<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark one)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES AND EXCHANGE
ACT OF 1934
For the Quarterly period ended MARCH 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND
EXCHANGE ACT OF 1934
For the transition period from to
-------------------- --------------------
Commission File Number 0-18054
SUN SPORTSWEAR, INC.
(Exact name of registrant as specified in its charter)
Washington 91-1132690
(State or other jurisdiction (IRS Employer
of incorporation of Identification No.)
organization)
6520 South 190th Street, Kent, Washington 98032
(Address of principal executive offices) (Zip Code)
(206) 251-3565
(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 and 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
--- ---
As of May 1, 1996 the Registrant had 5,748,500 shares of common stock
outstanding.
Page 1 of 12
<PAGE> 2
SUN SPORTSWEAR, INC.
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C>
Part I. Financial Information
Item 1. Financial Statements:
Balance Sheets 3-4
at March 31, 1996 (unaudited)
and December 31, 1995
Statements of Income 5
for the three months ended March 31,
1996 and 1995 (unaudited)
Statements of Cash Flows 6
for the three months ended March 31,
1996 and 1995 (unaudited)
Notes to Financial Statements 7-8
Item 2. Management's Discussion and Analysis 9-11
of Financial Condition and Results
of Operations
Part II. Other Information
Item 1. Legal Proceedings 11
Item 2. Changes in Securities 11
Item 3. Defaults upon Senior Securities 11
Item 4. Submission of Matters to a Vote of 11
Security Holders
Item 5. Other Information 11
Item 6. Exhibits and Reports on Form 8-K 11
Signature Page 12
</TABLE>
Page 2 of 12
<PAGE> 3
SUN SPORTSWEAR, INC.
BALANCE SHEETS
<TABLE>
<CAPTION>
MARCH 31, 1996 DECEMBER 31, 1995
-------------- -----------------
(UNAUDITED)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash $ 114,661 $ 2,006,633
Accounts receivable, net of
allowance for doubtful accounts of
$46,110 and $46,317, respectively 15,701,879 13,102,275
Inventories, net (Note 2) 18,449,709 23,631,358
Prepaid expenses and other
current assets 1,035,839 959,872
Deferred income taxes 788,332 788,332
Federal income tax receivable 1,674,617 1,979,535
----------- -----------
Total current assets 37,765,037 42,468,005
EQUIPMENT AND LEASEHOLD IMPROVEMENTS, net:
(Note 3) 4,682,911 4,831,994
OTHER ASSETS: 14,500 15,107
----------- -----------
Total assets $42,462,448 $47,315,106
=========== ===========
</TABLE>
(continued)
See accompanying notes to financial statements
Page 3 of 12
<PAGE> 4
SUN SPORTSWEAR, INC.
BALANCE SHEETS
(CONTINUED)
<TABLE>
<CAPTION>
MARCH 31, 1996 DECEMBER 31, 1995
-------------- -----------------
(UNAUDITED)
<S> <C> <C>
LIABILITIES AND
SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable $ 7,019,656 $13,500,000
Accounts payable 5,967,813 4,985,953
Accrued royalties payable 2,145,856 1,753,745
Accrued wages and taxes payable 816,211 512,078
Accrued interest payable 72,125 51,263
Current portion of long-term debt -0- 245,652
----------- -----------
Total current liabilities 16,021,661 21,048,691
----------- -----------
NONCURRENT LIABILITIES:
Long-term debt,
net of current portion -0- 92,354
Deferred income taxes 155,642 155,642
----------- -----------
Total noncurrent liabilities 155,642 247,996
----------- -----------
SHAREHOLDERS' EQUITY:
Common stock, no par value,
20,000,000 shares authorized;
5,748,500 shares at 3/31/96
and 5,748,500 shares at 12/31/95
issued and outstanding 21,618,339 21,618,339
Retained earnings 4,666,806 4,400,080
----------- -----------
Total shareholders' equity 26,285,145 26,018,419
----------- -----------
COMMITMENTS AND
CONTINGENCIES:
Total liabilities and
shareholders' equity $42,462,448 $47,315,106
=========== ===========
</TABLE>
See accompanying notes to financial statements
Page 4 of 12
<PAGE> 5
SUN SPORTSWEAR, INC.
STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED MARCH 31,
1996 1995
------------ -----------
<S> <C> <C>
Proprietary sales $ 4,622,364 $ 6,032,857
Licensed sales 20,459,638 20,556,442
Sales deductions (648,562) (868,737)
----------- -----------
Net sales (Note 4): 24,433,440 25,720,562
Cost of goods sold 20,623,529 22,522,498
----------- -----------
Gross margin 3,809,911 3,198,064
----------- -----------
Operating expenses:
Selling 775,069 987,625
Design and pattern 662,261 644,143
General and administrative 1,712,697 1,981,996
Provision for doubtful
accounts and factoring fees 31,971 13,664
----------- -----------
3,181,998 3,627,428
----------- -----------
Operating income (loss) 627,913 (429,364)
----------- -----------
Other expense (income):
Interest expense 240,991 344,318
Other, net (17,804) (14,284)
----------- -----------
223,187 330,034
----------- -----------
Income (loss) before provision
for income taxes 404,726 (759,398)
Provision (benefit) for income taxes 138,000 (258,000)
----------- -----------
Net income (loss) $ 266,726 $ (501,398)
=========== ===========
Earnings (loss) per share: $ 0.05 $ (0.09)
=========== ===========
Weighted average shares outstanding 5,748,500 5,747,544
</TABLE>
See accompanying notes to financial statements
Page 5 of 12
<PAGE> 6
SUN SPORTSWEAR, INC.
STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED MARCH 31,
1996 1995
------------ -----------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ 266,726 $ (501,398)
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities:
Depreciation and amortization 398,025 355,538
(Gain) on disposal of equipment (6,230) (5,411)
(Increase) decrease in accounts receivable (2,599,604) 1,910,303
Decrease in inventories 5,181,649 1,146,159
Decrease (increase) in federal
income tax receivable, accrued and deferred 304,918 (407,000)
(Increase) decrease in other assets (75,360) 145,178
Increase (decrease) in accounts payable 563,798 (4,456,192)
Increase (decrease) in accrued liabilities 717,106 (131,671)
----------- -----------
Net cash provided by (used in) operating activities 4,751,028 (1,944,494)
----------- -----------
Cash flows from investing activities:
Capital expenditures (248,712) (513,000)
Proceeds from sale of equipment 6,000 33,442
----------- -----------
Net cash used in investing activities (242,712) (479,558)
----------- -----------
Cash flows from financing activities:
Increase in outstanding
checks in excess of funds on deposit 418,063 211,105
Net (repayments) borrowings
under line of credit agreement (6,480,344) 1,215,000
Principal payments under long-term debt (338,007) (68,333)
Proceeds from issuance of common
stock for employee stock options -0- 2,113
----------- -----------
Net cash (used in) provided by financing activities (6,400,288) 1,359,885
----------- -----------
Net (decrease) in cash (1,891,972) (1,064,167)
Cash at beginning of period 2,006,633 1,217,171
=========== ===========
Cash at end of period $ 114,661 $ 153,004
=========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid (received) during the period for:
Interest $ 220,129 $ 335,162
Income taxes $ (166,918) $ 149,000
</TABLE>
See accompanying notes to financial statements
Page 6 of 12
<PAGE> 7
SUN SPORTSWEAR, INC.
