U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED FEBRUARY 28, 1997
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 0-21299
STAR MULTI CARE SERVICES, INC.
------------------------------------------------------
(Exact Name of Registrant as specified in its charter)
NEW YORK 11-1975534
------------------------------ -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
99 RAILROAD STATION PLAZA, HICKSVILLE, NEW YORK 11801
-----------------------------------------------------------
(Address of principal executive offices including zip code)
Registrant's telephone number, including area code: (516) 938-2016
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 requirement for the past 90 days.
Yes [X] No [_]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of April 11, 1997:
CLASS NUMBER OF SHARES
Common Stock, $0.001 par value 4,154,318
<PAGE>
STAR MULTI CARE SERVICES, INC.
INDEX
Page
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
Consolidated Balance Sheets as of February 28, 1997 and May 31, 1996...........3
Consolidated Statements of Operations for the three months and
nine months ended February 28, 1997 and February 29, 1996 ..................4
Consolidated Statements of Cash Flows for the nine months ended
February 28, 1997 and February 29, 1996 ...................................5
Notes to Interim Consolidated Financial Statements ..........................6-7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations..............................8-10
PART II - OTHER INFORMATION
Item 1. Legal Proceedings..................................................11
Item 6. Exhibits and Reports on Form 8-K ..................................11
Signatures....................................................................12
2
<PAGE>
STAR MULTI CARE SERVICES, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
February 28, May 31,
1997 1996
------------ ------------
(Unaudited)
<S> <C> <C>
ASSETS
------
CURRENT ASSETS:
Cash and cash equivalents $ 78,574 $ 1,881,979
Short-term investments -- 100,000
Accounts receivable, less allowance for doubtful accounts
of $566,000 and $808,000 at February 28, 1997 and
May 31, 1996, respectively 10,130,449 9,611,169
Prepaid expenses and other current assets 769,365 800,665
Deferred income taxes 961,232 400,015
Income taxes receivable 28,997 --
------------ ------------
Total current assets 11,968,617 12,793,828
PROPERTY AND EQUIPMENT, net of accumulated depreciation
and amortization of $871,610 and $706,818 at
February 28, 1997 and May 31, 1996, respectively 916,281 766,480
NOTES RECEIVABLE FROM OFFICER 94,937 100,517
INTANGIBLE ASSETS, net 5,059,300 5,197,778
OTHER ASSETS 218,916 510,487
------------ ------------
$ 18,258,051 $ 19,369,090
============ ============
LIABILITIES, REDEEMABLE PREFERRED STOCK AND SHAREHOLDERS' EQUITY
----------------------------------------------------------------
CURRENT LIABILITIES:
Accrued payroll and related expenses $ 1,241,205 $ 1,329,826
Accounts payable and other accrued expenses 1,405,020 1,530,138
Net liability of discontinued operations -- 98,081
Income taxes payable -- 295,647
Current maturities of long-term debt 125,000 125,000
------------ ------------
Total current liabilities 2,771,225 3,378,692
------------ ------------
LONG TERM LIABILITIES:
Revolving Credit Line 1,997,000 3,280,000
Long-term Debt 156,250 250,000
Deferred income taxes -- 39,909
Other long-term liabilities 1,192,000 33,970
------------ ------------
Total long-term liabilities` 3,345,250 3,,603,879
REDEEMABLE PREFERRED STOCK:
Preferred stock, $.01 par value; authorized 3,000,000 shares;
Class B; issued and outstanding 130,071 shares at May 31, 1996 -- 1,301
Additional paid-in capital -- 340,135
------------ ------------
Total redeemable preferred stock -- 341,436
------------ ------------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Preferred stock, $1.00 par value per share,
5,000,000 shares authorized -- --
Common Stock, $.001 par value per share, 10,000,000 shares
authorized; 4,154,318 and 3,820,358 issued, respectively 4,154 3,820
Additional paid-in capital 14,925,603 13,288,607
Subscription receivable (397,782) (397,782)
Unrealized loss on short-term investments -- (6,000)
Deficit (2,111,477) (564,640)
------------ ------------
