UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
FORM 10-QSB
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarter ended June 30, 1998 Commission File Number 0-26270
CRESCENT CAPITAL, INC.
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 33-3645694
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
6701 Democracy Boulevard
Suite 300
Bethesda, Maryland 20817
(Address of principal executive offices) (Zip code)
(301) 530-1708
(Issuer'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 of 15(d) of the Securities and Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports) and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
----- -----
As of August 1, 1998 2,545,800 shares of common stock par value, $.01 per share
were outstanding.
<PAGE>
CRESCENT CAPITAL, INC.
FORM 10-QSB
QUARTERLY REPORT
For the Period Ended June 30, 1998
INDEX
Part I: FINANCIAL INFORMATION
Item 1 : Financial Statements
Condensed Consolidated Balance Sheets as of June 30, 1998
[Unaudited] and December 31, 1997 [Audited] 3 - 4
Condensed Consolidated Statements of Operations for the three months
ending June 30, 1998 and June 30, 1997 and for the six months
ended June 30, 1998 and June 30, 1997 [Unaudited] 5
Condensed Consolidated Statement of Stockholders' Equity for the six
months ended June 30, 1998 and the year ended December 30, 1997
[Unaudited] 6
Condensed Consolidated Statements of Cash Flows for the six months
ended June 30, 1998 and June 30, 1997 [Unaudited] 7
Notes to Condensed Consolidated Financial Statements 8
Item 2: Management's Discussion and Analysis of
Financial Condition and Results of Operations 9 - 13
Part II: OTHER INFORMATION 14
SIGNATURES 15
<PAGE>
CRESCENT CAPITAL, INC.
- --------------------------------------------------------------------------------
CONDENSED CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 1998 AND DECEMBER 31, 1997
- --------------------------------------------------------------------------------
June 30, 1998 December 31, 1997
[Unaudited]
ASSETS:
Current Assets:
Cash $ 1,275,409 $ 2,575,876
Trade Accounts Receivable - Net 2,275,060 2,050,094
Franchisee Loans 529,756 707,009
Other Receivables 940,693 611,690
Inventories 1,072,045 1,015,651
Prepaid Expenses and Accrued Income 883,619 306,716
Officer Loan Receivable 163,573 148,573
Due from Related Parties [D] 2,166,816 1,687,762
Deposits 420,080 308,318
----------- -----------
Total Current Assets 9,727,051 9,411,689
----------- -----------
Property and Equipment - Net 8,277,644 5,435,818
----------- -----------
Other Assets:
Deferred Opening Cost 100,000 100,000
Intangible Assets - Net 1,063,661 1,079,741
----------- -----------
Total Other Assets 1,163,661 1,179,741
----------- -----------
Total Assets $19,168,356 $16,027,248
----------- -----------
The Accompanying Notes are an Integral Part of these Condensed Consolidated
Financial Statements.
3
<PAGE>
CRESCENT CAPITAL, INC.
- --------------------------------------------------------------------------------
CONDENSED CONSOLIDATED BALANCE SHEETS AS OF JUNE 30, 1998 AND DECEMBER 31, 1997.
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
June 30, 1998 December 31, 1997
[Unaudited]
<S> <C> <C>
Liabilities and Stockholders' Equity:
Current Liability:
Trade Accounts Payable $ 3,898,355 $ 2,691,247
Accrued Expenses and Other Payables 2,148,234 1,920,684
Taxes Payable 1,071,063 1,042,354
Obligations Under Capital Leases 140,601 111,604
Current Portion of Long Term Debt 300,709 200,629
------------ ------------
Total Current Liabilities 7,558,962 5,966,518
------------ ------------
Long-Term Liabilities 2,764,882 1,515,252
------------ ------------
Minority Interest 3,559,785 3,415,973
------------ ------------
Stockholders' Equity:
$.01 Par Value, Preferred Stock,
1,000,000 Shares Authorized,
No Shares Issued and Outstanding -- --
$.001 Par Value, Class A Common Stock,
5,000,000 Shares Authorized and
545,800 Shares Issued and Outstanding 546 546
$.001 Par Value, Convertible Class B
Common Stock - 2,000,000 Shares
Authorized, Issued and Outstanding 2,000 2,000
Additional Paid-in-Capital 6,209,214 6,209,214
Retained Earnings 1,591,267 1,177,971
Cumulative Foreign Currency 290,120 288,194
Translation Adjustment
Note Receivable for Stock Including Accrued Interest (2,032,275) (1,972,275)
Treasury Stock (776,145) (776,145)
------------ ------------
Total Stockholders' Equity 5,284,727 5,129,505
------------ ------------
Total Liabilities and Stockholders' Equity $ 19,168,356 $ 16,027,268
------------ ------------
</TABLE>
The Accompanying Notes are an Integral Part of these Condensed Consolidated
Financial Statements.
