<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------------
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended March 31, 2000 Commission file number 001-11784
THE NETPLEX GROUP, INC.
-----------------------
(Exact name of registrant as specified in its charter)
NEW YORK 11-2824578
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1800 Robert Fulton Drive, Suite 250, Reston, Virginia 20191-4346
----------------------------------------------------------------
(Address of principal executive offices and zip code)
(703) 716-4777
----------------------------------------------------
(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 April 28, 2000, 17,885,199 shares of the issuer's Common Stock were
outstanding.
1
<PAGE>
THE NETPLEX GROUP, INC.
FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 2000
INDEX
<TABLE>
<S> <C>
Part I. Financial information
Item 1. Financial statements and supplementary data
a) Condensed Consolidated Balance Sheets as of
March 31, 2000 and December 31, 1999...................................... 3
b) Condensed Consolidated Statements of Operations for
the Three Months ended March 31, 2000 and 1999............................ 4
c) Condensed Consolidated Statements of Cash Flows for
the Three Months ended March 31, 2000 and 1999............................ 5
d) Notes to Condensed Consolidated Financial Statements...................... 6
Item 2. Management's Discussion and Analysis of Financial Condition and Results of
Operations................................................................... 9
Item 3. Quantitative and Qualitative Disclosures About Market Risk................... 12
Part II Other information............................................................ 12
Item 6. Exhibits and Reports on Form 8-K............................................. 12
Signatures................................................................... 13
</TABLE>
2
<PAGE>
Part I Financial Information
THE NETPLEX GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(Unaudited)
March 31, December 31,
Assets 2000 1999
----------- ------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 13,289,467 $ 4,220,148
Accounts receivable, net of allowance for doubtful
accounts of $462,000 and $342,000, respectively 11,870,802 12,513,823
Prepaid expenses and other current assets 223,727 923,762
------------ ------------
Total current assets 25,383,996 17,657,733
Property and equipment, net 2,108,350 1,891,084
Other assets 595,384 775,290
Goodwill and other intangible assets, net 5,745,839 6,092,610
------------ ------------
Total assets $ 33,833,569 $ 26,416,717
============ ============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 2,230,217 $ 3,294,404
Line of credit 3,437,000 5,126,245
Accrued expenses and other current liabilities 10,522,129 9,305,229
Capital lease obligation, current portion 75,812 107,890
Deferred revenues 558,218 193,263
------------ ------------
Total current liabilities 16,823,376 18,027,031
Insurance premium due 425,000 850,000
Capital lease obligations, net of current portion 195,504 195,504
------------ ------------
Total liabilities 17,443,880 19,072,535
Commitments and contingencies
Minority interest in subsidiary 357,299 481,877
------------ ------------
Stockholders' equity:
Preferred Stock:
Class A Cumulative, $.01 par value, liquidation preference of $4.00
per share; 2,000,000 shares authorized; 80,597 and 109,961 shares
issued and outstanding at March 31, 2000 and December 31, 1999,
respectively 805 1,099
Class C Cumulative, $.01 par value; liquidation preference of $3.50
per share; 2,500,000 shares authorized; 1,500,000 shares issued and
outstanding at March 31, 2000 and December 31, 1999, respectively 15,000 15,000
Class D Cumulative, $.01 par value; 15,000 shares authorized; 10,000
shares issued and outstanding at March 31, 2000 100 -
Common Stock: $.001 par value, 40,000,000 shares authorized;
17,812,066 and 16,137,250 shares issued and outstanding at March 31,
2000 and December 31, 1999, respectively 17,812 16,137
Additional paid in capital 34,721,180 21,762,418
Accumulated deficit (18,722,507) (14,932,347)
------------ ------------
Total stockholders' equity 16,032,390 6,862,307
------------ ------------
Total liabilities and stockholders' equity $ 33,833,569 $ 26,416,717
============ ============
</TABLE>
See notes to condensed consolidated statements
3
<PAGE>
THE NETPLEX GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended
----------------------------
