UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 1998
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _____________ to ______________
Commission file number 0-19263
SUPREMA SPECIALTIES, INC.
(Exact Name of Registrant as
specified in its charter)
New York 11-2662625
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
510 EAST 35TH STREET
PATERSON, NEW JERSEY 07543
(Address of principal executive offices)
(Zip Code)
(201) 684-2900
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes _X_ No ___
As of November 2, 1998 there were 4,556,440 outstanding shares of the issuer's
Common Stock, $.01 par value.
<PAGE>
SUPREMA SPECIALTIES, INC. AND SUBSIDIARY
INDEX
Page No.
--------
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
Consolidated Balance Sheets as of 3
September 30, 1998 and June 30, 1998
Consolidated Statements of Earnings 4
For The Three Month Periods Ended
September 30, 1998 and 1997
Consolidated Statements of Cash Flows 5
For the Three Month Periods Ended
September 30, 1998 and 1997
Notes to Consolidated Financial 6
Statements
ITEM 2. Management's Discussion and Analysis of 9
Financial Condition and Results of
Operations
PART II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K 11
Signatures 12
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<PAGE>
<TABLE>
<CAPTION>
SUPREMA SPECIALTIES, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(unaudited)
Sept. 30, June 30,
1998 1998
------------ ------------
(unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash $ 332,539 $ 489,890
Accounts receivable, net of allowances
of $407,290 at Sept. 30, 1998 and
$407,290 at June 30, 1998 25,186,167 23,239,810
Inventories 31,022,490 28,511,930
Prepaid expenses and other current assets 1,206,236 688,117
Deferred income taxes 188,000 188,000
------------ ------------
Total current assets 57,935,432 53,117,747
PROPERTY AND EQUIPMENT, NET 7,059,340 6,999,695
OTHER ASSETS 1,627,571 1,728,616
------------ ------------
$ 66,622,343 $ 61,846,058
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 7,858,553 $ 7,469,422
Current portion of long-term obligations 512,959 500,964
Mortgage payable - current 44,402 43,457
Income taxes payable 645,777 245,498
Accrued expenses and other current
liabilities 1,860,414 1,467,034
------------ ------------
Total current liabilities 10,922,105 9,726,375
DEFERRED INCOME TAXES 475,340 475,340
REVOLVING CREDIT LOAN 24,185,334 21,262,000
SUBORDINATED DEBT 10,500,000 10,500,000
LONG-TERM CAPITAL LEASES 2,133,599 2,266,090
MORTGAGE PAYABLE 909,952 921,413
------------ ------------
49,126,330 45,151,218
------------ ------------
STOCKHOLDERS' EQUITY:
Common stock, $.01 par value, 10,000,000
shares authorized, 4,558,300 and 4,562,800
issued and outstanding at Sept. 30, 1998
and June 30, 1998, respectively 45,628 45,628
Additional paid-in capital 11,243,347 11,243,347
Retained earnings 6,220,901 5,405,865
------------ ------------
17,509,876 16,694,840
Less: 4,500 shares treasury
stock at cost (13,863) --
------------ ------------
TOTAL STOCKHOLDERS' EQUITY 17,496,013 16,694,840
------------ ------------
$ 66,622,343 $ 61,846,058
============ ============
</TABLE>
See notes to consolidated financial statements.
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<PAGE>
<TABLE>
<CAPTION>
SUPREMA SPECIALTIES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF EARNINGS
(unaudited)
Three Months Ended
September 30,
---------------------------------------
1998 1997
------------ ------------
<S> <C> <C>
NET SALES $ 35,898,828 $ 25,156,440
COST OF SALES 29,773,379 20,884,249
------------ ------------
GROSS MARGIN 6,125,449 4,272,191
------------ ------------
EXPENSES:
Selling and shipping expenses 2,913,963 2,159,085
General and administrative expenses 792,900 662,804
------------ ------------
3,706,863 2,821,889
------------ ------------
INCOME FROM OPERATIONS 2,418,586 1,450,302
OTHER INCOME (EXPENSE)
Interest expense, net (1,036,550) (640,153)
Other -- --
------------ ------------
(1,036,550) (640,153)
EARNINGS BEFORE INCOME TAXES 1,382,036 810,149
INCOME TAXES 567,000 332,000
------------ ------------
NET EARNINGS 815,036 478,149
============ ============
EARNINGS PER SHARE OF COMMON STOCK:
BASIC EARNINGS PER SHARE $ .18 $ .10
============ ============
DILUTED EARNINGS PER SHARE $ .17 $ .10
============ ============
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:
BASIC WEIGHTED AVERAGE SHARES OUTSTANDING 4,561,514 4,562,800
============ ============
DILUTED WEIGHTED AVERAGE SHARES OUTSTANDING 4,683,897 4,986,435
============ ============
</TABLE>
See notes to consolidated financial statements.
