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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 December 31, 1996
OR
- --- TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from ____________ to ____________
Commission file number 0-20394
INMARK ENTERPRISES, INC.
(Exact name of registrant as specified in its charter)
Delaware 06-1340408
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
One Plaza Road
Greenvale, New York 11548
------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (516) 625-3500
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
On February 4, 1997, 2,885,751 shares of the Registrant's Common Stock, par
value $.001 a share, were outstanding.
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<PAGE>
INDEX
INMARK ENTERPRISES, INC. AND SUBSIDIARIES
Page
----
PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements of Inmark Enterprises, Inc.
(Unaudited)
Consolidated Balance Sheets -
December 31, 1996 and March 31, 1996 3
Consolidated Statements of Operations - Three month and nine
month periods ended December 31, 1996 and December 31, 1995 4
Consolidated Statement of Stockholders' Equity -
Nine month period ended December 31, 1996 5
Consolidated Statements of Cash Flows - Nine month periods ended
December 31, 1996 and December 31, 1995 6
Notes to Unaudited Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 8
PART II - OTHER INFORMATION 11
Items 1-4. Not Applicable
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
Exhibit No. Description of Exhibit
----------- ----------------------
27 Financial Data Schedule
SIGNATURES 12
2
<PAGE>
PART I - FINANCIAL INFORMATION
INMARK ENTERPRISES, INC.
Consolidated Balance Sheets
December 31, 1996 and March 31, 1996
<TABLE>
<CAPTION>
December 31, 1996 March 31, 1996*
----------------- ---------------
Assets (Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 957,833 700,598
Restricted cash -- 250,000
Accounts receivable 1,613,291 --
Due from factor -- 578,725
Interest and other receivables 1,901 31,040
Deferred tax asset 690,000 640,000
Prepaid expenses and other current assets 130,585 57,940
----------- -----------
Total current assets 3,393,610 2,258,303
----------- -----------
Furniture, fixtures and equipment, net 167,985 121,159
Deferred tax asset 150,000 --
Goodwill, net 2,307,217 2,524,927
Note receivable from officer 200,000 200,000
Other assets 25,986 14,180
----------- -----------
Total assets 6,244,798 5,118,569
=========== ===========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable 941,937 851,898
Accrued job costs 1,235,434 1,287,904
Accrued compensation 96,310 32,144
Other accrued liabilities 215,837 182,846
Notes payable - SPAR -- 750,000
----------- -----------
Total current liabilities 2,489,518 3,104,792
----------- -----------
Stockholders' equity:
Class A convertible preferred stock , par value $.001;
authorized 650,000 shares; none issued and outstanding -- --
Class B convertible preferred stock, par value $.001;
authorized 700,000 shares; none issued and outstanding -- --
Preferred stock, undesignated; authorized 3,650,000
shares; none issued and outstanding -- --
Common stock, par value $.001; authorized 25,000,000
shares; issued and outstanding 2,880,751 shares at
December 31, 1996 and 2,604,251 shares at March 31, 1996 2,881 2,604
Additional paid-in capital 1,323,849 1,043,526
Retained earnings 2,428,550 967,647
----------- -----------
Total stockholders' equity 3,755,280 2,013,777
----------- -----------
Total liabilities and stockholders' equity 6,244,798 5,118,569
=========== ===========
</TABLE>
* The consolidated balance sheet as of March 31, 1996 has been summarized
from the Company's audited balance sheet as of that date.
See accompanying notes to consolidated financial statements
3
<PAGE>
INMARK ENTERPRISES, INC.
