FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES 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 EXCHANGE ACT OF 1934
For the transition period from ________ to ___________
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Commission file number: 018597
NSC CORPORATION
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification No.)
DELAWARE 31-1295113
49 Danton Drive, Methuen, MA 01844
(508) 557-7300
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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 ofv1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject tosuch filing
requirements for the past 90 days. Yes X No ____
The total number of shares of the registrant's common stock, $.01 par value,
outstanding on May 6, 1996, was 9,971,175.
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NSC Corporation
Index to Quarterly Report on Form 10Q
For the Quarter Ended March 31, 1996
PartI
Financial Information
Page Number
Item 1 Financial Statements
Consolidated Balance Sheets (Unaudited)
-As of March 31, 1996 and December 31, 1995 3
Consolidated Statements of Income (Unaudited)
-For the Three Months Ended March 31, 1996 and 1995 4
Consolidated Statements of Cash Flows (Unaudited)
-For the Three Months Ended March 31, 1996 and 1995 5
Notes to the Consolidated Financial Statements (Unaudited) 6
Item 2 Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
PartII
Other Information
Item 1 Legal Proceedings 9
Item 6 Exhibits and Reports on Form 8-K 9
Signatures 10
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Part I. Financial Information
Item 1. Financial Statements.
NSC Corporation
Consolidated Balance Sheets
(In Thousands, Except Share and Per-Share Data)
(Unaudited)
March 31, December 31,
1996 1995
-------- --------
ASSETS
Current assets:
Cash and cash equivalents ....................... $ 342 $ 4,094
Accounts receivable, net ........................ 27,602 27,125
Costs and estimated earnings on contracts
in process in excess of billings .............. 8,480 7,894
Inventories ..................................... 1,178 1,041
Prepaid expenses and other current assets ....... 1,144 1,559
Refundable income taxes ......................... 87 92
-------- --------
38,833 41,805
-------- --------
Property and equipment:
Land ............................................ 998 998
Buildings and improvements ...................... 5,692 5,588
Machinery and equipment ......................... 9,111 8,813
-------- --------
15,801 15,399
Less accumulated depreciation ................... (7,334) (6,915)
-------- --------
8,467 8,484
-------- --------
Other noncurrent assets:
Goodwill, net of accumulated amortization ....... 37,004 36,872
-------- --------
Total Assets .................................... $ 84,304 $ 87,161
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable ................................... $ 1,000 $ --
Accounts payable ................................ 4,408 3,063
Billings in excess of costs and estimated
earnings on contracts in process .............. 3,560 3,932
Accrued compensation and related costs .......... 3,650 3,751
Federal, state and local taxes .................. 123 250
Other accrued liabilities ....................... 1,474 926
Contingent liabilities .......................... 5,751 6,694
Current portion of long-term debt ............... -- 5,850
-------- --------
19,966 24,466
-------- --------
Noncurrent liabilities:
Payable to affiliate ............................ 2,654 1,571
Deferred income taxes ........................... 3,843 3,843
Stockholders' equity:
Preferred stock $.01 par value, 10,000,000 shares
authorized,none issued and outstanding .......... -- --
Common stock $.01 par value, 20,000,000 shares
authorized, 9,971,175 issued and outstanding
in 1996 and 1995 ................................ 100 100
Additional paid-in capital ...................... 56,079 56,079
Retained Earnings ............................... 1,662 1,102
-------- --------
57,841 57,281
-------- --------
Total Liabilities and Stockholders' Equity ...... 84,304 87,161
======== ========
The accompanying notes are an integral part of these consolidated financial
statements.
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NSC Coporation
Consolidated Statements of Income
(In thousands, Except Per-Share Data)
(Unaudited)
Three Months Ended
March 31,
--------------------
1996 1995
------- -------
Revenues ............................................. $35,823 $29,544
Cost of services ..................................... 29,863 24,844
------- -------
Gross Profit ...................................... 5,960 4,700
Selling, general and administrative expenses ......... 4,454 3,885
Other operating expenses ............................. 209 --
Goodwill amortization ................................ 275 267
------- -------
Operating Income .................................. 1,022 548
------- -------
Other:
Interest expense .................................. 29 94
Other ............................................. 11 23
------- -------
40 117
------- -------
Income Before Income Taxes ........................ 982 431
Income taxes ......................................... 422 211
======= =======
Net Income ........................................ $ 560 $ 220
======= =======
Net income per share ................................. $ 0.06 $ 0.02
======= =======
Weighted-average number of common and
common-equivalent shares outstanding ................. 9,971 9,971
======= =======
The accompanying notes are an integral part of these consolidated financial
statements.
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NSC Corporation
Consolidated Statements of Cash Flow
(In Thousands)
(Unaudited)
Three Months Ended
March 31,
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1996 1995
------- -------
Cash flows from operating activities:
Net income ............................................ $ 560 $ 220
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation ..................................... 467 500
Goodwill amortization ............................ 275 267
Deferred income taxes ............................ -- (455)
Gain on disposition of property and equipment .... 9 (5)
Changes in current assets and liabilities,
net of effects of business acquisition:
Accounts receivable ................................... (477) (221)
Costs and estimated earnings on contracts
in process in excess of billings .................... (586) (1,537)
Other current assets .................................. 375 146
Accounts payable ...................................... 1,345 782
Billings in excess of costs and estimated
earnings on contracts in process .................... (372) (1,403)
Other ................................................. (625) (494)
------- -------
Net cash provided by (used in)
operating activities ...................... 972 (2,200)
------- -------
Cash flows from investing activities:
Purchases of property and equipment ................... (340) (102)
Proceeds from the sale of property and equipment ...... 1 21
Business acquisition .................................. (618) --
------- -------
Net cash used in investing activities ....... (957) (81)
------- -------
Cash flows from financing activities:
Net borrowings under short-term financing
arrangements ......................................... 1,000 --
Payments on long-term debt ............................ (5,850) (2,788)
Payable to affiliate .................................. 1,083 --
------- -------
Net cash used in financing activities ....... (3,767) (2,788)
------- -------
Net decrease in cash and cash equivalents ... (3,753) (5,068)
Cash and cash equivalents at beginning of periods ........ 4,094 8,818
======= =======
Cash and cash equivalents at end of periods .............. $ 342 $ 3,750
======= =======
The accompanying notes are an integral part of these consolidated financial
statements.