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<PAGE>
<TABLE>
<CAPTION>
SUPREMA SPECIALTIES, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
Three Months Ended
September 30,
--------------------------------------
1998 1997
------------ ------------
<S> <C> <C>
INCREASE (DECREASE) IN CASH:
CASH FLOW FROM OPERATING ACTIVITIES:
Net Earnings $ 815,036 $ 478,149
Adjustments to reconcile net earnings
to net cash provided by (used in)
operating activities:
Depreciation and amortization 133,721 119,449
Provision for doubtful accounts -- --
(Increase) decrease in assets:
Accounts receivable (1,946,357) (4,157,704)
Inventories (2,510,560) 735,952
Prepaid expenses and other
current assets (518,119) (595,498)
Prepaid Income Taxes -- 328,411
Other assets 101,045 146,078
Increase (decrease) in liabilities:
Accounts payable 389,131 751,200
Income taxes payable 400,279 --
Accrued expenses and other current
liabilities 393,380 77,522
Deferred income taxes -- --
------------ ------------
Net cash used in operating
activities (2,742,444) (2,116,441)
------------ ------------
CASH FLOW FROM INVESTING ACTIVITIES:
Net payments for purchase of
property and equipment (193,366) (273,924)
Purchase of treasury stock (13,863) --
------------ ------------
Net cash used in investing
activities (207,229) (273,924)
------------ ------------
CASH FLOW FROM FINANCING ACTIVITIES:
Proceeds from revolving credit loan $ 11,557,334 $ 6,939,981
Principal payments of revolving credit loan (8,634,000) (4,513,000)
Principal payments of capital leases (120,496) (99,912)
Principal payments of mortgage (10,516) (9,649)
------------ ------------
Net cash provided by financing
activities 2,792,322 2,317,420
------------ ------------
NET DECREASE IN CASH (157,351) (72,945)
CASH, BEGINNING OF PERIOD 489,890 480,225
------------ ------------
CASH, END OF PERIOD $ 332,539 $ 407,280
============ ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOWS INFORMATION:
Cash paid during the period for:
Interest $ 917,550 $ 640,154
============ ============
Income Taxes $ -- $ --
============ ============
Noncash investing and financing transactions:
Purchase of property and equipment through
capital leases $ -- $ 150,000
============ ============
</TABLE>
See notes to consolidated financial statements.
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<PAGE>
SUPREMA SPECIALTIES, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. FORMATION
The unaudited consolidated balance sheet as of September 30, 1998, the
unaudited consolidated statements of earnings for the three month periods
ended September 30, 1998 and 1997, and the unaudited consolidated
statements of cash flows for the three month periods ended September 30,
1998 and 1997 have been prepared in accordance with generally accepted
accounting principles for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X. In the opinion
of management, all adjustments (which include normal recurring accruals)
necessary to present fairly the financial position, results of operations
and cash flows at September 30, 1998 and 1997 and for the three month
periods presented, have been included.
Certain information and footnote disclosures normally included in annual
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted in this quarterly
financial statement. The attached financial statements should be read in
connection with the consolidated financial statements and notes thereto
included in the Company's 1998 Annual Report on Form 10-K for the year
ended June 30, 1998.
The results of operations for the three months ended September 30, 1998 are
not necessarily indicative of the results to be expected for the entire
fiscal year.
2. INVENTORIES
Inventories are summarized as follows:
September 30, 1998 June 30, 1998
------------------ -------------
Finished goods $25,236,103 $24,046,053
Raw materials 4,964,555 3,640,655
Packaging 821,832 825,222
----------- -----------
$31,022,490 $28,511,930
=========== ===========
3. SUBORDINATED DEBT FACILITY
In October 1995, the Company entered into a Loan and Security Agreement
(the "1995 Loan Agreement") with CoreStates Enterprise Fund (the "Fund"), a
division of CoreStates Bank, N.A. pursuant to which the Fund loaned
$5,000,000 to the Company. In connection with the execution and delivery of
the 1995 Loan Agreement, the Company delivered a warrant to the Fund
exercisable for nominal additional consideration to purchase up to 354,990
shares of the Company's Common Stock. After October 1, 2000, or upon the
occurrence of certain other rights, the Fund had the right to put the
warrant to the Company on a formula basis. The warrant was recorded at its
relative fair value at date of issue, $1,100,000. The corresponding debt
discount was being amortized over the life of the loan on the interest rate
method. At June 30, 1997, the value of the put option was approximately
$1,171,000.