NOTES TO FINANCIAL STATEMENTS
NOTE 1 - SIGNIFICANT ACCOUNTING POLICIES:
INTERIM FINANCIAL STATEMENTS
The accompanying financial statements at March 31, 1996 for the three months
ended March 31, 1996 and 1995 are unaudited. These unaudited interim financial
statements and related notes have been prepared pursuant to the rules and
regulations of the Securities and Exchange Commission. Accordingly, certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
omitted pursuant to such rules and regulations. However, in the opinion of
management, the accompanying condensed financial statements include all
adjustments, consisting only of normal recurring accruals, necessary for a fair
statement of the results for the interim periods. The results of operations and
cash flows for the three months ended March 31, 1996 and 1995 are not
necessarily indicative of the results of operations and cash flows that may be
expected for the entire year, which are subject to year-end adjustments in
conjunction with the annual audit by the Company's independent public
accountant. The accompanying condensed financial statements and related notes
should be read in conjunction with the financial statements and footnotes
thereto included in Sun Sportswear, Inc.'s (the "Company") 1995 Form 10-K and
Annual Report to Shareholders. See also "Item 2 - Management's Discussion and
Analysis of Financial Condition and Results of Operations Quarterly Net Sales -
Seasonality" on page 10 of this report.
NOTE 2 - INVENTORIES:
Inventories are composed as follows:
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
----------- -------------
<S> <C> <C>
Garments in process $ 1,852,817 $ 2,244,781
Unprinted finished garments 17,028,386 19,827,823
Printed finished garments 2,893,247 5,617,347
Supplies 452,823 407,064
Lower of cost or market allowance (3,777,564) (4,465,657)
=========== ===========
$18,449,709 $23,631,358
=========== ===========
</TABLE>
NOTE 3 - EQUIPMENT AND LEASEHOLD IMPROVEMENTS:
Equipment and leasehold improvements are summarized by major classifications as
follows:
<TABLE>
<CAPTION>
Estimated useful March 31, December 31,
lives 1996 1995
---------------- ----------- ------------
<S> <C> <C> <C>
Production equipment 5-7 $ 3,700,974 $ 3,658,352
Leasehold improvements 5-10 1,284,819 1,271,542
Computer hardware and software 3-5 3,078,787 2,996,638
Furniture and fixtures 5 1,116,112 1,116,112
Distribution equipment 5-10 1,452,716 1,452,716
Warehouse equipment 5-7 395,797 395,797
Vehicles 5 12,417 12,417
----------- -----------
11,041,622 10,903,574
Construction in progress 110,936 509
LESS - Accumulated depreciation (6,469,647) (6,072,089)
=========== ===========
$ 4,682,911 $ 4,831,994
=========== ===========
</TABLE>
Page 7 of 12
<PAGE> 8
NOTE 4 - MAJOR CUSTOMERS:
The Company operates almost exclusively in one industry, which is the wholesale
distribution of imprinted, dyed and decorated casual apparel. The Company has
three major customers, all of whom are mass merchants. The percentage of gross
sales for each customer and the total percentage of gross sales for the three
customers are as follows:
<TABLE>
<CAPTION>
Percentage of gross sales for Total percentage
the Company's three largest of gross sales for
customers the three customers
<S> <C> <C>
For the three months ended March 31,
1996 11%, 22% and 57% 90%
1995 17%, 29% and 42% 88%
For the year ended December 31, 1995 17%, 24% and 47% 88%
</TABLE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, the
percentage relationship of certain income statement items to net sales and the
dollar increase or decrease as a percentage of such items from period to period:
<TABLE>
<CAPTION>
Dollar Increase
(Decrease)
Three months ended March 31, Percentage
1996 1995 1995 to 1996
----- ----- ---------------
<S> <C> <C> <C>
Gross sales
Proprietary sales 18.9% 23.5% (23.4)%
Licensed sales 83.7 79.9 (0.5)
Sales deductions (2.6) (3.4) (25.3)
----- -----
Net sales 100.0 100.0 (5.0)
Cost of goods sold 84.4 87.6 (8.4)
Gross margin 15.6 12.4 19.1
Operating expenses 13.0 14.1 (12.3)
Interest expense 1.0 1.3 (30.0)
Other (income) and expense (0.1) (0.1) (24.1)
Provision (benefit) for income taxes 0.6 (1.0) 153.5
----- -----
Net income (loss) 1.1% (1.9)% 153.2
===== =====
</TABLE>
FIRST QUARTER OF 1996 AND FIRST QUARTER OF 1995
NET SALES. Net sales for the three months ended March 31, 1996 decreased 5.0% to
$24.4 million from $25.7 million in the first three months of 1995. The Company
believes the primary reason for this decrease was the decline in sales of men's
and boys' products. Sales of men's and boys' products decreased 21% to $8.6
million in the first quarter of 1996 from $10.9 million in the same period of
1995, primarily as a result of a soft retail environment.
