SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
Quarterly Report Under Section 13 and 15(d)
of the Securities Exchange Act of 1934
For the quarter ended September 30, 1996
Commission file number 1-10184
ABATIX ENVIRONMENTAL CORP.
(Exact name of registrant as specified in its charter)
Delaware 75-1908110
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification number)
8311 Eastpoint Drive, Suite 400
Dallas, Texas 75227
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (214) 381-1146
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 twelve 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
Common stock outstanding at October 31, 1996 was 2,033,564 shares.
<PAGE>
ABATIX ENVIRONMENTAL CORP. AND SUBSIDIARY
Consolidated Balance Sheets
<TABLE>
<CAPTION>
September 30,
1996
(Unaudited) December 31, 1995
------------------ ------------------
<S> <C> <C>
Assets
Current assets:
Cash $ 206,152 $ 415,867
Trade accounts receivable net of allowance for doubtful accounts of
$413,555 in 1996 and $336,486 in 1995 (note 2) 6,106,155 4,370,595
Inventories 3,977,776 3,088,276
Prepaid expenses and other current assets 246,831 218,187
Deferred income taxes 100,136 136,719
------------------ ------------------
Total current assets 10,637,050 8,229,644
Receivables from officers and employees 77,392 70,577
Property and equipment, net 656,425 593,060
Deferred income taxes 69,370 39,657
Other assets 44,193 43,993
------------------ ------------------
$ 11,484,430 $ 8,976,931
================== ==================
Liabilities and Stockholders' Equity
Current liabilities:
Notes payable to bank $ 4,818,866 $ 2,631,828
Accounts payable 1,171,619 1,031,481
Net liability of discontinued operations (note 3) - 56,813
Other accrued expenses and current liabilities 893,671 939,031
------------------ ------------------
Total current liabilities 6,884,156 4,659,153
------------------ ------------------
Stockholders' equity (note 4):
Preferred stock - $1 par value, 500,000 shares authorized; none issued - -
Common stock - $.001 par value, 5,000,000 shares authorized; issued
2,381,314 shares in 1996 and 2,366,314 shares in 1995 2,381 2,366
Additional paid-in capital 2,407,603 2,365,118
Retained earnings 3,213,007 2,487,838
Less cost of 347,750 common shares in treasury in 1996 and 207,100
common shares in treasury in 1995 (1,022,717) (537,544)
------------------ ------------------
Total stockholders' equity 4,600,274 4,317,778
Commitments and contingency (note 5)
------------------ ------------------
$ 11,484,430 $ 8,976,931
================== ==================
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
ABATIX ENVIRONMENTAL CORP. AND SUBSIDIARY
Consolidated Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------------------- --------------------------------------
1996 1995 1996 1995
----------------- ----------------- ------------------ ------------------
<S> <C> <C> <C> <C>
Net sales $ 8,517,896 $ 7,129,372 $ 25,203,647 $ 20,831,377
Cost of sales (6,111,665) (5,079,693) (18,158,129) (14,785,132)
----------------- ----------------- ------------------ ------------------
Gross profit 2,406,231 2,049,679 7,045,518 6,046,245
Selling, general and administrative expenses (1,919,057) (1,618,609) (5,715,227) (4,660,178)
Special (charge) credit (note 3) - (80,000) 56,711 (80,000)
----------------- ----------------- ------------------ ------------------
Operating profit 487,174 351,070 1,387,002 1,306,067
Other income (expense):
Interest expense (110,508) (74,847) (265,029) (204,573)
Other (expense) income, net (4,164) 11,779 (3,026) 22,215
----------------- ----------------- ------------------ ------------------
Earnings from continuing operations
before income taxes 372,502 288,002 1,118,947 1,123,709
Income tax expense (148,127) (97,780) (415,323) (457,125)
----------------- ----------------- ------------------ ------------------
Earnings from continuing operations 224,375 190,222 703,624 666,584
Earnings from discontinued operations, net of
tax expense of $8,348 (note 3) - - 21,545 -
----------------- ----------------- ------------------ ------------------
Net earnings $ 224,375 $ 190,222 $ 725,169 $ 666,584
================= ================= ================== ==================
Earnings per common and common equivalent share:
Earnings from continuing operations $ .11 $ .09 $ .33 $ .30
Earnings from discontinued operations - - .01 -
---------------- ----------------- ------------------ ------------------
