SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
|X| QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 1999
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: 0-26464
CSI Computer Specialists, Inc.
(Exact name of Registrant as specified in its charter)
Delaware 52-1599610
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
904 Wind River Lane Suite 100
Gaithersburg, Maryland 20878
(Address of principal executive offices) (Zip code)
301-921-8860
(Registrant's telephone number including area code)
Check whether the issuer (1) has filed all reports required to be filed
by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 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 ____
State the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Title Outstanding
Common Stock, par value $0.001 per share 3,715,888 shares at August 31, 1999
Transitional Small Business Disclosure Format (check one);
Yes___ No__X___
<PAGE>
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CSI COMPUTER SPECIALISTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
September 30, December 31,
1999 1998
---------------- ---------------
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 298,697 $ 49,035
Accounts receivable 2,511,680 3,647,632
Net investment in sales-type leases - current 84,970 118,502
Inventory for resale 485,724 513,179
Parts and supplies 958,398 926,044
Prepaid income taxes 347,506 343,662
Prepaid expenses 317,070 104,427
---------------- ---------------
Total current assets 5,004,045 5,702,481
---------------- ---------------
PROPERTY AND EQUIPMENT - AT COST 1,723,787 1,836,732
Less accumulated depreciation 1,221,284 1,131,490
---------------- ---------------
502,503 705,242
---------------- ---------------
OTHER ASSETS
Goodwill (Net of accumulated amortization) 472,452 500,890
Net investment in sales-type leases - non-current - 72,360
Deferred tax asset 145,000 145,000
Cash - restricted - 443,846
Other assets 93,625 96,403
---------------- ---------------
711,077 1,258,499
---------------- ---------------
$ 6,217,625 $ 7,666,222
================ ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable 2,373,321 2,713,031
Accrued expenses 197,070 262,246
Revolving line of credit 1,550,672 2,308,656
Current maturities of long term debt - 7,700
Deferred income taxes payable - -
---------------- ---------------
Total current liabilities 4,121,063 5,291,633
---------------- ---------------
LONG-TERM DEBT, less current maturities - 4,474
---------------- ---------------
COMMITMENTS
REDEEMABLE COMMON STOCK - 313,726 SHARES - 400,000
STOCKHOLDERS' EQUITY
Preferred stock - authorized, 10,000,000
shares of $.001 par value $ - $ -
Common stock - authorized, 25,000,000 shares
of $.001 par value; issued and outstanding,
3,715,988 shares 3,716 3,716
Paid-in capital 5,073,593 5,117,439
Retained earnings (2,980,747) (3,151,040)
---------------- ---------------
Total stockholders' equity 2,096,562 1,970,115
---------------- ---------------
$ 6,217,625 $ 7,666,222
================ ===============
See accompanying notes to condensed financial statements.
<PAGE>
CSI COMPUTER SPECIALISTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Three Months Ended
September 30,
1999 1998
----------------- -----------------
Revenues
Maintenance services $ 3,205,771 $ 3,332,493
Parts and equipment sales 1,255,080 4,566,507
----------------- -----------------
$ 4,460,851 $ 7,899,000
Costs and expenses
Cost of maintenance services 2,210,594 2,592,491
Cost of parts and equipment sales 1,054,306 4,118,665
Selling, general and administrative 1,111,561 1,504,141
----------------- -----------------
4,376,461 8,215,297
----------------- -----------------
Operating profit 84,390 (316,297)
Other income (deductions)
Gain on sale of assets - -
Net interest income (expense) (43,823) (18,515)
----------------- -----------------
(43,823) (18,515)
----------------- -----------------
Earnings before income taxes 40,567 (334,812)
Income taxes
Currently payable 14,300 (118,189)
Deferred - -
----------------- -----------------
14,300 (118,189)
Less: Adjustment of valuation allowance
of benefit of tax loss carryforward (14,300) -
----------------- -----------------
- (118,189)
NET EARNINGS $ 40,567 $ (216,623)
================= =================
Per share amounts
Net earnings per share $ 0.01 $ (0.05)
================= =================
Weighted average number of shares
outstanding 3,715,988 4,029,212
================= =================
See accompanying notes to condensed financial statements.