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Notes
Note 1 Organization and Summary of Significant Accounting Policies
Basis of Presentation. The accompanying unaudited consolidated financial
statements have been prepared by NSC Corporation (the "Company") and reflect all
adjustments, consisting of only normal recurring adjustments, which are, in the
opinion of management, necessary for a fair presentation of financial results
for the three month period ended March 31, 1996 and 1995, in accordance with
generally accepted accounting principles for interim financial reporting and
pursuant to Article 10 of Regulation S-X. Certain information and footnote
disclosures normally included in audited financial statements have been
condensed or omitted pursuant to such rules and regulations. These interim
consolidated financial statements should be read in conjunction with the
Company's Annual Report to Stockholders on Form 10-K for the year ended December
31, 1995. The results of operations for the three month period ended March 31,
1996 and 1995 are not necessarily indicative of the results for the full year.
The accompanying interim consolidated financial statements include the accounts
of the Company and its wholly-owned subsidiaries. The Company is a Delaware
corporation and is owned approximately 40% by OHM Corporation and approximately
40% by Rust International Inc.
Seasonality. The revenues derived from the Company's asbestos abatement services
are affected by the timing of its clients' planned asbestos abatement work.
Because of this change in demand, the Company's quarterly revenues can
fluctuate. Revenues and operating results of asbestos-abatement activities may
also be further affected by the timing of large contracts, especially if all or
a substantial part of the performance of such contracts occurs within one or two
quarters while the revenues and operating results of the demolition and
dismantling activities may be affected by fluctuations in the price of scrap
metals. Accordingly, quarterly or other interim results should not be considered
indicative of results to be expected for any other quarter or for the full
fiscal year.
Long-Lived Assets. The Company adopted the provisions of the Financial
Accounting Standards Board Statement No.121 "Accounting for the Impairment of
Long-Lived Assets to be Disposed Of"(FAS121) in the first quarter of 1996. The
adoption of FAS121 did not have a material effect on the financial statements.
Net Income Per Share Information. The net income per share amounts have been
computed by dividing net income by the weighted-average number of common and
common-equivalent shares, if dilutive, outstanding during the respective
periods.
Reclassifications. Certain reclassifications have been made to prior year
financial statements to conform with the current year presentation.
Note 2 - Debt
On May 1, 1996 the Company amended its May 4, 1993 revolving credit facility.
Under this amendment the Company can borrow up to $25,000,000 on a revolving
basis for a term expiring April 30, 1999. The amended revolving credit facility
contains debt service coverage, leverage and interest covenants and allows for
payment of dividends subject to certain conditions. As of March 31, 1996 the
Company had oustanding $1,000,000 in working capital loan and $8,000,000 in
letters of credit.
Note 3 - Litigation and Contingencies
See Item 1. Legal Proceedings
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Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operation.
Results of Operations
General. The following discussion should be read in conjunction with the
information set forth in the Consolidated Financial Statements and related notes
for the three month period ended March 31, 1996 and 1995 included herein, and
with the Company's Annual Report to Stockholders for the year ended December 31,
1995.
The Company is a leading provider of asbestos abatement and other specialty
contracting services to a broad range of commercial, industrial and
institutional clients, which are located throughout the United States. The
timing of revenues is dependent on the Company's backlog, contract awards and
the performance requirements of each contract. Generally, cost of services as a
percentage of net revenues fluctuates based on the amount and timing of revenues
earned, the mix of projects requiring union or non-union labor, pricing and
other factors.
Three Months Ended March 31, 1996
Versus
Three Months Ended March 31, 1995
Revenues.
Revenues for the three months ended March 31, 1996 increased 21% to $35,823,000
from $29,545,000 for the same period in 1995. The increase in revenues is
primarily attributable to the inclusion in 1996 of $6,076,000 revenues generated
by Olshan Demolishing Management, Inc.(ODMI).
Selling, General and Administrative Expenses.
Selling, general and administrative expenses (SG&A) for the three months ended
March 31, 1996 increased 15% to $4,454,000 from $3,885,000 for the same period
in 1995 reflecting the inclusion of the ODMI activities. The SG&A expenses as a
percentage of revenue for the three month period in 1996 were 12% compared to
13% for the same period in 1995.
Other (Income) and Expenses.
Other (income) and expenses for the three months ended March 31, 1996 were
$40,000 compared to $117,000 for the same period in 1995. The net decrease of
$77,000 is primarily attributable to lower interest expense due to the reduction
of the Company's long-term debt.
Net Income.
Net income for the three months ended March 31, 1996 increased 155% to $560,000
from $220,000 for the same period in 1995. Net income as a percentage of
revenues for the three month period ended March 31, 1996 increased to 2% from 1%
for the same period in 1995. This increase is directly related to the increase
in revenues and a decrease in indirect and sg&a costs as a percentage of these
revenues.
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Liquidity and Capital Resources. Working capital at March 31, 1996 was
$18,867,000 compared to $17,339,000 at December 31, 1995. The current ratio was
1.9/1 at March 31, 1996 compared to 1.7/1 at December 31, 1995. Cash provided by
operating activities was $972,000 for the three month period ended March 31,
1996 compared to cash used in operating activities of $2,200,000 for the same
period in 1995. During the first three months of 1996, cash of $340,000 was used
for purchases of property and equipment, $618,000 was used for the acquisition
of the assets of Safe Air Inc., a leader in the indoor air quality industry, and
$5,850,000 was used for repayment of the Company's long-term debt.
Pursuant to the Olshan Business Operating Agreement, dated April 20, 1995 the
Company has received to date $2,654,000, a portion of a possible maximum
$5,500,000 interest-free working capital loan. The loan is payable according to
the provisions contained in the agreement and is expected to remain outstanding
for the full term of the agreement.
The Company believes that its cash flows from operations and funds available
under the existing senior revolving credit facilities, as amended on May 1,
1996, will be sufficient throughout the next twelve months to finance its
working capital needs, planned capital expenditures and to service the
indebtedness of its existing business. While the Company's Board of Directors
has not established a policy concerning payment of regular dividends, it intends
to review annually the feasibility of declaring additional dividends depending
upon the results of operations, financial condition and cash needs of the
Company.
