UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C., 20459
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 March 31, 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 1-13550
-------
HAUPPAUGE DIGITAL, INC.
-----------------------
(Exact name of registrant as specified in its charter)
DELAWARE 11-3227864
-------- ----------
(State or other (I.R.S. Employer
jurisdiction of Identification No.)
incorporation or
organization)
91 Cabot Court, Hauppauge, New York 11788
-----------------------------------------
(Address of principal executive offices)
(516) 434-1600
--------------
(Issuer's telephone number)
Check whether the issuer (1) 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
---- -----
As of April 24, 1997, 4,419,102 shares of .01 par value Common Stock of the
registrant were outstanding, not including treasury shares.
<PAGE>
HAUPPAUGE DIGITAL, INC. AND SUBSIDIARIES
----------------------------------------
INDEX
-----
Page No.
--------
PART I. FINANCIAL INFORMATION
- -----------------------------
Item 1. Financial Statements
Condensed Consolidated Balance Sheets-
March 31, 1997 and September 30, 1996 3
Condensed Consolidated Statements of Operations-
Six Months ended March 31, 1997 and 1996 4
Condensed Consolidated Statements of Operations-
Three Months ended March 31, 1997 and 1996 5
Condensed Consolidated Statements of Cash Flows-
Six Months ended March 31, 1997 and 1996 6
Notes to Condensed Consolidated Financial
Statements 7-8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9-13
PART II. OTHER INFORMATION
- --------------------------
Item 4. Submission of Matters to a Vote of Security Holders 14
SIGNATURES 15
- ----------
<PAGE>
PART I, FINANCIAL INFORMATION
- -----------------------------
Item 1. Financial Statements
HAUPPAUGE DIGITAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
As of
March 31, 1997 As of
(Unaudited) September 30, 1996
-------------- ------------------
CURRENT ASSETS:
Cash . . . . . . . . . . . . . . $ 5,580,646 $ 6,559,175
Accounts Receivable, net
allowance for doubtful
accounts . . . . . . . . . . . . 1,732,118 1,835,882
Inventories (Note 2). . . . . .. 6,232,223 3,138,961
Prepaid expenses and other
current assets 361,423 191,161
----------- -----------
Total Current Assets: $13,906,410 $11,725,179
----------- -----------
Property, plant and equipment-at cost 433,037 374,218
Less: Accumulated depreciation and
amortization . . . . . . . . . . 248,627 228,678
----------- -----------
184,410 145,540
----------- -----------
SECURITY DEPOSITS AND OTHER ASSETS. . 58,566 59,881
----------- -----------
$14,149,386 $11,930,600
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts Payable . . . . . . . . $ 4,390,291 $ 2,818,832
Accrued Expenses . . . . . . . . 1,106,547 936,851
----------- -----------
Total Current Liabilities $ 5,496,838 $ 3,755,683
=========== ===========
SHAREHOLDERS' EQUITY:
Common Stock $.01 par value;
10,000,000 shares authorized,
4,465,302 issued as of March 31,
1997 and September 30, 1996. . . $ 44,653 $ 44,653
Additional paid-in capital . . . 10,344,844 10,344,844
Accumulated deficit. . . . . . . (1,581,070) (2,214,580)
Treasury stock-at cost (Note 5). (155,879) -
----------- -----------
$ 8,652,548 $ 8,174,917
----------- -----------
$14,149,386 $11,930,600
=========== ===========
See notes to condensed consolidated financial statements.
