UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934. For the quarterly period ended June 30, 1997.
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934. For the transition period from __________ to __________.
Commission File Number 0-23880
-------
Monroc, Inc.
Delaware 87-0436697
------------------------ ------------------
(State of incorporation) (I.R.S. Employer
Identification Number)
P.O. Box 537, 1730 Beck Street, Salt Lake City, Utah 84110
------------------------------------------------------------
(Address of principal executive offices)
Registrant's telephone number 801-359-3701
------------
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 requirement for the past 90 days. Yes X No
----- -----
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding in each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at July 31, 1997
- ----------------------------- ----------------------------
Common Stock, $0.01 par value 4,870,438 shares
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
MONROC, INC.
CONSOLIDATED BALANCE SHEETS
ASSETS
June 30, December 31,
1997 1996
--------- ----------
CURRENT ASSETS: (Unaudited)
Cash and cash equivalents $800,257 $1,189,631
Accounts receivable, net of allowance for discounts
and doubtful accounts of $281,615 at June 30,
1997 and $301,624 at December 31, 1996 10,078,215 13,201,601
Costs and estimated earnings in excess of billings
on uncompleted contracts 578,800 181,634
Inventories 3,812,513 3,977,274
Prepaid expenses 540,742 1,305,491
--------- ----------
Total current assets 15,810,527 19,855,631
PROPERTY, PLANT AND EQUIPMENT, AT COST 28,392,042 27,310,062
Less accumulated depreciation and amortization 11,698,629 11,802,432
--------- ----------
16,693,413 15,507,630
AGGREGATE DEPOSITS 2,477,154 2,477,154
Less accumulated depletion 378,702 337,595
--------- ----------
2,098,452 2,139,559
LAND 2,523,491 2,352,155
OTHER ASSETS, at cost, less accumulated amortization
of $337,438 at June 30, 1997 and $363,660 at
December 31, 1996 747,784 783,277
--------- ----------
TOTAL ASSETS $37,873,66 $40,638,252
========== ===========
(Continued)
The accompanying notes are an integral part of these statements
-1-
<PAGE>
MONROC, INC.
CONSOLIDATED BALANCE SHEETS (Continued)
LIABILITIES AND STOCKHOLDERS' EQUITY
June 30, December 31,
1997 1996
----------- -----------
(Unaudited)
CURRENT LIABILITIES:
Notes payable $3,640,027 $5,354,688
Current maturities of long-term obligations 1,300,053 1,131,289
Trade accounts payable 3,339,544 6,328,925
Accrued liabilities 2,194,854 1,549,652
Billings in excess of costs and estimated earnings
on uncompleted contracts 424,093 690,254
----------- -----------
Total current liabilities 10,898,571 15,054,808
LONG-TERM OBLIGATIONS, less current maturities 5,596,318 5,161,743
DEFERRED COMPENSATION 735,305 779,263
DEFERRED INCOME TAXES 971,855 971,855
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, $0.01 par value; 1,000,000
shares authorized; none issued
Common stock, $0.01 par value; 20,000,000
shares authorized; issued and
outstanding 4,870,438 shares 44,670 44,670
Capital in excess of par value 24,481,864 24,481,864
Accumulated deficit (2,730,870) (3,331,905)
----------- -----------
21,795,664 21,194,629
Less unpaid principal of Employee Stock
Ownership Plan note receivable (2,124,046) (2,524,046)
----------- -----------
TOTAL STOCKHOLDERS' EQUITY 19,671,618 18,670,583
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $37,873,66 $40,638,252
========= ==========
The accompanying notes are an integral part of these statements.
