SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
( x )QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES AND EXCHANGE ACT OF 1934
For the Quarterly period Ended:
December 31, 1999
Commission File Number 1-12506
LUCILLE FARMS, INC.
(Exact Name of Registrant as Specified in its Charter)
Delaware 13-2963923
(State or other Jurisdiction I.R.S. Employer
Of Incorporation Identification No.)
150 River Road,P.O. Box 517 07045
Montville, New Jersey (Zip Code)
(Address of Principal
Executive Offices)
Registrant's Telephone Number, Including Area Code)
(973) 334-6030
Former name, former address and former fiscal year,
if changed since last report. N/A
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___
The number of shares of Registrant's common stock, par
value $.001 per share, outstanding as of February 8,
2000 was 2,971,342.
Item 1. Financial Statements
LUCILLE FARMS, INC.
CONSOLIDATED BALANCE SHEET
ASSETS
DECEMBER 31, 1999 MARCH 31, 1999
(UNAUDITED)
CURRENT ASSETS:
Cash and cash equivalents $ 477,000 $1,924,000
Accounts receivable, net of 2,674,000 3,618,000
allowances of $188,000 at
December 31, 1999 and
$132,000 at March 31, 1999
Inventories 1,724,000 1,785,000
Deferred income taxes 45,000 67,000
Prepaid expenses and other
current assets 98,000 143,000
Total Current Assets 5,018,000 7,537,000
PROPERTY, PLANT AND
EQUIPMENT, NET 8,190,000 7,591,000
OTHER ASSETS:
Due from officers 141,000 139,000
Deferred income taxes 443,000 469,000
Deferred loan costs, net 260,000 268,000
Other 116,000 152,000
Total Other Assets 960,000 1,028,000
TOTAL ASSETS $14,168,000 $16,156,000
see notes to consolidated financial statements
2
LUCILLE FARMS, INC.
CONSOLIDATED BALANCE SHEET
LIABILITIES AND STOCKHOLDER'S EQUITY
DECEMBER 31, 1999 MARCH 31, 1999
CURRENT LIABILTIES:
Accounts payable $ 2,998,000 $4,323,000
Current portion of
long-term debt 92,000 97,000
Accrued expenses 269,000 371,000
Total Current
Liabilities 3,359,000 4,791,000
LONG TERM LIABILITIES
Long-term debt 4,849,000 4,863,000
Revolving credit line 1,718,000 3,300,000
Deferred income taxes 488,000 536,000
Total Long-term
Liabilities 7,055,000 8,699,000
TOTAL LIABILITIES 10,414,000 13,490,000
STOCKHOLDER'S EQUITY:
Common stock- $.001
par value,10,000,000 shares
authorized,3,021,342 shares
issued 3,000 3,000
Additional paid-in capital 4,438,000 4,438,000
Retained (Deficit)earnings (562,000) (1,650,000)
3,879,000 2,791,000
Less: 50,000 shares
treasury stock at cost (125,000) (125,000)
Total Stockholders' Equity 3,754,000 2,666,000
TOTAL LIABILITIES AND
STOCKHOLDERS' EQUITY $14,168,000 $16,156,000
see notes to consolidated financial statements
3
LUCILLE FARMS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED DECEMEBER 31, 1999 AND 1998
(UNAUDITED)
Nine Months Ended December 31,
1999 1998
SALES $34,472,000 $35,496,000
COST OF SALES 31,385,000 32,654,000
GROSS PROFIT 3,087,000 2,842,000
OTHER EXPENSE (INCOME):
Selling 1,285,000 1,250,000
General and administrative 463,000 527,000
Interest income (12,000) (25,000)
Interest expense 511,000 421,000
Insurance proceeds realized
-Key Man (256,000) ___-____
TOTAL OTHER EXPENSE (INCOME) 1,991,000 2,173,000
INCOME BEFORE INCOME TAXES 1,096,000 669,000
(Provision) for income taxes (8,000) (1,000)
NET INCOME $1,088,000 $668,000
NET INCOME PER SHARE: BASIC $.36 $.22
: DILUTED __$.36___ ___$.22
WEIGHTED AVERAGE SHARES
OUTSTANDING USED TO COMPUTE
NET INCOME PER SHARE: BASIC 2,971,342 3,002,500
: DILUTED 2,984,848 3,002,500
see notes to consolidated financial statements
4
LUCILLE FARMS, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