The nature and scope of the Company's business bring it into regular contact
with the general public, a variety of businesses and government agencies. Such
activities inherently subject the Company to the hazards of litigation. While
the outcome of all claims is not clearly determinable at the present time,
management has recorded an estimate of any losses it expects to incur in
connection with the resolution of the claims. Management believes that the
resolution of these claims will not have a material effect on the financial
condition of the Company; however, such resolutions could materially affect the
results of operations or cash flows for either a quarterly or annual reporting
period (See Item 1. Legal Proceedings).
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Part II. Other Information
Item 1. Legal Proceedings.
The company is currently cooperating in a grand jury investigation being
conducted by the Department of Justice, Environmental Crimes Section, relating
to operational activities involving a subsidiary of the Company as a
subcontractor at the Weldon Springs Site Remedial Action Project. The Company
cannot speculate what effects, if any, the results of such investigation will
have on the company. The Company is also subject to certain other legal
proceedings, including those relating to regulatory compliance, in the ordinary
course of business. Management believes that the resolution of these claims will
not have a material effect on the financial condition of the Company; however,
such resolutions could materially affect the result of operations or cash flows
for either a quarterly or annual reporting period.
Item 6. Exhibits and Reports on Form 8-K.
1. EXHIBITS
Exhibit 10. Second Amendment to Revolving Credit Agreement, dated as of
May 1, 1996 by and between NSC Coporation, its subsidiaries,
The First National Bank of Boston and Fleet National Bank.
Exhibit 11. Statement Re-Computation of Per-Share Earnings
Exhibit 27. Financial Data Schedule
2. REPORTS ON FORM 8K
No reports on form 8-K were filed during the quarter ended March 31, 1996.
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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.
NSC CORPORATION
Date: May 14, 1996 By:_____/s/ J. DRENNAN LOWELL_______
J. Drennan Lowell
Vice President, Chief Financial Officer,
Treasurer and Secretary
Signing on behalf of the registrant
and as principal financial officer.
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EXHIBIT 10
NSC CORPORATION
SECOND AMENDMENT TO
REVOLVING CREDIT AGREEMENT
AND AMENDMENT TO SECURITY DOCUMENTS
THIS SECOND AMENDMENT TO REVOLVING CREDIT AGREEMENT and AMENDMENT TO SECURITY
DOCUMENTS (this "Second Amendment") is made and entered into as of the 1st day
of May, 1996, by and among NSC CORPORATION, a Delaware corporation (the
"Parent"), its Subsidiaries listed on the signature pages hereto (the
"Subsidiaries," the Parent and such Subsidiaries collectively referred to herein
as the "Borrowers" and individually as a "Borrower"), each of which Borrowers
having its principal place of business at 49 Danton Drive, Methuen,
Massachusetts 01844, THE FIRST NATIONAL BANK OF BOSTON ("FNBB"), a national
banking association having its principal place of business at 100 Federal
Street, Boston, Massachusetts 02110, FLEET NATIONAL BANK ("Fleet"), a national
banking association formerly known as Fleet Bank of Massachusetts, N.A. with its
principal place of business at One Federal Street, Boston, Massachusetts 02111
(the "Banks"), and FNBB, as Agent for the Banks.
WHEREAS, the Borrower and the Banks entered into a Revolving Credit Agreement
dated as of May 4, 1993 and amended as of December 2, 1993 (the "Credit
Agreement") pursuant to which the Banks extended credit to the Borrowers on the
terms set forth therein;
WHEREAS, the Banks, the Borrowers, and the Agent have agreed to amend the Credit
Agreement as hereinafter set forth;
NOW, THEREFORE, for good and valuable consideration the receipt and sufficiency
of which is hereby acknowledged, the parties hereto agree as follows:
I. AMENDMENT TO THE CREDIT AGREEMENT
A. Amendment to Schedule 1 of the Credit Agreement. Schedule 1 to the Credit
Agreement is hereby amended (a) to add Olshan Demolishing Management, Inc.
("Olshan"), NSC Specialty Coatings, Inc. ("Coatings"), and NSC Energy Services,
Inc. ("Energy"), each as a Subsidiary of the Parent and as a Borrower, and (b)
to delete National Surface Cleaning Management, Inc. as a Subsidiary of the
Parent and as a Borrower. An amended and restated Schedule 1 is attached to this
Second Amendment. The Borrowers represent and warrant that the entities listed
on Schedule 1 hereto are all of the Subsidiaries of the Parent, and that each
such Subsidiary is a Borrower.
B. Amendment to ss.1.1 of the Credit Agreement.
(i) The following definitions in ss.1.1 of the Credit Agreement are hereby
deleted in their entirety and the following substituted in place thereof:
"Balance Sheet Date. December 31, 1995."
"Consolidated Current Assets. All assets of the Borrowers on a consolidated
basis that, in accordance with GAAP, are properly classified as current
assets."
"Consolidated Current Liabilities. All liabilities of the Borrowers on a
consolidated basis maturing on demand or within one (1) year from the date
as of which Consolidated Current Liabilities are to be determined, and such
other liabilities as may properly be classified as current liabilities in
accordance with GAAP, together with the outstanding principal amount of the
Loans whether or not so classified accordance with GAAP.
"Consolidated Earnings Before Interest, Taxes, and Amortization or
EBITA. For any period, the Consolidated Net Income of the Borrowers,
determined in accordance with GAAP, plus (a) interest expense, (b) income
tax expense, and (c) amortization expense for such period."
"Notes. The Revolving Credit Notes, as the same may be amended, restated,
modified, or supplemented from time to time."
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"Pricing Ratio. The ratio of (a) Consolidated Total Liabilities plus the
Maximum Drawing Amount of all outstanding Letters of Credit to (b)
Consolidated Tangible Net Worth."
"Total Commitment. $25,000,000, as such amount may be reduced pursuant to
ss.ss.2.1 or 2.2 hereof."
