SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------------------
FORM 10-Q
[x] QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
FOR THE TRANSITION PERIOD FROM _______ TO _______
Commission File Number 0-22710
- - --------------------------------------------------------------------------------
ATEC Group, Inc.
- - --------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 13-3673965
- - --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1952 Jericho Turnpike, East Northport, New York 11752
- - --------------------------------------------------------------------------------
(Address of principal executive offices) (zip code)
- - --------------------------------------------------------------------------------
Registrant's telephone number, including area code: (516) 462-2832
- - --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report.)
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 the close of business on March 31, 1996 there were 11,083,591 shares of
the Registrant's Common Stock outstanding.
<PAGE>
ATEC Group, Inc.
TABLE OF CONTENTS
- - -----------------
PART I Financial Information
Page
Item 1 - Financial Statements 1-5
Item 2 - Notes to Condensed Financial Statements 6-10
Item 3 - Managements Discussion & Analysis
of Financial Condition and Results
of Operations 11-12
PART II 0ther Information Required in Report
Item 6 - Other Information 13
Signature Page 14
<PAGE>
ATEC GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
UNAUDITED AUDITED
March 31, 1996 June 30, 1995
-------------- -------------
ASSETS
Current Assets
Cash $1,159,430 $441,462
Accounts receivable, net 3,551,284 3,129,688
Inventories 1,884,553 1,438,126
Current portion of note receivable-officer --- 16,218
Due from officers and related parties --- 65,791
Deferred taxes 15,213 15,213
Other current assets 581,807 310,336
------- -------
Total current assets 7,192,287 5,416,834
--------- ---------
Property and equipment,net 384,124 340,493
Goodwill, net 2,000,045 2,108,096
Note receivable - officer --- 94,691
Other assets 91,982 96,493
------ ------
$9,668,438 $8,056,607
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Revolving inventory line of credit $2,411,192 $1,668,371
Accounts payable 706,009 1,597,144
Accrued expenses 923,807 390,077
Deferred sales tax obligation 502,052 502,052
Due to related parties --- 25,000
Other current liabilities 1,318 206,754
----- -------
Total current liabilities 4,544,378 4,389,398
Notes payable - officers 397,244 396,246
------- -------
Total liabilities 4,941,622 4,785,644
Stockholders' equity
Preferred stocks 11,003,496 3,338,193
Common stock 141,138 128,321
Additional paid-in capital 4,085,300 2,736,566
Discount on preferred stock (9,046,100) (1,167,000)
Retained earnings (deficit) (1,457,018) (1,765,117)
---------- ----------
Total stockholders' equity 4,726,816 3,270,963
--------- ---------
$9,668,438 $8,056,607
========== ==========
<PAGE>
ATEC GROUP, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENT OF CASH FLOWS
NINE MONTHS ENDED MARCH 31,
1996 1995
==== ====
Net cash provided by (used in) operating ($353,012) ($681,851)
activities
Cash flows from investing activities:
Purchase of property and equipment (99,460) (76,466)
Additional acquisition costs --- (280,821)
---------- ---------
Net cash (used in) provided by investing activities (99,460) (357,287)
---------- ---------
Cash flows from financing activities:
Notes payable officers 998 ---
Sales of common stock (private placement) 1,074,751 ---
Shares issued to noteholders --- 415,500
Notes receivable - officer 94,691 ---
Long term borrowings --- 278,064
Short term borrowings --- 414,544
---------- -------
Net cash (used in) provided by financing 1,170,440 1,108,108
activities ---------- ---------
Net increase in cash 717,968 (111,030)
Cash and cash equivalents - Beginning of period 441,462 254,403
------- -------
Cash and cash equivalents - End of period 1,159,430 $143,373