March 31
----------------------------
2000 1999
---- ----
(Unaudited)
<S> <C> <C>
Revenues
Services $16,806,469 $16,530,465
Product 3,640,561 6,163,734
----------- -----------
20,447,030 22,694,199
Cost of revenues
Services 14,802,487 13,329,091
Product 2,174,343 5,071,680
----------- -----------
16,976,830 18,400,771
----------- -----------
Gross profit 3,470,200 4,293,428
Selling, general and administrative expenses 7,337,136 4,037,697
----------- -----------
Operating income (loss) (3,866,936) 255,731
Interest expense, net 47,800 132,810
----------- -----------
Income(loss) before income taxes (3,914,736) 122,921
Provision for income taxes - -
----------- -----------
Income (loss) before minority interest (3,914,736) 122,921
Minority interest (124,578) -
----------- -----------
Net income (loss) (3,790,158) 122,921
Preferred Stock dividend (153,031) (135,286)
----------- -----------
Loss applicable to common shareholders $(3,943,189) $ (12,365)
=========== ===========
Basic and diluted loss per common share $ (0.23) $ 0.00
=========== ===========
Weighted average common shares outstanding:
Basic and diluted 17,223,798 10,676,327
=========== ===========
</TABLE>
See notes to condensed consolidated statements
4
<PAGE>
THE NETPLEX GROUP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Three Months Ended
----------------------------
March 31
----------------------------
2000 1999
---- ----
(Unaudited)
<S> <C> <C>
Net cash used by operating activities $(1,642,538) $ (318,234)
----------- ----------
Investing activities:
Purchases of property and equipment (213,672) (122,824)
Capitalized software development (240,060) -
Net Cash paid in acquisitions 15,623 (207,900)
Other, net 170,807 -
----------- ----------
Net cash used by investing activities (267,302) (330,724)
----------- ----------
Financing activities:
Proceeds from the exercise of stock options and warrants 2,167,026 799,269
Proceeds from the issuance of Preferred Stock, net of issuance costs 9,485,211 -
Proceed from sale of warrants 1,312,000 -
Issuance of note payable - 800,000
Line of credit advances, net (1,689,245) 356,612
Payments of notes payable (425,000) (300,000)
Payment of Preferred Stock dividends (3,993) (304,504)
Repayment of employee note receivable 165,239 -
Principal payments on capital lease obligations (32,079) -
----------- ----------
Net cash provided by financing activities 10,979,159 1,351,377
----------- ----------
Increase in cash and cash equivalents 9,069,319 702,419
Cash and cash equivalents at beginning of period 4,220,148 870,465
----------- ----------
Cash and cash equivalents at end of period $13,289,467 $1,572,884
========== ==========
Supplemental information:
Cash paid during the period for:
Interest $ 120,608 $ 113,406
========== ==========
Income taxes - -
========== ==========
</TABLE>
See notes to condensed consolidated statements
5
<PAGE>
THE NETPLEX GROUP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
For the Three Months Ended March 31, 2000 and 1999
(Unaudited)
The accompanying unaudited condensed consolidated financial statements of The
Netplex Group, Inc. and Subsidiaries ("Netplex" or the "Company") have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Rule 10-01 of
Regulation S-X. Accordingly, certain information and note disclosures normally
included in the financial statements presented in accordance with generally
accepted accounting principles have been condensed or omitted. The year-end
condensed balance sheet data was derived from audited financial statements, but
does not include all disclosures required by generally accepted accounting
principles. The Company believes the disclosures made are adequate to make the
information presented consistent with past practices. However, these condensed
consolidated financial statements should be read in conjunction with the
consolidated financial statements and notes thereto included in the Company's
annual report on Form 10-K for the fiscal year ended December 31, 1999.
In the opinion of the Company, the accompanying condensed consolidated financial
statements reflect all adjustments and reclassifications (which include only
normal recurring adjustments) necessary to present fairly the financial position
of the Company as of March 31, 2000 and December 31, 1999 and the results of its
operations and its cash flows for the three months ended March 31, 2000 and
1999. Interim results are not necessarily indicative of the results that may be
expected for the full year.
