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   <TITLE>Argan, Inc. - Form 8-K</TITLE>

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<FONT face="serif">UNITED STATES <br>
SECURITIES AND EXCHANGE COMMISSION <br>
WASHINGTON, DC 20549 <BR>--------------------</FONT></P>

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<FONT face="serif">FORM 8-K </FONT>
</P>
<P align="center">
<FONT face="serif">CURRENT REPORT <br>
PURSUANT TO SECTION 13 OR 15(d) OF THE <br>
SECURITIES EXCHANGE ACT OF 1934 </FONT>
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<FONT face="serif">Date of Report (Date of earliest event reported): October 31, 2003 <BR>------------<BR> Argan, Inc.
<br>
</FONT>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">----------------------------------------------<BR> (Exact name of registrant as specified in its charter) </FONT>
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<FONT face="serif">Formerly Puroflow Incorporated </FONT>
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<FONT face="serif">Delaware <br>
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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">----------------------------------------------<BR> (State or other jurisdiction of incorporation) </FONT>
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<FONT face="serif">001-31756</FONT></td>
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<FONT face="serif">13-1947195 </FONT></td>
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<FONT face="serif">---------</FONT></td>
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<FONT face="serif">-----------</FONT> </td>
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<FONT face="serif">(Commission File Number) </FONT>
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<FONT face="serif">(I.R.S. Employer I.D. Number) </FONT>
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<FONT face="serif">&nbsp;</FONT></P>
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<FONT face="serif"> 	One Church Street  	<br>
      Suite 302  	<br>
      Rockville, MD</FONT></td>
      <td valign="bottom" align="center"><FONT face="serif">20850 </FONT></td>
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<FONT face="serif"> 	-----------------------</FONT> </td>
      <td valign="bottom" align="center"><FONT face="serif">-----</FONT></td>
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      <td valign="bottom" align="center">
<FONT face="serif">(Address of Principal Executive Offices)</FONT> </td>
      <td valign="bottom" align="center"><FONT face="serif">(Zip Code)</FONT>
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<FONT face="serif">(301) 315-0027 <br>
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&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">----------------------------------------------<BR> (Registrant's telephone number; including area code)</FONT>
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<FONT face="serif">ITEM 2. Acquisition or Disposition of Assets: </FONT>
</P>
<P>
&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">On October 31, 2003, Argan, Inc. (AI) sold, in a cash transaction, its subsidiary, Puroflow Incorporated, to Western Filter Corporation (WFC). The sale price of approximately $3,500,000 was satisfied
in cash of which $300,000 is being held in escrow for one year to protect WFC from any breach of representations and warranties under the Stock Purchase Agreement ( Item 10.01 below). The proceeds from the sale will be used for AI&#146;s ongoing
acquisition program and for working capital in expanding the business of Southern Maryland Cable, Inc., its wholly owned subsidiary which it acquired on July 17, 2003. </FONT>
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<FONT face="serif">ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits: </FONT>
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<FONT face="serif">(b)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Pro Forma Financial Information: </FONT>
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<P style="margin-left: 50">
<FONT face="serif">Unaudited pro forma condensed combined statements of operations for the fiscal years ended January 31, 2003 and 2002, respectively, and for the six months ended July 31, 2003 and unaudited pro forma condensed combined balance
sheet as of July 31, 2003.</FONT>
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<FONT face="serif">(c)&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; Exhibits: </FONT>
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<P style="text-indent: -50; margin-left: 50">
<FONT face="serif">10.01&nbsp;&nbsp;&nbsp; Stock Purchase Agreement by and between Argan, Inc., a Delaware corporation, and Western Filter Corporation, a California corporation, dated as of October 31, 2003. </FONT>
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<FONT face="serif">SIGNATURES </FONT>
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<FONT face="serif"> 	Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. </FONT>
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<FONT face="serif"> 	 	 	 	 	 	 	ARGAN, INC.</FONT></td>
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      <td>&nbsp;</td>
      <td>&nbsp; </td>
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<FONT face="serif"> 	 	 	 	 	 	 	Date: November 14, 2003 </FONT>
      </td>
      <td>
<FONT face="serif"> 	 	 	 	 	 	 	BY /s/ 	 	 	 	 	 	 	Rainer H. Bosselmann	 	 	 	  	 	 	 	 	 	 	<BR>--------------------------------</FONT></td>
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      <td>&nbsp;</td>
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<FONT face="serif"> 	 	 	 	 	 	 	Rainer H. Bosselmann <br>
      Chairman of the Board and <br>
      Chief Executive Officer </FONT>
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<FONT face="serif"> 	 	 	 	 	 	 	&nbsp;</FONT></P>
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&nbsp;</P>
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<FONT face="serif">2</FONT>
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<FONT face="serif">The accompanying unaudited pro forma condensed combined statements of operations present the results of operations of AI as if the sale of PMD had occurred as of February 1, 2001 and the purchase of SMC had occurred on February 1,
2002. PMD is accounted for as a discontinued operation for all periods for which condensed combined proforma statements of operations are presented. The pro forma unaudited condensed combined balance sheet reflects the unaudited pro forma condensed
combined financial position of AI as if the sale of PMD had occurred July 31, 2003. (See Item 2., above, for details.) </FONT>
</P>
<P>
<FONT face="serif">The pro forma financial data is not necessarily indicative of what the results would have been if the sale of PMD and the acquisition of SMC had occurred on the dates indicated and are not necessarily representative of the
Company&#146;s financial position or results of operations for any future period. Because SMC and the Company were not under common control prior to July 17, 2003, historical combined results may not be comparable to, or indicative of, future
performance.</FONT>
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<TABLE width="740" border=0 cellspacing=0 cellpadding=0 style="border-collapse: collapse" bordercolor="#111111">
<TR>
   <TD colspan=8 width="740" align="center"><FONT face="serif">Unaudited Pro Forma Condensed Combined Statement of Operations</FONT></TD>
</TR>
<TR>
   <TD colspan=6 width="576" align="center"><FONT face="serif">For the Year Ended January 31, 2002</FONT></TD>
   <TD width="30" align="center">&nbsp;</TD>
   <TD width="134" align="center">&nbsp;</TD>
</TR>
<TR>
   <TD colspan=6 width="576" align="center">&nbsp; </TD>
   <TD width="30" align="center">&nbsp;</TD>
   <TD width="134" align="center">&nbsp;</TD>
</TR>
<TR>
   <TD colspan=2 width="274">&nbsp;</TD>
   <TD width="148">
   <p align="right"><FONT face="serif">AI as</FONT></TD>
   <TD width="29">&nbsp;</TD>
   <TD width="14">&nbsp;</TD>
   <TD width="111">&nbsp;</TD>
   <TD colspan=2 width="164" align="right"><FONT face="serif">Pro Forma</FONT></TD>
</TR>
<TR>
   <TD colspan=3 width="422" style="border-bottom-style: solid; border-bottom-width: 1">
   <p align="right"><FONT face="serif">Reported(A)</FONT></TD>
   <TD width="29" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD colspan=2 width="125" style="border-bottom-style: solid; border-bottom-width: 1">
   <p align="right"><FONT face="serif">Adjustments</FONT></TD>
   <TD colspan=2 width="164" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">Adjusted</FONT></TD>
</TR>
<TR>
   <TD colspan=3 width="422" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD width="29" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD colspan=2 width="125" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD colspan=2 width="164" style="border-top-style: solid; border-top-width: 1"></TD>
</TR>
<TR>
   <TD width="260"><FONT face="serif">Net Sales </FONT></TD>
   <TD colspan=2 width="162" align="right"><FONT face="serif">$7,236,000</FONT></TD>
   <TD width="29" align="right">&nbsp;</TD>
   <TD colspan=2 width="125" align="right"><FONT face="serif">($7,236,000)(1)</FONT></TD>
   <TD colspan=2 width="164" align="right">----------</TD>
</TR>
<TR>
   <TD width="260">&nbsp;</TD>
   <TD colspan=2 align="right" width="162">&nbsp;</TD>
   <TD align="right" width="29">&nbsp;</TD>
   <TD colspan=2 align="right" width="125">&nbsp;</TD>
   <TD colspan=2 align="right" width="164"></TD>
</TR>
<TR>
   <TD width="260"><FONT face="serif">Cost of</FONT></TD>
   <TD width="14" align="right" style="border-bottom-style: none; border-bottom-width: medium">&nbsp;</TD>
   <TD width="148" align="right" style="border-bottom-style: none; border-bottom-width: medium">&nbsp;</TD>
   <TD width="29" align="right">&nbsp;</TD>
   <TD width="14" align="right" style="border-bottom-style: none; border-bottom-width: medium">&nbsp;</TD>
   <TD width="111" align="right" style="border-bottom-style: none; border-bottom-width: medium">&nbsp;</TD>
   <TD width="30" align="right">&nbsp;</TD>
   <TD width="134" align="right">&nbsp;</TD>
</TR>
<TR>
   <TD width="260" style="border-right-style: none; border-right-width: medium">&nbsp;&nbsp;&nbsp;<FONT face="serif">Goods Sold</FONT></TD>
   <TD colspan=2 width="162" align="right" style="border-left-style: none; border-left-width: medium; border-right-style: none; border-right-width: medium; border-top-style: none; border-top-width: medium; border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">5,137,000</FONT></TD>
   <TD width="29" align="right" style="border-left-style: none; border-left-width: medium; border-right-style: none; border-right-width: medium; border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD colspan=2 width="125" align="right" style="border-left-style: none; border-left-width: medium; border-right-style: none; border-right-width: medium; border-top-style: none; border-top-width: medium; border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">(5,137,000)(1)</FONT></TD>
   <TD width="30" align="right" style="border-left-style: none; border-left-width: medium; border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD width="134" align="right" style="border-bottom-style: solid; border-bottom-width: 1">----------</TD>
</TR>
<TR>
   <TD width="260">&nbsp;</TD>
   <TD colspan=2 align="right" width="162"></TD>
   <TD align="right" width="29" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD colspan=2 align="right" width="125"></TD>
   <TD align="right" width="30" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD align="right" width="134" style="border-top-style: solid; border-top-width: 1"></TD>
</TR>
<TR>
   <TD width="260"><FONT face="serif">Gross Profit</FONT></TD>
   <TD width="14" align="right">&nbsp;</TD>
   <TD width="148" align="right"><FONT face="serif">2,099,000</FONT></TD>
   <TD width="29" align="right">&nbsp;</TD>
   <TD colspan=2 width="125" align="right"><FONT face="serif">(2,099,000)</FONT></TD>
   <TD width="30" align="right">&nbsp;</TD>
   <TD width="134" align="right">----------</TD>
</TR>
<TR>
   <TD width="260">&nbsp;</TD>
   <TD align="right" width="14">&nbsp;</TD>
   <TD align="right" width="148">&nbsp;</TD>
   <TD align="right" width="29">&nbsp;</TD>
   <TD colspan=2 align="right" width="125">&nbsp;</TD>
   <TD align="right" width="30">&nbsp;</TD>
   <TD align="right" width="134"></TD>
</TR>
<TR>
   <TD width="260">&nbsp;</TD>
   <TD align="right" width="14">&nbsp;</TD>
   <TD align="right" width="148">&nbsp;</TD>
   <TD align="right" width="29">&nbsp;</TD>
   <TD align="right" width="14">&nbsp;</TD>
   <TD align="right" width="111">&nbsp;</TD>
   <TD align="right" width="30">&nbsp;</TD>
   <TD align="right" width="134">&nbsp;</TD>
</TR>
<TR>
   <TD width="260"><FONT face="serif">Selling General</FONT></TD>
   <TD width="14" align="right">&nbsp;</TD>
   <TD width="148" align="right">&nbsp;</TD>
   <TD width="29" align="right">&nbsp;</TD>
   <TD width="14" align="right">&nbsp;</TD>
   <TD width="111" align="right">&nbsp;</TD>
   <TD width="30" align="right">&nbsp;</TD>
   <TD width="134" align="right">&nbsp;</TD>
</TR>
<TR>
   <TD width="260">&nbsp;&nbsp;&nbsp;<FONT face="serif">And</FONT></TD>
   <TD width="14" align="right">&nbsp;</TD>
   <TD width="148" align="right">&nbsp;</TD>
   <TD width="29" align="right">&nbsp;</TD>
   <TD width="14" align="right">&nbsp;</TD>
   <TD width="111" align="right">&nbsp;</TD>
   <TD width="30" align="right">&nbsp;</TD>
   <TD width="134" align="right">&nbsp;</TD>
</TR>
<TR>
   <TD width="260"><FONT face="serif">Administrative</FONT></TD>
   <TD colspan=2 width="162" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">1,728,000</FONT></TD>
   <TD width="29" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD colspan=2 width="125" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">(1,513,000)(1)</FONT></TD>
   <TD colspan=2 width="164" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">215,000</FONT></TD>
</TR>
<TR>
   <TD width="260">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">Operating</FONT></TD>
   <TD width="14" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD width="148" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD width="29" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD width="14" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD width="111" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD width="30" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD width="134" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
</TR>
<TR>
   <TD width="260">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">Income</FONT></TD>
   <TD colspan=2 width="162" align="right"><FONT face="serif">371,000</FONT></TD>
   <TD width="29" align="right">&nbsp;</TD>
   <TD colspan=2 width="125" align="right"><FONT face="serif">(586,000)</FONT></TD>
   <TD colspan=2 width="164" align="right"><FONT face="serif">(215,000)</FONT></TD>
</TR>
<TR>
   <TD width="260">&nbsp;</TD>
   <TD align="right" width="14">&nbsp;</TD>
   <TD align="right" width="148">&nbsp;</TD>
   <TD align="right" width="29">&nbsp;</TD>
   <TD align="right" width="14">&nbsp;</TD>
   <TD align="right" width="111">&nbsp;</TD>
   <TD align="right" width="30">&nbsp;</TD>
   <TD align="right" width="134">&nbsp;</TD>
</TR>
<TR>
   <TD width="260"><FONT face="serif">Interest Expense</FONT></TD>
   <TD colspan=2 width="162" align="right"><FONT face="serif">(47,000)</FONT></TD>
   <TD width="29" align="right">&nbsp;</TD>
   <TD colspan=2 width="125" align="right"><FONT face="serif">(47,000)(1)</FONT></TD>
   <TD width="30" align="right">&nbsp;</TD>
   <TD width="134" align="right">----------</TD>
</TR>
<TR>
   <TD width="260">&nbsp;</TD>
   <TD colspan=2 align="right" width="162">&nbsp;</TD>
   <TD align="right" width="29">&nbsp;</TD>
   <TD colspan=2 align="right" width="125">&nbsp;</TD>
   <TD align="right" width="30">&nbsp;</TD>
   <TD align="right" width="134"></TD>
</TR>
<TR>
   <TD width="260"><FONT face="serif">Other Income</FONT></TD>
   <TD width="14" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD width="148" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">2,000</FONT></TD>
   <TD width="29" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD colspan=2 width="125" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">(2,000)(1)</FONT></TD>
   <TD width="30" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD width="134" align="right" style="border-bottom-style: solid; border-bottom-width: 1">----------</TD>
</TR>
<TR>
   <TD width="260">&nbsp;</TD>
   <TD align="right" width="14" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD align="right" width="148" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD align="right" width="29" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD colspan=2 align="right" width="125" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD align="right" width="30" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD align="right" width="134" style="border-top-style: solid; border-top-width: 1"></TD>
</TR>
<TR>
   <TD width="260"><FONT face="serif">Income from Cont-</FONT></TD>
   <TD width="14" align="right">&nbsp;</TD>
   <TD width="148" align="right">&nbsp;</TD>
   <TD width="29" align="right">&nbsp;</TD>
   <TD width="14" align="right">&nbsp;</TD>
   <TD width="111" align="right">&nbsp;</TD>
   <TD width="30" align="right">&nbsp;</TD>
   <TD width="134" align="right">&nbsp;</TD>
</TR>
<TR>
   <TD width="260">&nbsp;&nbsp;&nbsp;<FONT face="serif">inuing Operations</FONT></TD>
   <TD width="14" align="right">&nbsp;</TD>
   <TD width="148" align="right">&nbsp;</TD>
   <TD width="29" align="right">&nbsp;</TD>
   <TD width="14" align="right">&nbsp;</TD>
   <TD width="111" align="right">&nbsp;</TD>
   <TD width="30" align="right">&nbsp;</TD>
   <TD width="134" align="right">&nbsp;</TD>
</TR>
<TR>
   <TD width="260">&nbsp;&nbsp;&nbsp;<FONT face="serif">Before Tax</FONT></TD>
   <TD colspan=2 width="162" align="right"><FONT face="serif">326,000</FONT></TD>
   <TD width="29" align="right">&nbsp;</TD>
   <TD colspan=2 width="125" align="right"><FONT face="serif">(541,000)</FONT></TD>
   <TD colspan=2 width="164" align="right"><FONT face="serif">(215,000)</FONT></TD>
</TR>
<TR>
   <TD width="260">&nbsp;</TD>
   <TD align="right" width="14">&nbsp;</TD>
   <TD align="right" width="148">&nbsp;</TD>
   <TD align="right" width="29">&nbsp;</TD>
   <TD align="right" width="14">&nbsp;</TD>
   <TD align="right" width="111">&nbsp;</TD>
   <TD align="right" width="30">&nbsp;</TD>
   <TD align="right" width="134">&nbsp;</TD>
</TR>
<TR>
   <TD colspan=2 width="274"><FONT face="serif">Provision for Income</FONT></TD>
   <TD width="148" align="right">&nbsp;</TD>
   <TD width="29" align="right">&nbsp;</TD>
   <TD width="14" align="right">&nbsp;</TD>
   <TD width="111" align="right">&nbsp;</TD>
   <TD width="30" align="right">&nbsp;</TD>
   <TD width="134" align="right">&nbsp;</TD>
</TR>
<TR>
   <TD width="260">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">Taxes</FONT></TD>
   <TD width="14" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD width="148" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">130,000</FONT></TD>
   <TD width="29" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD colspan=2 width="125" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">(130,000)(1)</FONT></TD>
   <TD colspan=2 width="164" align="right" style="border-bottom-style: solid; border-bottom-width: 1">----------</TD>
</TR>
<TR>
   <TD width="260">&nbsp;</TD>
   <TD align="right" width="14" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD align="right" width="148" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD align="right" width="29" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD colspan=2 align="right" width="125" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD colspan=2 align="right" width="164" style="border-top-style: solid; border-top-width: 1"></TD>
</TR>
<TR>
   <TD width="260">&nbsp;&nbsp;&nbsp;<FONT face="serif">Net Income from</FONT></TD>
   <TD width="14" align="right">&nbsp;</TD>
   <TD width="148" align="right">&nbsp;</TD>
   <TD width="29" align="right">&nbsp;</TD>
   <TD width="14" align="right">&nbsp;</TD>
   <TD width="111" align="right">&nbsp;</TD>
   <TD width="30" align="right">&nbsp;</TD>
   <TD width="134" align="right">&nbsp;</TD>
</TR>
<TR>
   <TD width="260">&nbsp;&nbsp;&nbsp;<FONT face="serif">Continuing</FONT></TD>
   <TD width="14" align="right">&nbsp;</TD>
   <TD width="148" align="right">&nbsp;</TD>
   <TD width="29" align="right">&nbsp;</TD>
   <TD width="14" align="right">&nbsp;</TD>
   <TD width="111" align="right">&nbsp;</TD>
   <TD width="30" align="right">&nbsp;</TD>
   <TD width="134" align="right">&nbsp;</TD>
</TR>
<TR>
   <TD width="260">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">Operations</FONT></TD>
   <TD width="14" align="right">&nbsp;</TD>
   <TD width="148" align="right"><FONT face="serif">196,000</FONT></TD>
   <TD width="29" align="right">&nbsp;</TD>
   <TD colspan=2 width="125" align="right"><FONT face="serif">(411,000)</FONT></TD>
   <TD colspan=2 width="164" align="right"><FONT face="serif">(215,000)</FONT></TD>
</TR>
<TR>
   <TD width="260"><FONT face="serif">Loss on disposal</FONT></TD>
   <TD width="14" align="right">&nbsp;</TD>
   <TD width="148" align="right">&nbsp;</TD>
   <TD width="29" align="right">&nbsp;</TD>
   <TD width="14" align="right">&nbsp;</TD>
   <TD width="111" align="right">&nbsp;</TD>
   <TD width="30" align="right">&nbsp;</TD>
   <TD width="134" align="right">&nbsp;</TD>
</TR>
<TR>
   <TD width="260"><FONT face="serif">of manufacturing</FONT></TD>
   <TD width="14" align="right">&nbsp;</TD>
   <TD width="148" align="right">&nbsp;</TD>
   <TD width="29" align="right">&nbsp;</TD>
   <TD width="14" align="right">&nbsp;</TD>
   <TD width="111" align="right">&nbsp;</TD>
   <TD width="30" align="right">&nbsp;</TD>
   <TD width="134" align="right">&nbsp;</TD>
</TR>
<TR>
   <TD width="260">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">subsidiary</FONT></TD>
   <TD colspan=2 width="162" align="right">----------</TD>
   <TD width="29" align="right">&nbsp;</TD>
   <TD colspan=2 width="125" align="right"><FONT face="serif">(320,000)(1)</FONT></TD>
   <TD colspan=2 width="164" align="right"><FONT face="serif">(320,000)</FONT></TD>
</TR>
<TR>
   <TD width="260">&nbsp;</TD>
   <TD colspan=2 align="right" width="162"></TD>
   <TD align="right" width="29">&nbsp;</TD>
   <TD colspan=2 align="right" width="125">&nbsp;</TD>
   <TD colspan=2 align="right" width="164">&nbsp;</TD>
</TR>
<TR>
   <TD colspan=2 width="274"><FONT face="serif">Loss on discontinued</FONT></TD>
   <TD width="148" align="right">&nbsp;</TD>
   <TD width="29" align="right">&nbsp;</TD>
   <TD width="14" align="right">&nbsp;</TD>
   <TD width="111" align="right">&nbsp;</TD>
   <TD width="30" align="right">&nbsp;</TD>
   <TD width="134" align="right">&nbsp;</TD>
</TR>
<TR>
   <TD width="260">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">operations</FONT></TD>
   <TD colspan=2 width="162" align="right"><FONT face="serif">(155,000)</FONT></TD>
   <TD width="29" align="right">&nbsp;</TD>
   <TD colspan=2 width="125" align="right"><FONT face="serif">(155,000)(1)</FONT></TD>
   <TD width="30" align="right">&nbsp;</TD>
   <TD width="134" align="right">&nbsp;</TD>
</TR>
<TR>
   <TD width="260"><FONT face="serif">Loss on Disposal</FONT></TD>
   <TD width="14" align="right">&nbsp;</TD>
   <TD width="148" align="right">&nbsp;</TD>
   <TD width="29" align="right">&nbsp;</TD>
   <TD width="14" align="right">&nbsp;</TD>
   <TD width="111" align="right">&nbsp;</TD>
   <TD width="30" align="right">&nbsp;</TD>
   <TD width="134" align="right">&nbsp;</TD>
</TR>
<TR>
   <TD width="260">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">Of Discontinued</FONT></TD>
   <TD width="14" align="right">&nbsp;</TD>
   <TD width="148" align="right">&nbsp;</TD>
   <TD width="29" align="right">&nbsp;</TD>
   <TD width="14" align="right">&nbsp;</TD>
   <TD width="111" align="right">&nbsp;</TD>
   <TD width="30" align="right">&nbsp;</TD>
   <TD width="134" align="right">&nbsp;</TD>
</TR>
<TR>
   <TD width="260">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">Operations</FONT></TD>
   <TD width="14" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD width="148" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">(560,000)</FONT></TD>
   <TD width="29" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD colspan=2 width="125" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">(560,000)(1)</FONT></TD>
   <TD colspan=2 width="164" align="right" style="border-bottom-style: solid; border-bottom-width: 1">----------</TD>
</TR>
<TR>
   <TD width="260">&nbsp;</TD>
   <TD align="right" width="14" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD align="right" width="148" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD align="right" width="29" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD colspan=2 align="right" width="125" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD colspan=2 align="right" width="164" style="border-top-style: solid; border-top-width: 1"></TD>
</TR>
<TR>
   <TD width="260"><FONT face="serif">Net Income(Loss)</FONT></TD>
   <TD width="14" align="right" style="border-bottom-style: double; border-bottom-width: 3">&nbsp;</TD>
   <TD width="148" align="right" style="border-bottom-style: double; border-bottom-width: 3"><FONT face="serif">
   $&nbsp; (519,000)</FONT></TD>
   <TD width="29" align="right" style="border-bottom-style: double; border-bottom-width: 3">&nbsp;</TD>
   <TD width="14" align="right" style="border-bottom-style: double; border-bottom-width: 3">&nbsp;</TD>
   <TD width="111" align="right" style="border-bottom-style: double; border-bottom-width: 3"><FONT face="serif">
   $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (16,000)</FONT></TD>
   <TD width="30" align="right" style="border-bottom-style: double; border-bottom-width: 3">&nbsp;</TD>
   <TD width="134" align="right" style="border-bottom-style: double; border-bottom-width: 3"><FONT face="serif">
   $&nbsp;&nbsp;&nbsp; (535,000)</FONT></TD>
</TR>
<TR>
   <TD width="260">&nbsp;</TD>
   <TD align="right" width="14">&nbsp;</TD>
   <TD align="right" width="148"></TD>
   <TD align="right" width="29">&nbsp;</TD>
   <TD align="right" width="14">&nbsp;</TD>
   <TD align="right" width="111"></TD>
   <TD align="right" width="30">&nbsp;</TD>
   <TD align="right" width="134"></TD>
</TR>
</TABLE>

