<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, 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 1-13516
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 11, 1997 was 6,769,425 shares.
<PAGE> 2
UNIVERSAL AUTOMOTIVE INDUSTRIES, INC.
INDEX
PART I. FINANCIAL INFORMATION
Page (s)
Item 1. Financial Statements
Consolidated Balance Sheets
June 30, 1997 (Unaudited) and December 31, 1996 3
Consolidated Statement of Operations
(Unaudited) - for the three and six months ended
June 30, 1997 and 1996 4
Consolidated Statement of Cash Flows
(Unaudited) - for the six months ended
June 30, 1997 and 1996 5 - 6
Notes to Condensed Financial Statements (Unaudited) 7 - 8
Item 2. Management's Discussion and Analysis of Results of
Operations and Financial Condition 9 - 11
PART II. OTHER INFORMATION
Item 6 - Exhibits and Reports on Form 8-K 12
Signatures 13
2
<PAGE> 3
UNIVERSAL AUTOMOTIVE INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, 1997 December 31, 1996
------------- -----------------
(Unaudited)
Assets
<S> <C> <C>
Current Assets:
Cash & cash equivalents $ 22,703 $ 63,706
Accounts receivable, trade 15,807,742 11,919,002
Inventories 10,879,903 14,441,523
Income taxes refundable 181,435 183,049
Deferred income taxes 578,700 488,700
Prepaid expenses and other current assets 875,119 949,114
------------ ------------
28,345,602 28,045,094
------------ ------------
Property and Equipment, net 8,565,230 8,836,272
------------ ------------
Other Assets: 249,020 260,851
Goodwill, net 568,147 884,824
------------ ------------
Other assets 817,167 1,145,405
------------ ------------
Liabilities and Stockholders' Equity $ 37,727,999 $ 38,026,771
------------ ------------
Current Liabilities:
Accounts payable, trade $ 8,439,863 $ 8,583,217
Long-term indebtedness, current portion 2,824,018 2,710,583
Subordinated notes 675,000 1,050,000
Accrued expenses and other current liabilities 2,362,878 1,432,963
------------ ------------
14,301,759 13,776,763
------------ ------------
Long-term Liabilities:
Revolving loan indebtedness 11,017,586 11,432,525
Long-term indebtedness, non-current portion 2,420,928 2,710,145
Deferred income taxes 320,909 323,213
Due to stockholders 855,436 927,724
------------ ------------
14,614,859 15,393,607
------------ ------------
Stockholders' Equity:
Preferred stock (authorized 1,000,000 shares,
$.01 par value, none issued our outstanding) 0 0
Common stock (authorized 15,000,000 shares,
$.01 par value, 6,769,425 and 6,729,425 67,694 67,294
shares issued and outstanding, respectively) 7,913,840 7,777,788
Additional paid-in-capital 873,698 1,038,465
Retained earnings (43,851) (27,146)
------------ ------------
Foreign currency translation adjustments 8,811,381 8,856,401
------------ ------------
$ 37,727,999 $ 38,026,771
------------ ------------
</TABLE>
The accompanying notes are an integral part of the financial statements.