-2-
<PAGE>
MONROC, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<S> <C> <C> <C> <C>
Three Months Ended Six Months Ended
June 30, June 30,
1997 1996 1997 1996
------------ ----------- --------- -----------
Sales $16,352,296 $19,416,157 $31,265,431 $28,620,417
Costs and expenses
Cost of sales 13,753,480 16,855,930 26,621,211 25,337,483
General and administrative 1,594,860 1,472,199 3,205,893 2,911,337
Contribution to ESOP 200,000 200,000 400,000 400,000
----------- ---------- -------- ----------
15,548,340 18,528,129 30,227,104 28,648,820
----------- ---------- -------- ----------
Operating profit (loss) 803,956 888,028 1,038,327 (28,403)
Other income (expense)
Gain on sale of property, plant, equipment
and land 201,589 45,410 205,414 45,578
Interest income 6,190 8,483 14,567 53,087
Interest expense (247,821) (170,582) (487,066) (339,611)
----------- ---------- -------- ----------
(40,042) (116,689) (267,085) (240,946)
----------- ---------- -------- ----------
Earnings ( Loss) before income taxes 763,914 771,339 771,242 (269,349)
Income taxes 0 0 0 0
----------- ---------- -------- ----------
NET EARNINGS (LOSS) $763,914 $771,339 $771,242 $(269,349)
========== ========== ========= ==========
Primary earnings (loss) per common share and
common equivalent $0.16 $0.17 $0.16 ($0.06)
Fully diluted earnings (loss) per common
share and common equivalent $0.15 $0.17 $0.15 ($0.06)
========== ========== ========= ==========
Weighted average common shares outstanding: Primary 4,870,438 4,467,000 4,675,806 4,467,000
Fully Diluted 5,060,000 4,467,000 5,052,027 4,467,000
</TABLE>
The accompanying notes are an integral part of these statements
-3-
<PAGE>
MONROC, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Six Months Ended
June 30
1997 1996
---------- ----------
Cash flows from operating activities:
Net income (loss) $771,242 ($269,349)
Adjustments to reconcile net income (loss) to net
cash generated (used) in operating activities
Depreciation and amortization of property,
plant & equipment 1,150,678 1,203,752
Provision for contribution to ESOP 400,000 400,000
Amortization of other assets 35,493 40,416
Depletion of aggregate deposits 41,107 35,613
(Gain) loss on sale and abandonment of property,
plant, and equipment 306,652 (45,578)
Changes in assets and liabilities:
Accounts receivable 3,123,386 (4,857,162)
Costs and estimated earnings in excess of
billings on uncompleted contracts (397,166) (311,541)
Inventories 164,760 (558,387)
Prepaid expenses 764,749 (668,752)
Land (171,335) (29,257)
Trade accounts payable (2,989,381) 2,194,442
Accrued liabilities 645,202 985,197
Billings in excess of costs and estimated
earnings on uncompleted contracts (266,161) 237,070
Deferred compensation (43,958) 43,936
---------- ----------
Net cash generated (used) in
operating activities 3,535,268 (1,599,600)
Cash flows from investing activities:
Additions to property, plant and equipment (2,643,113) (3,057,773)
Proceeds from sale of property, plant,
equipment, and land 0 82,655
---------- ----------
Net cash used in investing activities (2,643,113) (2,975,118)
=========== ===========
(Continued)
The accompanying notes are an integral part of these statements.
<PAGE> -4-
MONROC, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Continued)
(Unaudited)
Six Months Ended
June 30
1997 1996
---------- -----------
Cash flows from financing activities:
Net increase (decrease) in notes payable (1,714,661) 1,773,461
Principal payments on long-term obligations (715,656) (2,391,249)
Purchase of Monroc Stock Warrants (170,207) 0
Issuance of long-term obligations 1,318,995 872,182
---------- -----------
Net cash generated (used) in financing
activities (1,281,529) 254,394
---------- -----------
Net decrease in cash and cash equivalents (389,374) (4,320,324)
Cash and cash equivalents at beginning of period 1,189,631 6,506,751
---------- -----------
Cash and cash equivalents at end of period $800,257 $2,186,427
========== ==========
Supplemental disclosures of cash flow information
Cash paid during the period for:
Interest $487,066 $339,611
Income taxes
The accompanying notes are an integral part of these statements.
-5-
<PAGE>
MONROC, INC
-----------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
------------------------------------------
(Unaudited)
Note 1. Basis of Presentation
The accompanying unaudited consolidated financial statements of Monroc,
Inc. (the "Company") have been prepared in accordance with generally accepted
accounting principles. In the opinion of management, all normally recurring
adjustments necessary for a fair presentation of the financial information
have been reflected therein. Because of the seasonality and cyclicality of
the Company's businesses, the operating results for the six months ended
June 30, 1997 are not necessarily indicative of the results that may be
expected for the year ending December 31, 1997. The revenues and net earnings
for any interim period are not necessarily indicative of results that may
be expected for the entire year.
