UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
------------
{X} QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended December 31, 1997
OR
{ } TRANSITION REPORT UNDER SECTION 13 OR 15(d)
OF THE EXCHANGE ACT
Commission File Number 0-22388
EIF HOLDINGS, INC.
----------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
HAWAII 99-0273889
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
53 Stiles Road, Suite 101
Salem, NH 03079
----------------------------------------
(Address of principal executive offices)
(603) 890-3680
---------------------------
(Issuer's telephone number)
15201 Pipeline Lane, Suite B, Huntington Beach, CA 92649
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year if changed since last report
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 the latest practicable date.
Class Outstanding at February 5, 1998
----- -------------------------------
Common stock, no par value 24,618,201
Transitional Small Business Disclosure Format (Check one):
Yes ; No X
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Page 1 of 14
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EIF HOLDINGS INC.
Table of Contents
PART I. FINANCIAL INFORMATION Page
ITEM 1. Financial Statements (Unaudited)
Consolidated Balance Sheets as of December 31, 1997
and September 30, 1997............................................ 3
Consolidated Statements of Operations for the Three Months
Ended December 31, 1997 and 1996.................................. 4
Consolidated Statements of Cash Flows for the Three Months
Ended December 31, 1997 and 1996.................................. 5
Notes to Consolidated Interim Financial Statements.................. 6
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations............................................. 8
PART II. OTHER INFORMATION
Item 1. Legal Proceedings................................................... 10
Item 5. Other Information................................................... 10
Item 6. Exhibits and Reports on Form 8-K.................................... 10
Signatures.......................................................... 11
Page 2 of 14
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
EIF HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
December 31, September 30,
1997 1997
------------ ------------
(Unaudited) (Audited)
ASSETS
Current assets:
Cash........................................... $ 3,262,314 $ 304,678
Accounts receivable, net....................... 12,466,530 3,807,367
Note Receivable................................ 2,676,374 2,562,500
Securities available for sale.................. 3,462,697 5,562,697
Receivable officer............................. 130,000 70,000
Costs and estimated earnings on contracts
in progress in excess of billings............. 463,797 52,003
Prepaid assets................................. 828,013 726,684
------------ ------------
Total current assets...................... 23,289,725 13,085,929
Machinery and equipment, net...................... 6,895,793 603,940
Other noncurrent assets:
Goodwill....................................... 4,253,674 755,597
Receivable officer............................. 210,000 210,000
Investments.................................... 427,836 --
Retention bonus agreements..................... 875,000 --
Other assets................................... 850,593 20,520
------------ ------------
6,617,103 986,117
------------ ------------
Total assets................................... $ 36,802,621 $ 14,675,986
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses........... $ 6,717,486 $ 2,408,077
Notes payable................................... 1,386,263 1,695,120
Billings in excess of costs and estimated
earnings on contracts in progress.............. 480,807 178,921
Note payable due to shareholder................. 17,908,945 17,609,424
Reserve for contingencies....................... 3,430,441 1,349,000
Net liabilities for discontinued operations..... 1,338,182 1,776,041
Current maturities of long-term debt............ 1,537,417 --
Income taxes payable............................ 228,000 --
Deferred income taxes........................... 333,000 --
------------ ------------
33,360,541 25,016,583
Non-current liabilities:
Long term debt................................. 13,266,672 --
Deferred taxes................................. 381,000 --
------------ ------------
13,647,672 --
Stockholders' deficit
Common stock................................... 3,019,246 3,019,246
Additional paid-in capital..................... 804,696 804,696
Accumulated deficit............................ (14,029,534) (14,164,539)
------------ ------------
Total stockholders' deficit.............. (10,205,592) (10,340,597)
------------ ------------
Total liabilities and stockholders' deficit... $ 36,802,621 $ 14,675,986
============ ============
The balance sheet at September 30, 1997 has been derived from the audited
financial statements at that date but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statement presentation.
The accompanying notes are an integral part of these consolidated financial
statements.
