U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] Quarterly report under Section 13 or 15(d) of the Securities
and Exchange Act of 1934
For the quarterly period ended March 31, 1997
[ ] Transition report under Section 13 or 15(d) of the Securities
and Exchange Act of 1934
For the transition period from ___ to ___
COMMISSION FILE NUMBER 33-97876
USTN HOLDINGS, INC.
(Exact name of small business issuer as specified in its charter)
Delaware 36-4042177
(State or other (I.R.S. Employer
jurisdiction of Identification No.)
incorporation or
organization)
4501 Intelco Loop, Lacey, 98503
Washington
(Address of principal (Zip code)
executive office)
(360) 493-6000
(Issuer's telephone number, including area code)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or
for such shorter period that the registrant was required to file such
reports), and (2) has been subject to such filing requirements for past
90 days. Yes X No __
At March 31, 1997, 5,278,430 shares of common stock, $0.01 per share par value,
and 2,632 shares of Series A convertible preferred stock, $0.01 per share par
value, were outstanding.
Transitional Small Business Disclosure Format (check one): Yes__ No X
<PAGE>
USTN HOLDINGS, INC.
INDEX TO 10-QSB FOR THE QUARTERLY
PERIOD ENDED MARCH 31, 1997
Page
PART I: FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
USTN Holdings, Inc. Consolidated Balance Sheet - March 31, 1997 2
USTN Holdings, Inc. Consolidated Statements of Operations -
Three Months ended March 31, 1997 and 1996 4
USTN Holdings, Inc. Consolidated Statements of Cash Flows -
Three Months ended March 31, 1997 and 1996 5
Notes to Consolidated Financial Statements - March 31, 1997 6
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS
OR PLAN OF OPERATIONS 8
PART II: OTHER INFORMATION
ITEM 1: LEGAL PROCEEDINGS 13
ITEM 2: CHANGES IN SECURITIES 13
ITEM 3: DEFAULTS UPON SENIOR SECURITIES 13
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS
ITEM 5: OTHER INFORMATION 13
ITEM 6: EXHIBITS AND REPORTS ON FORM 8 13
SIGNATURES 14
1
<PAGE>
PART I
FINANCIAL INFORMATION
ITEM 1: FINANCIAL STATEMENTS
USTN HOLDINGS, INC.
Consolidated Balance Sheet
March 31, 1997
ASSETS 1997
------ ----
Current assets:
Cash and cash equivalents $ 9,756,514
Accounts receivable, less allowance
for doubtful accounts of $410,000 23,940,445
Prepaid expenses and other 418,168
----------
Total current assets 34,115,127
----------
Property and equipment:
Land 911,765
Building and leasehold improvements 6,907,436
Equipment and furniture 2,510,631
Network assets 24,385,206
Capitalized network costs 8,188,112
Computer hardware and software 16,062,620
----------
58,965,770
Less: Accumulated depreciation and amortization 28,067,237
----------
Total property and equipment 30,898,533
----------
Computer software product costs, less
accumulated amortization of $802,000 2,056,508
Other assets, net of accumulated
amortization of $89,000 2,743,341
----------
Total assets $69,813,509
==========
See accompanying notes to consolidated financial statements.
2
<PAGE>
USTN HOLDINGS, INC.
Consolidated Balance Sheet, Continued
March 31, 1997
LIABILITIES AND SHAREHOLDERS' EQUITY 1997
- --------------------------------- ----
Current liabilities:
Trade accounts payable $ 2,566,160
Accrued expenses 2,257,922
Due to customers 19,120,756
Current portion of long-term debt 2,205,407
----------
Total current liabilities 26,150,245
----------
Long-term debt, less current portion 20,486,739
----------
Total non-current liabilities 20,486,739
----------
Shareholders' equity:
USTN Holdings, Inc. Series A Convertible Preferred
Stock, par value $.01 per share, authorized 4,416
shares, issued and outstanding 2,632 26
USTN Holdings, Inc. Preferred Stock, par value $.01
per share, authorized 95,584 shares, none issued
or outstanding -
USTN Holdings, Inc. Common Stock, par value $.01 per
share, authorized 12,000,000 shares, issued and
outstanding 5,278,430 52,784
Additional paid-in capital 10,757,347
Retained earnings 12,366,368
----------
Total shareholders' equity 23,176,525
----------
Total liabilities and shareholders' equity $69,813,509
==========
See accompanying notes to consolidated financial statements.
3
<PAGE>
USTN HOLDINGS, INC.
