<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 1994
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 1-1000
SPARTON CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
OHIO 38-1054690
------------------------------- --------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2400 EAST GANSON STREET, JACKSON, MICHIGAN 49202
------------------------------------------ ----------
(Address of principal executive offices) (Zip Code)
</TABLE>
517-787-8600
---------------------------------------------------
(Registrant's telephone number, including area code)
Indicate by checkmark 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
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date. The number of shares of
common stock outstanding as of October 31, 1994 was 7,811,370.
<PAGE> 2
SPARTON CORPORATION
INDEX
<TABLE>
<CAPTION>
PAGE NO.
--------
<S> <C>
Financial Statements:
Consolidated Condensed Balance Sheet - September 30 and June 30, 1994 3
Consolidated Condensed Statement of Operations - Three-Month Periods ended
September 30, 1994 and 1993 4
Consolidated Condensed Statement of Cash Flows - Three-Month Periods ended
September 30, 1994 and 1993 5
Notes to Consolidated Condensed Financial Statements 6
Management's Discussion and Analysis of Financial Condition and Results of
Operations 7
Other Information and Signatures 9
</TABLE>
2
<PAGE> 3
<TABLE>
SPARTON CORPORATION AND SUBSIDIARIES
Consolidated Condensed Balance Sheet (Unaudited)
September 30 and June 30, 1994
<CAPTION>
September 30 June 30
1994 1994
------------ ------------
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $2,072,554 $1,713,718
Income taxes recoverable 704,000 2,591,000
Accounts receivable 29,020,047 31,933,179
Inventories and costs on contracts in progress,
less progress payments of $2,414,000 at
September 30 ($5,627,000 at June 30) 39,900,814 45,835,914
Prepaid expenses 3,772,209 2,434,109
------------ ------------
Total current assets 75,469,624 84,507,920
Miscellaneous receivables and other assets 2,969,022 3,060,062
Property, plant and equipment - net 22,202,311 21,153,958
------------ ------------
Total assets $100,640,957 $108,721,940
============ ============
Liabilities and Shareowners' Equity
Current liabilities:
Notes payable - due within one year $17,350,000 $20,614,550
Accounts payable 8,806,486 12,872,286
Taxes on income 386,527 446,331
Accrued liabilities 9,014,767 8,370,212
------------ ------------
Total current liabilities 35,557,780 42,303,379
Deferred income taxes 1,809,500 1,809,500
Deferred compensation 1,924,182 1,912,265
Long-term obligations, net of current maturities 529,929 626,012
Shareowners' equity:
Common stock - 7,811,370 shares outstanding
after deducting 123,342 shares in treasury 9,764,213 9,764,213
Capital in excess of par value 403,067 403,067
Retained earnings 50,652,286 51,903,504
------------ ------------
Total shareowners' equity 60,819,566 62,070,784
------------ ------------
Total liabilities & shareowners' equity $100,640,957 $108,721,940
============ ============
<FN>
See accompanying notes.
</TABLE>
3
<PAGE> 4
<TABLE>
SPARTON CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statement of Operations (Unaudited)
For the Three-month Periods Ended September 30, 1994 and 1993
<CAPTION>
1993
As Restated
1994 (Note 2)
----------- -----------
<S> <C> <C>
Net sales $50,280,023 $41,392,602
Costs and expenses 51,932,539 42,482,164
----------- -----------
(1,652,516) (1,089,562)
Other income (expense):
Interest (325,988) (58,365)
Other - net 23,286 29,956
----------- -----------
Income (loss) before income taxes (1,955,218) (1,117,971)
Provision (credit) for income taxes (704,000) (402,000)
----------- -----------
Net income (loss) ($1,251,218) ($715,971)
========== ========
Information per share of common stock:
Net income (loss) $(.16) $(.09)
========== ========
Dividends $-0- $-0-
========== ========
<FN>
See accompanying notes.