========= ========
<PAGE>
ATEC GROUP, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31,
1996 1995
==== ====
Net Sales 16,671,644 $7,539,345
Cost of sales 15,522,129 6,499,725
---------- ---------
Gross profits 1,149,515 1,039,620
---------- ---------
Operating expenses
Selling and administrative 1,080,923 733,188
Amortization of goodwill-computer business 36,017 ---
---------- ---------
Total operating expenses 1,116,940 733,188
---------- ---------
Income from operations 32,575 306,432
---------- ---------
Other income (expense)
Charge-off of goodwill relating to
acquisition of Hillside --- (447,340)
Miscellaneous income --- (7,059)
Interest income 2,413 8,567
Interest expense (23,420) (44,743)
----------- ---------
Total other (expense) income (21,007) (490,575)
----------- ---------
Income (loss) before provision for income taxes 11,568 (184,143)
Provision for income taxes 5,083 141,827
----------- ---------
Net income (loss) $6,485 ($325,970)
========== ==========
Net earnings (loss) per share:
Primary $0.00 ($0.10)
========== ==========
Fully Diluted $0.00 ($0.10)
========== ==========
Weighted average number of share-primary 9,600,675 3,184,240
========== ==========
Weighted average number of share-fully 12,810,505 3,184,240
diluted ========== ==========
<PAGE>
ATEC GROUP, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS
NINE MONTHS ENDED MARCH 31,
1996 1995
==== ====
Net Sales $45,196,268 $17,498,148
Cost of sales 41,585,007 15,064,451
---------- ---------
Gross profits 3,611,261 2,433,697
---------- ---------
Operating expenses
Selling and administrative 2,965,989 1,671,567
Amortization of goodwill-computer business 108,051 ---
---------- ---------
Total operating expenses 3,074,040 1,671,567
---------- ---------
Income from operations 537,221 762,130
---------- ---------
Other income (expense)
Charge-off of goodwill relating to
acquisition of Hillside --- (1,255,840)
Miscellaneous income 12,199 52,941
Interest income 6,745 17,208
Interest expense (42,666) (47,509)
----------- ---------
Total other (expense) income (23,722) (1,233,200)
----------- ---------
Income (loss) before provision for income taxes 513,499 (471,070)
Provision for income taxes 205,400 314,862
----------- ---------
Net income (loss) $308,099 ($785,932)
========== ==========
Net earnings (loss) per share:
Primary $0.03 ($0.25)
========== ==========
Fully Diluted $0.02 ($0.25)
========== ==========
Weighted average number of share-primary 8,868,008 3,184,240
========== ==========
Weighted average number of share-fully 12,513,922 3,184,240
diluted ========== ==========
<PAGE>
ATEC GROUP, INC.
UNAUDITED CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
NINE MONTHS ENDED MARCH 31, 1996
<TABLE>
<CAPTION>
Common Value Series Value
Shares Common Preferred Preferred
Issued Stock Issued Stock
--------- --------- ---------- -----------
<S> <C> <C> <C> <C>
Balance at June 30, 1995 8,022,349 $128,321 608,736 $3,338,193
Shares issued for conversion of
Preferred Series F and G 344,119 3,441 (66,801) (334,000)
Shares issued for services 20,004 200 --- ---
Shares issued for conversion of
Preferred Series B 1,119,897 11,199 1,193,033 5,999,303
Shares issued for conversion of
Preferred Series I (400,000) (4,000) 390,000 2,000,000
Shares issued for satisfaction of debts 116,281 116 --- ---
Shares issued in a private placement 1,860,941 1,861 --- ---
Net Income for the Nine Months Ended
March 31, 1996 --- --- --- ---
Balance at March 31, 1996 11,083,591 $141,138 2,124,968 $11,003,496
========== ======== ========= ===========
</TABLE>
<TABLE>
<CAPTION>
Additional Discount on Retained Total
Paid-In Preferred Earnings Stockholders
Capital Stock (Deficit) Equity
---------- ------------ --------- ------------
<S> <C> <C> <C> <C>
Balance at June 30, 1995 $2,736,566 $1,167,000 ($1,765,117) $3,270,963
Shares issued for conversion of