In October 1997, the Company entered into an agreement with Fleet Bank,
pursuant to which the bank provided bridge financing of $10 million to the
Company. Approximately $6.7 million of the proceeds from such financing was
used to retire $5.0 million of subordinated debt with the Fund and
repurchase from the Fund warrants to purchase 354,990 shares of the
Company's Common Stock. The balance of the proceeds was used for general
working capital purposes. These transactions resulted in an extraordinary
loss of approximately $1,011,000, net, during the second quarter of fiscal
year 1998. The extraordinary loss was comprised of the prepayment penalty
of $1,279,000 and the write-off of deferred financing costs and debt
discount of $494,000, net of the combined tax benefit of $762,000. The fair
value of
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<PAGE>
the warrants was determined pursuant to the contractually agreed value
among the relevant parties.
In March, 1998, the Company entered into a Loan and Security Agreement (the
"1998 Loan Agreement") with Albion Alliance Mezzanine Fund, L.P. and the
Equitable Life Assurance Society of the United States ("Alliance") pursuant
to which Alliance loaned $10,500,000 to the Company. The loan is unsecured
and is subordinated to the loan of the Company's senior lender. The
Alliance loan bears interest at 16.5% with 12% interest payable currently
and the balance deferred until February 1, 2003 when it is due in full. The
principal amount of the loan is payable in three installments of $3,500,000
on each March 1, beginning in the year 2004. In addition, in connection
with the execution and delivery of the 1998 Loan Agreement, the Company
delivered a warrant to Alliance to purchase up to 150,000 shares of the
Company's Common stock at an exercise price of $4.12 per share. The warrant
is exercisable until March 1, 2006. Proceeds of the Alliance loan were used
to retire the bridge loan facility agreement with Fleet Bank, N.A.
4. EARNINGS PER SHARE
During 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 128, "Earnings per Share," which
provides for the calculation of "basic" and "diluted" earnings per share.
This statement is effective for financial statements issued for periods
ending after December 15, 1997 and requires restatement of all prior period
EPS data presented. Basic earnings per share includes no dilution and is
computed by dividing income available to common shareholders by the
weighted average number of common shares outstanding for the period.
Diluted earnings per share reflect, in periods in which they have a
dilutive effect, the effect of common shares issuable upon exercise of
stock options. All periods presented have been restated to comply with
provisions of SFAS No. 128
The earnings per share for the three month periods ended September 30, 1998
and 1997 were computed by dividing the weighted average number of shares
outstanding into net earnings.
The weighted average number of issued and outstanding common shares for the
three months ended September 30, 1998 is based upon the 4,562,800 shares
outstanding at the beginning of the year less a proration of the 4,500
shares of treasury stock repurchased during the first quarter of fiscal
year 1999. Also included in the weighted average number of common shares
are incremental shares attributable to assumed exercise of options and
warrants.
The weighted average number of issued and outstanding common shares for the
three month period ended September 30, 1997 is based upon the 4,562,800
shares outstanding at the beginning of the year. Also included in the
weighted average number of common shares are incremental shares
attributable to assumed exercise of options and warrants.
Basic and diluted earnings per share for the three month periods ended
September 30, 1998 and September 30, 1997 are as follows:
<TABLE>
<CAPTION>
Three months ended Sept. 30, 1998 Three months ended Sept. 30, 1997
---------------------------------------- --------------------------------------
Net Income Shares Per Share Net Income Shares Per Share
---------- --------- --------- ---------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
Basic earnings per share $ 815,036 4,561,514 $.18 $ 478,149 4,562,800 $.10
Effect of assumed conversion
of warrants and employee
stock options 122,383 423,635
--------- --------- ---- --------- --------- ----
Diluted earnings per share $ 815,036 4,683,897 $.17 $ 478,149 4,986,435 $.10
========= ========= ==== ========= ========= ====
</TABLE>
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<PAGE>
5. TREASURY STOCK
During the three months ended September 30, 1998, the Company in accordance
with its stock repurchase plan, purchased 4,500 shares of its common stock
at a cost of $13,863.
6. SUBSEQUENT EVENTS
On October 19, 1998, the bridges loan agreement between the Company and
Fleet Bank, N.A. that provides the Company with a revolving credit facility
was amended to temporarily increase the facility by $4 million, from $26
million to $30 million. The increase of the total commitment of Fleet Bank,
N.A. commenced on October 19, 1998 and expires December 31, 1998.
