<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
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 1-13516
-------
UNIVERSAL AUTOMOTIVE INDUSTRIES, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 36-3973627
------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3350 North Kedzie
Chicago, Illinois 60618-5722
---------------------------------------
(Address of principal executive offices)
(Zip Code)
(312) 478-2323
----------------------------------------------------
(Registrant's telephone number, including area code)
N/A
-------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
------ ------
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes No
------- -------
APPLICABLE ONLY TO CORPORATE ISSUERS:
The number of shares of issuer's Common Stock, par value $.01 per share,
outstanding as of August 13, 1996 was 6,729,425 shares.
<PAGE> 2
UNIVERSAL AUTOMOTIVE INDUSTRIES, INC.
INDEX
PART I. FINANCIAL INFORMATION Page (s)
Item 1. Financial Statements
Consolidated Balance Sheets
June 30, 1996 (Unaudited) and December 31, 1995 3
Consolidated Statement of Operations
(Unaudited) - for the three and six months ended
June 30, 1996 and 1995 4
Consolidated Statement of Cash Flows
(Unaudited) - for the six months ended
June 30, 1996 and 1995 5
Notes to Condensed Financial Statements (Unaudited) 6 - 7
Item 2. Management's Discussion and Analysis of Results of
Operations and Financial Condition 8 - 10
PART II. OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K 11
Signatures 12
Computation of Earnings per Share 13
2
<PAGE> 3
UNIVERSAL AUTOMOTIVE INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, 1996 December 31, 1995
------------- -----------------
<S> <C> <C>
Assets (Unaudited)
Current Assets:
Cash & cash equivalents $266,310 $401,117
Accounts receivable, trade 12,269,823 8,446,630
Inventories 11,591,915 10,362,510
Income taxes refundable 2,027 302,313
Deferred income tax benefit 323,619 220,400
Prepaid expenses and other current assets 760,319 365,416
----------- ------------
25,214,013 20,098,386
----------- ------------
Property and Equipment, net 7,770,301 5,254,644
----------- ------------
Other Assets:
Investments 0 60,316
Goodwill, net 266,803 284,305
Other assets 1,379,803 718,184
----------- -----------
1,646,606 1,062,805
----------- -----------
$34,630,920 $26,415,835
=========== ===========
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable, trade 9,879,131 4,850,584
Long-term indebtedness, current portion 774,495 407,079
Accrued expenses and other current liabilities 831,555 491,488
Income taxes payable 136,187 22,441
----------- -----------
11,621,368 5,771,592
----------- -----------
Long-term Liabilities:
Revolving loan indebtedness 9,243,594 9,332,584
Long-term indebtedness, non-current portion 3,690,327 2,036,866
Deferred income taxes 181,858 181,818
Due to stockholders & affiliates 235,810 533,988
----------- -----------
13,351,589 12,085,256
----------- -----------
Stockholders' Equity:
Preferred stock (authorized 1,000,000 shares,
$.01 par value, none issued or outstanding) 0 0
Common stock (authorized 15,000,000 shares,
$.01 par value, 6,728,025 and 6,500,000 sha
issued and outstanding, respectively) 66,897 65,000
Additional paid-in-capital 8,619,606 6,976,204
Retained earnings 1,927,701 1,531,885
Foreign currency translation adjustments (13,741) (14,102)
Treasury stock (78,675 shares) (942,500) 0
----------- ------------
9,657,963 8,558,987
----------- -----------
$34,630,920 $26,415,835
=========== ===========
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE> 4
UNIVERSAL AUTOMOTIVE INDUSTRIES, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
----------------------------- ----------------------------
1996 1995 1996 1995
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Net Sales $19,451,798 $13,028,477 $32,462,166 $21,519,450
Cost of Sales 15,439,735 10,617,857 26,537,803 17,791,176
----------- ----------- ----------- ------------
Gross Profit 4,012,063 2,410,620 5,924,363 3,728,274
Selling, General and Administrative Expenses 2,807,086 1,952,670 4,900,361 3,329,096
----------- ----------- ----------- ------------
Income from Operations 1,204,977 457,950 1,024,002 399,178
----------- ----------- ----------- ------------
Other Expense (Income):
Equity in income of subsidiary (827) (40,899) (827) (63,055)
Interest expense 218,198 173,644 486,433 337,794
Loss (gain) on foreign exchange (8,167) 0 (8,167) 0
Other (69,791) (13,441) (69,791) (24,175)
----------- ----------- ----------- ------------
139,413 119,304 407,648 250,564
----------- ----------- ----------- ------------
Income before Provision for Income Taxes 1,065,564 338,646 616,354 148,614
Income Tax Provision: 364,580 62,538 220,537 22,292
----------- ----------- ----------- ------------
Net Income $700,984 $276,108 $395,817 $126,322
=========== =========== =========== ============
Net Income Per Share $0.10 $0.04 $0.06 $0.02
=========== =========== =========== ============
Weighted average number of common
shares outstanding 7,103,533 7,051,353 7,087,561 7,035,488
=========== =========== =========== ============
</TABLE>
The accompanying notes are an integral part of the financial statements.
