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, 1997
Commission file number 0-22924
-------------------------------
HILITE INDUSTRIES, INC.
---------------------------------------------------
(Exact name of registrant specified in its charter)
DELAWARE 75-2147742
- ------------------------------------------------ -------------------
(State or other jurisdiction of incorporation or (I.R.S. Employer
organization) Identification No.)
1671 S. BROADWAY
CARROLLTON, TEXAS 75006
- --------------------------------------- -------------------
(Address of principal executive offices) (Zip code)
(972) 466-0475
----------------------------------------------------
(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 May 14, 1997, the Company had 4,900,000 shares of Common Stock
outstanding.
<PAGE>
HILITE INDUSTRIES, INC.
FORM 10-Q FOR THE QUARTER ENDED MARCH 31, 1997
INDEX
PAGE
----
Part I. FINANCIAL STATEMENTS
--------------------
Item 1. Consolidated Financial Statements
Consolidated Balance Sheets as of June 30, 1996
(Audited) and March 31, 1997
(Unaudited).............................................3
Consolidated Statements of Income for the
Three and Nine Months Ended
March 31, 1997 and 1996 (Unaudited)........................4
Consolidated Statements of Cash Flows for the
Three and Nine Months Ended
March 31, 1997 and 1996 (Unaudited)........................5
Notes to Interim Consolidated Financial Statements
(Unaudited)................................................6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of
Operations................................................7
Part II. OTHER INFORMATION..................................................11
-----------------
-2-
<PAGE>
HILITE INDUSTRIES, INC.
Consolidated Balance Sheets
<TABLE>
<CAPTION>
March 31, June 30,
1997 1996
(Unaudited) (Audited)
------------ ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents ................................... $ -- $ --
Accounts receivable, less allowance for doubtful accounts of
$106,667 and $91,100 at March 31 and June 30, respectively 11,563,772 11,356,477
Tooling receivables ......................................... -- 760,982
Inventories ................................................. 10,428,683 8,845,457
Income tax receivable ....................................... 441,029 235,615
Deferred income taxes ....................................... 472,627 472,627
Prepaid expenses and other .................................. 768,657 542,089
------------ ------------
Total current assets ...................................... 23,674,768 22,213,247
------------ ------------
Property, plant and equipment, at cost ........................ 41,610,511 38,139,671
Less: accumulated depreciation and amortization ............... (12,536,735) (10,349,569)
------------ ------------
Property, plant and equipment, net ............................ 29,073,776 27,790,102
Goodwill, net of amortization ................................. 5,947,813 6,195,290
------------ ------------
TOTAL ASSETS .................................................. $ 58,696,357 $ 56,198,639
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses ....................... $ 9,346,326 8,607,287
Long-term debt - current portion ............................ 2,320,672 2,320,672
------------ ------------
Total current liabilities ................................. 11,666,998 10,927,959
------------ ------------
Note payable .................................................. 9,414,393 5,933,659
Long-term debt ................................................ 10,090,639 11,738,709
Deferred income taxes ......................................... 2,315,442 2,077,589
Subordinated debt ............................................. 1,785,184 1,860,184
------------ ------------
Total non-current liabilities ............................. 23,605,658 21,610,141
Shareholders' equity:
Preferred Stock, $.01 par value; 5,000,000 shares authorized,
none issued and outstanding ............................... -- --
Common stock, $.01 par value; 15,000,000 shares authorized,
4,900,000 issued and outstanding .......................... 49,000 49,000
Additional paid-in capital .................................. 9,105,674 9,105,674
Retained earnings ........................................... 14,269,027 14,505,865
------------ ------------
Total shareholders' equity ................................ 23,423,701 23,660,539
------------ ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY .................... $ 58,696,357 $ 56,198,639
============ ============
</TABLE>
The accompanying notes are an integral part of these interim
consolidated financial statements.
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<PAGE>
HILITE INDUSTRIES, INC.
