betterments which increase
the value or extend the useful life of the property are capitalized. Gains or
losses on sales or other dispositions of property and equipment are credited or
charged to income.
-7-
<PAGE>
Depreciation is provided using the straight-line method over the lesser of the
capital lease term or estimated useful lives of the related assets. The
Company's fixed assets are currently depreciated over periods ranging from two
to five years beginning in the month the property is placed in service. The
Company's building is being depreciated over 40 years.
Revenue recognition-
Revenues from conversion service contracts are recognized at the time services
are provided and are based upon the number of documents converted and the
conversion rates established in the contracts.
Revenues from software licensing fees are recognized upon delivery of the
software. Revenues from maintenance and telephone support contracts are
recognized ratably over the term of the contract, typically one year.
Software development costs-
Included in software development costs is $250,000 for advanced litigation
support software (Litigator's Notebook(TM)) which was acquired during March
1994. Also included in software development costs is approximately $438,000 of
costs which were incurred during 1995, 1996 and 1997 to develop software which
will support and complement Litigator's Notebook(TM). These costs are being
amortized over periods ranging from three to five years.
Goodwill-
In connection with an acquisition in March 1994, the Company recognized goodwill
of approximately $372,000. This goodwill is being amortized on a straight-line
basis over 20 years.
Use of estimates-
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make certain estimates and
assumptions. These estimates and assumptions 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.
Statements of cash flows-
During the six months ended June 30, 1997, the Company had noncash investing and
financing activities consisting of a capital lease entered into for $16,240 and
two shares of preferred stock and accrued dividends that were converted into
66,666 shares and 51,280 shares of common stock, respectively.
NOTE 4
Common stock and preferred stock-
Each share of the Company's preferred stock ($25,000 stated value) is
convertible into 33,333 shares of common stock and earns cash dividends of 11
percent per annum. As of June 30, 1997, cumulative undeclared dividends on the
preferred stock approximated $333,000. As these dividends are undeclared, they
have not been recorded as a reduction of the Company's equity. On March 28,
1997, two shares of preferred stock were converted into 66,666 shares of common
stock. Dividends related to the converted preferred stock were paid in the form
of 51,280 shares of common stock in the second quarter.
-8-
<PAGE>
DOCUCON, INCORPORATED
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The Company's operations during the quarter ended June 30, 1997, resulted in net
income applicable to common shareholders of $50,411 compared to net income
applicable to common shareholders of $198,965 for the same quarter in 1996. The
Company incurred a net loss applicable to common shareholders of $6,752 for the
six months ended June 30, 1997, as compared to net income of $203,789 for the
same period in 1996.
Revenues decreased 20 percent to $2,688,577 for the quarter ended June 30,
1997, as compared to the same quarter in 1996. Conversion service revenues
earned under commercial contracts and a contract with the Department of Defense
(DOD) (see "Liquidity and Capital Resources") decreased 12 percent, or
approximately $290,000, as compared to the 1996 quarter. The decrease is due to
what management believes to be a temporary discontinuation of funding for a
specific project on which the Company has been performing under the DOD
contract. In addition, revenues earned from sales of the Company's software
products decreased 36 percent during the 1997 quarter compared to the 1996
quarter, when the Company had its largest single order ever. Total revenues
increased slightly for the six-month period ended June 30, 1997, as compared to
the 1996 six-month period due to increased conversion service revenues on the
aforementioned project in the first quarter of 1997 as compared to 1996.
Production costs decreased 25 percent for the quarter ended June 30, 1997, as
compared to the 1996 quarter due to the decreased revenue levels. Production
costs increased 8 percent for the six months ended June 30, 1997, over the
comparable 1996 six-month period. The increase in costs for the six-month period
is related to the higher level of conversion service revenues, particularly on
the aforementioned project which has a higher than historical level of labor
costs.
Research and development costs decreased 31 percent for the quarter ended June
30, 1997, compared to the same period in 1996 due to a temporary decrease in
personnel expense. Research and development costs increased slightly for the
1997 six-month period as the Company continued to devote resources to
development of new conversion applications and capabilities and to the expansion
of the capabilities of its JFS Litigator's Notebook(TM).