</TABLE>
4
<PAGE> 5
<TABLE>
SPARTON CORPORATION AND SUBSIDIARIES
Consolidated Condensed Statement of Cash Flows (Unaudited)
For the Three-month Periods Ended September 30, 1994 and 1993
<CAPTION>
1993
As Restated
1994 (Note 2)
---------- --------
<S> <C> <C>
Cash flows provided (used) by operating activities:
Net income (loss) ($1,251,218) ($715,971)
Add non-cash items charged to operations:
Depreciation 929,826 897,934
Deferred compensation 41,917 36,076
Deferred income taxes -- (210,000)
---------- ----------
(279,475) 8,039
Add (deduct) changes in operating assets
and liabilities:
Income taxes recoverable 1,887,000 (402,000)
Accounts receivable 2,913,132 2,559,446
Inventories 5,935,100 210,591
Accounts payable (4,065,800) (6,134,578)
Taxes on income (59,804) (740,893)
Other (693,646) (1,758,076)
---------- ----------
Net cash provided (used) by operations 5,636,507 (6,257,471)
Cash flows provided (used) by investing activities:
Purchases of property, plant and equipment-net (1,978,179) (554,985)
Other 61,040 131,086
---------- ----------
(1,917,139) (423,899)
Cash flows provided (used) by financing activities:
(Decrease) increase in notes payable (3,264,550) 5,620,000
Changes in long-term obligations, including
current maturities thereof (95,982) (95,748)
---------- ----------
(3,360,532) 5,524,252
---------- ----------
Increase (decrease) in cash and cash equivalents 358,836 (1,157,118)
Cash and cash equivalents at beginning of period 1,713,718 2,560,566
---------- ----------
Cash and cash equivalents at end of period $2,072,554 $1,403,448
========== ==========
Cash paid (refunded) during the period for:
Interest $255,000 $58,000
========== ==========
Income taxes ($2,590,000) $607,000
========== ==========
<FN>
See accompanying notes.
</TABLE>
5
<PAGE> 6
SPARTON CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
1) The accompanying consolidated condensed balance sheet at September
30, 1994, and the related consolidated condensed statements of operations and
cash flows for the three-month periods ended September 30, 1994 and 1993 are
unaudited, but include all adjustments (consisting only of normal recurring
accruals) which the Company considers necessary for a fair presentation of such
financial statements. The results of operations for the three-month period
ended September 30, 1994 are not necessarily indicative of the results that may
be expected for the full fiscal year.
2) Effective the first quarter of fiscal 1994, the Company adopted
Statement of Financial Accounting Standards (SFAS) No. 109, "Accounting for
Income Taxes." The cumulative effect of this accounting change was to decrease
the net loss for the first quarter of fiscal 1994 by $264,000 ($.03 per share).
In the fourth quarter of fiscal 1994, the Company elected to early adopt SFAS
No. 112, "Employers' Accounting for Postemployment Benefits," retroactively as
of July 1, 1993. The cumulative effect of the accounting change was to
increase the net loss for the first quarter of fiscal 1994 by $264,000 ($.03
per share), net of income taxes of $149,000. The effect of this accounting
change on fiscal 1994 operations was not material.
The first quarter fiscal 1994 loss and loss per common share have
been restated to reflect the retroactive application of SFAS No. 112. This
restatement increased the first quarter fiscal 1994 net loss by $264,000 ($.03
per share) from amounts previously reported.
3) Earnings per share are computed using the weighted average number
of shares outstanding of 7,811,370 in 1994 and 7,810,370 in 1993.
4) There are various legal proceedings pending against the Company.
In many cases, these proceedings involve ordinary and routine claims incidental
to the business of the Company. In others, they represent allegations that are
non-routine. The Company and its subsidiaries are also involved in certain
compliance issues with the United States Environmental Protection Agency and
various state environmental regulatory agencies. The Company has been involved
in an environmental clean-up effort at one of its facilities since 1983. A
reserve of $1,200,000 was established and charged against operations in 1991 in
order to cover estimated minimum future costs of this clean-up effort. As of
September 30, 1994, the remaining reserve for these future costs at this
facility, principally ongoing monitoring, totaled $617,000. The Company has
previously recovered all amounts available under insurance policies concerning
this clean-up effort.