Preferred Series F and G 213,659 (116,900) --- ---
Shares issued for services 7,798 --- --- 7,998
Shares issued for conversion of
Preferred Series B (10,497) 6,000,000 --- 5
Shares issued for conversion of
Preferred Series I --- 1,996,000 --- ---
Shares issued for satisfaction of debts 64,884 --- --- ---
Shares issued in a private placement 1,072,890 --- --- ---
Net Income for the Nine Months Ended
March 31, 1996 --- --- 308,099 308,099
Balance at March 31, 1996 $4,085,300 $9,046,100 ($1,457,018) $3,587,065
========== ========== =========== ==========
</TABLE>
<PAGE>
ATEC GROUP, INC. AND SUBSIDIARIES
FORM 10Q
QUARTER ENDED MARCH 31, 1996
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. Consolidated Financial Statements
Basis of Presentation
The accompanying interim unaudited consolidated financial statements
include the accounts of ATEC Group, Inc. and its wholly owned subsidiaries Sun
Computer and Software, Inc. (SCSI), Micro Computer Store, Inc. (MCS), American
Computer Systems Corp., Inc. (ACS), and Cony Computer Systems, Inc. (CONY) which
are hereafter referred to as (the "Company"). All intercompany accounts and
transactions have been eliminated in consolidation.
These financial statements have been prepared in accordance with generally
accepted accounting principles for interim financial information and with the
instructions to Form 10-Q. 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 management, such interim
statements reflect all adjustments (consisting of normal recurring accruals)
necessary to present fairly the financial position and the results of operations
and cash flows for the interim periods presented. The results of operations for
these interim periods are not necessarily indicative of the results to be
expected for the full year. These financial statements should be read in
conjunction with the audited consolidated financial statements and footnotes
included in the Company's report on Form 10-K dated October 1995, for the year
ended June 30, 1995.
2. Equity Securities
On September 9, 1994, the Company's Board of Directors authorized a reverse
stock split pursuant to which each ten (10) outstanding shares of common stock
and preferred stock were automatically converted into one (1) share of common
stock and/or preferred stock. Average number of shares outstanding and per share
amounts have been retroactively restated to reflect this reverse stock split.
<PAGE>
Note 2 - Equity Securities (continued)
Capital Stock
The Company's capital stock consists of the following:
<TABLE>
<CAPTION>
Amount
(including
Shares Shares to shares to
isued be issued be issued
Shares and for for
Authorized Outstanding Acquisition Acquisition
---------- ----------- ----------- -----------
December 31, 1995
- - -----------------
<S> <C> <C> <C> <C>
Preferred Stocks:
Series A cumulative convertible 29,233 29,231 --- $2,923
Series B convertible 30,900 5,736 --- 573
Series D convertible 400,000 300,000 100,000 2,000,000
Series E convertible 200,000 200,000 --- 1,000,000
Series H convertible 83,520 --- --- ---
Series I convertible 390,000 390,000 --- 2,000,000
Series J convertible 800,000 800,000 --- 2,000,000
Series K convertible 400,000 400,000 --- 4,000,000
------- ------- ---------
Total preferred 2,124,967 100,000 11,003,496
Common Stock 70,000,000 11,083,591 --- $141,136
</TABLE>
In March 1996, the comany sold 1,860,941 shares of common stock for net proceeds
of $1,072,890.
<PAGE>
3. Computation of Earnings Per Share
Earnings per share are based on the weighted average number of common shares
outstanding. Fully diluted earnings per share are based on the assumption that
all common stock equivalents were converted as of the end of each period.
4. Goodwill
Goodwill relating to the 1994 acquisition of the retail bedding operations is
being charged off over twelve months. Goodwill relating to the acquisition of
CONY and ACS is being amortized over a period of fifteen years.