Page 3 of 14
<PAGE>
EIF HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months ended
December 31,
----------------------------
1997 1996
------------ ------------
Revenue........................................... $ 10,453,400 $ 3,389,944
Cost of revenue................................... 7,808,302 2,211,680
------------ ------------
Gross profit..................................... 2,645,098 1,178,264
Selling, general and administrative expenses...... 1,885,667 2,422,463
------------ ------------
759,431 (1,244,199)
Other:
Other income..................................... (53,668) --
Interest expense................................. 536,096 387,028
------------ ------------
Income (loss) before income taxes................ 277,003 (1,631,227)
Income taxes...................................... 20,000 --
------------ ------------
Income (loss) from continuing operations.......... 257,003 (1,631,227)
(Loss) from discontinued operations............... -- (5,035,795)
------------ -------------
Net income (loss) ................................ $ 257,003 $ (6,667,022)
============ =============
Net income (loss) per share....................... $ 0.01 $ (0.27)
============ =============
Weighted average number of common
shares outstanding.............................. 24,618,201 24,618,201
============ ============
The accompanying notes are an integral part of these consolidated financial
statements.
Page 4 of 14
<PAGE>
EIF HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Three Months ended
December 31,
----------------------------
1997 1996
------------ ------------
Net cash provided by (used in) operating
activities net of effects of business
acquired...................................... $ 71,002 $ (1,148,572)
Cash flow from investing activities
Purchase of machinery and equipment........... (359,669) (204,207)
Proceeds from sale of equipment............... 233,129 --
Acquisition of business net of cash acquired.. 192,253 --
------------ ------------
Net cash provided by (used in) investing
activities....................................... 65,713 (204,207)
Cash flow from financing activities
Proceeds from sale of marketable securities..... 2,100,000 --
Net advances (payments) on notes payable....... 588,237 332,175
Net advances on notes due to shareholder....... 299,521 1,294,803
Net payments on long-term debt................. -- (73,882)
------------ ------------
Net cash provided by financing activities......... 2,820,921 1,553,096
------------ ------------
Net increase in cash.............................. 2,957,636 200,317
Cash, beginning of period......................... 304,678 178,231
------------ ------------
Cash, end of period............................... $ 3,262,314 $ 378,548
============ ============
Supplemental disclosure of Non-cash Investing and Financing Activities
During the three months ended December 31, 1997, the Company assumed $9,000,000
of liabilities associated with the acquisition of a business.
The accompanying notes are an integral part of these consolidated financial
statements.
Page 5 of 14
<PAGE>
EIF HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited interim consolidated financial statements have been
prepared by EIF Holdings, Inc., (the "Company"), in accordance with generally
accepted accounting principles pursuant to Regulation SB of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in audited financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted. Accordingly,
these interim consolidated financial statements should be read in conjunction
with the Company's consolidated financial statements and related notes as
contained in Form 10-KSB for the year ended September 30, 1997. In the opinion
of management, the interim consolidated financial statements reflect all
adjustments, including normal recurring adjustments, necessary for fair
presentation of the interim periods presented. The results of operations for the
three months ended December 31, 1997 are not necessarily indicative of results
of operations to be expected for the full year.
The accompanying consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiaries; J.L. Manta, Inc.("Manta"), P.W.
Stephens Residential, Inc.(Residential"), and P.W. Stephens Contractors, Inc.
and P.W. Stephens Services, Inc. (collectively referred to as "St. Louis"). The
P.W. Stephens Contractors, Inc. and QHI Stephens Contractors, Inc. subsidiaries
were discontinued in May 1997 and have been accounted for as discontinued
operations for all current periods reported under this Form 10-QSB. Kelar
Controls, Inc. was divested on June 30, 1997, and is also accounted for as
discontinued operations for all periods reported under this current Form 10-QSB.
Net Income (Loss) Per Share Information. The net income (loss) per share amounts
have been computed by dividing net loss by the weighted-average number of common
shares outstanding during the respective periods.
In February 1997, The Financial Accounting Standards Board Issued Statement No.
128, Earnings Per Share, which was required to be adopted on December 31, 1997.
The Company is now required to exclude the dilutive effect of stock options in
its calculation of primary earnings per share and to restate prior periods. The
impact of statement 128 on the calculation of fully diluted earnings per share
was not material.
Fair Value of Financial Instruments: The Company's financial instruments consist
of cash and cash equivalents, accounts receivable, accounts payable and notes
payable. The Company believes that the carrying value of these instruments on
the accompanying balance sheet approximates their fair value.