The ultimate legal and financial liability of the Company in
respect to these matters cannot be estimated with certainty. Based upon its
own examination and experience to date, and upon information provided by legal
counsel and outside consultants, it is management's opinion that the resolution
of these matters should not have a material impact on the Company's
consolidated financial statements.
6
<PAGE> 7
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following is management's discussion and analysis of certain significant
events affecting the Company's earnings and financial condition during the
periods included in the accompanying financial statements.
RESULTS OF OPERATIONS
- - - ---------------------
Sales for the three-month period ended September 30, 1994 were $50,280,000, an
increase of $8,887,000 (21%) from the corresponding period last year. Revenues
in total were consistent with internal expectations. Sales increased 27% at
Sparton Electronics, but were still below anticipated levels. Certain
commercial revenues did not materialize as planned. Commercial sales volume
continues to expand, but not at a level sufficient to offset the decline in
defense-related revenues. Sales increased modestly at the Canadian unit, while
revenues at Sparton Technology were comparable to last year. The Automotive
and Industrial Products segment continues to expand with an aggregate sales
increase of $4,030,000 (19%) for the current three-month period compared to the
same period last year. This growth was consistent with expectations and
reflects both increased customer demand as well as new product shipments.
An operating loss of $1,653,000 was reported for the three months ended
September 30, 1994 compared to an operating loss of $1,090,000 last year.
Sparton Electronics operated at a small loss for the period. Margins continue
to be adversely impacted by increased costs associated with the start-up of
several new programs and lower than anticipated sales volumes. While the
Canadian unit incurred a small operating loss, this was an improvement over the
loss incurred last year. These improved operating results were primarily due
to cost-cutting measures instituted this past year. Sparton Technology
operated on a break-even basis for the current period. The Automotive and
Industrial Products segment incurred an operating loss for the current
three-month period. The loss was significantly higher than the operating loss
incurred last year and substantially higher than anticipated. Factors
contributing to this loss included continuing productivity and efficiency
issues, capacity problems at certain facilities, difficulties achieving
customer quality demands, and an inability to adjust certain prices due to
competitive pressures. The Hartford City, Indiana facility purchased last
fiscal year was placed into production this period. Price increases on several
product lines have been requested, but with only limited success. Efforts to
obtain price increases continue.
Interest expense increased $268,000 to $326,000 due to higher average
borrowings and higher interest rates. Effective July 1, 1993, the Company
adopted Statement of Financial Accounting Standards (SFAS) No. 109, "Accounting
for Income Taxes." The cumulative effect of this accounting change was to
decrease the net loss for the first quarter of fiscal 1994 by $264,000 ($.03
per share). In the fourth quarter of fiscal 1994, the Company elected to early
adopt SFAS No. 112, "Employers' Accounting for Postemployment Benefits,"
retroactively as of July 1, 1993. The cumulative effect of the accounting
change was to increase the net loss for the first quarter of fiscal 1994 by
$264,000 ($.03 per share), net of income taxes of $149,000. The effect of this
accounting change on fiscal 1994 operations was not material. The accounting
changes, when taken together, offset each other for the first quarter of fiscal
1994, as restated. After provision for applicable income taxes, the Company's
net loss for the three-month period ended September 30, 1994 was $1,251,000
($.16 per share) compared to $716,000 ($.09 per share), as restated, for the
corresponding period last year.
7
<PAGE> 8
FINANCIAL POSITION
- - - ------------------
For the three-month period ended September 30, 1994, cash and cash equivalents
increased $359,000 to $2,073,000. Operating activities provided $5,637,000 in
net cash flows. Principal sources of cash flows from operating activities
included decreases in inventories, accounts receivable, and income taxes
recoverable. Primary uses included the operating loss and a decrease in
accounts payable. Cash flows used by investing activities were $1,917,000,
primarily for the purchase of property, plant and equipment within the
Automotive and Industrial Products segment. Financing activities used
$3,361,000 in cash flows as the Company decreased its short-term borrowings.
No dividends were declared in either period presented. At September 30, 1994,
the Company had $60,820,000 ($7.79 per share) in recorded shareowners' equity,
$39,912,000 in working capital, and a 2.12:1 working capital ratio.