<PAGE>
CSI COMPUTER SPECIALISTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
Nine Months Ended
September 30,
1999 1998
----------------- -----------------
Revenues
Maintenance services $ 9,973,095 $ 9,666,404
Parts and equipment sales 9,807,870 13,141,110
----------------- -----------------
$ 19,780,965 $ 22,807,514
Costs and expenses
Cost of maintenance services 7,024,206 7,081,107
Cost of parts and equipment sales 8,795,873 11,607,089
Selling, general and administrative 3,759,178 4,713,861
----------------- -----------------
19,579,257 23,402,057
----------------- -----------------
Operating profit 201,708 (594,543)
Other income (deductions)
Gain on sale of assets 66,551 -
Net interest income (expense) (97,966) (62,142)
----------------- -----------------
(31,415) (62,142)
----------------- -----------------
Earnings before income taxes 170,293 (656,685)
Income taxes
Currently payable 60,100 (256,598)
Deferred - 24,788
----------------- -----------------
60,100 (231,810)
Less: Adjustment of valuation allowance
of benefit of tax loss carryforward (60,100) -
----------------- -----------------
- (231,810)
NET EARNINGS $ 170,293 $ (424,875)
================= =================
Per share amounts
Net earnings per share $ 0.05 $ (0.11)
================= =================
Weighted average number of shares
outstanding 3,750,780 4,029,212
================= =================
See accompanying notes to condensed financial statements.
<PAGE>
CSI COMPUTER SPECIALISTS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine Months Ended
September 30,
1999 1998
--------------- --------------
Net cash flows from operating activities $ 1,047,276 $(1,062,320)
--------------- --------------
Cash flows used in investing activities
(Increase) decrease in restricted cash 443,846 -
Acquisition of property and equipment (34,213) (145,902)
--------------- --------------
Net cash used in investing activities 409,633 (145,902)
--------------- --------------
Cash flows used in financing activities
Payments on long-term debts (5,417) (6,619)
Acquisition of treasury stock (443,846) (110,000)
Increase in revolving line of credit (757,984) 1,309,329
--------------- --------------
Net cash used in financing activities (1,207,247) 1,192,710
--------------- --------------
NET INCREASE (DECREASE) IN CASH 249,662 (15,512)
Cash at beginning of period 49,035 193,056
--------------- --------------
Cash at end of period $ 298,697 $ 177,544
=============== ==============
Supplemental disclosure of cash flow information
Cash paid through September 30, 1999 and 1998 for:
Interest 154,210 137,170
Income taxes 6,045 7,834
See accompanying notes to condensed financial statements.
<PAGE>
CSI COMPUTER SPECIALISTS, INC. AND SUBSIDIARY
NOTES TO CONDENSED FINANCIAL STATEMENTS
(Unaudited)
Note 1 - Basis of Presentation
The condensed financial statements at September 30, 1999 and for the
three and nine month periods ended September 30, 1999 and 1998 are unaudited and
reflect all adjustments (consisting only of normal recurring adjustments) which
are, in the opinion of management, necessary for a fair presentation of the
financial position and operating results for the interim periods. The condensed
financial statements have been prepared in accordance with the rules and
regulations of the Securities and Exchange Commission, and therefore omit
certain information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles.
The Company believes that the disclosures contained in the condensed financial
statements are adequate to make the information presented therein not
misleading. The financial statements should be read in conjunction with the
financial statements and notes thereto, together with management's discussion
and analysis of financial condition and results of operations, contained in the
Company's Annual Report on Form 10-KSB for the fiscal year ending December 31,
1998.