</div>
<p>&nbsp;</p>
<p align="center">3</p>

<hr color="#000080"><P style="page-break-after: always"></p>

<p>&nbsp;</p>
<p>&nbsp;</p>


<A name="page_4"></A>

<div align="left">

<TABLE width="720" border=0 cellspacing=0 cellpadding=0 style="border-collapse: collapse" bordercolor="#111111">
<TR>
   <TD width="371"><FONT face="serif">Earnings Per Share:</FONT></TD>
   <TD width="137" align="right" colspan="3">&nbsp;</TD>
   <TD width="34" align="right">&nbsp;</TD>
   <TD width="52" align="right">&nbsp;</TD>
   <TD width="136" align="right">&nbsp;</TD>
</TR>
<TR>
   <TD width="371">&nbsp;&nbsp;&nbsp;<FONT face="serif">Basic - Continuing</FONT></TD>
   <TD width="137" align="right" colspan="3">&nbsp;</TD>
   <TD width="34" align="right">&nbsp;</TD>
   <TD width="52" align="right">&nbsp;</TD>
   <TD width="136" align="right">&nbsp;</TD>
</TR>
<TR>
   <TD width="371">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">Operations</FONT></TD>
   <TD width="137" align="right" colspan="3" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">
   $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; .40</FONT></TD>
   <TD width="34" align="right">&nbsp;</TD>
   <TD width="52" align="right">&nbsp;</TD>
   <TD width="136" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">
   $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (.43)</FONT></TD>
</TR>
<TR>
   <TD width="371">&nbsp;</TD>
   <TD align="right" colspan="3" style="border-top-style: solid; border-top-width: 1" width="137">&nbsp;</TD>
   <TD align="right" width="34">&nbsp;</TD>
   <TD align="right" width="52"></TD>
   <TD align="right" style="border-top-style: solid; border-top-width: 1" width="136"></TD>
</TR>
<TR>
   <TD width="371">&nbsp;&nbsp;&nbsp;<FONT face="serif">Basic &#150; Discontinued</FONT></TD>
   <TD width="137" align="right" colspan="3">&nbsp;</TD>
   <TD width="34" align="right">&nbsp;</TD>
   <TD width="52" align="right">&nbsp;</TD>
   <TD width="136" align="right">&nbsp;</TD>
</TR>
<TR>
   <TD width="371">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">Operations</FONT></TD>
   <TD colspan=3 width="137" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">(1.45)</FONT></TD>
   <TD width="34" align="right">&nbsp;</TD>
   <TD width="52" align="right">&nbsp;</TD>
   <TD width="136" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">(.65)</FONT></TD>
</TR>
<TR>
   <TD width="371">&nbsp;</TD>
   <TD colspan=3 align="right" style="border-top-style: solid; border-top-width: 1" width="137"></TD>
   <TD align="right" width="34">&nbsp;</TD>
   <TD align="right" width="52">&nbsp;</TD>
   <TD align="right" style="border-top-style: solid; border-top-width: 1" width="136"></TD>
</TR>
<TR>
   <TD width="371">&nbsp;&nbsp;&nbsp;<FONT face="serif">Total</FONT></TD>
   <TD width="137" align="right" colspan="3" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">
   $&nbsp; (1.05)</FONT></TD>
   <TD width="34" align="right">&nbsp;</TD>
   <TD width="52" align="right">&nbsp;</TD>
   <TD width="136" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">
   $&nbsp;&nbsp; (1.08)</FONT></TD>
</TR>
<TR>
   <TD width="371">&nbsp;</TD>
   <TD align="right" colspan="3" style="border-top-style: solid; border-top-width: 1" width="137">&nbsp;</TD>
   <TD align="right" width="34">&nbsp;</TD>
   <TD align="right" width="52"></TD>
   <TD align="right" style="border-top-style: solid; border-top-width: 1" width="136"></TD>
</TR>
<TR>
   <TD width="371">&nbsp;</TD>
   <TD align="right" colspan="3" width="137">&nbsp;</TD>
   <TD align="right" width="34">&nbsp;</TD>
   <TD align="right" width="52">&nbsp;</TD>
   <TD align="right" width="136">&nbsp;</TD>
</TR>
<TR>
   <TD width="371">&nbsp;&nbsp;&nbsp;<FONT face="serif">Diluted &#150; Continuing</FONT></TD>
   <TD width="137" align="right" colspan="3">&nbsp;</TD>
   <TD width="34" align="right">&nbsp;</TD>
   <TD width="52" align="right">&nbsp;</TD>
   <TD width="136" align="right">&nbsp;</TD>
</TR>
<TR>
   <TD width="371">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">Operations</FONT></TD>
   <TD width="137" align="right" colspan="3" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">
   $&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; .40</FONT></TD>
   <TD width="34" align="right">&nbsp;</TD>
   <TD width="52" align="right">&nbsp;</TD>
   <TD width="136" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">
   $&nbsp;&nbsp;&nbsp;&nbsp; (.43)</FONT></TD>
</TR>
<TR>
   <TD width="371">&nbsp;</TD>
   <TD align="right" colspan="3" style="border-top-style: solid; border-top-width: 1" width="137">&nbsp;</TD>
   <TD align="right" width="34">&nbsp;</TD>
   <TD align="right" width="52"></TD>
   <TD align="right" style="border-top-style: solid; border-top-width: 1" width="136"></TD>
</TR>
<TR>
   <TD colspan=2 width="371"><FONT face="serif">Diluted &#150; Discontinued</FONT></TD>
   <TD width="74" align="right">&nbsp;</TD>
   <TD width="63" align="right">&nbsp;</TD>
   <TD width="34" align="right">&nbsp;</TD>
   <TD width="52" align="right">&nbsp;</TD>
   <TD width="136" align="right">&nbsp;</TD>
</TR>
<TR>
   <TD width="371">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">Operations</FONT></TD>
   <TD width="137" align="right" colspan="3" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">(1.45)</FONT></TD>
   <TD width="34" align="right">&nbsp;</TD>
   <TD width="52" align="right">&nbsp;</TD>
   <TD width="136" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">(.65)</FONT></TD>
</TR>
<TR>
   <TD width="371">&nbsp;</TD>
   <TD align="right" colspan="3" style="border-top-style: solid; border-top-width: 1" width="137">&nbsp;</TD>
   <TD align="right" width="34">&nbsp;</TD>
   <TD align="right" width="52">&nbsp;</TD>
   <TD align="right" style="border-top-style: solid; border-top-width: 1" width="136"></TD>
</TR>
<TR>
   <TD width="371">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">Total</FONT></TD>
   <TD width="137" align="right" colspan="3" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">
   $&nbsp; (1.05)</FONT></TD>
   <TD width="34" align="right">&nbsp;</TD>
   <TD width="52" align="right">&nbsp;</TD>
   <TD width="136" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">
   $&nbsp; (1.08)</FONT></TD>
</TR>
<TR>
   <TD width="371">&nbsp;</TD>
   <TD align="right" colspan="3" style="border-top-style: solid; border-top-width: 1" width="137">&nbsp;</TD>
   <TD align="right" width="34">&nbsp;</TD>
   <TD align="right" width="52"></TD>
   <TD align="right" style="border-top-style: solid; border-top-width: 1" width="136"></TD>
</TR>
</TABLE>
</div>
<P>
<FONT face="serif">Notes to unaudited pro forma condensed combined statement of operations</FONT>
</P>
<div align="left">
<TABLE width="730" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0" cellspacing="0">
<TR>
   <TD valign="top" width="5%"><FONT face="serif">(1)</FONT><BR>&nbsp;&nbsp;</TD>
   <TD valign="top" colspan="2"><FONT face="serif">To adjust for the sale of PMD as if the transaction had occurred on February 1, 2001. The net loss on disposal of the manufacturing subsidiary was calculated on a pro forma basis utilizing
PMD&#146;s July 31, 2003 net book value including estimated deal costs of $150,000 see (7) and (8) below.</FONT><BR></TD>
</TR>
<TR>
   <td valign="top" width="3%">&nbsp;</td>
   <TD valign="top" width="5%"><FONT face="serif">(A)</FONT><BR>&nbsp;&nbsp;</TD>
   <td valign="top"><FONT face="serif">Reported on Form 10-KSB for the year ended January 31, 2003 filed with the Securities and Exchange Commission on March 20, 2003.</FONT><BR></td>
</tr>
</TABLE>
</div>
<P align="center">
<FONT face="serif">4</FONT>
</P>

