SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
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, 1998
[_] 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: 000-22061
INDUSTRIAL DATA SYSTEMS CORPORATION
(Exact name of registrant as specified in its charter)
NEVADA 88-0322261
(State or, other Jurisdiction of (I.R.S.Employer Identification Number)
corporation or organization)
600 CENTURY PLAZA DRIVE, BUILDING 140, HOUSTON, TEXAS 77073-6013
(Address of Principal Executive Offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (281) 821-3200
Check whether the issuer (1) has filed all reports required to be filed by
Section 1.3 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 CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes of common
stock as of the latest practicable date.
Common Stock, $.001 Par Value 13,023,718
(Shares outstanding as of March 31, 1998)
1
<PAGE>
QUARTERLY REPORT ON FORM 10-QSB
FOR THE PERIOD ENDED MARCH 31, 1998
TABLE OF CONTENTS
PAGE
NUMBER
PART 1 FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets at March 31, 1998
and December 31, 1997............................................3
Condensed Consolidated Statements of Operations for the
Three Months ended March 31, 1998 and March 31, 1997.............4
Condensed Consolidated Statements of Cash Flows for the
Three Months ended March 31, 1998 and March 31, 1997.............5
Notes to Condensed Consolidated Financial Statements...............6
ITEM 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations..............................................7
PART II. OTHER INFORMATION
ITEM 2. Changes in Securities.............................................11
ITEM 6. Exhibits and Reports on Form 8-K..................................11
Signature ........................................................12
2
<PAGE>
INDUSTRIAL DATA SYSTEMS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
FOR YEAR ENDED DECEMBER 31, 1997
AND MARCH 31, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1998 1997
----------- -----------
(audited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents: ...................... $ 632,429 $ 77,684
Mutual funds .................................... 354,449 380,017
----------- -----------
986,878 457,701
Marketable securities:
Trading ......................................... 419,217 375,045
----------- -----------
419,217 375,045
Accounts receivable - trade, less allowance
for doubtful accounts of Approximately $33,000
and $13,500 in 1997 and 1998, respectively ...... 2,461,970 2,268,864
Inventory .......................................... 1,424,723 884,342
Note receivable from stockholder ................... 200,000 200,000
Advances to affiliate .............................. 0 5,546
Prepaid assets and deferred costs .................. 104,323 66,152
----------- -----------
Total current assets ......................... $ 5,597,111 $ 3,424,904
----------- -----------
PROPERTY AND EQUIPMENT, net ........................ 1,054,028 1,044,381
OTHER ASSETS ....................................... 0 6,228
GOODWILL ........................................... 59,841 59,841
----------- -----------
Total assets ................................. $ 6,710,980 $ 5,368,100
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Note payable to bank ............................... 425,000 425,000
Current portion - Note payable to bank, term ....... 25,682 34,242
Accounts payable ................................... 922,866 697,255
Income taxes payable ............................... 243,600 79,698
Accrued expenses and other current liabilities ..... 328,573 230,896
----------- -----------
Total current liabilities: ................... $ 1,945,721 $ 1,467,091
----------- -----------
420,671 420,671
Note payable to bank, term
DEFERRED INCOME TAX ................................ 41,334 41,334
STOCKHOLDERS' EQUITY:
Common stock, $.001 par value; 75,000,000 shares
authorized; 13,023,718 shares issued in
1998, 12,723,718 shares issued in 1997 ....... 13,024 12,724
Additional paid- in capital ........................ 2,879,682 2,216,713
Retained earnings .................................. 1,425,871 1,224,890
----------- -----------
4,318,577 3,454,327
Treasury stock ..................................... (15,323) (15,323)
----------- -----------
Total stockholders' equity ......................... $ 4,303,254 $ 3,439,004
----------- -----------
Total liabilities and stockholders' equity ... $ 6,710,980 $ 5,368,100
=========== ===========
</TABLE>
3
<PAGE>
INDUSTRIAL DATA SYSTEMS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED MARCH 31, 1997