Net earnings $ .11 $ .09 $ .34 $ .30
================= ================= ================== ===================
Weighted average common and common equivalent
shares outstanding 2,097,614 2,208,440 2,136,048 2,216,076
================= ================= ================== ==================
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
ABATIX ENVIRONMENTAL CORP. AND SUBSIDIARY
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
-------------------------------------
1996 1995
------------------ -----------------
<S> <C> <C>
Cash flows from operating activities: $ 725,169 $ 666,584
Net earnings
Adjustments to reconcile net earnings to net cash provided by (used
in) operating activities:
Depreciation and amortization 281,767 250,042
Deferred income taxes, net 6,870 (40,215)
Loss (gain) on disposal of assets 15,805 (11,615)
Changes in assets and liabilities:
Receivables (note 2) (1,735,560) (420,670)
Inventories (889,500) (438,292)
Prepaid expenses and other (23,644) 61,002
Net asset/liability of discontinued operations (note 2) (56,813) 147,807
Accounts payable 140,138 373,011
Other accrued expenses and current liabilities (45,360) 249,757
------------------ -----------------
Net cash (used in) provided by operating activities (1,581,128) 837,411
------------------ -----------------
Cash flows from investing activities:
Purchase of property and equipment (402,143) (135,014)
Proceeds from sale of property and equipment 41,206 49,934
Advances to officers and employees (42,735) (31,359)
Collection of advances to officers and employees 35,920 25,065
Other assets (5,200) (3,681)
------------------ -----------------
Net cash used in investing activities (372,952) (95,055)
------------------ -----------------
Cash flows from financing activities:
Exercise of stock options 42,500 25,511
Purchase of treasury stock (note 4) (485,173) (400,879)
Net borrowings on notes payable to bank 2,187,038 (313,664)
Principal payments on capital lease obligations - (4,719)
------------------ -----------------
Net cash provided by (used in) financing activities 1,744,365 (693,751)
------------------ -----------------
Net (decrease) increase in cash (209,715) 48,605
Cash at beginning of period 415,867 150,727
------------------ -----------------
Cash at end of period $ 206,152 $ 199,332
================== =================
Supplemental disclosure information
Cash paid during the period for: Interest $ 245,171 $ 207,142
Income taxes $ 517,531 $ 430,123
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
ABATIX ENVIRONMENTAL CORP. AND SUBSIDIARY
Notes to Consolidated Financial Statements
(Unaudited)
(1) Basis of Presentation, General and Business
Abatix Environmental Corp. ("Abatix") and its wholly owned subsidiary,
International Enviroguard Systems, Inc. ("IESI"), collectively the "Company",
market and distribute personal protection and safety equipment and durable and
nondurable supplies to the asbestos and lead abatement, industrial safety,
hazardous materials, and construction tool industries. The Company, through
IESI, imports certain products sold primarily through the Company's distribution
system. The sorbent manufacturing business of IESI was discontinued in December
1994 (see note 3).
The accompanying consolidated financial statements are prepared in accordance
with the instructions to Form 10-Q, are unaudited and do not include all the
information and disclosures required by generally accepted accounting principles
for complete financial statements. All adjustments that, in the opinion of
management, are necessary for a fair presentation of the results of operations
for the interim periods have been made and are of a recurring nature unless
otherwise disclosed herein. Certain amounts have been reclassified for
consistency in presentation. The results of operations for such interim periods
are not necessarily indicative of results of operations for a full year.
(2) Concentrations of Credit Risk
Through an acquisition in the third quarter, two of the Company's customers in
the asbestos abatement industry came under common ownership, although they both
remain separate legal entities. As of September 30, 1996 and December 31, 1995,
17% and 2% of the trade accounts receivable before allowances ("receivables")
were represented by these two customers. The increase in receivables primarily
resulted from increased activity from these two customers during the quarter.