3
<PAGE> 4
UNIVERSAL AUTOMOTIVE INDUSTRIES, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
--------------------------- ------------------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net Sales $17,953,416 $19,451,798 $32,004,919 $32,462,166
Cost of Sales 13,817,094 15,439,735 25,064,641 26,537,803
---------- ---------- ---------- -----------
Gross Profit 4,136,322 4,012,063 6,940,278 5,924,363
Selling, General and Administrative Expenses 3,189,708 2,807,086 5,708,904 4,900,361
---------- ---------- ---------- -----------
Income From Operations 946,614 1,204,977 1,231,374 1,024,002
---------- ---------- ---------- -----------
Other Expense: 0 0 650,000
Provision for lawsuit settlement 395,321 218,198 815,220 486,433
Interest expense (44,208) (78,785) (33,604) (78,785)
---------- ---------- ---------- -----------
Other 351,113 139,413 1,431,616 407,648
========== ========== ========== ===========
Income (Loss) before Provision for Income Taxes 595,501 1,065,564 (200,242) 618,354
Income Tax Provision (Benefit) 288,525 364,580 (35,475) 220,537
---------- ---------- ---------- -----------
Net Income (Loss) $328,976 $700,984 ($164,767) $395,817
========== ========== ========== ===========
Net Income (Loss) Per Share 0.05 $0.10 ($0.02) $0.06
Weighted average number of common shares
outstanding 6,766,801 7,103,533 6,734,041 7,087,581
</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>
Six Months Ended June 30,
-----------------------------
1997 1996
----------- ------------
<S> <C> <C>
Cash Flows from Operating Activities:
Net Income ( Loss) ($164,767) $395,817
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization 612,646 384,824
Provision for lawsuit settlement 650,000 0
Effect of exchange rate changes (16,705) 361
Compensation expense for stock options 79,048 56,008
Deferred income taxes (92,304) (103,179)
Changes in operating assets and liabilities:
Accounts receivable, trade (3,888,740) (3,823,193)
Inventories 3,561,620 1,229,405
Prepaid expenses and other current assets 75,609 (94,618)
Other assets 136,811 (377,283)
Accounts payable, trade (143,354) 5,028,547
Accrued expenses and other current liabilities 337,317 453,813
---------- -----------
Net cash provided by operating activities 1,147,181 691,692
---------- -----------
Cash Flows for Investing Activities:
(Increase) in advances & loans to partially
owned entity 0 (141,301)
Purchase of property and equipment (150,175) (2,520,525)
---------- -----------
Net cash used in investing activities (150,175) (2,661,826)
---------- -----------
Cash Flows from Financing Activities:
Net (decrease)in revolving loan indebtedness (414,939) (88,990)
Proceeds on notes payable 233,448 2,318,939
Principal payments on notes payable (409,230) (298,061)
Principal payments on subordinated notes (375,000) 0
Principal payments on loans from shareholders
(72,288) (96,561)
Net cash provided by (used in) financing
activities (1,038,009) 1,835,327
---------- -----------
Net Decrease in Cash and Cash Equivalents (41,003) (134,807)
Cash and Cash Equivalents, Beginning of Period 63,706 401,117
---------- -----------
Cash and Cash Equivalents, End of Period $22,703 $266,310
========== ===========
</TABLE>
5
<PAGE> 6
<TABLE>
<S> <C> <C>
Supplemental Disclosures of Cash Flow Information:
Cash paid for interest $607,789 $530,791
---------- ----------
Cash paid for income taxes $9,316 $21,897
---------- ----------
Supplemental Disclosures of Noncash Investing
and Financing Activities:
Assets acquired by issuance of common stock $0 $648,801
---------- ----------
</TABLE>
The accompanying notes are an integral part of the financial statements.
6
<PAGE> 7
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. For additional disclosures, see the
Notes to Consolidated Financial Statements contained in the Company's Annual
Report on Form 10-K for the year ended December 31, 1996.
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
June 30, 1997
-------------
Finished goods $ 9,328,534
Work in process 321,097
Raw materials 1,230,272
-----------
$10,879,903
-----------
3. BASIS OF PRESENTATION
Income Taxes
The Company's effective tax rate of 18% in 1997 and 36% in 1996 varies from
the federal statutory tax rate principally due to losses in the Company's
Hungarian subsidiary for which no tax benefits are available.
Net Income Per Share
Warrants and options issued by the Company are only included in the computation
of weighted average number of shares, where their inclusion is not
anti-dilutive.
Recently issued FASB Statement 128, "Earnings Per Share," which will become
effective for the year ended December 31, 1997, is not expected to have a
significant effect on the Company's reported earnings per share.
4. LEGAL PROCEEDINGS
During 1995, a lawsuit was filed against the Company in the United States
Bankruptcy Court by the Trustee of the bankrupt estate of First National
Parts Exchange, Inc. ("the Estate") 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 $5,100,000 in damages under two claims. The largest claim,
for approximately $4,600,000 is the result of alleged "voidable transactions"
concerning transfers of product by the Estate to the Company without receiving
"reasonably equivalent values" (as defined). In April, 1997, the Company entered
into a settlement agreement with the Trustee covering all litigation between the
parties. The settlement agreement called for the payment of a total of
$250,000 in several installments and the issuance of 200,000 shares (with a
guaranteed price of $2.00 per share) of Universal common stock to the Estate.
