1
CONCEPT INCORPORATED AND SUBSIDIARIES
Consolidated Financial Statements
December 31, 1994
With Independent Auditors' Report Thereon
2
CONCEPT INCORPORATED AND SUBSIDIARIES
Table of Contents
Page(s)
Independent Auditors' Report 1
Consolidated Balance Sheet 2-3
Consolidated Statement of Income 4
Consolidated Statement of Shareholders' Equity 5
Consolidated Statement of Cash Flows 6-7
Notes to Consolidated Financial Statements 8-14
3
Independent Auditors' Report
The Board of Directors and Shareholders
Concept Incorporated:
We have audited the accompanying consolidated balance sheet of Concept
Incorporated and subsidiaries as of December 31, 1994, and the related
consolidated statements of income, shareholders' equity, and cash flows for the
year then ended. These consolidated financial statements are the responsibility
of the Company's management. Our responsibility is to express an opinion on
these consolidated financial statements based on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Concept
Incorporated and subsidiaries as of December 31, 1994, and the results of their
operations and their cash flows for the year then ended in conformity with
generally accepted accounting principles.
Louisville, Kentucky
February 17, 1995, Except as to
note 15, which is as of April 25, 1995
1
4
CONCEPT INCORPORATED AND SUBSIDIARIES
Consolidated Balance Sheet
December 31, 1994
Assets
Current assets:
Cash $ 234,273
Accounts receivable - trade 2,021,137
Accounts receivable - partnership 1,287,841
Prepaid expenses 272,517
Inventories 158,140
Deferred income taxes 153,169
----------
Total current assets 4,127,077
Property, plant and equipment:
Land 184,956
Buildings and improvements 3,966,151
Equipment and automobiles 711,820
----------
4,862,927
Less accumulated depreciation and amortization 507,115
4,355,812
Other assets:
Investment in partnership --
Facility start-up costs, net of accumulated amortization
of $198,299 1,145,668
Organization costs, net of accumulated amortization
of $88,177 31,500
----------
1,177,168
$9,660,057
(Continued)
2
5
CONCEPT INCORPORATED AND SUBSIDIARIES
Consolidated Balance Sheet, Continued
December 31, 1994
Liabilities and Shareholders' Equity
Current liabilities:
Line of credit $ 785,150
Accounts payable 2,178,484
Accrued expenses 1,141,119
Deferred revenue 197,640
Income taxes payable 3,030
Long-term debt and capital lease obligations - current 460,727
Notes payable and advances - shareholders 60,000
-----------
Total current liabilities 4,826,150
Long-term debt and capital lease obligations - non-current 854,317
Investment in partnership 479,517
Deferred compensation 87,908
Notes payable - shareholders 40,000
Deferred income taxes 993
-----------
Total liabilities 6,288,885
Shareholders' equity:
Class A common stock ($10 par value, 30,000 shares
authorized, issued 20,882 shares) 208,820
Additional paid-in capital 1,335,991
Retained earnings 2,112,797
Less shareholder notes receivable (286,436)
-----------
Total shareholders' equity 3,371,172
Commitments and contingencies
$ 9,660,057
See accompanying notes to consolidated financial statements.
3
6
CONCEPT INCORPORATED AND SUBSIDIARIES
Consolidated Statement of Income
Year Ended December 31, 1994
Operating revenues:
Contract revenues $ 21,489,274
Other revenues 1,847,470
------------
Total operating revenues 23,336,744
Facility operating expenses 19,858,079
Contribution from operations 3,478,665
General and administrative expenses 1,928,021
Net operating income 1,550,644
Other income (expenses):
Interest income 53,135
Interest expense (154,540)
Loss on disposition of assets (35,373)
Loss on write-off of option (384,000)
Equity in net earnings of unconsolidated partnership 200,591
------------
Total other income (expenses) (320,187)
Income before income taxes 1,230,457
Income taxes 466,650
------------
Net income $ 763,807
============
See accompanying notes to consolidated financial statements.
