SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
QUARTERLY REPORT FILED PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarter year ended Commission File Number
March 31, 1996 1-13752
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SMITH-MIDLAND CORPORATION
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(Name of Small Business
Issuer As Specified In Its Charter)
Delaware 54-1727060
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(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification Number)
Route 28, P.O. Box 300, Midland, Virginia 22728
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(Address of Principal Executive Offices, Zip Code)
(540) 439-3266
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(Issuer's Telephone Number, Including Area Code)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act 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
------ -----
As of May 17, 1996, the Company had outstanding 3,085,718 shares of
Common Stock, $.01 par value per share.
SMITH-MIDLAND CORPORATION
INDEX
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION PAGE NUMBER
Item 1. Financial Statements
<S> <C>
Consolidated Balance Sheets; 1
March 31, 1996 (Unaudited)
and December 31, 1995 (Unaudited)
Consolidated Statements of 2
Operations (Unaudited); Three
months ended March 31, 1996 and 1995
Consolidated Statements of Cash Flows 3
(Unaudited); Three months ended
March 31, 1996 and 1995
Notes to Consolidated Financial 4
Statements (Unaudited)
Item 2. Management's Discussion and 7
Analysis of Financial
Condition and Results of
Operations
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 11
Item 2. Changes in Securities 11
Item 3. Defaults Upon Senior Securities 11
Item 4. Submission of Matters to a Vote of
Security Holders 11
Item 5. Other Information 11
Item 6. Exhibits and Reports on Form 8-K 11
Signatures 12
</TABLE>
PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
SMITH-MIDLAND CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
ASSETS 1996 1995
------ -------------- ------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 580,601 $ 938,089
Accounts receivable
Trade - billed, less allowances for doubtful accounts of
$249,783 and $231,367 2,858,186 2,559,796
Trade - unbilled 219,643 101,873
Inventories
Raw materials482,772 482,939
Finished goods 727,796 743,205
Prepaid expenses and other assets 118,455 159,490
---------- ----------
Total current assets 4,987,453 4,985,392
--------- ---------
Property and equipment, net 1,393,869 1,430,286
--------- ---------
Other assets:
Note receivable, officer 667,598 665,474
Other 91,169 76,103
---------- ----------
Total other assets 758,767 741,577
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TOTAL ASSETS $7,140,089 $7,157,255
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of notes payable $1,053,395 $1,274,544
Accounts payable -- trade 1,696,493 1,603,325
Accrued expenses and other liabilities 540,395 597,480
Customer deposits 339,492 51,132
---------- -----------
Total current liabilities 3,629,775 3,526,481
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Notes payable -- less current maturities 1,785,507 1,720,726
Notes payable -- related parties 116,753 116,753
---------- ----------
TOTAL LIABILITIES 5,532,035 5,363,960
--------- ---------
Stockholders' equity:
Preferred stock, $.01 par value, authorized 1,000,000 shares,
none outstanding - -
Common stock, $.01 par value, authorized 8,000,000 shares,
issued and outstanding 3,085,718 and 2,935,718 30,857 29,357
Additional capital 3,450,085 3,055,252
Retained earnings (deficit) (1,872,888) (1,291,314)
----------- -----------
TOTAL STOCKHOLDERS' EQUITY 1,608,054 1,793,295
----------- ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $7,140,089 $7,157,255
========== ==========
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
-1-
SMITH-MIDLAND CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
1996 1995
------------ --------
<S> <C> <C>
Revenue:
Net sales $ 1,890,779 $ 2,342,564
Shipping and installation income 215,642 313,186
------------ ------------
Total revenue 2,106,421 2,655,750
------------ ------------
Cost of goods sold:
Cost of goods sold -- sales 1,576,303 1,663,759