The Company recorded a provision of $650,000 to reflect this settlement
agreement in the first quarter of 1997. The settlement agreement was objected
to by certain creditors of
7
<PAGE> 8
the Estate, and the Company was unwilling to increase the settlement to the sum
demanded by such creditors. Accordingly, the settlement agreement has lapsed
as of July 31, 1997 and the case is expected to go to trial in the fourth
quarter of 1997.
5. BANK FINANCING
At June 30, 1997, the Company was in violation of some covenants under its
then existing credit agreement with American National Bank and had executed
a forbearance agreement with the Bank until replacement financing was obtained.
On July 14, 1997, the Company closed a line of credit with LaSalle National
Bank of up to $20,000,000 based on eligible accounts receivable and inventory
and a $4,450,000 term loan. The line of credit bears interest at prime plus
0.5% per annum, subject to an ongoing option to convert to LIBOR plus 2.5% per
annum. The revolving credit facility is for an initial term ending May 1,
1999. The term loan amortizes through May 1, 2002 and bears interest at prime
plus 0.75% per annum, with an ongoing option to convert to LIBOR plus 2.75% per
annum.
On the same day, the Company sold a $4,500,000 subordinated debenture to
Tandem Capital, Inc. (an affiliate of Sirrom Capital Corporation), calling for
payments of interest only at 12.25% per annum through maturity. The Company
issued Tandem a warrant to purchase 450,000 shares of the Company's common
stock at an exercise price equal to 80% of the average closing bid price of the
Company's common stock for the 20 days preceding the first anniversary of the
debenture closing date. Tandem will also receive warrants to purchase an
additional 225,000 shares of common stock on the 14th of each of the following
months: August 1998; February 1999; August 1999; August 2000; and August 2001;
provided that if the debenture is prepaid before any scheduled warrant issue
date except August 1998, then all subsequent warrants will not issue. In each
instance, the exercise price for the warrants is 80% of the average closing bid
price of the Company's common stock for the 20 days preceding each such warrant
issue date. The warrants are exercisable at any time through the sixth
anniversary of the debenture issue date. The amounts to be allocated to such
warrants are in the process of determination.
8
<PAGE> 9
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATION AND FINANCIAL CONDITION1
RESULTS OF OPERATIONS
Three Months Ended June 30, 1997 Compared To Three Months Ended June 30, 1996
Net sales for the three months ended June 30, 1997 decreased by
$1,498,382 or 8% to $17,953,416. Such decrease was due primarily to a 68%
decrease in sales of the Company's non-brake related businesses which have not
been fully offset by sales of UBP brake products which have increased 32%. The
Company discontinued its non-brake warehouse distribution business in the
second half of 1996 to focus on its higher margin brake business.
Gross profits for the three months ended June 30, 1997 were $4,136,322
or 23.0% of net sales compared to $4,012,063 or 20.6% in the same period of
1996. Such increase in gross profit was due primarily to an increase in gross
profit percentage as sales of higher margin brake parts replace lower margin
non-brake warehouse distribution business discontinued in 1996 offset by
decreased sales.
Selling, general and administrative expenses for the three months ended
June 30, 1997 increased by $382,622 or 13.6% from $2,807,086 for the same
period in 1996. Such increase was due primarily to: (i) an increase in selling
and distribution expenses due to the changing mix of customers, and (ii)
selling, general and administrative expenses related to the friction
manufacturing business acquired by the Company in June 1996.
Other expense for the three months ended June 30, 1997 increased to
$351,113 from $139,413 for the same period of 1996. The increase is
attributable to an increase in interest expense due primarily to a higher level
of borrowing at June 30, 1997 compared to June 30, 1996.
Net income for the three months ended June 30, 1997 was $328,976
compared to net income of $700,984 for the same period in 1996. This decrease
in net income is attributed to increased selling, general and administrative
expenses and increased interest expense offset by increased gross profits.
