U.S. Securities and Exchange Commission
Washington, D.C. 20549
FORM 10-QSB
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 for the quarterly period ended June 30, 1999
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 for the transition period from _______ to _______
COMMISSION FILE NUMBER 1-12711
DIGITAL POWER CORPORATION
(Exact name of small business issuer as specified in its charter)
California 94-1721931
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
|
41920 Christy Street, Fremont, CA 94538-3158
(Address of principal executive offices)
(510) 657-2635
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act 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 ___
Number of shares of common stock outstanding as of June 30, 1999: 2,771,435
DIGITAL POWER CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
JUNE 30, 1999
ASSETS
------------------------------------------------------------------------------ ----------------
CURRENT ASSETS:
Cash $ 1,090,292
Accounts receivable - trade, net of allowance for doubtful accounts
of $320,000 3,134,013
Income tax refund receivable 176,729
Other receivables 151,987
Inventory, net 4,409,544
Prepaid expenses and deposits 100,003
Deferred income taxes 385,605
----------------
Total current assets 9,448,173
PROPERTY AND EQUIPMENT, net 1,287,852
EXCESS OF PURCHASE PRICE OVER NET ASSETS ACQUIRED
net amortization of $249,320 1,202,870
DEPOSITS 83,218
----------------
TOTAL ASSETS $ 12,022,113
===============
LIABILITIES AND STOCKHOLDERS' EQUITY
-------------------------------------
CURRENT LIABILITIES:
Notes payable $ 1,529,637
Current portion of long-term debt 97,930
Current portion of capital lease obligations 56,754
Accounts payable 1,561,727
Accrued liabilities 1,283,123
-----------------
Total current liabilities 4,529,171
LONG-TERM DEBT, less current portion 40,986
CAPITAL LEASE OBLIGATIONS, less current position 100,896
OTHER LONG-TERM LIABILITIES 25,000
DEFERRED INCOME TAXES 26,000
-----------------
Total liabilities 4,722,053
-----------------
COMMITMENTS AND CONTINGENCIES -
STOCKHOLDERS' EQUITY:
Preferred stock issuable in series, no par value,
2,000,000 shares authorized; no
shares issued and outstanding -
Common Stock, no par value, 10,000,000 shares authorized;
2,771,435 shares issued and outstanding 9,012,679
Warrants 60,776
Additional paid-in capital 218,334
Accumulated deficit (1,954,564)
Unearned employee stock ownership plan shares (138,916)
Accumulated other comprehensive income 101,751
---------------
Total stockholders' equity 7,300,060
---------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 12,022,113
===============
|
See accompanying notes to these condensed consolidated financial statements.
DIGITAL POWER CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
-------------------------------- -------------------------------
1999 1998 1999 1998
---- ---- ---- ----
REVENUES $ 4,332,948 $ 4,575,030 $ 7,549,411 $ 9,630,361
COST OF GOODS SOLD 3,279,891 3,535,150 5,763,266 7,070,504
-------------- --------------- --------------- ---------------
Gross Margin 1,053,057 1,039,880 1,786,145 2,559,857
-------------- --------------- --------------- ---------------
OPERATING EXPENSES
Engineering and product development 210,516 271,223 431,282 541,119
Marketing and selling 317,978 369,636 597,984 714,115
General and administrative 363,582 388,775 715,474 694,827
-------------- ---------------- --------------- ----------------
Total operating expenses 892,076 1,029,634 1,744,740 1,950,061
--------------- --------------- --------------- ---------------
INCOME FROM OPERATIONS 160,981 10,246 41,405 609,796
--------------- ---------------- --------------- --------------
OTHER INCOME (EXPENSES):
Interest income 3,474 109 7,508 1,989
Interest expense (46,775) (67,841) (98,888) (115,075)
Translation loss (3,679) (11,439) (6,260) (14,960)
----------------- --------------- ---------------- --------------
Other income (expense) (46,980) (79,171) (97,640) (128,046)
---------------- --------------- ----------------- -------------
INCOME (LOSS) BEFORE INCOME TAXES 114,001 (68,925) (56,235) 481,750
PROVISION (BENEFIT) FOR INCOME TAXES 53,500 (73,342) 38,800 182,900
--------------- ---------------- ---------------- -------------
NET INCOME (LOSS) 60,501 4,417 (95,035) 298,850
--------------- ---------------- ---------------- -------------
Other comprehensive income (loss):Foreign
currency translation adjustment (85,562) (12,573) (169,677) 70,094
----------------- --------------- ---------------- --------------
COMPREHENSIVE INCOME (LOSS) $ (25,061) $ (8,156) $ (264,712) $ 368,944
================ =============== ================ ==============
NET INCOME (LOSS) PER SHARE
BASIC $ 0.02 $ * $ (0.03) $ 0.11
================= =============== ================ ==============
DILUTED $ 0.02 $ * $ (0.03) $ 0.09
================ ============== ================ ===============
*Less than $0.01
|
See accompanying notes to these condensed consolidated financial statements.
