<PAGE>
The Eastwind Group, Inc.
Consolidated Balance Sheets
(Unaudited)
<TABLE>
<CAPTION>
June 28, December 31,
ASSETS 1997 1996
------------- -------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 342,218 $ 709,697
Accounts receivable, net 7,507,995 7,655,763
Due from related parties -- 1,047,354
Inventories 5,243,881 4,001,007
Prepaid expenses 158,790 203,820
Prepaid or recoverable income taxes 844,703 91,500
------------ ------------
Total current assets 14,097,587 13,709,141
Property, plant and equipment, net 8,558,642 7,024,393
Investment in investee companies -- 700,000
Goodwill and other assets 8,204,019 7,024,489
------------ ------------
$ 30,860,248 $ 28,458,023
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Lines of credit $ 4,938,074 $ 3,626,365
Current portion of long-term debt 1,094,506 880,012
Current portion of capitalized lease obligations 968,582 848,701
Accounts payable 4,599,068 3,775,002
Accrued expenses 2,693,856 2,718,391
Due to related parties -- 276,260
Deferred income taxes 59,431 98,186
------------ ------------
Total current liabilities 14,353,517 12,222,917
------------ ------------
Long-term debt 5,162,748 5,537,523
------------ ------------
Capitalized lease obligations 1,990,570 1,695,229
------------ ------------
Accrued pension and postretirement benefits 222,840 218,510
------------ ------------
Deferred credit, net 147,899 160,224
------------ ------------
Other liabilities 629,096 --
------------ ------------
Deferred income taxes 398,550 382,814
------------ ------------
Minority interest in consolidated subsidiary 22,529 14,927
------------ ------------
Redeemable Series B Preferred Stock 900,000 900,000
------------ ------------
Stockholders' equity:
Series A Preferred stock, $.10 par value, 3,000,000 shares
authorized; 1,000 issued and outstanding at June 28, 1997
and December 31, 1996 100 100
Common stock, $.10 par value, 5,000,000 shares authorized,
2,800,019 and 2,411,482 issued and 2,800,019 and 2,376,482
outstanding at June 28, 1997 and December 31, 1996, respectively 280,002 241,148
Warrants outstanding 929,497 1,271,597
Additional paid-in capital 7,860,539 6,408,621
Accumulated deficit (1,425,639) (147,051)
------------ ------------
7,644,499 7,774,415
Less-Common stock in treasury, 35,000 shares at cost -- (193,609)
Notes receivable from sale of stock (612,000) (240,000)
Deferred compensation -- (14,927)
------------ ------------
Total stockholders' equity 7,032,499 7,325,879
------------ ------------
$ 30,860,248 $ 28,458,023
============ ============
</TABLE>
The accompanying notes and notes to the financial statements included in the
Annual Report on Form 10-KSB for the year ended December 31, 1996 are an
integral part of these financial statements.
(4)
<PAGE>
The Eastwind Group, Inc.
Consolidated Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Quarter Ended Two Quarters Ended
June 28, June 30, June 28, June 30,
1997 1996 1997 1996
------------ ----------- ------------ ------------
<S> <C> <C> <C> <C>
Net sales $ 13,638,211 $ 4,726,480 $ 27,293,495 $ 9,693,462
Cost of goods sold 11,251,782 3,463,274 21,550,976 7,152,027
------------ ------------ ------------ ------------
Gross profit 2,386,429 1,263,206 5,742,519 2,541,435
Selling, general and administrative expenses:
Selling 1,097,192 508,410 2,075,263 927,913
General and administrative 2,320,786 400,386 3,955,034 907,579
Consolidation expenses - Team Graphics, Inc. 188,524 -- 188,524 --
Contract settlement with former officer 430,137 -- 430,137 --
------------ ------------ ------------ ------------
4,036,639 908,796 6,648,958 1,835,492
------------ ------------ ------------ ------------
Operating income (loss) (1,650,210) 354,410 (906,439) 705,943
Interest expense, net 431,794 144,665 879,873 294,958
------------ ------------ ------------ ------------
Income before income taxes and
minority interest (2,082,004) 209,745 (1,786,312) 410,985
Income taxes (benefit) (712,792) 27,900 (614,392) 84,400
------------ ------------ ------------ ------------
Income (loss) before minority interest (1,369,212) 181,845 (1,171,920) 326,585
Minority interest in income of
consolidated subsidiary (492) -- (7,602) --
------------ ------------ ------------ ------------
Net income (loss) (1,369,704) 181,845 (1,179,522) 326,585
Preferred stock dividends (49,500) -- (99,000) --
------------ ------------ ------------ ------------
Net income (loss)available to
Common stockholders $ (1,419,204) $ 181,845 $ (1,278,522) $ 326,585
============ ============ ============ ============
Earnings (loss) per share $ (0.51) $ 0.09 $ (0.49) $ 0.16
============ ============ ============ ============
Shares used in computing earnings per share 2,763,338 2,897,633 2,596,589 2,806,562
============ ============ ============ ============
</TABLE>
The accompanying notes and notes to the financial statements included in the
Annual Report on Form 10-KSB for the year ended December 31, 1996 are an
integral part of these financial statements.