These statements should be read in conjunction with the Company's
Annual Report on Form 10-K for the year ended December 31, 1996.
Note 2. Environmental Matters
The Company is currently the owner of property located in Murray, Utah
which contains mining slag previously deposited by the former owner. The slag
contains certain heavy metals including lead and arsenic which may have
leached from the slag into the environment. This and adjoining properties have
been proposed by the Environmental Protection Agency (EPA) for
listing on the National Priorities List for cleanup of the slag and potential
groundwater contamination. Although the Company did not generate the slag
material, under the Comprehensive Environmental Response, Compensation and
Liability Act ("CERCLA"), the current owner of a property may be liable for
cleanup costs. In such case, the Company would have a claim against the former
owner for its respective share of these costs. The Company has not
been designated a Potentially Responsible Party by the EPA with respect to
cleanup of any waste at this site.
The Company has been participating in a study group with the EPA, the
former owner, Murray City and the other current landowners to develop a plan
that would result in the remediation of the problems described above. An
Agreement in Principle was signed among all parties on May 5, 1997, The EPA
has begun the process of preparing a consent agreement which is scheduled for
signature in late 1997. Cleanup will take six months to one year to accomplish
and will involve a combination of offsite disposal, depositing of contaminated
soils in a proposed roadway, redevelopment of the area under certain
zoning restrictions and on site treatment. The agreement in principle requires
the Company to contribute a certain amount of its property for the roadway as
its share of the clean up costs as well as participate in a local improvement
district for the installation of curb, gutter and sidewalks along the proposed
roadway. Until approval of a final consent agreement, it is still uncertain as
to the full financial impact on the Company, if any.
-6-
<PAGE>
Prior to learning of the potential presence of lead in the slag from
the Murray site, the Company sold some of the slag for use in road base and
railroad fill. The Company may be liable for cleanup costs if it is determined
that the lead from this slag poses an environmental hazard. The Company has
not received any notice of government or private action on this matter. The
potential cost to the Company, if any, is not ascertainable at the present
time. The Company's management believes that there are economically reasonable
methods of containing the slag should this become necessary.
On May 5, 1997, the Company entered into an agreement to sell its
total acreage in Murray, Utah to The Boyer Company, L.C. for a total purchase
price of approximately $1.8 million. The agreement is subject to the purchaser
obtaining necessary zoning and permits. Pursuant to the agreement, the
purchaser will also assume the Company's liabilities under
the agreement in principle and the proposed EPA consent agreement described
above. Subject to certain conditions, the Company expects the sale of the
Murray property to close on of before April 1, 1998.
-7-
<PAGE>
Note 3. Recently Issued Accounting Standards
In February 1997, the Financial Accounting Standards Board issued SFAS
No. 128, "Earnings per Share". This standard establishes standards for
computing and presenting earnings per share (EPS). SFAS No. 128 simplifies the
approach for computing both basic and diluted EPS previously found in
Accounting Principles Board Opinion (APB) Opinion No. 15.
Under the new statement, basic EPS excludes dilution and is computed by
dividing income available to common stockholders by the weighted-average
number of common shares outstanding for the period. Diluted EPS reflects the
potential dilution that could occur if securities or other contracts to issue
common stock were exercised or converted into common stock.
SFAS No. 128 is effective for financial statements issued for periods
ending after December 15, 1997 including interim periods with earlier
application not permitted. Implementation will not have a material effect of
the Company's financial statements.
In June 1997, the Financial Accounting Standards Board issued SFAS
No. 130 "Reporting Comprehensive Income" which establishes standards for
reporting and display of comprehensive income and its components (revenue,
expenses, gains, and losses) in a full set of general-purpose financial
statements. SFAS No. 130 requires that all items that are required to be
recognized under accounting standards as components of comprehensive income be
reported in a financial statement that is displayed with the same prominence as
other financial statements. It does not require a specific format for that
financial statement but requires that an enterprise display an amount
representing total comprehensive income for the period in that financial
statement. SFAS No. 130 is effective for fiscal years beginning after
December 15, 1997. Reclassification of financial statements for earlier
periods provided for comparative purposes is required. The impact on FSCO of
the adoption of SFAS No. 130 has not yet been fully determined.