Consolidated Statements of Operations
Three Month and Nine Month Periods Ended December 31, 1996 and 1995
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended December 31, Nine Months Ended December 31,
1996 1995 1996 1995
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Sales $ 3,665,711 3,624,084 $ 13,467,749 11,091,655
Direct expenses 2,407,384 2,571,114 9,018,482 7,736,384
------------ ------------ ------------ ------------
Gross Profit 1,258,327 1,052,970 4,449,267 3,355,271
------------ ------------ ------------ ------------
Salaries 670,587 533,881 1,779,824 1,477,752
Selling, general and administrative expense 331,342 536,218 1,204,828 1,640,343
------------ ------------ ------------ ------------
Total operating expenses 1,001,929 1,070,099 2,984,652 3,118,095
------------ ------------ ------------ ------------
Operating income (loss) 256,398 (17,129) 1,464,615
237,176
Other income -- 177,277 -- 177,277
Interest (income) expense, net (15,208) 16,660 (1,903) 86,762
------------ ------------ ------------ ------------
Income before income taxes 271,606 143,488 1,466,518 327,691
Provision for income taxes (76,679) 14,079 5,615 85,917
------------ ------------ ------------ ------------
Net income $ 348,285 129,409 $ 1,460,903 241,774
============ ============ ============ ============
Net income per common and common equivalent share:
Primary $ 0.09 $ 0.05 $ 0.40 $ 0.18
============ ============ ============ ============
Fully diluted $ 0.09 $ 0.05 $ 0.39 $ 0.17
============ ============ ============ ============
Weighted average number of common and
common equivalent shares outstanding:
Primary 3,701,810 2,685,912 3,646,312 1,389,684
============ ============ ============ ============
Fully diluted 3,711,168 2,700,975 3,700,672 1,425,556
============ ============ ============ ============
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
4
<PAGE>
INMARK ENTERPRISES, INC.
Consolidated Statement of Stockholders' Equity
Nine Months Ended December 31, 1996
(Unaudited)
<TABLE>
<CAPTION>
Common Stock Additional Total
par value $.001 Paid - in Retained Stockholders'
Shares Amount Capital Earnings Equity
------ ------ ------- -------- ------
<S> <C> <C> <C> <C> <C>
Balance, March 31, 1996 2,604,251 $ 2,604 $1,043,526 $ 967,647 $2,013,777
Exercise of warrants 276,500 277 280,323 -- 280,600
Net income -- -- -- 1,460,903 1,460,903
---------- ---------- ---------- ---------- ----------
Balance, December 31, 1996 2,880,751 $ 2,881 $1,323,849 $2,428,550 $3,755,280
========== ========== ========== ========== ==========
</TABLE>
5
<PAGE>
INMARK ENTERPRISES, INC.
Consolidated Statements of Cash Flows
Nine Months Ended December 31, 1996 and 1995
(Unaudited)
<TABLE>
<CAPTION>
1996 1995
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income $ 1,460,903 241,774
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 255,947 412,057
Deferred income taxes (200,000) 73,285
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable (1,613,291) 897,613
Increase in prepaid expenses and other current assets (84,451) (19,932)
Decrease (increase) in interest and other receivables 29,139 (82,965)
Increase (decrease) in accounts payable 90,039 (884,072)
(Decrease) increase in accrued job costs (52,470) 515,038
Increase in other accrued liabilities 32,991 103,093
Increase (decrease) in accrued compensation 64,166 (519,250)
----------- -----------
Net cash (used in) provided by operating activities (17,027) 736,641
----------- -----------
Cash flows from investing activities:
Cash resulting from reverse purchase of Health Image
Media, Inc. -- 387,780
Acquisition costs related to management led buyout of SPAR -- (294,429)
Purchases of fixed assets (85,063) (65,781)
----------- -----------
Net cash (used in) provided by investing activities (85,063) 27,570
----------- -----------
Cash flows from financing activities:
Repayments of loan payable to SPAR (750,000) (922,000)
Release of restricted cash from factor 250,000 250,000
Decrease in due from factor, net 578,725 --
Proceeds from exercise of warrants 280,600 --
----------- -----------
Net cash provided by (used in) financing activities 359,325 (672,000)
----------- -----------
Net increase in cash 257,235 92,211
Cash at beginning of period 700,598 1,250
----------- -----------
Cash at end of period $ 957,833 93,461
=========== ===========
Supplemental disclosure:
Interest paid during the period $ 38,294 38,520
=========== ===========
Income tax paid during the period $ 247,200 --
=========== ===========
Non-cash financing and investing activities:
Debt payable to shareholders converted to equity -- 163,783
Restricted cash of Health Image Media, Inc. acquired in
reverse purchase $ -- 500,000
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
6
<PAGE>
Inmark Enterprises, Inc. and Subsidiaries
Notes to the Unaudited Consolidated Financial Statements
December 31, 1996 and 1995
(1) Organization and Nature of Business
Inmark Enterprises, Inc. (formerly Health Image Media, Inc.) (the
"Company") completed a merger on September 29, 1995 whereby Inmark
Services, Inc., a New York corporation, was merged with and into the
Company's wholly-owned subsidiary, InMark Acquisition Corp., a Delaware
corporation (the "Merger"). Following the Merger, InMark Acquisition Corp.