FOR THE THREE MONTHS ENDED DECEMBER 31, 1999 AND 1998
(UNAUDITED)
Three Months Ended December 31,
1999 1998
SALES $ 10,319,000 $13,960,000
COST OF SALES 9,586,000 12,611,000
GROSS PROFIT 733,000 1,349,000
OTHER EXPENSE (INCOME)
Selling 407,000 406,000
General and administrative 156,000 201,000
Interest income (4,000) (7,000)
Interest expense 156,000 162,000
Insurance proceeds realized
-Key Man ___-___ _____-____
TOTAL OTHER EXPENSE (INCOME) 715,000 762,000
INCOME BEFORE INCOME TAXES 18,000 587,000
(Provision) for income taxes (6,000) _ -___
NET INCOME $12,000 $587,000
NET INCOME PER SHARE: BASIC $.00 $.19__
: DILUTED ____$.00___ ___$.19__
WEIGHTED AVERAGE SHARES
OUTSTANDING USED TO COMPUTE
NET INCOME PER SHARE: BASIC 2,971,342 3,002,500
: DILUTED 2,984,804 3,002,500
see notes to consolidated financial statements
5
LUCILLE FARMS, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
Nine Months Ended December 31,
1999 1998
CASH FLOWS FROM OPERATING ACTIVITES:
NET INCOME $ 1,088,000 $668,000
Adjustments to reconcile net
income to net cash(used by)
operating activities:
Depreciation and amortization 360,000 300,000
Provision for doubtful accounts 56,000 70,000
(Increase) decrease in assets:
Accounts receivable 888,000 (2,766,000)
Inventories 61,000 (79,000)
Prepaid expenses & other current
assets 45,000 (25,000)
Other assets 42,000 (8,000)
Increase (decrease) in liabilities:
Accounts payable (1,325,000) 1,600,000
Accrued expenses (102,000) 73,000
Net Cash Provided(Used by)
Operating Activities 1,113,000 (167,000)
CASH FLOW FROM INVESTING
ACTIVITIES:
Purchase of property, plant
equipment (959,000) (1,844,000)
Net Cash (used by) Investing
Activities (959,000) (1,844,000)
CASH FLOW FROM FINANCING ACTIVITIES:
(Payments of) proceeds from
revolving credit loan-net (1,582,000) 951,000
(Payments of) proceeds from
long-term debt and notes (19,000) 480,000
Net Cash (Used by) Provided
by Financing Activities (1,601,000) 1,431,000
NET (DECREASE) IN CASH AND
CASH EQUIVALENTS (1,447,000) (580,000)
CASH AND CASH EQUIVALENTS-BEGINNING 1,924,000 737,000
CASH AND CASH EQUIVALENTS-ENDING $477,000 $157,000
see notes to consolidated financial statements
6
LUCILLE FARMS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. The Consolidated Balance Sheet as of December 31, 1999,
the Consolidated Statement of Operations for the three and
nine month periods ended December 31, 1999 and 1998 and
the Consolidated Statement of Cash Flows for the nine month
period ended December 31, 1999 and 1998 have been prepared
by the Company without audit. In the opinion of management,
the accompanying consolidated financial statements contain
all adjustments (consisting only of normal recurring
adjustments) necessary to present fairly the financial position
of Lucille Farms, Inc. as of December 31, 1999, the results
of its operations for the three months and nine months ended
December 31, 1999 and 1998 and the changes in its cash flows
for the nine months ended December 31, 1999 and 1998.
Certain information and footnote disclosures normally included
in financial statements prepared in accordance with generally
accepted accounting principals have been condensed or omitted
pursuant to the rules and regulations of the Securities and
Exchange Commission ("SEC"). Although the Company believes
that the disclosures are adequate to make the information
presented not misleading, it is suggested that these financial
statements be read in conjunction with the year-end financial
statements and notes thereto for the fiscal year ended March 31,
1999 included in the Company's Annual Report on Form 10-K as
filed with the SEC.