In June 1997, the Financial Accounting Standards Board issued SFAS
No. 131 "Disclosures About Segments of an Enterprise and Related
Information" which establishes standards for the way that public businesses
report information about operating segments in annual financial statements and
requires that those enterprises report selected information about operating
segments in interim financial reports issued to shareholders. SFAS No. 131
also established standards for related disclosures about products and services,
geographical areas, and major customers. It supersedes SFAS No. 14 but retains
the requirement to report information about major customers. It amends SFAS
No. 94 to remove the special disclosure requirements for previously
unconsolidated subsidiaries.
-8-
<PAGE>
SFAS No. 131 is effective for financial statements for periods beginning after
December 15, 1997. In the initial year of application, comparative information
for earlier years is to be restated. It need not be applied to interim
financial statements in the initial year of its application, but comparative
information for interim periods in the initial year of application is to be
reported in financial statements for interim periods in the second year of
application. The adoption of SFAS No. 131 will result in additional
disclosures but is no expected to have a material impact on FSCO's results
of operations of financial condition.
-9-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the
unaudited Consolidated Financial Statements and related Notes included
elsewhere in this report. Also, the discussion should be read in conjunction
with the audited consolidated Financial Statements and related Notes thereto
and Management's Discussion and Analysis of Financial Conditions and Results of
Operations for the year ended December 31, 1996. See "Risks and
Uncertainties" and "Seasonality" for trends and uncertainties known to the
Company that could cause reported financial information not to be necessarily
indicative of the future, including discussion of the effects of seasonality
on the Company.
Results of Operations - Three Months Ended June 30
- --------------------------------------------------
Sales for the three-month period ended June 30, 1997 ("the 1997
period"), were $16,352,296 compared to $19,416,157 for the three month ended
June 30, 1996 ("the 1996 period"). Sales for the Prestress Division decreased
by $2,613,000 as a result of the completion of the Company's Snake River
Correctional Facility contract in Ontario, Oregon in May 1997. Sand and
Gravel sales increased by 34% in the 1997 period compared to the 1996 period
due to strong demand in the Salt Lake Valley. Ready Mix concrete sales in
Boise, Idaho increased by 21% in 1997 compared to the 1996 period. This
increase was due primarily to recent strong economic activity in the Boise
market.
Operating income was $803,956 or 4.9% of sales for the 1997 period
compared to $888,028 or 4.5% of sales in the 1996 period. A continued
emphasis on reducing operating costs along with a focus on high margin
products contributed to the percentage increase.
Net earnings were $763,914 or $.16 per share for the 1997 period
versus $771,339 or $.17 per share for the 1996 period. The effect of the 15.8%
reduction in sales on net earnings was partially offset by management's
continued emphasis on reducing operating costs.
Interest expense increased to $247,821 for the 1997 period compared
to $170,582 in the 1996 period due to increased borrowings to support working
capital requirements. These additional funds were borrowed from the CIT
Group under the company's revolving line of credit arrangement. See "Liquidity
and Capital Resources below".
-10-
<PAGE>
Results of Operations - Six Months Ended June 30
- ------------------------------------------------
Sales increased 9% from $28,620,417 for the six month period ended
June 30, 1996 ("1996 period") to $31,265,431 for the six months ended June 30,
1997 ("1997 period"). Sales for the Prestress Division were 113% higher in the
1997 period compared to the 1996 period primarily due to higher volume
related to production on the $21 million Snake River Correctional Facility
contract in Ontario, Oregon. Work on the Snake River facility was completed in
May 1997. Ready mix concrete sales were up 5% due to increased volume in the
Salt Lake and Boise markets. Sand and gravel sales were also 162% higher in
the 1997 period due to the operation of the Point of the Mountain pit which
commenced in the third quarter of 1996 as well as production of materials for
modifications to I-15 in Salt Lake County.
General and administrative costs were $3,205,893 in the 1997 period
compared to $2,911,337 in the 1996 period. Most of this increase was due to
management changes made to improve the operating capability of the Company
and the addition of extra staff to meet the demands of the Snake River
Correctional Facility contract.
Operating income increased $1,066,730 from an operating loss of
$28,403 in the 1996 period to an operating profit of $1,038,327 in the 1997
period. Most of the improvement in the 1997 period is due to increased sales
volume in higher margin products such as Prestress and Sand and Gravel. In
addition, the Company experienced favorable operating efficiencies from
changes made under its new management.