The results of operations for the three months ended September 30, 1999
are not necessarily indicative of the results that may be expected for the
entire fiscal year ending December 31, 1999.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operation
Certain statements made in this Quarterly Report on Form 10-QSB are
"forward-looking" statements within the meaning of the Private Securities
Litigation Reform Act of 1995. Such statements involve known and unknown risks,
uncertainties, and other factors that may cause actual results, performance, or
achievements of the Company to be materially different from any future results,
performance, or achievements expressed or implied by such forward-looking
statements. Although the Company believes that the expectations reflected in
such forward-looking statements are based upon reasonable assumptions, the
Company's actual results could differ materially from those set forth in the
forward-looking statements. Certain factors that might cause such a difference
include, but are not limited to, the timing of revenues, rapid technological
change, the demand for services for computer hardware systems and computer
equipment, the timing and amount of capital expenditures and other risks
detailed herein.
GENERAL
The Company provides a full range of computer hardware services,
including sales and maintenance of mainframe and mid-range computer equipment
and parts, network design and installation, computer upgrades, and installation
and de-installation of equipment. These services are provided to commercial
customers, agencies of federal, state and local governments, universities,
associations and hospitals primarily in the Mid-Atlantic region of the United
States, including West Virginia, Virginia, Maryland, the District of Columbia,
New Jersey, New York, Connecticut and Pennsylvania, and also in Illinois and
California.
The Company's principal business is providing computer maintenance and
repair services, which are provided under both fixed fee and time and materials
arrangements. Under the fixed fee arrangement, which is the primary method of
service, a customer pays a fixed monthly fee for the term of the agreement,
generally one to two years, for which the Company provides the parts and labor
for both scheduled preventative maintenance and emergency repairs. The Company
records the revenue from fixed fee contracts ratably over the term of the
contract, while the costs the Company incurs to provide the maintenance and
emergency repairs are charged to expense as incurred. Accordingly, the
profitability of the Company's maintenance and repair services can and will be
affected by period to period fluctuations in the number and severity of the
emergency repairs required by its customers, which the Company cannot predict or
control. Additionally, in certain circumstances the Company will choose to
provide the contracted-for services by subcontracting with others, particularly
when the equipment covered by the agreement cannot be serviced in a cost
effective manner, is difficult to repair or replace, or requires unique
engineering expertise that is not applicable to equipment utilized by a
significant number of Company's other customers. The Company obtains such
subcontracting services through short-term agreements, and its profit margin
will generally be lower than if the work were not subcontracted. Accordingly,
operating results may fluctuate from period to period as a result of changes in
the level and nature of subcontracted services.
The sale of computer equipment expanded rapidly in 1997 and leveled out
in 1998, due to increased competition, decreases in profit margins and changes
in purchasers' buying patterns, revenues therefrom have shown some fluctuation
from period to period. The expansion of these sales was fueled primarily by the
acquisition of Cintronix, Inc., in 1997, which sold mid-range and personal
computer equipment, primarily to the federal government. The continued decrease
in the margins in these equipment sales over the last twelve months resulted in
management's decision to sell off the book of business of Cintronix on June 30,
1999. This sale has resulted in a significant decrease in revenues for the
Company, but has allowed the elimination of overhead cost associated with the
operation of Cintronix with a net result of increased income. Mainframe
equipment sales are entered into more commonly to secure contracts for the
maintenance thereof than for the profit on the equipment sale itself, and the
margins on these sales of equipment are subject to market conditions.
Consequently, operating profits as a percentage of gross sales are subject to
fluctuation due to the volume and the makeup of equipment sales. Other areas of
expansion are in the areas of servicing laser printers, providing help desk
support services, and expanding the Company's technical capabilities to maintain
the more current mainframe technology.