The accounting policies followed by the Company are set
forth in the notes to the Company's consolidated financial
statements as set forth in its Annual Report on Form 10-K
as filed with the SEC.
2. The results of operations for the three and nine months ended
December 31, 1999 are not necessarily indicative of the
results to be expected for the entire fiscal year.
3. Inventories are summarized as follows:
December 31, 1999 March 31, 1999
Finished goods $885,000 $855,000
Raw Materials 491,000 572,000
Supplies and Packaging 348,000 358,000
$1,724,000 $1,785,000
4. On February 8, 1999, a new $4,950,000 bank loan agreement
was signed. The new loan is collateralized by the Company's
plant and equipment. Provisions of the new loan are as
follows:
A $3,960,000 commercial term note with interest fixed at
9.75 percent having an amortization period of 20 years
with a maturity in February 2019.
7
A $990,000 commercial term note with interest fixed at
10.75 percent having an amortization period of 20 years
with a maturity in February, 2019.
5. Income (loss) per share of commons stock was computed by
dividing net income (loss) by the weighted average number
of common shares outstanding during the period in
accordance with the provisions of the Statement of
Financial Accounting Standards No. 128. The dilution
in the three and nine month periods ended December 31,
1999 is due to the net incremental effect of incentive
stock options and warrants of 13,462 and 13,506.
respectively. Basic and diluted per share amounts are the
same for 1998, since the effect of stock options would be
antidilutive and therefore not taken into consideration.
8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERTAIONS
General
The Company's conventional cheese product's, which account
for substantially all of the Company's sales, are commodity items.
The Company prices its conventional cheese products competitively
with others in the industry, which pricing, since May 1997, is
referenced to the Chicago Mercantile Exchange (and was formerly
referenced to the Wisconsin Block Cheddar Market.) The price
the Company pays for fluid milk, a significant component of cost of
goods sold, is not determined until the month after its cheese has
been sold. While the Company generally can anticipate a change in the
price of milk, it cannot anticipate the extent thereof. By virtue of
the pricing structure for its cheese and the competitive nature of the
marketplace, the Company cannot always pass along to the customer the
changes in the cost of milk in the price of its conventional cheese.
As a consequence thereof, the Company's gross profit margin for such
cheese is subject to fluctuation, which fluctuation, however slight,
can have a significant effect on the Company's profitability.
The Company is unable to predict any future increase or decrease
in the prices in the Chicago Mercantile Exchange as such markets are
subject to fluctuation based on factors and commodity markets outside
of the control of the Company. Although the cost of fluid milk does
tend to move correspondingly with the prices on the Chicago Mercantile
Exchange, the extent of such movement and the timing thereof
also is not predictable as it is subject to government control and
support. As a result of these factors, the Company is unable to
predict pricing trends.
Three months ended December 31, 1999 compared to three months
ended December 31, 1998
Sales for the three months ended December 31, 1999
decreased to $10,319,000 from $13,960,000 for the comparable
period in 1998, a decrease of $3,641,000(or 26.1%).
Approximately $4,456,000 (or 122%) of such amount was due
to a decrease in the average selling price of cheese. This
decrease in sales was offset by an increase in the number of
pounds of cheese sold resulting in a $365,000 (or 10%) increase
in sales when compared to the year ago quarter and approximately
$450,000 (or 12%) was offset by increased whey sales produced in
our new facility.
Cost of sales and gross profit for the three months
ended December 31, 1999 was $9,586,000 (or 92.9% of sales) and
$733,000 (or 7.1% of sales), respectively, compared to a cost
of sales and gross profit margin of $12,611,000 (or 90.3% of sales)
and $1,349,000 (or 9.7% of sales), respectively, for the
comparable period in 1998. The increase in cost of sales and
corresponding decrease in gross profit margin for 1999(as a
percent of sales and corresponding decrease in gross profit
margin in 1999) was primarily due to an increase in the Company's
9
cost of raw materials as a percentage of selling price.