Consolidated Statements of Income
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
March 31, March 31,
--------------------------- ----------------------------
1997 1996 1997 1996
------------ ------------ ------------ ------------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Net sales................................................$ 18,754,695 $ 17,907,061 $ 53,180,631 $ 52,314,617
Cost of sales ............................................ 15,755,508 14,369,290 46,083,667 41,176,883
------------ ------------ ------------ ------------
Gross profit ............................................. 2,999,187 3,537,771 7,096,964 11,137,734
Selling, general and administrative expenses ............. 2,120,866 1,978,256 6,034,335 5,575,872
------------ ------------ ------------ ------------
Operating income ......................................... 878,321 1,559,515 1,062,629 5,561,862
Interest expense, net .................................... 436,773 451,903 1,267,675 1,214,585
------------ ------------ ------------ ------------
Income (Loss) before income taxes ........................ 441,548 1,107,612 (205,046) 4,347,277
Income tax provision ..................................... 303,127 397,066 31,791 1,576,915
------------ ------------ ------------ ------------
Net income (loss)........................................$ 138,421 $ 710,546 $ (236,837) $ 2,770,362
============ ============ ============ ============
Per share data:
Earnings (Loss) per share...............................$ .03 $ .15 $ (0.05) $ .57
============ ============ ============ ============
Weighted average number of
shares outstanding ..................................... 4,900,000 4,900,000 4,900,000 4,900,000
============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of these interim
consolidated financial statements.
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<PAGE>
HILITE INDUSTRIES, INC.
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
Nine Months Ended
March 31,
----------------------------
1997 1996
------------ ------------
(Unaudited) (Unaudited)
<S> <C> <C>
Cash flows from operations:
Net income (loss) ................................. $ (236,837) $ 2,770,362
Adjustments to reconcile net income to
net cash provided by operations:
Depreciation ................................. 2,631,750 2,107,873
Amortization ................................. 247,477 216,184
Increase in net deferred income taxes ........ 237,853 28,208
------------ ------------
Cash provided from operations before changes
in operating assets and liabilities ........... 2,880,243 5,122,627
Changes in operating assets and liabilities:
Increase in accounts receivable .............. (207,296) (2,214,110)
Decrease in tooling receivable ............... 760,982 654,767
Increase in inventories ...................... (1,583,226) (1,999,916)
Increase in prepaid expenses and
other current assets ....................... (226,568) (442,688)
Increase in accounts payable and
accrued expenses ........................... 828,437 1,404,137
Increase (decrease) in income taxes payable .. (205,414) 470,827
------------ ------------
Total changes in operating assets and liabilities (633,085) (2,126,983)
------------ ------------
Net cash provided by operations ..................... 2,247,158 2,995,644
------------ ------------
Cash flows used in investing activities:
Acquisition of subsidiary ......................... -- (7,789,000)
Net additions to property, plant and equipment .... (3,915,429) (5,128,782)
------------ ------------
Net cash used in investing activities ............... (3,915,429) (12,917,782)
------------ ------------
Cash flows from financing activities:
Proceeds from acquisition financing ............... -- 15,397,000
Proceeds from long-term debt ...................... -- 1,497,000
Repayment of debt and capital lease ............... (1,737,464) (9,070,256)
Repayment of subordinated debt .................... (75,000) --
Net increase in note payable ...................... 3,480,735 1,297,217
------------ ------------
Net cash from financing activities .................. 1,668,271 9,120,961
------------ ------------
Net decrease in cash and cash equivalents ........... -- (801,177)
Cash and cash equivalents at beginning of period .... -- 1,120,543
------------ ------------
Cash and cash equivalents at end of period .......... $ -- $ 319,366
============ ============
</TABLE>
Non-cash transaction: As part of the acquisition on July 21, 1995, $2,000,000 in
subordinated debt were issued to the selling shareholders as consideration for
the purchase price. The issuance of the subordinated notes increased the value
of goodwill recorded.
The accompanying notes are an integral part of these
interim consolidated financial statements.
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<PAGE>
HILITE INDUSTRIES, INC.
NOTES TO INTERIM FINANCIAL STATEMENTS (UNAUDITED)
1. BASIS OF PRESENTATION
The interim financial statements of Hilite Industries, Inc. (the "Company")
at March 31, 1997 and for the nine-month period ended March 31, 1997, are
unaudited, but include all adjustments (consisting of normal recurring
adjustments) which the Company considers necessary for a fair presentation.