<hr color="#000080"><P style="page-break-after: always"></p>


<A name="page_5"></A>

<div align="left">

<TABLE width="740" border=0 cellspacing=0 cellpadding=0 style="border-collapse: collapse" bordercolor="#111111">
<TR>
   <TD colspan="13" align="center" width="740" valign="bottom"><FONT face="serif">Unaudited Pro Forma Condensed Combined Statement of Operations</FONT></TD>
</TR>
<TR>
   <TD colspan="13" align="center" width="740" valign="bottom"><FONT face="serif">For the Year Ended January 31, 2003</FONT></TD>
</TR>
<TR>
   <TD width="163" valign="bottom">&nbsp;</TD>
   <TD width="14" valign="bottom">&nbsp;</TD>
   <TD width="14" valign="bottom">&nbsp;</TD>
   <TD width="88" valign="bottom">&nbsp;</TD>
   <TD width="22" valign="bottom">&nbsp;</TD>
   <TD width="136" valign="bottom">&nbsp;</TD>
   <TD width="44" valign="bottom">&nbsp;</TD>
   <TD width="7" valign="bottom">&nbsp;</TD>
   <TD width="103" valign="bottom">&nbsp;</TD>
   <TD width="26" valign="bottom">&nbsp;</TD>
   <TD width="22" valign="bottom">&nbsp;</TD>
   <TD width="49" valign="bottom">&nbsp;</TD>
   <TD width="52" valign="bottom">&nbsp;</TD>
</TR>
<TR>
   <TD width="163" valign="bottom">&nbsp;</TD>
   <TD colspan=3 width="116" align="center" valign="bottom"><FONT face="serif">AI as</FONT></TD>
   <TD width="22" align="center" valign="bottom">&nbsp;</TD>
   <TD width="136" align="center" valign="bottom"><FONT face="serif">Proforma</FONT></TD>
   <TD width="44" align="center" valign="bottom">&nbsp;</TD>
   <TD width="110" align="center" colspan="2" valign="bottom"><FONT face="serif">SMC</FONT></TD>
   <TD width="26" align="center" valign="bottom">&nbsp;</TD>
   <TD colspan=3 width="123" align="center" valign="bottom"><FONT face="serif">Pro Forma</FONT></TD>
</TR>
<TR>
   <TD width="163" valign="bottom">&nbsp;</TD>
   <TD colspan=3 width="116" align="center" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">Reported(B)</FONT></TD>
   <TD width="22" align="center" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD width="136" align="center" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">Adjustments</FONT></TD>
   <TD colspan=3 width="154" align="center" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">Acquisition(C)</FONT></TD>
   <TD width="26" align="center" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD width="123" align="center" colspan="3" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">Adjusted</FONT></TD>
</TR>
<TR>
   <TD width="163" valign="bottom">&nbsp;</TD>
   <TD colspan=3 width="116" valign="bottom" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD width="22" valign="bottom" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD width="136" valign="bottom" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD colspan=3 width="154" valign="bottom" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD width="26" valign="bottom" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD width="22" valign="bottom" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD colspan=2 width="101" valign="bottom" style="border-top-style: solid; border-top-width: 1"></TD>
</TR>
<TR>
   <TD width="163" valign="bottom"><FONT face="serif">Net Sales</FONT></TD>
   <TD width="14" align="right" valign="bottom">&nbsp;</TD>
   <TD colspan=2 width="102" align="right" valign="bottom"><FONT face="serif">$ 6,834,000</FONT></TD>
   <TD width="22" align="right" valign="bottom">&nbsp;</TD>
   <TD width="136" align="right" valign="bottom"><FONT face="serif">($6,834,000)(2)</FONT></TD>
   <TD width="44" align="right" valign="bottom">&nbsp;</TD>
   <TD colspan=2 width="110" align="right" valign="bottom"><FONT face="serif">$8,808,000</FONT></TD>
   <TD width="26" align="right" valign="bottom">&nbsp;</TD>
   <TD width="22" align="right" valign="bottom">&nbsp;</TD>
   <TD colspan=2 width="101" align="right" valign="bottom"><FONT face="serif">$8,808,000</FONT></TD>
</TR>
<TR>
   <TD width="163" valign="bottom"><FONT face="serif">Cost of</FONT></TD>
   <TD width="14" align="right" valign="bottom">&nbsp;</TD>
   <TD width="14" align="right" valign="bottom">&nbsp;</TD>
   <TD width="88" align="right" valign="bottom">&nbsp;</TD>
   <TD width="22" align="right" valign="bottom">&nbsp;</TD>
   <TD width="136" align="right" valign="bottom">&nbsp;</TD>
   <TD width="44" align="right" valign="bottom">&nbsp;</TD>
   <TD width="7" align="right" valign="bottom">&nbsp;</TD>
   <TD width="103" align="right" valign="bottom">&nbsp;</TD>
   <TD width="26" align="right" valign="bottom">&nbsp;</TD>
   <TD width="22" align="right" valign="bottom">&nbsp;</TD>
   <TD width="49" align="right" valign="bottom">&nbsp;</TD>
   <TD width="52" align="right" valign="bottom">&nbsp;</TD>
</TR>
<TR>
   <TD width="163" valign="bottom">&nbsp;&nbsp;&nbsp;<FONT face="serif">Goods Sold</FONT></TD>
   <TD width="14" align="right" valign="bottom">&nbsp;</TD>
   <TD colspan=2 width="102" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">4,500,000</FONT></TD>
   <TD width="22" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD width="136" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">(4,500,000)(2)</FONT></TD>
   <TD width="44" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD colspan=2 width="110" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">6,939,000</FONT></TD>
   <TD width="26" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD width="22" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD colspan=2 width="101" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">6,939,000</FONT></TD>
</TR>
<TR>
   <TD width="163" valign="bottom">&nbsp;</TD>
   <TD align="right" width="14" valign="bottom">&nbsp;</TD>
   <TD colspan=2 align="right" width="102" valign="bottom" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD align="right" width="22" valign="bottom" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD align="right" width="136" valign="bottom" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD align="right" width="44" valign="bottom" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD colspan=2 align="right" width="110" valign="bottom" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD align="right" width="26" valign="bottom" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD align="right" width="22" valign="bottom" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD colspan=2 align="right" width="101" valign="bottom" style="border-top-style: solid; border-top-width: 1"></TD>
</TR>
<TR>
   <TD width="163" valign="bottom"><FONT face="serif">Gross Profit</FONT></TD>
   <TD colspan=3 width="116" align="right" valign="bottom"><FONT face="serif">2,334,000</FONT></TD>
   <TD width="22" align="right" valign="bottom">&nbsp;</TD>
   <TD width="136" align="right" valign="bottom"><FONT face="serif">(2,334,000)</FONT></TD>
   <TD width="44" align="right" valign="bottom">&nbsp;</TD>
   <TD colspan=2 width="110" align="right" valign="bottom"><FONT face="serif">1,869,000</FONT></TD>
   <TD width="26" align="right" valign="bottom">&nbsp;</TD>
   <TD width="22" align="right" valign="bottom">&nbsp;</TD>
   <TD colspan=2 width="101" align="right" valign="bottom"><FONT face="serif">1,869,000</FONT></TD>
</TR>
<TR>
   <TD width="163" valign="bottom">&nbsp;</TD>
   <TD align="right" width="14" valign="bottom">&nbsp;</TD>
   <TD align="right" width="14" valign="bottom">&nbsp;</TD>
   <TD align="right" width="88" valign="bottom">&nbsp;</TD>
   <TD align="right" width="22" valign="bottom">&nbsp;</TD>
   <TD align="right" width="136" valign="bottom">&nbsp;</TD>
   <TD align="right" width="44" valign="bottom">&nbsp;</TD>
   <TD align="right" width="7" valign="bottom">&nbsp;</TD>
   <TD align="right" width="103" valign="bottom">&nbsp;</TD>
   <TD align="right" width="26" valign="bottom">&nbsp;</TD>
   <TD align="right" width="22" valign="bottom">&nbsp;</TD>
   <TD align="right" width="49" valign="bottom">&nbsp;</TD>
   <TD align="right" width="52" valign="bottom">&nbsp;</TD>
</TR>
<TR>
   <TD colspan=2 width="177" valign="bottom"><FONT face="serif">Selling General</FONT></TD>
   <TD width="14" align="right" valign="bottom">&nbsp;</TD>
   <TD width="88" align="right" valign="bottom">&nbsp;</TD>
   <TD width="22" align="right" valign="bottom">&nbsp;</TD>
   <TD width="136" align="right" valign="bottom">&nbsp;</TD>
   <TD width="44" align="right" valign="bottom">&nbsp;</TD>
   <TD width="7" align="right" valign="bottom">&nbsp;</TD>
   <TD width="103" align="right" valign="bottom">&nbsp;</TD>
   <TD width="26" align="right" valign="bottom">&nbsp;</TD>
   <TD width="22" align="right" valign="bottom">&nbsp;</TD>
   <TD width="49" align="right" valign="bottom">&nbsp;</TD>
   <TD width="52" align="right" valign="bottom">&nbsp;</TD>
</TR>
<TR>
   <TD width="163" valign="bottom">&nbsp;&nbsp;&nbsp;<FONT face="serif">And</FONT></TD>
   <TD width="14" align="right" valign="bottom">&nbsp;</TD>
   <TD width="14" align="right" valign="bottom">&nbsp;</TD>
   <TD width="88" align="right" valign="bottom">&nbsp;</TD>
   <TD width="22" align="right" valign="bottom">&nbsp;</TD>
   <TD width="136" align="right" valign="bottom">&nbsp;</TD>
   <TD width="44" align="right" valign="bottom">&nbsp;</TD>
   <TD width="7" align="right" valign="bottom">&nbsp;</TD>
   <TD width="103" align="right" valign="bottom">&nbsp;</TD>
   <TD width="26" align="right" valign="bottom">&nbsp;</TD>
   <TD width="22" align="right" valign="bottom">&nbsp;</TD>
   <TD width="49" align="right" valign="bottom">&nbsp;</TD>
   <TD width="52" align="right" valign="bottom">&nbsp;</TD>
</TR>
<TR>
   <TD width="163" valign="bottom"><FONT face="serif">Administrative</FONT></TD>
   <TD width="14" align="right" valign="bottom">&nbsp;</TD>
   <TD colspan=2 width="102" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">1,939,000</FONT></TD>
   <TD width="22" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD width="136" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">(1,741,000)(2)</FONT></TD>
   <TD width="44" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD colspan=2 width="110" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">1,646,000</FONT></TD>
   <TD width="26" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD width="22" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD colspan=2 width="101" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">1,844,000</FONT></TD>
</TR>
<TR>
   <TD width="163" valign="bottom">&nbsp;</TD>
   <TD align="right" width="14" valign="bottom">&nbsp;</TD>
   <TD colspan=2 align="right" width="102" valign="bottom" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD align="right" width="22" valign="bottom" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD align="right" width="136" valign="bottom" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD align="right" width="44" valign="bottom" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD colspan=2 align="right" width="110" valign="bottom" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD align="right" width="26" valign="bottom" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD align="right" width="22" valign="bottom" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD colspan=2 align="right" width="101" valign="bottom" style="border-top-style: solid; border-top-width: 1"></TD>
</TR>
<TR>
   <TD width="163" valign="bottom">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">Operating</FONT></TD>
   <TD width="14" align="right" valign="bottom">&nbsp;</TD>
   <TD width="14" align="right" valign="bottom">&nbsp;</TD>
   <TD width="88" align="right" valign="bottom">&nbsp;</TD>
   <TD width="22" align="right" valign="bottom">&nbsp;</TD>
   <TD width="136" align="right" valign="bottom">&nbsp;</TD>
   <TD width="44" align="right" valign="bottom">&nbsp;</TD>
   <TD width="7" align="right" valign="bottom">&nbsp;</TD>
   <TD width="103" align="right" valign="bottom">&nbsp;</TD>
   <TD width="26" align="right" valign="bottom">&nbsp;</TD>
   <TD width="22" align="right" valign="bottom">&nbsp;</TD>
   <TD width="49" align="right" valign="bottom">&nbsp;</TD>
   <TD width="52" align="right" valign="bottom">&nbsp;</TD>
</TR>
<TR>
   <TD width="163" valign="bottom">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">Income</FONT></TD>
   <TD width="14" align="right" valign="bottom">&nbsp;</TD>
   <TD colspan=2 width="102" align="right" valign="bottom"><FONT face="serif">395,000</FONT></TD>
   <TD width="22" align="right" valign="bottom">&nbsp;</TD>
   <TD width="136" align="right" valign="bottom"><FONT face="serif">(593,000)</FONT></TD>
   <TD width="44" align="right" valign="bottom">&nbsp;</TD>
   <TD colspan=2 width="110" align="right" valign="bottom"><FONT face="serif">223,000</FONT></TD>
   <TD width="26" align="right" valign="bottom">&nbsp;</TD>
   <TD width="22" align="right" valign="bottom">&nbsp;</TD>
   <TD width="49" align="right" valign="bottom">&nbsp;</TD>
   <TD width="52" align="right" valign="bottom"><FONT face="serif">25,000</FONT></TD>
</TR>
<TR>
   <TD width="163" valign="bottom">&nbsp;</TD>
   <TD align="right" width="14" valign="bottom">&nbsp;</TD>
   <TD align="right" width="14" valign="bottom">&nbsp;</TD>
   <TD align="right" width="88" valign="bottom">&nbsp;</TD>
   <TD align="right" width="22" valign="bottom">&nbsp;</TD>
   <TD align="right" width="136" valign="bottom">&nbsp;</TD>
   <TD align="right" width="44" valign="bottom">&nbsp;</TD>
   <TD align="right" width="7" valign="bottom">&nbsp;</TD>
   <TD align="right" width="103" valign="bottom">&nbsp;</TD>
   <TD align="right" width="26" valign="bottom">&nbsp;</TD>
   <TD align="right" width="22" valign="bottom">&nbsp;</TD>
   <TD align="right" width="49" valign="bottom">&nbsp;</TD>
   <TD align="right" width="52" valign="bottom">&nbsp;</TD>
</TR>
<TR>
   <TD colspan=2 width="177" valign="bottom"><FONT face="serif">Interest Expense</FONT></TD>
   <TD colspan=2 width="102" align="right" valign="bottom"><FONT face="serif">(26,000)</FONT></TD>
   <TD width="22" align="right" valign="bottom">&nbsp;</TD>
   <TD width="136" align="right" valign="bottom"><FONT face="serif">(26,000)(2)</FONT></TD>
   <TD width="44" align="right" valign="bottom">&nbsp;</TD>
   <TD colspan=2 width="110" align="right" valign="bottom"><FONT face="serif">(90,000)</FONT></TD>
   <TD width="26" align="right" valign="bottom">&nbsp;</TD>
   <TD width="22" align="right" valign="bottom">&nbsp;</TD>
   <TD colspan=2 width="101" align="right" valign="bottom"><FONT face="serif">(90,000)</FONT></TD>
</TR>
<TR>
   <TD width="163" valign="bottom"><FONT face="serif">Other Income</FONT></TD>
   <TD width="14" align="right" valign="bottom">&nbsp;</TD>
   <TD colspan=2 width="102" align="right" valign="bottom"><FONT face="serif">57,000</FONT></TD>
   <TD width="22" align="right" valign="bottom">&nbsp;</TD>
   <TD width="136" align="right" valign="bottom"><FONT face="serif">(57,000)(2)</FONT></TD>
   <TD width="44" align="right" valign="bottom">&nbsp;</TD>
   <TD colspan=2 width="110" align="right" valign="bottom"><FONT face="serif">17,000</FONT></TD>
   <TD width="26" align="right" valign="bottom">&nbsp;</TD>
   <TD width="22" align="right" valign="bottom">&nbsp;</TD>
   <TD colspan=2 width="101" align="right" valign="bottom"><FONT face="serif">17,000</FONT></TD>
</TR>
<TR>
   <TD colspan=3 width="191" valign="bottom"><FONT face="serif">Write-down of Excess</FONT></TD>
   <TD width="88" align="right" valign="bottom">&nbsp;</TD>
   <TD width="22" align="right" valign="bottom">&nbsp;</TD>
   <TD width="136" align="right" valign="bottom">&nbsp;</TD>
   <TD width="44" align="right" valign="bottom">&nbsp;</TD>
   <TD width="7" align="right" valign="bottom">&nbsp;</TD>
   <TD width="103" align="right" valign="bottom">&nbsp;</TD>
   <TD width="26" align="right" valign="bottom">&nbsp;</TD>
   <TD width="22" align="right" valign="bottom">&nbsp;</TD>
   <TD width="49" align="right" valign="bottom">&nbsp;</TD>
   <TD width="52" align="right" valign="bottom">&nbsp;</TD>
</TR>
<TR>
   <TD colspan=2 width="177" valign="bottom"><FONT face="serif">and Obsolete</FONT></TD>
   <TD width="14" align="right" valign="bottom">&nbsp;</TD>
   <TD width="88" align="right" valign="bottom">&nbsp;</TD>
   <TD width="22" align="right" valign="bottom">&nbsp;</TD>
   <TD width="136" align="right" valign="bottom">&nbsp;</TD>
   <TD width="44" align="right" valign="bottom">&nbsp;</TD>
   <TD width="7" align="right" valign="bottom">&nbsp;</TD>
   <TD width="103" align="right" valign="bottom">&nbsp;</TD>
   <TD width="26" align="right" valign="bottom">&nbsp;</TD>
   <TD width="22" align="right" valign="bottom">&nbsp;</TD>
   <TD width="49" align="right" valign="bottom">&nbsp;</TD>
   <TD width="52" align="right" valign="bottom">&nbsp;</TD>
</TR>
<TR>
   <TD width="163" valign="bottom">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">Inventory</FONT></TD>
   <TD width="14" align="right" valign="bottom">&nbsp;</TD>
   <TD colspan=2 width="102" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">(250,000)</FONT></TD>
   <TD width="22" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD width="136" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">(250,000)(2)</FONT></TD>
   <TD width="44" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD colspan=2 width="110" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">
   --------</TD>
   <TD width="26" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD width="22" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD colspan=2 width="101" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">
   --------</TD>
</TR>
<TR>
   <TD width="163" valign="bottom">&nbsp;</TD>
   <TD align="right" width="14" valign="bottom">&nbsp;</TD>
   <TD colspan=2 align="right" width="102" valign="bottom" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD align="right" width="22" valign="bottom" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD align="right" width="136" valign="bottom" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD align="right" width="44" valign="bottom" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD colspan=2 align="right" width="110" valign="bottom" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD align="right" width="26" valign="bottom" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD align="right" width="22" valign="bottom" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD colspan=2 align="right" width="101" valign="bottom" style="border-top-style: solid; border-top-width: 1"></TD>
</TR>
<TR>
   <TD colspan=2 width="177" valign="bottom"><FONT face="serif">Income from Cont-</FONT></TD>
   <TD width="14" align="right" valign="bottom">&nbsp;</TD>
   <TD width="88" align="right" valign="bottom">&nbsp;</TD>
   <TD width="22" align="right" valign="bottom">&nbsp;</TD>
   <TD width="136" align="right" valign="bottom">&nbsp;</TD>
   <TD width="44" align="right" valign="bottom">&nbsp;</TD>
   <TD width="7" align="right" valign="bottom">&nbsp;</TD>
   <TD width="103" align="right" valign="bottom">&nbsp;</TD>
   <TD width="26" align="right" valign="bottom">&nbsp;</TD>
   <TD width="22" align="right" valign="bottom">&nbsp;</TD>
   <TD width="49" align="right" valign="bottom">&nbsp;</TD>
   <TD width="52" align="right" valign="bottom">&nbsp;</TD>
</TR>
<TR>
   <TD colspan=2 width="177" valign="bottom"><FONT face="serif">inuing Operations</FONT></TD>
   <TD width="14" align="right" valign="bottom">&nbsp;</TD>
   <TD width="88" align="right" valign="bottom">&nbsp;</TD>
   <TD width="22" align="right" valign="bottom">&nbsp;</TD>
   <TD width="136" align="right" valign="bottom">&nbsp;</TD>
   <TD width="44" align="right" valign="bottom">&nbsp;</TD>
   <TD width="7" align="right" valign="bottom">&nbsp;</TD>
   <TD width="103" align="right" valign="bottom">&nbsp;</TD>
   <TD width="26" align="right" valign="bottom">&nbsp;</TD>
   <TD width="22" align="right" valign="bottom">&nbsp;</TD>
   <TD width="49" align="right" valign="bottom">&nbsp;</TD>
   <TD width="52" align="right" valign="bottom">&nbsp;</TD>
</TR>
<TR>
   <TD width="163" valign="bottom">&nbsp;&nbsp;&nbsp;<FONT face="serif">Before Tax</FONT></TD>
   <TD width="14" align="right" valign="bottom">&nbsp;</TD>
   <TD colspan=2 width="102" align="right" valign="bottom"><FONT face="serif">176,000</FONT></TD>
   <TD width="22" align="right" valign="bottom">&nbsp;</TD>
   <TD width="136" align="right" valign="bottom"><FONT face="serif">(374 ,000)</FONT></TD>
   <TD width="44" align="right" valign="bottom">&nbsp;</TD>
   <TD colspan=2 width="110" align="right" valign="bottom"><FONT face="serif">150,000</FONT></TD>
   <TD width="26" align="right" valign="bottom">&nbsp;</TD>
   <TD width="22" align="right" valign="bottom">&nbsp;</TD>
   <TD colspan=2 width="101" align="right" valign="bottom"><FONT face="serif">(48,000)</FONT></TD>
</TR>
<TR>
   <TD width="163" valign="bottom">&nbsp;</TD>
   <TD align="right" width="14" valign="bottom">&nbsp;</TD>
   <TD align="right" width="14" valign="bottom">&nbsp;</TD>
   <TD align="right" width="88" valign="bottom">&nbsp;</TD>
   <TD align="right" width="22" valign="bottom">&nbsp;</TD>
   <TD align="right" width="136" valign="bottom">&nbsp;</TD>
   <TD align="right" width="44" valign="bottom">&nbsp;</TD>
   <TD align="right" width="7" valign="bottom">&nbsp;</TD>
   <TD align="right" width="103" valign="bottom">&nbsp;</TD>
   <TD align="right" width="26" valign="bottom">&nbsp;</TD>
   <TD align="right" width="22" valign="bottom">&nbsp;</TD>
   <TD align="right" width="49" valign="bottom">&nbsp;</TD>
   <TD align="right" width="52" valign="bottom">&nbsp;</TD>
</TR>
<TR>
   <TD colspan=3 width="191" valign="bottom"><FONT face="serif">Provision for Income</FONT></TD>
   <TD width="88" align="right" valign="bottom">&nbsp;</TD>
   <TD width="22" align="right" valign="bottom">&nbsp;</TD>
   <TD width="136" align="right" valign="bottom">&nbsp;</TD>
   <TD width="44" align="right" valign="bottom">&nbsp;</TD>
   <TD width="7" align="right" valign="bottom">&nbsp;</TD>
   <TD width="103" align="right" valign="bottom">&nbsp;</TD>
   <TD width="26" align="right" valign="bottom">&nbsp;</TD>
   <TD width="22" align="right" valign="bottom">&nbsp;</TD>
   <TD width="49" align="right" valign="bottom">&nbsp;</TD>
   <TD width="52" align="right" valign="bottom">&nbsp;</TD>
</TR>
<TR>
   <TD width="163" valign="bottom">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">Taxes</FONT></TD>
   <TD width="14" align="right" valign="bottom">&nbsp;</TD>
   <TD width="14" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD width="88" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">31,000</FONT></TD>
   <TD width="22" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD width="136" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">(31,000)(2)</FONT></TD>
   <TD width="44" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD colspan=2 width="110" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">(9,000)</FONT></TD>
   <TD width="26" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD width="22" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD width="49" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD width="52" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">(9,000)</FONT></TD>
</TR>
<TR>
   <TD width="163" valign="bottom">&nbsp;</TD>
   <TD align="right" width="14" valign="bottom">&nbsp;</TD>
   <TD align="right" width="14" valign="bottom" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD align="right" width="88" valign="bottom" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD align="right" width="22" valign="bottom" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD align="right" width="136" valign="bottom" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD align="right" width="44" valign="bottom" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD colspan=2 align="right" width="110" valign="bottom" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD align="right" width="26" valign="bottom" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD align="right" width="22" valign="bottom" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD align="right" width="49" valign="bottom" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD align="right" width="52" valign="bottom" style="border-top-style: solid; border-top-width: 1"></TD>
</TR>
<TR>
   <TD colspan=2 width="177" valign="bottom"><FONT face="serif">Net Income from</FONT></TD>
   <TD width="14" align="right" valign="bottom">&nbsp;</TD>
   <TD width="88" align="right" valign="bottom">&nbsp;</TD>
   <TD width="22" align="right" valign="bottom">&nbsp;</TD>
   <TD width="136" align="right" valign="bottom">&nbsp;</TD>
   <TD width="44" align="right" valign="bottom">&nbsp;</TD>
   <TD width="7" align="right" valign="bottom">&nbsp;</TD>
   <TD width="103" align="right" valign="bottom">&nbsp;</TD>
   <TD width="26" align="right" valign="bottom">&nbsp;</TD>
   <TD width="22" align="right" valign="bottom">&nbsp;</TD>
   <TD width="49" align="right" valign="bottom">&nbsp;</TD>
   <TD width="52" align="right" valign="bottom">&nbsp;</TD>
</TR>
<TR>
   <TD width="163" valign="bottom">&nbsp;&nbsp;&nbsp;<FONT face="serif">Continuing</FONT></TD>
   <TD width="14" align="right" valign="bottom">&nbsp;</TD>
   <TD width="14" align="right" valign="bottom">&nbsp;</TD>
   <TD width="88" align="right" valign="bottom">&nbsp;</TD>
   <TD width="22" align="right" valign="bottom">&nbsp;</TD>
   <TD width="136" align="right" valign="bottom">&nbsp;</TD>
   <TD width="44" align="right" valign="bottom">&nbsp;</TD>
   <TD width="7" align="right" valign="bottom">&nbsp;</TD>
   <TD width="103" align="right" valign="bottom">&nbsp;</TD>
   <TD width="26" align="right" valign="bottom">&nbsp;</TD>
   <TD width="22" align="right" valign="bottom">&nbsp;</TD>
   <TD width="49" align="right" valign="bottom">&nbsp;</TD>
   <TD width="52" align="right" valign="bottom">&nbsp;</TD>
</TR>
<TR>
   <TD width="163" valign="bottom">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">Operations</FONT></TD>
   <TD width="14" align="right" valign="bottom">&nbsp;</TD>
   <TD colspan=2 width="102" align="right" valign="bottom"><FONT face="serif">145,000</FONT></TD>
   <TD width="22" align="right" valign="bottom">&nbsp;</TD>
   <TD width="136" align="right" valign="bottom"><FONT face="serif">(343,000)</FONT></TD>
   <TD width="44" align="right" valign="bottom">&nbsp;</TD>
   <TD colspan=2 width="110" align="right" valign="bottom"><FONT face="serif">141,000</FONT></TD>
   <TD width="26" align="right" valign="bottom">&nbsp;</TD>
   <TD width="22" align="right" valign="bottom">&nbsp;</TD>
   <TD colspan=2 width="101" align="right" valign="bottom"><FONT face="serif">(57,000)</FONT></TD>
</TR>
<TR>
   <TD width="163" valign="bottom">&nbsp;</TD>
   <TD align="right" width="14" valign="bottom">&nbsp;</TD>
   <TD align="right" width="14" valign="bottom">&nbsp;</TD>
   <TD align="right" width="88" valign="bottom">&nbsp;</TD>
   <TD align="right" width="22" valign="bottom">&nbsp;</TD>
   <TD align="right" width="136" valign="bottom">&nbsp;</TD>
   <TD align="right" width="44" valign="bottom">&nbsp;</TD>
   <TD align="right" width="7" valign="bottom">&nbsp;</TD>
   <TD align="right" width="103" valign="bottom">&nbsp;</TD>
   <TD align="right" width="26" valign="bottom">&nbsp;</TD>
   <TD align="right" width="22" valign="bottom">&nbsp;</TD>
   <TD align="right" width="49" valign="bottom">&nbsp;</TD>
   <TD align="right" width="52" valign="bottom">&nbsp;</TD>
</TR>
<TR>
   <TD colspan=2 width="177" valign="bottom"><FONT face="serif">Recovery of Excess</FONT></TD>
   <TD width="14" align="right" valign="bottom">&nbsp;</TD>
   <TD width="88" align="right" valign="bottom">&nbsp;</TD>
   <TD width="22" align="right" valign="bottom">&nbsp;</TD>
   <TD width="136" align="right" valign="bottom">&nbsp;</TD>
   <TD width="44" align="right" valign="bottom">&nbsp;</TD>
   <TD width="7" align="right" valign="bottom">&nbsp;</TD>
   <TD width="103" align="right" valign="bottom">&nbsp;</TD>
   <TD width="26" align="right" valign="bottom">&nbsp;</TD>
   <TD width="22" align="right" valign="bottom">&nbsp;</TD>
   <TD width="49" align="right" valign="bottom">&nbsp;</TD>
   <TD width="52" align="right" valign="bottom">&nbsp;</TD>
</TR>
<TR>
   <TD colspan=3 width="191" valign="bottom"><FONT face="serif">Accrual for Disposal</FONT></TD>
   <TD width="88" align="right" valign="bottom">&nbsp;</TD>
   <TD width="22" align="right" valign="bottom">&nbsp;</TD>
   <TD width="136" align="right" valign="bottom">&nbsp;</TD>
   <TD width="44" align="right" valign="bottom">&nbsp;</TD>
   <TD width="7" align="right" valign="bottom">&nbsp;</TD>
   <TD width="103" align="right" valign="bottom">&nbsp;</TD>
   <TD width="26" align="right" valign="bottom">&nbsp;</TD>
   <TD width="22" align="right" valign="bottom">&nbsp;</TD>
   <TD width="49" align="right" valign="bottom">&nbsp;</TD>
   <TD width="52" align="right" valign="bottom">&nbsp;</TD>
</TR>
<TR>
   <TD width="163" valign="bottom">&nbsp;&nbsp;&nbsp;<FONT face="serif">Of Segment</FONT></TD>
   <TD width="14" align="right" valign="bottom">&nbsp;</TD>
   <TD colspan=2 width="102" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">(172,000)</FONT></TD>
   <TD width="22" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD width="136" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">(172,000)</FONT></TD>
   <TD width="44" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD colspan=2 width="110" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">
   --------</TD>
   <TD width="26" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD width="22" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD colspan=2 width="101" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">
   --------</TD>
</TR>
<TR>
   <TD width="163" valign="bottom">&nbsp;</TD>
   <TD align="right" width="14" valign="bottom">&nbsp;</TD>
   <TD colspan=2 align="right" width="102" valign="bottom" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD align="right" width="22" valign="bottom" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD align="right" width="136" valign="bottom" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD align="right" width="44" valign="bottom" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD colspan=2 align="right" width="110" valign="bottom" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD align="right" width="26" valign="bottom" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD align="right" width="22" valign="bottom" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD colspan=2 align="right" width="101" valign="bottom" style="border-top-style: solid; border-top-width: 1"></TD>
</TR>
<TR>
   <TD colspan=2 width="177" valign="bottom"><FONT face="serif">Net Income (Loss)</FONT></TD>
   <TD width="14" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD width="88" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">
   $ 317,000</FONT></TD>
   <TD width="22" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD width="136" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">($515,000)</FONT></TD>
   <TD width="44" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD width="7" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD width="103" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">&nbsp;
   $141,000</FONT></TD>
   <TD width="26" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD width="22" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD width="49" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD width="52" align="right" valign="bottom" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">
   ($57,000)</FONT></TD>
</TR>
<TR>
   <TD colspan=2 width="177" valign="bottom">&nbsp;</TD>
   <TD align="right" width="14" valign="bottom" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD align="right" width="88" valign="bottom" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD align="right" width="22" valign="bottom" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD align="right" width="136" valign="bottom" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD align="right" width="44" valign="bottom" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD align="right" width="7" valign="bottom" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD align="right" width="103" valign="bottom" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD align="right" width="26" valign="bottom" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD align="right" width="22" valign="bottom" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD align="right" width="49" valign="bottom" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD align="right" width="52" valign="bottom" style="border-top-style: solid; border-top-width: 1"></TD>
</TR>
</TABLE>
</div>
<P align="center">
<FONT face="serif">5</FONT>
</P>