Six Months Ended June 30, 1997 Compared to Six Months Ended June 30, 1996
Net sales for the six months ended June 30, 1997 decreased by $457,247
or 1% to $32,000,919. Sales of UBP brake parts were 41% higher than the same
period in 1996 and almost offset the 63% sales decrease in the Company's
non-brake businesses. The decrease in the non-brake business stems from the
discontinuance in the second half of 1996 of the warehouse distribution
business to allow the Company to focus on the higher margin UBP "value line"
brake business.
- -----------------
1 Some of the statements included in Management's Discussion and Analysis of
Financial Condition and Results of Operations, may be considered to be "forward
looking statements" since such statements relate to matters which have not yet
occurred. Foe example, phrases such as "the Company anticipates," "believes"
or "expects" indicate that it is possible that the event anticipated, believed
or expected may not occur.; Should such event not occur, then the result which
the Company expected also may not occur or occur in a different manner, which
may be more or less favorable to the Company. The Company does not undertake
any obligation to publicly release the result of any revisions to these forward
looking statements that may be made to reflect any future event or
circumstances.
9
<PAGE> 10
Gross profits for the six months ended June 30, 1997 increased
$1,015,915 or 17.1% to $6,940,278. The percent of gross profit for the six
month period was 21.7% compared to 18.2% for the same 1996 period. The
increase in gross profits is due to the change in sales mix toward higher
margin brake sales. Brake related sales for 1997 six months to date were 85% of
total sales versus 59% for 1996 six months to date.
Selling, general and administrative expenses for the six months ended
June 30, 1997 increased $808,543 or 16.5% from $4,900,361 for the same period
in 1996. Such increase was due primarily to (i) an increase in selling and
distribution expenses due to the changing mix of customers, (ii) an increase in
the reserve for bad debts for collection risks associated with certain
customers and (iii) selling, general and administrative expenses associated
with the friction manufacturing business acquired in June 1996.
Other Expense for the six months ended June 30, 1997 increased by
$1,023,968 from $407,648 for the same period of 1996. The increase is
attributable to a provision for lawsuit settlement of $650,000 (pretax) as
described in Note 4 to the Condensed Financial Statements and an increase in
interest expense due primarily to a higher level of borrowing at June 30, 1997
compared to June 30, 1996.
Net loss for the six months ended June 30, 1997 was $164,767 compared
to net income of $395,817 for the same period in 1996. This decrease in net
income is due to the one time provision for lawsuit settlement described
previously and increased interest expense offset by higher income from
operations due to increased gross profits.
10
<PAGE> 11
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATION AND FINANCIAL CONDITION (CONTINUED)
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities for the six months ended June
30, 1997 was $1,147,181. This was due primarily to cash generated from
operations of approximately $1,000,000. The increase in accounts receivable of
$3,888,740 was offset by decreases in inventories of approximately the same
magnitude.
Net cash used in investing activities was $150,175, which is
attributable primarily to acquisition of various items of manufacturing
equipment. Net cash used in financing activities was $1,038,009, consisting
primarily of payments which decreased bank borrowings and payments of certain
subordinated notes.
The Company expects to continue to finance its operations through cash
flow generated from operations, borrowings under the Company's bank lines of
credit, and credit from its suppliers. At June 30, 1997, the Company was in
violation of some covenants under its then existing credit agreement with
American National Bank and had executed a forbearance agreement with the Bank
until replacement financing was obtained. On July 14, 1997, the Company closed
a line of credit with LaSalle National Bank of up to $20,000,000 based on
eligible accounts receivable and inventory and a $4,450,000 term loan. The
line of credit bears interest at prime plus 0.5% per annum, subject to an
ongoing option to convert to LIBOR plus 2.5% per annum. The revolving credit
facility is for an initial term ending May 1, 1999. The term loan amortizes
through May 1, 2002 and bears interest at prime plus 0.75% per annum, with an
ongoing option to convert to LIBOR plus 2.75% per annum.