changed its name to Inmark Services, Inc. and Health Image Media, Inc.
changed its name to Inmark Enterprises, Inc.
Inmark Services, Inc. is the successor to SPAR Promotion & Marketing
Services, Inc. ("Spar"), a sales promotion and marketing firm, as a result
of a management led buy-out of that company's net assets and business on
April 3, 1995.
(2) Basis of Presentation
The Merger has been accounted for as a reverse purchase of the Company by
Inmark Services, Inc. and, for financial accounting and reporting purposes,
Inmark Services, Inc. is treated as the acquirer of the Company. No
goodwill was recognized in the Merger. The financial statements for the
nine months ended December 31, 1995 consist of the results of operations
solely of Inmark Services, Inc. for the six months ended September 30, 1995
and the results of operations of the consolidated company for the three
months ended December 31, 1995.
The interim financial statements of the Company for the three and nine
month periods ended December 31, 1996 and 1995 have been prepared without
audit. In the opinion of management, such financial statements reflect all
adjustments, consisting of normal recurring accruals, necessary to present
fairly the Company's results for the interim periods presented. The results
of operations for the three and nine month periods ended December 31, 1996
are not necessarily indicative of the results for a full year.
Certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. These consolidated financial
statements should be read in conjunction with the consolidated financial
statements and notes thereto for the year ended March 31, 1996 included in
the Company's Annual Report on Form 10-K for the year ended March 31, 1996.
(3) Earnings Per Share
The computation of earnings per common and common equivalent share is based
upon the weighted average number of common shares outstanding during the
period, plus the assumed exercise of stock options and warrants, less the
number of treasury shares assumed to be purchased from the proceeds of such
exercises using the average market price of the Company's common stock for
primary and the period end market price for fully diluted earnings per
share. The weighted average number of common shares was computed assuming
that the 677,106 shares of the Company's common stock exchanged for the
common stock of Inmark Services, Inc. in the Merger were outstanding until
September 29, 1995, and thereafter, the actual outstanding common stock and
common stock equivalents of the Company were used in the computation. Stock
options and warrants have been excluded from the calculation of the primary
and fully diluted earnings per share in any period in which they would be
antidilutive.
7
<PAGE>
(4) Income Taxes
The provision for income taxes for the three and nine month periods ended
December 31, 1996 includes deferred tax benefits arising from the reduction
of the valuation allowance for deferred tax assets, as a result of
management's belief that it is more likely than not that such assets will
be realized in utilization of prior years' net operating loss
carryforwards. To the extent that net operating loss carryforwards may not
be available to offset state and local income taxes, provision for such
taxes has been established for the three and nine month periods ended
December 31, 1996.