12,420,498 12,324,005
Less treasury stock - 137,500 common shares at
February 28, 1997 and May 31, 1996 278,922 278,922
------------ ------------
Total shareholders' equity 12,141,576 12,045,083
------------ ------------
$ 18,258,051 $ 19,369,090
============ ============
</TABLE>
See accompanying notes
3
<PAGE>
STAR MULTI CARE SERVICES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three months ended Nine months ended
February 28, February 29, February 28, February 29,
1997 1996 1997 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net revenues $ 13,326,186 $ 12,004,506 $ 39,163,979 $ 35,463,592
------------ ------------ ------------ ------------
Operating costs and expenses:
Costs of revenue 8,710,173 7,752,294 25,624,871 23,004,659
Selling, general and administrative 3,577,889 3,408,739 10,652,192 10,410,591
Depreciation and amortization 163,684 200,766 480,597 598,722
------------ ------------ ------------ ------------
Income from operations 874,440 642,707 2,406,319 1,449,620
Interest expense (49,545) (77,117) (164,518) (216,668)
Merger transaction costs -- -- (2,808,223) --
Interest income 24,981 37,910 61,861 142,345
------------ ------------ ------------ ------------
Income (loss) before income taxes 849,876 603,500 (504,561) 1,375,297
(Provision) benefit for income taxes (348,000) (246,000) 207,000 (608,955)
------------ ------------ ------------ ------------
Net income (loss) $ 501,876 $ 357,500 $ (297,561) $ 766,342
============ ============ ============ ============
Net income (loss) per
common share $ .12 $ .08 $ (.07) $ .18
============ ============ ============ ============
Shares used in computing per
share amounts 4,278,169 4,257,046 4,278,169 4,257,046
============ ============ ============ ============
</TABLE>
See accompanying notes.
4
<PAGE>
STAR MULTI CARE SERVICES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
February 28, February 29,
1997 1996
----------- -----------
<S> <C> <C>
Cash flow from operating activities:
Net (loss) income $ (297,561) $ 766,342
----------- -----------
Adjustments to reconcile net (loss) income to net cash
provided by (used in) operating activities:
Provision for doubtful accounts 148,556 230,000
Depreciation and amortization of property and equipment 164,792 135,226
Amortization of intangible assets 315,805 463,496
Deferred income taxes (601,126) --
Changes in operating assets and liabilities:
(Increase) decrease in assets:
Accounts receivable (667,836) (2,918,989)
Prepaid expenses and other current assets 31,300 (225,216)
Income taxes receivable (28,997) --
Other assets 291,571 (60,108)
Increase (decrease) in liabilities:
Accrued payroll and related expenses (88,621) 334,535
Accounts payable and other accrued expenses (125,118) 157,605
Income taxes payable (295,647) (53,127)
Other liabilities 1,158,030 17,386
----------- -----------
Total adjustments 302,709 (1,919,192)
----------- -----------
Net cash provided by (used in) operating activities 5,148 (1,152,850)
----------- -----------
Cash flows from investing activities:
Payments of costs related to discontinued operations (98,081) (306,747)
Purchase of property and equipment (314,593) (186,932)
Increase in intangibles (177,327) (83,254)
Repayment of note receivable from officer 5,580 27,629
Net proceeds from the sale of short-term investments 106,000 1,089,179
----------- -----------
Net cash (used in) provided by investing activities (478,421) 539,875
----------- -----------
Cash flows from financing activities:
Net repayments of and proceeds from revolving credit line (1,283,000) 1,500,000
Repayment of long-term debt (93,750) (93,750)
Redemption of class B preferred shares (341,436) (170,717)
Proceeds from issuance of common stock 388,054 296,130
----------- -----------
Net cash (used in) provided by financing activities (1,330,132) 1,531,663
----------- -----------
Net (decrease) increase in cash and cash equivalents (1,803,405) 918,688
Cash and cash equivalents at beginning of period 1,881,979 1,496,792
----------- -----------
Cash and cash equivalents at end of period $ 78,574 $ 2,415,480
=========== ===========
Supplemental disclosures:
Income taxes paid $ 600,000 $ 669,000
=========== ===========
Interest paid $ 173,000 $ 204,000
=========== ===========
</TABLE>
See accompanying notes.