(5)
<PAGE>
The Eastwind Group, Inc.
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Two Quarters Ended
June 28, June 30,
1997 1996
------------ -------------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ (1,179,522) $ 326,585
Adjustments to reconcile net income (loss) to net cash provided by (used in)
operating activities:
Depreciation and amortization 817,801 176,089
Amortization of deferred credit (12,325) (11,825)
Imputed interest 22,347 --
Minority interest in income of consolidated subsidiary 7,602 --
Changes in assets and liabilities, net of effect from acquisitions:
(Increase) decrease in:
Accounts receivable 1,311,355 398,162
Inventories 76,899 (91,686)
Prepaid expenses 145,209 (57,436)
Deferred tax benefit (766,933) --
Other assets (65,533) (11,800)
Increase (decrease) in:
Accounts payable (445,321) 52,090
Accrued expenses (947,905) 19,684
Liability to former officer 430,137
Accrued income taxes 0 40,900
Other liabilities (18,500)
Accrued pension and postretirement benefits 4,330 9,000
------------ -------------
Net cash (used in) operating activities (620,359) 849,763
------------ -------------
Cash flows from investing activities:
Purchase of property and equipment (239,481) (6,302)
Net cash acquired in purchase of Lavelle 172,550 --
Purchase of subordinated note receivable -- (450,000)
Purchase of preferred stock -- (250,000)
Other 20,631 --
------------ -------------
Net cash provided by (used in) investing activities (46,300) (706,302)
------------ -------------
Cash flows from financing activities:
Net repayments under lines of credit 733,967 (1,115,885)
Principal payments on term notes and capital leases (1,014,124) (217,341)
Proceeds from sale of common stock and warrants 174,337 474,381
Net proceeds from exercise of warrants 450,000 1,321,000
Proceeds from sale of preferred stock, net of warrants -- 459,411
Issuance of warrants, net of exercise -- 1,296,511
Proceeds from subordinated debenture -- 289,600
Payment of preferred stock dividends (45,000) (12,857)
------------ -------------
Net cash provided by financing activities 299,180 2,494,820
------------ -------------
Net increase (decrease) in cash and cash equivalents (367,479) 2,638,281
Cash and cash equivalents, beginning of period 709,697 426,377
------------ -------------
Cash and cash equivalents, end of period $ 342,218 $ 3,064,658
============ =============
</TABLE>
The accompanying notes and notes to the financial statements included in the
Annual Report on Form 10-KSB for the year ended December 31, 1996 are an
integral part of these financial statements.
(6)
<PAGE>
THE EASTWIND GROUP, INC.
PART II - OTHER INFORMATION
Item 1: Legal Proceedings
-----------------
Reference is made to the Company's Form 10-QSB for the period ended
March 29, 1997 for a description of the binding arbitration proceedings
involving Bruce K. Worrall. There have been no material developments in this
matter since the last report.
Item 2: Change in Securities.
--------------------
During the quarter ended June 28, 1997, certain of the outstanding
warrants issued to Clifton Capital, Ltd. were exercised by their holders. In
April such holders received 100,000 shares of the Company's Common Stock for an
aggregate consideration of $300,000, payable in the form of a Promissory Note.
Based upon the limited nature of the warrant offering and exercise, and the
accredited status of the exercising holders, the Company relied upon Section
4(2) of the Securities Act as an exemption from registration.
Item 3: Defaults on Senior Securities.
