<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
---------- ----------
Commission File Number 33-27603
-------------------------------
NORTH AMERICAN INTEGRATED MARKETING, INC.
(Exact name of registrant as specified in its charter)
Delaware 22-2942013
- ------------------------------- -------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
3 Garret Mountain Plaza
West Paterson, New Jersey 07424
----------------------------------------
(Address of principal executive offices)
(201) 890-7330
----------------------------------------------------
(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
--- ---
<PAGE>
<TABLE>
<CAPTION>
NORTH AMERICAN INTEGRATED MARKETING, INC.
CONSOLIDATED BALANCE SHEETS
ASSETS
(UNAUDITED)
6/30/97 12/31/97
----------- -----------
<S> <C> <C>
CURRENT ASSETS
Cash $ 1,087,879 $ 1,080,630
Accounts receivable, less allowance for
doubtful accounts of $98,898 in 1997 and $53,093 in 1996 5,798,204 4,236,638
Inventories 552,713 466,117
Prepaid and other current assets 130,978 422,259
----------- -----------
Total current assets 7,569,774 6,205,644
PROPERTY, PLANT AND EQUIPMENT, Net 4,336,371 3,849,063
OTHER ASSETS 270,392 179,101
----------- -----------
TOTAL ASSETS $12,176,537 $10,233,808
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Note payable $ - $ 466,593
Current maturities of long-term debt 268,000 275,175
Accounts payable 728,731 764,913
Accounts payable - related company 887,064 371,315
Income taxes payable 427,006 703,482
Accrued expenses and other current liabilities 1,072,555 818,776
Deferred revenue - 99,475
----------- -----------
Total current liabilities 3,383,356 3,499,729
LONG-TERM DEBT 2,852,525 2,952,713
LONG-TERM DEBT - RELATED COMPANY 676,743 925,000
DEFERRED INCOME TAXES 542,200 542,200
OTHER LONG-TERM LIABILITIES 147,688 284,096
MINORITY INTEREST 762,415 571,816
SHAREHOLDERS' EQUITY
Common stock, $.00001 par value - authorized, 50,000,000
shares; issued and outstanding: 40,100,091 shares, of which
3,840,000 shares are held as treasury stock. 212 212
Preferred stock $.00001 par value - authorized 10,000,000;
issued and outstanding -0-. - -
Paid-in capital 500,003 500,003
Retained earnings 3,466,395 1,263,039
----------- -----------
3,966,610 1,763,254
Less treasury stock, at cost (155,000) (305,000)
----------- -----------
3,811,610 1,458,254
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $12,176,537 $10,233,808
=========== ===========
</TABLE>
See notes to consolidated financial statements
<PAGE>
NORTH AMERICAN INTEGRATED MARKETING, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THREE MONTH PERIOD ENDED JUNE 30
(UNAUDITED)
<TABLE>
<CAPTION>
1997 1996
----------- -----------
<S> <C> <C>
REVENUES
Database $ 1,927,557 $ 1,167,285
Printing 4,819,232 -
----------- -----------
Total revenues 6,746,789 1,167,285
COST OF REVENUE
Database - related company 635,395 291,133
Database - other 493,147 247,890
Printing 2,268,692 -
----------- -----------
Total cost of revenue 3,397,234 539,023
Selling, general and
administrative expense 978,431 334,419
Interest expense 93,116 384
Depreciation and amortization 260,450 24,404
----------- -----------
Total costs and expenses 4,729,231 898,230
----------- -----------
Income before income taxes and minority interest 2,017,558 269,055
Provision for income taxes 863,427 108,750
----------- -----------
Income before minority interest 1,154,131 160,305
Minority interest in income of subsidiary 230,244 -
----------- -----------
Net income $ 923,887 $ 160,305
=========== ===========
EARNINGS PER SHARE $ 0.04 $ 0.01
=========== ===========
WEIGHTED AVERAGE COMMON SHARES
USED IN COMPUTING EARNINGS PER SHARE 27,877,527 18,674,895
=========== ===========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
NORTH AMERICAN INTEGRATED MARKETING, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR SIX MONTH PERIOD ENDED JUNE 30
(UNAUDITED)
<TABLE>
<CAPTION>
1997 1996
----------- -----------
<S> <C> <C>
REVENUES
Database $ 4,819,099 $ 4,397,086