Shipping and installation expense 175,616 248,392
----------- ------------
Total cost of goods sold 1,751,919 1,912,151
----------- ------------
Gross profit 354,502 743,599
----------- ------------
Operating expenses:
General and administrative expenses 731,133 657,600
Selling expenses 150,973 118,425
---------- ------------
Total operating expenses 882,106 776,025
----------- ------------
Operating income (loss) (527,604) (32,426)
----------- ------------
Other income (expense):
Royalties 57,699 36,736
Interest expense (108,163) (111,558)
Interest income 28,110 9,458
Other (31,616) (36,234)
------------- -------------
Total other income (expense) (53,970) (101,598)
------------- ------------
Income (loss) before income taxes (581,574) (134,024)
Income tax expense (benefit) -- --
---------------- --------------
Net income (loss) $ (581,574) $ (134,024)
============ =============
Net income (loss) per share $ (.19) $ (.07)
============== =============
Weighted average common shares outstanding 3,057,696 1,792,858
============== =============
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
-2-
SMITH-MIDLAND CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
1996 1995
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<S> <C> <C>
Cash flows from operating activities:
Cash received from customers $2,036,320 $2,578,938
Cash paid to suppliers and employees (2,475,915) (2,532,564)
Interest paid (108,163) (96,081)
Other (3,506) (26,776)
------------- -----------
Net cash provided (absorbed) by operating activities (551,264) (76,483)
---------- -----------
Cash flows from investing activities:
Purchases of property and equipment (44,065) (32,478)
Increase in officer note receivable (2,124) (25,671)
---------- ------------
Net cash (absorbed) by investing activities (46,189) (58,149)
--------- ----------
Cash flows from financing activities:
Proceeds from bank borrowings -- --
Repayments of bank borrowings (156,368) (73,524)
Proceeds from issuance of common stock 396,333 --
Proceeds (repayments) on borrowings -
related parties, net -- (2,979)
------------ ----------
Net cash provided (absorbed) by financing activities 239,965 (76,503)
------------ ---------
Net increase (decrease) in cash (357,488) (211,135)
Cash at beginning of period 938,089 320,514
------------ ---------
Cash at end of period $ 580,601 $ 109,379
============ ============
Reconciliation of net income (loss) to net cash provided by operating
activities:
Net income (loss) $ (581,574) $ (134,024)
Adjustments to reconcile net income (loss) to net cash
provided (absorbed) by operating activities:
Depreciation and amortization 80,482 130,043
Decrease (increase) in other assets (15,066) (25,486)
Decrease(increase) in:
Accounts receivable - billed (298,390) (122,868)
Accounts receivable - unbilled (117,770) 18,862
Inventories 15,576 (163,032)
Prepaid expenses and other assets 41,035 (58,829)
Increase (decrease) in:
Accounts payable - trade 93,168 339,182
Accrued expenses and other liabilities (57,085) (50,789)
Customer deposits 288,360 (9,542)
------------ ---------
Net cash provided (absorbed) by operating activities $ (551,264) $ 76,483
=========== =========
The accompanying notes are an integral part of these consolidated financial statements.
</TABLE>
-3-
SMITH-MIDLAND CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
MARCH 31, 1996
BASIS OF PRESENTATION
As permitted by the rules of the Securities and Exchange Commission (the
"Commission") applicable to quarterly reports on Form 10-QSB, these notes are
condensed and do not contain all disclosures required by generally accepted
accounting principles. Reference should be made to the consolidated financial
statements and related notes included in the Company's Annual Report on Form
10-KSB, for the year ended December 31, 1995.
In the opinion of management of the Company, the accompanying financial
statements reflect all adjustments which were of a normal recurring nature
necessary for a fair presentation of the Company's results of operations for the
three months ended March 31, 1996 and March 31, 1995.
The results disclosed in the consolidated statements of operations are not
necessarily indicative of the results to be expected for any future periods.