4
7
CONCEPT INCORPORATED AND SUBSIDIARIES
Consolidated Statement of Shareholders' Equity
Year Ended December 31, 1994
Additional Shareholder Total
Class A Class B Paid-in Retained Notes Shareholders'
Shares Amount Shares Amount Capital Earnings Receivable Equity
Balance at
December 31, 1993 15,508 155,080 9,896 98,960 529,165 1,348,990 -- 2,132,195
Conversion of Class B
common stock to Class A 1,881 18,810 (9,896) (98,960) 80,150 -- -- --
Issuance of Class A common
stock for cash and notes 3,493 34,930 -- -- 726,676 -- (286,436) 475,170
Net income -- -- -- -- -- 763,807 -- 763,807
------ -------- ------ -------- ---------- ---------- --------- ----------
Balance at
December 31, 1994 20,882 $208,820 -- $ -- $1,335,991 $2,112,797 $(286,436) $3,371,172
====== ======== ====== ======== ========== ========== ========= ==========
See accompanying notes to consolidated financial statements.
5
8
CONCEPT INCORPORATED AND SUBSIDIARIES
Consolidated Statement of Cash Flows
Year Ended December 31, 1994
Cash flows from operating activities:
Net income $ 763,807
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization 301,032
Other amortization, net 52,747
Deferred income taxes (209,969)
Loss on disposition of assets 35,373
Equity in net earnings of unconsolidated partnership (200,591)
(Increase) decrease in:
Accounts receivable - trade (344,680)
Accounts receivable - partnership (1,287,841)
Income tax receivable --
Prepaid expenses (15,643)
Inventories (65,523)
Increase (decrease) in:
Accounts payable 1,179,306
Accrued expenses 522,799
Deferred revenue 197,640
Income taxes payable (510,317)
Deferred compensation 87,908
-----------
Net cash provided by operating activities 506,048
-----------
Cash flows from investing activities:
Purchase of property, plant and
equipment (1,424,376)
Facility start-up costs (1,343,967)
Proceeds from disposition of property,
plant and equipment 3,400
Investment in partnership, net 355,193
Net cash used in investing activities (2,409,750)
-----------
Cash flows from financing activities:
Proceeds from line of credit, net 785,150
Proceeds from issuance of long-term debt --
Principal payments on long-term debt and
capital lease obligations (205,405)
Proceeds from issuance of common stock 475,170
Net cash used in financing activities 1,054,915
-----------
Net decrease in cash (848,787)
Cash - beginning of year 1,083,060
-----------
Cash - end of year $ 234,273
===========
(Continued)
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CONCEPT INCORPORATED AND SUBSIDIARIES
Consolidated Statement of Cash Flows, Continued
Year Ended December 31, 1994
Noncash investing and financing activities:
Assets acquired under capital lease
obligations $ 184,419
===========
Investment in option $ (384,000)
===========
Claims settlement $ 384,000
===========
Supplemental disclosures:
Cash paid during the year for:
Interest $ 129,256
===========
Income taxes $ 1,113,558
===========
See accompanying notes to consolidated financial statements.
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CONCEPT INCORPORATED AND SUBSIDIARIES
Notes to Consolidated Financial Statements
December 31, 1994
1. Summary of Significant Accounting Policies
Nature of Business
Concept Incorporated (the Company) operates six secure prison facilities
under contract with federal, state and municipal governmental agencies.
Three facilities are used for pre-parole transfers, one is an intermediate
sanction facility, one is a metropolitan jail and one houses medium
security inmates. Two facilities are owned, three are leased and one is
owned by a partnership in which the Company has a 50% ownership interest.
Four management contracts expire in August 1995, one expires in January
1996, and one expires in February 1998. Contract revenues from contracts
which expire in 1995 amounted to approximately $18.4 million in 1994.
Management believes these contracts will be renewed. Two additional state
contracts were awarded to the Company in 1994, with scheduled facility
openings in May and September of 1995.
Principles of Consolidation
The consolidated financial statements include the accounts of Concept
Incorporated and its wholly owned subsidiaries, Mineral Wells R.E. Holding
Corp. and Concept Incorporated of Overton, Texas. Intercompany
transactions and balances have been eliminated.
The Company owns, directly and indirectly, 49.9999% of United-Concept,
Limited Partnership (UCLP), including 49.95% of United-Concept, Inc., the
managing general partner of UCLP. This investment is recorded in the
Company's consolidated financial statements on the equity method.