<hr color="#000080"><P style="page-break-after: always"></p>


<A name="page_6"></A>

<div align="left">

<TABLE width="690" border=0 cellspacing=0 cellpadding=0 style="border-collapse: collapse" bordercolor="#111111">
<TR>
   <TD width="440"><FONT face="serif">Earnings Per Share(3)</FONT></TD>
   <TD width="134" align="right">&nbsp;</TD>
   <TD width="125">&nbsp;</TD>
   <TD width="106" align="right">&nbsp;</TD>
</TR>
<TR>
   <TD width="440">&nbsp;&nbsp;&nbsp;<FONT face="serif">Basic - Continuing</FONT></TD>
   <TD width="134" align="right">&nbsp;</TD>
   <TD width="125">&nbsp;</TD>
   <TD width="106" align="right">&nbsp;</TD>
</TR>
<TR>
   <TD width="440">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">Operations</FONT></TD>
   <TD width="134" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">$.29</FONT></TD>
   <TD width="125">&nbsp;</TD>
   <TD width="106" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">
   $(.03)</FONT></TD>
</TR>
<TR>
   <TD width="440">&nbsp;</TD>
   <TD width="134" align="right" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD width="125">&nbsp;</TD>
   <TD width="106" align="right" style="border-top-style: solid; border-top-width: 1"></TD>
</TR>
<TR>
   <TD width="440">&nbsp;&nbsp;&nbsp;<FONT face="serif">Basic &#150; Discontinued</FONT></TD>
   <TD width="134" align="right">&nbsp;</TD>
   <TD width="125">&nbsp;</TD>
   <TD width="106" align="right">&nbsp;</TD>
</TR>
<TR>
   <TD width="440">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">Operations</FONT></TD>
   <TD width="134" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">$.35</FONT></TD>
   <TD width="125">&nbsp;</TD>
   <TD width="106" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
   ----</TD>
</TR>
<TR>
   <TD width="440">&nbsp;</TD>
   <TD width="134" align="right" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD width="125">&nbsp;</TD>
   <TD width="106" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
</TR>
<TR>
   <TD width="440">&nbsp;&nbsp;&nbsp;<FONT face="serif">Total</FONT></TD>
   <TD width="134" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">$.64</FONT></TD>
   <TD width="125">&nbsp;</TD>
   <TD width="106" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">
   $(.03)</FONT></TD>
</TR>
<TR>
   <TD width="440">&nbsp;</TD>
   <TD width="134" align="right" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD width="125">&nbsp;</TD>
   <TD width="106" align="right" style="border-top-style: solid; border-top-width: 1"></TD>
</TR>
<TR>
   <TD width="440">&nbsp;</TD>
   <TD width="134" align="right">&nbsp;</TD>
   <TD width="125">&nbsp;</TD>
   <TD width="106" align="right">&nbsp;</TD>
</TR>
<TR>
   <TD width="440">&nbsp;&nbsp;&nbsp;<FONT face="serif">Diluted &#150; Continuing</FONT></TD>
   <TD width="134" align="right">&nbsp;</TD>
   <TD width="125">&nbsp;</TD>
   <TD width="106" align="right">&nbsp;</TD>
</TR>
<TR>
   <TD width="440">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">Operations</FONT></TD>
   <TD width="134" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">$.29</FONT></TD>
   <TD width="125">&nbsp;</TD>
   <TD width="106" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">
   $(.03)</FONT></TD>
</TR>
<TR>
   <TD width="440">&nbsp;</TD>
   <TD width="134" align="right" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD width="125">&nbsp;</TD>
   <TD width="106" align="right" style="border-top-style: solid; border-top-width: 1"></TD>
</TR>
<TR>
   <TD width="440">&nbsp;&nbsp;&nbsp;<FONT face="serif">Diluted &#150; Discontinued</FONT></TD>
   <TD width="134" align="right">&nbsp;</TD>
   <TD width="125">&nbsp;</TD>
   <TD width="106" align="right">&nbsp;</TD>
</TR>
<TR>
   <TD width="440">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">Operations</FONT></TD>
   <TD width="134" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">$.35</FONT></TD>
   <TD width="125">&nbsp;</TD>
   <TD width="106" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
   ----</TD>
</TR>
<TR>
   <TD width="440">&nbsp;</TD>
   <TD width="134" align="right" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD width="125">&nbsp;</TD>
   <TD width="106" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
</TR>
<TR>
   <TD width="440">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">Total</FONT></TD>
   <TD width="134" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">$.64</FONT></TD>
   <TD width="125">&nbsp;</TD>
   <TD width="106" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">
   $(.03)</FONT></TD>
</TR>
<TR>
   <TD width="440">&nbsp;</TD>
   <TD width="134" align="right" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD width="125">&nbsp;</TD>
   <TD width="106" align="right" style="border-top-style: solid; border-top-width: 1"></TD>
</TR>
</TABLE>
</div>
<blockquote>
<P>
<FONT face="serif">Notes to unaudited pro forma condensed combined statement of operations</FONT>
</P>
</blockquote>
<div align="left">
  <blockquote>
<TABLE width="700" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0" cellspacing="0">
<TR>
   <TD valign="top" width="5%"><FONT face="serif">(2)</FONT><BR>&nbsp;&nbsp;</TD>
   <TD valign="top"><FONT face="serif">To adjust for the sale of PMD as if it occurred on February 1, 2001.</FONT></TD>
</TR>
<TR>
   <TD valign="top" width="5%"><FONT face="serif">(3)</FONT><BR>&nbsp;&nbsp;</TD>
   <TD valign="top"><FONT face="serif">The number of shares outstanding were increased to 1,798,000 to reflect the impact of the Company&#146;s private placement consummated on April 29, 2003, a portion of whose proceeds were used to acquire
SMC.</FONT></TD>
</TR>
</TABLE>
  </blockquote>
</div>
<blockquote>
<TABLE width="700" style="border-collapse: collapse" bordercolor="#111111" cellpadding="0" cellspacing="0">
<TR>
   <TD valign="top" width="5%"><FONT face="serif">(B)</FONT><BR>&nbsp;&nbsp;</TD>
   <td valign="top"><FONT face="serif">Reported on Form 10-KSB for the year ended January 31, 2003 filed with the Securities and Exchange Commission on March 20, 2003. </FONT></td>
</tr>
<TR>
   <TD valign="top" width="5%">&nbsp;</TD>
   <td valign="top">&nbsp; </td>
</tr>
<TR>
   <TD valign="top" width="5%"><FONT face="serif">(C) </FONT>
   </TD>
   <td valign="top">
<P>
&nbsp;<FONT face="serif">Gives effect to the acquisition of Southern Maryland Cable, Inc. (SMC) as if the transaction had occurred on February 1, 2002. SMC was acquired on July 17, 2003. The adjustments reflecting the
impact of the acquisition of SMC contained herein are the combination of the historical results of SMC and the proforma adjustments as previously reported on the Company&#146;s Form 8-KA filed with the Securities and Exchange Commission on September
24, 2003. </FONT>
</P>
   </td>
</tr>
</TABLE>
</blockquote>
<P>
&nbsp;</P>
<P align="center">
<FONT face="serif">6</FONT>
</P>