<PAGE>
HAUPPAUGE DIGITAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Six Months Ended March 31,
1997 1996
(Unaudited) (Unaudited)
----------- -----------
SALES. . . . . . . . . . . . . . . $12,852,113 $ 8,239,378
COST OF SALES. . . . . . . . . . . 9,895,261 6,264,755
----------- -----------
Gross Profit. . . . . . . . . 2,956,852 1,974,623
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES. . . . . 2,014,286 1,493,174
RESEARCH AND DEVELOPMENTAL
EXPENSES . . . . . . . . . . . . 239,399 201,270
----------- -----------
Income from operations. . . . 703,167 280,179
OTHER INCOME (EXPENSE):
Interest Income. . . . . . . . . 127,773 15,858
Miscellaneous income,(expense) . (11,503) 8,017
----------- -----------
Income before income tax
provision. . . . . . . . . . . 819,437 304,054
INCOME TAX PROVISION (Note 4). . . 185,927 20,000
----------- -----------
Net Income . . . . . . . . . . . $ 633,510 $ 284,054
=========== ===========
Net income per share . . . . . . . $ 0.14 0.10
=========== ===========
Weighted average shares
outstanding (Note 3) . . . . . . 4,445,999 $ 2,756,183
=========== ===========
See notes to condensed consolidated financial statements
<PAGE>
HAUPPAUGE DIGITAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended March 31,
1997 1996
(Unaudited) (Unaudited)
----------- -----------
SALES. . . . . . . . . . . . . . . $ 6,305,925 $ 3,729,161
COST OF SALES. . . . . . . . . . . 4,977,971 2,795,946
----------- -----------
Gross Profit. . . . . . . . . 1,327,954 933,215
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES. . . . . 1,010,624 746,114
RESEARCH AND DEVELOPMENTAL
EXPENSES . . . . . . . . . . . . 130,650 107,393
----------- -----------
Income from operations. . . . 186,680 79,708
OTHER INCOME (EXPENSE):
Interest Income. . . . . . . . . 56,709 6,042
Miscellaneous income,(expense) . ( 4,818) 5,677
----------- -----------
Income before income tax
provision. . . . . . . . . . . . 238,571 91,427
INCOME TAX PROVISION (Note 4). . . 55,000 10,000
----------- -----------
Net Income . . . . . . . . . . . $ 183,571 $ 81,427
=========== ===========
Net income per share . . . . . . . $ 0.04 0.03
=========== ===========
Weighted average shares
outstanding (Note 3) . . . . . . 4,435,580 $ 2,756,183
=========== ===========
See notes to condensed consolidated financial statements
<PAGE>
HAUPPAUGE DIGITAL, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Six Months Ended March 31,
1997 1996
(Unaudited) (Unaudited)
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income . . . . . . . . . . . . $ 633,510 $ 284,054
----------- -----------
Adjustments to reconcile net
income to net cash (used in)
provided by operating activities:
Depreciation and amortization. . 21,264 18,646
Provision for uncollectible
accounts receivable. . . . . . . 5,500 10,000
Provision for system board
obsolescence . . . . . . . . . 20,000 28,000
Increase (decrease) in cash
resulting from changes in
operating asset and liabilities:
Accounts receivable. . . . . . . 98,264 181,759
Inventories. . . . . . . . . . . (3,113,262) (374,915)
Prepaid expenses and other
current assets . . . . . . . . (170,262) (40,375)
Accounts payable . . . . . . . . 1,571,459 (938,622)
Accrued expenses . . . . . . . . 169,696 206,229
----------- -----------
(1,397,341) (909,278)
----------- -----------
Net cash used in operating
activities . . . . . . . . . . (763,831) (625,224)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant
and equipment . . . . . . . . . (58,819) (23,714)
------------ -----------
Net cash used in investing
activities. . . . . . . . . . . (58,819) (23,714)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Purchase of Treasury Stock. . . (155,879) -
----------- -----------
Net cash used by financing
activities . . . . . . . . . . (155,879) -
----------- -----------
Net decrease in cash. . . . . . (978,529) (648,938)
CASH, beginning of period. . . . . 6,559,175 1,214,940
----------- -----------
CASH, end of period. . . . . . . . $ 5,580,646 $ 566,002
=========== ===========
SUPPLEMENTAL DISCLOSURES:
Income taxes paid. . . . . . . . $ 10,087 $ 8,182
=========== ===========
See notes to condensed consolidated financial statements
<PAGE>
HAUPPAUGE DIGITAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial
statements included herein have been prepared in accordance with
generally accepted accounting principles for interim period
reporting in conjunction with the instructions to Form 10-QSB.