DIGITAL POWER CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
SIX MONTHS ENDED
JUNE 30,
----------------------------
1999 1998
---- ----
Cash Flows from Operating Activities:
Net income (loss) $ (95,035) $ 298,850
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization
Deferred income taxes 267,816 179,325
Compensation recognized upon issuance of stock or stock options (15,234)
Contribution to ESOP 48,032
Foreign currency translation adjustment 46,003 47,560
Changes in operating assets and liabilities: 6,260 14,960
Cash - restricted (600,000)
Accounts receivable 426,025 509,305
Other receivables (48,945) (9,075)
Income Tax Refund Receivable 215,917
Inventory 454,976 (1,090,776)
Prepaid expenses (44,739) (89,422)
Deposits (42,427) (13,641)
Accounts payable 314,872 (1,089,267)
Accrued liabilities (341,975) 953,080
Other long-term liabilities 19,957
---------------- ---------------
Net adjustments 1,273,740 (1,155,153)
---------------- ---------------
Net cash provided by (used in) operating activities 1,178,705 (856,303)
--------------- ---------------
Cash Flows from Investing Activities:
Acquisition of Gresham Power Electronics (2,974,411)
Purchases of property and equipment (37,234) (46,695)
Proceeds from sale of asset 8,528
--------------- ---------------
Net cash used in investing activities (37,234) (3,012,578)
--------------- ---------------
Cash Flows from Financing Activities:
Proceeds from exercise of stock options including related
tax benefits 61,150
Payments on long-term debt (46,002) (47,560)
Payments on capital lease obligations (19,637) (5,918)
Proceeds from line of credit 1,750,000
Principal payments on notes payable (677,209)
---------------- ---------------
Net cash provided by (used in) financing activities (742,848) 1,757,672
---------------- ---------------
Effect of Exchange Rate Changes on Cash (175,938) 55,134
---------------- ---------------
Net increase (decrease) in cash and cash equivalents 222,685 (2,056,075)
Cash and cash equivalents, beginning of period 867,607 2,205,282
--------------- -------------
Cash and cash equivalents, end of period $ 1,090,292 $ 149,207
============= ==============
Supplemental Cash Flow Information:
Cash payments for:
Interest $ 99,807 $ 108,877
=============== =============
Income taxes $ 36,957 $ 288,850
=============== =============
See accompanying notes to these condensed consolidated financial statements.
|
DIGITAL POWER CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
JUNE 30, 1999
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and pursuant to the rules and regulations of the Securities and Exchange Commission. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. For further information, refer to the financial statements and footnotes thereto included in the Company's annual report on Form 10-KSB for the fiscal year ended December 31, 1998.
In the opinion of management, the unaudited condensed consolidated financial statements contain all adjustments consisting only of normal recurring accruals considered necessary to present fairly the Company's financial position at June 30, 1999, the results of operations for the three month and six month periods ended June 30, 1999 and 1998, and cash flows for the six months ended June 30, 1999 and 1998. The results for the period ended June 30, 1999, are not necessarily indicative of the results to be expected for the entire fiscal year ending December 31, 1999.