Page 8 of 12
<PAGE> 9
Women's and girls' gross sales increased by 5% to $16.3 million in the
first quarter of 1996 from $15.5 million in the same period of 1995. The Company
believes this increase was primarily due to the strong design and merchandising
abilities of this division, coupled with a strong license portfolio.
Gross sales of licensed products remained virtually unchanged at $20.5
million in the first quarter of 1996 versus $20.6 million in the first quarter
of 1995. Sales of product bearing Winnie the Pooh((C) Disney) designs increased
in the first quarter of 1996 over 1995 and Looney Tunes(C) and joint Looney
Tunes(C) licensed product sales decreased in the first quarter of 1996 versus
the first quarter of 1995. The Company, on an ongoing basis, is actively seeking
additional licenses and brands to add to its existing stable of licensed
properties. Recent license acquisitions include Disney Enterprises' 1996
animated movie The Hunchback of Notre Dame((C) Disney) and the live action
release, 101 Dalmatians((C) Disney). There can be no assurances, however, that
any license acquisitions will receive positive market acceptance by Sun's
customers.
Gross sales of proprietary products decreased by 23% to $4.6 million in
the 1996 quarter from $6.0 million in the 1995 quarter. The Company believes
this decrease was primarily the result of the soft retail environment and strong
competition from garments bearing licensed characters and trademarks.
Gross sales to Sun's largest three customers decreased 4% in the first
three months of 1996 versus sales in the same period of 1995. Gross sales to
Sun's other customers decreased 22% in the first three months of 1996 versus the
same period of 1995, primarily as a result of the competitive retail environment
faced by many of these customers.
Sales deductions, consisting of sales returns, discounts and
allowances, decreased to $649,000 in the 1996 quarter from $869,000 in 1995.
This decrease was primarily due to decreases in the amount of product returns.
GROSS MARGIN. Gross margin as a percentage of net sales increased to 15.6% in
the first quarter of 1996 from 12.4% in the first quarter of 1995. This increase
was primarily the result of three factors. First, customer returns were down in
the 1996 quarter versus 1995. Second, 1995 margins were negatively impacted by
efforts to reduce men's inventory, including customer incentives and
substitution of existing, higher value inventory to fill customer orders for
lower value product, while the 1996 quarter was not impacted by such actions.
Third, the Company's efforts to re-engineer its operating processes, begun in
1995, lowered Sun's manufacturing costs in the first quarter of 1996.
OPERATING EXPENSES. Operating expenses decreased to $3.2 million (or 13.0% of
net sales) in 1996 from $3.6 million (or 14.1% of net sales) in the first
quarter of 1995. This decrease was primarily attributable to decreases in
selling, and general and administrative expenses.
General and administrative expenses decreased to $1.7 million, or 7.0%
of net sales, in the first quarter of 1996 from $2.0 million, or 7.8% of net
sales, in the same period of 1995. This decrease was primarily the result of
elimination of positions under a restructuring plan implemented by the Company
in the first quarter of 1996 (see "First Quarter 1996 Restructuring" below).
Selling expense decreased to $775,000, or 3.2% of net sales, in the
first quarter of 1996 from $988,000, or 3.8% of net sales, in the same period of
1995. This decrease was primarily the result of the elimination of positions
under a restructuring plan implemented by the Company in the first quarter of
1996 (see "First Quarter 1996 Restructuring" below).