Consolidated Statements of Operations
Three Months Ended March 31, 1997 and 1996
1997 1996
---- ----
Revenues $11,571,891 $5,966,911
---------- ---------
Expenses:
Operating 2,924,993 2,313,073
Selling, general and administrative 2,342,458 1,553,695
Depreciation and amortization 1,532,565 1,106,566
Network operating 3,161,221 1,000,047
Corporate realignment - 350,067
---------- ---------
Total expenses 9,961,237 6,323,448
---------- ---------
Operating income (loss) 1,610,654 (356,537)
Interest income 131,021 89,090
Interest expense (353,699) (180,070)
---------- ---------
Income (loss) before income taxes 1,387,976 (447,517)
Income tax provision 27,760 -
---------- ---------
Net income (loss) $ 1,360,216 $ (447,517)
========== =========
Weighted average common shares 5,277,226 4,215,300
========== ==========
Primary earnings (loss) per share $ 0.26 $ (0.11)
========== ==========
Fully diluted earnings (loss) per share $ 0.23 $ (0.11)
========== ==========
See accompanying notes to consolidated financial statements.
4
<PAGE>
USTN HOLDINGS, INC.
Consolidated Statements of Cash Flows
Three Months Ended March 31, 1997 and 1996
1997 1996
---- ----
Cash flows from operating activities:
Cash received from customers $40,747,257 $34,105,567
Interest received 133,650 86,965
Cash paid to customers, suppliers and employees (40,065,359) (31,317,836)
Income taxes paid (111,921) -
Income tax refund - 173,795
Interest paid (448,831) (152,370)
---------- ----------
Net cash provided by operating activities 254,796 2,896,121
---------- ----------
Cash flows from investing activities:
Cash acquired in acquisition of Independent
Telecommunications Network, Inc . - 613,086
Capital expenditures (2,565,711) (793,816)
---------- ----------
Net cash used by investing activities (2,565,711) (180,730)
---------- ----------
Cash flows from financing activities:
Principal payments on notes payable (447,078) (257,747)
---------- ----------
Net increase(decrease)in cash and cash equivalents (2,757,993) 2,457,644
Cash and cash equivalents at:
Beginning of year 12,514,507 6,992,206
---------- ----------
End of period $ 9,756,514 $ 9,449,850
========== ===========
See accompanying notes to consolidated financial statements.
5
<PAGE>
USTN HOLDINGS, INC.
Notes to Consolidated Financial Statements
March 31, 1997 (unaudited)
(1) BASIS OF PRESENTATION
The consolidated financial statements of USTN Holdings, Inc., and its
wholly-owned subsidiary Illuminet, Inc.,(collectively referred to as
"ILLUMINET") presented in this Form 10-QSB are unaudited and reflect, in the
opinion of management, all adjustments (consisting only of normal recurring
adjustments) necessary for a fair presentation of ILLUMINET's financial
position, results of its operations and its cash flows for each period
presented. Certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to the rules and regulations
of the Securities and Exchange Commission. ILLUMINET believes that the
disclosures made are adequate to make the information presented not misleading.
The results of the interim periods are not necessarily indicative of future
results. These consolidated financial statements should be read in conjunction
with the consolidated financial statements and the notes thereto included in
ILLUMINET's latest annual report on FORM 10-KSB.
(2) EARNINGS PER COMMON SHARE
Earnings per share is computed using the weighted average number of common
shares and dilutive common share equivalents outstanding during each period.
Other potentially dilutive securities include USTN Holdings, Inc. Series A
Preferred Stock and convertible redeemable subordinated debentures, which if
dilutive, are included in the calculation of fully diluted earnings per share.
In February 1997, the Financial Accounting Standards Board issued Statement No.
128, "Earnings Per Share", which is required to be adopted on December 31, 1997.
At that time, ILLUMINET will be required to change the method currently used to
compute earnings per share and to restate all prior periods. The impact of
Statement 128 on the calculation of primary and fully diluted earnings per share
for the quarters ended March 31, 1997 and 1996 is not expected to be material.
(3) ACQUISITION
ILLUMINET was incorporated for the purpose of effecting the merger of U.S.
Intelco Holdings, Inc. ("U.S. Intelco") and Independent Telecommunications
Network, Inc. ("ITN") that was consummated effective February 23, 1996
("Merger"). The Merger was accounted for as a purchase business combination
in accordance with generally accepted accounting principles with U.S. Intelco
designated as the acquiring company. The results of ITN's operations are
included in the consolidated financial statements prospectively from the date
of the Merger.
6
<PAGE>
Assuming that the acquisition of ITN had taken place on January 1, 1996,
unaudited pro forma results of operations from continuing operations would have
been as follows:
Three months ended March 31,
----------------------------
1997 1996
---- ----
Revenues $11,571,891 $9,694,448
========== =========
Net income (loss) $ 1,360,216 $ (742,513)
========== =========
Income (loss) per common share $ 0.26 $ (0.14)
========== =========
(4) SUBSEQUENT EVENT
On April 30, 1997, USTN Holdings, Inc. stockholders approved the change in
name of USTN Holdings, Inc. to Illuminet Holdings, Inc.