NOTE 2 - EARNINGS PER SHARE
The following represents the calculation of earnings per share:
FOR THE THREE MONTHS FOR THE SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
---------------------------------- -------------------------------
1999 1998 1999 1998
BASIC
Net Income (loss) $ 60,501 $ 4,417 $ (95,035) $ 298,850
Less - preferred stock dividends - - - -
--------------- ------------- -------------- ------------
Net income (loss) applicable to common
shareholder $ 60,501 $ 4,417 $ (95,035) $ 298,850
Weighted average number of common shares 2,771,435 2,704,377 2,771,435 2,701,566
--------------- ------------- -------------- ------------
Basic earnings (loss) per share $ 0.02 $ * $ (0.03) $ 0.11
================ ============== =============== =============
DILUTED
Net income (loss) applicable to common
shareholders $ 60,501 $ 4,417 $ (95,035) $ 298,850
Preferred stock dividend - - - -
--------------- ------------- -------------- ------------
Net income (loss) available to common
shareholders plus assumed conversion $ 60,501 $ 4,417 $ (95,035) $ 298,850
--------------- ------------- -------------- ------------
Weighted average number of common shares 2,771,435 2,704,377 2,771,435 2,701,566
Common stock equivalent shares representing
shares issuable upon exercise of stock
options 65,150 367,409 65,350 386,347
Common stock equivalent shares representing
shares issuable upon exercise of warrants -- 65,468 -- 116,228
--------------- ------------- -------------- ------------
Weighted average number of shares used in
calculation of diluted income (loss) per share 2,836,585 3,137,254 2,836,785 3,204,141
--------------- ------------- -------------- ------------
Diluted earnings (loss) per share $ 0.02 $ * $ (0.03) $ 0.09
================ ============= ============== =============
* Less than $0.01
|
NOTE 3 - SEGMENT REPORTING
The company has identified its segments based upon its geographic operations. These segments are represented by each of the Company's individual legal entities: Digital Power Corporation (DPC), Poder Digital, S.A. de C.V. (PD) and Digital Power Limited (DPL). Segment information is as follows:
For the Three Months Ended June 30, 1999
DPC PD DPL Eliminations Totals
------------- --------------- --------------- ----------------- --------------
Revenues $ 2,501,309 $ 9,625 $ 1,822,014 $ -- $ 4,332,948
============= =============== =============== ================ ==============
Intersegment Revenues $ 56,071 $ 693,257 $ -- $ (749,328) $ --
============= =============== =============== ================ ==============
Interest Income $ 31,705 $ 169 $ -- $ (28,400) $ 3,474
============= =============== =============== ================ ==============
Interest Expense $ 32,985 $ 2,591 $ 39,599 $ (28,400) $ 46,775
============= =============== =============== ================ ==============
Income Tax Expense(Benefit) $ -- $ -- $ 53,500 $ -- $ 53,500
============= =============== =============== ================ ==============
Income (loss) $ (24,772) $ (14,844) $ 100,117 $ -- $ 60,501
============= ============== =============== ================ ==============
For the Three Months Ended June 30, 1998
DPC PD DPL Eliminations Totals
------------- --------------- --------------- ----------------- -------------
Revenues $ 2,845,907 $ 3,540 $ 1,725,583 $ -- $ 4,575,030
============= =============== =============== ================ ==============
Intersegment Revenues $ -- $ 401,039 $ -- $ (401,039) $ --
============= =============== =============== ================ ==============
Interest Income $ 109 $ -- $ -- $ -- $ 109
============= =============== =============== ================ ==============
Interest Expense $ 43,787 $ 917 $ 23,137 $ -- $ 67,841
============= =============== =============== ================ ==============
Income Tax Expense (Benefit) $ (78,400) $ -- $ 5,058 $ -- $ (73,342)
============= =============== =============== ================ ==============
Income (loss) $ 278,441 $ (274,536) $ 512 $ -- $ 4,417
============= =============== =============== ================ ==============
|
For the Six Months Ended June 30, 1999
DPC PD DPL Eliminations Totals
------------- --------------- --------------- ----------------- --------------
Revenues $ 4,433,282 $ 9,652 $ 3,106,477 $ -- $ 7,549,411
============= ============== ============== ================ =============
Intersegment Revenues $ 100,910 $ 1,040,449 $ -- $ (1,141,359) $ --