4
<PAGE> 5
UNIVERSAL AUTOMOTIVE INDUSTRIES, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended June 30,
--------------------------
1996 1995
-------- --------
<S> <C> <C>
Cash Flows from Operating Activities:
Net Income $395,817 $126,322
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization 384,824 230,819
Equity in income of subsidiary (827) (63,055)
Effect of exchange rate changes 361 22,745
Compensation expense for stock options 56,008
Deferred income taxes (103,179)
Changes in operating assets and liabilities:
Accounts receivable, trade (3,823,193) (702,755)
Inventories (1,229,405) (1,091,689)
Prepaid expenses and other current assets (94,618) (74,338)
Accounts payable, trade 5,028,547 (683,809)
Accrued expenses and other current
liabilities 453,813 (319,107)
---------- ----------
Net cash provided by (used in) operating
activities 1,068,148 (2,554,867)
---------- ----------
Cash Flows from Investing Activities:
Decrease in advances & loans to partially
owned entity (141,301) (4,014)
Purchase of property and equipment (2,805,525) (556,628)
Purchase of other assets and goodwill (739,072)
---------- ----------
Net cash used in investing activities (3,685,898) (560,642)
---------- ----------
Cash Flows from Financing Activities:
Issuance of common stock 647,616
Revolving loan indebtedness (88,990) 854,455
Net principal borrowings (payments)
on notes payable 2,020,878 (426,751)
Payment on stockholders loans (96,561)
---------- ----------
Net cash provided by financing activities 2,482,943 427,704
---------- ----------
Net Decrease in Cash and Cash Equivalents (134,807) (2,687,805)
Cash and Cash Equivalents, Beginning of Period 401,117 2,966,396
---------- ----------
Cash and Cash Equivalents, End of Period $266,310 $278,591
========== ==========
</TABLE>
The accompanying notes are an integral part of the financial statements.
5
<PAGE> 6
UNIVERSAL AUTOMOTIVE INDUSTRIES, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
1. UNAUDITED INTERIM FINANCIAL STATEMENTS
Interim condensed financial statements are prepared pursuant to the
requirements for reporting on Form 10-Q. Accordingly, certain disclosures
accompanying annual financial statements prepared in accordance with generally
accepted accounting principles are omitted.
In the opinion of management of Universal Automotive Industries, Inc. (the
"Company"), all adjustments, consisting solely of normal recurring adjustments,
necessary for the fair presentation of the financial statements for these
interim periods have been included. The current periods' results of operations
are not necessarily indicative of results which ultimately may be achieved for
the year.
2. INVENTORIES
<TABLE>
<CAPTION>
June 30, 1996
----------------
<S> <C>
Finished goods $10,542,527
Work in process 274,450
Raw materials 774,938
----------------
$11,591,915
----------------
</TABLE>
3. ACQUISITION
In June 1996, the Company acquired substantially all of the assets of North
American Friction, Inc., a Canadian manufacturer of brake friction parts, for
approximately $1,132,000. A substantial portion of the acquisition price was
paid for by the Company through the assumption of liabilities. In connection
with this acquisition, the Company issued 130,000 shares of its common stock to
the seller.