Printing 9,072,476 -
----------- -----------
Total revenues 13,891,575 4,397,086
COST OF REVENUE
Database - related company 1,800,904 2,611,349
Database - other 994,611 663,117
Printing 4,624,192 -
----------- -----------
Total cost of revenue 7,419,707 3,274,466
Selling, general and
administrative expense 1,866,151 635,166
Interest expense 191,798 853
Depreciation and amortization 480,287 44,277
----------- -----------
Total costs and expenses 9,957,943 3,954,762
----------- -----------
Income before income taxes and minority interest 3,933,632 442,324
Provision for income taxes 1,539,677 179,750
----------- -----------
Income before minority interest 2,393,955 262,574
Minority interest in income of subsidiary 190,599 -
----------- -----------
Net income $ 2,203,356 $ 262,574
=========== ===========
EARNINGS PER SHARE $ 0.08 $ 0.02
=========== ===========
WEIGHTED AVERAGE COMMON SHARES
USED IN COMPUTING EARNINGS PER SHARE 27,877,527 16,397,484
=========== ===========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
NORTH AMERICAN INTEGRATED MARKETING, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR SIX MONTH PERIOD ENDED JUNE 30
(UNAUDITED)
<TABLE>
<CAPTION>
1997 1996
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 2,203,354 $ 262,574
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 480,287 44,277
Minority interest 190,599 -
(Increase) decrease in: net of effects of acquisition
Accounts receivable, net (1,561,566) 818,142
Inventory (86,596) -
Prepaid and other current assets 291,281 (99,096)
Other assets (91,291) -
Increase (decrease) in: net effects of acquisition
Accounts payable (36,182) 11,388
Accounts payable - related company 515,749 (1,747,844)
Income taxes payable (276,476) 156,807
Accrued expenses and other current liabilities 253,779 28,472
Deferred revenue (99,475) -
Deferred income taxes - (43,300)
----------- -----------
Cash provided by (used in) operating activities 1,783,463 (568,580)
Cash flows from investing activities:
Purchase of furniture and equipment (967,593) (129,544)
----------- -----------
Net cash used in investing activities (967,593) (129,544)
----------- -----------
Cash flows from financing activities:
Sale of treasury stock 150,000 -
Net borrowings under (repayments of) notes payable (473,768) -
Repayments of long-term debt (348,445) (8,290)
Debenture payable - 500,000
Decrease in long term liabilities (136,408) -
----------- -----------
Net cash used in financing activities (808,621) 491,710
----------- -----------
Net increase (decrease) in cash 7,249 (206,414)
Cash at beginning of year 1,080,630 520,865
----------- -----------
Cash at end of year $ 1,087,879 $ 314,451
=========== ===========
</TABLE>
See notes to consolidated financial statements.
<PAGE>
NORTH AMERICAN INTEGRATED MARKETING, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
JUNE 30, 1997
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-Q 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 (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the six month period ended June 30,1997, are not
necessarily indicative of the results that may be expected for the year ended
December 31, 1997. For further information, refer to the financial statement
footnotes thereto included in North American Integrated Marketing, Inc.'s annual
report on Form 10-K for the year ended December 31, 1996.
NOTE 2 - ACQUISITIONS
Effective October 1, 1996, pursuant to a Stock Purchase Agreement dated
September 30, 1996, the Company acquired 82% of the outstanding common stock of
Color Graphics, Inc. for a total consideration of $1,909,283. The
consideration consisted of $1,000,000 in cash paid by the Company, $286,000 in
cash paid by Color Graphics, Inc., the assumption of liabilities totaling
$250,000 and the transfer of a life insurance policy valued at $210,806 by Color
Graphics, Inc.. In addition, Color Graphics, Inc. assigned an accounts
receivable of $464,000 which Color Graphics, Inc. had previously written off.