============= ============== ============== ================ =============
Interest Income $ 62,397 $ 1,599 $ -- $ (56,488) $ 7,508
============= ============== ============== ================ =============
Interest Expense $ 68,179 $ 3,189 $ 84,008 $ (56,488) $ 98,888
============= ============== ============== ================ =============
Income Tax Expense (Benefit) $ -- $ -- $ 38,800 $ -- $ 38,800
============= ============== ============== ================ =============
Income (loss) $ (95,169) $ (16,224) $ 16,358 $ -- $ (95,035)
============= ============== ============== ================ =============
For the Six Months Ended June 30, 1998
DPC PD DPL Eliminations Totals
------------- --------------- --------------- ----------------- --------------
Revenues $ 6,105,715 $ 19,196 $ 3,505,450 $ -- $ 9,630,361
============= =============== =============== ================= ==============
Intersegment Revenues $ -- $ 880,296 $ -- $ (880,296) $ --
============= =============== =============== ================= ==============
Interest Income $ 1,989 $ -- $ -- $ -- $ 1,989
============= =============== =============== ================= ==============
Interest Expense $ 77,387 $ 1,379 $ 36,309 $ -- $ 115,075
============= =============== =============== ================= ==============
Income Tax Expense (Benefit) $ 126,800 $ $ 56,100 $ -- $ 182,900
============= =============== =============== ================= ==============
Income (loss) $ 572,409 $ (440,368) $ 166,809 $ -- $ 298,850
============= =============== =============== ================= ==============
|
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
With the exception of historical facts stated herein, the matters discussed in this report are "forward looking" statements that involve risks and uncertainties that could cause actual results to differ materially from projected results. Such "forward looking" statements include, but are not necessarily limited to, statements regarding anticipated levels of future revenues and earnings from operations of the Company. Factors that could cause actual results to differ materially include, in addition to other factors identified in this report, a high degree of customer concentration, dependence on the computer and other electronic equipment industry, competition in the power supply industry, dependence on the Guadalajara, Mexico facility, and other risks factors detailed in the Company's Securities and Exchange Commission ("SEC") filings including the risk factors set forth in Company's Registration Statement on Form SB-2, SEC File No. 333-14199, and "Certain Considerations" section in the Company's Form 10-KSB for the year ended December 31, 1998. Readers of this report are cautioned not to put undue reliance on "forward looking" statements which are, by their nature, uncertain as reliable indicators of future performance. The Company disclaims any intent or obligation to publicly update these "forward looking" statements, whether as a result of new information, future events, or otherwise.
THREE AND SIX MONTH PERIODS ENDED JUNE 30, 1999, COMPARED TO JUNE 30, 1998
REVENUES
Revenues decreased by 5.3% to $4,332,948 for the three months ended June 30, 1999, from $4,575,030 for the three months ended June 30, 1998. Revenues from the Company's United Kingdom's operations of Digital Power Ltd. increased 5.6% to $1,822,014 for the second quarter ended June 30, 1999, from $1,725,583 for the second quarter ended June 30, 1998. Revenues attributed to the United States operations decreased by 11.9% from the same quarter during the prior year. The decrease in revenues can be attributed primarily from discontinued purchases from one large customer who began buying a lower priced product from a competitor. This customer resumed placing orders with the Company during the first quarter of 1999.
For the six months ended June 30, 1999, revenues decreased by 21.6% to $7,549,411 from $9,630,361 for the six months ended June 30, 1998. The decrease in revenues during the six months ended June 30, 1999, can be attributed primarily to the reduction in purchases from the one large customer as stated in the quarterly review discussion above. For the six months ended June 30, 1999, Digital Power Ltd. contributed $3,106,477 to the Company's revenues compared to $3,505,450 for the six months ended June 30, 1998.