Reclassifications: Certain reclassifications have been made to prior year
financial statements to conform with the current year presentation.
NOTE 2 - SECURITIES AVAILABLE FOR SALE
Securities available for sale consist of 570,333 common shares of American Eco
Corporation ("AEC"). These shares were issued to the Company by AEC in lieu of
cash in conjunction with the Amendment dated September 30, 1997, to the existing
line of credit which increased the maximum borrowing amount under the line to
$20,000,000. The Company intends to sell these securities to settle certain
existing obligations (see NOTE 3 - TRANSACTIONS WITH AFFILIATES and Item 2
Liquidity for additional disclosures).
NOTE 3 - TRANSACTIONS WITH AFFILIATES
On September 30, 1997, AEC executed a renewal and amendment to the existing line
of credit facility increasing the Company's maximum borrowing amount to
$20,000,000. The AEC line of credit facility carries interest at the prime rate
plus 2% per annum, is unsecured and matures on February 18, 1998 (there are
discussions being held regarding an extension to the line of credit facility).
As of December 31, 1997 and September 30, 1997, the total amounts outstanding
under the AEC facility were $17,908,945 and $17,609,424 respectively. Included
in these amounts are accrued interest of $1,134,832 and $835,311 respectively.
Page 6 of 14
<PAGE>
The renewal of the line of credit facility also provides AEC an option to
convert the entire outstanding principal amount of the line of credit plus any
accrued interest outstanding at the time of conversion, into common shares of
EIF Holdings, Inc. subject to stockholder approval to increase the number of
authorized shares. No guarantee can be made that stockholder approval will be
obtained. The conversion price for each common share is equal to 85% of the five
day weighted average closing price of the common shares as quoted in the
over-the-counter "pink sheets" immediately prior to the conversion date.
In connection with the acquisition of Manta, the Company issued convertible
promissory notes totalling $2,235,312 to certain of Manta's former stockholders.
The convertible notes are non-interest bearing and payable in installments with
a final payment due on November 18, 2000. The notes allow for the conversion of
any principal payment due under the Stockholder Notes into shares of the
Company's common stock, at a conversion price equal to the closing transaction
price of the EIF Stock on the date of conversion. The conversion option is
subject to shareholder approval of an increase in the authorized number of
outstanding shares. There is no assurance that this can be achieved.
Concurrent with the closing of the acquisition, the Company entered into
Retention Bonus Agreements with certain Manta Stockholders and key employees.
The Retention Bonus Agreements provide for bonus payments in the aggregate
amount of $900,000 to be made by the Company over a three year period. The
non-compete provisions associated with the Retention Bonus Agreements extend
over a six year period.
NOTE 4 - NOTES PAYABLE
On September 30, 1996 the Company obtained a $1,300,000 line of credit
from an investor group. The terms of the revolving credit facility provide for
an interest rate of 10% per annum and matures on March 1, 1998. The outstanding
balance under the facility as of December 31, 1997 was $1,030,000.
In connection with the financing of the Manta acquisition the Company issued a
$6,500,000 Convertible Promissory Note to Deere Park Capital. The Note bears
interest at the rate of 5 1/4% per annum, becomes due on May 18, 1999 and is
secured by a pledge of all of the Manta Stock. The Note is convertible into 5
1/4% convertible preferred stock at a conversion price of One Dollar $1.00 per
share, with such convertible preferred stock convertible into EIF common stock
subject to approval of the Company's Stockholders of an amendment to EIF's
charter authorizing the requisite amount of preferred and common stock.
Also in connection with the acquisition, the Company issued a $2,500,000
Promissory Note. The note bears interest at the rate of Nine Percent (9%) per
annum and becomes due on February 16, 1998. The loan amount represented by the
note was used by the Company to refinance certain indebtedness of Manta.
NOTE 5 - SUBSEQUENT EVENTS
In February 1998, the Company's JL Manta subsidiary signed a $9.5 million credit
facility with LaSalle National Bank. A portion of the facility will be used to
refinance certain indebtedness of JL Manta with the remainder available to meet
working capital requirements. The facility is comprised of a one year renewable
term loan, revolving loans and letters of credit. The facility is secured by the
assets of Manta and guaranteed by the Company. It includes typical financial
covenants which allow, with certain restrictions, distributions of excess cash
generated by Manta to the Company.