Basis of Presentation
The accompanying financial statements include the accounts of The Netplex Group,
Inc. and its wholly owned subsidiaries. All acquisitions by the Company are
accounted for as purchases. Additionally, the operating results of all
acquisitions have been included in the consolidated financial statements from
their effective dates of acquisition. All material intercompany transactions
were eliminated in consolidation.
Earnings (loss) per share
Basic net income (loss) per share is calculated using the weighted average
number of common shares outstanding during the relevant periods. Diluted net
income (loss) per common share is calculated using the weighted average number
of common shares and dilutive potential common shares outstanding during the
relevant periods. For the three month ended March 31, 2000 and 1999, the assumed
exercise of the Company's outstanding stock options and warrants, Convertible
Preferred Stock and contingently issuable shares in connection with certain
business combinations would be anti-dilutive. The number of shares used for the
diluted calculation, including common stock equivalents, would be 22,051,688 and
16,980,984 at March 31, 2000 and 1999, respectively.
Sale of Equity Securities
In March 2000, the Company sold 10,000 shares of convertible preferred stock
that resulted in net proceeds to the Company of $9.5 million and issued prepaid
warrants that resulted in net proceeds to the Company of $1.3 million.
6
<PAGE>
The conversion ratio of the preferred to common will be established based on the
weighted average actual trades during the thirty trading days, which ends May
16, 2000, following the closing.
Segment Information
In accordance with SFAS No. 131, "Disclosures about Segments of an Enterprise
and Related Information," the Company's reportable segments are strategic
business units that offer different products and services to different
industries through-out the United States.
The Company's reportable segments are as follows:
-- e-Information Systems (e-Info)--provides professional services that
constitute the strategic and creative aspects of Netplex's e-solutions, as
well as complete Internet-based application development and Retail
Industry-focused consulting and integration services.
-- e-Infrastructure Services (e-Infra)--provides information security,
performance management, contingency planning, and network management
services that ensure the long-term viability of Netplex's e-solutions, as
well as other aspects of our customers' businesses.
-- Contractor's Resources (CR)-- provides business infrastructure and advisory
services for its membership of independent contractors, which allow members
to maximize the freedom and wealth potential of the independent lifestyle
while enjoying the benefits associated with full-time employment.
In 1999, the Company restructured its segments by combining all operations not
related to Contractor's Resources into a single profit and loss center,
e-Infrastructure services, except for its operations related to the acquisition
of AIG that now form the e-Information Services segment. The Company also
changed its components of cost of services to include all labor related to
direct labor employees and their attendant fringe benefits. Prior to 1999, non-
billable direct labor related to idle time, training and other activities was
included in operating expenses. These changes were made to permit a more direct
reflection upon gross profits of the impact of increasing or decreasing labor
productivity. All prior year's cost of services and operating expenses have been
restated to reflect these changes.
The Company's accounting policies for these segments are the same as those
described in the summary of Significant Accounting Policies, except that income
tax expense is not allocated to each segment. In addition, the Company evaluates
the performance of its segments and allocates resources based on gross margin,
and earnings before interest, taxes, depreciation and amortization ("EBITDA").
Inter-segment revenues are immaterial.