Contract Accounting
Revenues and expenses related to contracts for facilities in operation are
accounted for using the accrual method of accounting. From the date a
contract is awarded until the facility is in operation, revenue and direct
expenses related to the facility which would otherwise be recognized on
the accrual basis are deferred and the net amount is amortized on the
straight-line method over the initial contract term. Such deferred amounts
do not include indirect expenses or overhead.
Contract bidding costs and corporate general and administrative expenses
not directly associated with particular facilities are expensed as
incurred.
Inventories
Inventories consist of food, inmate clothing, commissary goods and office
supplies. Carrying value of inventories is based on cost determined by the
first-in, first-out method, which approximates market value.
(Continued)
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CONCEPT INCORPORATED AND SUBSIDIARIES
Notes to Consolidated Financial Statements
1. Summary of Significant Accounting Policies (Continued)
Property, Plant and Equipment
Property, plant and equipment are carried at cost. Renewals and
betterments that extend the useful lives of the assets or increase their
value are capitalized, while repairs and maintenance expenditures are
charged to operations. Depreciation is provided using the straight-line
method over the estimated useful lives of the assets, which is forty years
for buildings and improvements and three to ten years for equipment and
automobiles. Assets under capital leases are amortized on the
straight-line method over the shorter of the term of the related lease or
the estimated useful life of the assets.
Income Taxes
Effective January 1, 1993, the Company adopted Statement of Financial
Accounting Standards No. 109, "Accounting for Income Taxes," which
requires an asset and liability approach to financial accounting and
reporting for income taxes. The difference between the financial statement
and tax bases of assets and liabilities are computed for those differences
that have future tax consequences using the currently enacted tax laws and
tax rates that apply to the periods in which they are expected to affect
taxable income. Valuation allowances are established, if necessary, to
reduce the deferred tax asset to the amount that will more likely than not
be realized. Income tax expense is the current tax payable or refundable
for the period plus or minus the net change in the deferred tax assets and
liabilities.
2. Cash
The Company maintains two operating checking accounts and an
interest-bearing checking account with a single bank, as well as a demand
money market account with a financial institution. Operating funds are
moved back and forth among these accounts depending on availability of
funds. Because one of the accounts automatically sweeps either between the
interest-bearing account or the Company's line of credit with the same
bank, it generally shows as overdrawn on the Company's books. At December
31, 1994, after netting the three operating accounts, a credit balance of
$209,228 was reclassified to accounts payable.
3. Investment in Partnership
The investment in partnership of ($479,517) at December 31, 1994, which is
presented as a deferred credit in the accompanying consolidated balance
sheet, represents the Company's contributions to capital, advances, and
50% share of cumulative net income of UCLP accounted for on the equity
method, net of the $1,500,000 in payments discussed below.
Mineral Wells R.E. Holding Corp. (MWREHC), a wholly-owned subsidiary of
the Company, owns 49.5% of UCLP as a limited partner and .2% of UCLP as a
general partner. The Company directly owns .2% of UCLP as a general
partner. The Company also owns 50% of the common stock of United-Concept,
Inc., which owns .2% of UCLP as the managing general partner.
(Continued)
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CONCEPT INCORPORATED AND SUBSIDIARIES
Notes to Consolidated Financial Statements
3. Investments in Partnership (Continued)
United-Concept, Inc. has issued and outstanding 1,000 shares of common
stock (of which the Company and the Company's partner in UCLP each own 500
shares) and one share of voting preferred stock, which is held by The
First National Bank of Chicago under an indenture agreement related to the
financing of the Eloy facility. Each share of stock, common and preferred,
has one vote. The preferred stock does not participate in income
distribution by United-Concept, Inc., and has a $10 liquidation value. The
by-laws of United-Concept, Inc. require 100% shareholder approval of
significant corporate actions, and also require an independent director.
Thus, the Company is entitled to 50% of the income of UCLP, but
mathematically owns less than 50% of its capital and controls less than
50% of voting decisions. The independent director effectively has veto
power over the actions of UCLP's managing general partner, United-Concept,
Inc.
UCLP has a contract with the Federal Bureau of Prisons (BOP) to operate
the Eloy Detention Center at Eloy, Arizona. UCLP owns the facility,
including furniture, fixtures and equipment and a waste water treatment
plant. UCLP is the primary obligor on the debt incurred to finance the
facility, which is secured by the Eloy facility real and personal
property, the Eloy contract receivables, $269,000 of the Company's
contract receivables from its Mineral Wells facility, and the Mineral
Wells real estate. The Company and the other UCLP partners have jointly
and severally guaranteed the UCLP debt, which totaled $29,860,073 at
December 31, 1994.