<hr color="#000080"><P style="page-break-after: always"></p>


<A name="page_7"></A>

<div align="left">

<TABLE width="740" border=0 cellspacing=0 cellpadding=0 style="border-collapse: collapse" bordercolor="#111111">
<TR>
   <TD colspan="12" align="center" width="735"><FONT face="serif">Unaudited Pro Forma Condensed Combined Statement of Operations</FONT></TD>
</TR>
<TR>
   <TD colspan="12" align="center" width="735"><FONT face="serif">For the Six Months Ended July 31, 2003</FONT></TD>
</TR>
<TR>
   <TD width="165">&nbsp;</TD>
   <TD width="14">&nbsp;</TD>
   <TD width="116">&nbsp;</TD>
   <TD width="39">&nbsp;</TD>
   <TD width="126">&nbsp;</TD>
   <TD width="55">&nbsp;</TD>
   <TD width="36">&nbsp;</TD>
   <TD width="44">&nbsp;</TD>
   <TD width="20">&nbsp;</TD>
   <TD width="12">&nbsp;</TD>
   <TD width="15">&nbsp;</TD>
   <TD width="93">&nbsp;</TD>
</TR>
<TR>
   <TD width="165">&nbsp;</TD>
   <TD width="130" colspan="2" align="center"><FONT face="serif">AI as</FONT></TD>
   <TD width="39" align="center">&nbsp;</TD>
   <TD width="126" align="center"><FONT face="serif">Pro Forma</FONT></TD>
   <TD width="135" colspan="3" align="center"><FONT face="serif">SMC</FONT></TD>
   <TD width="20" align="center">&nbsp;</TD>
   <TD colspan=3 width="120" align="center"><FONT face="serif">Pro Forma</FONT></TD>
</TR>
<TR>
   <TD width="165">&nbsp;</TD>
   <TD colspan=2 width="130" align="center" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">Reported (D)</FONT></TD>
   <TD width="39" align="center" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD width="126" align="center" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">Adjustments</FONT></TD>
   <TD colspan=3 width="135" align="center" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">Acquisition(E)</FONT></TD>
   <TD width="20" align="center" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD colspan=3 width="120" align="center" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">Adjusted</FONT></TD>
</TR>
<TR>
   <TD width="165">&nbsp;</TD>
   <TD colspan=2 width="130" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD width="39" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD width="126" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD colspan=3 width="135" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD width="20" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD colspan=2 width="27" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD width="93" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
</TR>
<TR>
   <TD width="165"><FONT face="serif">Net Sales</FONT></TD>
   <TD width="14" align="right">&nbsp;</TD>
   <TD width="116" align="right"><FONT face="serif">$4,166,000</FONT></TD>
   <TD width="39" align="right">&nbsp;</TD>
   <TD width="126" align="right"><FONT face="serif">($3,603,000)(4)</FONT></TD>
   <TD width="55" align="right">&nbsp;</TD>
   <TD colspan=2 width="80" align="right"><FONT face="serif">$4,277,000</FONT></TD>
   <TD width="20" align="right">&nbsp;</TD>
   <TD width="120" align="right" colspan="3"><FONT face="serif">$4,840,000</FONT></TD>
</TR>
<TR>
   <TD width="165"><FONT face="serif">Cost of</FONT></TD>
   <TD width="14" align="right">&nbsp;</TD>
   <TD width="116" align="right">&nbsp;</TD>
   <TD width="39" align="right">&nbsp;</TD>
   <TD width="126" align="right">&nbsp;</TD>
   <TD width="55" align="right">&nbsp;</TD>
   <TD width="36" align="right">&nbsp;</TD>
   <TD width="44" align="right">&nbsp;</TD>
   <TD width="20" align="right">&nbsp;</TD>
   <TD width="12" align="right">&nbsp;</TD>
   <TD width="15" align="right">&nbsp;</TD>
   <TD width="93" align="right">&nbsp;</TD>
</TR>
<TR>
   <TD width="165"><FONT face="serif">Goods Sold</FONT></TD>
   <TD colspan=2 width="130" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">2,979,000</FONT></TD>
   <TD width="39" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD width="126" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">(2,515,000)(4)</FONT></TD>
   <TD colspan=3 width="135" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">3,300,000</FONT></TD>
   <TD width="20" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD colspan=3 width="120" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">3,764,000</FONT></TD>
</TR>
<TR>
   <TD width="165">&nbsp;</TD>
   <TD colspan=2 align="right" width="130" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD align="right" width="39" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD align="right" width="126" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD colspan=3 align="right" width="135" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD align="right" width="20" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD colspan=3 align="right" width="120" style="border-top-style: solid; border-top-width: 1"></TD>
</TR>
<TR>
   <TD width="165"><FONT face="serif">Gross Profit</FONT></TD>
   <TD colspan=2 width="130" align="right"><FONT face="serif">1,187,000</FONT></TD>
   <TD width="39" align="right">&nbsp;</TD>
   <TD width="126" align="right"><FONT face="serif">(1,088,000)</FONT></TD>
   <TD width="55" align="right">&nbsp;</TD>
   <TD colspan=2 width="80" align="right"><FONT face="serif">977,000</FONT></TD>
   <TD width="20" align="right">&nbsp;</TD>
   <TD width="12" align="right">&nbsp;</TD>
   <TD colspan=2 width="108" align="right"><FONT face="serif">1,076,000</FONT></TD>
</TR>
<TR>
   <TD width="165">&nbsp;</TD>
   <TD align="right" width="14">&nbsp;</TD>
   <TD align="right" width="116">&nbsp;</TD>
   <TD align="right" width="39">&nbsp;</TD>
   <TD align="right" width="126">&nbsp;</TD>
   <TD align="right" width="55">&nbsp;</TD>
   <TD align="right" width="36">&nbsp;</TD>
   <TD align="right" width="44">&nbsp;</TD>
   <TD align="right" width="20">&nbsp;</TD>
   <TD align="right" width="12">&nbsp;</TD>
   <TD align="right" width="15">&nbsp;</TD>
   <TD align="right" width="93">&nbsp;</TD>
</TR>
<TR>
   <TD colspan=2 width="179"><FONT face="serif">Selling General</FONT></TD>
   <TD width="116" align="right">&nbsp;</TD>
   <TD width="39" align="right">&nbsp;</TD>
   <TD width="126" align="right">&nbsp;</TD>
   <TD width="55" align="right">&nbsp;</TD>
   <TD width="36" align="right">&nbsp;</TD>
   <TD width="44" align="right">&nbsp;</TD>
   <TD width="20" align="right">&nbsp;</TD>
   <TD width="12" align="right">&nbsp;</TD>
   <TD width="15" align="right">&nbsp;</TD>
   <TD width="93" align="right">&nbsp;</TD>
</TR>
<TR>
   <TD width="165">&nbsp;&nbsp;&nbsp;<FONT face="serif">And</FONT></TD>
   <TD width="14" align="right">&nbsp;</TD>
   <TD width="116" align="right">&nbsp;</TD>
   <TD width="39" align="right">&nbsp;</TD>
   <TD width="126" align="right">&nbsp;</TD>
   <TD width="55" align="right">&nbsp;</TD>
   <TD width="36" align="right">&nbsp;</TD>
   <TD width="44" align="right">&nbsp;</TD>
   <TD width="20" align="right">&nbsp;</TD>
   <TD width="12" align="right">&nbsp;</TD>
   <TD width="15" align="right">&nbsp;</TD>
   <TD width="93" align="right">&nbsp;</TD>
</TR>
<TR>
   <TD width="165"><FONT face="serif">Administrative</FONT></TD>
   <TD colspan=2 width="130" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">1,359,000</FONT></TD>
   <TD width="39" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD width="126" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">(1,128,000)(4)</FONT></TD>
   <TD width="55" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD colspan=2 width="80" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">806,000</FONT></TD>
   <TD width="20" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD width="12" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD colspan=2 width="108" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">1,037,000</FONT></TD>
</TR>
<TR>
   <TD width="165">&nbsp;</TD>
   <TD colspan=2 align="right" width="130" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD align="right" width="39" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD align="right" width="126" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD align="right" width="55" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD colspan=2 align="right" width="80" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD align="right" width="20" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD align="right" width="12" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD colspan=2 align="right" width="108" style="border-top-style: solid; border-top-width: 1"></TD>
</TR>
<TR>
   <TD width="165">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">Operating</FONT></TD>
   <TD width="14" align="right">&nbsp;</TD>
   <TD width="116" align="right">&nbsp;</TD>
   <TD width="39" align="right">&nbsp;</TD>
   <TD width="126" align="right">&nbsp;</TD>
   <TD width="55" align="right">&nbsp;</TD>
   <TD width="36" align="right">&nbsp;</TD>
   <TD width="44" align="right">&nbsp;</TD>
   <TD width="20" align="right">&nbsp;</TD>
   <TD width="12" align="right">&nbsp;</TD>
   <TD width="15" align="right">&nbsp;</TD>
   <TD width="93" align="right">&nbsp;</TD>
</TR>
<TR>
   <TD colspan=2 width="179"><FONT face="serif">Income (Loss)</FONT></TD>
   <TD width="116" align="right"><FONT face="serif">(172,000)</FONT></TD>
   <TD width="39" align="right">&nbsp;</TD>
   <TD width="126" align="right"><FONT face="serif">40,000</FONT></TD>
   <TD width="55" align="right">&nbsp;</TD>
   <TD colspan=2 width="80" align="right"><FONT face="serif">171,000</FONT></TD>
   <TD width="20" align="right">&nbsp;</TD>
   <TD width="12" align="right">&nbsp;</TD>
   <TD width="15" align="right">&nbsp;</TD>
   <TD width="93" align="right"><FONT face="serif">39,000</FONT></TD>
</TR>
<TR>
   <TD width="165">&nbsp;</TD>
   <TD align="right" width="14">&nbsp;</TD>
   <TD align="right" width="116">&nbsp;</TD>
   <TD align="right" width="39">&nbsp;</TD>
   <TD align="right" width="126">&nbsp;</TD>
   <TD align="right" width="55">&nbsp;</TD>
   <TD align="right" width="36">&nbsp;</TD>
   <TD align="right" width="44">&nbsp;</TD>
   <TD align="right" width="20">&nbsp;</TD>
   <TD align="right" width="12">&nbsp;</TD>
   <TD align="right" width="15">&nbsp;</TD>
   <TD align="right" width="93">&nbsp;</TD>
</TR>
<TR>
   <TD colspan=2 width="179"><FONT face="serif">Interest Expense</FONT></TD>
   <TD width="116" align="right"><FONT face="serif">(12,000)</FONT></TD>
   <TD width="39" align="right">&nbsp;</TD>
   <TD width="126" align="right"><FONT face="serif">8,000(4)</FONT></TD>
   <TD width="55" align="right">&nbsp;</TD>
   <TD colspan=2 width="80" align="right"><FONT face="serif">(36,000)</FONT></TD>
   <TD width="20" align="right">&nbsp;</TD>
   <TD width="12" align="right">&nbsp;</TD>
   <TD width="15" align="right">&nbsp;</TD>
   <TD width="93" align="right"><FONT face="serif">(40,000)</FONT></TD>
</TR>
<TR>
   <TD width="165"><FONT face="serif">Other Income</FONT></TD>
   <TD width="14" align="right">&nbsp;</TD>
   <TD width="116" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">27, 000</FONT></TD>
   <TD width="39" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD width="126" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
   ------</TD>
   <TD width="55" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD colspan=2 width="80" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">16,000</FONT></TD>
   <TD width="20" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD width="12" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD width="15" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD width="93" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">43,000</FONT></TD>
</TR>
<TR>
   <TD width="165">&nbsp;</TD>
   <TD align="right" width="14">&nbsp;</TD>
   <TD align="right" width="116" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD align="right" width="39" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD align="right" width="126" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD align="right" width="55" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD colspan=2 align="right" width="80" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD align="right" width="20" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD align="right" width="12" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD align="right" width="15" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD align="right" width="93" style="border-top-style: solid; border-top-width: 1"></TD>
</TR>
<TR>
   <TD width="165"><FONT face="serif">Pretax (Loss)</FONT></TD>
   <TD width="14" align="right">&nbsp;</TD>
   <TD width="116" align="right">&nbsp;</TD>
   <TD width="39" align="right">&nbsp;</TD>
   <TD width="126" align="right">&nbsp;</TD>
   <TD width="55" align="right">&nbsp;</TD>
   <TD width="36" align="right">&nbsp;</TD>
   <TD width="44" align="right">&nbsp;</TD>
   <TD width="20" align="right">&nbsp;</TD>
   <TD width="12" align="right">&nbsp;</TD>
   <TD width="15" align="right">&nbsp;</TD>
   <TD width="93" align="right">&nbsp;</TD>
</TR>
<TR>
   <TD width="165">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">Income</FONT></TD>
   <TD colspan=2 width="130" align="right"><FONT face="serif">(157,000)</FONT></TD>
   <TD width="39" align="right">&nbsp;</TD>
   <TD width="126" align="right"><FONT face="serif">48,000</FONT></TD>
   <TD width="55" align="right">&nbsp;</TD>
   <TD colspan=2 width="80" align="right"><FONT face="serif">151,000</FONT></TD>
   <TD width="20" align="right">&nbsp;</TD>
   <TD width="12" align="right">&nbsp;</TD>
   <TD width="108" align="right" colspan="2"><FONT face="serif">42,000</FONT></TD>
</TR>
<TR>
   <TD width="165">&nbsp;</TD>
   <TD align="right" width="14">&nbsp;</TD>
   <TD align="right" width="116">&nbsp;</TD>
   <TD align="right" width="39">&nbsp;</TD>
   <TD align="right" width="126">&nbsp;</TD>
   <TD align="right" width="55">&nbsp;</TD>
   <TD align="right" width="36">&nbsp;</TD>
   <TD align="right" width="44">&nbsp;</TD>
   <TD align="right" width="20">&nbsp;</TD>
   <TD align="right" width="12">&nbsp;</TD>
   <TD align="right" width="15">&nbsp;</TD>
   <TD align="right" width="93">&nbsp;</TD>
</TR>
<TR>
   <TD colspan=2 width="179"><FONT face="serif">Provision for Income</FONT></TD>
   <TD width="116" align="right">&nbsp;</TD>
   <TD width="39" align="right">&nbsp;</TD>
   <TD width="126" align="right">&nbsp;</TD>
   <TD width="55" align="right">&nbsp;</TD>
   <TD width="36" align="right">&nbsp;</TD>
   <TD width="44" align="right">&nbsp;</TD>
   <TD width="20" align="right">&nbsp;</TD>
   <TD width="12" align="right">&nbsp;</TD>
   <TD width="15" align="right">&nbsp;</TD>
   <TD width="93" align="right">&nbsp;</TD>
</TR>
<TR>
   <TD width="165">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">Taxes</FONT></TD>
   <TD width="14" align="right">&nbsp;</TD>
   <TD width="116" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">245,000</FONT></TD>
   <TD width="39" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD width="126" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">(245,000)(4)</FONT></TD>
   <TD width="55" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD colspan=2 width="80" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">145,000</FONT></TD>
   <TD width="20" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD width="12" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD width="108" align="right" colspan="2" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">145,000</FONT></TD>
</TR>
<TR>
   <TD width="165">&nbsp;</TD>
   <TD align="right" width="14">&nbsp;</TD>
   <TD align="right" width="116" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD align="right" width="39" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD align="right" width="126" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD align="right" width="55" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD colspan=2 align="right" width="80" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD align="right" width="20" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD align="right" width="12" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD align="right" width="15" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD align="right" width="93" style="border-top-style: solid; border-top-width: 1"></TD>
</TR>
<TR>
   <TD width="165">&nbsp;</TD>
   <TD align="right" width="14">&nbsp;</TD>
   <TD align="right" width="116">&nbsp;</TD>
   <TD align="right" width="39">&nbsp;</TD>
   <TD align="right" width="126">&nbsp;</TD>
   <TD align="right" width="55">&nbsp;</TD>
   <TD align="right" width="36">&nbsp;</TD>
   <TD align="right" width="44">&nbsp;</TD>
   <TD align="right" width="20">&nbsp;</TD>
   <TD align="right" width="12">&nbsp;</TD>
   <TD align="right" width="15">&nbsp;</TD>
   <TD align="right" width="93">&nbsp;</TD>
</TR>
<TR>
   <TD colspan=2 width="179"><FONT face="serif">Net (Loss) Income </FONT></TD>
   <TD width="116" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">
   $(402,000)</FONT></TD>
   <TD width="39" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD width="126" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">293,000</FONT></TD>
   <TD width="55" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD width="80" align="right" colspan="2" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">
   $6,000</FONT></TD>
   <TD width="20" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD width="12" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD width="108" align="right" colspan="2" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">
   $(103,000)</FONT></TD>
</TR>
<TR>
   <TD colspan=2 width="179"></TD>
   <TD align="right" width="116" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD align="right" width="39" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD align="right" width="126" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD align="right" width="55" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD align="right" width="36" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD align="right" width="44" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD align="right" width="20" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD align="right" width="12" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD align="right" width="15" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD align="right" width="93" style="border-top-style: solid; border-top-width: 1"></TD>
</TR>
<TR>
   <TD width="165">&nbsp;</TD>
   <TD align="right" width="14">&nbsp;</TD>
   <TD align="right" width="116">&nbsp;</TD>
   <TD align="right" width="39">&nbsp;</TD>
   <TD align="right" width="126">&nbsp;</TD>
   <TD align="right" width="55">&nbsp;</TD>
   <TD align="right" width="36">&nbsp;</TD>
   <TD align="right" width="44">&nbsp;</TD>
   <TD align="right" width="20">&nbsp;</TD>
   <TD align="right" width="12">&nbsp;</TD>
   <TD align="right" width="15">&nbsp;</TD>
   <TD align="right" width="93">&nbsp;</TD>
</TR>
<TR>
   <TD colspan=3 width="295"><FONT face="serif">Earnings Per Share(5):</FONT></TD>
   <TD width="39" align="right">&nbsp;</TD>
   <TD width="126" align="right">&nbsp;</TD>
   <TD width="55" align="right">&nbsp;</TD>
   <TD width="36" align="right">&nbsp;</TD>
   <TD width="44" align="right">&nbsp;</TD>
   <TD width="20" align="right">&nbsp;</TD>
   <TD width="12" align="right">&nbsp;</TD>
   <TD width="15" align="right">&nbsp;</TD>
   <TD width="93" align="right">&nbsp;</TD>
</TR>
<TR>
   <TD colspan=2 width="179"><FONT face="serif">Basic and Diluted</FONT></TD>
   <TD width="116" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">$.(34)</FONT></TD>
   <TD width="39" align="right">&nbsp;</TD>
   <TD width="126" align="right">&nbsp;</TD>
   <TD width="55" align="right">&nbsp;</TD>
   <TD width="36" align="right">&nbsp;</TD>
   <TD width="44" align="right">&nbsp;</TD>
   <TD width="20" align="right">&nbsp;</TD>
   <TD width="12" align="right">&nbsp;</TD>
   <TD width="108" align="right" colspan="2" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">$.(06)</FONT></TD>
</TR>
<TR>
   <TD colspan=2 width="179">&nbsp;</TD>
   <TD align="right" width="116" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD align="right" width="39">&nbsp;</TD>
   <TD align="right" width="126">&nbsp;</TD>
   <TD align="right" width="55">&nbsp;</TD>
   <TD align="right" width="36">&nbsp;</TD>
   <TD align="right" width="44">&nbsp;</TD>
   <TD align="right" width="20">&nbsp;</TD>
   <TD align="right" width="12">&nbsp;</TD>
   <TD align="right" width="15" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD align="right" width="93" style="border-top-style: solid; border-top-width: 1"></TD>
</TR>
</TABLE>
</div>
<P>
<FONT face="serif">Notes to unaudited pro forma condensed combined statement of operations </FONT>
</P>
<P style="margin-left: 30">
<FONT face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (4)To adjust for the sale of PMD as if it had occurred on February 1, 2001. </FONT>
</P>
<P style="margin-left: 30">
<FONT face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (5)The number of shares outstanding were increased to 1,798,000 to reflect the impact of the Company&#146;s private placement consummated on April 29, 2003, a portion of whose proceeds were used to
acquire SMC. </FONT>
</P>
<P style="margin-left: 30">
<FONT face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (D) Reported on Form 10-QSB for the six months ended July 31, 2003 filed with the Securities and Exchange Commission on September 12, 2003  </FONT>
</P>
<P style="margin-left: 30">
<FONT face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; (E)</FONT><FONT size=2 face="monospace"> </FONT><FONT
face="serif">Gives effect to the acquisition of Southern Maryland Cable, Inc. (SMC) as if the transaction had occurred on February 1, 2002. SMC was acquired on July 17, 2003. The adjustments reflecting the impact of the acquisition of SMC contained
herein are the combination of the historical results of SMC and the pro forma adjustments as previously reported on Form 8-KA filed with the Securities and Exchange Commission on September 24, 2003.</FONT><FONT size=2 face="monospace"> </FONT>
</P>
<P align="center">
<FONT face="serif"> 	7</FONT>
</P>