The June 30, 1996 balance sheet was derived from the balance sheet included
in the Company's audited Financial Statements as included in the Company's
Annual Report on Form 10-K.
The accompanying unaudited financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10
of Regulation S-X. Accordingly, they do not include all of the information
and footnotes, and should be read in conjunction with the Company's audited
Financial Statements. Operating results for the nine-month period ended
March 31, 1997 are not necessarily indicative of the results that may be
expected for the fiscal year ending June 30, 1997.
2. INVENTORIES
Inventories at March 31, 1997 and June 30, 1996 consisted of the following:
March 31 June 30
----------------- ----------------
(Unaudited) (Audited)
Raw materials...............$ 4,397,168 $ 3,432,454
Work in process.............. 2,010,840 2,194,099
Finished goods............... 4,020,675 3,218,904
---------------- ----------------
$ 10,428,683 $ 8,845,457
================ ================
3. DEBT
Effective July 21, 1995, the Company, in conjunction with its acquisition
of North American Spring and Stamping Corp.("NASS") or ("specialty
components and assemblies division"), executed an amendment to its existing
loan agreement ("the Agreement") with a bank to reflect new credit
facilities totaling $26,700,000. The credit facilities consist of the
following:
1) A revolving line of credit of $10,000,000, of which $5,590,000 was
used to complete financing on the acquisition, with interest payable
monthly. As of March 31, 1997, $9,414,000 had been used on the line of
credit and $686,000 is available. The interest
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<PAGE>
rate on the line of credit is LIBOR plus 1 1/2% which resulted in a
blended rate ranging from 7.69% to 8.19% at March 31, 1997. The
revolving line of credit expires on July 21, 1998. An annual
commitment fee of 1/4% is payable quarterly on the average unused
portion of the revolving line of credit,
Term loans with an original principal balance of $13,700,000 and a
balance at March 31, 1997 of $10,456,000. Principal payments on the
term loan of approximately $163,000 together with interest are payable
monthly. The maturity date of the term loans is August 1, 2002. The
interest rate on the term loans, LIBOR plus 1 1/2%, ranged between
7.19% and 7.67% at March 31, 1997. The term loans werE used for
funding the acquisition and for refinancing existing Company debt,
3) An equipment acquisition facility of $3,000,000 for the financing of
equipment purchases. Any term loans issued under this facility will
bear interest, at the Company's option, at either prime rate or LIBOR
plus 1 1/2% (7.13% at March 31, 1997). As of March 31, 1997,
$1,198,000 had been used under thiS facility and $1,503,000 is
available. Principal payments on the equipment acquisition facility of
approximately $25,000 together with interest are payable monthly;
In addition to the above credit facility, the Company also has a fifteen
year real estate note with the same bank that expires on November 1, 2007.
The note, which has an original principal amount of $960,000 and a $683,000
outstanding balance at March 31, 1997, is payable in monthly installments
of $5,333 plus interest at the prime rate (8.50% at March 31, 1997). The
real estate note's due date can be accelerated, at the bank's option, to
July 21, 1998.
All of the notes and line of credit are collateralized by accounts
receivable, inventory, equipment and real estate of the Company.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Results of Operations
- ---------------------
QUARTER ENDED MARCH 31, 1997 COMPARED TO QUARTER ENDED MARCH 31, 1996
Net sales for the quarter ended March 31, 1997 were $18,755,000 compared to
$17,907,000 for the quarter ended March 31, 1996, representing a increase of
$848,000 (4.7%). The specialty components and assemblies division's sales
increased 6.5% to $7,217,000 compared to $6,775,000 in the third quarter of the
prior year. The increase was primarily due to higher after-market sales and
higher sales on the second generation mass air flow assembly in the current year
than the first generation assembly it replaced in the prior year. Brake valve
sales decreased 3.8% to $5,561,000 compared to $5,778,000 in the third quarter
of fiscal 1996. The decrease in this division was due to a slow start-up of new
programs, particularly the GM P-90 program, which was intended to replace
another GM product line. Sales on the P-90 program are expected to be strong in
the fourth quarter and two other large volume programs, a relief valve for Bosch
and a
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<PAGE>
brake valve for Ford's UPN150 program, are also expected to begin in the fourth
quarter. Sales on these three programs are expected to reach $6,000,000 annually
by fiscal 1998. The power transmission components division's sales increased
11.6% to $5,977,000 compared to $5,354,000 in the third quarter of the prior
year. New sales to Mitsubishi for a machined mounting bracket was the primary
reason for the increase. The impact of price changes in the quarter was not
significant.