The Company has assigned a value of $162,477 to this receivable for purchase
accounting. The Company obtained the $1,000,000 from North American
Communications, Inc. (NAC), a related party. In addition, the Company granted
to a consultant an option to acquire 10 % of the Color Graphics, Inc. stock at
an exercise price of $1,058.82 per share or $30,000 in the aggregate through
September 30, 2001 for his role in consummating the acquisition. On July 21,
1997 the Company purchased these options from the consultant (see Note 10).
The acquisition was accounted for as a purchase and property, plant and
equipment was reduced by the excess of the fair value of the net assets acquired
over the cost using the purchase method of accounting. The operations of Color
Graphics, Inc. are included in the accompanying consolidated financial statement
from the date of acquisition.
<PAGE>
NOTE 3 - INVENTORIES
Inventories consist of the following:
<TABLE>
<CAPTION>
June 30, December 31,
1997 1997
--------- ------------
<S> <C> <C>
Paper $284,315 $321,623
Other raw materials 100,782 81,628
Work-in-process 167,616 62,866
-------- --------
$552,713 $466,117
======== ========
</TABLE>
NOTE 4 - FURNITURE AND EQUIPMENT
Furniture and equipment consists of the following:
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
------------ -------------
<S> <C> <C>
Machinery and equipment $3,826,093 $3,561,995
Office furniture and equipment 124,532 105,742
Transportation equipment 103,420 135,737
Computer equipment and software 683,612 432,185
Leasehold improvements 61,703 61,703
Construction in progress 529,093 63,496
---------- ----------
5,328,453 4,360,858
Accumulated depreciation and
amortization (992,082) (511,795)
---------- ----------
$4,336,371 $3,849,063
========== ==========
</TABLE>
NOTE 5 - COMMON STOCK
On April 16, 1997 the Certificate of Incorporation of North American Integrated
Marketing, Inc. was restated. In the restatement the total number of shares
which the Corporation shall have authority to issue is 70,000,000 shares,
consisting of 60,000,000 shares of Common Stock, having a par value of $.00001
per share, and 10,000,000 shares of Preferred Stock having a par value of
$.00001 per share.
<PAGE>
NOTE 6 - EARNINGS PER SHARE
Earnings per share are calculated as follows assuming retroactive application of
the reverse stock split (see Note 8):
<TABLE>
<CAPTION>
June 30,
----------------------
1997 1996
---------- ----------
<S> <C> <C>
Average shares outstanding 3,021,674 1,176,673
Net income $2,203,356 $ 262,574
Per share amount $ .33 $ .22
</TABLE>
NOTE 7 - SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
<TABLE>
<CAPTION>
June 30,
-------------------------
1997 1996
---------- ----------
<S> <C> <C>
Cash paid during the period for:
Interest $ 191,798 $ 853
========== =======
Income taxes $1,202,988 $21,043
========== =======
</TABLE>
NOTE 8 - REVERSE STOCK SPLIT
Effective April 15, 1997, the Company authorized a twelve-for-one reverse stock
split whereby every twelve shares of common stock issued and outstanding
immediately prior to the effectuation of such stock split was exchanged for one
new share of common stock, with each new share of common stock having the rights
and preferences of the former shares of common stock. The reverse stock split
was retroactively applied in determining earnings per share.
NOTE 9 - TREASURY STOCK
On May 13, 1997 North American Integrated Marketing, Inc., sold 80,000 shares of
common stock on a post-split basis for $150,000.
<PAGE>
NOTE 10 - SUBSEQUENT EVENTS
On July 25, 1997, Color Graphics, Inc. terminated the lease for its New York
office. The lease was to originally expire on September 6, 1998. The cost of the
termination of the lease was $113,000.