Selling, general and administrative expense for the
three months ended December 31, 1999 amounted to $563,000
(or 5.5% of sales) compared to $607,000 or (4.3% of sales)
for the comparable period in 1998. The increase in selling,
general, and administrative expenses as a percentage of sales
was primarily due to the decreased sales in the period without
a corresponding percentage decrease in these expenses.
Interest expense for the three months ended December 31,
1999 amounted to $156,000 compared to $162,000 for the three
months ended December 31, 1998 a decrease of $6,000. This
decrease is due to a more favorable rate of borrowing on
long-term debt.
There was a $6,000 increase (due to provision for AMT)
in the provision for income tax for the three month period
ended December 31, 1999 over the three month period ended
December 31, 1998. Charges for federal income taxes were
offset by decreases in the valuation allowances for the three
months ended December 31, 1999 and December 31, 1998.
Such amounts are re-evaluated each quarter based on the
results of operations.
The Company's net operating income of $12,000 for the
three months ended December 31, 1999 represents a decrease
of $575,000 from the net income of $587,000 for the comparable
period in 1998. The primary factors contributing to these
changes are discussed above.
With respect to its gross profit margin, the Company is
continuing its efforts to increase sales of its value added
products which are less dependent on the Chicago Mercantile
Exchange. The selling price for the Company's nutritional
line of cheeses is less dependent on the Block Cheddar Market,
which dictates the Company's commodity cheese prices. With
respect to its nutritional line of cheeses, the Company is
continuing its efforts to increase sales of such products.
To date sales of nutritional cheese has not been significant.
The Company has now positioned itself to co-pack private label
retail products. However, there can be no assurance as to
whether such sales can be achieved or maintained. In addition,
the Company has continued to upgrade its equipment to enable it
to reduce costs and add product lines with greater margins.
Nine months ended December 31, 1999 compared to nine months
December 31, 1998.
Sales for the nine months ended December 31, 1999
decreased to $34,472,000 from $35,496,000 for the comparable
period in 1998, a decrease of $1,024,000(or 2.9%).
Approximately $4,980,000 (or 486%) of such amount was due
to a decrease in the average selling price for cheese.
Approximately $960,000(or 94%) of such amount was offset by
increased whey sales produced in our new facility.
10
The decrease in average selling price was also offset by
approximately $2,996,000 (or 293%) due to an increase in the
number of pounds of cheese sold in the period.
The decrease in average selling price was the result of a
decrease in block cheddar market prices resulting in a lower
average selling price per pound of cheese in the period.
Cost of sales and gross profit for the nine months
ended December 31, 1999 was $31,385,000 (or 91.0% of sales) and
$3,087,000 (or 9.0% of sales), respectively, compared to a cost
of sales and gross profit margin of $32,654,000 (or 92.0% of sales)
and $2,842,000 (or 8.0% of sales), respectively, for the
comparable period in 1998. The decrease in cost of sales and
corresponding increase in gross profit margin for 1999(as a
percent of sales and corresponding increases in gross profit
margin in 1999) was primarily due to a decrease in the Company's
cost of raw materials as a percentage of selling price.
Selling, general and administrative expense for the
nine months ended December 31, 1999 amounted to $1,748,000
(or 5.1% of sales) compared to $1,777,000 or (5.0% of sales)
for the comparable period in 1998. The increase in selling,
general, and administrative expenses as a percentage of sales
was primarily due to the decreased sales in the period without
a corresponding decrease in these expenses.
Interest expense for the nine months ended December 31,
1999 amounted to $511,000 compared to $421,000 for the nine
months ended December 31, 1998 an increase of $90,000. This
increase is the result of increased borrowing due to the
addition of a new whey facility and production equipment and
higher revolving line usage in the period.
The provision for income tax for the nine month period
ended December 31, 1999 of $8,000 and December 31, 1998 of
$1,000 reflect minimum state taxes and provision for AMT.