4. WAREHOUSE DISTRIBUTION BUSINESS
During June, 1996, the Company canceled an agreement that had been entered into
in January, 1996 to sell its Chicago warehouse distribution business because
the potential purchaser of such business could not obtain the necessary
financing. The Company has decided to liquidate the remaining warehouse
distribution inventory in the ordinary course of business. Management has
established a reserve for any anticipated loss on the liquidation of such
inventory.
5. EXERCISE OF UNDERWRITERS' WARRANTS
In connection with the Company's public offering in December 1994, the Company
agreed to sell to the underwriter, warrants to purchase 130,000 units (one
share of common stock and one warrant) at a price of $.001 per unit,
exercisable until December 31, 1999, at an initial per unit exercise price
equal to 145% of the public offering price of $5.00 per unit (or an exercise
price of $7.25). On January 24, 1996, such underwriter warrants for the
purchase of 130,000 units were exercised. Based on the Underwriting Agreement,
the holders of such underwriter warrants elected to exchange shares of the
Company stock (78,675 shares) whose then current market value was equal to the
total required exercise price of $942,500 (130,000 unit at $7.25). Thus, an
additional 51,325 shares of Company stock were issued to the underwriter,
without any cash consideration to the Company.
6. BASIS OF PRESENTATION
Income Taxes
The Company's effective income tax rate in 1995 of 21 % varies from the federal
statutory tax rate principally due to the utilization of loss carry forwards
offsetting the income net of state taxes of one of the Canadian subsidiaries
and a higher income tax rate on the other Canadian subsidiary.
The Company's effective tax rate in 1996 of 32% varies from the federal
statutory tax rate principally due to losses in the Company's Hungarian
subsidiary for which no tax benefits are available.
6
<PAGE> 7
UNIVERSAL AUTOMOTIVE INDUSTRIES, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
6. BASIS OF PRESENTATION - CONTINUED
Net Income Per Share
Net income per share is computed by dividing net income by the weighted average
number of shares of common stock and common stock equivalents outstanding
during the period using the treasury stock method based on the average price of
the stock during the period..
Foreign Currency Translation
During 1996, the Company determined that Hungary qualified as a highly
inflationary economy and therefore changed its method of translating foreign
currency for its Hungarian subsidiary. The financial statements are remeasured
as if the functional currency is the U.S. dollar. The remeasurement of the
local currency into U.S. dollars creates translation adjustments which are
included in net income.
7. LEGAL PROCEEDINGS
During 1995, a lawsuit was filed against the Company in the United States
Bankruptcy Court by the Trustee of a bankrupt entity (the "Debtor") with which
the Company had transacted both purchases and sales of certain automotive parts
in 1992 and 1993. The Trustee is seeking a total of $4,100,000 in damages under
two claims. The largest claim, for approximately $3,700,000 is the result of
alleged "voidable transactions" concerning transfers of product by the Debtor
to the Company without receiving "reasonably equivalent values" (as defined in
the proceedings). The Company believes that all transactions with the Debtor
were conducted in the ordinary course of business and at "reasonably equivalent
values", and thus disclaims any liability under these claims. The Company,
which is in the midst of defending such action, (currently in the discovery
stage) believes that no significant liability will result and has made no
provisions therefor.
Further, the Company has filed a claim of approximately $322,000 against the
Debtor for the amounts owed to it for auto parts sold to the Debtor. Because of
the Debtor's bankruptcy, no receivable is reflected for such amount.
8. ISSUANCE OF STOCK
During June, 1996, the Company issued shares of its common stock in connection
with the following:
a. 39,500 shares of stock were issued to a company in Dallas, Texas from which
the Company acquired inventory and a customer list in June, 1995. The shares
were issued in consideration of the termination of the cash component of a
consulting agreement and covenants not to compete, both expiring in October,
1998, entered into with the principals of the selling company. At the date the
shares were issued, an amount of $342,200 remained unpaid under such
agreements, which amount will be charged to expense at the rate of $11,800 per
month.
b: 7,200 shares issued to certain individuals in connection with the
acquisition of the inventory and customer list of an aftermarket distributor
located in Massachusetts.