AND MARCH 31, 1998 (UNAUDITED)
Three Months Three Months
ended ended
March 31, 1998 March 31, 1997
(unaudited) (unaudited)
------------ ------------
OPERATING REVENUES::
Product sales ......................... $ 650,681 $ 310,249
Consulting fees ........................ 1,048,615 909,407
Thermal sales .......................... 932,292 242,785
------------ ------------
$ 2,631,588 $ 1,462,441
COST OF REVENUES:
Product ................................ 461,361 233,856
Consulting .............................. 802,329 631,178
Thermal ................................ 750,882 162,690
------------ ------------
$ 2,014,572 $ 1,027,724
============ ============
GROSS PROFIT ............................. 617,016 434,717
Selling, general and administrative ...... 327,449 305,900
Depreciation ............................. 29,985 22,794
OTHER INCOME (EXPENSE)
Realized gains on marketable securities 16,681 55,497
Other income ........................... -- 15,460
Unrealized gain (loss) on marketable
securities ............................... (2,528) (51,377)
Interest income, net ................... (19,547) (20,152)
Thermal expense ........................ -- (22,723)
------------ ------------
INCOME BEFORE TAXES .................... $ 254,187 $ 82,728
TAX PROVISION ............................ 53,205 28,335
============ ============
NET INCOME ............................... $ 200,981 $ 54,393
============ ============
BASIC EARNINGS PER COMMON SHARE ......... $ .015 $ .004
============ ============
DILUTED EARNINGS PER COMMON SHARE ....... $ .015 $ .004
============ ============
BASIC WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING .............................. 13,023,718 12,926,858
============ ============
DILUTED WEIGHTED AVERAGE COMMON SHARES
OUTSTANDING .............................. 13,023,718 12,926,858
============ ============
4
<PAGE>
INDUSTRIAL DATA SYSTEMS CORPORATION
AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE
MONTHS ENDED
MARCH 31,
------------------------
(unaudited)
1998 1997
--------- -----------
CAH FLOWS FROM OPERATING ACTIVITIES:
Net income ........................................ $ 200,981 $ 54,393
Changes in working capital, net of Thermal
and Constant Power Manufacturing acquisitions .... 390,575 (183,291)
Net cash provided (used) by operating activities .. 591,556 (128,898)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Thermal ............................... -- (212,000)
Advances on note receivable from stockholder ...... -- (50,000)
Property acquired ................................. (9,647) (500,000)
Purchase of investments ........................... (44,172) (500,000)
Net cash used by investing activities ............. (53,819) (1,262,000)
--------- -----------
CASH FLOW FROM FINANCING ACTIVITIES:
Repayments on notes payable, net .................. (8,560) (300,000)
Proceeds from issuance of common stock, net ....... -- 799,999
Borrowings from bank .............................. -- 450,000
Net cash provided by financing activities ......... (8,560) 949,999
--------- -----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS ................................ 529,177 (440,899)
CASH AND CASH EQUIVALENTS, at beginning of period .. 457,701 975,100
--------- -----------
CASH AND CASH EQUIVALENTS, at end of period ........ $ 986,878 $ 534,201
========= ===========
* Non-Cash Transactions:
Issuance of common stock for acquisitions ......... 663,269 387,000
5
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INDUSTRIAL DATA SYSTEMS CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The financial statements of Industrial Data Systems Corporation (the
"Company"), included herein, are unaudited for all periods ended March 31,
1998 and 1997. They reflect all adjustments (consisting of normal recurring
adjustments) which are, in the opinion of management, necessary to fairly
depict the results for the periods presented. Certain information and note
disclosures, normally included in financial statements prepared in
accordance with generally accepted accounting principles', have been
condensed or omitted pursuant to rules and regulations of the Securities
and Exchange Commission. It is suggested these condensed financial
statements be read in conjunction with the Company's audited financial
statements for the years ended December 31, 1997 and 1996, which are
included in the Company's annual report on Form 10-KSB/A. The Company
believes that the disclosures made herein are adequate to make the
information presented not misleading.