(ii) The following definitions are hereby added to ss.1.1 of the
Credit Agreement:
"Accounts Receivable. All rights of the Borrowers to payment for goods
sold, leased or otherwise marketed in the ordinary course of business and
all rights of the Borrowers to payment for services rendered in the
ordinary course of business and all sums of money or other proceeds due
thereon pursuant to transactions with account debtors, except for that
portion of the sum of money or other proceeds due thereon that relate to
sales, use or property taxes in conjunction with such transactions,
recorded on books of account in accordance with GAAP."
"Acquisition Loans. Revolving Credit Loans, the proceeds of which are
used for acquisitions permitted by ss.8.4 hereof or otherwise
permitted by the Banks in writing."
"Applicable L/C Fee. The applicable rate per annum of fees for Letters of
Credit, as set forth in the following table:
- - ------------------------------- ---------------- ---------------------------
Applicable L/C Fee Applicable L/C Fee
for Performance for all other
Pricing Ratio Letters of Credit Letters of Credit
- - ------------------------------- ---------------- ---------------------------
- - ------------------------------- ---------------- ---------------------------
Less than 2.00:1 0.75% 1.50%
- - ------------------------------- ---------------- ---------------------------
- - ------------------------------- ---------------- ---------------------------
greater than or equal to 2.00:1 0.875% 1.75%
but less than 2.50:1
- - ------------------------------- ---------------- ---------------------------
- - ------------------------------- ---------------- ---------------------------
greater than or equal to 2.50:1 1.00% 2.00%
but less than 3.00:1
- - ------------------------------- ---------------- ---------------------------
- - ------------------------------- ---------------- ---------------------------
greater than or equal to 3.00:1 1.125% 2.25%
- - ------------------------------- ---------------- ---------------------------
The effective date of a change in the Applicable L/C Fee shall be the first
day after receipt by the Banks of financial statements delivered pursuant
to ss.7.4(a) or (b) hereof which indicate a change in the Pricing Ratio and
in the Applicable L/C Fee in accordance with the above table.
Notwithstanding the foregoing, until receipt by the Banks of financial
statements delivered pursuant to ss.7.4(a) or (b) hereof for the fiscal
quarter ended March 31, 1996, the Applicable L/C Fee shall be 0.75% per
annum for all Performance Letters of Credit and 1.50% per annum for all
other Letters of Credit. If at any time the financial statements required
to be delivered pursuant to ss.7.4(a) or (b) hereof are not delivered
within the time periods specified in such subsections, the Applicable L/C
Fee shall be 1.125% with respect to any Performance Letter of Credit and
2.25% with respect to any other Letter of Credit, subject to adjustment
upon actual receipt of such financial statements."
"Applicable Margin. The applicable interest rate margin per annum set forth
in the following table:
- - --------------------------- ----------------- --------------------------
Pricing Applicable Applicable
Ratio Base Rate Margin Eurodollar Margin
- - --------------------------- ----------------- --------------------------
less than 2.00:1 0% 1.50%
- - --------------------------- ----------------- --------------------------
greater than or equal to
2.00:1, but less than 2.50:1 0.125% 1.75%
- - --------------------------- ----------------- --------------------------
greater than or equal to
2.50:1, but less than 3.00:1 0.25% 2.00%
- - --------------------------- ----------------- --------------------------
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- - --------------------------- ----------------- --------------------------
greater than or equal to 0.375% 2.25%
3.00:1
- - --------------------------- ----------------- --------------------------
Any change in the Applicable Margin shall become effective (a) with respect
to Eurodollar Loans, on the first day of each Interest Period which begins
three (3) or more days after receipt by the Banks of financial statements
delivered pursuant to ss.7.4(a) or (b) hereof which indicate a change in
the Pricing Ratio and in the Applicable Margin in accordance with the above
table, and (b) with respect to Base Rate Loans, on the first Business Day
after receipt by the Banks of such financial statements. Notwithstanding
the foregoing, until receipt by the Lenders of financial statements
delivered pursuant to ss.7.4(a) or (b) hereof for the fiscal quarter ended
March 31, 1996, the Applicable Margin shall be 0% with respect to Base Rate
Loans and 1.50% with respect to Eurodollar Loans. If at any time the
financial statements required to be delivered pursuant to ss.7.4(a) or (b)
hereof are not delivered within the time periods specified in such
subsections, the Applicable Margin shall be 0.375% with respect to any Base
Rate Loans outstanding after the date on which such financial statements
were required to be delivered and 2.25% with respect to any Eurodollar Loan
requested on or after the date on which such financial statements were
required to be delivered but before the time of actual receipt of such
financial statements."
"Consolidated Total Debt Service. For any period, Consolidated Total
Interest Expense plus (a) scheduled payments on capitalized leases (to the
extent not already included in the calculation of Consolidated Total Interest
Expense or in the scheduled principal payments described in clause (b) of this
definition), and (b) scheduled principal payments with respect to Indebtedness
for borrowed money due and payable during such period (excluding (i) the
$5,850,000 prepayment made on March 31, 1996 with respect to the March 31, 1996
and June 5, 1996 scheduled repayments of principal of the Non-Working Capital
Loan, and (ii) scheduled repayments of principal with respect to the Non-Working
Capital Loan made on June 30, 1995, October 2, 1995, and January 2, 1996 each in
the amount of $650,000), and (c) pro-forma five-year equal amortization of the
outstanding principal amount of the Acquisition Loans, all as determined in
accordance with GAAP".
"Consolidated Earnings Before Interest, Taxes, Depreciation, and
Amortization, or EBITDA. For any period, the Consolidated Net Income (or
Deficit) of the Borrowers determined in accordance with GAAP, plus (a) interest
expense, (b) income tax expense, (c) depreciation, and (d) amortization, all as
determined in accordance with GAAP."
"Consolidated Net Worth. The excess of Consolidated Total Assets over
Consolidated Total Liabilities."