Thereafter, the commitment for the revolving credit facility is $26
million.
Subsequent to September 30, 1998, the Company repurchased an additional
1,860 of its common stock at a cost of approximately $7,157.
-8-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS.
The Private Securities Litigation Reform Act of 1995 provides a "safe
harbor" for forward-looking statements. Certain information included in this
Report contains statements that are forward-looking, such as statements relating
to plans for future activities. Such forward-looking information involves
important known and unknown risks and uncertainties that could significantly
affect actual results, performance or achievements of the Company in the future
and, accordingly, such actual results, performance or achievements may
materially differ from those expressed or implied in any forward-looking
statements made by or on behalf of the Company. These risks and uncertainties
include, but are not limited to, those relating to the Company's growth
strategy, customer concentration, outstanding indebtedness, seasonality,
expansion and other activities of competitors, changes in federal or state laws
and the administration of such laws, protection of trademarks and other
proprietary rights, and the general condition of the economy and its effect on
the securities markets and other risks detailed in the Company's other filings
with the Securities and Exchange Commission. The words "believe," "expect,"
"anticipate," "intend" and "plan" and similar expressions identify
forward-looking statements. Readers are cautioned not to place undue reliance on
these forward-looking statements which speak only as of the date the statement
was made.
Results of Operations - Three months ended September 30, 1998 vs. three months
ended September 30, 1997.
Net sales for the three months ended September 30, 1998 were approximately
$35,898,000 as compared to approximately $25,156,000 for the three months ended
September 30, 1997, an increase of approximately $10,742,000 or 42.7%. This
increase reflects an increase in the average selling price for cheese (as a
result of the higher CME Block Cheddar Market, the commodity index on which bulk
cheese prices are based) and to a lesser extent, an increase in sales volume for
food service products manufactured by the Company.
The Company's gross margin increased by approximately 1,853,000, from
approximately $4,272,000 for the three months ended September 30, 1997 to
approximately $6,125,000 for the three months ended September 30, 1998,
primarily as a result of an increase in the average selling price of cheese as a
result of the higher CME Block Cheddar Market, and to a lesser extent an
increase in the Company's sales volume. The Company's gross margin as a
percentage of sales increased slightly to 17.1% for the three months ended
September 30, 1998 as compared to 17.0% for the three months ended September 30,
1997.
Selling and shipping expenses increased from approximately $2,159,000 during the
three months ended September 30, 1997 to approximately $2,914,000 during the
three months ended September 30, 1998, an increase of approximately $755,000.
This increase was primarily due to an increase in advertising and promotional
allowances, commission expenses, as well as shipping expenses. As a percentage
of sales, selling and shipping expenses decreased to 8.1% for the three months
ended September 30, 1998 as compared to 8.6% for the three month period ended
September 30, 1997. This decrease is primarily due to the Company's increased
revenue growth offset by the increase in expenses.
General and administrative expenses increased from approximately $663,000 during
the three months ended September 30, 1997 to approximately $793,000 for the
three months ended September 30, 1998, or an increase of approximately $130,000.
The increase in general and administrative expenses is primarily a result of an
increase in personnel and other administrative expenses associated with the
Company's revenue growth. As a percentage of sales, general and administrative
expenses decreased from 2.6% during the three months ended September 30, 1997 to
2.2% for the three months ended September 30, 1998.
Net interest expense increased to approximately $1,037,000 for the three months
ended September 30, 1998 as compared to approximately $640,000 for the three
month period ended September 30, 1997, or an increase of approximately $397,000.
The increase was the result of the Company's expanded borrowing requirements
necessary for working capital needs.
-9-
<PAGE>
The provision for income taxes for the three months ended September 30, 1998
increased to $567,000 from $332,000 during the three months ended September 30,
1997. The increase is primarily a result of increased taxable income during the
three months ended September 30, 1998.
Net earnings increased to approximately $815,000 in the three month period ended
September 30, 1998 from approximately $478,000 during the three month period
ended September 30, 1997, or approximately $337,000. The increase in net
earnings is due to the increase in gross margin resulting from increased sales,
partially offset by the increases in selling and shipping, general and
administrative expenses and interest expense.
Financial Position, Liquidity and Capital Resources
At September 30, 1998, the Company had working capital of approximately
$47,013,000, as compared with $43,391,000 at June 30, 1998, an increase of
approximately $3,622,000. The increase in working capital is primarily due to
the increase in accounts receivable and inventory levels in support of the
Company's increased sales as well as an increase in pre-paid expenses and other
current assets, partially offset by an increase in accounts payable, income
taxes payable, and accrued expenses and other current liabilities.