2. NOTE RECEIVABLE FROM STOCKHOLDER:
At March 31, 1998, The Company had notes receivable due from a stockholder
in the amount of $200,000. The notes are unsecured, due on demand and bear
interest at a rate of 9% per annum. Interest on the note is due annually.
3. STOCKHOLDERS' EQUITY:
The Company issued 300,000 shares of common stock in exchange for the
entire stock of CPM (see note 4).
4. ACQUISITION:
In March 1998, the Company acquired Constant Power Manufacturing
Incorporated, (CPM) in a stock purchase. The Company issued 300,000 shares
of the Company's common stock, which may be put back to the Company for $1
per share at the option of the holder.
The following is the computation recorded in connection with the
acquisition of CPM:
Purchase price ........................................ $ 663,269
Fair value of net assets of
CPM acquired .................................... (663,269)
=========
$ --
The accounts of CPM are reflected in the condensed consolidated balance
sheets as of March 31, 1998. The shares of common stock issued by the
Company have been reflected as issued and outstanding. The following table
reflects pro forma information as if this transaction had occurred at the
beginning of each of the periods presented, (in 000's except per share
data):
FOR THE THREE FOR THE THREE
MONTHS MONTHS
ENDED MARCH 31, ENDED MARCH 31,
1998 1997
--------------- ---------------
Total Revenue ...................... $ 3,550 $ 3,308
Net Income ......................... 328 787
Income per Share ................... .02 .06
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
The following discussion is qualified in its entirety by, and should be
read in conjunction with, the Company's Consolidated Financial Statements
including the notes thereto, included elsewhere in the Company's Annual Report
on Form 10-KSB/A for the year ended December 31, 1997.
OVERVIEW
The Company has been in business since 1985 engaging in providing
engineering consulting services to the pipeline divisions of major integrated
oil and gas companies. For the period 1985 through 1989, most of its revenues
were derived from this segment. In October 1997, the engineering consulting
segment, which had previously operated as Industrial Data Systems, Inc. dba IDS
Engineering, was incorporated as a Texas corporation under the name of IDS
Engineering, Inc. (IED). The Company introduced its computer product segment in
1989 to provide industrial grade portable and rack mounted computers for
commercial use. This segment operated as a Texas corporation under the name of
Industrial Data Systems, Inc. (IPD). The IPD segment has generated sales as a
percent of total revenue of 25% and 21%, for the three months ended March 31,
1998 and 1997, respectively, while the IED segment has generated sales as a
percent of total revenue of 40% and 62% for the same periods. In 1997, the
Company acquired the Thermal segment, which fabricates air handling equipment
for commercial heating ventilation and cooling systems. The Thermal segment has
generated sales as a percent of total revenue of 35% and 17% for the three
months ended March 31, 1998 and 1997, respectively.
The gross margin varies between each of its operating segments. Computer
product sales have produced a gross margin ranging from 29.1% and 24.6% for the
three months ended March 31, 1998 and 1997, respectively, due to the decrease in
component part costs. The gross margin for pipeline engineering services, which
reflects direct labor costs, has ranged from 23.5% in 1998 to 30.5% in 1997.
This decrease is attributable to higher labor costs and increased competition,
resulting in lower margins. Thermal's gross margin was 19.5% and 32.9% for the
three months ended March 31, 1998 and 1997, respectively. This variation is
primarily attributable to pricing, and to direct labor as a component of cost.
The overall gross margin for Industrial Data Systems Corporation, which includes
product sales, pipeline consulting services, and Thermal's operations for the
three months ended March 31, 1998 was 23.5%. The overall gross margin for the
Company for the same period in 1997 was 29.7%. Gross margin for 1997 reflects
Thermal's operation only for the month of March 1997.