Additionally, a change in management of the acquired entity delayed funding on a
newly established banking line of credit, thereby slowing down payments to
Abatix. Currently, the Company is working closely with its customers and
anticipates payment of the entire balance. Sales to these two companies
represented less than 5% of total sales for the first nine months of 1996.
(3) Restructuring
On December 15, 1994, the Company announced a formal plan to discontinue the
sorbent manufacturing business of IESI. The Company recorded an estimated loss
on disposal of IESI at December 31, 1994 of $139,487, net of taxes. This
estimated loss on disposal primarily included costs related to the leased
facility, the writedown of fixed assets and inventory to net realizable value
and the estimated loss from operations up to the expected disposal date. As of
December 31, 1995, the balance of the reserve existed primarily to cover the
remaining costs associated with the facility lease, which was to expire
September 1999. Sales for the discontinued operations of IESI were $8,000 and
$116,000 for the three and nine months ended September 30, 1995, respectively.
In the third quarter of 1995, the Company incurred a special charge of $80,000
to accrue for future lease commitments resulting from the closure of its
distribution center in Corpus Christi, Texas. The noncancelable lease was to
expire September 1999. Sales and operating losses for the Corpus Christi branch
were $67,000 and $26,000, respectively, for the third quarter 1995. Sales and
operating losses were $294,000 and $56,000, respectively, for the first nine
months of 1995.
The Company's lease agreement on the building that was occupied by both the
operations of IESI and the Corpus Christi branch included an option to purchase
the building. In March 1996, the Company purchased this facility and
simultaneously sold the building to a third party. This transaction terminated
the Company's lease obligation. In March 1996, the Company reversed the
remaining reserves resulting in the special credit and the earnings from
discontinued operations. Total actual costs approximated management's December
1994 estimates.
(4) Stockholders' Equity
In accordance with the Company's stock option plan, certain employees exercised
options totaling 15,000 shares during 1996.
The Board of Directors has approved the repurchase of up to 476,500 shares of
the Company's common stock, of which 347,750 shares have been purchased through
September 30, 1996, including 60,400 shares in the third quarter of 1996.
(5) Contingency
The Company was named as a defendant in a product liability lawsuit. The Company
has requested and received (1) indemnification under the manufacturer's product
liability insurance and (2) legal representation at the cost of the
manufacturer. Depositions have been taken, and management believes the
defendant's case to be without merit. Therefore, the Company does not anticipate
any material impact on its financial statements as a result of this litigation.
<PAGE>
ABATIX ENVIRONMENTAL CORP. AND SUBSIDIARY
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
THREE MONTH PERIOD ENDED SEPTEMBER 30, 1996 COMPARED TO THREE
MONTH PERIOD ENDED SEPTEMBER 30, 1995.
RESULTS OF OPERATIONS
Net sales of $8,518,000 for the three months ended September 30, 1996, increased
19% or $1,389,000 over the same period in 1995 due to the expansion of product
lines and sales force in several locations.
Gross profit of 28% of sales for the three month period ended September 30,
1996, decreased from 29% for the same period in 1995 because of increased
competition and lower product rebates.
Selling, general and administrative expenses of $1,919,000 for the three month
period ended September 30, 1996, increased 19% or $300,000 over the same period
in 1995. The increase is primarily attributable to higher payroll and other
administrative expenses due to the opening of the Las Vegas facility in December
1995 and the expansion in the Phoenix and Houston branches in late 1995 and
early 1996, respectively. In addition, an increase in selling expenses resulted
from increased gross profit dollars. Selling, general and administrative
expenses for the third quarters of 1996 and 1995 were 23% of sales. These
expenses, relative to sales, are expected to remain in their current range for
the remainder of 1996.