The Company's gross profit was $2,999,000 (16.0% of net sales) for the third
quarter of the 1997 fiscal year compared to gross profit of $3,538,000 (19.8% of
net sales) for the third quarter of the 1996 fiscal year. The decline in gross
profit is largely attributable to the specialty components and assemblies
division which is six months into an action plan to return the division's Q1
status with Ford. Ford, in recognition of the division's efforts, is working
with the Company to allow more time to demonstrate improvement in quality and
systems. Management continues to evaluate and implement strategies and
alternatives for streamlining the division and for addressing unprofitable
products and product lines. The Company's goals are to restore the division to
Q1 status with Ford and to return the division to profitability as soon as
possible.
Gross profits in the brake valve and power transmission components divisions
increased in the period over the prior year due to a favorable product mix and
improved operating efficiencies.
Selling, general and administrative expenses were $2,121,000 (11.3% of net
sales) in the third quarter of the 1997 fiscal year compared to $1,978,000
(11.0% of net sales) in the third quarter of the 1996 fiscal year. The increase
of $143,000 in selling, general and administrative expenses is primarily due to
increased labor and consulting expenses, much of which has been devoted to the
reorganization plan at the specialty components and assemblies division.
Interest expense was $437,000 for the three months ended March 31, 1997 compared
to $452,000 for the three months ended March 31, 1996. The increase is due to
higher average line of credit balances.
Primarily as a result of the issues at the specialty components and assemblies
division, net income of $138,000 was recorded for the third quarter of fiscal
1997 compared to net income of $778,000 for the comparable period of the prior
year.
NINE MONTHS ENDED MARCH 31, 1997 COMPARED TO NINE MONTHS ENDED MARCH 31, 1996
Net sales for the nine months ended March 31, 1997 were $53,181,000 compared to
$52,315,000 in the nine months ended March 31, 1996, an increase of 1.7%. Sales
by the specialty components and assemblies division increased 8.4% to
$20,776,000 in the current year period compared to $19,158,000 in the prior year
period. The increase primarily resulted from a full nine months sales from the
division, which was acquired on July 21, 1995. The brake valve division sales
decreased 3.9%, or $680,000, to $16,569,000 in the first nine months of the
current year from $17,249,000 in the first nine months of the prior year. The
decrease in this division was due to a slow start-up on new programs,
particularly the GM P-90 program, which was intended to replace another GM
product line. Sales from the P-90 program are expected to be strong in the
fourth quarter and two other large programs, a relief valve for Bosch and a
brake valve for Ford's
- 8 -
<PAGE>
UPN150 program, are also expected to begin in the fourth quarter. Sales on these
three programs are expected to reach $6,000,000 annually by fiscal 1998. Power
transmission component sales were $15,837,000 for the first nine months of
fiscal 1997, a decrease of 0.5% from $15,909,000 in the first nine months of the
prior year. New sales to Mitsubishi for a machined mounting bracket were not
sufficient to offset declines in electromagnetic clutches. The impact of price
changes in the period was not significant.
The Company's gross profit was $7,097,000 (13.3% of net sales) for the first
nine months of the 1997 fiscal year compared to gross profit of $11,138,000
(21.3% of net sales) for the first nine months of the 1996 fiscal year. The
decline in gross profit is largely attributable to the specialty components and
assemblies division which is six months into a reorganization action plan to
address issues resulting from the previously announced "Q1" probation from Ford.