Interest expense increased to $487,066 in the 1997 period compared to
$339,611 in the 1996 period due to increased borrowings from the CIT Group
under the Company's revolving line of credit arrangement. The funds from such
borrowings were used primarily to finance higher working capital requirements.
See "Liquidity and Capital Resources" below.
Net earnings of $771,242 or 16 cents per share were realized in the
1997 period compared to a net loss of $269,349 or 6 cents per share in the
comparable 1996 period. The increased income resulted from higher sales and
improved margins.
Repurchase of Warrants
- ----------------------
As part of the underwriting agreement when the company went public
in May of 1994, 60,000 warrants exercisable at $5.50 per common share were
issued to the underwriters. Under the Underwriting Agreement, those shares
were not registered but warrant holders of more than 50% of the warrants could
demand that the company register the shares. In June 1997, holders of warrants
for 52,500 shares requested that company register the offering. The company
then exercised its right to buy the warrants at the difference between the
market price as determined by a formula in the Underwriting Agreement and the
exercise price. The warrants were repurchased at a total cost of $170,207.
-11-
<PAGE>
Liquidity and Capital Resources
- -------------------------------
The Company has the use of a credit facility provided by the CIT Group
that includes a line of credit for working capital and term loans. The
Company's liabilities to the CIT Group are secured by liens on substantially
all of the Company's real and personal property. As of June 30, 1997, total
borrowings under the CIT loan agreement totaled $5,640,027 compared to
$7,354,688 at December 31, 1996. Total availability under the line of credit
was $9,359,973 as of June 30, 1997.
As of June 30, 1997 the Company had positive working capital of
$4,911,956 compared to a positive working capital balance of $4,800,823 at
December 31, 1996. Cash generated from operations was $3,535,268 for the six
month 1997 period as compared to cash used of $1,599,600 in the 1996 period.
Most of the improvement in operating cash flow in the 1997 period was the
result of a $3.1 million decrease in accounts receivable. Cash used in
investing activities decreased to $2,643,113 in the 1997 period from $2,975,118
in the 1996 period. Much of the equipment acquired in the 1996 period was
acquired with off-balance sheet operating leases. Overall, the Company expects
investment in equipment to be significantly lower for total year 1997 compared
to 1996. Also, cash used for financing activities was $1,281,529 for the 1997
period compared to cash generated in financing activities of $254,394 in the
1996 period. In the 1997 six month period, the Company paid down the CIT
revolving credit line by $1,714,661 compared to an increase in the credit
line of $1,773,461 in the 1996 six month period.
The Company continues to explore and evaluate various opportunities to
increase shareholder value. Such opportunities may include acquiring other
complimentary businesses or assets. Such acquisitions could impact the
Company's liquidity position if cash were required to fund any such
acquisition or the operations of any acquired business.
Risks and Uncertainties
- -----------------------
FORWARD-LOOKING STATEMENTS - The Company cautions the reader
that statements made in this quarterly report that are not descriptions of
historical fact are forward-looking statements as defined in the Private
Securities Litigation Reform Act of 1995. These
forward-looking statements involve risks and uncertainties and are based on
certain assumptions that may not be realized. Actual results and outcomes
may differ materially from those discussed or anticipated. Factors that might
cause such differences include, but are not limited to, risks and uncertainties
associated with management of the Company's growth, the Company's
planned expansion into new markets, competition from other
companies, seasonality and cyclicality and regulation of the Company's
operations by numerous federal, state and local laws and regulations including
environmental matters (see note 2 to the consolidated financial statements).
For a more detailed discussion of these and other risks please refer to the
documents filed by the Company with the Securities and Exchange
Commission, specifically the Company's Annual Report on Form 10-K
for the fiscal year ended December 31, 1996.
-12-
<PAGE>
Seasonality
- -----------
The Company services the construction industry principally in areas
where construction activity is restricted during the winter. As a result, the
Company experiences reduced revenues generally from December through
March and realizes the substantial part of its revenues during the other months
of the year. The Company generally incurs losses during the winter months
and must have sufficient working capital to fund operations at a reduced level.