Interest expense of $111,000 increased 48% from 1995 interest expense of $75,000
because of increased borrowings to fund the growth in accounts receivable and
inventory and the purchase of fixed assets, primarily office furniture and
information technology hardware. The Company's credit facilities are variable
rate notes tied to the Company's lending institution's prime rate. Increases in
the prime rate could negatively affect the Company's earnings.
NET RESULTS
Net earnings for the three months ended September 30, 1996 of $224,000 or $.11
per share increased $34,000 from net earnings of $190,000 or $.09 per share for
the same period in 1995. The 18% increase in net earnings is primarily due to
higher sales volume, partially offset by higher selling, general and
administrative expenses and lower selling prices.
<PAGE>
NINE MONTH PERIOD ENDED SEPTEMBER 30, 1996 COMPARED TO NINE MONTH PERIOD ENDED
SEPTEMBER 30, 1995.
RESULTS OF CONTINUING OPERATIONS
Net sales of $25,204,000 for the nine months ended September 30, 1996, increased
21% or $4,372,000 over the same period in 1995 due to the expansion of product
lines and sales force in several locations.
Gross profit of 28% of sales for the nine month period ended September 30, 1996,
decreased from gross profit of 29% of sales for the same period in 1995 due to
increased competition from low-priced competitors and reductions in rebates.
Selling, general and administrative expenses of $5,715,000 for the nine month
period ended September 30, 1996, increased 23% or $1,055,000 over the same
period in 1995. The increase is primarily attributable to higher payroll and
other administrative expenses due to the opening of the Las Vegas facility and
the expansion in the Phoenix and Houston branches. Also, the increase in selling
expenses resulting from increased gross profit dollars. Selling, general and
administrative expenses for the first nine months of 1996 were 23% of sales
compared to 22% of sales for 1995. These expenses, relative to sales, are
expected to remain in their current range for the remainder of 1996.
The Company recorded a special charge in September 1995 of $80,000 to account
for the costs associated with closing the Corpus Christi branch. A significant
portion of this charge related to the remaining portion of its long-term leased
facility. In March 1996, the Company exercised its option to purchase this
leased facility in Corpus Christi, Texas, and simultaneously sold the facility
to a third party, resulting in the special credit in 1996 from the reversal of
previously accrued lease obligations. Sales and operating losses were $294,000
and $56,000, respectively, for the first nine months of 1995. See Note 3 to the
consolidated financial statements for additional information.
Interest expense of $265,000 was 30% higher than 1995 interest expense because
of an increased level of borrowings to fund the accounts receivable and
inventory growth and the purchase of fixed assets, primarily office furniture
and information technology hardware. The Company's credit facilities are
variable rate notes tied to the Company's lending institution's prime rate.
Increases in the prime rate could negatively affect the Company's earnings.
DISCONTINUED OPERATIONS
At December 31, 1994, the Company recorded an estimated loss for the shutdown of
its sorbent manufacturing business of IESI of $139,487, net of taxes. This
estimated loss on disposal primarily included costs related to the leased
facility, the writedown of fixed assets and inventory to net realizable value
and the estimated loss from operations up to the expected disposal date. Sales
for the discontinued operations of IESI were $116,000 for the nine months ended
September 30, 1995.
The Company's lease agreement on the building that was occupied by both the
operations of IESI and the Corpus Christi branch included an option to purchase
the building. In March 1996, the Company purchased this facility and
simultaneously sold the building to a third party. This transaction terminated
the Company's lease obligation. In March 1996, the Company reversed the
remaining reserves resulting in the earnings from discontinued operations.
See Note 3 to the consolidated financial statements for additional information.
NET RESULTS
Net earnings for the nine months ended September 30, 1996 of $725,000 or $.34
per share increased $58,000 from net earnings of $667,000 or $.30 per share for
the same period in 1995. The 9% increase in net earnings is due to higher sales
volume and the reversal of previously recorded reserves (see Note 3 to the
consolidated financial statements), partially offset by higher selling, general
and administrative expenses and lower selling prices.