NOTE 6 - BUSINESS COMBINATIONS
On November 19, 1997, the Company completed its acquisition of JL Manta, Inc.
("Manta"), an Illinois corporation which provides specialized maintenance
services for clients in the industrial, environmental and low-level nuclear
sectors. The Company acquired all of the issued and outstanding common stock for
a total cost of $9,387,000 in cash and convertible promissory notes. See FORM
8-K Amendment No. 2 dated February 3, 1998 for the financial statements and pro
forma information relating to the acquisition.
NOTE 7 - RESERVE FOR CONTINGENCIES
See PART II, ITEM 1. Legal Proceedings.
Page 7 of 14
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS:
- ---------------------
General
The Company currently operates in three primary segments of the specialized
maintenance services industry; Residential provides residential asbestos
abatement services, St. Louis provides environmental remediation services and
the newly acquired Manta operations provide industrial maintenance services. The
other services formerly provided by the Company have been classified as
discontinued operations in the accompanying financial statements. The following
discussion and analysis relate to the Company's continuing operations. The
results of operations for the three months ended December 31, 1997 are not
necessarily indicative of results of operations to be expected for the full
year.
Revenue
Consolidated revenue for the three months ended December 31, 1997 increased to
$10,453,000 from $3,390,000 for the same period in 1996. The increase in revenue
was primarily the result of the inclusion of two months of activity from the
acquired industrial maintenance services operations which amounted to
$6,787,000. The revenue from the Residential asbestos abatement operations
reflected a 22.8% increase to $1,717,000 in the current quarter over the same
period in the prior year. This increase was the result of an increase in weather
related residential insurance claims in the California markets. Weather related
claims in these markets are expected to remain at higher than normal levels
through the second quarter. Revenues for environmental remediation services
decreased by 1.8% to $1,949,000 in the current quarter over the same period in
the prior year. The decrease in revenue was the result of normal fluctuations in
being awarded new contracts and the timing of the commencement of new work. The
Company has traditionally experienced seasonal slow downs in the first and
second quarters in its environmental remediation operations and expects that the
newly acquired industrial maintenance services will experience similar trends.
Gross Profit
Gross profit as a percentage of revenue for the three month period ended
December 31, 1997 was 25.3% compared to 34.8% for the same period in 1996. The
decrease in the gross profit margin was primarily due to the inclusion of the
industrial maintenance services operations which generated margins of
approximately 19%. Residential experienced a decrease in gross margin percentage
in the quarter ended December 31, 1997 to 46% from 55% for the same period in
1996. The decrease was the combined result of an increase in the insurance costs
of the operations and an increase in various indirect costs associated with the
restructuring efforts initiated in the fourth quarter of the prior year. These
restructuring efforts resulted in overall reductions in residential asbestos
abatement's total operating expenses. The Company expects that the residential
asbestos operations will continue to achieve gross margins between 45% and 50%.
The results for environmental remediation for the first quarter reflected an
increase in its gross margin of 8% to 29% compared to the same period in 1996
due primarily to gains recognized on several projects that were completed in the
current period. The Company expects that environmental services will continue to
perform at gross margins between 17.0% and 22%.
Selling, General And Administrative Expenses
Consolidated selling, general and administrative expenses (SG&A) for the three
months ended December 31, 1997 decreased to $1,886,000 from $2,422,000 for the
same period in the prior year. As a percentage of revenue, SG&A decreased to 18%
from 71.6% respectively. Corporate expenses reflects the largest change to
$565,000 for the three months ended December 31, 1997 from $1,355,000 for the
same period in the prior year. The decrease is due primarily to the $1,000,000
of management fees incurred from AEC in the first quarter of the prior year to
help stablize the
Page 8 of 14
<PAGE>
Company. This decrease in corporate expenses is partially offset by the combined
effect of an increase in current management and related salaries and an increase
in amortization and retention bonus expenses. SG&A as a percentage of revenue
for both environmental remediation services and residential asbestos abatement
decreased in the current quarter by 7% and 8% respectively compared to the same
period in the prior year. Both decreases in SG&A expenses in the current quarter
reflected the benefits of the restructuring and cost containment efforts
initiated by those operations throughout the prior year. These SG&A reductions
have been offset in the current quarter by the inclusion of $419,000 of SG&A
related to the industrial maintenance operations. Although the Company expects
to continue to initiate restructuring and cost containment measures to achieve
its strategic goals, it can not guarantee that future efficiencies will be
recognized.