On July 21, 1997 North American Integrated Marketing, Inc. purchased the option
to acquire an additional 28 1/3 shares (10%) of common stock of Color Graphics,
Inc. for a total consideration of $750,000. The purchase price was payable by a
$250,000 cash payment on July 21, 1997 and two (2) additional payments with
interest at 8%, of $250,000 each. The first due on April 10, 1998 and the second
due on April 10, 1999.
<PAGE>
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
GENERAL
The Company has focused its growth strategy on acquiring complementary database
and direct mail marketing companies. The Company intends to build a vertically
integrated company that provides turnkey database marketing products and
services to direct marketers. These services will include database management
and data warehousing, predictive modeling, marketing strategy consulting, agency
creative and design work, production management and direct mail production and
fulfillment. In October 1996, the Company entered the printing business with
the purchase of 82% of the stock of Color Graphics, Inc.. Due to this
acquisition the results of operations for 1997 are not comparable to prior
years. See Note 2 of Notes to Financial Statements for additional information
concerning this acquisition.
(A) RESULTS OF OPERATIONS - THREE MONTHS ENDED JUNE 30, 1997 AND JUNE 30, 1996
<TABLE>
<CAPTION>
Three Months Ended June 30
--------------------------
1997 1996
-------------------------------- -----------------------------
Database Printing Database Printing
-------- ---------- --------- --------
<S> <C> <C> <C> <C>
Revenues $1,927,557 $4,819,232 $1,167,285 -
Gross profit $ 799,015 $2,550,054 $ 628,262 -
Operating income $ 777,649 $1,239,909 $ 269,055 -
</TABLE>
Consolidated net revenues of $6,746,789 in 1997 represent an increase of
$5,579,504 over 1996. Operating income of $2,017,558 in 1997 represents an
increase of $1,748,503 over 1996. The increase in the net revenues and
operating income of the Company resulted from the acquisition of Color Graphics,
Inc. on October 1, 1996 and the continued expanding database and advertising
operations of the Company for the three month period ended June 30, 1997.
<PAGE>
Revenues
- --------
Net revenues increased $5,579,504 from $1,167,285 to $6,746,789 as compared to
1996. The net revenue increase for the three month period ended June 30, 1997
was primarily attributable to the acquisition of Color Graphics, Inc. on
October 1, 1996 providing an increase in revenue of $4,819,232 through direct
mail printing services provided to customers in the financial services industry
and sales of database analysis and advertising services to several new clients
including Capital One, NewSub Services, Citibank and MBNA.
Cost of Revenue
- ---------------
The Company's cost of revenue, as a percentage of sales was 50.3%, for the three
month period ended June 30, 1997 as compared to 46.1% for the prior period. The
increase in the cost of revenue of 4.2% can be attributed to a decrease in
database cost revenue as a percentage of sales of 29.4%, offset by an increase
in printing cost of revenue as a percentage of sales of 33.6%. The cost of
revenue as a percentage of sales for database increased from 46.1% in 1996 to
58.5% in 1997. The increase resulted primarily from: a) increased salary
expenses to support the increased revenue and b) increased use of outside
services to support the increase in revenue.
Selling, General and Administrative Expenses
- --------------------------------------------
Selling, general and administrative expenses increased $644,012 in 1997 as
compared to the prior period. The increase in 1997 expenses resulted primarily
from: a) an increase in database expenses and supplies related to computer
equipment. and b) the acquisition of Color Graphics, Inc.. The acquisition of
Color Graphics, Inc. accounted for approximately 76% of the increase for 1997.
Interest Expense
- ----------------
Interest expense increased $92,732 in 1997 as compared to the prior period. The
increase resulted primarily from related party long-term debt incurred in
connection with the acquisition of Color Graphics, Inc..