LIQUIDITY AND CAPITAL RESOURCES
Net cash used in operations during the first nine months of 1996 of $1,581,000
resulted principally from increases in accounts receivable and inventory,
partially offset by the net earnings, noncash charges and the increase in
accounts payable. Because of the projected revenue growth for 1996 of 15 to 20%,
slightly slower collections and the increased expenditures related to the
additional personnel and expanded facilities providing the foundation for future
growth, cash flow from operations for 1996 is expected to be negative. However,
the historical increase in accounts receivable collections and reduction of
inventory in the fourth quarter is expected to have a positive impact on cash
flows from operations. Finally, the Company anticipates continued growth in the
Las Vegas branch, reducing the amount of cash required to operate that facility.
Cash requirements for non-operating activities during the first nine months of
1996 were for the purchase of property and equipment amounting to $402,000 and
the repurchase of the Company's common stock totaling $485,000. The property and
equipment expenditures for 1996 have consisted primarily of furniture and
fixtures and information technology hardware and software. Additional technology
purchases in 1996 will consist of software, computer hardware and
telecommunications equipment. The Company will also continue to replace delivery
vehicles as needed.
The Company currently has no plans to expand geographically in 1996; however,
the Company will continue to search for geographic locations that would
complement the existing infrastructure. If another location were to be opened in
1996, the Company would fund the startup expenses through its lines of credit.
In the third quarter 1996, the Company negotiated increases in its lines of
credit. The Company now maintains a $5,500,000 working capital line of credit at
a commercial lending institution that allows the Company to borrow up to 80
percent of the book value of eligible trade receivables plus the lessor of 40
percent of eligible inventory or $1,500,000. As of October 28, 1996, there are
advances outstanding under this credit facility of $3,632,000. Based on the
borrowing formula, the Company had the capacity to borrow an additional
$1,868,000 as of October 28, 1996. The Company also maintains a $550,000 capital
equipment credit facility providing for borrowings at 80 percent of cost on
purchases. The advances outstanding under this credit facility as of October 28,
1996 were $212,000. Both credit facilities are payable on demand and bear a
variable rate of interest computed at the prime rate plus one-half of one
percent.
Management believes, that based on its equity position, the Company's current
credit facilities can be expanded during the next twelve months, if necessary,
and that these facilities, together with cash provided by operations, will be
sufficient for its capital and liquidity requirements for the next twelve
months.
<PAGE>
ABATIX ENVIRONMENTAL CORP. AND SUBSIDIARY
PART II
Other Information
Item 1. Legal Proceedings --
The Company was named as a defendant in a product liability lawsuit filed in the
Superior Court of the State of California for the County of Los Angeles -
Central District (Placido Alvarez vs. Abatix Environmental Corp., et al, Case
No. BC133537). The Company has requested and received (1) indemnification under
the manufacturer's product liability insurance and (2) legal representation at
the cost of the manufacturer. Depositions have been taken and management
believes the plaintiff's case is without merit. Therefore, the Company does not
anticipate any material impact on its financial statements as a result of this
litigation.
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 Information -- None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits --
Exhibit 11 - Computation Re Per Share Earnings for the three and
nine month periods ended September 30, 1996 and 1995.
Exhibit 27 - Financial Data Schedule for the nine months ended
September 30, 1996 (filed with the Company's electronic filing
only).
(b) Reports on Form 8-K --
There were no reports on Form 8-K filed for the three months ended
September 30, 1996.
<PAGE>
SIGNATURE
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 as both a duly authorized officer and as the principal financial and
accounting officer by the Registrant.
ABATIX ENVIRONMENTAL CORP.