Other Expenses
Interest expense during the three months ended December 31, 1997, was $536,000
compared to $387,000 for the same period in 1996. The increase in interest
expense in the current quarter was primarily due to the increased outstanding
borrowings under the line of credit from its principal shareholder AEC compared
to the same period in the prior year. Additional interest was recognized in the
current quarter from notes issued to finance the business acquisition,
outstanding borrowings from an investor group and from a bank in support of the
industrial maintenance operations.
Net Loss
The net income for the three months ended December 31, 1997 was $257,000
compared to a net loss of $1,631,227 for the same period in the 1997. The
increase in income was the combined result of the contribution of $716,000 from
the industrial maintenance business, the reductions in SG&A in all of the
existing operations partially offset by an increase in interest expense.
Liquidity and Capital Resources:
- --------------------------------
During the first quarter the Company generated positive cash from operations of
$72,002 compared to negative cash from operations of $1,148,572 for the same
period in 1996. The positive cash flow is the result of an increase in activity
in the residential asbestos abatement operations resulting in increased
collections, a decrease in use from the environmental remediation operations due
to seasonal slow downs and the efficiencies gained from the company-wide cost
containment initiatives.
During the three months ended December 31, 1997, the Company received proceeds
of $2,100,000 from the sale of a portion of its AEC securities the Company
received in lieu of cash under the line of credit facility with AEC. The Company
expects that the debt to equity conversion option under the existing AEC line of
credit facility will be exercised in quarter three. The proceeds received from
the sale of securities will be used to reduce existing debt and to settle
outstanding obligations for the Company's discontinued operations.
In February 1998, the Company's JL Manta subsidiary signed a $9.5 million credit
facility with LaSalle National Bank. A portion of the facility will be used to
refinance certain indebtedness of JL Manta with the remainder available to meet
working capital requirements. The facility is comprised of a one year renewable
term loan, revolving loans and letters of credit. The facility is secured by the
assets of Manta and guaranteed by the Company. The facility also includes
typical financial covenants which allow, with certain restrictions,
distributions of excess cash generated by Manta to the Company.
The Company believes, that the proceeds from the sale of securities, the
proceeds from the sale of a business due in June 1998, the cash flows from the
existing operations coupled with the financing arrangements the Company
currently has in place will be sufficient throughout the next twelve months to
finance its working capital needs, planned capital expenditures, debt service
and the outstanding obligations from the Company's discontinued operations.
The Company has included on this Form 10-QSB certain forward-looking statements.
Forward-looking statements are statements relating to the Company's plans,
goals, objectives, strategies, future performance and events as well as any
other statements or representations other than those relating to historical
data. Forward-looking statements inherently possess risks and uncertainties. As
a result, although the Company's forward-looking statements are expressed in
good faith, the Company's actual results could differ materially.
Page 9 of 14
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The nature and scope of the Company's business operations bring it into regular
contact with the general public, a variety of businesses and government
agencies. These activities inherently subject the Company to the hazards of
litigation, which are defended in the normal course of business. The Company is
currently involved in several litigations and investigations including
regulatory compliance. Although the outcome of these claims is not clearly
determinable at the present time, Management believes that such proceedings are
either adequately covered by insurance, or if uninsured, by the estimated losses
it has recorded to date. The resolution of such claims, however, could have a
material effect on the Company's results of operations or cash flows. The
reserves for litigation and contingencies recorded by the Company as of December
31, 1997 amounted to $3,449,000. Included in this amount is a $2,100,000 reserve
for the acquired industrial maintenance service operations which is comprised of
a $500,000 warranty reserve for certain work performed that is guaranteed for a
three year period and a $1,600,000 contingency reserve for various ongoing
litigation.
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
Exhibit 99.4 Press Release issued by the registrant on February 12, 1998
announcing the signing of a $10 Million Credit Facility with
LaSalle National Bank.