The Company believes the addition of Constant Power Manufacturing
Incorporated (CPM) to its operations, will add to the overall performance of the
company by increasing revenues and creating positive profit margins.
7
<PAGE>
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, certain
financial data derived from the Company's consolidated statements of operations
and indicates percentage of total revenue for each item.
THREE MONTHS ENDED MARCH 31,
1998 1997
------------------- -------------------
AMOUNT % AMOUNT %
---------- ----- ---------- -----
Revenue:
Computer Products .............. 650,681 24.7 310,249 21.2
Consulting Services ............ 1,048,615 39.8 909,407 62.2
Thermal ........................ 932,292 35.5 242,785 16.6
---------- ----- ---------- -----
Total revenue ............... 2,631,588 100.0 1,462,441 100.0
---------- ----- ---------- -----
Gross Profit:
Computer Products .............. 189,320 7.2 76,393 5.2
Consulting Services ............ 246,286 9.4 278,229 19.0
Thermal ........................ 181,410 6.9 80,095 5.5
---------- ----- ---------- -----
Total gross profit .......... 617,016 23.5 434,717 29.7
Selling, general and
administrative expenses ........ 327,449 12.4 305,900 20.9
Depreciation ..................... 29,985 11.3 22,794 1.6
---------- ----- ---------- -----
Operating income ............. 259,582 9.9 106,023 7.2
Other income (expense) ........... (5,394) (.2) (23,295) (1.6)
Income before provision
for income taxes ......... 254,186 9.7 82,728 5.7
Provision for income taxes ....... 53,205 2.0 28,335 1.9
Net income after income taxes .... 200,981 7.7 54,393 3.7
---------- ----- ---------- -----
THREE MONTHS ENDED MARCH 31, 1997 COMPARED TO THREE MONTHS ENDED MARCH 31, 1998
TOTAL REVENUE. Total revenue increased by $1,169,147 or 79.9% from
$1,462,441 for the three months ended March 31, 1997, compared to $2,631,588 in
1998. Revenue from the IPD, which comprised 24.7% of total revenue for the three
months ended March 31, 1998, increased by $340,432 or 109.7%. The increase in
IPD revenue was generally attributable to increased sales to new and existing
customers which resulted from the hiring of additional sales personnel, in
addition to the introduction of new product lines. Revenue from the IED which
comprised 39.8% of total revenue for the three months ended March 31, 1998
increased slightly by $139,208 or 15.3%. Revenue from Thermal, which comprised
35.5% of total revenue for the three months ended March 31, 1998, increased
$689,507 or 284.0%. The increase in Thermal revenue was attributable, in part,
to the fact that the 1997 revenue was derived only during the month of March,
following the acquisition.
GROSS PROFIT. Gross profit increased by $182,299 or 41.9% from $434,717
for the three months ended March 31, 1997 to $617,016 for the same period in
1998. The gross margin as a percentage of total revenues decreased from 29.7%
for the period ended March 31, 1997 to 23.5% for the same period in 1998. The
decrease was attributable to a decrease in gross margin for the IED during the
1998 period. The gross margin for the IPD increased from 5.2% for the period
ended March 31, 1997 to 7.2% for the same period in 1998. This increase was
primarily attributable to a
8
<PAGE>
sales blend of products that have higher gross margins. The gross margin for the
IED decreased from 19.0% for the period ended March 31, 1997 to 9.4% for the
same period in 1998. This decrease was due to an increase in competition and
higher labor costs resulting in lower margins . The gross margin for Thermal
increased from 5.5% for the period ended March 31, 1997 to 6.9% for the same
period in 1998. This increase was attributable to cost controls implemented at
Thermal subsequent to the acquisition in 1997.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expenses increased by $21,549 or 7.0% from $305,900 for the three
months ended March 31, 1997 compared to $327,449 for the same period in 1998. As
a percentage of total revenue, selling, general and administrative expenses
decreased from 20.9% for the three months ended March 31, 1997 to 12.4% for the
same period in 1998. The dollar decrease was primarily attributable to a
decrease in general and administrative expenses as a result of consolidating
clerical and administrative functions.