PRINCIPLES OF CONSOLIDATION
The accompanying consolidated financial statements include the accounts of
Smith-Midland Corporation and its wholly owned subsidiaries, Smith-Midland
Corporation, a Virginia corporation, Easi-Set Industries, Inc., a Virginia
corporation, Smith-Carolina Corporation, a North Carolina corporation, Concrete
Safety Systems, Inc., a Virginia corporation, and Midland Advertising & Design,
Inc., a Virginia corporation. All significant intercompany accounts and
transactions have been eliminated in consolidation.
INVENTORIES
Inventories are stated at the lower of cost, using the first-in, first-out
(FIFO) method, or market.
PROPERTY AND EQUIPMENT
Property and equipment is stated at depreciated cost. Expenditures for
ordinary maintenance and repairs are charged to income as incurred. Costs of
betterments, renewals, and major replacements are capitalized. At the time
properties are retired or otherwise disposed of, the related cost and allowance
for depreciation are eliminated from the accounts and any gain or loss on
disposition is reflected in income.
-4-
SMITH-MIDLAND CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
Depreciation is computed using the straight-line method over the following
estimated useful lives:
<TABLE>
<CAPTION>
Years
-----
<S> <C>
Buildings........................................................................ 10-33
Trucks and automotive equipment.................................................. 3-10
Shop machinery and equipment..................................................... 3-10
Land improvements................................................................ 10-30
Office equipment................................................................. 3-10
</TABLE>
INCOME TAXES
The provision for income taxes is based on earnings reported in the
financial statements. A deferred income tax asset or liability is determined by
applying currently enacted tax laws and rates to the expected reversal of the
cumulative temporary differences between the carrying value of assets and
liabilities for financial statement and income tax purposes. Deferred income tax
expense is measured by the change in the deferred income tax asset or liability
during the year.
Effective January 1, 1993, the Company adopted SFAS 109 "Accounting for
Income Taxes." The adoption of SFAS 109 did not have a material effect on the
consolidated financial statements as the deferred tax asset related to the
Company's net operating loss carry forward has been reserved in its entirety. No
provision for income taxes has been made for the three month periods ended March
31, 1996 and 1995 as the Company does not expect to incur income tax expense for
the full year.
REVENUE RECOGNITION
The Company primarily recognizes revenue on the sale of its precast
concrete products at shipment date, including revenue derived from any projects
to be completed under short-term contracts. Installation services for precast
concrete products, leasing and royalties are recognized as revenue as they are
earned on an accrual basis. Licensing fees are recognized under the accrual
method unless collectibility is in doubt, in which event revenue is recognized
as cash is received. Certain sales of Soundwall and SlenderwallTM concrete
products are recognized upon completion of production and customer site
inspections. Provisions for estimated losses on contracts are made in the period
in which such losses are determined.
-5-
ESTIMATES
The preparation of these financial statements requires management to make
estimates and assumptions that affect the reported amounts of assets and
liability at the date of the financial statements and the reported amounts of
revenues and expenses. Actual results could differ from those estimates.
INCOME PER SHARE
Income per share is calculated based on net income and the weighted average
number of shares of common stock outstanding during the period.
COMMON STOCK OFFERING
In December 1995, the Company completed an initial public offering ("IPO")
of 1,000,000 shares of common stock, $.01 par value per share (the "Common
Stock"), and 1,000,000 Redeemable Common Stock Purchase Warrants (the
"Warrants"), at a purchase price of $3.60 per share of Common Stock and Warrant
sold together. The Company realized net proceeds from the IPO of approximately
$2,618,000. In January 1996, the Company completed an overallotment of an
additional 150,000 shares of Common Stock and 150,000 Warrants for net proceeds
of approximately $396,000.
-6-
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
GENERAL
The Company generates revenues primarily from the sale, shipping,
licensing, leasing and installation of precast concrete products for the
construction, utility and farming industries. The Company's operating strategy
has involved producing innovative and proprietary products, including
Slenderwall(TM), a patent-pending, lightweight, energy efficient concrete and
steel exterior wall panel for use in building construction; J-J Hooks(TM)Highway
Safety Barrier, a patented, positive-connected highway safety barrier; Sierra
Wall, a sound barrier primarily for roadside use; and transportable concrete
buildings. In addition, the Company produces utility vaults, farm products such
as cattleguards, and water and food troughs, and custom order precast concrete
products with various architectural surfaces.