"Eligible Accounts Receivable. The aggregate of the unpaid portions of
Accounts Receivable (net of any credits, rebates, offsets, holdbacks or other
adjustments, or commissions payable to third parties that are adjustments to
such Accounts Receivable) (i) that the Borrowers reasonably and in good faith
determine to be collectible; (ii) that are with account debtors that (A) are not
Borrowers, (B) purchased the goods or services giving rise to the relevant
Account Receivable in an arm's length transaction, (C) are not insolvent or
involved in any case or proceeding, whether voluntary or involuntary, under any
bankruptcy, reorganization, arrangement, insolvency, adjustment of debt,
dissolution, liquidation or similar law of any jurisdiction and (D) are, in the
Majority Banks' reasonable judgment, creditworthy; (iii) that are billable under
the terms of the relevant contract; (iv) that are not subject to any pledge,
restriction, security interest or other lien or encumbrance, other than those
created by the Loan Documents or security interests in favor of the providers of
performance bonds securing the performance of services by the Borrowers,
provided that the relevant Borrower shall not have defaulted in the performance
of such services and that the bond provider has not otherwise been called upon
to perform such services; (v) in which the Agent has a valid and perfected first
priority security interest; (vi) that have been billed and are not outstanding
for more than sixty (60) days past the earlier to occur of (A) the date of the
respective invoices therefor and (B) the date on which such receivable could
have been billed under the terms of the applicable contract; (vii) that are not
due from an account debtor located in Minnesota or New Jersey unless the
appropriate Borrower (A) has received a certificate of authority to do business
and is in good standing in such state or (B) has filed a notice of business
activities report with the appropriate office or agency of such state for the
current year; (viii) that are payable in Dollars; (ix) that are not payable from
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an office outside of the United States or Canada; and (x) that are not secured
by a letter of credit unless the Agent has a prior, perfected security interest
in such letter of credit."
"Performance Letter of Credit. A Letter of Credit where the event which
entitles the beneficiary to draw thereunder is performance-related, such as a
letter of credit posted as a bid bond, and not a letter of credit where the
event which entitles the beneficiary to draw thereunder is the failure to pay
money, such as a letter of credit backing industrial revenue bonds or workers'
compensation obligations."
"Revolver Maturity Date. April 30, 1999."
C. Amendment to ss.2.1 of the Credit Agreement. Section 2.1 of the
Credit Agreement is hereby deleted in its entirety and the following
substituted in place thereof:
"ss.2.1. Commitment to Lend. Subject to the terms and
conditions set forth in this Agreement, each of the Banks severally
agrees to lend to the Borrowers, and the Borrowers may borrow, repay,
and reborrow from time to time between the Closing Date and the
Revolver Maturity Date upon notice by the Borrowers to the Agent given
in accordance with ss.2.4, its Commitment Percentage of such sums as
are requested by the Borrowers (each such advance hereinafter referred
to as a "Revolving Credit Loan," or, if more than one, the "Revolving
Credit Loans") up to a maximum aggregate amount by the Banks (after
giving effect to all amounts requested) at any one time outstanding not
to exceed the Total Commitment minus the Maximum Drawing Amount of the
Letters of Credit outstanding at such time, provided that (a) the sum
of the outstanding amounts (after giving effect to all amounts
requested) of all Working Capital Loans shall not at any time exceed
the lesser of (i) $10,000,000, or (ii) seventy percent (70%) of the
Eligible Accounts Receivable, and provided further that (b) the sum of
the outstanding amounts (after giving effect to all amounts requested)
of all Acquisition Loans shall not at any time exceed $10,000,000. The
Revolving Credit Loans shall be made pro rata in accordance with each
Bank's Commitment Percentage. Each request for a Revolving Credit Loan
hereunder shall constitute a representation and warranty by the
Borrowers that the conditions set forth in ss.10 and ss.11, as the case
may be, have been satisfied on the date of such request. Any unpaid
Reimbursement Obligation under the Letters of Credit shall for all
purposes be a Revolving Credit Loan hereunder."
D. Amendment to ss.2.4 of the Credit Agreement. Section 2.4 of the
Credit Agreement is hereby amended to add the phrase, "and the
calculation of Eligible Accounts Receivable from the most recent
borrowing base report delivered pursuant to the terms of ss.7.4(h)
hereof" at the end of the second sentence thereof.
E. Amendment to ss.2.5 of the Credit Agreement. Section 2.5 of the
Credit Agreement is hereby deleted in its entirety and the following
substituted in place thereof:
"ss.2.5 Funds for Revolving Credit Loans.
(a) Subject to the terms and conditions hereof, not later than
1:00 p.m. (Boston time) on the proposed Drawdown Date of any Revolving
Credit Loan, each of the Banks will make available to the Agent, at its
Head Office, in immediately available funds, the amount of such Bank's
Commitment Percentage of the amount of the requested Revolving Credit
Loan. Upon receipt from each Bank of such amount, and upon receipt of
the documents required by ss.10 or ss.11, as the case may be, and the
satisfaction of the other conditions set forth therein, to the extent
applicable, the Agent will make available to the Borrowers the
aggregate amount of such Revolving Credit Loans made available to the
Agent by the Banks. The failure or refusal of any Bank to make
available to the Agent at the aforesaid time and place on any Drawdown
Date the amount of its Commitment Percentage of the requested Revolving
Credit Loan shall not relieve any other Bank from its several
obligations hereunder to make available to the Agent the amount of such
Bank's Commitment Percentage of any requested Revolving Credit Loan.
(b) The Agent may (unless earlier notified to the contrary by
any Bank by 1:00 p.m. (Boston time) on any Drawdown Date) assume that
each Bank has made available (or will before the end of such Business
Day make available) to the Agent the amount of such Bank's Commitment
Percentage with respect to the Revolving Credit Loan to be made on such
Drawdown Date, and the Agent may (but shall not be required to), in
reliance upon such assumption, make available to the Borrowers a
corresponding amount. If any Bank makes such amount available to the
Agent on a date after such Drawdown Date, such Bank shall pay the Agent
14 of 22
<PAGE>
on demand an amount equal to the product of (i) the average, computed
for the period referred to in clause (iii) below, of the weighted
average annual interest rate paid by the Agent for federal funds
acquired by the Agent during each day included in such period
multiplied by (ii) the amount equal to such Bank's Commitment
Percentage of such Revolving Credit Loan, multiplied by (iii) a
fraction, the numerator of which is the number of days that elapse from
and including such Drawdown Date to but not including the date on which
the amount equal to such Bank's Commitment Percentage of such Revolving
Credit Loan shall become immediately available to the Agent and the
denominator of which is 365. A statement of the Agent submitted to such
Bank with respect to any amounts owing under this paragraph shall be
prima facie evidence of the amount due and owing to the Agent by such
Bank. If such amount is not in fact made available to the Agent by such
Bank within three (3) Business Days of such Drawdown Date, the Agent
shall be entitled to debit the Borrowers' accounts to recover such
amount from the Borrowers, with interest thereon at the rate per annum
applicable to any Revolving Credit Loan made on such Drawdown Date."