On November 16, 1993, the Company entered into an Operating Agreement with
UCLP, under which the Company operates the Eloy facility. The Company is
responsible for all operating expenses of the facility, including taxes,
insurance and maintenance. The Company's compensation under the agreement
is equal to the monthly contractual revenue less the monthly debt service
payment. The Operating Agreement expires sixty (60) days after maturity,
as defined, or upon thirty (30) days written notice from UCLP to the
Company.
Concurrent with the closing of the financing on the Eloy Detention Center
in November 1993, the Company received payments totaling $448,000 from its
partner in UCLP and $252,000 from an affiliate of its partner in UCLP,
under terms of a Funding Agreement entered into by and between the Company
and companies related to its partner in UCLP. These payments were recorded
as deferred revenue during 1993, and subsequently credited to the
Company's investment in UCLP during 1994. In addition, $800,000 of loan
proceeds to UCLP were paid to the Company during 1994 which were credited
to the Company's investment in UCLP. Of these payments, $1,100,000 is
being amortized over the life of the debt on the Eloy facility due to the
Company's guarantee of such debt. Such amortization amounted to $156,419
in 1994.
(Continued)
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CONCEPT INCORPORATED AND SUBSIDIARIES
Notes to Consolidated Financial Statements
3. Investments in Partnership (Continued)
Condensed financial information of UCLP is summarized as follows:
(Dollars in thousands)
Year ended December 31
Net revenue $ 1,886
Net income 401
========
At December 31
Current assets $ 2,560
Non-current assets 29,397
--------
Total assets $ 31,957
========
Current liabilities $ 5,789
Non-current liabilities 25,965
Partners' capital 203
--------
Total liabilities and partners' capital $ 31,957
========
4. Investment in Option
The Company and its partners in UCLP have entered into an agreement under
which the Company can purchase its partners' interests in UCLP, including
United-Concept, Inc., for $5,250,000 on or before September 30, 1995. As
compensation to its partners to enter the option agreement, the Company
waived all of its claims under the Funding Agreement for lost revenues due
to reduced prisoner population during the opening of the Eloy facility.
The amount of these claims was agreed by the parties to be $384,000, which
has been recorded by the Company as other revenues, representing its
investment in the option agreement. The Company does not have sufficient
capital at this time to exercise the option and, accordingly, has written
off the amount of the option as of December 31, 1994.
5. Line of Credit
In 1994, the Company obtained a line of credit from a bank in the amount
of $1,500,000, secured by accounts receivable and a first mortgage on real
estate located in Bridgeport, Texas, having a net book value of $685,058
as of December 31, 1994. Portions of the line are also guaranteed up to
$800,000 by shareholders/employees of the Company. Balances outstanding on
the line bear interest at the prime rate of the bank, which was 8.5% at
December 31, 1994. The line is activated when checks presented to the bank
for payment exceed the balance of the operating account, and reduced when
receivables are collected and deposited in the bank. The balance due on
the line was $785,150 at December 31, 1994. The line expires December 2,
1995.
6. Deferred Revenue
In 1994, the Company received advance commission payments, against which
commissions earned are being offset. The remaining balance at December 31,
1994 was $197,640.