OPERATING INCOME. Operating income increased by $153,558 or 144.8% from
$106,023 for the three months ended March 31, 1997, compared to $259,581 for the
same period in 1998. Operating income increased as a percentage of total revenue
from 7.2% for the three months ended March 31, 1997 to 9.9% for the same period
in 1998. The increase in operating income was a result of decreased selling,
general and administrative expenses.
OTHER INCOME (EXPENSE). Other income decreased by $17,901 or 76.8% from
($23,295) for the three months ended March 31, 1997 to ($5,394) for the same
period in 1998. This decrease was due to increased realized gains on marketable
securities.
NET INCOME. Net income after taxes increased by $146,589 or 269.5% from
$54,393 for the three months ended March 31, 1997 to $200,981 for the same
period in 1998. Net income after taxes increased as a percentage of total
revenue from 3.7% for the three months ended March 31, 1997 to 7.6% for the same
period in 1998.
LIQUIDITY AND CAPITAL RESOURCES
Historically, the Company has satisfied its cash requirements principally
through borrowings under its line of credit and through operations. As of March
31, 1998, the Company's cash position, including marketable securities, was
sufficient to meet its working capital requirements. The Company had, as of
March 31, 1998, $325,000 in additional advances available under its line of
credit with a bank. The Company's line of credit which provides for maximum
borrowings of $350,000, which bears interest at prime plus 1%, is for a term of
one year and matures on June 11, 1998. The line of credit is secured by accounts
receivable, inventory and the personal guarantees of certain stockholders and
officers of the Company. The Company has established an additional line of
credit for Thermal, which will provide for maximum borrowings of $400,000, which
bears interest at prime plus 1%, is for a term of one year and matures on June
11, 1998. As of March 31, 1998 no advances were available under this line. The
additional line of credit is secured by accounts receivable and inventory of
Thermal, and a guarantee from the Company. An additional line of credit for CPM
has been applied for, in the amount of $400,000.
The Company's working capital was $1,994,467 and $3,651,405 at December
31, 1997 and March 31, 1998, respectively.
9
<PAGE>
CASH FLOW
Operating activities used net cash totaling $128,898 for the three months
ended March 31, 1997 and generated $237,107 for the three months ended March 31,
1998. The Company did not generate significant cash flow from operating
activities for the three months ended March 31, 1997, due to the working capital
requirements resulting from the rapid growth of the Company. Trade accounts
receivable increased $193,106 since December 31, 1997. Inventory increased by
$540,381 for the same period.
Investing activities used cash totaling, $1,262,000 for the three months
ended March 31, 1997 and used cash totaling $53,819 for the same period in 1998.
The Company's investing activities that used cash during the period ended March
31, 1997 was primarily related to the purchase of Thermal and its facilities.
As of March 31, 1998, the Company had a portfolio of marketable securities
which had a fair market value of $419,217 and consisted of common stocks,
preferred stocks, bonds and mutual funds. The common stocks, preferred stocks
and bonds that the Company holds consists of securities which are traded on
three national exchanges - the New York Stock Exchange, the American Stock
Exchange and the NASDAQ National Market System. These securities are frequently
traded by the Company. The mutual funds that the Company has available for sale
are open end stock funds which are managed by Aim, Pioneer, and Smith Barney &
Co. These mutual fund investments are generally held for longer than a one year
period. These securities are traded by the Company as part of its plan to
provides additional cash for working capital requirements.
The marketable securities to be held to maturity are stated at amortized
cost. Marketable securities classified as available-for-sale are stated at
market value, with unrealized gains and losses reported as a separate component
of stockholder's equity, net of deferred income taxes. If a decline in market
value is determined to be other than temporary, any such loss is charged to
earnings. Marketable securities accounted for as trading securities are stated
at market value, with unrealized gains and losses charged to income. William A.