OTHER
- - - -----
The Company has been involved in an environmental clean-up effort at Sparton
Technology's Coors Road facility since 1983. Costs incurred totalled $46,000
for the current three-month period compared to $19,000 for the corresponding
period last year. These costs were charged against a reserve initiated in 1991
to cover estimated future minimum costs. As of September 30, 1994, the
remaining reserve for future minimum costs totalled $617,000. The Company has
previously recovered all amounts available under insurance policies concerning
this clean-up effort. A remedial action plan has been developed and submitted
for approval but negotiations continue with respect to such plan. In addition,
the Company is involved in several related issues with State of New Mexico
environmental agencies. Until these and other related issues are resolved,
management is unable to accurately assess what the ultimate costs may be.
Management continues to work diligently in pursuing these issues and believes
that their ultimate resolution should not have a material adverse effect on the
Company's consolidated financial statements.
The Company's sales of sonobuoys, principally to the U.S. Navy, have declined
dramatically from $151,024,000 in fiscal 1992 to $47,645,000 in fiscal 1994.
Based on currently available information, it is expected that the U.S. Navy's
budget for production sonobuoys for the foreseeable future will continue at
reduced levels. In response to this changing environment, the Company has
previously consolidated certain of its manufacturing facilities, continues to
reduce costs within the defense-oriented operations and is developing
commercial opportunities which will utilize its existing technological and
manufacturing capabilities. In addition, the Company is focusing on expanding
sales in its automotive and other commercial electronics markets on a worldwide
basis. Management, however, cannot predict the level of U.S. sonobuoy awards
it will receive over the next several years, the growth in sales volume of new
commercial business intended to replace these declining defense revenues, nor
the resulting financial impact of these changes on the Company's operations.
As with any change of this magnitude, unanticipated delays in new program
start-ups and their associated cost impact can reasonably be expected to occur.
Investors should be aware of this uncertainty and make their own independent
evaluation.
8
<PAGE> 9
OTHER INFORMATION
PART II
- - - -------
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
- - - -----------------------------------------
(a) Exhibits
<TABLE>
<S> <C>
3 & 4 Instruments defining the rights of security holders have been previously filed as follows:
Articles of Incorporation of the Registrant were filed on Form 10-K for the year ended June 30, 1981 and an amendment
thereto was filed on Form 10-Q for the three-month period ended September 30, 1983 and are incorporated herein
by reference.
By-laws of the Registrant were filed on Form 10-K for the year ended June 30, 1981 and are incorporated herein
by reference.
Code of Regulation of the Registrant was filed on Form 10-K for the year ended June 30, 1981 and an amendment thereto
was filed on Form 10-Q for the three-month period ended September 30, 1982 and are incorporated herein by reference.
10 The employment agreement with John J. Smith (filed herewith).
27 Submitted to the Securities and Exchange Commission for its information.
</TABLE>
(b) Reports on Form 8-K Filed in the First Quarter of Fiscal 1995: None
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.
<TABLE>
<S> <C>
SPARTON CORPORATION
-------------------
Registrant
Date: October 31, 1994 /s/ John J. Smith
--------------------- -----------------------------------------------
John J. Smith, Chairman of the Board and Chief
Executive Officer
Date: November 10, 1994 /s/ Richard Langley
-------------------- -----------------------------------------------
Richard Langley, Vice President-
Treasurer & Principal Financial Officer
</TABLE>
9
<PAGE> 1
EXHIBIT 10
AGREEMENT
AGREEMENT made this 26th day of October 1994 between SPARTON CORPORATION,
an Ohio corporation (hereinafter call "Sparton"), and JOHN J. SMITH of
Jackson, Michigan (hereinafter called "Smith").
Smith has served as chairman and chief executive officer of Sparton
pursuant to the terms of an Employment Agreement dated as of August 30, 1991,
for a term which expired on June 30, 1994, having previously served as
president and general manager since November 3, 1950. Sparton desires to
retain his services as chief executive officer in the future and to renew his
Employment Agreement for an additional term of three (3) years beginning as of
July 1, 1994, upon the terms and conditions set forth herein.