-----------------------------
Pursuant to terms of the Company's Series B Preferred Stock, the
holder of all of the issued and outstanding shares of that series of preferred
stock requested that a portion of such shares be redeemed on April 1, 1997. The
Company determined not to redeem the 1,800 shares requested by the holder at the
stated value of $100 per share, or $180,000. In addition, quarterly dividends
at a rate of 6% per annum of the stated value of all 9,000 shares, at $100 per
share,
<PAGE>
were payable on that same April 1, 1997 date, aggregating $13,500, which
the Company also declined to pay. The Company's decision not to redeem these
shares nor pay these dividends was predicated upon the size of the damages being
asserted against the holder of such shares in the arbitration proceeding
identified in Item 1 above, far in excess of these payments due the holder.
Item 4: Submission of Matters to a Vote of Security Holders.
---------------------------------------------------
At the Company's Annual Meeting of Stockholders on June 5, 1997, all
nominees for directors, as named in the Company's Proxy Statement dated May 7,
1997, were elected to the terms of office described in such Proxy Statement.
The tabulation of the votes for each Director were as follows:
<TABLE>
<CAPTION>
Vote in Vote
Name Term Favor Against Abstention
- -------------------------------- ------- --------- ------- ----------
<S> <C> <C> <C> <C>
Paul A. DeJuliis 3 years 2,378,133 0 20,421
John R. Thach 3 years 2,377,133 0 21,421
William B. Miller 3 years 2,377,686 0 20,868
Anthony J. Mendicino 2 years 2,378,186 0 20,368
Bruce P. Murray 2 years 2,378,186 0 20,368
Andrew Panzo 1 year 2,378,120 0 20,434
Porter Bibb 1 year 2,378,186 0 20,368
Edward F. Sager, Jr. 1 year 2,378,186 0 20,368
</TABLE>
2
<PAGE>
The other matters voted upon at such meeting, and all as described in
such Proxy Statement in more detail, were all approved, as follows:
(a) The proposal to amend the Company's Certificate of Incorporation
to classify its Board of Directors, was approved with a vote of 1,398,728 shares
in favor, 33,698 shares against, 9,435 shares abstaining and the balance of the
2,398,573 shares in attendance in person or in proxy either withholding their
vote or represented by broker's non-votes.
(b) The proposal to change the name and address of the Company's
Registered Agent in Delaware and to make other technical connections was
approved with a vote of 1,470,585 shares in favor, 10,440 shares against, 7,927
shares abstaining and the balance of the 2,398,573 shares in attendance in
person or in proxy either withholding their vote or represented by broker's non-
votes.
(c) The proposal to approve the proposed amendments to the Company's
Stock Option Incentive Plan was approved with a vote of 1,372,081 shares in
favor, 78,330 shares against, 11,034 shares abstaining and the balance of the
2,398,573 shares in attendance in person or in proxy either withholding their
vote or represented by broker's non-votes.
3
<PAGE>
(d) The proposal to approve the proposed amendments to the Company's
Non-Employee Directors Stock Option Plan was approved with a vote of 1,369,703
shares in favor, 81,815 shares against, 12,666 shares abstaining and the balance
of the 2,398,573 shares in attendance in person or in proxy either withholding
their vote or represented by broker's non-votes.
Item 5: Other Information.
-----------------
By agreement dated June 20, 1997 and effective July 1, 1997, John R.
Thach resigned as the President and as a member of the Executive Committee of
the Board of Directors of the Company. By subsequent action of the Board of
Directors, Anthony J. Mendicino was appointed to fill his position as President
and as a member of the Board's Executive Committee. The terms of that agreement
are set forth in an Exhibit filed herewith. Mr. Thach took this action in order
to pursue other interests and activities, although he will remain as a member of
the Board of Directors for his current term, which expires at the Annual Meeting
of Stockholders in the year 2000.
Item 6: Exhibits and Reports on Form 8-K.
---------------------------------
(a) Exhibits
4
<PAGE>
Exhibit Method
Number Description of Filing
--------- ------------ --------------
10.1 Severance Agreement between the Filed herewith
Company and John R. Thach dated
June 20, 1997.
27 Financial Data Schedule In electronic
format only
(b) Reports on Form 8-K
-------------------
The Company filed a report on Form 8-K on April 2, 1997 in connection
with the acquisition of all of the outstanding common stock of Wickersham
Printing Company, Inc. by the Company, which was consummated on March 19, 1997.