Charges for federal income taxes were offset by decreases
in the valuation allowances for the nine months ended December
31, 1999 and December 31, 1998. Such amounts are re-evaluated
each quarter based on the results of operations.
The Company's net operating income of $1,088,000 for the
nine months ended December 31, 1999 represents an improvement
of $420,000 from the net income of $668,000 for the comparable
period in 1998. The primary factors contributing to these
changes are discussed above.
With respect to its gross profit margin, the Company is
continuing its efforts to increase sales of its value added
products which are less dependent on the Chicago Mercantile
11
Exchange. The selling price for the Company's nutritional
line of cheeses is less dependent on the Block Cheddar Market,
which dictates the Company's commodity cheese prices. With
respect to its nutritional line of cheeses, the Company is
continuing its efforts to increase sales of such products.
To date sales of nutritional cheese has not been significant.
The Company has now positioned itself to co-pack private label
retail products. However, there can be no assurance as to
whether such sales can be achieved or maintained. In addition,
the Company has continued to upgrade its equipment to enable it
to reduce costs and add product lines with greater margins.
Liquidity and Capital Resources
At December 31, 1999 the Company had working capital of
$1,659,000 as compared to working capital of $2,746,000 at March 31,
1999. The Company's revolving bank line of credit is available for the
Company's working capital requirements.
At December 31, 1999, $1,718,000 was outstanding under such
revolving credit line of credit and $1,596,000 was available for
additional borrowing at that time (based on the inventory and
receivable formula). Advances under this facility are limited to 50%
of inventory and 80% of receivables. The rate of interest on amounts
borrowed against the revolving credit facility is prime plus 1%. A
.25% annual unused line fee is also charged on this facility. The
agreement contains various restrictive covenants the most significant
of which relates to limitations on capital expenditures ($1,000,000
annually without bank consent). In addition, the Company is required
to generate an increase in its dollar amount of net worth annually.
The Company intends to continue to utilize this line of credit as
needed for operations.
On February 8, 1999, a new $4,950,000 bank loan agreement was
signed. The new loan is collateralized by the Company's plant
and equipment. Provisions of the loan are as follows:
A $3,960,000 commercial term note with interest
fixed at 9.75 percent having an amortization period
of 20 years with a maturity in February, 2019.
A $990,000 commercial term note with interest
fixed at 10.75 percent having an amortization period
of 20 years with a maturity in February, 2019.
Proceeds of the new loans were used to repay the $2,647,000
of the long term debt outstanding at December 31, 1998, reduce
the revolving credit loan by $954,000 and the balance was
added to the working capital of the Company.
The Company's major source of external working capital financing
has been and is currently the revolving line of credit. For the
foreseeable future the Company believes that its current working
capital and its existing lines of credit will continue to represent the
12
Company's major source of working capital financing besides income
generated from operations.
For the nine months ended December 31, 1999 cash provided by
operating activities was $1,113,000. In addition to the income from
operations, decreases in accounts receivable of $888,888, in
inventories of $61,000, and a decrease in prepaid expenses and other
assets of $87,000 provided cash. Cash was decreased by a decrease in
accrued expenses of $102,000 and a decrease in accounts payable of
$1,325,000.
Net cash used by investing activities was $959,000 for the period
ended December 31, 1999 which represented purchase of property, plant
and equipment.
Net cash used by financing activities was $1,601,000 for the
period ended December 31, 1999. Payments of the revolving credit loan
of $1,582,000 used cash. Payments of long-term debt and notes of
$19,000 also used cash in the period.
The Company estimates that based upon its current plans, its
resources including revenues from operations and utilization of its
existing credit lines, will be sufficient to meet its anticipated needs
for at least 12 months.
Year 2000 Issue
Many software applications and operational programs
written in the past may not properly recognize calendar dates
beginning in the Year 2000. It is possible that, even after
January 1, 2000, this problem could force computers to either
shut down or provide incorrect information and could result in
an inability to process transactions or engage in normal business
activities. The Company believes that its operations systems will
not be impacted by the Year 2000 issue. Costs spent to date on the
Year 2000 issue are minimal and the Company does not expect to
incur additional costs which would be considered material. If the
Company determines that a particular vender will be impacted by
this problem, it may attempt to identify additional or replacement
vendors which could delay accessibility of the products or services
provided by such vendors. A delay or failure to identify an
additional or replacement vendor could have a material adverse
effect on the Company's business, operating results and financial
condition.