Included in the second quarter were expenses of approximately $550,000 relating
to reorganization expenses, a negative inventory adjustment and increased
warranty reserves. These expenses are not anticipated to recur in future
quarters. However, additional expenses have been committed in the second and
third quarter over the previous year's quarter for management and engineering
resources and increased maintenance and tooling of equipment. Management
continues to evaluate and implement strategies and alternatives for streamlining
the division and for addressing unprofitable products and product lines. The
Company's goals are to restore the division to Q1 status with Ford and to return
the division to profitability as soon as possible.
The gross profits of the brake valve division increased slightly for the nine
months ending March 31, 1997 compared to the same period of the prior year
despite the lower sales level due primarily to operating efficiencies. The power
transmission components division's gross profits also increased slightly in the
period primarily due to a favorable product mix and operating efficiencies.
Selling, general and administrative expenses were $6,034,000 (11.3% of net
sales) in the first nine months of the 1997 fiscal year compared to $5,576,000
(10.7% of net sales) in the first nine months of the 1996 fiscal year. The
increase of $458,000 in selling, general and administrative expenses is
primarily due to increased labor and consulting expenses, much of which has been
devoted to the reorganization plan at the specialty components and assemblies
division and the current year's amount reflects a full nine months of expenses
of the specialty components and assemblies division which was acquired on July
21, 1995.
Net interest expense was $1,268,000 for the nine months ended March 31, 1997
compared to $1,215,000 for the nine months ended March 31, 1996. The increase of
$53,000 is due to a full nine month's acquisition debt as opposed to the prior
year which carried the debt from the acquisition date.
Primarily as a result of the issues at the specialty components and assemblies
division, a net loss of $237,000 was recorded for the nine months ended March
31, 1997 compared to net income of $2,770,000 for the comparable period of the
prior year.
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<PAGE>
Liquidity and Capital Resources
- -------------------------------
During the nine month period ended March 31, 1997, the Company's net cash
provided from operations was $2,247,000 compared to $2,996,000 in the prior
year. Additional cash provided by an increase of notes payable of $3,481,000.
For the nine month period cash was used for capital expenditures of $3,915,000
and to pay debt of $1,738,000. At March 31, 1997 the Company's working capital
was $12,008,000 compared to working capital of $11,285,00 at June 30, 1996. The
current ratio was 2.0 to 1 at March 31, 1997 and June 30, 1996. During the nine
months ended March 31, 1997, the book value per share decreased slightly due to
the reported loss to $4.78 at March 31, 1997 from $4.83 per share at June 30,
1996.
Inventory increased by $1,583,000 during the nine months ended March 31, 1997
due to a larger product base and high raw material balances on start-up
programs. The average number of days outstanding for receivables was 55 days at
March 31, 1997 compared to 52 days at June 30, 1996. The increase in the average
number of days is primarily due primarily due to timing of cash receipts.
Approximately $2,000,000 cash was received in payment of accounts receivable
during the first week in April. As of March 31, 1997, no significant amounts
were considered uncollectible.
The Company's capital expenditures were $3,915,000 for the nine months ended
March 31, 1997. The Company presently estimates capital expenditures for the
year ending June 30, 1997 will approximate $5,000,000, unless new business
opportunities require additional capital commitments. As of March 31, 1997,
commitments, net of progress payments, were $900,000 for capital expenditures
and $2,400,000 for tooling which is expected to be reimbursed from customers.
The Company's long-term debt includes consolidated term and mortgage notes
(original principal amounts of $13,700,000 and $960,000, respectively, and
current balances at March 31, 1997 of $10,456,000 and $683,000, respectively)
which are payable in monthly installments of $163,095 and $5,333, respectively,
plus interest at a blended rate of 6 month and 12 month LIBOR plus 1 1/2%. All
amounts borrowed under the consolidated term and mortgage notes are secured by
the Company's real estate, accounts receivable, inventory, machinery and
equipment and have maturities of August 1, 2002 and November 1, 2007,
respectively. The consolidated term note limits dividends payable by the
Company.