5. Legal Proceedings
On March 4, 1994, the Company settled a class action suit commenced in the
United States District Court, Southern District of New York against it on
October 14, 1993. The suit alleged numerous claims against the Company including
allegations of material misstatements and/or omissions from the Company's
initial public offering prospectus dated February 1993 as well as improprieties
concerning the filing of certain registration statements under Form S-8. The
settlement of such action was approved by the District Court on
June 6, 1994. In full settlement of all claims made against the Company in the
class action suit, Hillside agreed to issue a total of 350,000 shares of Series
C Preferred stock and five year warrants to purchase an aggregate of 350,000
additional shares of common stock at $3.00 per share to the class action
claimants. Hillside also assigned all of its rights to the class action
claimants regarding claims against other defendants in the suit. Each ten shares
of Series C Preferred Stock will be convertible into one share of the Company's
common stock for a period of five years from its date of issuance. The Company
intends to issue such shares and warrants upon approval by the Company's
shareholders of a proposal to increase the number of authorized shares of the
Company at the Company's Annual Meeting scheduled for December 14, 1995.
In May 1994, Brown Raysman & Millstein ("Brown") commenced an action against the
Company with respect to outstanding fees for general corporate legal work
previously performed by Brown. The summons and complaint were filed in the New
York Supreme Court, New York County. The complaint set forth two causes of
action, one for breach of contract and one for unjust enrichment. During
September 1995, the parties agreed to settle this action by a Company's payment
to Brown of a total of $67,500 over an 18 month period in equal monthly
installments of $3,750 each.
<PAGE>
A third party action was commenced against Atlantic to Pacific Corp. ("AP")
d/b/a Hillside Bedding in the Supreme Court, Bronx County in 1993. The action
results from a claim by one of AP's former workers who was allegedly injured
while operating a forklift during the course of his employment. The worker
commenced an action against the Company which maintained the forklift, Mid
Hudson Clarklift ("MH"), seeking damages of $7,000,000 for the alleged failure
of such company to properly maintain and service the lift. MH instituted a third
party action against AP seeking judgment over and against AP for all or part of
any verdict or judgment which may be obtained against MH. The case is presently
in the discovery stages.
A breach of contract action, Anderson Street Realty Corp. d/b/a Anderson
Street Realty Company v. RHMB New Rochelle Leasing Corp. d/b/a a/k/a Hillside
Bedding and/or Atlantic to Pacific Bedding Corp. d/b/a Hillside Bedding, Index
No. 00360/93 is currently pending in the Supreme Court, Westchester County
relating to a store lease dispute. The claim is in an amount in excess of
$100,000 representing the amount of payments remaining under the lease. The
action is in the early stages of discovery.
An action entitled Steinbrock, Braff, Inc. T/A Kat-Nap Products v. Hillside
Bedding, Inc., Index No. 9980-94 was commenced in the Supreme Court, Kings
County for breach of contract involving an inventory dispute whereby plaintiff
demands $61,079.93. A motion filed by the Company to dismiss the action is
currently pending.
In 1990, an action entitled Bedding Discount Center, Inc., MJR Bedding co.,
Inc., Hapat Bedding Corp. v. Sid Patterson, Hillside Bedding Corporation and
Robert Matire was brought against the Company in Supreme Court, Nassau County,
Index No. 3720-90. The suit seeks damages in the amount of $1,000,000 for
alleged disclosure of certain trade secrets and confidential information to the
Company, together with punitive damages in the amount of $10,000,000 and similar
monetary damages based upon the allegations that defendants interfered with and
impaired plaintiffs contractual and business relations and the plaintiffs have
engaged in acts constituting a prima facie tort. The action has been nearly
inactive since commencement. The Company believes that the action has no merit.
There can be no assurances however that the Company will prevail in any such
action.
Prudential Insurance, Inc. has filed a claim against Hillside seeking
$23,000 for a premium claim. Previous arrangements for a settlement payment were
dishonored by the bank. As a result, Prudential is still seeking payment.