(Continued)
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CONCEPT INCORPORATED AND SUBSIDIARIES
Notes to Consolidated Financial Statements
7. Long-Term Debt and Capital Lease Obligations
Long-term debt and capital lease obligations consist of the following:
Notes payable to United-Concept, Limited Partnership, bearing interest at
10% per annum, of which 3% per year is reimbursed to the Company by a
partner, payable in monthly installments of principal and interest of
$19,000, due January 2000, secured by land, buildings and improvements $ 891,735
Note payable to a vendor, bearing interest at prime plus 1.75% (10.25% as
of December 31, 1994), payable in quarterly installments of principal and
interest of $18,723, due in December 1997, classified as currently payable
due to a debt covenant violation 224,683
Various obligations under capitalized leases with a related party expiring
through 1997. The net book value of the related equipment is approximately
$44,630 at December 31, 1994 196,663
Notes payable to banks at interest rates ranging from 9.75% to 13%, with
monthly installments of principal and interest, with varying due dates
through April 1995, secured by automobiles 1,963
-----------
1,315,044
Less current portion 460,727
$ 854,317
Scheduled repayments of long-term debt and capital lease obligations are
as follows for the years ended December 31:
Capital leases Long-term debt
1995 $ 115,448 $ 372,015
1996 85,338 160,592
1997 38,150 177,408
1998 -- 195,985
1999 -- 212,381
----------- ----------
238,936 $1,118,381
===========
Less amount representing interest (42,273)
-----------
Present value of minimum lease payments 196,663
Less current portion 88,712
-----------
Long-term portion of capital lease
obligations $ 107,951
===========
(Continued)
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CONCEPT INCORPORATED AND SUBSIDIARIES
Notes to Consolidated Financial Statements
8. Notes Payable and Advances - Shareholders
Included in current liabilities is a cash advance from a shareholder with
no specified repayment terms. The balance was $50,000 at December 31,
1994.
The Company is obligated under unsecured notes payable to shareholders
totaling $50,000 and bearing interest at 9%. The notes are payable in
annual principal amounts of $10,000, plus interest, beginning January 1995
through January 1999.
9. Income Taxes
The provision for income taxes is comprised of:
Current:
Federal $ 561,921
State 114,698
---------
676,619
Deferred:
Federal (179,820)
State (30,149)
(209,969)
Total $ 466,650
=========
The effective tax rate of 37.9% in 1994 represents the combined statutory
federal and state tax rates, because there were no significant permanent
differences.
The temporary differences that give rise to the deferred tax assets and
deferred tax liabilities primarily relate to facility start-up costs,
payments from UCLP, UCLP partners and affiliates, vacation accruals and
commission payments paid in advance.
10. Common Stock
In 1994, shareholders received .19 share of Class A common stock for each
share of Class B common stock they held, and all of the Class B common
stock previously issued and outstanding was retired. The Class B stock
option plan, under which no options had been granted, was canceled. There
are currently no stock option plans in effect for any of the Company's
common stock.
On July 27, 1994, the Company sold 2,949 shares of Class A common stock
for cash of $29,490 and notes receivable of $332,116 to officers of the
Company. The notes receivable, which were originally due on August 31,
1994, were renewed for one year and bear interest at 5.83%. At December
31, 1994 the outstanding balance of these notes is $286,436. The shares
are subject to a buy-sell agreement which gives the Company a right of
first refusal to buy back shares at book value, as of the buyback date.
All of the Class A common stock is subject to a voting trust agreement,
which gives the majority shareholder the right to vote all outstanding
shares.
(Continued)
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CONCEPT INCORPORATED AND SUBSIDIARIES
Notes to Consolidated Financial Statements
11. Operating Leases
The Company leases real property and equipment under noncancelable
operating leases with terms of two (2) to five (5) years. The future
minimum rentals under the leases at December 31, 1994, are as follows:
1995 $ 592,888
1996 184,519
1997 167,442
1998 49,226
1999 8,603
----------
$1,002,678
12. Related Party Transactions
The Company legal fees to a law firm of which one of the partners is also
a shareholder and director of the Company. Legal fees paid to the law
firm, amounted to $20,420 in 1994.
A corporation owned by a stockholder provides professional services to the
Company. These professional services and related costs amounted to
$126,756 in 1994. At December 31, 1994 accounts payable due the
corporation were $0.
The Company leases certain automobiles and equipment from a corporation of
which one of the stockholders is also a stockholder of the Company. Total
lease payments to this related party in 1994 were $91,008. Capital lease
obligations under these leases were $196,663 as of December 31, 1994.
13. Economic Dependency
The Company receives a significant portion of its contract revenues from
the Texas Board of Pardons and Paroles (Texas Board). Such revenues
amounted to $18.4 million and $15.4 million in 1994 or 79% of operating
revenues. At December 31, 1994 accounts receivable balances due the
Company from the Texas Board are $1,560,448.
14. Contingencies
In the normal course of business, the Company has become subject to
certain claims and litigation. In the opinion of management, the outcome
of such matters will not have a material effect on the consolidated
financial position or results of operations of the Company.