The results for the quarter ended March 31, 1996 are not necessarily
indicative of the results of the Company's operations that may be expected for
the year ending December 31, 1996.
THREE MONTHS ENDED MARCH 31, 1996 COMPARED TO THE THREE MONTHS ENDED MARCH
31, 1995
For the three months ended March 31, 1996, the Company had total revenue of
approximately $2,106,000 compared to total revenue of approximately $2,656,000
for the three months ended March 31, 1995, a decrease of approximately $550,000,
or 21%. Total product sales decreased from approximately $2,343,000 to
$1,891,000, a decrease of approximately $452,000 or 19%. The decrease in total
product sales was primarily attributed to the severe winter weather experienced
in the Mid-Atlantic region during the 1996 period which delivered record
snowfall which affected the Company's production (see "Seasonality and
Inflation") In addition, the 1996 sales were adversely affected by the Company's
continued modification and preparation of selected areas of its manufacturing
facility for the production of Slenderwall(TM) systems (the "Slenderwall
Transition"). During the Slenderwall Transition, which began in 1995, the
Company was unable to produce the same volume of products as during the previous
period. Management initiated the Slenderwall Transition as a result of the
positive reaction to Slenderwall(TM) systems in the marketplace, the anticipated
demand for Slenderwall(TM) systems, and the higher profit margins the Company
expects to realize on sales of Slenderwall(TM) systems in 1996 and beyond. Of
the Company's approximate $3,100,000 backlog of purchase orders as of May 13,
1996, approximately $2,100,000 was for the manufacture of Slenderwall(TM)
systems. Shipping and installation revenue decreased from approximately $313,000
to $216,000, a decrease of approximately $97,000 or 31%, due to a lower volume
of installation services and deliveries.
Total cost of goods sold for the three months ended March 31, 1996
decreased by approximately $160,000 to $1,752,000 from $1,912,000 for the three
months ended March 31, 1995, a decrease of approximately 8%. Total cost of goods
sold as a percentage of total revenue increased from approximately 72% for the
three months ended March 31, 1995 to
-7-
approximately 83% for the three months ended March 31, 1996, primarily as a
result of the adverse winter weather during the 1996 period which significantly
reduced the level of sales to cover the fixed portion of cost of goods sold. In
the future, although no assurance can be given, management expects the total
cost of goods sold as a percentage of total revenue to trend downward as higher
profit margin products, primarily Slenderwall(TM) systems, become a larger
percentage of the mix of products sold.
For the three months ended March 31, 1996, the Company's general and
administrative expenses increased by approximately $73,000, or 11% to $731,000,
or 36% of total revenue, from $658,000, or 25% of total revenue, for the three
months ended March 31, 1995. The increase is primarily the result of increased
insurance and worker's compensation expenses, increased fees for professional
services, a portion of which is non-recurring, increased expenditures related to
the licensing activities conducted by Easi-Set, and increased costs related to
the introduction of the Slenderwall(TM) systems and the Slenderwall Transition.
Selling expenses for the three months ended March 31, 1996 increased to
approximately $151,000 from approximately $118,000 for the three months ended
March 31, 1995 an increase of approximately 33,000, or 28%, primarily resulting
from an increase in advertising and promotion.
The Company's operating loss for the three months ended March 31, 1996 was
$528,000, compared to an operating loss of $32,000, for the three months ended
March 31, 1995, an increased loss of $496,000. This increase in the first
quarter operating loss was primarily attributed to the severe weather
experienced in the 1996 quarter, coupled with marketing and production start-up
costs incurred in connection with the Slenderwall Transition. In the future,
although no assurance can be given, management believes that profit margins and
operating income will increase as sales of Slenderwall(TM) wall panels become a
larger percentage of revenues.