5
<PAGE>
STAR MULTI CARE SERVICES, INC.
NOTES TO INTERIM CONSOLIDATED FINANCIAL
STATEMENTS (UNAUDITED)
In the opinion of management, the accompanying unaudited interim
consolidated financial statements of Star Multi Care Services, Inc. and its
subsidiaries (the "Company") contain all adjustments necessary to present fairly
the Company's financial position as of February 28, 1997 and the results of its
operations and cash flows for the three month periods and the nine month periods
ended February 28, 1997 and February 29, 1996.
The accounting policies followed by the Company are set forth in Note
1 to the Company's consolidated financial statements included in its Annual
Report on Form 10-KSB for the fiscal year ended May 31, 1996, which is
incorporated herein by reference. Specific reference is made to this report for
the notes to consolidated financial statements included therein.
The results of operations for the three month period and the nine
month period ended February 28, 1997 are not necessarily indicative of the
results to be expected for the full year.
NOTE 1 - NET INCOME PER SHARE
- -----------------------------
Net income (loss) per share has been computed by dividing net income
(loss) by the weighted average number of common stock and common stock
equivalents outstanding during each period. Common stock equivalents represent
the dilutive effect of the assumed exercise of certain outstanding stock options
and warrants.
NOTE 2 - MERGER
- ---------------
On August 23, 1996, the Company completed a merger, accounted for as
a pooling of interests, to acquire AMSERV HEALTHCARE INC. ("Amserv"), a health
care service company which provides home care services in New Jersey and Ohio.
In accordance with the Merger Agreement, each share of common stock of Amserv
outstanding immediately prior to consummation of the merger was converted into
.4090 shares of common stock of the Company. The total shares issued amounted to
1,410,731. The Company also assumed all outstanding options and other rights to
acquire Amserv stock. Costs related to the merger amounted to $2,808,223. Unpaid
amounts at February 28, 1997 have been included in "Accounts payable and other
accrued expenses" and "other long-term liabilities".
NOTE 3 - STOCK DIVIDEND
- -----------------------
The Company declared a 5% stock dividend which was distributed on
November 4, 1996 to shareholders of record as of October 11, 1996. A total of
188,570 shares of common stock were issued in connection with the dividend.
Common stock has been adjusted for the par value of the shares issued.
Additional paid in capital and retained earnings have been adjusted for the
difference between the fair market value and the par value of the shares.
NOTE 4 - SUPPLEMENTARY INFORMATION - STATEMENT OF CASH FLOWS
- ------------------------------------------------------------
During the nine months ended February 28, 1997 the Company issued a
5% stock dividend which amounted to $1,249,276.
6
<PAGE>
NOTE 5 - SUBSEQUENT EVENT
- -------------------------
On January 3, 1997, the Company entered into an agreement and plan of
merger (the "EFCC Merger Agreement") to acquire (the "EFCC Merger") Extended
Family Care Corporation ("EFCC"), a health care service company which provides
home care services in New Jersey, New York and Pennsylvania. Pursuant to the
terms of the EFCC Merger, the Company will pay $2,400,000 in cash (plus cash
payments to dissenting shareholders, if any) and $4,850,000 in stock (less the
amount that would have been paid to dissenting shareholders, if any) or
$7,250,000 cash at the Company's option (the "Cash Option").