4
<PAGE>
CRESCENT CAPITAL, INC
- --------------------------------------------------------------------------------
CONDENSED STATEMENTS OF OPERATIONS.
[UNAUDITED]
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Three Months For the Six Months
April 1, 1998 April 1, January 1, January 1,
to June 30, 1997 to June 1998 to June 1997 to June
1998 30, 1997 30, 1998 30, 1997
<S> <C> <C> <C> <C>
Revenue:
Sales by Company Owned Stores $ 974,605 $ 1,030,626 $ 1,955,632 $ 1,939,351
Commissary Sales 5,342,645 4,042,559 10,039,054 7,961,599
Franchise Fees 135,260 122,095 257,915 255,372
Rental Income 626,462 540,255 1,195,473 1,031,706
Royalty Sales 1,300,210 957,971 2,360,582 1,844,745
Computer Sales 185,289 201,079 391,627 569,602
Other Operating Income 87,564 69,942 171,169 146,651
------------ ------------ ------------ ------------
Total Revenue 8,652,035 7,054,627 16,371,432 13,749,026
------------ ------------ ------------ ------------
Cost of Sales:
Company Owned Stores 382,826 614,543 753,440 1,176,900
Commissary 4,998,409 3,445,331 9,210,341 6,834,735
Other Operating Expenses 841,053 1,037,487 1,824,385 2,048,418
------------ ------------ ------------ ------------
Total Cost of Sales 6,222,288 5,097,361 11,788,166 10,060,053
------------ ------------ ------------ ------------
2,429,747 1,957,266 4,583,266 3,688,973
Gross Margin
Administrative Expenses 1,981,061 1,585,471 3,785,593 2,988,466
Amortization/Depreciation 85,970 196,526 305,372 382,147
Gain on Sale of Fixed Assets (2,442) 88,434 (2,442) 88,434
------------ ------------ ------------ ------------
Operating Income/(Loss) 365,158 263,703 494,743 406,794
Interest Income 111,342 77,318 213,125 162,320
Interest Expense (52,659) (20,906) (52,659) (50,979)
Income from Continuing Operations 423,841 320,115 655,209 518,135
------------ ------------ ------------ ------------
(Loss) from Discontinued Operations -- 349 -- (68,022)
------------ ------------ ------------ ------------
Minority Interest in Net Income of Subsidiary (93,356) (93,886) (143,812) (131,167)
Extraordinary Income After Tax -- 1,756,038 -- 1,756,038
------------ ------------ ------------ ------------
Minority Interest on Extraordinary Income -- (526,811) -- (526,811)
Income Before Income Taxes 330,485 -- 511,397 --
Income Tax (173,387) -- (298,102) --
Net Income 157,098 1,455,805 213,295 1,548,173
Earnings Per Share:
From Continuing Operations $ 0.06 $ 0.12 $ 0.08 $ 0.20
From Discontinued Operations -- -- -- $ (0.02)
Extraordinary Income -- $ 0.69 -- $ 0.69
Minority Interest $ (0.04) $ (0.24) $ (0.06) $ (0.26)
------------ ------------ ------------ ------------
Net Income Per Share $ 0.02 $ 0.57 $ 0.02 $ 0.60
------------ ------------ ------------ ------------
Weighted Average Number of Shares Outstanding
2,545,800 2,545,800 2,545,800 2,545,200
------------ ------------ ------------ ------------
</TABLE>
The Accompanying Notes are an Integral Part of these Condensed Consolidated
Financial Statements.