The table below presents information about segments used by the chief operating
decision-maker of Netplex as of and for the three months ended March 31, 2000
and 1999:
<TABLE>
<CAPTION>
Segment
e-Info e-Infra CR Total
------ ------- -- -------
<S> <C> <C> <C> <C>
2000:
Revenues $2,254 $ 8,258 $ 9,935 $20,447
Gross profit 717 2,403 350 3,470
EBITDA (376) 312 (1,217) (1,281)
Total assets 8,193 7,172 10,526 25,891
===================================================================
1999:
Revenues $2,209 $11,496 $ 8,990 $22,695
Gross profit 1,172 2,817 305 4,294
EBITDA 589 1,006 46 1,641
Total assets 8,503 10,538 5,297 24,338
===================================================================
</TABLE>
Reconciliation of Segment Profit or (Loss) to Income (Loss) from Operations:
<TABLE>
<CAPTION>
2000 1999
---- ----
<S> <C> <C>
Segment EBITDA $(1,281) $1,641
Unallocated corporate expenses (2,033) (947)
Depreciation and amortization (428) (438)
Interest expense, net (48) (133)
Tax expense - -
------- ------
(Loss) income from operations $(3,790) $ 123
======= ======
</TABLE>
7
<PAGE>
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following table sets forth the revenue, gross profit, expenses, and income
of each of the business areas for the three months ended March 31, 2000 and
1999:
Consolidated Operating Results by Segment (amounts in 000's)
<TABLE>
<CAPTION>
2000 1999
---- ----
<S> <C> <C>
Operating revenues
e-Information Services $ 2,254 $ 2,209
------- -------
e-Infrastructure Services 4,617 5,333
e-Infrastructure Product Resales 3,641 6,163
------- -------
e-Infrastructure e-Infrastructure 8,258 11,496
------- -------
e-Business Solutions 10,512 13,705
Contractor's Resources 9,935 8,990
------- -------
Operating revenues 20,447 22,695
------- -------
Gross profit
e-Information Services 717 1,172
------- -------
e-Infrastructure Services 937 1,726
e-Infrastructure Product Resales 1,466 1,091
------- -------
e-infrastructure 2,403 2,817
------- -------
e-Business Solutions 3,120 3,989
Contractor's Resources 350 305
------- -------
Gross profit 3,470 4,294
------- -------
Gross profit percentage
e-Information Services 31.8% 53.1%
------- -------
e-Infrastructure Services 20.3% 32.4%
e-Infrastructure Product Resales 40.3% 17.7%
------- -------
e-infrastructure 29.1% 24.5%
------- -------
e-Business Solutions 29.7% 29.1%
Contractor's Resources 3.7% 3.5%
------- -------
Gross profit percentage 17.0% 18.9%
------- -------
Operating Expenses
e-Information Services 1,093 583
e-Infrastructure Services and Product Resales 2,091 1,811
------- -------
e-Business Solutions 3,184 2,394
Contractor's Resources 1,567 259
------- -------
Operating expenses 4,751 2,653
------- -------
Operating income
e-Information Services (376) 589
e-Infrastructure Services and Product Resales 312 1,006
------- -------
e-Business Solutions (64) 1,595
Contractor's Resources (1,217) 46
------- -------
Operating income (1,281) 1,641
Corporate Expenses 2,033 947
------- -------
EBITDA (3,314) 694
Interest, taxes, depreciation,
amortization and minority interest 476 571
------- -------
Net operating income (loss) $(3,790) $ 123
======= =======
</TABLE>
8
<PAGE>
Results of Operations:
Three months ended March 31, 2000 compared to the three months ended March 31,
1999:
Revenue for the three months ended March 31, 2000 declined $2.2 million or 10%
to $20.4 million, compared to $22.7 million for the same period in 1999. This
decline includes a $3.2 million or 23% decrease in e-Business Solutions revenue
made up primarily of a $2.5 million or 41% decrease in e-Infrastructure Product
Resales and a related decrease in e-Infrastructure Services of $0.7 million or
13%. This decrease is reflective of abnormally high product resales in 1999
coupled with the effect of the Company's planned move of product resales to
third parties to decrease the cost of financing the sales and to focus efforts
more on services offerings. This decline was offset by a $0.9 million or 11%
increase in Contractor's Resources revenue.
Gross profit for the three months ended March 31, 2000 declined $0.8 million or
19% to $3.4 million as compared to $4.3 million for the same period of 1999.
This decline includes decreases in e-Information Services and e-Infrastructure
gross profits of $455,000 or 39% and $413,000 or 15%, respectively. The decrease
in e-Infrastructure was comprised of a $789,000 or 46% decrease in
e-Infrastructure Services gross profit offset by a $375,000 or 34% increase in
gross profits of e-Infrastructure Product Resales. The e-Business Solutions
decline was offset by a Contractor's Resources gross profit increase of $45,000
or 15%.