Accordingly, these statements do not include all of the information
required by generally accepted accounting principles for annual
financial statements, and are subject to year-end adjustments. In
the opinion of management, all known adjustments (consisting of
normal recurring accruals and reserves) necessary to present fairly
the quarterly financial results for the period have been included.
It is suggested that these interim statements be read in
conjunction with the financial statements and related notes
included in the Company's September 30, 1996 Form 10-KSB.
The operating results for the three months and six months
ended March 31, 1997 are not necessarily indicative of the results
to be expected for the September 30, 1997 year end.
NOTE 2. INVENTORIES
Inventories have been valued at the lower of average cost or
market. The components of inventory at March 31, 1997 and September
30, 1996 consist of:
March 31, September 30,
1997 1996
---- ----
Component Parts $2,734,462 $ 849,324
Work in Progress 2,676,154 1,861,391
Finished Goods 821,607 428,246
------- -------
$6,232,223 $3,138,961
========== ==========
NOTE 3. NET INCOME (LOSS) PER SHARE
Net income and loss per share have been computed on the
basis of weighted average common shares outstanding for each period
presented.
<PAGE>
HAUPPAUGE DIGITAL, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Net income (loss) per share - continued
Weighted average shares outstanding listed below were used in
the per share computation:
Three Months Ended Six Months Ended
March 31, March 31,
1997 1996 1997 1996
---- ---- ---- ----
4,435,580 2,756,183 4,445,999 2,756,183
On November 8, 1996, the Company approved a stock repurchase
program (See note 5). Shares outstanding for the quarter and six
months ended March 31, 1997 reflect a reduction on a weighted
average basis for the repurchased shares. Common stock equivalents
in the form of options did not result in material dilution for the
current quarter and year to date period. For the prior year's
quarter and six month periods, the Company's stock did not trade at
an average price that was in excess of the exercise price for the
Company's outstanding Class A warrants. Therefore the warrants were
not included in the weighted average shares outstanding.
NOTE 4. INCOME TAXES
Income taxes are based on annualized statutory rates for
federal and state income taxes. The provision for income taxes
reflects an annualized effective tax rate after deductions for the
utilization of restricted and unrestricted net operating loss
carryforwards, adjusted for applicable federal and state
alternative minimum tax provisions. The benefits of these operating
loss carryforwards had previously been subject to a 100% valuation
allowance. However, based on projected fiscal 1997 taxable income,
management has reduced the valuation allowance accordingly. Future
reductions in the valuation allowance will be predicated on
projected results for future years which are not available.
NOTE 5. STOCK REPURCHASE PROGRAM
On November 8, 1996, the Company approved a stock repurchase
program for the repurchase of up to 300,000 shares of its own
stock. The repurchased shares will be used by the Company for
certain employee benefit programs. As of March 31, 1997, the
Company had repurchased 46,200 shares for $155,879 at an average
purchase price of approximately $3.37 per share.
<PAGE>
ITEM 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations
---------------------------------------------
Results of Operations
- ---------------------
Six Month Period ended March 31, 1997 versus March 31, 1996
- -----------------------------------------------------------
Sales for the six months ended March 31, 1997 were $12,852,113,
compared to $8,239,378 for the comparable period in the prior
fiscal year, resulting in an increase of $4,612,735 or 56%. The
increase in sales was primarily due the shipments of several new
digital video products introduced worldwide during the latter part
of fiscal 1996, coupled with the commencement of shipments on an
OEM basis of the Company's video conferencing board. Average unit
sales prices as well as average unit production costs declined from
the prior year due to technological advances, OEM sales and higher
unit production.