5
<PAGE>
CRESCENT CAPITAL, INC.
- --------------------------------------------------------------------------------
CONDENSED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
[UNAUDITED]
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Total
Common Stock Additional Currency Stock of the Note Stock-
Number of Paid-in Retained Translation Parent Held by Receivable holders'
Shares Amount Capital Earnings Adjustments a Subsidiary For Stock Equity
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balance - December 31, 1996 2,545,800 $ 2,546 $6,209,214 $ 322,246 $250,400 $(776,145) $(1,852,275) $4,155,986
========= ======= ========== ========== ======== ========= =========== ==========
Minority Interest Adjustment -- -- -- (577,057) -- -- -- (577,057)
Net Profit for the Year Ended
December 31, 1997 -- -- -- 1,632,782 -- -- -- 1,632,782
Accrued Interest on Note -- -- -- -- -- -- (120,000) (120,000)
Foreign Currency
Translation Adjustment -- -- -- -- 37,794 -- -- 37,794
--------- ------- ---------- ---------- -------- --------- ----------- ----------
Balance - December 31, 1997 2,545,800 $ 2,546 $6,209,214 $1,377,971 $288,194 $(776,145) $(1,972,275) $5,129,505
========= ======= ========== ========== ======== ========= =========== ==========
Net Income for the Period
January 1, 1998 to June 30, 1998 -- -- -- 213,295 -- -- -- 213,295
Accrued Interest on Note -- -- -- -- -- -- (60,000) (60,000)
Foreign Currency
Translation Adjustment -- -- -- -- 1,927 -- -- 1,927
========= ======= ========== ========== ======== ========= =========== ==========
Balance - June 30, 1998 2,545,800 $ 2,546 $6,209,214 $1,591,267 $290,121 $(776,145) $(2,032,275) $5,284,728
========= ======= ========== ========== ======== ========= =========== ==========
</TABLE>
Foreign Currency Translation
The functional currency for the Company's foreign operations is the British
pound sterling. The translation from the British pound sterling into U.S.
dollars is performed for balance sheet accounts using the current exchange rate
in effect at the balance sheet date and for revenue and expense accounts using a
weighted average exchange rate during the period. The gains or losses resulting
from such translations are included in stockholders' equity. Equity transactions
are denominated in British Pound sterling have been translated into U.S. dollars
using the effective rate of exchange at date of issuance.
The Accompanying Notes are an Integral Part of these Condensed Consolidated
Financial Statements
6
<PAGE>
CRESCENT CAPITAL, INC.
- --------------------------------------------------------------------------------
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
[UNAUDITED]
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
For the Six Months
January 1, 1998 January 1, 1997
to to
June 30, 1998 June 30, 1997
<S> <C> <C>
Net Cash - Operating Activities $ 781,625 $ 653,987
----------- -----------
Investing Activities:
Purchase of Property, Equipment and Capitalized Costs (3,147,198) (857,886)
Proceeds on Disposal of Property and Equipment 178,526 328,934
Loan to Officer (15,000) --
Loan to Related Party (479,054) --
----------- -----------
Net Cash - Investing Activities (3,462,726) (528,952)
----------- -----------
Financing Activities:
New Bank Loans 1,638,489 260,236
Payment of Debt & Capitalized Leases (259,782) (255,726)
Proceeds from Sale of Common Stock -- 3,129,572
----------- -----------
Net Cash - Financing Activities 1,378,707 3,129,572
----------- -----------
Effect of Exchange Rate Changes on Cash 1,927 29,766
Net [Decrease] in Cash and Cash Equivalents (1,300,467) 3,284,373
Cash and Cash Equivalents - Beginning of Periods 2,575,409 657,880
----------- -----------
Cash and Cash Equivalents - End of Periods 1,275,876 3,942,253
----------- -----------
Supplemental Disclosures of Cash Flow Information:
Cash paid during the periods for:
Interest Paid 52,659 43,610
Taxes Paid -- --
Supplemental Disclosures of Non-Cash Financing and Investing Activities:
Exchange of Treasury Stock and Assignment of Consulting Agreements -- --
Fixed Assets acquired under Capital Leases -- --
</TABLE>
The Accompanying Notes are an Integral Part of these Condensed Consolidated
Financial Statements.