GROSS MARGINS
Gross margins were 24.3% for the three months ended June 30, 1999, compared to 22.7% for the three months ended June 30, 1998. The improvement in gross margins can primarily be attributed to favorable product mix.
Gross margins were 23.7% for the six months ended June 30, 1999, compared to 26.6% for the six months ended June 30, 1998. The decrease in gross margins can primarily be attributed to reduced shipment level of higher margin products.
SELLING, GENERAL AND ADMINISTRATIVE
Selling, general and administrative expenses were 15.7% of revenues for the three months ended June 30, 1999, compared to 16.6% for the three months ended June 30, 1998. Selling, general and administrative expenses were 17.4% of revenues for the six months ended June 30, 1999, compared to 14.6% for the six months ended June 30, 1998. The continued cost constainments implemented by the Company resulted in actual dollar reductions in these expenses of $76,851 for the quarter and $95,484 for the six months ended June 30, 1999.
ENGINEERING AND PRODUCT DEVELOPMENT
Engineering and product development expenses were 4.9% of revenues for the three months ended June 30, 1999, and 5.9% for the three months ended June 30, 1998. Engineering and product development expenses were 5.7% of revenues for the six months ended June 30, 1999, compared to 5.6% for the six months ended June 30, 1998. Actual dollar expenditures decreased $60,707 and $109,837 respectively for the quarter and six months ended June 30, 1999.
INTEREST EXPENSE
Interest expense, net of interest income, was $43,301 for the three months ended June 30, 1999, compared to $67,732 for the three months ended June 30, 1998. Interest expense, net of interest income, was $91,380 for the six months ended June 30, 1999, compared to $113,086 for the six months ended June 30, 1998. The decrease in interest expense is related primarily to payments made to reduce notes payable.
INCOME (LOSS) BEFORE INCOME TAXES
For the three months ended June 30, 1999, the Company had an income before income taxes of $114,001 compared to a loss before income taxes of $68,925 for the three months ended June 30, 1998. For the six months ended June 30, 1999, the Company had a loss before income taxes of $56,235 compared to income of $481,750 for the six months ended June 30, 1998.
INCOME TAX
The provision for income tax increased from a tax benefit of $73,342 for the three months ended June 30, 1998, to a tax expense of $53,500 for the three months ended June 30, 1999, and decreased from $182,900 for the six months ended June 30, 1998, to $38,800 for the six months ended June 30, 1999.
NET INCOME
Net income for the three months ended June 30, 1999, was $60,501 compared to $4,417 for the three months ended June 30, 1998. Net loss for the six months ended June 30, 1999, was $95,035, compared to net income of $298,850 for the six months ended June 30, 1998. The increase in net income for the three month period was due to the reduction in operating and other expenses implemented to bring costs in line with revenue levels, while the decrease in net income for the six month period is primarily related to decreased revenues for the six month period, primarily related to the Company's United States operations.
LIQUIDITY AND CAPITAL RESOURCES
On June 30, 1999, the Company had cash of $1,090,292 and working capital of $4,919,002. This compares with cash of $149,207 and working capital of $5,993,382 at June 30, 1998. The decrease in working capital was due to an increase in other receivables and prepaid expenses and decrease of notes payable and accrued liabilities, offset by a decrease in accounts receivable and inventory and increase in accounts payable, resulting in an increase in cash and cash equivalents. Cash provided by (used in) operating activities for the Company totaled $1,178,705 and ($856,303) for the six months ended June 30, 1999 and 1998.
Cash used in investing activities was $37,234 for the six months ended June 30, 1999, compared to $3,012,578 for the six months ended June 30, 1998. Net cash provided by (used in) financing activities was ($742,848) for the six months ended June 30, 1999, compared to $1,757,672. During the six months ended June 30, 1999, the Company paid down the bank line credit of $125,000.