RESULTS OF OPERATIONS
The Company's third quarter revenues of $4,460,851 was a decrease of 43
% from the third quarter revenues of the prior year of $7,899,000, and the first
nine months' revenue of 1999 of $19,780,965 showed a net decrease of 13% from
the first nine months of 1998's revenues of $22,807,514. The decrease in net
revenues for the quarter was a direct result of the decrease in sales for
mid-range and personal computer equipment. Maintenance revenues for the third
quarter and first nine months of 1999 decreased approximately 4% from the third
quarter of 1998 and increased 3% over the first nine months of 1998. Equipment
sales for the third quarter and first nine months of 1999 decreased 72% and 25%,
respectively, from the same periods of 1998. Management intends to increase
marketing efforts to promote continued growth primarily in the maintenance
revenue area. Management does not intend to aggressively pursue growth in the
equipment sales area, due to the decreased margins available, and also due to
the sale of the book of business of Cintronix, Inc., which was the main source
of revenue in this area. Maintenance revenues accounted for approximately 72%
for the third quarter and 50% for the first nine months of 1999, and 42% for
both periods, respectively, of the Company's 1998 consolidated revenues.
The Company's cost of sales as a percentage of revenues was 73%in the
third quarter and 80% for the first nine months of 1999 compared to 85% and 82%,
respectively, for the same periods in 1998. This decrease is primarily a result
of the higher percentage of revenues comprised of maintenance services, which
have a higher profit margin than that available on equipment sales. The costs of
maintenance services has remained basically steady, with an increase in
subcontract costs offset by a current decrease in the need for emergency
replacement parts. Subcontractor costs could decrease as the necessary expertise
is further developed in-house to service newer technology; however, as the
Company enters into contracts on even more recent technology, the services of
subcontractors may still be required. Gross margins on equipment sales increased
slightly during the third quarter of the year, primarily as a result of smaller
transactions that normally provide higher margins than the larger quantity sales
on which there is greater price competition. Also, the mix changed to more
mainframe related equipment sales, which carry higher margins. The equipment
gross margins for the first nine months of 1999 still show an overall decrease,
primarily due to the increased competition, especially from manufacturers, on
the large-quantity sales and the changes in the buying patterns of the federal
government. As revenues from sales of personal computer and mid-range network
computers continue to decrease, the margins on these equipment sales will show
some increase based on the mix between the mid-range and personal computer sales
and the mainframe computer sales, which usually carry higher margins.
Selling, general and administrative expenses as a percentage of net
revenues were 25% and 19% respectively, for the third quarters of 1999 and 1998,
and 19% and 21%, respectively, for the first nine months of 1999 and 1998. The
current increase in the percentage is primarily due to the spread of the
administrative costs over fewer sales, while the year-to-date decrease is a
result of elimination of some duplicate efforts in the consolidation of the
administrative functions of the combined companies. These expenses will decrease
as a percentage of sales as the Company adjusts its selling and general and
administrative expenses to align with the lower sales base. The selling, general
and administrative expenses decreased 26% to $1,111,561 for the third quarter of
1999 compared to $1,504,141 for the same period of 1998, and showed a decrease
of 20% for the first nine months of 1999 from the first nine months of 1998.
These decrease result from both the elimination of the Cintronix business and a
concentrated effort to reduce costs.
The Company showed operating income of $84,390 for the third quarter of
1999 compared to an operating loss of $316,297 for the same period of 1998. The
first nine months of 1999 also showed operating income of $201,708 compared to
an operating loss of $594,543 for the first nine months of 1998. This increase
in operating profit was primarily attributable to the decrease in the selling,
general and administrative costs related to integrating the administrative
operations of the Company and each of its subsidiaries, as well as the decrease
in the high-volume mid-range and personal computer sales, which resulted in
losses to the consolidated companies.
Net interest expense increased to $97,966 for the nine months ended
September 30, 1999, from $62,142 for the same period of the prior year. The
interest expense for the third quarter of both years showed an increase as well,
from $18,515 for 1998 to $43,823 for 1999. The Company expects that net interest
expense continue at this level until the continued positive cash flows from
operations can be used to decrease the Company's outstanding debt. The line of
credit debt at June 30, 1999 has been reduced from $2,184,656 to a September 30,
outstanding balance of 1, 550,672, 30% reduction.