9. BANK FINANCING
At June 30, 1996 the Company was in violation of some covenants under its
credit agreement with NBD Bank. The bank has agreed to waive such violation.
7
<PAGE> 8
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATION AND FINANCIAL CONDITION
RESULTS OF OPERATIONS
Three Months Ended June 30, 1996 Compared To Three Months Ended June 30, 1995
Net sales for the three months ended June 30, 1996 increased by $6,423,321
or 49% to $19,451,798. Such increase was due primarily to a 60% increase in
sales in the Company's UBP brake parts business. The overall increase was
achieved despite a 30% sales decrease in the Company's Chicago warehouse
distribution business, which the Company is in the process of restructuring.
The sale of the Chicago area warehouse business was canceled when the buyer was
unable to secure the necessary financing. The Company is in the process of
downsizing the Chicago area warehouse business from 40,000 stock keeping units
to 2,500 stock keeping units, all brake parts. The Company will continue
servicing its existing Chicago area jobber customers with higher margin brake
parts. The Company is in the process of an orderly liquidation of
approximately $750,000 of non-brake items. Management has estimated that it
will recover $.90 on the dollar and has recorded a reserve for the anticipated
loss on liquidation. Also contributing to the second quarter sales increase
were $1,851,998 in sales from UPB Hungary, Inc., a wholly owned subsidiary
comprising the Company's Hungarian foundry operations, which was acquired in
October, 1995, and improved sales of commodity type auto parts sold by the
Company on a drop ship basis.
Gross profits for the three months ended June 30, 1996 were 20.6% of net
sales compared to 18.5% in the same period of 1995. Such increase in gross
profit as a percentage of net sales was due primarily to: (i) increased sales
of higher gross profit margin brake parts and (ii) improved sales of commodity
type products.
Selling, general and administrative expenses for the three months ended
June 30, 1996 increased by approximately $854,000 or 44% from $1,952,670 for
the same period in 1995 and as a percentage to sales 14.4% compared to 18.5%
for the same period in 1995. The increase in these expenses was due primarily
to: (i) an increase in selling and distribution expenses of a mostly variable
nature related to the 60% increase in sales in the Company's UBP brake parts
business, (ii) increase in expenses incurred by UBP Hungary, which was acquired
in October, 1995 (iii) start up costs associated with moving the rotor
manufacturing operations from Canada to Laredo, Texas and (iv) approximately
$56,000 in non-cash stock option compensation costs.
Net income for the three months ended June 30, 1996 was $700,984 compared
to a net income of $276,108 for the same period in 1995. This increase in net
income is attributed to (i) increased sales of higher margin brake parts and
(ii) improved sales of: commodity type parts.
Six Months Ended June 30, 1996 Compared To Six Months Ended June 30, 1995
Net sales for the six months ended June 30, 1996 increased by $10,942,716
or 51% to $32,462,166. Such increase was due primarily to a 60% increase in
sales in the Company's UBP brake parts business. The overall increase was
achieved despite a 30% sales decrease in the Company's Chicago warehouse
distribution business, which the Company is in the process of restructuring.
The sale of the Chicago area warehouse business was canceled when the buyer was
unable to secure the necessary financing. The Company is in the process of
downsizing the Chicago area warehouse business from 40,000 stock keeping units
to 2,500 stock keeping units. The Company will continue servicing its existing
Chicago area jobber customers with higher margin brake parts. The Company is in
the process of an orderly liquidation of approximately $750,000 of non-brake
items. Management has estimated that it will recover $.90 on the dollar and
has recorded a reserve for the anticipated loss on liquidation. Also
contributing to this increase in six months sales were $3,575,560 in sales from
the Company's Hungarian foundry operations, which was acquired in October,
1995, and improved sales of commodity type auto parts sold by the Company on a
drop ship basis.