15. Subsequent Event
Effective April 25, 1995, all of the outstanding common shares of the
Company were exchanged for 1,362,496 shares of common stock of Corrections
Corporation of America (CCA), and the Company became a wholly-owned
subsidiary of CCA.
14
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CONCEPT INCORPORATED AND SUBSIDIARIES
Consolidated Financial Statements
March 31, 1995
(Unaudited)
May 8, 1995
18
CONCEPT INCORPORATED AND SUBSIDIARIES
Consolidated Balance Sheet
March 31, 1995
(Unaudited)
Assets
- ------
Current assets:
Cash 20,043
Accounts receivable - trade 1,812,190
Accounts receivable - partnership 1,580,349
Prepaid expenses 371,828
Inventories 162,951
Deferred and refundable income taxes 469,916
------------
Total current assets 4,417,277
Property, plant and equipment:
Land 206,281
Buildings and improvements 4,220,924
Equipment and automobiles 830,753
------------
5,257,958
Less accumulated depreciation 622,750
------------
Net Property, plant and equipment 4,635,208
Other assets:
Investment in partnership 823,859
Facility start-up costs, net 103,168
------------
Net other assets 927,027
------------
Total assets 9,979,512
============
19
CONCEPT INCORPORATED AND SUBSIDIARIES
Consolidated Balance Sheet, Continued
March 31, 1995
(Unaudited)
Liabilities and Shareholders' Equity
- ------------------------------------
Current liabilities:
Line of Credit 1,046,189
Accounts payable 2,440,882
Accrued expenses 1,111,118
Deferred revenue 1,211,638
Long-term debt and capital lease obligations - current 220,999
Notes payable and advances - shareholders 60,000
------------
Total current liabilities 6,090,826
Long-term debt and capital lease obligations - non-current 936,161
Deferred compensation 100,467
Notes payable - shareholders 30,000
------------
Total liabilities 7,157,454
Shareholders' equity:
Common stock 208,820
Additional paid-in capital 1,335,991
Retained earnings 1,558,683
Less shareholders notes receivable (281,436)
------------
Total shareholders' equity 2,822,058
------------
Total liabilities and shareholders' equity 9,979,512
============
20
CONCEPT INCORPORATED AND SUBSIDIARIES
Consolidated Statements of Income (Loss) and Retained Earnings
Three Months Ended March 31, 1995
(Unaudited)
Operating revenues:
Contract revenues 5,936,599
Other revenues 448,118
-----------
Total operating revenues 6,384,717
Facility operating expenses 7,103,710
-----------
Contribution (loss) from operations (718,993)
General and administrative expenses 429,111
-----------
Net operating income (loss) (1,148,104)
Other income (expense):
Interest income 2,973
Interest expense (58,612)
Gain on disposition of assets 4,509
Equity in net income of unconsolidated partnership 359,667
-----------
Total other income (expense) 308,537
Income (loss) before taxes (839,567)
Income tax expense (benefit) (285,453)
----------
Net income (loss) (554,114)
Retained earnings at December 31, 1994 2,112,797
----------
Retained earnings at March 31, 1995 1,558,683
===========
21
CONCEPT INCORPORATED AND SUBSIDIARIES
Consolidated Statement of Cash Flow
Three Months Ended March 31, 1995
(Unaudited)
Cash flows from operating activities (554,114)
Net Income
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 224,749
Deferred income taxes and taxes payable (320,770)
Gain on disposition of assets (4,509)
Equity in earnings of unconsolidated partnership (359,667)
(Increase) decrease in:
Accounts receivable - trade 208,947
Accounts receivable - partnership (292,508)
Prepaid expenses (99,311)
Inventories (4,811)
Increase (decrease) in:
Accounts payable 262,398
Accrued expenses (30,001)
Deferred revenue 1,013,998
Deferred compensation 12,559
-------------
Net cash provided by operating activities 56,960
Cash flows from investing activities:
Purchase of property, plant and equipment (369,217)
Investment in partnership, net (128)
-------------
Net cash used in investing activities (369,345)
Cash flows from financing activities:
Proceeds from line of credit, net 261,039
Principal payments on long-term debt and
capital lease obligations (162,884)
-------------
Net cash provided by financing activities 98,155
=============
Net increase (decrease) in cash (214,230)
Cash - beginning of period 234,273
=============
Cash - end of period 20,043
=============