F. Amendment to Exhibit C of the Credit Agreement An amended and
restated Exhibit C is attached to this Second Amendment.
G. Amendment to ss.2.7 of the Credit Agreement.
(a) Section 2.7(a) of the Credit Agreement is hereby amended
to delete the phrase, "subject to Settlement among the Banks in
accordance with ss.2.5(b) hereof" from such subsection.
(b) Section 2.7(b) of the Credit Agreement is hereby amended
to add the phrase ", or (iii) the outstanding amount of the Acquisition
Loans exceeds the amount set forth in ss.2.1 hereof," immediately
before the phrase "whether by reduction of the Total Commitment or
otherwise" appearing in the sixth line thereof. Section 2.7(b) of the
Credit Agreement is hereby further amended to delete the phrase ",
subject to Settlement among the Banks in accordance with ss.2.5(b)
hereof" appearing in the ninth and tenth lines thereof.
H. Amendment to ss.4.1(a) of the Credit Agreement. Section 4.1(a) of
the Credit Agreement is hereby amended to insert the phrase "the
lesser of (x) $12,000,000 or (y)" immediately following the phrase
"provided, however, that the Maximum Drawing Amount of all Letters of
Credit shall not exceed" appearing in the fourteenth through sixteenth
lines thereof.
I. Amendment to ss.5.1 of the Credit Agreement. Section 5.1 of the
Credit Agreement is hereby deleted in its entirety and the following
substituted in place thereof:
"ss.5.1. Interest on Loans. The outstanding principal amount
of the Revolving Credit Loans shall bear interest at the rate per annum
equal to (a) with respect to Base Rate Loans, the Base Rate plus the
Applicable Margin, or, (b) at the Borrowers' option as provided in
ss.2.4 hereof, at the Eurodollar Rate plus the Applicable Margin.
Interest with respect to the Loans shall be payable (i) monthly in
arrears on the first Business Day of each month on Base Rate Loans,
(ii) on the last day of the applicable Interest Period, and if such
Interest Period is longer than one (1) month, also on the day of each
month following the beginning of such Interest Period which corresponds
to the day on which such Interest Period began on Eurodollar Loans,
(iii) on any prepayment date with respect to accrued interest on
amounts prepaid, and (iv) on the Revolver Maturity Date and on any date
on which any amounts owing under any of the Loan Documents are declared
immediately due and payable for all Loans."
J. Amendment to ss.5.3(b) of the Credit Agreement. Section 5.3(b) of
the Credit Agreement is hereby deleted in its entirety and the
following substituted in place thereof:
Agent in advance on the date of issuance of the applicable
Letter of Credit, the Agent's customary issuance fee, and (b) pay a fee
(the "Letter of Credit Fee") to the Agent equal to the Applicable L/C
Fee. Such Letter of Credit Fee is for the accounts of the Banks in
accordance with their respective Commitment Percentages and shall be
payable quarterly in advance on the first Business Day of each calendar
quarter, and on the Revolver Maturity Date."
K. Amendment to ss.6.5 of the Credit Agreement. The second sentence of
ss.6.5 of the Credit Agreement is hereby amended to add the phrase,
"other than Distributions permitted by ss.8.6 hereof" at the end of
such sentence.
15 of 22
<PAGE>
L. Amendment to ss.6.21 of the Credit Agreement.
(a) Section 6.21 of the Credit Agreement is hereby amended to
add the phrase, "and other accounts the funds held in which at any time
do not exceed an aggregate of $10,000" immediately following the phrase
"Other than the accounts maintained at the Agent's Head Office subject
to the Lockbox Agreement (the "Depository Accounts")" in the first
sentence thereof.
(b) An amended and restated Schedule 6.21 is attached to this
Second Amendment.
M. Amendment to ss.7.4 of the Credit Agreement. Section 7.4 of the
Credit Agreement is hereby amended to add subsection 7.4(h) thereto,
immediately following subsection 7.4(g) thereof, which subsection
7.4(h) reads as follows:
"(h) within twenty (20) days after the end of each calendar
month or at such earlier time as the Agent may reasonably request, a
borrowing base report setting forth the calculation of Eligible
Accounts Receivable as at the end of such calendar month or other date
so requested by the Agent."
N. Amendment to ss.7.7 of the Credit Agreement. Section 7.7 of the
Credit Agreement is hereby amended to delete the second and third
sentences thereof.
O. Amendment to ss.7.18 of the Credit Agreement.
(a) Section 7.18 of the Credit Agreement is hereby amended to
add the phrase, ", and (c) the Acquisition Loans shall be used solely
for acquisitions permitted by ss.8.4 hereof or as otherwise permitted
by the Banks in writing" at the end of the first sentence of such
section.
(b) The second sentence of ss.7.18 of the Credit Agreement is
hereby deleted and the following substituted in place thereof: "No
proceeds of the Loans shall be used in any way that will violate
Regulations G, T, U, or X of the Board of Governors of the Federal
Reserve System."
P. Amendment to ss.8.1 of the Credit Agreement.
(i) An amended and restated Schedule 8.1(c) is attached to
this Second Amendment.
(ii) Section 8.1(h) of the Credit Agreement is hereby
amended to delete the phrase "or, with respect to Indebtedness of
the Parent, an acquisition permitted under ss.8.4 hereof."
(iii) Section 8.1(i) of the Credit Agreement is hereby
deleted in its entirety and the following substituted in place
thereof:
"(i) Subject to the limitations set forth in ss.8.4(g) and
(h) hereof, Indebtedness of any Borrower incurred in connection
with the acquisition of all of the stock of, or all or
substantially all of the assets of, any Person pursuant to ss.8.4
hereof."
Q. Amendment to Schedule 8.2(g) of the Credit Agreement. An amended
and restated Schedule 8.2(g) is attached to this Second Amendment.