Depreciation and Amortization
- -----------------------------
Depreciation and amortization increased $236,046 in 1997 as compared to prior
periods. The increase resulted primarily from the purchase of computer
equipment and software necessary to fulfill the demand by database customers and
to support additional staffing. The acquisition of Color Graphics, Inc.
accounted for approximately 89% of the increase for 1997.
<PAGE>
Provision for Income Taxes
- --------------------------
Provision for income taxes increased $754,677 in 1997, as compared to the prior
period. The increase in 1997 was due to the increase in income.
(B) RESULTS OF OPERATIONS - SIX MONTHS ENDED JUNE 30, 1997 AND JUNE 30, 1996
<TABLE>
<CAPTION>
Six Months Ended June 30
--------------------------
1997 1996
-------------------------------- -----------------------------
Database Printing Database Printing
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenues $4,819,099 $9,072,479 $4,397,086 -
Gross profit $2,023,584 $4,448,284 $1,122,620 -
Operating income $1,973,005 $1,960,627 $ 442,324 -
</TABLE>
Consolidated net revenues of $13,891,575 in 1997 represent an increase of
$9,494,489 over 1996. Operating income of $3,933,632 in 1997 represents an
increase of $3,491,308 over 1996. The increase in the net revenues and operating
income of the Company resulted from the acquisition of Color Graphics, Inc. on
October 1, 1996 and the continued expanding database and advertising operations
for the six month period ended June 30, 1997.
Revenues
- --------
Net revenues increased $9,494,489 from $4,397,086 to $13,891,575 as compared to
1996. The net revenue increase for the six month period ended June 1997 was
primarily attributable to the acquisition of Color Graphics, Inc. on October 1,
1996 providing an increase in revenue of $9,072,476 through direct mail
printing services provided to customers in the financial services industry and
sales of database analysis and advertising services to several new customers,
including Capital One, NewSub Services, Citibank and MBNA and increased sales to
existing customers including Fleet Corporation and Bank of New York (Delaware).
Cost of Revenue
- ---------------
The Company's cost of revenue, as a percentage of sales was 53.4% for the six
month period ended June 30, 1997 as compared to 74.4% for the prior period. The
decrease in the cost of revenue of 21% can be attributed to a decrease in
database cost of revenue as a percentage of sales of 54.3%, offset by an
increase in printing cost of revenue as a percentage of sales of 33.3%. The cost
of revenue as a percentage of sales for database decreased from 74.4% in 1996 to
58% in 1997. The decrease is primarily attributed to decreased costs of
production services supplied by a related party.
<PAGE>
Selling, General and Administrative Expenses
- --------------------------------------------
Selling, general and administrative expenses increased $1,230,985 in 1997 as
compared to the prior period. The increase in 1997 expenses resulted primarily
from: a) an increase in database expenses and supplies related to computer
equipment. b) costs associated with the relocation, in March, of the corporate
office. and c) the acquisition of Color Graphics, Inc.. The acquisition of Color
Graphics, Inc. accounted for approximately 76% of the increase for 1997.
Interest Expense
- ----------------
Interest expense increased $190,945 in 1997 as compared to the prior period. A
significant portion of the increase in 1997 resulted from the acquisition of
Color Graphics, Inc. The increase resulted primarily from: a) related party
long-term debt incurred in connection with the acquisition of Color Graphics,
Inc. and b) Color Graphics, Inc.'s borrowings on both their revolving line of
credit and equipment loans.
Depreciation and Amortization
- -----------------------------
Depreciation and amortization increased $436,010 in 1997 as compared to prior
periods. The increase resulted primarily from the purchase of computer
equipment and software necessary to fulfill the demand by database customers and
to support additional staffing. The acquisition of Color Graphics, Inc.
accounted for approximately 89% of the increase for 1997.
Provision for Income Taxes
- --------------------------
Provision for income taxes increased $1,359,927 in 1997, as compared to the
prior period. The increase in 1997 was due to the increase in income.