In connection with the EFCC Merger, the Company and EFCC have entered
into a consulting agreement, which is subject to approval by the New York State
Department of Health, pursuant to which the Company will render to EFCC
consulting and advisory services in connection with the management, operation
and supervision of EFCC. The term of the consulting agreement will end on the
earlier of (i) one year from signing of the EFCC Merger Agreement, (ii) the
effective time of the EFCC Merger or (iii) the termination of the EFCC Merger
Agreement. In consideration for the consulting services rendered by the Company,
EFCC will pay $25,000 per month payable (a) $15,000 in arrears on the last day
of each month and (b) the remaining $10,000 on the earlier of the closing date
or termination of the EFCC Merger Agreement. As of February 28, 1997 $35,000 due
from EFCC is included in prepaid and other current assets. The EFCC Merger is
subject to approval by the shareholders of both the company and EFCC as well as
the satisfaction of certain other conditions and is expected to be consummated
on or before August 15, 1997.
7
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
---------------------------------------------------------------
RESULTS OF OPERATIONS.
----------------------
The following discussion should be read in conjunction with the
attached consolidated financial statements and notes thereto, and with the
Company's audited financial statements and notes thereto for the fiscal year
ended May 31, 1996.
RESULTS OF OPERATIONS.
- ----------------------
On August 23, 1996, the Company completed a merger (the "Amserv
Merger"), accounted for as a pooling of interests, with AMSERV HEALTHCARE, INC.
("Amserv"), a health care service company that provides home care services,
including personal care, such as assistance with the activities of daily living
(e.g. eating, walking and grooming), and skilled nursing services, such as wound
care and assistance with medications, injections and patient education, in New
Jersey and Ohio. In accordance with the terms of the Amserv Merger, each share
of common stock of Amserv, outstanding immediately prior to consummation of the
Amserv Merger, was converted into .4090 shares of common stock of the Company. A
total of 1,410,731 shares of common stock of the Company were issued upon
consummation of the Amserv Merger. The Company also assumed all outstanding
options and other rights to acquire Amserv stock. The following results of
combined operations for the periods ending February 28, 1997 and 1996 include
the operations of both the Company and Amserv.
QUARTER ENDED AND NINE MONTHS ENDED FEBRUARY 28, 1997 COMPARED TO
QUARTER ENDED AND NINE MONTHS ENDED FEBRUARY 29, 1996.
Total net revenues increased $1,321,680 or 11% to $13,326,186 for the
quarter ended February 28, 1997 over net revenues of $12,004,506 for the quarter
ended February 29, 1996. For the nine months ended February 28, 1997 net
revenues increased $3,700,387 or 10% to $39,163,979 from net revenues of
$35,463,592 for the nine months ended February 29, 1996.
The Company's decided shift towards providing placement services of
registered nurses and home health aides to patients for care at home ("Home
Care") mirrors a changing social and economic attitude toward the de-
institutionalization of patients. Due to the long hospital stays of some
terminally ill patients and the greater costs associated with institutional
treatment plans, the Company believes that the industry (i.e. hospital,
insurance companies and home care agencies) trend is to find ways to care for
patients in the home. The Company continues to devote its resources toward the
growth in Home Care and believes this upward trend will continue in the future.
Home Care revenues represented approximately 99% of fiscal 1997 net revenues and
providing temporary health care personnel recruiting to hospitals and nursing
homes represented approximately 1% of fiscal 1997 net revenues.
Gross profit margins were approximately 35% for the quarter ended and
nine months ended February 28, 1997 and 1996.
Selling, general and administrative costs and depreciation and
amortization as a percentage of net revenues were 28% for the quarter ended
February 28, 1997 as compared with 30% for the quarter ended February 29, 1996.
Selling, general and administrative costs and depreciation and amortization as a
percentage of net revenues were 28% for the nine months ended February 28, 1997
as compared with 31% for the nine months ended February 29, 1996. Such decrease
is primarily attributable to the increase in revenues being without a
proportionate increase in back office overhead.
8
<PAGE>
Income from operations increased $231,733 or 36% to $874,440 for the
quarter ended February 28, 1997 compared with $642,707 for the quarter ended
February 29, 1996. Income from operations increased $956,699 or 66% to
$2,406,319 for the nine months ended February 28, 1997 compared with $1,449,620
for the nine months ended February 29, 1996.