The Company has a general credit facility of $10,000,000 and an equipment
acquisition facility of $3,000,000 (collectively the "Credit Facilities") for
working capital and capital equipment needs. The Credit Facilities mature on
July 21, 1998. As of March 31, 1997, $686,000 was available under the general
credit facility and $1,503,000 was available under the equipment acquisition
facility. An annual fee of one quarter of one percent is payable monthly on the
unused portion of the Credit Facilities. The bank has the right to accelerate
each of the maturity dates of the consolidated term note and real estate note to
coincide with the maturity date of the Credit Facilities.
Management anticipates that cash flow from operations and bank credit
availability will be adequate to fund the existing acquisition debt, anticipated
capital and tooling requirements and working capital needs for the next two
years.
- 10 -
<PAGE>
Seasonality
- -----------
Net sales and operating results do not follow a predictable seasonal pattern
from quarter to quarter because the development, initial production and sales of
new products may occur at different times of the year. Generally, in these
periods certain inefficiencies are experienced which result in higher costs to
the Company. In addition, the Company usually experiences somewhat lower sales
in the quarters ended December 31 and September 30 as automobile manufacturers
traditionally close their plants for vacations or model changeovers during these
periods resulting in lower demand for the Company's products.
Inflation
- ---------
The Company believes that the relatively moderate rate of inflation has not had
a significant impact on the Company's revenues or profitability.
Proceeding Against Sellers of Speciality Components and Assemblies Division
- ---------------------------------------------------------------------------
In May 1997 the Company initiated a suit in the United States District Court for
the Northern District of Illinois (Eastern Division) against the sellers of NASS
(now known as the speciality components and assemblies division) to the Company.
The Company alleges, among other things, that the sellers made material
misrepresentations upon the sale of NASS and the Company is seeking that the
sellers pay substantial damages to the Company and or that the transaction be
rescinded. Management of the Company believes that it has a strong case against
the sellers and the Company intends to vigorously prosecute this action.
Safe Harbor for Forward-looking Statements
- ------------------------------------------
Except for historical information contained herein, certain statements in this
release are forward-looking statements that are made pursuant to the safe harbor
provisions of the Private Securities Litigation Reform Act of 1995.
Forward-looking statements involve known and unknown risks and uncertainties
which may cause the Company's actual results in future periods to differ
materially from forecasted results. Those risks include, among others, risks
associated with the manufacturing process and production yields and risks
related to technological changes in components which affect the life of the
product. Also, there can be no assurance that the corrective action program at
the specialty components and assemblies division will satisfy Ford's
requirements or time frame. Those and other risks are described in the Company's
Form 10-K for the year ending June 30, 1996 filed with the Securities and
Exchange Commission ("SEC"), copies of which are available from the SEC or may
be obtained upon request from the Company.
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) There are no exhibits attached to this report.
(b) There were no reports on Form 8-K filed during the quarter for which this
report is filed.
- 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.
HILITE INDUSTRIES, INC.
Date: MAY 14, 1997 /S/ DANIEL W. BRADY
------------ ----------------------------
Daniel W. Brady
Chief Executive Officer
Date: MAY 14, 1997 /S/ ROY WIEGMANN
------------ ----------------------------
Roy Wiegmann
Chief Financial Officer
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<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000915197
<NAME> HILITE INDUSTRIES, INC.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 11,670,439
<ALLOWANCES> (106,667)
<INVENTORY> 10,428,683
<CURRENT-ASSETS> 1,682,313
<PP&E> 41,610,511
<DEPRECIATION> 12,536,735
<TOTAL-ASSETS> 58,696,357
<CURRENT-LIABILITIES> 11,666,998
<BONDS> 0
0
0
<COMMON> 49,000
<OTHER-SE> 23,374,701
<TOTAL-LIABILITY-AND-EQUITY> 58,696,357
<SALES> 18,754,695
<TOTAL-REVENUES> 18,754,695
<CGS> 15,755,508
<TOTAL-COSTS> 17,876,374
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 436,773
<INCOME-PRETAX> 441,548
<INCOME-TAX> 303,127
<INCOME-CONTINUING> 138,421
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 138,421
<EPS-PRIMARY> 0.03
<EPS-DILUTED> 0.03
</TABLE>