8
<PAGE> 9
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATION AND FINANCIAL CONDITION
RESULTS OF OPERATIONS - CONTINUED
Gross profits for the six months ended June 30, 1996 were 18.25% of net
sales compared to 17.33% in the same period of 1995. Such increase in gross
profit as a percentage of net sales was due primarily to increased sales of
higher gross profit margin brake parts.
Selling, general and administrative expenses for the six months ended June
30, 1996 increased by approximately $1,571,265 or 47% from $3,329,096 for the
same period in 1995. Such increase was due primarily to: (i) an increase in
selling and distribution expenses of a mostly variable nature related to the
60% increase in sales in the Company's UBP brake parts business, (ii) an
increase in expenses incurred by UBP Hungary, which was acquired in October,
1995, (iii) an approximately $85,000 increase in legal fees incurred by the
Company in connection with defending the lawsuit filed against the Company in
the US Bankruptcy Court (see Note 7 to Condensed Financial Statements), (iv)
start up costs to move the rotor manufacturing operation from Canada to Laredo,
Texas and (v) approximately $56,000 in non-cash stock option compensation
costs.
Net income for the six months ended June 30, 1996 was $395,817 compared to
a net income of $126,322 for the same period in 1995. This increase in net
income is attributed to the following: (i) increased sales of higher gross
profit margin brake parts and (ii) improved sales of commodity type auto parts.
Management believes that the net income from operations for the six months
ended June 30, 1996 would have been approximately $391,000 higher if not for
the following one time charges:
Non-recurring costs
for six months ended June 30, 1996
<TABLE>
<S> <C>
Loss attributable to restructuring of the Company's Chicago
warehouse distribution division $110,000
Start up, down-time and moving costs of brake rotor manufacturing operation 136,000
Loss attributable to UBP Hungary - primarily as a result of disruptions
caused by the renovations and improvement projects which are expected
to be completed by June, 1996. 60,000
Legal fees related to the U. S. Bankruptcy Court lawsuit 85,000
--------
$391,000
</TABLE>
LIQUIDITY AND CAPITAL RESOURCES
Net cash generated from operating activities for the six months ended June
30, 1996 was $1,068,148. This was due primarily to; an approximately $5,000,000
increase in accounts payable resulting from extended vendor payment terms,
which was offset by an approximately $3,800,000 increase in accounts receivable
which was a result of a substantial increase in sales over the fourth quarter
of 1995.
Net cash used in investing activities was $3,685,898, which is
attributable primarily to the acquisition in January, 1996 of the remaining 50%
of UBP Friction, Inc., and other brake friction equipment, renovation and
improvements at the Hungarian foundry and the acquisition of additional rotor
manufacturing equipment.
Net cash provided from financing activities was $2,482,943 , consisting
primarily of long-term bank financing provided for the Hungarian foundry and
the rotor manufacturing operation.
9
<PAGE> 10
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATION AND FINANCIAL CONDITION
LIQUIDITY AND CAPITAL RESOURCES - CONTINUED
The Company expects to continue to finance its operations through cash
flow from the increases in sales and funds which may be made available by the
liquidation of non-brake inventory associated with the downsizing of the
Chicago area warehouse business. The Company anticipates that it will need
additional funds to finance continued growth.
The Company is negotiating with its current lender for an increase in its
revolving credit facility and is exploring additional debt and equity financing
opportunities. However, the Company cannot offer any assurances that it will
be successful in securing such additional financing.
10
<PAGE> 11
PART II OTHER INFORMATION
Item 4 - Submission of Matters to a Vote of Security Holders
On June 12, 1996, Universal Automotive Industries, Inc. held its annual
stockholders meeting. Present at this meeting, in person and by proxy, were
stockholders representing 5,453,096 of the 6,551,325 issued and outstanding
shares of Common Stock (83.24% of the total number of shares of Common Stock
outstanding and entitled to vote). The following items were voted upon at the
meeting:
a) The following Directors were elected to the Board:
<TABLE>
<CAPTION>
Name Votes For Votes Against Abstentions
- ---- --------- ------------- -----------
<S> <C> <C> <C>
Arvin Scott 5,439,446 13,650 0
Yehuda Tzur 5,439,446 13,650 0
Sami Israel 5,439,446 13,650 0
Eric Goodman 5,439,446 13,650 0
Sheldon Rubenstein 5,439,446 13,650 0
Sol Wiener 5,439,446 13,650 0
</TABLE>
b) The firm of Altschuler, Melvoin and Glasser LLP was re-appointed as the
Company's independent auditors for 1996. Holders of Common Stock holding
5,422,996 votes were cast in favor, 14,600 votes were cast against and no
shares abstained from voting.