INTEREST EXPENSE. Quarterly interest expense decreased 30% to $241,000 in the
first quarter of 1996 from $344,000 in 1995 primarily as a result of lower
borrowing levels in the 1996 quarter.
NET INCOME (LOSS). Net income increased to $267,000 in the first quarter of 1996
from a net loss of $501,000 in the same period of 1995, as a result of the
factors described above.
FIRST QUARTER 1996 RESTRUCTURING. In February 1996, the company initiated a
restructuring plan, that, among other things, resulted in the combining of Sun's
Women's and Girls' Division and Men's and Boys' Division. Sandra L. Teufel
assumed leadership of the combined Women's/Girls' and Men's/Boys' operations, as
Senior Vice President - Sales and Merchandising. Ms. Teufel had most recently
served as
Page 9 of 12
<PAGE> 10
Sun's Senior Vice President - Women's and Girls' Division. The restructuring
plan also resulted in the elimination of approximately 30 indirect positions
from the Company's workforce, including Kenneth R. Schrang's position as Senior
Vice President - Men's and Boys' Division.
QUARTERLY NET SALES - SEASONALITY
The Company's net sales fluctuate from quarter to quarter. Quarterly
net sales for 1996 and 1995 are set forth below.
<TABLE>
<CAPTION>
1996 1995
--------------------------------------------------
Amount Percent Amount Percent
<S> <C> <C> <C> <C>
First Quarter $24,433 * $25,720 27.4%
Second Quarter 30,582 32.5
Third Quarter 16,225 17.3
Fourth Quarter _______ 21,438 22.8
------- -----
Total $24,433 $93,965 100.0%
======= ======= =====
</TABLE>
* Unknown
The Company's highest sales and heaviest production demands
historically occur in the first, second and fourth quarters of each year. During
the first, second and fourth quarters, spring and summer products - which
include T-shirts, tank tops, shorts and similar garments - and back-to-school
products are primarily produced and sold. During the third and part of the
fourth quarter, winter season products - which include sweatshirts and long
sleeve T-shirts - and holiday products are primarily produced and sold.
LIQUIDITY AND CAPITAL RESOURCES
The Company finances working capital needs primarily from "internally
generated funds" (which the Company defines as net income plus depreciation) and
short term borrowing under a credit agreement. In February 1996, the Company
replaced its former $27 million U.S. Bank credit agreement with a credit
agreement provided by Heller Financial, Inc. The Heller credit agreement
provides for a line of credit (including commercial letters of credit) of up to
$24 million and expires in February 1998. At March 31, 1996, approximately $11.5
million was available for borrowing. The borrowing rate for the revolving
portion of the line is the prime rate. All the Company's assets, including
accounts receivable and inventories, are pledged as security for borrowings
under the Heller credit agreement. Under the agreement, the amount borrowed at
any time, together with letters of credit issued on behalf of the Company, may
not exceed 85% of eligible accounts receivable and 60% of eligible inventory -
up to $8.5 million. The Heller credit agreement requires compliance with certain
financial covenants principally relating to working capital, tangible net worth,
ratio of debt to equity, expenditures for fixed assets, minimum earnings (before
taxes, interest and depreciation), interest coverage, restrictions on the
payment of dividends and restrictions on the incurrence of long-term debt. The
Company was in compliance with the Heller debt covenants at March 31, 1996.
Inventory levels decreased by $5,182,000 or 21.9% from December 31,1995
to March 31, 1996 primarily as a result of the Company's concerted efforts to
operate its business with lower levels of inventory. The Company believes there
was approximately $3.0 million (net of inventory markdown reserves of $3.8
million) of impaired surplus inventory on hand at March 31, 1996, which is
expected to be sold at little or no margin in 1996. As a result, the Company
believes its gross margin will be negatively impacted in 1996 by 1% to 2% of net
sales.