The Company incurred a one-time charge of $2,808,223 for acquisition
costs, legal fees and restructuring expenses associated with the Merger, which
contributed to a net loss for the nine months ended February 28, 1997 of
$297,561 compared with net income of $766,342 for the nine months ended February
29, 1996.
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
- ----------------------------------------------------
As of February 28, 1997 cash and cash equivalents were $78,574 as
compared with $1,881,979 at May 31, 1996. The net decrease of $1,803,405
resulted primarily from the repayment of its revolving credit line.
The nature of the Company's business requires weekly payments to its
personnel at the time they render services, while it receives payment for
services rendered over an extended period of time (60 to 180 days or longer),
particularly when the payor is an insurance company, medical institution or
governmental unit. Accounts receivable represent a substantial portion of
current and total assets at February 28, 1997 and May 31, 1996. During the nine
months ended February 28, 1997 and for the year ended May 31, 1996, accounts
receivable turnover was approximately 71 days.
The Company currently has available a line of credit with a bank
which allows for maximum borrowings of $8,000,000. This line of credit expires
on October 31, 1998 and is subject to renewal. However, as the Company's
business expands, additional financing may be required. Short-term borrowings at
February 28, 1997 were $1,997,000 as compared to $3,280,000 at May 31, 1996.
On January 3, 1997, the Company entered into an agreement and plan of
merger (the "EFCC Merger Agreement") to acquire (the "EFCC Merger") Extended
Family Care Corporation ("EFCC"), a health care service company which provides
home care services in New Jersey, New York and Pennsylvania. Pursuant to the
terms of the EFCC Merger, the Company will pay $2,400,000 in cash (plus cash
payments to dissenting shareholders, if any) and $4,850,000 in stock (less the
amount that would have been paid to dissenting shareholders, if any) or
$7,250,000 cash at the Company's option (the "Cash Option").
Unless the Company exercises the Cash Option, in which case the
Company would have to raise $7,250,000 through additional borrowing or
otherwise, the Company does not anticipate any extraordinary material cash
commitments for capital expenditures for the Company's current fiscal year and
the Company believes that cash generated from operations, together with
borrowings available under its existing line of credit, will be sufficient to
meet its short-term and long-term liquidity needs.
Unless the Company exercises the Cash Option, the Company intends to
meet its long-term liquidity needs through available cash, cash flow and, if
necessary, the Company's bank line of credit. To the extent that such sources
are inadequate, the Company will be required to seek additional financing. In
such event, there can be no assurance that additional financing will be
available to the Company on satisfactory terms.
In addition to the proposed acquisition of EFCC, the Company is
continually exploring possible acquisitions of compatible companies in the
health care business. If any such acquisition were to be made with available
cash, the Company's long-term liquidity would depend to a greater extent on cash
flow and the line of credit.
9
<PAGE>
In connection with the EFCC Merger, the Company and EFCC have entered
into a consulting agreement, which is subject to approval by the New York State
Department of Health, pursuant to which the Company will render to EFCC
consulting and advisory services in connection with the management, operation
and supervision of EFCC. The term of the consulting agreement will end on the
earlier of (i) one year from signing of the EFCC Merger Agreement, (ii) the
effective time of the EFCC Merger or (iii) the termination of the EFCC Merger
Agreement. In consideration for the consulting services rendered by the Company,
EFCC will pay $25,000 per month payable (a) $15,000 in arrears on the last day
of each month and (b) the remaining $10,000 on the earlier of the closing date
or termination of the EFCC Merger Agreement. As of February 28, 1997 $35,000 due
from EFCC is included in prepaid and other current assets. The EFCC Merger is
subject to approval by the shareholders of both the company and EFCC as well as
the satisfaction of certain other conditions and is expected to be consummated
on or before August 15, 1997.