In consideration of the foregoing and the mutual promises hereinafter set
forth, the parties hereto agree as follows:
1. Sparton hereby employs Smith as its chief executive officer for
the period commencing July 1, 1994, and ending June 30, 1997. Smith hereby
accepts such employment and, subject to the provisions of paragraph 2 hereof,
agrees to perform such services as shall from time to time be reasonably
assigned to him by the Board of Directors of Sparton, such services to be
substantially the same as the services which he has been performing under the
prior agreement. Smith agrees during the period of such employment to devote
his best efforts and, subject to the provisions of paragraph 2 hereof, his full
business time and attention to the performance of his duties hereunder except
during reasonable vacation periods and reasonable periods of illness or other
incapacity.
2. Smith's employment may be terminated by Sparton, at its option, if
Smith shall be unable to carry on its duties and responsibilities hereunder for
a period of six (6) consecutive months by reason of physical or mental
disability or incapacity. Smith shall have the right, upon six (6) months'
prior written notice to Sparton, to reduce his responsibilities and the time he
devotes to the performance of his duties hereunder, in which event his base
compensation and incentive compensation shall be reduced proportionately.
3. Smith shall receive as base compensation for his services the
following amounts each year, payable in equal semimonthly installments:
<TABLE>
<CAPTION>
Smith's Base
For Twelve Months Ending: Compensation Shall Be
<S> <C>
June 30, 1995 $274,802
June 30, 1996 288,542
June 30, 1997 302,969
</TABLE>
1
<PAGE> 2
In addition to such base compensation, Smith shall also receive as
incentive compensation each fiscal year an amount equal to five percent (5%) of
the consolidated net income, before federal income taxes, of Sparton and its
subsidiaries for such fiscal year in excess of Five Million Dollars
($5,000,000), provided, however, that such additional incentive compensation
shall not exceed One Hundred Fifty Thousand Dollars ($150,000) for any fiscal
year. The amount of Smith's incentive compensation shall be paid to him each
year within ten (10) days after the audited balance sheet and profit and loss
statement for the fiscal year are available.
As of June 1, 1994, and continuing to the date hereof, Smith voluntarily
reduced his base compensation to the annual rate of One Hundred Twenty Thousand
Dollars ($120,000). Smith shall have the right at any time, in his discretion,
to increase his base compensation in any amount up to but not exceeding the
applicable base compensation set forth above in this paragraph 3.
By written notice to the Company, Smith shall also have the right,
voluntarily in his discretion, at any time and from time to time to reduce his
base compensation or his incentive compensation, or both, in such amount and
for such reason (or no reason) as he sees fit. Smith shall likewise have the
right at any time and from time to time to restore all or any part of any prior
voluntary reduction in his compensation (including the reduction referred to
above) so long as the resulting base compensation or incentive compensation
does not exceed respectively the base compensation or incentive compensation
set forth above in this paragraph 3. All such reduction and increases shall be
prospective and not retroactive. It is the intent of this paragraph that by
prior written notice to the Company Smith shall have the right to establish his
own base and incentive compensation from time to time up to but not exceeding
the applicable base and incentive compensation set forth above in this
paragraph 3.
4. In the same manner as provided in Smith's prior Employment
Agreement with Sparton, interest shall be credited to the balance in Smith's
deferred compensation account on a quarterly basis as of September 30, December
31, March 31, and June 30 of each year, at a rate equal to one and one-half
percent (1-1/2%) above the prime rate in effect at the National Bank of Detroit
at the beginning of each such quarter, with a maximum rate of interest of ten
percent (10%) per annum or the prime rate, whichever is greater, but in no
event greater than fourteen percent (14%) per annum. Upon termination of
Smith's employment, interest shall continue to accrue at the rate specified
above on the unpaid balance of Smith's account. Such interest shall be paid to
him, his beneficiary, or estate in quarterly installments or in such other
periodic installments as Sparton and Smith shall then agree.