The Company filed a report on Form 8-K\A on June 2, 1997 which included the
financial statements of Wickersham Printing Company, Inc.
5
<PAGE>
[LOGO OF THE EASTWIND GROUP, INC.]
PERSONAL AND CONFIDENTIAL
- -------------------------
June 20, 1997
Mr. John R. Thach
122 Lenape Drive
Berwyn, PA 19312
Dear John:
The purpose of this letter is to reach an agreement between you and Eastwind,
whereby you will be fairly compensated and Eastwind and you will release each
other from any implied or real obligations it or you may have under the terms of
your Employment Contract.
The terms of the agreement are as follows:
1) You do hereby agree to:
a) Resign, effective July 1, 1997, from any and all offices you now hold
as an officer of Eastwind, other than as a member of the Board of
Directors, and resign from the Executive Committee thereof; and to forgo
any claims you might have in the future to such offices.
b) Release The Eastwind Group, Inc. ("Eastwind"), with prejudice, from any
and all, implied or real, claims and/or obligations by/to you under the
terms of your employment contract, including, but not limited to any
obligations to increase or add to any compensation that you are now, or
have been, receiving, whether they be accrued salary (other than those
normal salary payments already being paid on a consistent basis and
having accrued until the date of the signature of this agreement),
accrued bonuses, or otherwise (unless listed below).
c) Release Eastwind, with prejudice, from any and all, implied or real,
claims and/or obligations that you might have in the future regarding
further compensation or employment (other than as a shareholder or Board
<PAGE>
Mr. John R. Thach
June 20, 1997
Page 2
Member or as listed below), including, but not limited to any bonuses
that you might feel Eastwind would be obligated to pay you subsequent to
or regarding the sale of any Eastwind subsidiaries, such as Lavelle or
Polychem.
d) Indemnify and hold Eastwind harmless for any and all real or imagined
past or present damages that you may feel that you have sustained as a
result of your mistreatment as an officer, shareholder or employee of
Eastwind; to keep all information you may have regarding Eastwind or the
matters covered by this agreement strictly confidential, unless
otherwise notified in writing, by me; and not to make any defamatory
remarks or statements in the future to anyone regarding Eastwind or its
officers or directors.
e) Not compete directly with Eastwind, by acquiring more than a 20%
ownership position in, or indirectly by accepting employment from any
companies whose principal business is in the printing or municipal
wastewater treatment equipment manufacturing industries, within a one
hundred and fifty mile radius of Philadelphia, through January 1, 2000.
f) At my discretion, but with thirty (30) days written notice, vacate your
current office at Eastwind. You are to leave behind all business related
files that you have, other than those files and materials that are
purely personal, or which you brought with you to Eastwind, or which you
may find useful solely in the pursuit of acquiring your own businesses
in the future, other than those businesses described in paragraph 1(e).
You will be provided with all of the general and administrative support
that you have been and are currently being provided, at no cost to you,
until such time as you vacate the Eastwind premises.
2) In return for which, Eastwind (and/or its successors), does hereby agree
to:
a) Pay you, in full, the sum of $125,000, in cash at closing of the earlier
of either Eastwind's refinancing the majority of its secured debt or its
sale of Polychem.
b) Pay you the amount of $200,000 per annum, on a semi-
<PAGE>
Mr. John R. Thach
June 20, 1997
Page 3
monthly basis, effective immediately, beginning to accrue upon signature
of this agreement and continuing through January 1, 2000, in return for
your non-complete obligations set forth in this agreement and its
exhibits, with full confession of judgement in the event of Eastwind's
failure to make payments (The terms of the non-compete agreement are
outlined in Exhibit A). No further pro-active performance will be
required of or from you in order that you be able to collect the amounts
owed you under the terms therein, and no deductions, offsets or claw-
backs will be allowed therefrom, unless you violate the terms of
paragraph 1(e) of this agreement.
c) Immediately vest you fully in all options that you now have in Eastwind
or any of its subsidiaries, including options to acquire 100,000 shares
in Team Graphics, Inc., or its successor, at the same exercise price
granted or if a more favorable exercise price by reason of future
adjustment, that I will have the right to acquire and exercise options
granted to me on the same dates. Eastwind will register all shares
underlying these options, at Eastwind's expense, as part of the next
registration of option shares, or if at earlier time an amendment of a
current registration.