Gross profit margins decreased to 17% for the three months ended March 31, 2000
from 19% in the same period of 1999. E-Information Services gross profit margins
decreased from 53% in 1999 to 32% in 2000. E-Infrastructure gross profit margins
increased from 25% in 1999 to 30% in 2000. This consisted of an increase in
e-Infrastructure Product Resales gross profit margins from 18% in 1999 to 40% in
2000 offset by a decrease in e-Infrastructure Services gross profit margins from
32% in 1999 to 20% in 2000. Contractor's Resources gross profit margins
increased slightly from 3.5% in 1999 to 3.7% in 2000.
Segment operating expenses for the three months ended March 31, 2000 increased
$2.1 million or 79% to $4.8 million from $2.7 million for the same period of
1999. This increase includes increases in e-Information Services,
e-Infrastructure and Contractor's Resources of $0.5 million or 88%, $0.3 million
or 15%, and $1.3 million or 505%, respectively.
Segment loss for the three months ended March 31, 2000 was $1.3 million as
compared to segment income of $1.6 million for the same period of 1999, a
decline of $2.9 million. This decline includes decreases in segment profits from
e-Information, e-Infrastructure and Contractor's Resources of $1.0 million or
164%, $0.7 million or 69%, and $1.3 million or 2,745%, respectively.
Corporate expense for the three months ended March 31, 2000 increased $1.1
million or 115% to $2.0 million from $0.9 million in the same period of 1999.
This increase reflects an additional investment in corporate development
capability to support the growth of operations and the integration of
acquisitions.
Earnings before interest, income taxes, depreciation and amortization ("EBITDA")
for the three months ended March 31, 2000 was a loss of $3.3 million as compared
to earnings of $694,000 for the same period of 1999, a decline in EBITDA of $4.0
million or 578%. The components of this decline are discussed above.
Depreciation, amortization and interest expense for the three months ended March
31, 2000 decreased $96,000 to $475,000 from $571,000 for the same period of
1999. This decrease is principally due to decreased amortization resulting from
the write-off of goodwill and intangibles of the PSS Group, Inc. in 1999.
No provision for income taxes was required for the three months ended March 31,
2000 due to the generation of net losses. No provision for income taxes was
required for the three months ended March 31, 1999 due to utilization of net
operating loss carryforwards generated in previous years.
Net loss for the three months ended March 31, 2000 was $3.8 million compared to
net income of $123,000 in the same period of 1999 a decrease of $3.9 million.
The components of this decrease are discussed above.
Liquidity and Capital Resources:
At March 31, 2000, the Company had cash and cash equivalents of $13.3 million.
The Company had $3.4 million outstanding on its line of credit facilities.
The following increased the Company's liquidity and capital resources:
For the three months ended March 31, 2000 the Company's cash increased by $9
million. This increase is comprised of cash used in operating activities of $1.6
million, cash used in investing activities of $0.2 million and cash provided by
financing activities of $11.0 million.
9
<PAGE>
In March 2000, the Company issued prepaid warrants that resulted in net proceeds
to the Company of $1.3 million and issued convertible preferred stock that
resulted in net proceeds to the Company of $9.5 million.
The Company has a line of credit agreement with a bank that expires on May 31,
2000. Under the agreement, the Company may borrow 80% of eligible accounts
receivable (as defined in the agreement) up to $6,000,000. Amounts borrowed bear
interest at the bank's prime rate plus 3/4%. Outstanding advances were
$3,437,000 at March 31, 2000. The loan is secured by substantially all of the
Company's tangible and intangible assets. The Company is required to meet
certain financial and other covenants. As of December 31, 1999, the Company was
not in compliance with the covenant that requires it to maintain tangible net
assets of $900,000. The bank was notified of the violation but did not issue a
notice of default. The noncompliance with the covenant was cured by the influx
of cash in January and February 2000 from the exercise of options and warrants
and the Company's tangible net asset position was further strengthened by the
sale of equity securities in March 2000.