The Company also typically finances equipment purchases through capital lease
financing transactions. At September 30, 1998, the Company had obligations of
approximately $2,647,000 under capital leases.
In March, 1996, the Company purchased its Paterson, New Jersey production
facility which it previously had leased. At September 30, 1998, the Company had
outstanding obligations of approximately $954,000 under the mortgage financing
the purchase of the Paterson facility.
The Company has a bank revolving credit facility that, in January 1998 was
amended and increased the bank's potential commitment to $26 million through
November 1999. In October 1998, the revolving credit facility was amended to
include a temporary increase of the banks' total commitment by $4 million to $30
million. The increase commenced on October 19, 1998 and expires December 31,
1998. Thereafter, the commitment for the revolving credit facility is $26
million. The rate of interest on amounts borrowed under the revolving credit
facility is the LIBOR plus 200 basis points. The revolving credit loan agreement
expires on November 2, 1999. Advances under this facility are limited to 80% of
eligible accounts receivable and 40% of most inventory. The agreement contains
restrictive covenants, including the maintenance of total debt to tangible net
worth and debt service coverage ratios, minimum levels of tangible net worth,
and capital expenditure limitations. As of September 30, 1998, the Company is in
compliance with these covenants. At September 30, 1998 the Company's total
outstanding debt to the bank was $24,185,334.
Management believes that the Company has adequate working capital to meet its
reasonably foreseeable cash requirements.
Net cash used in operating activities for the first quarter of Fiscal 1999 was
approximately $2,742,000 as compared to $2,116,000 in the comparable period of
Fiscal 1998. The use of cash in operations was primarily the result of increases
in accounts receivable and inventory levels in support of the Company's
increased sales and prepaid expenses and other current assets, partially offset
by an increase in net earnings as adjusted for non-cash expenses, increases in
accounts payable, income taxes payable, and accrued expenses and other current
liabilities. The cash used in operations was financed through cash flow from
financing activities. Net cash used in investing activities for the first
quarter of fiscal 1999 was approximately $207,000, as compared with $274,000 in
the first quarter of fiscal 1998. As a result, at September 30, 1998 the Company
had cash of $332,539, as compared to $407,280 at September 30, 1997.
Year 2000 Issue
The Company has assessed the potential issues associated with the year 2000
and believes that its costs to address such issues would not be material. The
Company anticipates that all of its operating systems are Year 2000 compliant.
The Company also believes that costs or consequences of an incomplete or
untimely resolution would not result in the occurrence of a material event or
uncertainty reasonably likely to have a material adverse effect on the Company.
However, the Company has not determined whether its principal suppliers and
customers are Year 2000 compliant. In the event any of the Company's principal
suppliers and customers are not year 2000 compliant it may have a material
adverse effect on the Company.
-10-
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. Exhibits and Reports on Form 8-K
Exhibits
Exhibit 27 - Financial Data Schedule
Reports on Form 8-K
None
-11-
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
SUPREMA SPECIALTIES, INC.
-------------------------
(registrant)
Date: November 3, 1998 By: /s/ Mark Cocchiola
--------------------------------
Mark Cocchiola
President & Chief Executive Officer
Date: November 3, 1998 By: /s/ Steven Venechanos
--------------------------------
Steven Venechanos
Chief Financial Officer & Secretary
-12-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY CONSOLIDATED FINANCIAL INFORMATION EXTRACTED FROM
FORM 10-Q AT SEPTEMBER 30, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH CONSOLIDATED FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-END> SEP-30-1998
<CASH> 332,539
<SECURITIES> 0
<RECEIVABLES> 25,593,457
<ALLOWANCES> 407,290
<INVENTORY> 31,022,490
<CURRENT-ASSETS> 57,935,432
<PP&E> 8,681,208
<DEPRECIATION> 1,621,868
<TOTAL-ASSETS> 66,622,343
<CURRENT-LIABILITIES> 10,922,105
<BONDS> 0
0
0
<COMMON> 45,628
<OTHER-SE> 17,450,385
<TOTAL-LIABILITY-AND-EQUITY> 66,622,343
<SALES> 35,898,828
<TOTAL-REVENUES> 35,898,828
<CGS> 29,773,379
<TOTAL-COSTS> 33,480,242
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,036,550
<INCOME-PRETAX> 1,382,036
<INCOME-TAX> 567,000
<INCOME-CONTINUING> 815,036
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 815,036
<EPS-PRIMARY> 0.18
<EPS-DILUTED> 0.17
</TABLE>