7
<PAGE>
CRESCENT CAPITAL, INC.
- --------------------------------------------------------------------------------
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
[UNAUDITED]
- --------------------------------------------------------------------------------
(A) Significant Accounting Policies
Significant accounting policies of Crescent Capital, Inc. are set forth in
the Company's Form 10-KSB for the year ended December 31, 1997, as filed
with the Securities and Exchange Commission. Crescent Capital's strategic
objective is to invest in business ventures which will maximize the return
to the shareholders. Currently, Crescent Capital, Inc.'s only operations
are the 67% ownership of International Franchise Systems, Inc. Crescent
Capital, Inc. and International Franchise Systems, Inc. [including its
wholly owned subsidiaries] are collectively referred to as "the Company."
(B) Basis of Reporting
The balance sheets as of June 30, 1998, the statements of operations for
the period January 1, 1998 to June 30, 1998, and for the period January 1,
1997 to March 31, 1997, the statement of stockholders' equity for the
period January 1, 1998 to June 30, 1998 and the statements of cash flows
for the period January 1, 1998 to June 30, 1998 and for the period January
1, 1997 to March 31, 1997 have been prepared by the Company without audit.
The accompanying interim condensed unaudited financial have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions of Form 10-QSB and
Regulation SB. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of the management of the Company, such
statements include all adjustments [consisting only of normal recurring
items] which are considered necessary for a fair presentation of the
financial position of the Company at June 30, 1998, and the results of its
operations and cash flows for the three months then ended. It is suggested
that these unaudited financial statements be read in conjunction with the
financial statements and notes contained in the Company's Form 10-KSB for
the year ended December 31, 1997.
Certain reclassifications may have been made to the 1997 financial
statements to conform to classification used in 1998.
(C) Assignment Of Consulting Agreements
The three consulting agreements entered into by International Franchise
Systems, Inc. ("IFS") were assigned to Woodland Limited Partnership at
their net book value on April 1, 1996. IFS received shares of Crescent
Capital, Inc. in return for consideration. The shares are reflected as
"Treasury Stock" in the shareholders equity section of the Company's
balance sheet.
(D) Due From Related Parties
Woodland Limited Partnership is a partnership controlled by members of the
Colin Halpern family. At June 30, 1998, $2,189,247 was due from Woodland
for funds advanced by the
8
<PAGE>
Company and its subsidiaries. These funds are to be repaid on a short term
basis and are interest bearing.
(E) Related Party Transactions
On March 11, 1998, the Company received an offer from IFS Acquisition
Corporation, an affiliate of Crescent Capital, Inc., the Company's largest
shareholder, to participate in a merger which would result in all of the
shareholders other than Crescent Capital, Inc. receiving $2.80 per share
for each share of the Company's stock. The Board of Directors named a
Special Committee of directors, comprised of Bernard Goldman and David
Coffer, to consider the offer. The Special Committee hired legal and
financial advisors and is considering the offer. On April 17, 1998, the
Special Committee announced that an agreement had been reached on the
financial terms of the merger and that the public shareholders would
receive $3.60 per share if the transaction is completed. The proposed
merger is subject to, among other things (i) execution of a definitive
merger agreement containing customary representations, warranties,
covenants and conditions (including a financial condition), and (ii)
compliance with all applicable regulatory and governmental requirements.
Accordingly, there can be no assurance that the proposed merger will be
consummated.
On July 24, 1998, a Proxy Statement was sent to IFS shareholders seeking
approval of the merger. On August 19, 1998, in a Special Meeting,
shareholders voted "FOR" the merger.
9
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Result of Operations
Overview -
Income before extraordinary items taxes and minority interest for the thirteen
week period ended June 28, 1998 was higher than the same period of the previous
year due to more stores open, an increase in average weekly sales, and improved
commissary efficiencies ($422,854 in 1998 versus $312,604 in 1997). During the
thirteen week period ended June 28, 1998, the Company opened 8 delivery units
which brings the total to 167 units operating in the United Kingdom and Ireland.