Net sales of the Company's products are summarized as follows:
Six Months Ended March 31, Increase
1997 1996 (Decrease)%
---- ---- ---------
System Sales $ 259,323 $ 845,588 (69)
Video & Conferencing Boards 12,592,790 7,393,790 70
---------- --------- ----
Total Company Sales $12,852,113 $8,239,378 56
=========== ========== ====
Unit sales of digital video and conferencing boards increased to
approximately 154,700 as compared to approximately 33,200 for the
prior year, resulting in an increase of approximately 363%. Sales
to domestic customers for the six month period were 35% of net
sales for the current year and 38% for the prior year. Sales to
international customers were 65% of net sales for the current year
and 62% for the comparable period of last year.
Gross profit increased to $2,956,852 from $1,974,623, an
increase of $982,229 or 50% over the prior comparable fiscal year.
The gross profit percentage was 23% compared to 24% for 1996. As a
result of international sales increasing to 65% of total sales,
gross margins were negatively impacted by the corresponding
increase in customs duties plus the effects of a weaker German
Mark, which offset lower unit production costs resulting from the
absorption of manufacturing overhead over a greater number of
units.
Though selling, general and administrative expenses increased
$521,112 over the prior year, they declined to 16% of revenue in
the current year compared to 18% of revenue for the six months
ended March 31, 1996. The increase in expenses was primarily due to
increased sales and marketing expenses of $263,678, mainly for
higher personnel costs due to an increased outside sales staff,
increased commissions resulting from the 56% sales increase and
higher marketing and promotional costs in support of retail sales;
<PAGE>
ITEM 2. Management's Discussion and Analysis-Continued
- ---------------------------------------------------------
higher technical support costs of $48,589 for additional staff
required to consistently maintain a high level of customer support;
increased freight costs of $155,776 due to the higher volume of
sales and higher general and administrative costs of $53,069,
mainly for contractual wage increases, insurance premiums for D&O
insurance and the amortization of costs relating to the Company's
bank line of credit.
Research and development expenses increased $38,129 or
approximately 19%. The increase was due to the infusion of new
capital resulting from the July 1996 conversion of the Company's
Class A Warrants, which has enabled the Company to expand its
engineering research and development resources to enhance current
products and further develop future product lines.
The Company had net other income of $116,270 for the March
31, 1997 six month period as opposed to net other income of $23,875
for the corresponding six months of the preceding fiscal year. The
increase in net other income was primarily due interest income
earned from the investing of the cash received from the July 1996
warrant conversion.
As a result of all of the above, the Company recorded a net
profit after taxes for the six months ended March 31, 1997 of
$633,510 or $0.14 per share as opposed to net income after taxes of
$284,054 or $0.10 per share.
Three Month Period ended March 31, 1997 versus March 31, 1996
- -------------------------------------------------------------
Net sales for the three months ended March 31, 1997 were
$6,305,925 compared to $3,729,161 for the comparable period in the
prior fiscal year, resulting in an increase of $2,576,764 or 69%.
The increase in sales was primarily due the shipments of several
new digital video products introduced worldwide during the latter
part of fiscal 1996, coupled with the shipments on an OEM basis of
the Company's video conferencing board. Average unit sales prices
as well as average unit production costs declined from the prior
year due to technological advances, OEM sales and higher unit
production.
Net sales of the Company's products are summarized as follows:
Three Months Ended March 31, Increase
1997 1996 (Decrease)%
---- ---- ----------
System Sales $ 79,981 $ 443,012 (82)
Video & Conferencing Boards 6,225,944 3,286,149 89
--------- --------- ---
Total Company Sales $6,305,925 $3,729,161 69
========= ========== ===
Unit sales of digital video and conferencing boards increased to
approximately 71,771 as compared to approximately 13,200 for the
<PAGE>
ITEM 2. Management's Discussion and Analysis-Continued
- ---------------------------------------------------------
prior year, resulting in an increase of 444%. Sales to domestic
customers for the three month period were 32% of net sales for the
current quarter and 43% for the prior year's quarter. Sales to
international customers were 68% of net sales for the current
quarter and 57% for the comparable quarter of last year.