Exhibit 27. Financial Data Schedule
(b) REPORTS ON FORM 8-K
The following reports Form 8-K were filed during the quarter ended
December 31, 1997:
(i) A report dated October 8, 1997 concerning the appointment of J.
Drennan Lowell as Vice President and Chief Financial Officer in place
of Joel Thomas.
(ii) A report dated October 15, 1997 concerning the Company's signing of a
definitive agreement to purchase all of the outstanding common stock
of JL Manta, Inc.
(iii) A report dated December 4, 1997 concerning the completion of the
acquisition of J.L. Manta, Inc. (not included Item 7. Financial
Statements and Exhibits which were subsequently filed on February 3,
1998).
(iv) A report dated December 4, 1997 serving as amendment No. 1 to the
original report dated December 4, 1997. The amendment corrects certain
reported dates and adds exhibits omitted in the original filing.
Page 10 of 14
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned, thereto duly
authorized.
EIF HOLDINGS, INC.
------------------
Registrant
February 17, 1998 By: /S/ J. Drennan Lowell
-----------------------------
J. Drennan Lowell
Vice President, Chief Financial Officer,
Treasurer and Secretary
Page 11 of 14
<PAGE>
EIF HOLDINGS, INC.
EXHIBIT INDEX
Exhibit Description Page
------- ----------- ----
Exhibit 99.1 Press Release issued by the registrant on
February 12, 1998 announcing the signing of
a $10 Million Credit Facility with LaSalle
National Bank..................................... 13
Exhibit 27 Financial Data Schedule........................... 14
Page 12 of 14
Exhibit 99.1
[EIF HOLDING INC. LETTERHEAD]
PRESS RELEASE
For Immediate Release
EIF HOLDINGS SIGNS $10 MILLION CREDIT
FACILITY WITH LASALLE NATIONAL BANK
SALEM, New Hampshire- Thursday February 12, 1998, EIF Holdings [OTCBB: EIFH]
announced that the Company, through its JL Manta subsidiary, has signed a $10
million credit facility with LaSalle National Bank. A portion of the facility
will be used to refinance existing indebtedness of JL Manta. The remainder will
be available to meet working capital requirements.
When asked to comment, Frank Fradella, President and CEO, stated,"The LaSalle
facility is an important milestone in our efforts to improve the financial
condition of EIF and position the Company as a nationwide industrial services
provider. The importance of this accomplishment is that the facility is based
solely on the assets and earnings potential of EIF and its subsidiaries. We
truly appreciate the support of LaSalle National Bank in this transaction."
EIF Holdings provides specialized maintenance services for clients in the
industrial, low-level nuclear and environmental sectors. The company offers a
full range of services to its clients located throughout the United States.
For further information, call:
Andrew White
(281) 537-9660
Fax-on-demand: 1-800-758-5804 (Code#:122264)
[EIF HOLDINGS, INC.. LETTERFOOT]
Page 13 of 14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM EIF HOLDINGS,
INC. FORM 10-QSB FOR THE PERIOD ENDED DECEMBER 31, 1997 AND IS QUALIFIED IN IT'S
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
Page 14 of 14
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-END> DEC-31-1997
<CASH> 3,262,314
<SECURITIES> 3,462,697
<RECEIVABLES> 15,461,440
<ALLOWANCES> 318,536
<INVENTORY> 190,446
<CURRENT-ASSETS> 23,289,725
<PP&E> 15,341,332
<DEPRECIATION> 8,445,539
<TOTAL-ASSETS> 36,802,621
<CURRENT-LIABILITIES> 33,360,541
<BONDS> 0
0
0
<COMMON> 3,019,246
<OTHER-SE> (13,224,838)
<TOTAL-LIABILITY-AND-EQUITY> 36,802,621
<SALES> 10,453,400
<TOTAL-REVENUES> 10,453,400
<CGS> 7,808,302
<TOTAL-COSTS> 7,808,302
<OTHER-EXPENSES> 1,885,667
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 536,096
<INCOME-PRETAX> 277,003
<INCOME-TAX> 20,000
<INCOME-CONTINUING> 257,003
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 257,003
<EPS-PRIMARY> 0.01
<EPS-DILUTED> 0.01
</TABLE>