Domino units opened include 161 delivery units, (12 that are Company owned) and
6 units that are "call and collect".
In a move to strengthen IFS's investment value and future growth potential, in
June 1997, the Company sold a 15% interest in its Domino's subsidiary for $3.125
million. After expenses and taxes, the Company realized a net profit of $2.0
million from the sale. The Company is using the proceeds from the sale to help
finance a new commissary and administrative center to support continuing rapid
growth of Domino's in the UK. In connection with the sale, the purchaser has an
option to acquire an additional 5% interest in the company's Domino's
subsidiary.
In December 1997, the Company sold the last two Haagen Dazs units. The first
quarter 1997 trading loss is shown as discontinued operations in the 1997 first
quarter financial statements.
The Company opened a sit down restaurant, Pizzazz, in December 1995, to further
increase awareness of the Domino's brand. The restaurant was closed in June 1996
after the Company determined that the success of the concept would require too
much management attention to be redirected from the Company's primary business.
Accordingly, the Company reported the losses from Pizzazz as a loss from
discontinued operations in the 1997 first quarter financial statements. The
Company subleased the property commencing April 1997.
10
<PAGE>
Results of Operations
For the Thirteen Weeks Ended
Income Statement Data June 28, June 29,
1998 1997
Revenues: (%) (%)
Sales by Company Owned Stores 11.3 14.1
Commissary Sales 61.8 57.9
Franchise Fees 1.6 1.9
Rental Income 7.2 7.3
Royalty Sales 15.0 13.4
Computer Sales 2.1 4.1
All Other Revenues 1.0 1.1
------- -------
Total Revenues 100.0 100.0
Cost of Sales:
Company Owned Stores (1) 64.5 60.7
Commissary Sales (1) 93.6 87.4
Other Cost of Sales (1) 36.0 53.2
------- -------
Total Cost of Sales 71.9 73.2
Gross Margin 21.4 26.8
Administrative 16.1 21.4
Amortization/Depreciation 1.0 2.8
Sale Of Fixed Assets -- (0.6)
------- -------
Operating Income 4.3 2.8
Other Income 0.5 0.4
------- -------
Continuing Operations 4.9 3.2
Discontinued Operations - (Loss) -- (0.5)
------- -------
Income/(Loss) before Extraordinary Income 4.9 2.7
======= =======
Notes:
(1) as a percentage of respective revenue
Comparison of the Thirteen Week Periods April 1, 1998 to June 30, 1998 and April
1, 1997 to June 30, 1997.
Revenue
Total revenue for the thirteen week period ended June 28, 1998 was $8.7 million,
an increase of 22.6% against the same period of 1997. The main constituents of
this increase arose from royalty income which increased by approximately $0.4
million, and commissary sales which increased by $1.3 million.
For the period ended June 28, 1998, system wide sales totalled $23.6 million
versus $17.5 million in the second quarter of 1997. This represents a 25.9%
improvement from the previous year. This increase in system-wide sales is the
primary reason for the increase in royalty income and commissary sales. Sales at
11
<PAGE>
Company owned stores decreased by approximately $55,000 for the period ended
June 28, 1998 as compared to the period ended June 29, 1997. The decrease was
attributed to more open corporate units (12 versus 11) and better sales
performance at its flagship store in Milton Keynes.
Cost and Expenses
The Company experienced an increase in cost of sales against the same thirteen
week period in 1997 from approximately $5.1 million to $6.2, an increase of 22%.
The cost of sales as a percentage of commissary sales was higher to the same
period of the previous year (93.6% vs 87.4%) primarily because of higher
distribution costs and lower margin on cheese. The cost of sales as a percentage
of Company owned store sales increased from 60.7% in the same period in 1997 to
64.5% in 1998. This is the result of new stores and under-performing stores
acquired in the first quarter of 1998.