R. Amendment to ss.8.4 of the Credit Agreement.
(a) Section 8.4(c) of the Credit Agreement is hereby amended
to delete the phrase, "related businesses" and to substitute the phrase
"specialty contracting businesses similar to those businesses conducted
by the Borrowers on or before April 30, 1996."
(b) Section 8.4 of the Credit Agreement is hereby further
amended to add subsections (g) and (h) thereto, immediately following
subsection (f) thereof, which subsections (g) and in respect of
capitalized leases (h) read as follows: "; (g) the aggregate cash
consideration to be paid in connection with any one such transaction
(including the amount of all Indebtedness for borrowed money and in
respect of capitalized leases assumed in connection therewith) does not
exceed $2,500,000 and; the aggregate amount of all other liabilities
(contingent and otherwise) assumed in connection with such transaction
arising out of the application of any Environmental Laws or in respect
of any Hazardous Substances does not exceed $250,000; and (h) the
aggregate cash consideration to be paid in connection with all such
16 of 22
<PAGE>
transactions (including the amount of all Indebtedness for borrowed
money and in respect of capitalized leases assumed in connection
therewith) does not exceed $10,000,000."
S. Amendment to ss.8.6 of the Credit Agreement. Section 8.6 of the
Credit Agreement is hereby deleted in its entirety and the following
substituted in place thereof:
"ss.8.6 Restricted Distributions and Redemptions. None of the
Borrowers will declare or pay any Distributions other than (a)
Distributions payable solely in common stock of the Borrowers, (b)
Distributions by the Subsidiaries to the Parent, and (c) annual
Distributions by the Parent to its shareholders, provided that after
giving effect to such Distribution described in clause (c), the ratio
of (i) EBITDA for the four fiscal quarters ending immediately prior to
such Distribution less Capital Expenditures, income tax expense, and
Distributions for such four fiscal quarters to (ii) Consolidated Total
Debt Service for such four fiscal quarters shall not be less than
1.10:1, and provided further that no Default of Event of Default shall
exist or be created by the making of any Distribution pursuant to this
ss.8.6. In addition, the Borrowers shall not redeem, convert, retire or
otherwise acquire shares of any class of capital stock of the Borrowers
in aggregate amount in excess of $500,000 in any year. The Borrowers
shall not effect or permit any change in or amendment to any document
or instrument pertaining to the terms of the Borrowers' capital stock.
T. Amendment to ss.9.1 of the Credit Agreement. Section 9.1 of the
Credit Agreement is hereby deleted in its entirety and the following
substituted in place thereof:
ss.9.1. Debt Service Coverage Ratio. As at the end of any
fiscal quarter commencing with the fiscal quarter ending March 31,
1996, the ratio of (a) EBITDA for the four fiscal quarters ending on
such date less Capital Expenditures and income tax expenses for such
period to (b) Consolidated Total Debt Service for such period shall not
be less than 1.50:1"
U. Amendment to ss.9.2 of the Credit Agreement. Section 9.2 of the
Credit Agreement is hereby deleted in its entirety and the following
substituted in place thereof:
"ss.9.2. Leverage Ratio. As at the end of any fiscal quarter
commencing with the fiscal quarter ending March 31, 1996, the ratio of
(a) Consolidated Total Liabilities plus the Maximum Drawing Amount of
all outstanding Letters of Credit to (b) Consolidated Tangible Net
Worth on that date shall not exceed the stated ratio for the respective
periods set forth below:
Period Ratio
3/31/96 Through 4/30/97 3.50:1
5/01/97 Through 4/30/98 3.25:1
Thereafter 2.75:1
V. Addition of ss.ss.9.5 and 9.6 to the Credit Agreement. Sections 9.5
and 9.6 are hereby added to the Credit Agreement immediately following
ss.9.4, which ss.ss.9.5 and 9.6 read as follows:
"ss.9.5. Consolidated Working Capital. As at the end of any
fiscal quarter, commencing with the fiscal quarter ending March 31,
1996, Consolidated Working Capital shall not be less than $10,000,000."
ss.9.6. Consolidated Net Worth. As at the end of any fiscal
quarter commencing with the fiscal quarter ending March 31, 1996,
Consolidated Net Worth shall not be less than $55,500,000."
W. Amendment to Exhibit D to the Credit Agreement. An amended and
restated Exhibit D is attached to this Second Amendment.
X. Amendment to ss.13.1(m) of the Credit Agreement. Section 13.1(m) of
the Credit Agreement is hereby deleted in its entirety and the
following substituted in place thereof:
"(m) if OHM Corporation ("OHM") or WMX Technologies, Inc.
("WMX") or any of their Subsidiaries sells, dilutes, or otherwise
reduces its voting control interest in the Parent in such a manner as
to cause (i) the aggregate voting control interest (on a direct or
indirect basis) of OHM and WMX in the Parent to be less than fifty-one
percent (51%), or (ii) the voting control interest (either direct or
indirect) of WMX in the Parent to be less than twenty percent (20%);"
17 of 22
<PAGE>
Y. References to Maturity Date. The term "Maturity Date" is hereby
deleted in ss.ss.2.6, 4.1(a), 4.2(b), 5.2(c), and 5.3(a), and the term "Revolver
Maturity Date" substituted in place thereof, and any and all other references to
the term "Maturity Date" appearing in the Loan Documents shall be deemed to be
references to the "Revolver Maturity Date."
II. AMENDMENT TO SECURITY DOCUMENTS
A. Amendment to Security and Pledge Agreement. By executing this Second
Amendment where indicated below, each of Olshan, Coatings, and Energy (i) hereby
grants to the Agent for the benefit of the Banks, to secure the payment and
performance of the Obligations, all of such Borrower's right title and interest
in all Collateral (as defined in the Security and Pledge Agreement), and (ii)
agrees to be bound by the terms and conditions of the Security and Pledge
Agreement as if it were an original party thereto.
III. PROVISIONS RELATING TO THIS SECOND AMENDMENT
A. Definitions. Capitalized terms used herein without definition have
the meanings ascribed to them in the Credit Agreement.