Marketing expenses increased only slightly for the quarter ended June 30, 1997,
as compared to the same period in 1996. Although the Company increased marketing
efforts for the JFS Litigator's Notebook(TM) product line, the increased
expenses were offset by lower sales commissions paid on the decreased revenues
(in late 1996, the Company established a corporate marketing department to
oversee and coordinate the total marketing strategy of the JFS division). The 20
percent increase in the marketing expenses for the six months ended June 30,
1997, as compared to the same period in 1996 reflects those increased marketing
efforts.
LIQUIDITY AND CAPITAL RESOURCES
Since its inception, the Company's operations have been supplemented through
bank borrowings, capital contributions, borrowings from affiliated and
unaffiliated lenders, capital lease agreements, an initial public offering of
the Company's common stock in 1989, the conversion of warrants into common stock
and preferred stock placements.
-9-
<PAGE>
DOCUCON, INCORPORATED
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS (Continued)
From 1991 to mid 1996, the Company has performed conversion services under
contracts from the Defense Printing Services Office (DPS) to provide services
for the DOD totaling $16.8 million. In 1995, DPS awarded additional contracts
totaling approximately $2.0 million to the Company. In February of 1996, DPS
awarded a contract to the Company. This contract allows the Company to provide
up to $14.8 million of document services to DOD agencies. The Company has
recently submitted a bid to the DOD along with several other competitors for a
contract for services similar to those already being provided by the Company.
The size of this contract is believed to be substantially larger than those
previously awarded. The Company believes that it is in good position to win all
or part of this new contract but to date has received no word from the DOD.
With the addition of J. Feuerstein Systems (JFS) in 1994, the Company made
significant investments in the marketing and development areas of its litigation
support products and services. These investments resulted in substantially
increased revenues in both the services and products areas. It is the strategic
intent of management to expand its software revenue base. Such investment has
enabled the Company to offer enhanced versions of Litigator's Notebook and the
Optical Notebook and a recently announced product, JFSNet to the marketplace.
Additional complementary products are also now available and another major
product is anticipated to be released by the end of 1997.
In October 1996, the Company refinanced the mortgage on its office building. The
new note bears interest at a fixed rate of 9.5 percent, payable monthly to a
commercial bank, and is being amortized over a 20-year term with a 5-year
maturity. The note is secured by the Company's building, other fixed assets,
accounts receivable and inventory. Approximately $68,000 of debt issuance costs
were incurred and will be amortized over a five-year period. The Company
utilizes the building for office and production space and believes that the
building will fulfill its needs for the foreseeable future.
Accounts receivable and unbilled revenues decreased approximately $670,000 from
December 31, 1996, to June 30, 1997, due to the decrease in revenues discussed
above and upon the completion of a large scale, low margin production project
for the DOD early in 1997. Accounts payable and accrued liabilities decreased
approximately $970,000 for the comparable period as a result of the decrease in
operations.
The Company expects to fund its operations and marketing activities through
utilization of cash on hand and cash generated from operations. At June 30,
1997, $609,500 was outstanding under the Company's $750,000 revolving term note
which has a current maturity date of October 31, 1997. Management of the Company
believes that it will be able to obtain a renewal of this revolving term note.
These funds are expected to be adequate for the Company's needs for at least the
next 12 months. While the Company may consider and evaluate, from time to time,
acquisitions and opportunities for future growth, the Company has not entered
into any agreements with respect to future acquisitions. Should the Company
enter into any such agreements, the Company would, in all likelihood, be
required to raise outside capital to consummate such transactions.
-10-
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings - None
Item 2. Changes in Securities - None
Item 3. Defaults Upon Senior Securities - None
Item 4. Submission of Matters to a Vote of Security Holders - None
Item 5. Other Matters - None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 11 - Computation of Earnings Per Share
Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K - None
-11-
<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.