<hr color="#000080"><P style="page-break-after: always"></p>


<A name="page_8"></A>

<P>
<FONT face="serif">Unaudited Pro Forma Condensed Combined Balance Sheet As of July 31, 2003 </FONT>
</P>
<div align="left">
<TABLE width="730" border=0 cellspacing=0 cellpadding=0 style="border-collapse: collapse" bordercolor="#111111">
<TR>
   <TD width="190">&nbsp;</TD>
   <TD width="87">&nbsp;</TD>
   <TD width="14">&nbsp;</TD>
   <TD width="126" align="center"><FONT face="serif">AI as</FONT></TD>
   <TD colspan=2 width="133" align="center"><FONT face="serif">Pro Forma</FONT></TD>
   <TD colspan=2 width="180" align="center"><FONT face="serif">Pro Forma</FONT></TD>
</TR>
<TR>
   <TD width="190">&nbsp;</TD>
   <TD width="87">&nbsp;</TD>
   <TD width="14">&nbsp;</TD>
   <TD width="126" align="center" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">Reported(F)</FONT></TD>
   <TD colspan=2 width="133" align="center" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">Adjustments</FONT></TD>
   <TD colspan=2 width="180" align="center" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">Adjusted</FONT></TD>
</TR>
<TR>
   <TD width="190">&nbsp;</TD>
   <TD width="87">&nbsp;</TD>
   <TD width="14">&nbsp;</TD>
   <TD width="126" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD colspan=2 width="133" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD colspan=2 width="180" style="border-top-style: solid; border-top-width: 1"></TD>
</TR>
<TR>
   <TD colspan=2 width="277"><FONT face="serif">Cash and cash equivalents</FONT></TD>
   <TD width="14" align="right">&nbsp;</TD>
   <TD width="126" align="right"><FONT face="serif">$5,875,000</FONT></TD>
   <TD colspan=2 width="133" align="right"><FONT face="serif">(79,000)(6)</FONT></TD>
   <TD width="48" align="right">&nbsp;</TD>
   <TD width="132" align="right"><FONT face="serif">$8,846,000</FONT></TD>
</TR>
<TR>
   <TD width="190">&nbsp;</TD>
   <TD width="87">&nbsp;</TD>
   <TD width="14" align="right">&nbsp;</TD>
   <TD width="126" align="right">&nbsp;</TD>
   <TD colspan=2 width="133" align="right"><FONT face="serif">3,050,000(7)</FONT></TD>
   <TD width="48" align="right">&nbsp;</TD>
   <TD width="132" align="right">&nbsp;</TD>
</TR>
<TR>
   <TD colspan=2 width="277"><FONT face="serif">Accounts receivable, net</FONT></TD>
   <TD width="14" align="right">&nbsp;</TD>
   <TD width="126" align="right">&nbsp;</TD>
   <TD width="56" align="right">&nbsp;</TD>
   <TD width="77" align="right">&nbsp;</TD>
   <TD width="48" align="right">&nbsp;</TD>
   <TD width="132" align="right">&nbsp;</TD>
</TR>
<TR>
   <TD colspan=2 width="277"><FONT face="serif">of allowance for doubtful</FONT></TD>
   <TD width="14" align="right">&nbsp;</TD>
   <TD width="126" align="right">&nbsp;</TD>
   <TD width="56" align="right">&nbsp;</TD>
   <TD width="77" align="right">&nbsp;</TD>
   <TD width="48" align="right">&nbsp;</TD>
   <TD width="132" align="right">&nbsp;</TD>
</TR>
<TR>
   <TD width="190">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">accounts of $35,000</FONT></TD>
   <TD width="87">&nbsp;</TD>
   <TD width="14" align="right">&nbsp;</TD>
   <TD width="126" align="right"><FONT face="serif">2,444,000</FONT></TD>
   <TD colspan=2 width="133" align="right"><FONT face="serif">(1,164,000)(6)</FONT></TD>
   <TD width="48" align="right">&nbsp;</TD>
   <TD width="132" align="right"><FONT face="serif">1,280,000</FONT></TD>
</TR>
<TR>
   <TD colspan=2 width="277"><FONT face="serif">Estimated earnings in</FONT></TD>
   <TD width="14" align="right">&nbsp;</TD>
   <TD width="126" align="right">&nbsp;</TD>
   <TD width="56" align="right">&nbsp;</TD>
   <TD width="77" align="right">&nbsp;</TD>
   <TD width="48" align="right">&nbsp;</TD>
   <TD width="132" align="right">&nbsp;</TD>
</TR>
<TR>
   <TD colspan=2 width="277"><FONT face="serif">excess of billings</FONT></TD>
   <TD width="14" align="right">&nbsp;</TD>
   <TD width="126" align="right"><FONT face="serif">226,000</FONT></TD>
   <TD colspan=2 width="133" align="right">------</TD>
   <TD width="48" align="right">&nbsp;</TD>
   <TD width="132" align="right"><FONT face="serif">226,000</FONT></TD>
</TR>
<TR>
   <TD colspan=2 width="277">&nbsp;</TD>
   <TD align="right" width="14">&nbsp;</TD>
   <TD align="right" width="126">&nbsp;</TD>
   <TD colspan=2 align="right" width="133"></TD>
   <TD align="right" width="48">&nbsp;</TD>
   <TD align="right" width="132">&nbsp;</TD>
</TR>
<TR>
   <TD width="190"><FONT face="serif">Inventories</FONT></TD>
   <TD width="87">&nbsp;</TD>
   <TD width="14" align="right">&nbsp;</TD>
   <TD width="126" align="right"><FONT face="serif">1,688,000</FONT></TD>
   <TD colspan=2 width="133" align="right"><FONT face="serif">(1,688,000)(6)</FONT></TD>
   <TD width="48" align="right">&nbsp;</TD>
   <TD width="132" align="right">------</TD>
</TR>
<TR>
   <TD width="190">&nbsp;</TD>
   <TD width="87">&nbsp;</TD>
   <TD align="right" width="14">&nbsp;</TD>
   <TD align="right" width="126">&nbsp;</TD>
   <TD colspan=2 align="right" width="133">&nbsp;</TD>
   <TD align="right" width="48">&nbsp;</TD>
   <TD align="right" width="132"></TD>
</TR>
<TR>
   <TD colspan=2 width="277"><FONT face="serif">Prepaid expenses and other</FONT></TD>
   <TD width="14" align="right">&nbsp;</TD>
   <TD width="126" align="right">&nbsp;</TD>
   <TD width="56" align="right">&nbsp;</TD>
   <TD width="77" align="right">&nbsp;</TD>
   <TD width="48" align="right">&nbsp;</TD>
   <TD width="132" align="right">&nbsp;</TD>
</TR>
<TR>
   <TD width="190">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">current assets</FONT></TD>
   <TD width="87">&nbsp;</TD>
   <TD width="14" align="right">&nbsp;</TD>
   <TD width="126" align="right"><FONT face="serif">305,000</FONT></TD>
   <TD colspan=2 width="133" align="right"><FONT face="serif">(181,000)(6)</FONT></TD>
   <TD width="48" align="right">&nbsp;</TD>
   <TD width="132" align="right"><FONT face="serif">124,000</FONT></TD>
</TR>
<TR>
   <TD colspan=2 width="277"><FONT face="serif">Funds escrowed from</FONT></TD>
   <TD width="14" align="right">&nbsp;</TD>
   <TD width="126" align="right">&nbsp;</TD>
   <TD width="56" align="right">&nbsp;</TD>
   <TD width="77" align="right">&nbsp;</TD>
   <TD width="48" align="right">&nbsp;</TD>
   <TD width="132" align="right">&nbsp;</TD>
</TR>
<TR>
   <TD colspan=3 width="291"><FONT face="serif">Acquisition and disposition</FONT></TD>
   <TD width="126" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">260,000</FONT></TD>
   <TD colspan=2 width="133" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">300,000(7)</FONT></TD>
   <TD width="48" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD width="132" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">560,000</FONT></TD>
</TR>
<TR>
   <TD colspan=3 width="291">&nbsp;</TD>
   <TD align="right" width="126" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD colspan=2 align="right" width="133" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD align="right" width="48" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD align="right" width="132" style="border-top-style: solid; border-top-width: 1"></TD>
</TR>
<TR>
   <TD width="190"><FONT face="serif">Total current assets</FONT></TD>
   <TD width="87">&nbsp;</TD>
   <TD align="right" width="14">&nbsp;</TD>
   <TD align="right" width="126" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">10,798,000</FONT></TD>
   <TD align="right" width="56" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD align="right" width="77" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">238,000</FONT></TD>
   <TD align="right" width="48" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD align="right" width="132" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">11,036,000</FONT></TD>
</TR>
<TR>
   <TD colspan=2 width="277"><FONT face="serif">Leasehold improvements</FONT></TD>
   <TD width="14" align="right">&nbsp;</TD>
   <TD width="126" align="right" style="border-top-style: solid; border-top-width: 1"><FONT face="serif">469,000</FONT></TD>
   <TD colspan=2 width="133" align="right"><FONT face="serif">(317,000)(6)</FONT></TD>
   <TD width="48" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD width="132" align="right" style="border-top-style: solid; border-top-width: 1"><FONT face="serif">152,000</FONT></TD>
</TR>
<TR>
   <TD colspan=2 width="277"><FONT face="serif">Machinery and equipment</FONT></TD>
   <TD width="14" align="right">&nbsp;</TD>
   <TD width="126" align="right"><FONT face="serif">4,720,000</FONT></TD>
   <TD colspan=2 width="133" align="right"><FONT face="serif">(3,785,000)(6)</FONT></TD>
   <TD width="48" align="right">&nbsp;</TD>
   <TD width="132" align="right"><FONT face="serif">935,000</FONT></TD>
</TR>
<TR>
   <TD width="190"><FONT face="serif">Trucks</FONT></TD>
   <TD width="87">&nbsp;</TD>
   <TD width="14" align="right">&nbsp;</TD>
   <TD width="126" align="right"><FONT face="serif">615,000</FONT></TD>
   <TD width="56" align="right">&nbsp;</TD>
   <TD width="77" align="right">&nbsp;</TD>
   <TD width="48" align="right">&nbsp;</TD>
   <TD width="132" align="right"><FONT face="serif">615,000</FONT></TD>
</TR>
<TR>
   <TD colspan=2 width="277"><FONT face="serif">Tooling and dies</FONT></TD>
   <TD width="14" align="right">&nbsp;</TD>
   <TD width="126" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">413,000</FONT></TD>
   <TD colspan=2 width="133" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">(413,000)(6)</FONT></TD>
   <TD width="48" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD width="132" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
   ------</TD>
</TR>
<TR>
   <TD colspan=2 width="277">&nbsp;</TD>
   <TD align="right" width="14">&nbsp;</TD>
   <TD align="right" width="126" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD colspan=2 align="right" width="133" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD align="right" width="48" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD align="right" width="132" style="border-top-style: solid; border-top-width: 1"></TD>
</TR>
<TR>
   <TD width="190">&nbsp;</TD>
   <TD width="87">&nbsp;</TD>
   <TD width="14" align="right">&nbsp;</TD>
   <TD width="126" align="right"><FONT face="serif">6,217,000</FONT></TD>
   <TD colspan=2 width="133" align="right"><FONT face="serif">(4,515,000)</FONT></TD>
   <TD width="48" align="right">&nbsp;</TD>
   <TD width="132" align="right"><FONT face="serif">1,702,000</FONT></TD>
</TR>
<TR>
   <TD colspan=2 width="277"><FONT face="serif">Less accumulated</FONT></TD>
   <TD width="14" align="right">&nbsp;</TD>
   <TD width="126" align="right">&nbsp;</TD>
   <TD width="56" align="right">&nbsp;</TD>
   <TD width="77" align="right">&nbsp;</TD>
   <TD width="48" align="right">&nbsp;</TD>
   <TD width="132" align="right">&nbsp;</TD>
</TR>
<TR>
   <TD colspan=2 width="277"><FONT face="serif">depreciation and</FONT></TD>
   <TD width="14" align="right">&nbsp;</TD>
   <TD width="126" align="right">&nbsp;</TD>
   <TD width="56" align="right">&nbsp;</TD>
   <TD width="77" align="right">&nbsp;</TD>
   <TD width="48" align="right">&nbsp;</TD>
   <TD width="132" align="right">&nbsp;</TD>
</TR>
<TR>
   <TD width="190">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">amortization</FONT></TD>
   <TD width="87">&nbsp;</TD>
   <TD width="14" align="right">&nbsp;</TD>
   <TD width="126" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">3,868,000</FONT></TD>
   <TD colspan=2 width="133" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">(3,848,000)(6)</FONT></TD>
   <TD width="48" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD width="132" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">20,000</FONT></TD>
</TR>
<TR>
   <TD width="190">&nbsp;</TD>
   <TD width="87">&nbsp;</TD>
   <TD align="right" width="14">&nbsp;</TD>
   <TD align="right" width="126" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD colspan=2 align="right" width="133" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD align="right" width="48" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD align="right" width="132" style="border-top-style: solid; border-top-width: 1"></TD>
</TR>
<TR>
   <TD colspan=2 width="277"><FONT face="serif">Net property and equipment</FONT></TD>
   <TD width="14" align="right">&nbsp;</TD>
   <TD width="126" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">2,349,000</FONT></TD>
   <TD colspan=2 width="133" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">(667,000)</FONT></TD>
   <TD width="48" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD width="132" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">1,682,000</FONT></TD>
</TR>
<TR>
   <TD colspan=2 width="277">&nbsp;</TD>
   <TD align="right" width="14">&nbsp;</TD>
   <TD align="right" width="126" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD colspan=2 align="right" width="133" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD align="right" width="48" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD align="right" width="132" style="border-top-style: solid; border-top-width: 1"></TD>
</TR>
<TR>
   <TD width="190">&nbsp;</TD>
   <TD width="87">&nbsp;</TD>
   <TD align="right" width="14">&nbsp;</TD>
   <TD align="right" width="126">&nbsp;</TD>
   <TD align="right" width="56">&nbsp;</TD>
   <TD align="right" width="77">&nbsp;</TD>
   <TD align="right" width="48">&nbsp;</TD>
   <TD align="right" width="132">&nbsp;</TD>
</TR>
<TR>
   <TD colspan=2 width="277"><FONT face="serif">Contractual customer</FONT></TD>
   <TD width="14" align="right">&nbsp;</TD>
   <TD width="126" align="right">&nbsp;</TD>
   <TD width="56" align="right">&nbsp;</TD>
   <TD width="77" align="right">&nbsp;</TD>
   <TD width="48" align="right">&nbsp;</TD>
   <TD width="132" align="right">&nbsp;</TD>
</TR>
<TR>
   <TD width="190">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">relationships</FONT></TD>
   <TD width="87">&nbsp;</TD>
   <TD width="14" align="right">&nbsp;</TD>
   <TD width="126" align="right"><FONT face="serif">2,655,000</FONT></TD>
   <TD width="56" align="right">&nbsp;</TD>
   <TD width="77" align="right">------</TD>
   <TD width="48" align="right">&nbsp;</TD>
   <TD width="132" align="right"><FONT face="serif">2,655,000</FONT></TD>
</TR>
<TR>
   <TD width="190">&nbsp;</TD>
   <TD width="87">&nbsp;</TD>
   <TD align="right" width="14">&nbsp;</TD>
   <TD align="right" width="126">&nbsp;</TD>
   <TD align="right" width="56">&nbsp;</TD>
   <TD align="right" width="77"></TD>
   <TD align="right" width="48">&nbsp;</TD>
   <TD align="right" width="132">&nbsp;</TD>
</TR>
<TR>
   <TD width="190"><FONT face="serif">Tradename</FONT></TD>
   <TD width="87">&nbsp;</TD>
   <TD colspan=2 width="140" align="right"><FONT face="serif">1,133,000</FONT></TD>
   <TD width="56" align="right">&nbsp;</TD>
   <TD width="77" align="right">------</TD>
   <TD width="48" align="right">&nbsp;</TD>
   <TD width="132" align="right"><FONT face="serif">1,133,000</FONT></TD>
</TR>
<TR>
   <TD width="190">&nbsp;</TD>
   <TD width="87">&nbsp;</TD>
   <TD colspan=2 align="right" width="140">&nbsp;</TD>
   <TD align="right" width="56">&nbsp;</TD>
   <TD align="right" width="77"></TD>
   <TD align="right" width="48">&nbsp;</TD>
   <TD align="right" width="132">&nbsp;</TD>
</TR>
<TR>
   <TD width="190"><FONT face="serif">Goodwill</FONT></TD>
   <TD width="87">&nbsp;</TD>
   <TD width="14" align="right">&nbsp;</TD>
   <TD width="126" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">636,000</FONT></TD>
   <TD width="56" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD width="77" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
   ------</TD>
   <TD width="48" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD width="132" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">636,000</FONT></TD>
</TR>
<TR>
   <TD width="190">&nbsp;</TD>
   <TD width="87">&nbsp;</TD>
   <TD align="right" width="14">&nbsp;</TD>
   <TD align="right" width="126" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD align="right" width="56" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD align="right" width="77" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD align="right" width="48" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD align="right" width="132" style="border-top-style: solid; border-top-width: 1"></TD>
</TR>
<TR>
   <TD width="190"><FONT face="serif">Total assets</FONT></TD>
   <TD width="87">&nbsp;</TD>
   <TD align="right" width="14">&nbsp;</TD>
   <TD align="right" width="126" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">
   $17,571,000</FONT></TD>
   <TD align="right" width="56" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD align="right" width="77" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">
   ($429,000)</FONT></TD>
   <TD align="right" width="48" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD align="right" width="132" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">
   $17,142,000</FONT></TD>
</TR>
</TABLE>