Royalty income increased by approximately $21,000 or 57%, from $37,000 for
the three months ended March 31, 1995 to approximately $58,000 for the same
period in 1996. The increase was a result of a general increase in the number of
licensees throughout 1995 and continuing into 1996, who generated increased
royalty revenue, specifically with increase in royalties generated from the sale
by licensees of J-J Hooks(TM) Barriers. Although no assurance can be given,
management expects royalty income to grow during the year ended December 31,
1996 due to an increased sales staff and the efforts of the Company to obtain
additional licensees and implement a licensing program for its Slenderwall(TM)
wall panel product.
Interest expense was approximately $108,000 for the three months ended
March 31, 1996, compared to approximately $112,000 for the three months ended
March 31, 1995. This $4,000 decrease, or 4%, was primarily due to a decreased
level of debt outstanding during the 1996 quarter. Interest income of $28,000
for the 1996 period represented a $19,000 increase (211%) over interest income
of $9,000 for the 1995 quarter due to investment of IPO proceeds during the 1996
quarter. The Company incurred total other expenses of approximately $32,000 for
the three months ended March 31, 1996, compared to other expenses of
approximately $36,000 for
-8-
the three months ended March 31, 1995, a decrease of approximately $4,000, which
resulted primarily from reduced fees and miscellaneous charges.
The Company experienced a net loss for the three months ended March 31, 1996 of
approximately $582,000 compared to a net loss of approximately $134,000 for the
same quarter in 1995. This increase in net loss of approximately is $448,000 was
primarily attributed to the unusually severe winter weather during the 1996
period, which reduced revenue, coupled with increased general and administrative
expenses and marketing costs during the Slenderwall Transition.
LIQUIDITY AND CAPITAL RESOURCES
In December 1995, the Company completed an initial public offering ("IPO")
of 1,000,000 shares of common stock, $.01 par value per share (the "Common
Stock"), and 1,000,000 Redeemable Common Stock Purchase Warrants (the
"Redeemable Warrants"), at a purchase price of $3.60 per share of Common Stock
and Redeemable Warrant sold together. The Company realized net proceeds from the
IPO of approximately $2,618,000. In January 1996, the Company completed an
overallotment of an additional 150,000 shares of Common Stock and 150,000
Redeemable Warrants for net proceeds of approximately $369,000.
The Company has financed its capital expenditures, operating requirements
and growth to date primarily through the IPO, bank and other borrowings, and the
sale of stock to and loans from its principal stockholders.
In late 1995, the Company filed four separate informal claims totalling
approximately $592,000 for damages and costs incurred as a result of
specification, policy and operating changes to contracts primarily instituted by
the State of Maryland, including the newly issued "Noise Barrier Acceptance
Criteria," all of which were undertaken after the award of the contracts and
after unit production in accordance with the contracts was virtually complete.
In early 1996 the Company received several counterclaims from the Company's
customers who were involved in the disputed State of Maryland contracts. In
connection with these disputed contracts, several involved parties have withheld
payment on accounts receivable to the Company. This increase in accounts
receivable due to the Maryland claims and related disputes has adversely
affected the Company's cash flow.
For the three months ended March 31, 1996, cash of approximately $551,000
was absorbed by operating activities. The substantial use of cash during this
period was from an increase of accounts receivable totalling approximately of
$416,000. In addition, the Company used cash of approximately $46,000 for
investing activities, primarily as a result of the purchase of and additions to
property and equipment. Cash totalling approximately $240,000 was provided to
the Company by financing activities, the major source of which was the IPO
overallotment proceeds.
-9-
The Company had approximately $1,053,000 of indebtedness at March 31, 1996,
due during the next 12 months. This indebtedness is generally secured by the
assets of the Company and is personally guaranteed by Rodney I. Smith, the
Company's President.
Management intends to extend or refinance this debt as it becomes due.