(5) Recent Accounting Developments
In December, 1995, the Financial Accounting Standards Board issued
Statement No. 123, "Accounting for Stock-Based Compensation" ("SFAS 123"),
effective for years beginning after December 15, 1995. Under SFAS 123, the
Company may elect either a "fair value" based method or the current
"intrinsic value" based method of accounting prescribed by APB No. 25,
"Accounting for Stock Issued to Employees", for its stock-based
compensation arrangements. Under the "intrinsic value" based method, the
Company will be required to disclose in the footnotes to the consolidated
financial statements net income and earnings per share computed under the
"fair value" based method. The Company has elected to continue accounting
for stock-based compensation arrangements using the "intrinsic value" based
method; therefore, the adoption of SFAS 123 will not impact the Company's
results of operations or financial condition.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
On September 29, 1995, the Company completed the Merger whereby Inmark
Services, Inc., a New York corporation, was merged with and into the Company's
wholly-owned subsidiary, InMark Acquisition Corp., a Delaware corporation.
Following the Merger, InMark Acquisition Corp. changed its name to Inmark
Services, Inc. and the Company changed its name from Health Image Media, Inc. to
Inmark Enterprises, Inc. Inmark Services, Inc. is the successor to SPAR
Promotion & Marketing Services, Inc.("Spar"), a sales promotion and marketing
firm, as a result of a management led buy-out of that company's net assets and
business on April 3, 1995.
The Merger has been accounted for as a reverse purchase of the Company by
Inmark Services, Inc. and, for financial accounting and reporting purposes,
Inmark Services, Inc. is treated as the acquirer of the Company. Accordingly,
the following discussion compares the Company's consolidated results of
operations for the three and nine month periods ended December 31, 1996 to the
Company's consolidated results of operations for the three months ended December
31, 1995 and the Company's results of operations for the nine months ended
December 31, 1995, consisting of the results of operations solely of Inmark
Services, Inc. for the six month period ended September 30, 1995 and the results
of operations of the consolidated Company for the quarter ended December 31,
1995. The following information should be read together with the consolidated
financial statements and notes thereto included elsewhere herein.
Results of Operations
Sales. Sales for the quarter ended December 31, 1996 were $3,666,000
compared to sales of $3,624,000 for the quarter ended December 31, 1995, an
increase of $42,000 or 1.2%. Sales for the nine months ended December 31, 1996
were $13,468,000 compared to sales of $11,092,000 for the nine months ended
December 31, 1995, an increase of $2,376,000 or 21.4%. The marginal increase in
sales for the quarter ended December 31,
8
<PAGE>
1996, not withstanding the overall increase for the nine month period, is
consistent with the pattern of having a lesser amount of contract billings
scheduled for a December 31 ended quarter; whereas the increase in sales for the
nine month period ended December 31, 1996 was primarily the result of the
overall increase in progress billings related to contracts in place during the
period.
Direct Expenses. Direct expenses for the quarter ended December 31, 1996
were $2,407,000, or 65.7% of sales, compared to $2,571,000, or 70.9% of sales,
for the comparable prior year quarter. Direct expenses for the nine months ended
December 31, 1996 were $9,018,000, or 67.0% of sales, compared to $7,736,000, or
69.7% of sales, for the comparable prior year period. The decrease in the amount
of direct expenses for the quarter ended December 31, 1996 was primarily the
result of higher gross profit margin contract billings during the period
compared to the comparable prior year quarter. The increase in the amount of
direct expenses for the nine month period ended December 31, 1996 principally
relates to the comparative increase in contracted sales for the period, whereas
the decrease in direct expenses as a percentage of sales for the nine month
period ended December 31, 1996 was primarily the result of current client
programs which in the aggregate have a higher gross profit margin than the mix
of programs in place during the comparable prior year nine month period.
As a result of these changes in sales and direct expenses, gross profit for
both the quarter and nine month periods ended December 31, 1996 increased by
$205,000 and $1,094,000 compared to the prior year respective periods, thereby
amounting to $1,258,000 and $4,449,000 of gross profit for the quarter and nine
month periods ended December 31, 1996, respectively.