</div>


<A name="page_9"></A>

<p>&nbsp;</p>
<p>&nbsp;</p>
<p align="center">8</p>

<hr color="#000080"><P style="page-break-after: always"></p>

<P>
&nbsp;</P>

<P align="center">
<FONT face="serif">Unaudited Pro Forma Condensed Combined Balance Sheet (continued)
<br>
As of July 31, 2003 </FONT>
</P>
<div align="left">
<TABLE width="730" border=0 cellspacing=0 cellpadding=0 style="border-collapse: collapse" bordercolor="#111111">
<TR>
   <TD width="255">&nbsp;</TD>
   <TD width="76" align="right">&nbsp;</TD>
   <TD width="215" align="right"><FONT face="serif">AI as</FONT></TD>
   <TD width="15" align="right">&nbsp;</TD>
   <TD width="90" align="right"><FONT face="serif">Pro Forma</FONT></TD>
   <TD colspan=2 width="110" align="right"><FONT face="serif">Pro Forma</FONT></TD>
</TR>
<TR>
   <TD width="255">&nbsp;</TD>
   <TD width="76" align="right">&nbsp;</TD>
   <TD width="215" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">Reported(F)</FONT></TD>
   <TD width="15" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD width="90" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">Adjustments</FONT></TD>
   <TD colspan=2 width="110" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">Adjusted</FONT></TD>
</TR>
<TR>
   <TD width="255">&nbsp;</TD>
   <TD width="76" align="right">&nbsp;</TD>
   <TD width="215" align="right" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD width="15" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD width="90" align="right" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD colspan=2 width="110" align="right" style="border-top-style: solid; border-top-width: 1"></TD>
</TR>
<TR>
   <TD width="255">&nbsp;</TD>
   <TD width="76" align="right">&nbsp;</TD>
   <TD width="215" align="right">&nbsp;</TD>
   <TD width="15" align="right">&nbsp;</TD>
   <TD width="90" align="right">&nbsp;</TD>
   <TD width="26" align="right">&nbsp;</TD>
   <TD width="84" align="right">&nbsp;</TD>
</TR>
<TR>
   <TD width="255"><FONT face="serif">Accounts Payable</FONT></TD>
   <TD width="76" align="right">&nbsp;</TD>
   <TD width="215" align="right"><FONT face="serif">$1,163,000</FONT></TD>
   <TD width="15" align="right">&nbsp;</TD>
   <TD width="90" align="right"><FONT face="serif">(463,000)(6)</FONT></TD>
   <TD width="26" align="right">&nbsp;</TD>
   <TD width="84" align="right"><FONT face="serif">$700,000</FONT></TD>
</TR>
<TR>
   <TD width="255"><FONT face="serif">Billings in excess of</FONT></TD>
   <TD width="76" align="right">&nbsp;</TD>
   <TD width="215" align="right">&nbsp;</TD>
   <TD width="15" align="right">&nbsp;</TD>
   <TD width="90" align="right">&nbsp;</TD>
   <TD width="26" align="right">&nbsp;</TD>
   <TD width="84" align="right">&nbsp;</TD>
</TR>
<TR>
   <TD width="255">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">estimated earnings</FONT></TD>
   <TD width="76" align="right">&nbsp;</TD>
   <TD width="215" align="right"><FONT face="serif">196,000</FONT></TD>
   <TD width="15" align="right">&nbsp;</TD>
   <TD width="90" align="right">&nbsp;</TD>
   <TD width="26" align="right">&nbsp;</TD>
   <TD width="84" align="right"><FONT face="serif">196,000</FONT></TD>
</TR>
<TR>
   <TD width="255"><FONT face="serif">Accrued expenses</FONT></TD>
   <TD width="76" align="right">&nbsp;</TD>
   <TD width="215" align="right"><FONT face="serif">459,000</FONT></TD>
   <TD width="15" align="right">&nbsp;</TD>
   <TD width="90" align="right"><FONT face="serif">(141,000)(6)</FONT></TD>
   <TD width="26" align="right">&nbsp;</TD>
   <TD width="84" align="right"><FONT face="serif">318,000</FONT></TD>
</TR>
<TR>
   <TD width="255"><FONT face="serif">Accrued income taxes</FONT></TD>
   <TD width="76" align="right">&nbsp;</TD>
   <TD width="215" align="right"><FONT face="serif">96,000</FONT></TD>
   <TD width="15" align="right">&nbsp;</TD>
   <TD width="90" align="right">&nbsp;</TD>
   <TD width="26" align="right">&nbsp;</TD>
   <TD width="84" align="right"><FONT face="serif">96,000</FONT></TD>
</TR>
<TR>
   <TD width="255"><FONT face="serif">Deferred income tax</FONT></TD>
   <TD width="76" align="right">&nbsp;</TD>
   <TD width="215" align="right">&nbsp;</TD>
   <TD width="15" align="right">&nbsp;</TD>
   <TD width="90" align="right">&nbsp;</TD>
   <TD width="26" align="right">&nbsp;</TD>
   <TD width="84" align="right">&nbsp;</TD>
</TR>
<TR>
   <TD width="255">&nbsp;&nbsp;&nbsp;<FONT face="serif">liability, net</FONT></TD>
   <TD width="76" align="right">&nbsp;</TD>
   <TD width="215" align="right"><FONT face="serif">128,000</FONT></TD>
   <TD width="15" align="right">&nbsp;</TD>
   <TD width="90" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">195,000(6)</FONT></TD>
   <TD width="26" align="right">&nbsp;</TD>
   <TD width="84" align="right"><FONT face="serif">323,000</FONT></TD>
</TR>
<TR>
   <TD width="255">&nbsp;</TD>
   <TD width="76" align="right">&nbsp;</TD>
   <TD width="215" align="right">&nbsp;</TD>
   <TD width="15" align="right">&nbsp;</TD>
   <TD width="90" align="right" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD width="26" align="right">&nbsp;</TD>
   <TD width="84" align="right">&nbsp;</TD>
</TR>
<TR>
   <TD colspan=2 width="331"><FONT face="serif">Current portion of long-term</FONT></TD>
   <TD width="215" align="right">&nbsp;</TD>
   <TD width="15" align="right">&nbsp;</TD>
   <TD width="90" align="right">&nbsp;</TD>
   <TD width="26" align="right">&nbsp;</TD>
   <TD width="84" align="right">&nbsp;</TD>
</TR>
<TR>
   <TD width="255">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">debt</FONT></TD>
   <TD width="76" align="right">&nbsp;</TD>
   <TD width="215" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">427,000</FONT></TD>
   <TD width="15" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD width="90" align="right" style="border-bottom-style: solid; border-bottom-width: 1">
   ------</TD>
   <TD width="26" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD width="84" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">427,000</FONT></TD>
</TR>
<TR>
   <TD width="255">&nbsp;</TD>
   <TD width="76" align="right">&nbsp;</TD>
   <TD width="215" align="right" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD width="15" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD width="90" align="right" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD width="26" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD width="84" align="right" style="border-top-style: solid; border-top-width: 1"></TD>
</TR>
<TR>
   <TD width="255"><FONT face="serif">Total current liabilities</FONT></TD>
   <TD width="76" align="right">&nbsp;</TD>
   <TD width="215" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">2,469,000</FONT></TD>
   <TD width="15" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD width="90" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">(409,000)</FONT></TD>
   <TD colspan=2 width="110" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">2,060,000</FONT></TD>
</TR>
<TR>
   <TD width="255">&nbsp;</TD>
   <TD width="76" align="right">&nbsp;</TD>
   <TD width="215" align="right" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD width="15" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD width="90" align="right" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD colspan=2 width="110" align="right" style="border-top-style: solid; border-top-width: 1"></TD>
</TR>
<TR>
   <TD width="255">&nbsp;</TD>
   <TD width="76" align="right">&nbsp;</TD>
   <TD width="215" align="right">&nbsp;</TD>
   <TD width="15" align="right">&nbsp;</TD>
   <TD width="90" align="right">&nbsp;</TD>
   <TD width="26" align="right">&nbsp;</TD>
   <TD width="84" align="right">&nbsp;</TD>
</TR>
<TR>
   <TD colspan=2 width="331"><FONT face="serif">Deferred income tax liability,</FONT></TD>
   <TD width="215" align="right">&nbsp;</TD>
   <TD width="15" align="right">&nbsp;</TD>
   <TD width="90" align="right">&nbsp;</TD>
   <TD width="26" align="right">&nbsp;</TD>
   <TD width="84" align="right">&nbsp;</TD>
</TR>
<TR>
   <TD width="255">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">net of current portion</FONT></TD>
   <TD width="76" align="right">&nbsp;</TD>
   <TD width="215" align="right"><FONT face="serif">1,535,000</FONT></TD>
   <TD width="15" align="right">&nbsp;</TD>
   <TD width="90" align="right"><FONT face="serif">312,000(6)</FONT></TD>
   <TD colspan=2 width="110" align="right"><FONT face="serif">1,847,000</FONT></TD>
</TR>
<TR>
   <TD width="255"><FONT face="serif">Long-term debt</FONT></TD>
   <TD width="76" align="right">&nbsp;</TD>
   <TD width="215" align="right"><FONT face="serif">531,000</FONT></TD>
   <TD width="15" align="right">&nbsp;</TD>
   <TD width="90" align="right"><FONT face="serif">(12,000)(6)</FONT></TD>
   <TD width="26" align="right">&nbsp;</TD>
   <TD width="84" align="right"><FONT face="serif">519,000</FONT></TD>
</TR>
<TR>
   <TD width="255">&nbsp;</TD>
   <TD width="76" align="right">&nbsp;</TD>
   <TD width="215" align="right">&nbsp;</TD>
   <TD width="15" align="right">&nbsp;</TD>
   <TD width="90" align="right">&nbsp;</TD>
   <TD width="26" align="right">&nbsp;</TD>
   <TD width="84" align="right">&nbsp;</TD>
</TR>
<TR>
   <TD width="255"><FONT face="serif">Common stock, par value</FONT></TD>
   <TD width="76" align="right">&nbsp;</TD>
   <TD width="215" align="right">&nbsp;</TD>
   <TD width="15" align="right">&nbsp;</TD>
   <TD width="90" align="right">&nbsp;</TD>
   <TD width="26" align="right">&nbsp;</TD>
   <TD width="84" align="right">&nbsp;</TD>
</TR>
<TR>
   <TD width="255">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">$.15
   per share, authorized -</FONT></TD>
   <TD width="76" align="right"><FONT face="serif">.</FONT></TD>
   <TD width="215" align="right">&nbsp;</TD>
   <TD width="15" align="right">&nbsp;</TD>
   <TD width="90" align="right">&nbsp;</TD>
   <TD width="26" align="right">&nbsp;</TD>
   <TD width="84" align="right">&nbsp;</TD>
</TR>
<TR>
   <TD colspan=2 width="331"><FONT face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; 12,000,000 shares
   - issued</FONT></TD>
   <TD width="215" align="right">&nbsp;</TD>
   <TD width="15" align="right">&nbsp;</TD>
   <TD width="90" align="right">&nbsp;</TD>
   <TD width="26" align="right">&nbsp;</TD>
   <TD width="84" align="right">&nbsp;</TD>
</TR>
<TR>
   <TD width="255">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">1,804,304 shares at</FONT></TD>
   <TD width="76" align="right">&nbsp;</TD>
   <TD width="215" align="right">&nbsp;</TD>
   <TD width="15" align="right">&nbsp;</TD>
   <TD width="90" align="right">&nbsp;</TD>
   <TD width="26" align="right">&nbsp;</TD>
   <TD width="84" align="right">&nbsp;</TD>
</TR>
<TR>
   <TD width="255"><FONT face="serif">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp; July 31, 2003</FONT></TD>
   <TD width="76" align="right">&nbsp;</TD>
   <TD width="215" align="right"><FONT face="serif">270,000</FONT></TD>
   <TD width="15" align="right">&nbsp;</TD>
   <TD width="90" align="right">&nbsp;</TD>
   <TD width="26" align="right">&nbsp;</TD>
   <TD width="84" align="right"><FONT face="serif">270,000</FONT></TD>
</TR>
<TR>
   <TD width="255"><FONT face="serif">Warrants outstanding</FONT></TD>
   <TD width="76" align="right">&nbsp;</TD>
   <TD width="215" align="right"><FONT face="serif">849,000</FONT></TD>
   <TD width="15" align="right">&nbsp;</TD>
   <TD width="90" align="right">&nbsp;</TD>
   <TD colspan=2 width="110" align="right"><FONT face="serif">849,000</FONT></TD>
</TR>
<TR>
   <TD width="255"><FONT face="serif">Additional paid-in capital</FONT></TD>
   <TD width="76" align="right">&nbsp;</TD>
   <TD width="215" align="right"><FONT face="serif">14,092,000</FONT></TD>
   <TD width="15" align="right">&nbsp;</TD>
   <TD width="90" align="right">&nbsp;</TD>
   <TD colspan=2 width="110" align="right"><FONT face="serif">14,092,000</FONT></TD>
</TR>
<TR>
   <TD width="255"><FONT face="serif">Accumulated deficit</FONT></TD>
   <TD width="76" align="right">&nbsp;</TD>
   <TD width="215" align="right"><FONT face="serif">(2,142,000)</FONT></TD>
   <TD width="15" align="right">&nbsp;</TD>
   <TD width="90" align="right"><FONT face="serif">(320,000)(8)</FONT></TD>
   <TD colspan=2 width="110" align="right"><FONT face="serif">(2,462,000)</FONT></TD>
</TR>
<TR>
   <TD width="255"><FONT face="serif">Treasury stock, at cost</FONT></TD>
   <TD width="76" align="right">&nbsp;</TD>
   <TD width="215" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">(33,000)</FONT></TD>
   <TD width="15" align="right">&nbsp;</TD>
   <TD width="90" align="right">&nbsp;</TD>
   <TD width="26" align="right">&nbsp;</TD>
   <TD width="84" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">(33,000)</FONT></TD>
</TR>
<TR>
   <TD width="255"><FONT face="serif">Total stockholders&#146; equity</FONT></TD>
   <TD width="76" align="right" style="border-bottom-style: none; border-bottom-width: medium">&nbsp;</TD>
   <TD width="215" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">13,036,000</FONT></TD>
   <TD width="15" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD width="90" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">(320,000)</FONT></TD>
   <TD width="26" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD width="84" align="right" style="border-top-style: solid; border-top-width: 1; border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">12,716,000</FONT></TD>
</TR>
<TR>
   <TD width="255" style="border-right-style: none; border-right-width: medium">&nbsp;</TD>
   <TD colspan=2 width="291" align="right" style="border-style: none; border-width: medium">&nbsp;</TD>
   <TD width="15" align="right" style="border-left-style: none; border-left-width: medium; border-right-style: none; border-right-width: medium; border-bottom-style: none; border-bottom-width: medium">&nbsp;</TD>
   <TD width="90" align="right" style="border-left-style: none; border-left-width: medium; border-right-style: none; border-right-width: medium; border-bottom-style: none; border-bottom-width: medium">&nbsp;</TD>
   <TD colspan=2 width="110" align="right" style="border-style: none; border-width: medium">&nbsp;</TD>
</TR>
<TR>
   <TD width="255">&nbsp;</TD>
   <TD colspan=2 width="291" align="right" style="border-top-style: none; border-top-width: medium"></TD>
   <TD width="15" align="right" style="border-top-style: none; border-top-width: medium">&nbsp;</TD>
   <TD width="90" align="right" style="border-top-style: none; border-top-width: medium"></TD>
   <TD colspan=2 width="110" align="right" style="border-top-style: none; border-top-width: medium"></TD>
</TR>
<TR>
   <TD width="255"><FONT face="serif">Total liabilities and</FONT></TD>
   <TD width="76" align="right">&nbsp;</TD>
   <TD width="215" align="right">&nbsp;</TD>
   <TD width="15" align="right">&nbsp;</TD>
   <TD width="90" align="right">&nbsp;</TD>
   <TD width="26" align="right">&nbsp;</TD>
   <TD width="84" align="right">&nbsp;</TD>
</TR>
<TR>
   <TD width="255">&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;<FONT face="serif">stockholders&#146; equity</FONT></TD>
   <TD width="76" align="right">&nbsp;</TD>
   <TD width="215" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">
   $17,571,000</FONT></TD>
   <TD width="15" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD width="90" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">(429,000)</FONT></TD>
   <TD width="26" align="right" style="border-bottom-style: solid; border-bottom-width: 1">&nbsp;</TD>
   <TD width="84" align="right" style="border-bottom-style: solid; border-bottom-width: 1"><FONT face="serif">
   $17,142,000</FONT></TD>
</TR>
<TR>
   <TD width="255">&nbsp;</TD>
   <TD width="76" align="right"></TD>
   <TD width="215" align="right" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD width="15" align="right" style="border-top-style: solid; border-top-width: 1">&nbsp;</TD>
   <TD width="90" align="right" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD width="26" align="right" style="border-top-style: solid; border-top-width: 1"></TD>
   <TD width="84" align="right" style="border-top-style: solid; border-top-width: 1"></TD>
</TR>
</TABLE>
</div>
<P>
<FONT face="serif">Notes to unaudited pro forma condensed combined balance sheet</FONT>
</P>
<TABLE>
<TR>
   <TD valign="top" width="5%">
<FONT face="serif">(6)</FONT></TD>
   <TD valign="top">
<FONT face="serif">To adjust for the sale of PMD as if it had occurred on July 31, 2003. </FONT>
   </TD>
</TR>
<TR>
   <TD valign="top" width="5%">
<FONT face="serif">(7)</FONT></TD>
   <TD valign="top">
<FONT face="serif">To reflect the proceeds of the sale of PMD of $3,500,000, of which $300,000 is being held in escrow. Cash proceeds have been reduced by $150,000 in employee and legal deal related costs. </FONT>
   </TD>
</TR>
<TR>
   <TD valign="top" width="5%"><FONT face="serif">(8)</FONT></TD>
   <TD valign="top"><FONT face="serif">To adjust the net assets for the sale of PMD based on July 31, 2003 net book value including deal related costs in (7) above.</FONT></TD>
</TR>
<TR>
   <TD valign="top" width="5%"><FONT face="serif">(F)</FONT></TD>
   <td valign="top"><FONT face="serif">Reported on Form 10-QSB for the six months ended July 31, 2003 filed with the Securities and Exchange Commission on September 12, 2003.</FONT> </td>
</tr>
</TABLE>
<P>
&nbsp;</P>
<P align="center">
<FONT face="serif"> 	9</FONT>
</P>