On the same day, the Company sold a $4,500,000 subordinated debenture
to Tandem Capital, Inc. (an affiliate of Sirrom Capital Corporation), calling
for payments of interest only at 12.25% per annum through maturity. The
Company issued Tandem a warrant to purchase 450,000 shares of the Company's
common stock at an exercise price equal to 80% of the average closing bid price
of the Company's common stock for the 20 days preceding the first anniversary
of the debenture closing date. Tandem will also receive warrants to purchase
an additional 225,000 shares of common stock on the 14th of each of the
following months: August 1998; February 1999; August 1999; August 2000; and
August 2001; provided that if the debenture is prepaid before any scheduled
warrant issue date except August 1998, then all subsequent warrants will not
issue. In each instance, the exercise price for the warrants is 80% of the
average closing bid price of the Company's common stock for the 20 days
preceding each such warrant issue date. The warrants are exercisable at any
time through the sixth anniversary of the debenture issue date. The amounts to
be allocated to such warrants are in the process of determination.
11
<PAGE> 12
PART II OTHER INFORMATION
Item 4 - Submission of Matters to a Vote of Security Holders
On June 26, 1997, Universal Automotive Industries, Inc. held its annual meeting
of shareholders. Present at this meeting, in person and by proxy, were
shareholders representing 4,157,980 of the 6,729,425 issued and outstanding
shares of Common Stock at the date of record (61.8%) 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:
Name Votes For Votes Against Abstentions
Arvin Scott 4,149,980 0 8,000
Yehuda Tzur 4,149,980 0 8,000
Sami Israel 4,149,980 0 8,000
Eric Goodman 4,149,980 0 8,000
Sheldon Robinson 4,149,980 0 8,000
Sol S. Weiner 4,149,980 0 8,000
Dennis L. Kessler 4,149,980 0 8,000
b)The firm of Altschuler, Melvoin and Glasser LLP was re-appointed as the
Company's independent auditors for 1997. Holders of Common Stock holding
4,157,980 votes were cast in favor, no 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
12
<PAGE> 13
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, 1997
13
<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,
--------------------------- -------------------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
PRIMARY NET INCOME (LOSS) PER COMMON SHARE
Net Income (Loss) $ 328,976 $ 700,984 $ (164,767) $ 395,817
---------- ----------- ---------- -----------
Weighted average Common Shares outstanding 6,738,656 6,594,207 6,734,041 6,566,280
Options and warrants assumed to be Common Stock
equivalents using Treasury Stock Method 28,145 509,326 0 521,281
---------- ----------- ---------- -----------
Weighted average Common Shares
outstanding, as adjusted 6,766,801 7,103,033 6,734,041 7,087,581
---------- ----------- ---------- -----------
Primary Net Income (Loss) Per Common Share $0.05 $0.10 ($0.02) $0.06
---------- ----------- ---------- -----------
FULLY DILUTED NET INCOME (LOSS) PER COMMON SHARE
Net Income (Loss) $ 328,976 $ 700,984 ($164,767) $ 395,817
---------- ----------- ---------- -----------
Weighted average Common Shares outstanding 6,738,656 6,594,207 6,734,041 6,566,280
Options and warrants assumed to be Common Stock
equivalents using Treasury Stock Method 38,551 654,149 0 598,639
---------- ----------- ---------- -----------
Weighted average common shares outstanding, as
adjusted 6,777,207 7,248,356 6,734,041 7,164,919
---------- ----------- ---------- -----------
Fully Diluted Net Income (Loss) per Common Share $0.05 $0.10 ($0.02) $0.06
---------- ----------- ---------- -----------
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1997
<CASH> 22,703
<SECURITIES> 0
<RECEIVABLES> 15,807,742
<ALLOWANCES> 0
<INVENTORY> 10,879,903
<CURRENT-ASSETS> 28,345,602
<PP&E> 10,921,192
<DEPRECIATION> 2,355,962
<TOTAL-ASSETS> 37,727,999
<CURRENT-LIABILITIES> 14,301,759
<BONDS> 13,438,514
0
0
<COMMON> 67,694
<OTHER-SE> 8,743,687
<TOTAL-LIABILITY-AND-EQUITY> 37,729,999
<SALES> 32,004,919
<TOTAL-REVENUES> 32,004,919
<CGS> 25,064,641
<TOTAL-COSTS> 25,064,641
<OTHER-EXPENSES> 6,325,300
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 815,220
<INCOME-PRETAX> (200,242)
<INCOME-TAX> (35,475)
<INCOME-CONTINUING> (35,475)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (35,475)
<EPS-PRIMARY> (.02)
<EPS-DILUTED> (.02)
</TABLE>