Page 10 of 12
<PAGE> 11
Accounts receivable increased by 19.8% to $15.7 million at March 31,
1996 from 13.1 million at December 3,1995 as a result of the higher levels of
sales in the first quarter of 1996 than in the fourth quarter of 1995.
The Company has an agreement with Heller Financial, Inc. that is
intended to transfer the collection risk to Heller for Sun's accounts receivable
for essentially all of its customers other than Target and Wal-Mart. Under the
agreement, Heller assumes 70% of the collection risk associated with Kmart
receivables (to a maximum of $4,000,000 in gross receivables) and 100% of the
collection risk associated with the Company's other covered receivables. Heller
receives a fee equal to .65% of the gross amount of Kmart receivables and .55%
of the gross amount of all other covered receivables for assuming such
collection risk.
Notes payable (borrowings under the Company's line of credit) decreased
$6.5 million or 48% and accounts payable increased $982,000 from December 31,
1995 to March 31, 1996. The net decrease in notes payable and accounts payable
was primarily the result of the reduction in inventory that occurred during the
first quarter of 1996.
During the first quarter of 1996, the Company purchased approximately
$249,000 of machinery and equipment for production, warehouse, distribution and
office use. The Company anticipates that total expenditures for machinery and
equipment will be less than $250,000 during the remainder of 1996.
Sun's primary ongoing cash needs are for working capital and capital
expenditures. The Company believes that its cash needs through the remainder of
1996 will be met by internally generated funds and borrowings under its Heller
credit facility.
INFLATION
From time to time, Sun's suppliers of blank garments and materials
increase their prices. Further, Sun increases its employees' compensation
relative to increases in the cost of living. Sun's mass merchant customers have
historically sold Sun's more basic products at predetermined sales price points,
many of which have not risen during the last few years. Because Sun's customers
generally operate on a fixed markup, their strategy of not increasing their
sales price points has made it difficult for the Company to pass on any cost
increases relative to its more basic products.
PART II. OTHER INFORMATION
ITEM 1 - LEGAL PROCEEDINGS
No material change.
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
None
Page 11 of 12
<PAGE> 12
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SUN SPORTSWEAR, INC.
DATE: May 8, 1996 BY: /s/ William S. Wiley
------------------------ ---------------------
William S. Wiley
Chairman of the Board,
Chief Executive Officer
and President
DATE: May 8, 1996 BY: /s/ Kevin C. James
------------------------ -------------------
Kevin C. James
Senior Vice President
and Chief Financial Officer
Page 12 of 12
<PAGE> 13
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Description Page
- ------- ------------- ----
<S> <C> <C>
27 Financial Data
Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from Form 10-Q
for the quarter ended March 31, 1996 and is qualified in its entirety by
reference to such financial statements.
</LEGEND>
<CIK> 0000856711
<NAME> SUN SPORTSWEAR, INC.
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<EXCHANGE-RATE> 1
<CASH> 114,661
<SECURITIES> 0
<RECEIVABLES> 15,747,989
<ALLOWANCES> 46,110
<INVENTORY> 18,449,709
<CURRENT-ASSETS> 37,765,037
<PP&E> 11,152,558
<DEPRECIATION> 6,469,647
<TOTAL-ASSETS> 42,462,448
<CURRENT-LIABILITIES> 16,021,661
<BONDS> 155,642
0
0
<COMMON> 21,618,339
<OTHER-SE> 4,666,806
<TOTAL-LIABILITY-AND-EQUITY> 26,285,145
<SALES> 24,433,440
<TOTAL-REVENUES> 24,433,440
<CGS> 20,623,529
<TOTAL-COSTS> 23,805,527
<OTHER-EXPENSES> (17,804)
<LOSS-PROVISION> 31,971
<INTEREST-EXPENSE> 240,991
<INCOME-PRETAX> 404,726
<INCOME-TAX> 138,000
<INCOME-CONTINUING> 266,726
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 266,726
<EPS-PRIMARY> .05
<EPS-DILUTED> .05
</TABLE>