13
Forward Looking Statements
This Quarterly Report on Form 10Q (and any other reports issued
by the Company from time to time) contains certain forward-looking
statements made in reliance upon the safe harbor provisions of the
Private Securities Litigation Reform Act of 1995. Such forward-looking
statements, including statements regarding the Company's ability to
improve margins and increase retail sales, are based on current
expectations that involve numerous risks and uncertainties. Actual
results could differ materially from those anticipated in such forward-
looking statements as a result of various known and unknown factors
including, without limitation, future economic, competitive,
regulatory, and market conditions, future business decisions, the
uncertainties inherent in the pricing of cheese on the Chicago
Mercantile Exchange upon which the Company's prices are based, changes
in consumer tastes, fluctuations in milk prices, and those factors
discussed above under Management's Discussion and Analysis of Financial
Condition and Results of Operations. Words such as "believes,"
"anticipates," "expects," "intends," "may," and similar expressions are
intended to identify forward-looking statements, but are not the
exclusive means of identifying such statements. The Company undertakes
no obligation to revise any of these forward-looking statements.
Item 3. Quantitative and Qualitative Disclosures about Market Risk
Not applicable
14
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of
Security Holders.
An Annual Meeting of Stockholders was held on
November 18, 1999. The matters voted on at the meeting
and the votes cast were as follows.
(a) The following directors were reappointed to serve as
directors until the Annual Meeting of Stockholders of the
Company to be held in the year 2000.
Votes For Votes Withheld
--------- --------------
Gennaro Falivene 2,309,890 49,800
Alfonso Falivene 2,310,890 48,800
Stephen M. Katz 2,309,890 49,800
Howard S. Breslow 2,013,180 346,510
Jay M. Rosengarten 2,013,180 346,510
(b) The selection of Citrin, Cooperman & Company, LLP as
independent auditors for the year ending March 31, 2000
was ratified.
For Against Abstain
--- ------- -------
2,058,680 300,310 700
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 27. Financial Data Schedule
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the three months
ended December 31, 1999
15
SIGNATURES
Pursuant to the requirements of the Securities and Exchange
Act of 1934, registrant has duly caused this report to be
signed on its behalf by the undersigned thereunto duly
authorized.
February 11, 2000 Lucille Farms, Inc.
(Registrant)
By: /s/Alfonso Falivene
Alfonso Falivene
President (Duly Authorized)
By: /s/Stephen M. Katz
Vice President-Finance
and Administration
(Principal Financial Officer)
16
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS OF THE COMPANY FOR THE NINE MONTH
PERIOD ENDED DECEMBER 31, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE THE
FORM 10Q FOR THE QUARTERLY PERIOD ENDED DECEMBER 31, 1999.
</LEGEND>
<CIK> 0000908179
<NAME> LUCILLE FARMS, INC.
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> MAR-31-2000
<PERIOD-START> APR-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 477,000
<SECURITIES> 0
<RECEIVABLES> 2,862,000
<ALLOWANCES> 188,000
<INVENTORY> 1,724,000
<CURRENT-ASSETS> 5,018,000
<PP&E> 13,180,000
<DEPRECIATION> 4,990,000
<TOTAL-ASSETS> 14,168,000
<CURRENT-LIABILITIES> 3,359,000
<BONDS> 6,567,000
0
0
<COMMON> 3,000
<OTHER-SE> 3,751,000
<TOTAL-LIABILITY-AND-EQUITY> 14,168,000
<SALES> 34,472,000
<TOTAL-REVENUES> 34,472,000
<CGS> 31,385,000
<TOTAL-COSTS> 31,385,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 511,000
<INCOME-PRETAX> 1,096,000
<INCOME-TAX> 8,000
<INCOME-CONTINUING> 1,088,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,088,000
<EPS-BASIC> .36
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