An action was commenced by Bestar Ltd. for breach of contract involving an
inventory dispute. As of June 30, 1995, there was a judgment entered against
Hillside amounting to approximately $32,000. An attempt to vacate such judgment
was made without success.
<PAGE>
Management has estimated that the probable loss relating to the aforementioned
cases will total approximately $287,000, an amount which has been previously
recorded.
6. At the annual meeting of shareholders' held on December 14, 1995, the
company's name was changed from Hillside Bedding, Inc. to Atec Group, Inc.
7. On December 22, 1995, the company entered into a letter of intent to
acquire the computer operations of Technical Services Group, Inc. On April 4,
1996, the company entered into a letter of intent to acquire 100% of the issued
and outstanding capital stock of Innovative Business Micros, Inc.
("Innovative"). Innovative's principal shareholders are Rajnish Rametra, Ashok
Rametra and Surinder Rametra. Messrs. Ashok and Surinder Rametra are officers,
directors and principal shareholders of the Company. Rajnish is the brother of
Surinder and Ashok.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Atec Group, Inc. and Subsidiaries
Background
Atec Group, Inc. through its wholly owned subsidiaries Sun Computer and
Software, Inc. (SCSI), Micro Computer Store, Inc. (MCS), American Computer
Systems Corp., Inc. (ACS), and CONY Computer Systems, Inc. (CONY) is principally
engaged in the sale of computer hardware, software, computer support and
technical services. The computer hardware and software related products are sold
primarily to businesses, professionals, governmental units and educational
institutions. In addition, the Company provides it customers with a full
spectrum of computer services and technical support including designing and
installing computer systems, training system users and maintaining and repairing
hardware and software products. Additionally, the Company sells hardware and
software products to the consumer market through its store facilities in Albany,
New York, Long Island, New York, Norwalk, Connecticut and New York City.
RESULTS OF OPERATIONS
Nine Months
1996 compared to 1995
- - ---------------------
In February and March 1995, the Company acquired two additional companies, ACS
and CONY engaged in the computer products and services business. As a result of
the acquisitions and internal growth, the Company's revenues for the nine months
increased to $45.2 million from $17.5 million for the prior year. Revenues have
almost tripled from the previous year. Revenues are generated by the Company's
sales of computer hardware and software, and related support services. Gross
margin for the six months increased to $3.6 million for 1996 from $2.4 million
for 1995, a 50% increase due to increased revenues. Gross margin as a percentage
of revenues for the nine months were 7.9% as compared to 13.9% for the prior
year. The decrease in gross margin percentage is primarily due to lower margins
of the acquired companies and a 2.5% decline in the third quarter. The third
quarter decline of approximately $300,000 arose from weather related delivery
delays and significant decrease in retail business resulting in lower than
normal margins. These margins are expected to increase as these companies
attempt to increase their market share in more profitable sectors of the
business such as integration, hardware service/maintenance, networkinq, and
training.
Operating expenses exclusive of amortization of intangible assets increased to
$3.0 million as compared to $1.7 million for the prior year. The increase in
operating expenses are related to expanded business operations through the 1995
acquisitions of ACS and CONY and the opening of a sales office in New Jersey in
the third quarter.
<PAGE>
Amortization of intangible assets increased to $108,000 for the nine months from
$0 in the comparable 1995 period. Other expenses decreased $1.2 million
primarily due to the write-off over twelve months of all costs associated with
the 1994 reorganization and the satisfaction of bedding related debts of the
former bedding operations.
The provision for income taxes was $205,400 as compared to $314,862 for the
comparable period in 1995. The provision for income taxes in 1995 was greater
than the federal and state combined statutory rate of 40% primarily due to the
effect of non deductible charges associated with the charge-off of Hillside's
goodwill.