B. Ratification, etc.
Except as expressly amended or waived hereby, the Credit Agreement, the
other Loan Documents and all documents, instruments and agreements related
thereto are hereby ratified and confirmed in all respects and shall continue in
full force and effect. This Second Amendment and the Credit Agreement shall
hereafter be read and construed together as a single document, and all
references in the Credit Agreement or any related agreement or instrument to the
Credit Agreement shall refer to the Credit Agreement as amended by this Second
Amendment.
C. GOVERNING LAW.
THIS SECOND AMENDMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS AND SHALL TAKE EFFECT AS A
SEALED INSTRUMENT IN ACCORDANCE WITH SUCH LAWS.
D. Counterparts. This Second Amendment may be executed in any number of
counterparts and by different parties hereto on separate counterparts, each of
which when so executed and delivered shall be an original, but all of which
counterparts taken together shall be deemed to constitute one and the same
instrument. Complete sets of counterparts shall be lodged with the Banks.
E. Effectiveness.
This Second Amendment shall become effective upon the satisfaction of
each of the following conditions:
(i) This Second Amendment shall have been executed and delivered by
the respective parties hereto;
(ii) Each of the Banks shall have received an executed original
amendment and restatement of such Bank's Revolving Credit Note;
(iii) The Agent shall have received the certified directors'
resolutions of each of the Borrowers satisfactory to the Agent
authorizing the execution and delivery of the amended and restated
Notes and this Second Amendment, and otherwise authorizing this Second
Amendment and all related documents;
(iv) The Banks shall have received opinions of counsel to the
Borrowers as to the due authorization and enforceability of this
Second Amendment, the amended and restated Notes to be issued to the
Banks pursuant to ss.III.E(ii) hereof, and all other matters as the
Banks may reasonably request;
(v) The Agent shall have received a certificate of the Secretary or
Assistant Secretary of each of the Borrowers regarding the charter
documents of such Borrower;
(vi) The Agent shall have received the Stock certificate(s) for all of
the issued and outstanding shares of Olshan, Coatings, and Energy
together with stock powers endorsed in blank;
(vii) The Agent shall have received a certificate of insurance from an
independent insurance broker dated as of the date hereof, or within 15
days prior thereof, identifying insurers, types of insurance,
insurance limits, and policy terms and otherwise describing any
insurance obtained by the Borrowers in accordance with the provisions
of the Security Documents and identifying the Agent as loss payee;
18 of 22
<PAGE>
(viii) The Banks shall have received from the Borrowers an amended and
restated Schedule 8.1(c) and an amended and restated Schedule 8.2(g),
which schedules shall be in form and substance satisfactory to the
Banks;
(ix) The Agent shall have received from the Borrowers a calculation of
the Eligible Accounts Receivable as of the date hereof, in form and
substance satisfactory to the Agent; and
(x) The Agent shall have received an amendment fee of $100,000 to be
shared pro rata among the Banks in accordance with their respective
Commitment Percentages.
F. Post-Closing Undertakings. The Borrowers agree to deliver to the
Agent on or before May 31, 1996 of the results of UCC searches satisfactory to
the Agent evidencing no liens against the assets of Olshan, Coatings, and Energy
other than Permitted Liens, and (ii) evidence (including the provision of
Perfection Certificates) of UCC financing statements having been filed in all
appropriate filing offices listing Olshan, Coatings, and Energy, as appropriate,
as the debtor and the Agent as secured party, and agree that the failure to
deliver the items required by the paragraph in a timely manner shall constitute
an Event of Default.
G. Entire Agreement. THE CREDIT AGREEMENT AND THE SECURITY DOCUMENTS AS
AMENDED BY THIS SECOND AMENDMENT REPRESENTS THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS, OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL
AGREEMENTS BETWEEN THE PARTIES.
IN WITNESS WHEREOF, the undersigned have duly executed this Second
Amendment under seal as of the date first set forth above.
THE BORROWERS:
NSC CORPORATION
By: J. Drennan Lowell
Title: Vice President
NATIONAL SERVICE CLEANING CORP.
By: Efstathios A. Kouninis
Title: Vice President
NATIONAL SURFACE CLEANING
CORP.
By: Greg Weimers
Title: Vice President
OLSHAN DEMOLISHING
MANAGEMENT, INC.
By: Efstathios A. Kouninis
Title: Vice President
NSC SPECIALTY COATINGS, INC.
By: Efstathios A. Kouninis
Title: Vice President
NSC ENERGY SERVICES, INC.
By: Efstatios A. Kouninis
Title: Vice President
19 of 22
<PAGE>
THE BANKS:
THE FIRST NATIONAL BANK OF
BOSTON, individually and as Agent
By:
Title:
FLEET NATIONAL BANK
By:
Title:
20 of 22
EXHIBIT 11
Statement Re Computation of Per-Share Earnings
NSC Corporation
Computation of Per-Share Earnings
(In Thousands, Except Per-Share Data)
Three Months Ended
March 31,
----------------------------------
1996 1995
-------------- ---------------
Primary:
Average shares outstanding 9,971 9,971
============== ===============
Total 9,971 9,971
============== ===============
Net income $ 560 $ 220
============== ===============
Per share amounts:
Net income $ 0.06 $ 0.02
============== ===============
Fully Diluted:
Average shares outstanding 9,971 9,971
============== ===============
Total 9,971 9,971
============== ===============
Net income $ 560 $ 220
============== ===============
Per share amounts:
Net income $ 0.06 $ 0.02
============== ===============
21 of 22
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 342
<SECURITIES> 0
<RECEIVABLES> 28,151
<ALLOWANCES> (549)
<INVENTORY> 1,178
<CURRENT-ASSETS> 38,833
<PP&E> 15,801
<DEPRECIATION> (7,334)
<TOTAL-ASSETS> 84,304
<CURRENT-LIABILITIES> 19,966
<BONDS> 0
0
0
<COMMON> 100
<OTHER-SE> 57,741
<TOTAL-LIABILITY-AND-EQUITY> 84,304
<SALES> 35,532
<TOTAL-REVENUES> 35,823
<CGS> 29,863
<TOTAL-COSTS> 34,812
<OTHER-EXPENSES> 11
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 29
<INCOME-PRETAX> 982
<INCOME-TAX> 422
<INCOME-CONTINUING> 560
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 560
<EPS-PRIMARY> .06
<EPS-DILUTED> .06
</TABLE>