5. Smith shall be entitled, upon termination of his employment
hereunder, to payment of the amount credited to his deferred compensation
account at the time of such termination of employment (which shall include
interest accrued to the date of termination) in equal monthly installments over
the period of eight (8) years beginning
2
<PAGE> 3
at that time. In the event Smith's employment shall be terminated by reason of
his death, the amount credited to his deferred compensation account at the time
of his death shall be paid in equal monthly installments over such eight- (8)
year period to such beneficiary or beneficiaries as he shall have designated in
writing, delivered to Sparton prior to his death or, in default of such
designation, to his estate. If Smith shall die after termination of his
employment but prior to receiving the full amount of deferred compensation to
which he is entitled, Sparton shall pay the remaining balance, if any, then
credited to his account to such beneficiary or beneficiaries as he shall have
so designated or, in default thereof, to his estate, in installments over the
balance of the eight- (8) year period.
In addition to the installment payment of such credits, interest on the
unpaid balance shall accrue and be paid as provided in paragraph 4.
Notwithstanding the foregoing, at any time before or after the termination
of his employment, and from time to time, Smith may request that a portion of
his deferred compensation account not to exceed Two Hundred Thousand Dollars
($200,000) in any twelve- (12) month period be paid to him. Each request shall
be submitted to Sparton's Board of Directors for approval or rejection. If
approved by the Board, Sparton shall pay the amount requested.
6. In the event Smith's employment shall be terminated other than at
the end of Sparton's fiscal year, his base compensation shall cease as of the
last day of the month in which such termination occurred. Smith's incentive
compensation shall be computed in the manner and at the time specified in
paragraph 3 and prorated to the end of the month in which termination occurred.
7. The determination by Sparton's independent certified public
accountants of the consolidated net income of Sparton and its subsidiaries, as
above defined, shall be binding upon Sparton and Smith.
8. The payments hereunder and the provisions hereof shall be in
addition to and shall not affect any rights or benefits which Smith may have
under Sparton's pension or retirement plans, group insurance program, or any
other employee benefit plans which may heretofore or hereafter be adopted, or
any stock options which shall heretofore or hereafter be granted to him.
9. In the event Sparton shall at any time be merged or consolidated
into or with any other corporation or corporations or in the event that
substantially all the assets of Sparton shall be sold or otherwise transferred
to another corporation, the provisions of this Agreement shall be binding upon
and shall inure to the benefit of the corporation resulting from such merger or
consolidation or the corporation to which such assets shall be sold or
transferred, but this Agreement shall not otherwise be assignable by Sparton or
by Smith without the consent of the other. This Agreement shall be binding
upon and inure to the benefit of the executors, administrators, heirs, and
successors of Smith.
3
<PAGE> 4
Executed in duplicate at Jackson, Michigan, this 26th day of October, 1994,
to be effective as of July 1, 1994.
<TABLE>
<S> <C>
SPARTON CORPORATION
/s/ John J. Smith By /s/ Marshall V. Noecker
- - - --------------------------- -----------------------------
John J. Smith Marshall V. Noecker, a Director
For the Board of Directors
</TABLE>
4
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1994
<PERIOD-START> JUL-01-1994
<PERIOD-END> SEP-30-1994
<CASH> 2,072,554
<SECURITIES> 0
<RECEIVABLES> 29,020,047
<ALLOWANCES> 0
<INVENTORY> 39,900,814
<CURRENT-ASSETS> 75,469,624
<PP&E> 22,202,311
<DEPRECIATION> 0
<TOTAL-ASSETS> 100,640,957
<CURRENT-LIABILITIES> 35,557,780
<BONDS> 529,929
<COMMON> 9,764,213
0
0
<OTHER-SE> 51,055,353
<TOTAL-LIABILITY-AND-EQUITY> 100,640,957
<SALES> 50,280,023
<TOTAL-REVENUES> 50,280,023
<CGS> 51,932,539
<TOTAL-COSTS> 51,932,539
<OTHER-EXPENSES> (23,286)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 325,988
<INCOME-PRETAX> (1,955,218)
<INCOME-TAX> (704,000)
<INCOME-CONTINUING> (1,251,218)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,251,218)
<EPS-PRIMARY> (.16)
<EPS-DILUTED> (.16)
</TABLE>