d) Provide you with the right to approve or disapprove any and all press
releases regarding you or the termination of your employment, that are
to be made by Eastwind, but the timing of any such press release or
public announcement shall rest within my sole discretion.
e) Release you, with prejudice, from all of the terms of your employment
contract with Eastwind.
f) Indemnify and hold you harmless for any and all real or imagined past or
present damages that Eastwind may believe that it has sustained as a
result of your performance as an officer, shareholder or employee of
Eastwind; and not allow any officers or employees of Eastwind to make
any defamatory remarks or statements in the future to anyone regarding
you or your performance.
g) Allow you to pursue and use any and all materials assembled or hitherto
used by you as an employee of
<PAGE>
Mr. John R. Thach
June 20, 1997
Page 4
Eastwind, to attempt to acquire for your own benefit additional
businesses in any industry not described in paragraph 1)e), without any
hindrance or interference by Eastwind.
h) Provide you, at no cost to yourself with:
i) Full health and medical benefit coverage, as is currently being
provided to you and your family by Eastwind or any of its
subsidiaries, until such time as you are able by virtue of your
having acquired Ivy/Tygart Acquisition Corp. or some other company,
to obtain similar health and medical coverage therefrom, but not
beyond January 1, 2000.
ii) Full and prompt payment of any and all automotive payments,
privileges or benefits that you are currently being provided or
reimbursed for, by Eastwind or its subsidiaries (including but not
limited to all lease, gasoline, repair and insurance payments),
through the later of December 31, 1997 or your acquisition of
Ivy/Tygart Acquisition Corp or some other company, but not beyond
January 1, 2000.
iii) The same office you now occupy, or a similar office acceptable to
you at Centennial Printing as well as all general and
administrative assistance you now receive (including but not
limited to phone, fax, copy, postal expense, etc.) or, at
Eastwind's discretion, the sum of $1,000 per month in cash to cover
the costs thereof, for a period of twelve (12) months subsequent to
the date of signature of this letter.
i) Pay all reasonable costs related to moving you into your new offices,
unless said office is outside of a thirty mile radius of Philadelphia.
The bill for moving services will be submitted directly to and paid
directly by Eastwind.
j) Provide you with first and last right of review and refusal regarding
any real and acceptable offer made by any person(s) or entity, who is
capable of consummating such a transaction, to acquire the business,
assets or stock of Ivy-Tygart Acquisition Corp, and provide you
<PAGE>
Mr. John R. Tach
June 20, 1997
Page 5
with adequate time to respond adequately.
3) To whatever extent that there may be any ambiguities in this agreement of
its exhibits, such ambiguities shall be construed or interpreted to your
benefit. Eastwind will reimburse you for any and all reasonable expenses
(legal and otherwise) that you might incur in attempting to collect
payments due under the terms of this agreement.
4) Any failure to pursue remedies for any violation of the terms of this
agreement, by either party, shall not be interpreted or construed as a
waiver of any rights either party has under the terms of this agreement.
5) This document is a fully enforceable and binding agreement to be governed
and interpreted by the law of the Commonwealth of Pennsylvania.
6) This letter agreement and Exhibit A set forth the entire understanding of
the parties hereto, and supersede all prior agreements, arrangements,
discussions and communications, verbal or written, between the parties with
respect to the matters covered in this agreement, unless otherwise stated
herein.
If the foregoing is acceptable to you, please confirm by signing this agreement
and returning the original copy to me. The terms of this offer supersede the
terms of any offer made prior to the date of this letter.
Sincerely,
/s/ Paul A. DeJuliis
Paul A. DeJuliis
Chairman and CEO
Agreed and accepted this 20th day of June, 1997, on behalf of himself, by:
---- -----
/s/ John R. Thach
- ------------------
John R. Thach
<PAGE>
EXHIBIT A
---------
The terms of the Non-Compete Agreement whereby John R. Thach ("Thach") agrees
not to compete with The Eastwind Group, Inc. ("Eastwind") under the terms of the
non-compete portion of his termination agreement dated June 20, 1997 and found
in paragraph 1)e) thereof; and in return Eastwind agrees to make certain
semimonthly cash payments to Thach, are as follows:
Agreement: Thach will not compete directly with Eastwind, by acquiring more
than a 20% ownership position in, or indirectly by accepting
employment from any companies whose principal business is in the
printing or municipal wastewater treatment equipment
manufacturing industries, within a one hundred and fifty mile
radius of Philadelphia, through January 1, 2000.