Home health care organizations involved in federal and state funded
programs, are subject to periodic survey by regulatory agencies. Accordingly, in
December, 1995, a survey by state and federal regulatory agencies was conducted
at the Medicare-certified home health agency operated by the Company. The
findings of the initial survey indicated that a follow up survey was warranted.
The survey, held in March, 1997, were favorable and that only minor deficiencies
existed. The final written report, confirming the surveyors' findings, however,
has not been received by the Company and there can be no assurances that the
written report will reflect the surveyors' verbal representations.
INFLATION AND SEASONALITY
- -------------------------
The rate of inflation was insignificant during the year ended May 31,
1996. In the past, the effects of inflation on personnel costs have been offset
by the Company's ability to increase its charges for services rendered. The
Company anticipates that it will be able to continue to do so in the near
future. The Company continually reviews its costs in relation to the pricing of
its services.
The Company's business is not seasonal.
10
<PAGE>
PART II: OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
------------------
A lawsuit was filed on November 14, 1996 in San Diego Superior Court
(Case No. 705475), by Eugene J. Mora against Amserv Healthcare, Inc., Star Multi
Care Services, Inc., William Fellerman, and Stephen Sternbach. Mr. Mora alleges
that he was the President and Chief Executive Officer of Amserv, at the time of
the merger between Amserv and the Company and that his employment contract with
Amserv was breached when he was terminated by Amserv and the Company following
the Merger.
Mr. Mora alleges that pursuant to his employment contract, upon
termination he would be entitled to five years of continued salary at $298,000
per year; an annual car allowance of $450 per month for the five year period;
payment for unutilized vacation days for a total of $112,000; and the cash value
of a whole life policy of life insurance, which premiums had been paid by
Amserv, for an approximate value of $350,000 and approximately $48,000 in
various fringe benefits. Mr. Mora further alleges that he had a contract which
would result in him being hired as a consultant upon termination and this too
was breached. Under this allegation, Mr. Mora seeks damages for two years
consulting fee at $129,200 per year. Mr. Mora also seeks reimbursement of
attorneys' fees.
The Company does not believe that this matter will result in a
material adverse impact on the Company.
In the Company's Annual Report on Form 10-KSB, for the fiscal year
ended May 31, 1996, the Company reported the existence of certain legal
proceedings against Amserv. On September 13, 1996 the Company settled and
resolved completely all pending litigation against Amserv previously reported.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
a. Exhibits
27. Financial Data Schedule
b. The Company filed no reports on form 8-K during the quarter ended
February 28, 1997.
All items required in Part II have been previously filed or are not applicable
for the quarter ended February 28, 1997.
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.
STAR MULTI CARE SERVICES, INC.
4/14/97 By:/s/ WILLIAM FELLERMAN
- ----------- ----------------------------
Date William Fellerman
Chief Financial Officer
(Principal Financial Officer)
12
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000874038
<NAME> STAR MULTI CARE SERVICES, INC.
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAY-31-1997
<PERIOD-START> JUN-01-1996
<PERIOD-END> FEB-28-1997
<CASH> 78,574
<SECURITIES> 0
<RECEIVABLES> 10,696,449
<ALLOWANCES> 566,000
<INVENTORY> 0
<CURRENT-ASSETS> 11,968,617
<PP&E> 1,787,891
<DEPRECIATION> 871,610
<TOTAL-ASSETS> 18,258,051
<CURRENT-LIABILITIES> 2,771,225
<BONDS> 0
0
0
<COMMON> 4,154
<OTHER-SE> 12,137,422
<TOTAL-LIABILITY-AND-EQUITY> 18,258,051
<SALES> 39,163,979
<TOTAL-REVENUES> 39,163,979
<CGS> 25,624,871
<TOTAL-COSTS> 36,757,660
<OTHER-EXPENSES> 2,808,223
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 164,518
<INCOME-PRETAX> (504,561)
<INCOME-TAX> 207,000
<INCOME-CONTINUING> (297,561)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (297,561)
<EPS-PRIMARY> (0.07)
<EPS-DILUTED> (0.07)
</TABLE>