IMPACT OF THE YEAR 2000 ISSUE
The Year 2000 Issue is the result of computer programs being written using two digits rather than four to define the applicable year. Any of the Company's, or its suppliers' and customers' computer programs that have date-sensitive software may recognize a date using "00" as the year 1900 rather than the year 2000. This could result in system failures or miscalculations causing disruptions of operations including, among other things, a temporary inability to process transactions, send invoices, or engage in similar normal business activities.
The Company upgraded its software at a cost of less than $10,000 and has been informed by its suppliers that such software is Year 2000 compliant. The software from these suppliers is used in major areas of the Company's operations such as for financial, sales, warehousing and administrative purposes. The Company has no internally generated software. The Company believes that all of its hardware is Year 2000 compliant. In connection with the acquisition of Gresham Power, the Company has acquired new hardware and software to address the Year 2000 Issue at a cost of approximately $150,000 to make Gresham Power Year 2000 compliant. Gresham Power has completed the installation of this new hardware and software. After reasonable investigation, the Company has not yet identified any other Year 2000 problem but will continue to monitor the issue. However, there can be no assurances that the Year 2000 problem will not occur with respect to the Company's computer systems.
The Company has initiated formal communications with significant suppliers and large customers to determine the extent to which those third parties' failure to remedy their own Year 2000 Issues would materially effect the Company and its subsidiaries. In the event that the Company receives indications from its suppliers and large customers that the Year 2000 Issue may materially effect their ability to conduct business, the Company will seek contingency plans such as finding other vendors that are Year 2000 compliant or increase its inventory of supplies or parts in an attempt to ensure smooth operations until such vendor can remedy the problem. The Company has not received any indication from its suppliers and large customers that the Year 2000 Issue may materially effect their ability to conduct business.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDS
None.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
27.1 Financial Data Schedule
SIGNATURES
In accordance with 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.
DIGITAL POWER CORPORATION
(Registrant)
Date: August 12, 1999 /s/ ROBERT O. SMITH
----------------------------
Robert O. Smith
Chief Executive Officer
(Principal Executive Officer)
Date: August 12, 1999 /s/ PHILIP G. SWANY
----------------------------
Philip G. Swany
Chief Financial Officer
(Principal Financial Officer)
|
| ARTICLE 5 |
| THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE 10-QSB FOR THE PERIOD ENDED JUNE 30, 1999, FOR DIGITAL POWER CORPORATIN, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. |
| PERIOD TYPE | 6 MOS |
| FISCAL YEAR END | DEC 31 1999 |
| PERIOD END | JUN 30 1999 |
| CASH | 1,090,292 |
| SECURITIES | 0 |
| RECEIVABLES | 3,454,013 |
| ALLOWANCES | (320,000) |
| INVENTORY | 4,490,544 |
| CURRENT ASSETS | 9,448,173 |
| PP&E | 2,655,571 |
| DEPRECIATION | (1,367,719) |
| TOTAL ASSETS | 12,022,113 |
| CURRENT LIABILITIES | 4,529,171 |
| BONDS | 0 |
| PREFERRED MANDATORY | 0 |
| PREFERRED | 0 |
| COMMON | 9,012,679 |
| OTHER SE | (1,712,619) |
| TOTAL LIABILITY AND EQUITY | 12,022,113 |
| SALES | 7,549,411 |
| TOTAL REVENUES | 7,549,411 |
| CGS | 5,763,266 |
| TOTAL COSTS | 5,763,266 |
| OTHER EXPENSES | 1,744,740 |
| LOSS PROVISION | 0 |
| INTEREST EXPENSE | 98,888 |
| INCOME PRETAX | (56,235) |
| INCOME TAX | 38,800 |
| INCOME CONTINUING | (95,035) |
| DISCONTINUED | 0 |
| EXTRAORDINARY | 0 |
| CHANGES | 0 |
| NET INCOME | (95,035) |
| EPS BASIC | (0.03) |
| EPS DILUTED | (0.03) |