Income
Operating income of $365,158 was achieved in the period against operating income
of $263,703 in the comparable period in 1997. This increase in profitability
resulted from an increase in operating and administrative expense that offset
the improved gross margin results.
Liquidity and Capital Resources
At June 28, 1998, the Company's working capital of $2.8 million compared to $4.4
million at June 29, 1997, and $4.0 million at December 29, 1997. The Company's
trade receivable has increased by $205,000 from the end of the year as the
Company sales increased. The Company's receivable from related parties increased
by $660,000 and inventories and other receivables have decreased by $128,000.
Total current liabilities have increased by $1.6 million from the year end. The
principle increase in current liabilities is related almost entirely to the
accrual for expenses and costs related to the construction of the new
commissary.
The Company anticipates it will spend $500,000 to open additional corporate
stores in 1998. The Company is not obligated to open any additional Company
owned stores through the end of 1998 under the Master Franchise Agreement.
To support the Company's continuing growth, the Company is constructing a new
administrative office and new commissary. The Company estimates the cost of the
new facility to be approximately 3.4 million pound sterling ($5.5 million). The
Company has secured financing from National Westminster Bank for approximately
70% of the total cost. The building construction cost will be financed over 15
years at a fixed rate interest rate of 8.75%. The equipment will be financed
over a 5 year lease. The Company believes its existing commissary will
adequately service the dough production needs of existing and projected new
franchisees for the next twelve months. The Company believes it can finance its
obligations from existing cash balances and projected cash flows. The new
facility is forecasted to open in September 1998.
The Company does not anticipate that the loan to Crescent Capital will be repaid
before September 1998.
If the Company's plans change or its assumptions or estimates prove to be
inaccurate, the Company may require additional funds to achieve increased sales.
If such funds are unavailable, the Company will have to reduce its operations to
a level consistent with its available funding.
12
<PAGE>
Exchange Rate
The weighted exchange rate for the three month period ended June 30, 1998
($1.6354 per British pound sterling) was approximately 1% lower than the
exchange rate during the comparable period in 1997 ($1.645 per British pound
sterling).
Inflation
The primary inflationary factor affecting the Company's operations is the cost
of food. As the cost of food has increased, the Company has historically been
able to offset these increases through economies of scale and improved operating
procedures, although there is no assurance that such offsets will continue. To
date, inflation has not had a material effect on the Company's operations.
13
<PAGE>
Part II OTHER INFORMATION
Item 1. Legal Proceedings
The Company is not a party to any litigation or governmental
proceedings that management believes would result in judgements or
fines that would have a material adverse effect on the Company.
Item 2. Changes in Securities
Not Applicable.
Item 3. Defaults Upon Senior Securities
Not Applicable.
Item 4. Other Information
Not Applicable.
Item 5. Exhibits
(a) Exhibits
None.
(b) Reports on Form 8-K
May 20, 1998 Change in Auditors
14
<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.
CRESCENT CAPITAL, INC.
Date: August 20, 1998 /s/ Colin Halpern
Colin Halpern, President
15
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000874017
<NAME> CRESCENT CAPITAL, INC.
<S> <C>
<PERIOD-TYPE> OTHER
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 1,275,409
<SECURITIES> 0
<RECEIVABLES> 2,275,060
<ALLOWANCES> 0
<INVENTORY> 1,072,045
<CURRENT-ASSETS> 9,727,051
<PP&E> 8,277,644
<DEPRECIATION> 0
<TOTAL-ASSETS> 19,168,356
<CURRENT-LIABILITIES> 7,558,962
<BONDS> 0
<COMMON> 546
0
0
<OTHER-SE> 2,000
<TOTAL-LIABILITY-AND-EQUITY> 19,168,356
<SALES> 5,342,645
<TOTAL-REVENUES> 8,652,035
<CGS> 6,222,288
<TOTAL-COSTS> 6,222,288
<OTHER-EXPENSES> 1,981,061
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (52,659)
<INCOME-PRETAX> 423,841
<INCOME-TAX> (173,387)
<INCOME-CONTINUING> 157,098
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 157,098
<EPS-PRIMARY> 0.02
<EPS-DILUTED> 0.02
</TABLE>