Gross profit increased to $1,327,954 from $933,215, an
increase of $394,739 or 42% over the prior comparable fiscal year
period. The gross profit percentage was 21% compared to 25% for
1996. As a result international sales increasing to 68% of total
sales, gross margins were negatively impacted by the corresponding
increase in customs duties plus the effects of a weaker German
Mark, which offset lower unit production costs resulting from the
absorption of manufacturing overhead over a greater number of
units.
Though selling, general and administrative expenses increased
$264,510 over the prior year, they declined to 16% of revenue in
the current quarter compared to 20% of revenue for the three months
ended March 31, 1996. The increase in expenses was primarily due to
increased sales and marketing expenses of $100,250, mainly for
higher personnel costs due to an increased outside sales staff,
increased commissions resulting from the 69% sales increase and
higher marketing and promotional costs in support of retail sales;
higher technical support costs of $27,891 for additional staff
required to consistently maintain a high level of customer support;
increased freight costs of $107,868 due to the higher volume of
sales and higher general and administrative costs of $28,501,
mainly for contractual wage increases, insurance premiums for D&O
insurance and the amortization of costs relating to the Company's
bank line of credit.
Research and development expenses increased $23,257 or
approximately 22%. The increase was due to the infusion of new
capital resulting from the July 1996 conversion of the Company's
Class A Warrants, which has enabled the Company to expand its
engineering research and development resources to enhance current
products and further develop future product lines.
The Company had net other income of $51,891 for the March 31,
1997 three month period compared to net other income of $11,719 for
the corresponding three months of the preceding fiscal year. The
increase in net other income was primarily due higher interest
income earned from the investing of the cash received from the July
1996 warrant conversion.
As a result of all of the above, the Company recorded a net
profit after taxes for the three months ended March 31, 1997 of
$183,571 or $0.04 per share as opposed to a net income after taxes
of $81,427 or $0.03 per share for the corresponding quarter of the
prior fiscal year.
<PAGE>
ITEM 2. Management's Discussion and Analysis-Continued
- ---------------------------------------------------------
Over the prior two fiscal years, the company has experienced
certain revenue trends. Since the Company's products are primarily
sold through distributors and retailers, the Company has
historically recorded stronger sales results during the Company's
first quarter (October to December), which due to the holiday
season is a strong quarter for computer equipment sales. In
addition, the Company's international sales, mostly into the
European market, have been 54% and 70% of sales for fiscal 1996 and
1995 and are 68% and 65% for the second quarter and six months
ended March 31, 1997. Due to this, the Company's sales for its
fourth fiscal quarter (July to September) are impacted by the
reduction of activity with Europe during the July and August summer
holiday period.
To offset the above cycles, the Company is working to increase
its penetration of the domestic retail market to create
counterbalancing domestic sales. Since it is difficult to control
the seasonality of retail sales, the Company is also looking to
establish strategic OEM alliances to produce a consistent level of
annual revenue to help offset the seasonality of the retail segment
of its business.
Liquidity and Capital Resources
- -------------------------------
The Company had a net cash position of $5,580,646, working
capital of $8,199,572 and shareholders' equity of $8,652,548 as of
March 31, 1997. The significant items of cash sources and (uses)
are detailed below:
Net income (adjusted for non cash items) $ 680,274
Investments in current assets (3,185,260)
Increase in current liabilities-net 1,741,155
Purchase of treasury stock (155,879)
Net cash of ($763,831) used in operating activities was
primarily due to cash required to finance accounts receivables and
inventory as a result of the growth in sales, offset partially by
operations funded by vendor financing and cash generated by the
Company's net income.
The company currently has in place an asset based line of
credit. Advances are to be made on a revolving basis based on a
formula of eligible domestic and foreign receivables not older than
90 days. As of March 31, 1997, the Company has not utilized this
loan facility.