In addition, variations in the severity of inclimate weather during the
remaining months of the year could negatively influence the Company's
results of operations.
Financial performance of the Company in any one-quarter of the year
should not be considered a reliable indicator of the anticipated current year
results. The seasonality and variability of weather conditions as well as the
cyclicality of demand in response to factors such as interest rate changes can
cause significant fluctuations in financial results from quarter to quarter and
from year to year.
-13-
<PAGE>
Part II. Other Information
- -------- -----------------
Item 5. Other Information
-----------------
On August 12, 1997 the Company issued a press release announcing
that it has engaged the investment banking firm of Dillon Read & Co. to help
the Company explore various strategic alternatives of capital structuring,
including, but not limited to, a sale of all or part of the Company, strategic
alliances or a merger with a suitable partner.
The Company is engaged in negotiations to supply certain materials,
including aggregates, ready mix concrete and Prestress concrete products, to
Wasatch Constructors for use in the Interstate 15 ("I-15") reconstruction
project in Salt Lake County. The Utah Department of Transportation previously
awarded the I-15 reconstruction contract to Wasatch Constructors. The Company
has entered into a preliminary Memorandum of Understanding with Wasatch
Constructors to supply aggregates and other materials for the project, but the
parties have not reached a definitive agreement. Accordingly, it is not
possible to assess what impact I-15 project may have on the Company's future
business and financial performance.
The Company continues to explore and evaluate various opportunities
which could increase shareholder value. Such opportunities may include
acquiring other complimentary businesses or assets.
FORWARD-LOOKING STATEMENTS - The statements made in this
Item 5 above are forward-looking statements and are subject to risks and
uncertainties which may cause actual events to vary materially from the
forward-looking statements. Factors which may cause such results to vary
include, without limitation, the Company's ability or inability to find a
suitable partner or buyer or buyers of all or part of the Company at acceptable
valuation levels and on terms acceptable to the Company, the receipt of
regulatory approvals, the inability to reach a definitive agreement with
Wasatch Constructors regarding the I-15 construction project and the
Company's ability to acquire complimentary businesses or assets.
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits
Exhibit 11 - Calculation of Earnings (Loss) Per Share
Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K
On April 14, 1997 the Company filed a current report on Form 8-K
dated April 9, 1997 providing the required disclosure regarding the
Company's change in its certifying accountants.
-14-
<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.
Monroc, Inc.
----------------
Registrant
Date: August 14, 1997 /s/ L. William Rands
--------------------- ------------------------
L. William Rands
Vice President and Chief
Financial and Accounting
Officer
<PAGE>
INDEX OF EXHIBITS
-----------------
Exhibit 11 - Calculation of Earnings (Loss) Per Share
Exhibit 27 - Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM JUNE 30,
1997 FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 800,257
<SECURITIES> 0
<RECEIVABLES> 10,078,215
<ALLOWANCES> 0
<INVENTORY> 3,812,513
<CURRENT-ASSETS> 15,810,527
<PP&E> 28,392,042
<DEPRECIATION> (11,698,629)
<TOTAL-ASSETS> 37,873,667
<CURRENT-LIABILITIES> 10,898,571
<BONDS> 10,536,398
0
0
<COMMON> 44,670
<OTHER-SE> 19,626,948
<TOTAL-LIABILITY-AND-EQUITY> 37,873,667
<SALES> 31,265,431
<TOTAL-REVENUES> 31,265,431
<CGS> 26,621,211
<TOTAL-COSTS> 30,227,104
<OTHER-EXPENSES> 267,085
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 487,066
<INCOME-PRETAX> 771,242
<INCOME-TAX> 0
<INCOME-CONTINUING> 771,242
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 771,242
<EPS-PRIMARY> 0.16
<EPS-DILUTED> 0.15
</TABLE>
Exhibit 11
Calculation of Earnings (Loss) Per Share
(in thousands except per share data)
Three Months Ended
March 31,
1997 1996
Weighted average common 4,467 4,467
and common equivalent
shares outstanding
Diluted weighted average common 4,763 4,467
and common equivalent
shares outstanding
Net Earnings (Loss) $ 7 $(1,041)
Primary Earnings (Loss) Per $ 0.00 $(0.23)
Common Share
Diluted Earnings (Loss) Per $ 0.00 $(0.23)
Common Share