DOCUCON, INCORPORATED
(Registrant)
By /s EDWARD P. GISTARO
Edward P. Gistaro,
Chairman of the Board and
Chief Executive Officer
By/s LORI TURNER
Lori Turner,
Vice President of Finance
and Treasurer
Dated: August 7, 1997
-12-
EXHIBIT 11
DOCUCON, INCORPORATED
COMPUTATION OF EARNINGS PER SHARE
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
ENDED JUNE 30 ENDED JUNE 30
---------------------------- -------------------------------
1997 1996 1997 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
COMPUTATION OF PRIMARY EARNINGS (LOSS) PER SHARE:
Net income ................................... $ 62,099 $ 213,403 $ 17,999 $ 232,665
Less- Preferred stock dividend requirements (11,688) (14,438) (24,751) (28,876)
------------ ------------ ------------ ------------
Net income (loss) applicable to common
stockholders used for computation ...... $ 50,411 $ 198,965 $ (6,752) $ 203,789
========== ========== ========== ==========
WEIGHTED AVERAGE NUMBER OF SHARES OF
COMMON STOCK OUTSTANDING ...................... 12,437,587 11,893,168 12,381,009 11,885,102
WEIGHTED AVERAGE INCREMENTAL SHARES
OUTSTANDING UPON ASSUMED CONVERSION
OF OPTIONS AND WARRANTS ....................... 381,437 706,717 -- 586,896
------------ ------------ ------------ ------------
WEIGHTED AVERAGE COMMON SHARES AND
COMMON SHARE EQUIVALENTS USED
FOR COMPUTATION ............................... 12,819,024 12,599,885 12,381,009 12,471,998
========== ========== ========== ==========
PRIMARY INCOME (LOSS) PER COMMON
SHARE AND COMMON SHARE EQUIVALENT ............. $ -- $ .02 $ -- $ .02
========== ========== ========== ==========
COMPUTATION OF FULLY DILUTED EARNINGS PER SHARE:
Net income ................................... $ 62,099 $ 213,403 $ 17,999 $ 232,665
Preferred stock dividend requirements ........ (11,688) (14,438) (24,751) (28,876)
Decrease in net income applicable
to common stock for-
Preferred stock dividends not incurred
upon assumed conversion of preferred
stock .................................. 11,688 14,438 24,751 28,876
------------ ------------ ------------ ------------
Net income available to common
stockholders used for computation ...... $ 62,099 $ 213,403 $ 17,999 $ 232,665
========== ========== ========== ==========
WEIGHTED AVERAGE NUMBER OF SHARES OF
COMMON STOCK OUTSTANDING ...................... 12,437,587 11,893,168 12,381,009 11,885,102
WEIGHTED AVERAGE INCREMENTAL SHARES
OUTSTANDING UPON ASSUMED CONVERSION
OF OPTIONS AND WARRANTS ....................... 381,437 706,717 498,069 586,896
WEIGHTED AVERAGE INCREMENTAL SHARES
OUTSTANDING UPON ASSUMED CONVERSION
OF THE PREFERRED STOCK ........................ 566,661 699,993 598,529 699,993
------------ ------------ ------------ ------------
WEIGHTED AVERAGE SHARES USED FOR
COMPUTATION ................................... 13,385,685 13,299,878 13,477,607 13,171,991
========== ========== ========== ==========
INCOME PER COMMON SHARE AND COMMON
SHARE EQUIVALENT ASSUMING FULL DILUTION ....... $ --(a) $ .02(a) $ --(a) $ .02(a)
========== ========== ========== ==========
</TABLE>
(a) This calculation is submitted in accordance with Item 601(b)(11) of
Regulation S-K although it is not required by APB Opinion No. 15 because it
results in dilution of less than 3 percent or is antidilutive.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM DOCUCON,
INCORPORATED'S CONDENSED CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 1997, AND ITS
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE SIX MONTHS THEN ENDED AND
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 38,961
<SECURITIES> 0
<RECEIVABLES> 3,543,181
<ALLOWANCES> 4,444
<INVENTORY> 29,078
<CURRENT-ASSETS> 3,679,595
<PP&E> 7,620,244
<DEPRECIATION> (5,097,314)
<TOTAL-ASSETS> 7,098,331
<CURRENT-LIABILITIES> 2,589,881
<BONDS> 1,602,503
0
17
<COMMON> 124,432
<OTHER-SE> 2,825,877
<TOTAL-LIABILITY-AND-EQUITY> 7,098,331
<SALES> 5,885,611
<TOTAL-REVENUES> 5,885,611
<CGS> 3,369,337
<TOTAL-COSTS> 5,785,694
<OTHER-EXPENSES> (29,278)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 99,196
<INCOME-PRETAX> 29,999
<INCOME-TAX> 12,000
<INCOME-CONTINUING> 17,999
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 17,999
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