Net income increased from losses of $216,623 and $424,875,
respectively, for the third quarter and first nine months of 1998 to net profits
of $40,567 and $170,293 for the same periods of 1999. This is primarily the
result of concentrating on is core business; the savings from greater
efficiencies in the selling and administrative costs; combined with the sale of
the book of business of Cintronix, Inc. This disposition of Cintonix assets
provided not only a profit from the sale but also stopped the losses incurred
from the high-volume mid-range and personal computer sales. This was also
increased by an adjustment to the valuation of the tax benefit from the
carry-forward of net operating losses, which eliminated the income taxes
attributed to the current period net income. The Company expects that its
performance will continue to improve, as the increased selling efforts increase
the book of business and with the elimination of the negative cash flows
resulting from the mid-range and personal computer sales.
LIQUIDITY AND CAPITAL RESOURCES
Working capital was $882,982 at September 30,1999 compared to $410,848
at December 31, 1998. Cash flows provided from operations for the first nine
months of 1999 totaled $1,047,276, resulting primarily from operations and
collections on accounts receivable, and partially offset by a decrease in
accounts payable. The ratio of current assets to current liabilities increase
slightly to 1.2:1 at September 30, 1999 from 1.1:1 at December 31, 1998.
The Company had a $2.5 million revolving line of credit with Crestar
Bank which expired in October, 1998 and continued under a forbearance agreement
until May, 1999, at which time the financial operations of the Company could be
reevaluated by the bank. The bank has since rejected extending this line for
another year, but is currently working with management of the Company to extend
the line until alternative financing has been acquired. Management is vigorously
exploring other options to obtain the required financing. In September the bank
reduced the line to $1,750,000. The management is confident that this new level
is adequate to sustain the operations of the Company. At September 30, 1999, the
balance owed on this line of credit was $1,550,672.
The Company's principal commitments at September 30, 1999 consisted of
obligations under operating leases for facilities.
The Company believes that its existing cash, as supplemented by
expected cash flow from operations and existing credit facility, is sufficient
to satisfy its currently anticipated working capital needs. Management
acknowledges that failure to acquire alternative financing could significantly
affect the ability of the Company to meet short-term working capital
requirements, but feel confident that, with the continued cooperation of Crestar
on extending the revolving line of credit, this financing will be secured in the
near future.
Year 2000 Issues
Year 2000 Compliance means the ability of software and other processing
capabilities to interpret and manipulate correctly all data that includes the
Year 2000 and dates thereafter. The Company principally sells and services
computer hardware and, to date, has not been confronted with Year 2000 issues in
providing such services. Further, the Company has surveyed all of its internal
business systems and software applications and determined that they are Year
2000 compliant. Consequently, the Company does not expect its business to be
adversely affected in any material respect because of Year 2000 issues.
<PAGE>
Part II. Other Information
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Security Holders
None.
Item 5. Other Information
Mr. James D. Boccabella resigned as Chief Financial Officer of the
Company effective August 20, 1999. Mr. Robert V. Windley has assumed
responsibilities as acting Chief Financial Officer on a part time basis
under a one year contract. Mr. Windley is Executive Vice President of
Interactive Systems, Inc. He has extensive experience in both general
and financial management in the Information Services industry. His
past experience includes serving as a Principal at Booz Allen &
Hamilton as a Vice President and General Manager at Martin Marietta
Data Systems.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit
Number Title of Exhibit
3.4 ** Agreement and Plan of Merger between CSI Computer Specialists, Inc.
(Delaware) and Computer Specialists, Inc. (Maryland) filed with the
Securities and Exchange Commission as an exhibit to the Registration
Statement filed on July 19, 1995 (the "Registration Statement") and
incorporated herein by reference.
3.5 ** Bylaws of CSI Computer Specialists, Inc. (Registrant) filed with the
Securities and Exchange Commission as an exhibit to the Registration
Statement and incorporated herein by reference.
3.7 ** Certificate of Amendment of Certificate of Incorporation of CSI Computer
Specialists, Inc. (Delaware) as filed with the Secretary of State of the
State of Delaware on August 5, 1994, filed with the Securities and Exchange
Commission as an exhibit to the Registration Statement and incorporated
herein by reference.