Inflation
- ---------
Inflation and price increases do not materially affect the Company's gross
profit margin as contract prices are adjusted at the same time increases are
implemented by outside vendors.
<PAGE>
B) LIQUIDITY AND CAPITAL RESOURCES
-------------------------------
<TABLE>
<CAPTION>
6/30/97 12/31/96
----------- ----------
<S> <C> <C>
Working capital $4,025,618 $2,705,915
Cash 1,087,879 1,080,630
6/30/97 6/30/96
----------- ----------
Cash provided by (used in) operating activities 1,783,463 (280,323)
Cash used in investing activities 967,593 77,154
Cash used in financing activities 808,621 4,106
</TABLE>
Working capital increased as of June 30, 1997 by $1,319,703 over working capital
as of December 31, 1996. The increase is primarily the result of an increase in
accounts receivable due to strong sales during the first six months of 1997.
The increase in cash flows from operations in 1997 resulted primarily from
improved profitability and strong cash collections.
The increase in cash used in investing activities is a result of primarily
higher capital expenditures for machinery, equipment and computers, to support
the Company's growth.
The increase of cash used in financing activities resulted primarily from the
repayments of notes payable.
At June 30, 1997, the Company had an outstanding debt of $3,797,268, primarily
in the form of notes payable.
At June 30, 1997 the amount available under the Company's lines of credit was
approximately $3,500,000.
The Company anticipates that current cash balances as well as anticipated cash
flows from operations will be sufficient to meet its working capital and capital
expenditure needs at least through December 31, 1997.
<PAGE>
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
---------------------------------------------------
On April 11, 1997, the holders of the majority (approximately 86%) of
Registrant's common stock (officers, directors and affiliated entities of
Registrant beneficially owning 2,885,002 shares of common stock), pursuant to
Section 228 of the Delaware General Corporation Law, waived notice of time,
place and purpose of the meeting and voted to amend the Registrant's Certificate
of Incorporation as set forth in detail in Form 8-A filed by Registrant on April
30, 1997 and incorporated herein by reference.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8K
-------------------------------
(a) Exhibit Index
Exhibit No. Description
----------- -----------
27 Financial Data Schedule
(b) None.
<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.
NORTH AMERICAN INTEGRATED MARKETING, INC.
(REGISTRANT)
Date: August 14, 1997 /s/ Robert W. Paltrow
-----------------------
Name: Robert W. Paltrow
Title: Treasurer
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 6-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1996
<PERIOD-START> JAN-01-1997 JAN-01-1996
<PERIOD-END> JUN-30-1997 JUN-30-1996
<CASH> 1,087,879 1,080,630
<SECURITIES> 0 0
<RECEIVABLES> 5,897,102 4,289,731
<ALLOWANCES> 98,898 53,093
<INVENTORY> 552,713 466,117
<CURRENT-ASSETS> 7,569,774 6,205,644
<PP&E> 4,336,371 3,849,063
<DEPRECIATION> 480,287 44,277
<TOTAL-ASSETS> 12,176,537 10,233,808
<CURRENT-LIABILITIES> 3,544,156 3,499,729
<BONDS> 0 0
0 0
0 0
<COMMON> 212 212
<OTHER-SE> 3,966,610 1,763,254
<TOTAL-LIABILITY-AND-EQUITY> 12,176,537 10,233,808
<SALES> 13,715,025 4,393,149
<TOTAL-REVENUES> 13,891,575 4,397,086
<CGS> 6,771,497 2,749,890
<TOTAL-COSTS> 7,419,707 3,274,466
<OTHER-EXPENSES> 1,831,151 629,166
<LOSS-PROVISION> 35,000 6,000
<INTEREST-EXPENSE> 191,798 853
<INCOME-PRETAX> 3,933,632 442,324
<INCOME-TAX> 1,539,677 179,750
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 2,203,356 262,574
<EPS-PRIMARY> .079 .016
<EPS-DILUTED> 0 0
</TABLE>