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{"company-data": {"conformed-name": "ARGAN INC", "cik": "0000100591", "assigned-sic": "3569", "irs-number": "131947195", "state-of-incorporation": "DE", "fiscal-year-end": "0131"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-31756", "film-number": "031003279"}, "business-address": {"street1": "ONE CHURCH STREET", "street2": "SUITE 302", "city": "ROCKVILLE", "state": "MD", "zip": "20850", "phone": "301 315-0027"}, "mail-address": {"street1": "ONE CHURCH STREET", "street2": "SUITE 302", "city": "ROCKVILLE", "state": "MD", "zip": "20850"}, "former-company": [{"former-conformed-name": "PUROFLOW INC", "date-changed": "19920703"}, {"former-conformed-name": "ULTRA DYNAMICS CORP", "date-changed": "19830522"}]}
Argan, Inc. - Form 8-K
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
--------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest event reported): October 31, 2003
------------
Argan, Inc.
----------------------------------------------
(Exact name of registrant as specified in its charter)
Formerly Puroflow Incorporated
Delaware
----------------------------------------------
(State or other jurisdiction of incorporation)
001-31756
13-1947195
---------
-----------
(Commission File Number)
(I.R.S. Employer I.D. Number)
One Church Street
Suite 302
Rockville, MD
20850
-----------------------
-----
(Address of Principal Executive Offices)
(Zip Code)
(301) 315-0027
----------------------------------------------
(Registrant's telephone number; including area code)
ITEM 2. Acquisition or Disposition of Assets:
On October 31, 2003, Argan, Inc. (AI) sold, in a cash transaction, its subsidiary, Puroflow Incorporated, to Western Filter Corporation (WFC). The sale price of approximately $3,500,000 was satisfied
in cash of which $300,000 is being held in escrow for one year to protect WFC from any breach of representations and warranties under the Stock Purchase Agreement ( Item 10.01 below). The proceeds from the sale will be used for AI's ongoing
acquisition program and for working capital in expanding the business of Southern Maryland Cable, Inc., its wholly owned subsidiary which it acquired on July 17, 2003.
ITEM 7. Financial Statements, Pro Forma Financial Information and Exhibits:
(b)        Pro Forma Financial Information:
Unaudited pro forma condensed combined statements of operations for the fiscal years ended January 31, 2003 and 2002, respectively, and for the six months ended July 31, 2003 and unaudited pro forma condensed combined balance
sheet as of July 31, 2003.
(c)         Exhibits:
10.01    Stock Purchase Agreement by and between Argan, Inc., a Delaware corporation, and Western Filter Corporation, a California corporation, dated as of October 31, 2003.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
ARGAN, INC.
Date: November 14, 2003
BY /s/ 	 	 	 	 	 	 	Rainer H. Bosselmann
--------------------------------
Rainer H. Bosselmann
Chairman of the Board and
Chief Executive Officer
2
The accompanying unaudited pro forma condensed combined statements of operations present the results of operations of AI as if the sale of PMD had occurred as of February 1, 2001 and the purchase of SMC had occurred on February 1,
2002. PMD is accounted for as a discontinued operation for all periods for which condensed combined proforma statements of operations are presented. The pro forma unaudited condensed combined balance sheet reflects the unaudited pro forma condensed
combined financial position of AI as if the sale of PMD had occurred July 31, 2003. (See Item 2., above, for details.)
The pro forma financial data is not necessarily indicative of what the results would have been if the sale of PMD and the acquisition of SMC had occurred on the dates indicated and are not necessarily representative of the
Company's financial position or results of operations for any future period. Because SMC and the Company were not under common control prior to July 17, 2003, historical combined results may not be comparable to, or indicative of, future
performance.
Unaudited Pro Forma Condensed Combined Statement of Operations
For the Year Ended January 31, 2002
AI as
Pro Forma
Reported(A)
Adjustments
Adjusted
Net Sales
$7,236,000
($7,236,000)(1)
----------
Cost of
Goods Sold
5,137,000
(5,137,000)(1)
----------
Gross Profit
2,099,000
(2,099,000)
----------
Selling General
And
Administrative
1,728,000
(1,513,000)(1)
215,000
Operating
Income
371,000
(586,000)
(215,000)
Interest Expense
(47,000)
(47,000)(1)
----------
Other Income
2,000
(2,000)(1)
----------
Income from Cont-
inuing Operations
Before Tax
326,000
(541,000)
(215,000)
Provision for Income
Taxes
130,000
(130,000)(1)
----------
Net Income from
Continuing
Operations
196,000
(411,000)
(215,000)
Loss on disposal
of manufacturing
subsidiary
----------
(320,000)(1)
(320,000)
Loss on discontinued
operations
(155,000)
(155,000)(1)
Loss on Disposal
Of Discontinued
Operations
(560,000)
(560,000)(1)
----------
Net Income(Loss)
$  (519,000)
$        (16,000)
$    (535,000)
3
Earnings Per Share:
Basic - Continuing
Operations
$       .40
$      (.43)
Basic – Discontinued
Operations
(1.45)
(.65)
Total
$  (1.05)
$   (1.08)
Diluted – Continuing
Operations
$       .40
$     (.43)
Diluted – Discontinued
Operations
(1.45)
(.65)
Total
$  (1.05)
$  (1.08)
Notes to unaudited pro forma condensed combined statement of operations
(1)
To adjust for the sale of PMD as if the transaction had occurred on February 1, 2001. The net loss on disposal of the manufacturing subsidiary was calculated on a pro forma basis utilizing
PMD's July 31, 2003 net book value including estimated deal costs of $150,000 see (7) and (8) below.
(A)
Reported on Form 10-KSB for the year ended January 31, 2003 filed with the Securities and Exchange Commission on March 20, 2003.
4
Unaudited Pro Forma Condensed Combined Statement of Operations
For the Year Ended January 31, 2003
AI as
Proforma
SMC
Pro Forma
Reported(B)
Adjustments
Acquisition(C)
Adjusted
Net Sales
$ 6,834,000
($6,834,000)(2)
$8,808,000
$8,808,000
Cost of
Goods Sold
4,500,000
(4,500,000)(2)
6,939,000
6,939,000
Gross Profit
2,334,000
(2,334,000)
1,869,000
1,869,000
Selling General
And
Administrative
1,939,000
(1,741,000)(2)
1,646,000
1,844,000
Operating
Income
395,000
(593,000)
223,000
25,000
Interest Expense
(26,000)
(26,000)(2)
(90,000)
(90,000)
Other Income
57,000
(57,000)(2)
17,000
17,000
Write-down of Excess
and Obsolete
Inventory
(250,000)
(250,000)(2)
--------
--------
Income from Cont-
inuing Operations
Before Tax
176,000
(374 ,000)
150,000
(48,000)
Provision for Income
Taxes
31,000
(31,000)(2)
(9,000)
(9,000)
Net Income from
Continuing
Operations
145,000
(343,000)
141,000
(57,000)
Recovery of Excess
Accrual for Disposal
Of Segment
(172,000)
(172,000)
--------
--------
Net Income (Loss)
$ 317,000
($515,000)
$141,000
($57,000)
5
Earnings Per Share(3)
Basic - Continuing
Operations
$.29
$(.03)
Basic – Discontinued
Operations
$.35
----
Total
$.64
$(.03)
Diluted – Continuing
Operations
$.29
$(.03)
Diluted – Discontinued
Operations
$.35
----
Total
$.64
$(.03)
Notes to unaudited pro forma condensed combined statement of operations
(2)
To adjust for the sale of PMD as if it occurred on February 1, 2001.
(3)
The number of shares outstanding were increased to 1,798,000 to reflect the impact of the Company's private placement consummated on April 29, 2003, a portion of whose proceeds were used to acquire
SMC.
(B)
Reported on Form 10-KSB for the year ended January 31, 2003 filed with the Securities and Exchange Commission on March 20, 2003.
(C)
Gives effect to the acquisition of Southern Maryland Cable, Inc. (SMC) as if the transaction had occurred on February 1, 2002. SMC was acquired on July 17, 2003. The adjustments reflecting the
impact of the acquisition of SMC contained herein are the combination of the historical results of SMC and the proforma adjustments as previously reported on the Company's Form 8-KA filed with the Securities and Exchange Commission on September
24, 2003.
6
Unaudited Pro Forma Condensed Combined Statement of Operations
For the Six Months Ended July 31, 2003
AI as
Pro Forma
SMC
Pro Forma
Reported (D)
Adjustments
Acquisition(E)
Adjusted
Net Sales
$4,166,000
($3,603,000)(4)
$4,277,000
$4,840,000
Cost of
Goods Sold
2,979,000
(2,515,000)(4)
3,300,000
3,764,000
Gross Profit
1,187,000
(1,088,000)
977,000
1,076,000
Selling General
And
Administrative
1,359,000
(1,128,000)(4)
806,000
1,037,000
Operating
Income (Loss)
(172,000)
40,000
171,000
39,000
Interest Expense
(12,000)
8,000(4)
(36,000)
(40,000)
Other Income
27, 000
------
16,000
43,000
Pretax (Loss)
Income
(157,000)
48,000
151,000
42,000
Provision for Income
Taxes
245,000
(245,000)(4)
145,000
145,000
Net (Loss) Income
$(402,000)
293,000
$6,000
$(103,000)
Earnings Per Share(5):
Basic and Diluted
$.(34)
$.(06)
Notes to unaudited pro forma condensed combined statement of operations
(4)To adjust for the sale of PMD as if it had occurred on February 1, 2001.
(5)The number of shares outstanding were increased to 1,798,000 to reflect the impact of the Company's private placement consummated on April 29, 2003, a portion of whose proceeds were used to
acquire SMC.
(D) Reported on Form 10-QSB for the six months ended July 31, 2003 filed with the Securities and Exchange Commission on September 12, 2003
(E)
Gives effect to the acquisition of Southern Maryland Cable, Inc. (SMC) as if the transaction had occurred on February 1, 2002. SMC was acquired on July 17, 2003. The adjustments reflecting the impact of the acquisition of SMC contained
herein are the combination of the historical results of SMC and the pro forma adjustments as previously reported on Form 8-KA filed with the Securities and Exchange Commission on September 24, 2003.
7
Unaudited Pro Forma Condensed Combined Balance Sheet As of July 31, 2003
AI as
Pro Forma
Pro Forma
Reported(F)
Adjustments
Adjusted
Cash and cash equivalents
$5,875,000
(79,000)(6)
$8,846,000
3,050,000(7)
Accounts receivable, net
of allowance for doubtful
accounts of $35,000
2,444,000
(1,164,000)(6)
1,280,000
Estimated earnings in
excess of billings
226,000
------
226,000
Inventories
1,688,000
(1,688,000)(6)
------
Prepaid expenses and other
current assets
305,000
(181,000)(6)
124,000
Funds escrowed from
Acquisition and disposition
260,000
300,000(7)
560,000
Total current assets
10,798,000
238,000
11,036,000
Leasehold improvements
469,000
(317,000)(6)
152,000
Machinery and equipment
4,720,000
(3,785,000)(6)
935,000
Trucks
615,000
615,000
Tooling and dies
413,000
(413,000)(6)
------
6,217,000
(4,515,000)
1,702,000
Less accumulated
depreciation and
amortization
3,868,000
(3,848,000)(6)
20,000
Net property and equipment
2,349,000
(667,000)
1,682,000
Contractual customer
relationships
2,655,000
------
2,655,000
Tradename
1,133,000
------
1,133,000
Goodwill
636,000
------
636,000
Total assets
$17,571,000
($429,000)
$17,142,000
8
Unaudited Pro Forma Condensed Combined Balance Sheet (continued)
As of July 31, 2003
AI as
Pro Forma
Pro Forma
Reported(F)
Adjustments
Adjusted
Accounts Payable
$1,163,000
(463,000)(6)
$700,000
Billings in excess of
estimated earnings
196,000
196,000
Accrued expenses
459,000
(141,000)(6)
318,000
Accrued income taxes
96,000
96,000
Deferred income tax
liability, net
128,000
195,000(6)
323,000
Current portion of long-term
debt
427,000
------
427,000
Total current liabilities
2,469,000
(409,000)
2,060,000
Deferred income tax liability,
net of current portion
1,535,000
312,000(6)
1,847,000
Long-term debt
531,000
(12,000)(6)
519,000
Common stock, par value
$.15
   per share, authorized -
.
12,000,000 shares
   - issued
1,804,304 shares at
July 31, 2003
270,000
270,000
Warrants outstanding
849,000
849,000
Additional paid-in capital
14,092,000
14,092,000
Accumulated deficit
(2,142,000)
(320,000)(8)
(2,462,000)
Treasury stock, at cost
(33,000)
(33,000)
Total stockholders' equity
13,036,000
(320,000)
12,716,000
Total liabilities and
stockholders' equity
$17,571,000
(429,000)
$17,142,000
Notes to unaudited pro forma condensed combined balance sheet
(6)
To adjust for the sale of PMD as if it had occurred on July 31, 2003.
(7)
To reflect the proceeds of the sale of PMD of $3,500,000, of which $300,000 is being held in escrow. Cash proceeds have been reduced by $150,000 in employee and legal deal related costs.
(8)
To adjust the net assets for the sale of PMD based on July 31, 2003 net book value including deal related costs in (7) above.
(F)
Reported on Form 10-QSB for the six months ended July 31, 2003 filed with the Securities and Exchange Commission on September 12, 2003.
9