Payments: Thach will be paid $200,000 per annum, in equal semi-monthly
payments to be made on the 1st and 15th of each month through
January 1, 2000, accruing from the date of signature of the
termination agreement, to which this is an Exhibit. In the event
of Thach's death, said payments will continue to be paid to the
benefit of his wife, heirs or personal representatives.
Duration: Up to and including January 1, 2000.
Prepayment: Eastwind shall have the right to prepay the remaining
unsatisfied amount owed under the terms of this non-compete
agreement in full, at any time without fear of loosing any
rights thereunder.
Security: By the full faith and credit of Eastwind. However, in the event
that the Eastwind is, or becomes, unable to make such payments
by virtue of declaring Chapter 11 or otherwise, Thach shall be
released from any and all non-compete obligations in the
agreement.
Withholding of
Payments: Eastwind shall not for any reason, whether real or
imagined, have any right to forgo, reduce or withhold any
payment to Thach, other than for Thach's having gone into
competition with Eastwind, as defined by the terms of this
Agreement. Furthermore, Eastwind shall be considered to have
signed a full confession of
<PAGE>
Exhibit A (continued)
June 20, 1997
judgement to its detriment, in the event of failure to make said
payments.
Failure: Payments are due, by mail or courier, within three (3) working
days of the 15th and end of each month. The failure to do so
will constitute a "Failure" under the terms of this agreement.
Remedy: Either the Chief Executive Officer, Chief Financial Officer or
Chief Operating Officer of Eastwind must receive either oral or
written notice from Thach of such Failure to make said payments,
after which Eastwind has 4 business days to correct such
Failure. However, in the event of ten (10) or more events of
Failure as defined above under the terms of this agreement or
one event of failure with a duration of more than ten (10) days
post-notification, Eastwind shall be required to immediately pay
the full amount of all payments to be made, in cash to Thach.
Eastwind will reimburse Thach for any and all reasonable
expenses (legal and otherwise) that Thach incurs in attempting
to collect said amounts.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
COMMENCING 1/1/97, THE EASTWIND GROUP, INC. WILL BE REPORTING RESULTS OF
OPERATIONS ON A 52-53 WEEK FISCAL YEAR, FIRST TWO QUARTERS OF 1997 ENDED ON
6/28/97--FISCAL YEAR WILL END ON 1/3/98.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> 6-MOS 6-MOS
<FISCAL-YEAR-END> JAN-03-1998 DEC-31-1996
<PERIOD-START> JAN-01-1997 JAN-01-1996
<PERIOD-END> JUN-28-1997 JUN-30-1996
<CASH> 342,218 709,697
<SECURITIES> 0 0
<RECEIVABLES> 7,507,995 7,655,763
<ALLOWANCES> 0 0
<INVENTORY> 5,243,881 4,001,007
<CURRENT-ASSETS> 14,097,587 13,709,141
<PP&E> 9,797,062 7,653,518
<DEPRECIATION> (1,238,420) (629,125)
<TOTAL-ASSETS> 30,860,248 28,458,023
<CURRENT-LIABILITIES> 14,353,517 12,222,917
<BONDS> 0 0
900,000 900,000
100 100
<COMMON> 280,002 241,148
<OTHER-SE> 6,752,497 7,084,631
<TOTAL-LIABILITY-AND-EQUITY> 30,860,248 28,458,023
<SALES> 27,293,495 9,693,462
<TOTAL-REVENUES> 27,293,495 9,693,462
<CGS> 21,550,976 7,152,027
<TOTAL-COSTS> 21,550,976 7,152,027
<OTHER-EXPENSES> 6,648,958 1,835,492
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 879,873 294,958
<INCOME-PRETAX> (1,786,312) 410,985
<INCOME-TAX> (614,392) 84,400
<INCOME-CONTINUING> (1,171,920) 326,585
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (1,171,920) 326,585
<EPS-PRIMARY> (.49) .16
<EPS-DILUTED> (.49) .16
</TABLE>