Operating Expenses. Operating expenses for the quarter ended December 31,
1996 decreased by $68,000 to $1,002,000 compared to $1,070,000 for the quarter
ended December 31, 1995. Operating expenses for the nine months ended December
31, 1996 decreased by $133,000 to $2,985,000 compared to $3,118,000 for the
comparable prior year nine month period. Operating expenses as a percentage of
sales were 27.3% and 29.5%, respectively, for the quarters ended December 31,
1996 and December 31, 1995 and 22.2% and 28.1% respectively, for the nine month
periods ended December 31, 1996 and 1995.
The decrease in operating expenses for both the quarter and nine month
period ended December 31, 1996 compared to the comparative quarter and nine
month period of 1995 resulted primarily from the net effect of (I) the
elimination of approximately $158,000 and $338,000 respectively, of
non-recurring acquisition, factoring agreement and merger expenses incurred in
the prior year quarter and nine month period, and (ii) a decrease in factoring
administrative and facility fees of approximately $83,000 and $278,000,
respectively during the quarter and nine month periods ended December 31, 1996;
offset for the quarter and nine month period ended December 31, 1996 by an
increase in (I) the total of salaries, related taxes and employee benefits of
approximately $137,000 and $302,000, respectively, (ii) selling and related
expenses, inclusive of sales commissions, of $5,000 and $170,000, respectively;
(iii) public company and related shareholder reporting expenses and fees to
directors, of approximately $5,000 and $50,000, respectively and (iv) other
expenses related to the overall increase in level of operations.
The increase in the total of salaries, related taxes and employee benefits
is primarily attributable to added personnel, a general increase in
non-executive salaries and the increased cost of medical insurance coverage
provided by the Company to its employees. The increase in selling and related
expenses is attributable to the increase in sales and in the amount budgeted for
marketing, advertising and promotion.
Other Income. Included in other income during the three and nine month
periods ended December 31, 1995 was a $150,000 payment received from Rx Returns,
Inc. in partial payment of amounts due to the Company in connection with a court
approved settlement of legal proceedings; whereas additional payments were not
received by the Company during the nine month period ended December 31, 1996.
Although the Company, pursuant to the settlement agreement, is entitled to
receive additional payments from Rx Returns, Inc., Rx Returns, Inc. currently is
in breach of its payment obligations, and there can be no assurance that the
Company will receive additional payments. Accordingly, the Company has not
recorded any additional amounts due.
9
<PAGE>
Interest Income/Expense. Net interest income was generated during the
quarter and nine month periods ended December 31, 1996 as a result of interest
expense decreases and earnings on cash equivalents. The interest expense
decreases from comparative prior year periods is the result of the reduced
balance and final payment on October 1, 1996 of the notes payable outstanding
during the quarter and nine month periods ended December 31, 1996. Interest
earned on cash equivalents during such periods amounted to $16,000 and $40,000,
respectively.
Provision For Income Taxes. For the three and nine month periods ended
December 31, 1996, the provision for income taxes includes deferred tax benefits
arising from the reduction of the valuation allowance for deferred tax assets
anticipated to be realized in utilization of prior years' net operating loss
carryforwards. For the respective periods, provision for state and local income
taxes has been made, at estimated effective annual rates, as net operating loss
carryforwards may not be allowable as an offset against such taxes. For the
three and nine month periods ended December 31, 1995, provisions for income
taxes had been made at the then estimated annual effective tax rates.
Net Income. As a result of the items discussed above, net income for the
quarter ended December 31, 1996 was $348,000 compared to net income of 129,000
for the comparable prior year quarter, and net income for the nine months ended
December 31, 1996 was $1,461,000 compared to net income of $242,000 for the nine
months ended December 31, 1995.
Liquidity and Capital Resources.