Capital expenditures for the three months ended March 31, 1999 were $453,732.
Dividends of $3,993 were paid on the Company's Class A and Class C Cumulative
Preferred Stock during the three months ended March 31, 2000.
At March 31, 2000, accrued dividends on the Company's Class A and Class C
Cumulative Preferred Stock was $57,500.
During the three months ended March 31, 2000, 29,364 shares of Class A
Cumulative Preferred Stock were converted into an equal number of shares of
Common Stock. The Class C shares are not eligible for conversion to Common Stock
until September 2003. The conversions of the Class A Cumulative Preferred Stock
during the three months ended March 31, 2000 will reduce the Company's
obligation for dividend payments by $1,835 per quarter ($7,341 annually).
Stock options and warrants to purchase 1,645,452 shares of the Company's Common
Stock were exercised during the three months ended March 31, 2000, generating
cash of $2,167,000 for the Company.
Acquisitions and future plans.
Based on the Company's current operating plan, the Company believes that the
cash generated from operating activities, coupled with borrowings on its line of
credit facility, will be sufficient to meet the anticipated needs for working
capital and capital expenditure for at least the next 12 months. Thereafter, if
cash generated from operations is insufficient to satisfy the Company's
liquidity needs, the Company may seek to obtain additional capacity on its line
of credit, sell convertible debt securities or sell additional equity
securities. However, no assurances can be given that any such addition financing
sources will be available on acceptable terms or at all. The sale of convertible
debt securities or additional equity securities could result in additional
dilution to the Company's stockholders. The Company has no current plans,
agreements, commitments, and is not engaged in any negotiations with respect to
such transactions.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
The Company does not believe that there is any material market risk exposure
with respect to derivative or other financial instruments that would require
disclosure under this item. The Company's obligations under its line of credit
are short-term in nature with an interest rate that approximates the market
rate.
Part II Other Information
Item 6 Exhibits and Reports on Form 8-K
(a) Exhibits
10 Revolving Credit Line Agreement
27 Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended March 31, 2000.
10
<PAGE>
Signatures
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE NETPLEX GROUP, INC.
(Registrant)
DATE: May 15, 2000 /s/ Gene Zaino
------------ -----------------------------
Gene Zaino
Chairman of the Board
(Principal Executive Officer)
DATE: May 15, 2000 /s/ Walton E. Bell, III
------------ -----------------------------
Walton E. Bell, III
Vice President and Chief
Financial Officer (Principal
Financial Officer)
DATE: May 15, 2000 /s/ Peter Russo
------------ -----------------------------
Peter Russo
Executive Vice President and Chief
Accounting Officer (Principal
Accounting Officer)
11
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S FINANCIAL STATEMENTS CONTAINED IN THE COMPANY'S 10-Q/A FOR THE PERIOD
ENDED MARCH 31, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-END> MAR-31-2000
<CASH> 13,289,467
<SECURITIES> 0
<RECEIVABLES> 12,332,802
<ALLOWANCES> (462,000)
<INVENTORY> 0
<CURRENT-ASSETS> 25,383,996
<PP&E> 4,932,110
<DEPRECIATION> (2,823,760)
<TOTAL-ASSETS> 33,833,569
<CURRENT-LIABILITIES> (16,823,376)
<BONDS> 0
0
(15,905)
<COMMON> (17,812)
<OTHER-SE> (15,998,673)
<TOTAL-LIABILITY-AND-EQUITY> (33,833,569)
<SALES> (20,447,030)
<TOTAL-REVENUES> (20,447,030)
<CGS> 16,976,830
<TOTAL-COSTS> 7,337,136
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 47,800
<INCOME-PRETAX> 3,790,158
<INCOME-TAX> 0
<INCOME-CONTINUING> 3,790,158
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,790,158
<EPS-BASIC> 0.23
<EPS-DILUTED> 0.23
</TABLE>