On November 8, 1996, the Company approved a stock repurchase
program for the repurchase of up to 300,000 shares of its own
stock. The repurchased shares will be used by the Company for
certain employee benefit programs. As of March 31, 1997, the
Company had repurchased 46,200 shares for $155,879 at an average
purchase price of approximately $3.37 per share.
<PAGE>
Liquidity and Capital Resources-continued
- -----------------------------------------
The Company believes that its current cash position,
internally generated cash flow and its bank financing will be
sufficient to satisfy the Company's anticipated operating needs for
a least the ensuing twelve months.
Risk Factors
- ------------
From time to time, information provided by the company,
statements made by its employees or information provided in its
Securities and Exchange Commission filings, including information
contained in this Form 10-QSB, may contain forward looking
information. The Company's actual future results may differ
materially from those projections or statements made in such
forward looking information as a result of various risks and
uncertainties, including but not limited to rapid changes in
technology, lack of funds for future research, competition,
proprietary patents and rights of others, loss of major customers,
loss of sources of supply for its digital video processing chips,
non-availability of management, government regulation, currency fluctuations,
and the inability of the Company to profitably sell its products. The
market price of the Company's common stock may be volatile at times
in response to fluctuation in the company's quarterly operating
results, changes in analysts' earnings estimates, market conditions
in the computer hardware industry, seasonality of the business
cycle, as well as general conditions and other factors external to
the Company.
<PAGE>
PART II. OTHER INFORMATION
- ---------------------------
Item 4 Submission of Matters to a Vote of Security Holders
---------------------------------------------------
The following propositions were submitted to the shareholders
for approval at the annual meeting of shareholders held on March 5,
1997 at the offices of the Company and were approved as indicated:
No. 1: ELECTION OF DIRECTORS
To serve for the term continuing through the next annual
meeting and until the election and qualification of their
respective successors.
FOR WITHHELD
--- --------
Kenneth R. Aupperle 4,150,517 77,450
Kenneth Plotkin 4,150,517 77,450
Laura Aupperle 3,742,357 485,610
Dorothy Plotkin 3,743,357 484,610
Leonard Neuhaus 3,735,397 492,570
Bernard Herman 3,747,357 480,610
No. 2: Proposal to ratify the appointment of BDO Seidman, LLP
Certified Public Accountants, as the independent auditors to
examine the financial statements of the Company for the fiscal year
ended September 30, 1997.
FOR 4,203,157 AGAINST 8,560 ABSTAIN 16,250
<PAGE>
SIGNATURES
----------
Pursuant to the requirements of the Securities and Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned thereunto duly authorized.
HAUPPAUGE DIGITAL, INC.
----------------------
Registrant
Date: May 7, 1997 By: /s/ KENNETH PLOTKIN
--------------------
KENNETH PLOTKIN
Vice President and
Chief Executive Officer
Date: May 7, 1997 By: /s/ GERALD TUCCIARONE
----------------------
GERALD TUCCIARONE
Treasurer and Chief
Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> MAR-31-1997
<CASH> 5,840,646
<SECURITIES> 0
<RECEIVABLES> 1,732,118
<ALLOWANCES> 80,500
<INVENTORY> 6,232,223
<CURRENT-ASSETS> 13,906,410
<PP&E> 433,037
<DEPRECIATION> 248,627
<TOTAL-ASSETS> 14,149,386
<CURRENT-LIABILITIES> 5,496,838
<BONDS> 0
0
0
<COMMON> 44,653
<OTHER-SE> 8,607,895
<TOTAL-LIABILITY-AND-EQUITY> 14,149,386
<SALES> 12,852,113
<TOTAL-REVENUES> 12,852,113
<CGS> 9,895,261
<TOTAL-COSTS> 2,253,685
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 5,500
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 819,437
<INCOME-TAX> 185,927
<INCOME-CONTINUING> 633,510
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 633,510
<EPS-PRIMARY> $ 0.14
<EPS-DILUTED> $ 0.14
</TABLE>