The Company's operating activities and other commitments until April 24,
1996 were funded with the sale of accounts receivable pursuant to a factoring
agreement and with cash provided from operations. Effective April 24, 1996, the
Company entered into a one year factoring agreement, which replaced its prior
factoring agreement, pursuant to which the Company may receive advances of up to
75% of those of its accounts receivable which the Company, at its discretion,
elects to sell to the factor. Total advances may not exceed $2,000,000 at any
given time during the term of the factoring agreement. In connection with the
factoring agreement, the Company paid a one time closing fee of $25,000 and pays
an administration fee and facility fee based upon the same terms upon which such
fees were paid under its earlier factoring agreement. In connection with the
termination of its earlier factoring agreement, the $250,000 cash collateral
deposit balance pledged to the factor was released together with the accrued
interest thereon.
For the nine months ended December 31, 1996, cash used in operations
amounted to $17,000 and purchases of fixed assets totaled $85,000. Cash provided
by the collection of receivable amounts due from the factor and by the release
of restricted cash by the factor totaled $829,000, and proceeds from the
exercise of warrants amounted to $281,000. On October 1, 1996, the Company paid
to Spar the entire $750,000 outstanding principal balance and accrued interest
on the notes issued to Spar in the Spar acquisition. As a net result of the
above, cash increased by $257,000. At December 31, 1996, the Company had cash of
$958,000 and working capital of $904,000 compared to cash of $701,000 and a
negative working capital of $846,000 at March 31, 1996. Stockholders' equity
increased by $1,742,000 during the nine months ended December 31, 1996 as a
result of the Company's net income and the proceeds received from the exercise
of outstanding warrants.
The Company believes its working capital position will continue to improve
as the Company continues to maintain profitable operations thereby negating the
need of external financing. Otherwise, the Company will require the continued
availability of funding under the factoring agreement or alternatively, will be
required to seek external financing, either through additional equity or debt
financing. There can be no assurance that the Company will be able to obtain
such additional financing, if required.
10
<PAGE>
PART II - OTHER INFORMATION
Items 1-4. Not Applicable
Item 5. Other Information.
Commencing December 17, 1996, the Company's Units, Common Stock and Class A and
Class B Warrants resumed trading on the Nasdaq SmallCap Market under the symbols
IMKEU, IMKE, IMKEW and IMKEZ, respectively. Previously, the Company's securities
had been traded in the over-the-counter market on the Electronic Bulletin Board.
The Company believes that the resumption of trading on the SmallCap Market will
enhance the liquidity and marketability of its securities.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
Exhibit No. Description of Exhibit
----------- ----------------------
27 Financial Data Schedule
(b) 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.
INMARK ENTERPRISES, INC.
Dated: February 4, 1997 By: /s/ John P. Benfield
-----------------------------------
John P. Benfield, President
(Principal Executive Officer)
and Director
Dated: February 4, 1997 By: /s/ Donald A. Bernard
-----------------------------------
Donald A. Bernard, Executive Vice
President and Chief Financial Officer
(Principal Accounting and Financial
Officer) and Director
12
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000886474
<NAME> INMARK ENTERPRISES, INC.
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-START> APR-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 957,833
<SECURITIES> 0
<RECEIVABLES> 1,613,291
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,393,610
<PP&E> 269,930
<DEPRECIATION> 101,945
<TOTAL-ASSETS> 6,244,798
<CURRENT-LIABILITIES> 2,489,518
<BONDS> 0
0
0
<COMMON> 2,881
<OTHER-SE> 3,752,399
<TOTAL-LIABILITY-AND-EQUITY> 6,244,798
<SALES> 13,467,749
<TOTAL-REVENUES> 13,467,749
<CGS> 9,018,482
<TOTAL-COSTS> 9,018,482
<OTHER-EXPENSES> 2,984,652
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 38,294
<INCOME-PRETAX> 1,466,518
<INCOME-TAX> 5,615
<INCOME-CONTINUING> 1,460,903
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,460,903
<EPS-PRIMARY> .09
<EPS-DILUTED> .09
</TABLE>