Coskey, the Company's President and Chief Executive Officer, is responsible for
managing the Company's portfolio of marketable securities. The funds used in
this portfolio were from generally available from cash reserves.
The Company has implemented a policy that restricts it from purchasing any
securities on margin, and also limits the investment of any one security or
mutual fund to represent no more than 10% of the Company's investment portfolio.
The Company believes that the risks associated with its investment portfolio are
slightly higher than the risk of loss in a Standard & Poor's 500 Index Fund.
This higher risk is due to the less diverse distribution of the Company's
portfolio as compared to the broadly based Standard & Poor's 500 Stock Index.
Financing activities used cash totaling $8,560 for the three months ended
March 31, 1998, which was repayment on the term note for Thermal's facilities.
The Company has additional financing amounts of $325,000 available on its line
of credit at March 31, 1998. The line of credit has been used principally to
finance accounts receivable and inventory purchases.
10
<PAGE>
ASSET MANAGEMENT
The Company's cash flow from operations has been affected primarily by the
timing of its collection of trade accounts receivable. The Company typically
sells its products and services on short-term credit terms and seeks to minimize
its credit risk by performing credit checks and conducting its own collection
efforts. The Company had net trade accounts receivable of $1,097,703 and
$2,461,970 at March 31, 1997 and 1998, respectively. The number of days' sales
outstanding in trade accounts receivable was 67 days and 85 days, respectively.
Bad debt expenses have been insignificant for each of these periods.
PART II OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES
On March 25, 1998, the Company issued 300,000 of its Common stock, $.001
par value, in connection with the acquisition of Constant Power Manufacturing
Incorporated (CPM), in a stock purchase. These shares are restricted and can be
put back to the Company for $1.00 per share. The stock was valued at the
estimated fair value of the net assets received in the purchase transaction.
ITEM 5. OTHER INFORMATION
The Company consolidated the operations and existing personnel of CPM into
its existing production and office facilities. The acquisition has been
accounted for on the purchase method of accounting. No goodwill arose as a
result of this transaction.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. None
b. Form 8-K filed on April 29, 1998 relating to the acquisition
of Constant Power Manufacturing, Inc.
11
<PAGE>
SIGNATURE
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.
INDUSTRIAL DATA SYSTEMS CORPORATION
Dated: May 15, 1998 By: /S/ HULDA L. COSKEY
Hulda L. Coskey, Vice President
and Chief Financial Officer
12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE FINANCIAL DATA SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
FROM THE COMPANY'S QUARTERLY REPORT ON FORM 10-QSB FOR THE THREE MONTHS ENDED
MARCH 31, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 986,878
<SECURITIES> 419,217
<RECEIVABLES> 2,475,470
<ALLOWANCES> (13,500)
<INVENTORY> 1,424,723
<CURRENT-ASSETS> 5,597,111
<PP&E> 1,249,102
<DEPRECIATION> (195,074)
<TOTAL-ASSETS> 6,710,980
<CURRENT-LIABILITIES> 1,945,720
<BONDS> 420,671
0
0
<COMMON> 13,024
<OTHER-SE> 4,290,230
<TOTAL-LIABILITY-AND-EQUITY> 6,710,980
<SALES> 2,631,588
<TOTAL-REVENUES> 2,631,588
<CGS> 2,014,572
<TOTAL-COSTS> 2,382,006
<OTHER-EXPENSES> (5,394)
<LOSS-PROVISION> (13,500)
<INTEREST-EXPENSE> (19,547)
<INCOME-PRETAX> 254,187
<INCOME-TAX> 53,205
<INCOME-CONTINUING> 209,981
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 209,981
<EPS-PRIMARY> .015
<EPS-DILUTED> .015
</TABLE>