However, no assurance can be given that the Company will be successful in its
efforts to extend or refinance its current indebtedness, or that if it is
successful in those efforts, that such extension or refinancing will be on terms
favorable to the Company. If the Company is not able to extend or refinance the
indebtedness, the Company may be subject to having its assets foreclosed upon by
certain lenders. As of May 17, 1996, the Company had not paid a $400,000
personal note that matured on April 30, 1996. Management is negotiating an
extension of that note, but no assurances can be made as to the ability to
successfully extend the maturity date. The note is secured by the Company's
accounts receivable.
As a result of the Company's substantial debt burden, the Company is
especially sensitive to changes in the prevailing interest rates, which have
risen substantially in 1995. Fluctuations in such interest rates may materially
and adversely affect the Company's ability to finance its operations either by
increasing the Company's cost to service its current debt, or by creating a more
burdensome refinancing environment, if interest rates should increase.
SEASONALITY AND INFLATION
The Company performs a portion of its concrete pouring and curing processes
on uncovered, outdoor manufacturing areas. During the winter months, cold or
adverse weather causes a slowdown or cessation of these outdoor production
activities, thereby severely reducing the Company's production capacity. In
addition, the Company services the construction industry primarily in areas of
the United States where construction activity is inhibited by adverse weather
during the winter. As a result, the Company experiences reduced revenues from
December through March and realizes the substantial part of its revenues during
the other months of the year. The Company typically experiences lower profits,
or losses, during the winter months, and must have sufficient working capital to
fund its operations at a reduced level until the spring construction season.
Management believes that the Company's operations have not been materially
affected by inflation.
-10-
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
In 1996, the Company's former Chief Financial Officer filed a
request for arbitration under the rules of the American Arbitration Association
("AAA Rules") seeking damages of approximately $250,000 based upon a claim of
wrongful termination under his employment agreement. The dispute was presented
to an arbitrator who heard the case pursuant to AAA Rules. The arbitrator has
heard all of the evidence and is expected to render his decision in June 1996.
No assurance can be given regarding the outcome of the arbitration. Refer to
"Item 3, Legal Proceedings" in the Company's Annual Report for the fiscal year
ended December 31, 1995, filed on Form 10-KSB, on April 15, 1996.
ITEM 2. CHANGES IN SECURITIES. None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES. None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. None.
ITEM 5. OTHER INFORMATION. None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. None
-11-
SIGNATURES
In accordance with the requirements of the Exchange Act, the registrant
caused this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
SMITH-MIDLAND CORPORATION
Date: May 17, 1996 By:/s/ Rodney I. Smith
---------------------------
Rodney I. Smith
Chairman of the Board,
Chief Executive Officer and President
(principal executive officer)
Date: May 17, 1996 By:/s/ Scott J. Friberg
---------------------------
Scott J. Friberg
Chief Financial Officer
(principal financial officer)
Date: May 17, 1996 By:/s/ Annette M. Somerford
---------------------------
Annette M. Somerford
Controller
(principal accounting officer)
-12-
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 580,601
<SECURITIES> 0
<RECEIVABLES> 2,858,186
<ALLOWANCES> 249,783
<INVENTORY> 1,210,568
<CURRENT-ASSETS> 4,987,453
<PP&E> 1,393,869
<DEPRECIATION> 80,482
<TOTAL-ASSETS> 7,140,089
<CURRENT-LIABILITIES> 3,629,775
<BONDS> 0
0
0
<COMMON> 30,857
<OTHER-SE> 1,577,197
<TOTAL-LIABILITY-AND-EQUITY> 7,140,089
<SALES> 1,890,779
<TOTAL-REVENUES> 2,192,230
<CGS> 1,751,919
<TOTAL-COSTS> 2,634,025
<OTHER-EXPENSES> 31,616
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 108,163
<INCOME-PRETAX> (581,574)
<INCOME-TAX> 0
<INCOME-CONTINUING> (581,574)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (581,574)
<EPS-PRIMARY> (.19)
<EPS-DILUTED> 0
</TABLE>