Item 6 - Exhibits and Reports on Form 8-K
a) Exhibit 11 - Computation of Earnings Per Share
b) One report on Form 8-K was filed on June 6, 1996 wherein information was
disclosed under Item 5.
c) Exhibit 27 - Financial Data Schedule
11
<PAGE> 12
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the Company has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
UNIVERSAL AUTOMOTIVE INDUSTRIES, INC.
/s/ ARVIN SCOTT
--------------------------------------------------
Arvin Scott, Chief Executive Officer & President
(Principal Executive Officer)
/s/ JEROME J. HISS
--------------------------------------------------
Jerome J. Hiss, Chief Financial Officer (Principal
Financial Officer and Principal Accounting Officer)
Date: August 13, 1996
12
<PAGE> 1
EXHIBIT 11
UNIVERSAL AUTOMOTIVE INDUSTRIES, INC.
COMPUTATION OF EARNINGS PER SHARE
<TABLE>
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
---------------------------- ---------------------------
1996 1995 1996 1995
---------- --------- ---------- -----------
<S> <C> <C> <C> <C>
PRIMARY NET INCOME PER COMMON SHARE
Net Income $700,984 $276,108 $395,817 $126,322
========= ========= ========= =========
Weighted average Common Shares outstanding 6,594,207 6,500,000 6,566,280 6,500,000
========= ========= ========= =========
Warrants assumed to be Common Stock equivalents
using Treasury Stock Method 509,326 551,353 521,281 535,488
--------- --------- --------- ---------
Weighted average Common Shares outstanding, as
adjusted 7,103,533 7,051,353 7,087,561 7,035,488
========= ========= ========= =========
Primary Net Income per Common Share $0.10 $0.04 $0.06 $0.02
========= ========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
---------------------------- ---------------------------
1996 1995 1996 1995
---------- --------- ---------- -----------
<S> <C> <C> <C> <C>
FULLY DILUTED NET INCOME PER COMMON SHARE
Net Income $700,984 $276,108 $395,817 $126,322
========= ========= ========= =========
Weighted average Common Shares outstanding 6,594,207 6,500,000 6,566,280 6,500,000
Warrants assumed to be Common Stock equivalents
using Treasury Stock Method 654,149 622,143 598,639 622,143
--------- --------- --------- ---------
Weighted average Common Shares outstanding, as
adjusted 7,248,356 7,122,143 7,164,919 7,122,143
========= ========= ========= =========
Primary Net Income per Common Share $0.10 $0.04 $0.06 $0.02
========= ========= ========= =========
</TABLE>
13
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 266,310
<SECURITIES> 0
<RECEIVABLES> 12,269,823
<ALLOWANCES> 0
<INVENTORY> 11,591,915
<CURRENT-ASSETS> 25,214,013
<PP&E> 9,374,258
<DEPRECIATION> 1,603,957
<TOTAL-ASSETS> 34,630,920
<CURRENT-LIABILITIES> 11,621,368
<BONDS> 12,933,921
<COMMON> 66,897
0
0
<OTHER-SE> 9,591,066
<TOTAL-LIABILITY-AND-EQUITY> 34,630,920
<SALES> 32,462,166
<TOTAL-REVENUES> 32,462,166
<CGS> 26,537,803
<TOTAL-COSTS> 26,537,803
<OTHER-EXPENSES> 4,900,361
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 486,433
<INCOME-PRETAX> 616,354
<INCOME-TAX> 220,537
<INCOME-CONTINUING> 395,817
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 395,817
<EPS-PRIMARY> $0.06
<EPS-DILUTED> $0.06
</TABLE>