As a result of the above, the Company's net income increased to $308,099 for the
nine months from a loss of $785,932 in the comparable 1995 period. For the
quarter ended March 31, 1996, net income increased to $6,485 from a loss of
$325,970 in the prior year. The primary reason for the 1995 loss resulted from
costs associated with the write-off of various items related to the Company's
former bedding business, the 1994 acquisition, and the reorganization of the
Company's business. For the nine months ended March 31, 1996, net income per
share was $.03 compared to a loss of $.25 in the comparable period of the prior
year. Primary and fully diluted average shares outstanding were 8,868,008 and
12,513,200 for the third quarter.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash position was $1,159,430 at March 31, 1996, an increase of
$717,968 as compared to June 30, 1995. The Company's working capital at March
31, 1996 was $2,856,305 as compared to a working capital of $1,027,436 at June
30, 1995. The increase in cash and working capital resulted from the sale of
1,860,941 shares of common stock for net proceeds of $1,072,890. Net cash used
by operating activities was $353,012.
Cash used for investing activities totaled $99,460 to purchase property and
equipment.
To accommodate the Company's financial needs for inventory financing, Deutsche
Financial Service (formally ITT Commercial Finance) has granted a credit line in
the amount of $3.25 million. At March 31, 1996, indebtedness of the Company to
Deutsche Financial was $2.4 million, or an increase of $742,821 compared at June
30, 1995. Substantially, all of subsidiary company tangible and intangible
assets are pledged as collateral for this facility.
<PAGE>
Atec Group, Inc. and Subsidiaries
Other Information
December 31, 1995
PART II
Item 6. Exhibits and Reports on form 8-k
a) Exhibits - none
b) Reports on Form 8-k: None
<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.
ATEC GROUP, INC.
(Registrant)
Dated: May 13, 1996
By: Ashok Rametra
---------------------------------------
Ashok Rametra, in the capacity of both
Vice President and Chief Financial Officer
<PAGE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1995
<PERIOD-START> JUL-01-1994
<PERIOD-END> MAR-31-1995
<CASH> 441,462
<SECURITIES> 0
<RECEIVABLES> 3,220,988
<ALLOWANCES> 91,300
<INVENTORY> 1,438,126
<CURRENT-ASSETS> 5,416,834
<PP&E> 571,802
<DEPRECIATION> 231,309
<TOTAL-ASSETS> 8,056,607
<CURRENT-LIABILITIES> 4,389,398
<BONDS> 0
0
2,171,193
<COMMON> 128,321
<OTHER-SE> 971,449
<TOTAL-LIABILITY-AND-EQUITY> 8,056,607
<SALES> 17,498,148
<TOTAL-REVENUES> 17,498,148
<CGS> 15,064,451
<TOTAL-COSTS> 16,736,018
<OTHER-EXPENSES> 1,233,200
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (471,070)
<INCOME-TAX> 314,862
<INCOME-CONTINUING> (785,932)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (785,932)
<EPS-PRIMARY> (.25)
<EPS-DILUTED> (.25)
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1995
<PERIOD-START> JUL-01-1994
<PERIOD-END> MAR-31-1995
<CASH> 1,159,430
<SECURITIES> 0
<RECEIVABLES> 3,642,584
<ALLOWANCES> 91,300
<INVENTORY> 1,884,553
<CURRENT-ASSETS> 7,192,287
<PP&E> 406,948
<DEPRECIATION> 22,824
<TOTAL-ASSETS> 9,668,438
<CURRENT-LIABILITIES> 4,544,378
<BONDS> 0
0
1,957,396
<COMMON> 141,138
<OTHER-SE> 2,628,282
<TOTAL-LIABILITY-AND-EQUITY> 9,668,438
<SALES> 45,196,268
<TOTAL-REVENUES> 45,196,268
<CGS> 41,585,007
<TOTAL-COSTS> 44,659,047
<OTHER-EXPENSES> 23,722
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 531,499
<INCOME-TAX> 205,400
<INCOME-CONTINUING> 308,099
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 308,099
<EPS-PRIMARY> .03
<EPS-DILUTED> .02
</TABLE>