(Registrant)
Date: October 31, 1996 By: /s/ Frank J. Cinatl, IV
------------------ -----------------------
Frank J. Cinatl, IV
Vice President and Chief Financial
Officer of Registrant
(Principal Accounting Officer)
EXHIBIT 11
ABATIX ENVIRONMENTAL CORP. AND SUBSIDIARY
Computation of Re Per Share Earnings
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September30, September 30,
------------------------------ ------------------------------
1996 1995 1996 1995
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Average shares outstanding:
Primary:
Common shares outstanding, beginning of period 2,091,464 2,319,748 2,159,214 2,319,748
Weighted average number of shares issued 1,806 21,566 9,991 17,147
Weighted average number of shares acquired (25,382) (173,389) (74,367) (148,741)
Dilutive stock options and warrants, based on the treasury stock
method using average market prices 29,726 40,515 41,210 27,922
-------------- -------------- -------------- --------------
Total 2,097,614 2,208,440 2,136,048 2,216,076
============== ============== ============== ==============
Fully Diluted:
Common shares outstanding, beginning of period 2,091,464 2,319,748 2,159,214 2,319,748
Weighted average number of shares issued 1,806 21,566 9,991 17,147
Weighted average number of shares acquired - (173,389) (74,367) (148,741)
Dilutive stock options and warrants, based on the treasury
stock method using the market price at the end of the period
if higher than the average market price 29,726 46,000 41,210 58,312
------------- ------------- ------------- -------------
Total 2,097,614 2,213,925 2,136,048 2,246,466
============= ============= ============= =============
Earnings:
Earnings from continuing operations $ 224,375 $ 190,222 $ 703,624 $ 666,584
Earnings from discontinued operations - - 21,545 -
------------- -------------- ------------- -------------
Net earnings $ 224,375 $ 190,222 $ 725,169 $ 666,584
============= ============== ============== =============
Primary earnings per common and common equivalent share:
Earnings from continuing operations $ .11 $ .09 $ .33 $ .30
Earnings from discontinued operations - - .01 -
-------------- -------------- ------------- -------------
Net earnings $ .11 $ .09 $ .34 $ .30
============== ============== ============= =============
Fully diluted earnings per common and common equivalent share:
Earnings from continuing operations $ .11 $ .09 $ .33 $ .30
Earnings from discontinued operations - - .01 -
-------------- -------------- ------------- -------------
Net earnings $ .11 $ .09 $ .34 $ .30
============== ============== ============= =============
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AT SEPTEMBER 30, 1996, AND THE CONSOLIDATED
STATEMENT OF OPERATIONS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996, AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 206,152
<SECURITIES> 0
<RECEIVABLES> 6,519,710
<ALLOWANCES> (413,555)
<INVENTORY> 3,977,776
<CURRENT-ASSETS> 10,637,050<F1>
<PP&E> 1,756,067
<DEPRECIATION> (1,099,642)
<TOTAL-ASSETS> 11,484,430
<CURRENT-LIABILITIES> 6,884,156
<BONDS> 0
0
0
<COMMON> 2,381
<OTHER-SE> 4,597,893
<TOTAL-LIABILITY-AND-EQUITY> 11,484,430<F2>
<SALES> 25,203,647
<TOTAL-REVENUES> 25,203,647
<CGS> 18,158,129
<TOTAL-COSTS> 18,158,129
<OTHER-EXPENSES> 5,658,516<F3>
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 268,055<F4>
<INCOME-PRETAX> 1,118,947
<INCOME-TAX> 415,323
<INCOME-CONTINUING> 703,624
<DISCONTINUED> 21,545<F5>
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 725,169
<EPS-PRIMARY> .34
<EPS-DILUTED> .34
<FN>
<F1> AMOUNT REPRESENTS TOTAL CURRENT ASSETS.
<F2> INCLUDES THE COST OF 347,750 COMMON SHARES OF IN TREASURY OF $1,022,717.
<F3> INCLUDES A SPECIAL CREDIT OF $56,711 FROM THE REVERSAL OF PREVIOUSLY
RECORDED CHARGES (SEE NOTE 3 TO THE CONSOLIDATED FINANCIAL STATEMENTS).
<F4> INCLUDES INTEREST EXPENSE OF $265,029 AND OTHER EXPENSE OF $3,026.
<F5> AMOUNT REPRESENTS THE REVERSAL OF PREVIOUSLY RECORDED CHARGES (SEE NOTE 3
TO THE CONSOLIDATED FINANCIAL STATEMENTS).
</FN>
</TABLE>