4.1 ** Specimen Common Stock Certificate, filed with the Securities and
Exchange Commission as an exhibit to the Registration Statement and
incorporated herein by reference.
4.2 ** Specimen Warrant Certificate, filed with the Securities and Exchange
Commission as an exhibit to the Registration Statement and incorporated
herein by reference.
4.3 ** Form of Underwriter's Unit Purchase Option, filed with the Securities
and Exchange Commission as an exhibit to the Registration Statement and
incorporated herein by reference.
4.4 ** Form of Warrant Agreement by and among the Company, Biltmore Securities,
Inc. and Continental Stock Transfer & Trust Company, amended from that
which was filed with the Securities and Exchange Commission as an exhibit
to the Registration Statement and incorporated herein by reference.
10.1 ** Form of Maintenance Agreement filed with the Securities and Exchange
Commission as an exhibit to the Registration Statement and incorporated
herein by reference.
10.2 ** Form of Subcontracting (Microcomputer Service) Agreement filed with the
Securities and Exchange Commission as an exhibit to the Registration
Statement and incorporated herein by reference.
10.3 ** Form of Equipment Sales Agreement filed with the Securities and Exchange
Commission as an exhibit to the Registration Statement and incorporated
herein by reference.
10.6 ** Employment Agreement, dated April 7, 1994, by and between the Company
and Donald C. Weymer filed with the Securities and Exchange Commission as
an exhibit to the Registration Statement and incorporated herein by
reference.
10.7 ** Employment Agreement, dated April 7, 1994, by and between the Company
and William Pershin filed with the Securities and Exchange Commission as an
exhibit to the Registration Statement and incorporated herein by reference.
10.8 ** CSI Computer Specialists, Inc. 1994 Stock Option Plan filed with the
Securities and Exchange Commission as an exhibit to the Registration
Statement and incorporated herein by reference.
10.9 ** Plan for Incentive Compensation of Donald C. Weymer filed with the
Securities and Exchange Commission as an exhibit to the Registration
Statement and incorporated herein by reference.
10.10** Revolving Commercial Loan Note, dated May 27, 1994, in favor of
Citizens Bank of Maryland in the principal amount of $750,000 filed with
the Securities and Exchange Commission as an exhibit to the Registration
Statement and incorporated herein by reference.
10.11** Security Agreement, dated May 27, 1994, in favor of Citizens Bank of
Maryland and corresponding Financing Statement filed with the Securities
and Exchange Commission as an exhibit to the Registration Statement and
incorporated herein by reference.
11. Computation of Net Income per Common Share (included in the Financial
Statements in Item 7).
21. Subsidiaries of the Company
27. Financial Data Schedule.
** Previously filed as noted.
(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.
CSI Computer Specialists, Inc.
November 12, 1999 By: /s/ William F. Pershin
- ----------------- -----------------------
Date William F. Pershin
Chief Accounting Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JUL-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 298,697
<SECURITIES> 0
<RECEIVABLES> 2,870,122
<ALLOWANCES> 358,442
<INVENTORY> 1,444,122
<CURRENT-ASSETS> 5,004,045
<PP&E> 1,723,787
<DEPRECIATION> 1,221,284
<TOTAL-ASSETS> 6,217,625
<CURRENT-LIABILITIES> 4,121,063
<BONDS> 0
0
0
<COMMON> 3,716
<OTHER-SE> 2,092,846
<TOTAL-LIABILITY-AND-EQUITY> 6,217,625
<SALES> 4,460,851
<TOTAL-REVENUES> 4,476,367
<CGS> 3,264,900
<TOTAL-COSTS> 3,264,900
<OTHER-EXPENSES> 1,111,561
<LOSS-PROVISION> 9,000
<INTEREST-EXPENSE> 59,339
<INCOME-PRETAX> 40,567
<INCOME-TAX> 0
<INCOME-CONTINUING> 40,567
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 40,567
<EPS-BASIC> 0.01
<EPS-DILUTED> 0.01
</TABLE>