7
<PAGE>
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OR
PLAN OF OPERATIONS
BASIS OF PRESENTATION
USTN Holdings, Inc., and its wholly-owned subsidiary Illuminet, Inc.,
(collectively referred to as "ILLUMINET") were incorporated in the State of
Delaware on August 2, 1995, to effect the merger of U.S. Intelco Holdings, Inc.
("U.S. Intelco") and Independent Telecommunications Network, Inc. ("ITN"). In
accordance with terms of the merger, U.S. Intelco and ITN merged with and into
USTN Services, Inc. ("USTN Services") on February 23, 1996 (the "Merger"). USTN
Services subsequently changed its name to Illuminet, Inc. The Merger was
accounted for as a purchase business combination with U.S. Intelco designated as
the acquiring company. The results of ITN's operations are included in the
consolidated financial statements prospectively from the date of the Merger. The
pro forma information presented in this Management's Discussion and Analysis or
Plan of Operations reflects the combined activities of U.S. Intelco and ITN as
if the Merger had occurred effective January 1, 1996.
RESULTS OF OPERATIONS
Three Months Ended March 31, 1997 and 1996
REVENUES. The following table summarizes ILLUMINET's services and the effect
of the Merger on ILLUMINET revenues:
1997 1996
---- ----
Billing-and-collection services $ 1,761,297 $ 2,095,550
Data base services 2,028,629 1,675,311
Network usage measurement 784,409 -
Other services 70,916 251,261
---------- ----------
4,645,251 4,022,122
---------- ----------
Services acquired by Merger:
- ---------------------------
Intelligent network services 5,725,206 5,127,175
Wireless services 1,201,434 545,151
---------- ----------
6,926,640 5,672,326
---------- ----------
Pro forma revenue 11,571,891 9,694,448
Financial statement reporting adjustment
for operations prior to the Merger - ( 3,727,537)
---------- ----------
Revenues per statements of operations $11,571,891 $ 5,966,911
========== ==========
Billing-and-collection services revenues for 1997 decreased primarily as a
result of a $326,943, or 19%, decrease in clearinghouse product line revenues.
This decrease reflects a fourth quarter 1996 price decrease offset by a 22%
increase in messages processed from 14.4 million in 1996 to 17.5 million in
1997, due to the addition of a large customer in the second quarter of 1996.
Although clearinghouse volumes are expected to increase in 1997, revenues are
expected to remain below 1996 levels due to the price decrease described above.
8
<PAGE>
Data base services revenues increased, reflecting an increase in Calling Name
Delivery ("CNAM") product line revenues partially offset by a reduction in Line
Information Data Base ("LIDB") product line revenues. CNAM revenues increased
$291,737, or 394%, in 1997, reflecting growing market acceptance of the service
introduced in 1995. CNAM queries increased 162% from 20.3 million in 1996 to
53.2 million in 1997. LIDB revenues decreased $62,937, or 5%, in 1997,
reflecting a 13% decrease in queries processed from 39.2 million in 1996 to 34.2
million in 1997 due to increased market penetration by competing calling card
service providers.
Network usage measurement revenues derived from the sale of ILLUMINET's SS7
network traffic tracking and measurement software products AMAT7(R) and CDR7(R)
increased in 1997 due to finalization of sales during the period. Network usage
measurement product sales have long sales cycle with each individual sale
normally contributing significant revenue to the product line. No sales were
completed in the corresponding 1996 period.
Other services revenues decreased primarily due to the termination of
ILLUMINET's contract to provide voice messaging services for the State of
Washington in September, 1996. Voice messaging contributed revenues of $190,299
for the 1996 period.
Intelligent network services revenues for 1997 increased primarily as a result
of a $628,139, or 62%, increase in trunk signaling and related service revenues,
reflecting new customer growth. Network connectivity product line revenues
increased $135,840, or 7%, from growth in chargeable customer links. Offsetting
the revenue growth in these product lines, LIDB switch and transport revenues
decreased $225,876, or 22%, in 1997 due to lower query volumes and reduced
prices brought on by competition.
Wireless services revenue increased primarily due to a $596,151, or 113%,
increase in 1997 in cellular switch and transport revenues. The increase
reflects customer growth and increased utilization of the network with message
volumes increasing 123% from 184.6 million for the 1996 period to 411.4 million
for the comparable 1997 period.
EXPENSES. The following table summarizes ILLUMINET's expenses and the effect
of the Merger on ILLUMINET expenses:
1997 1996
---- ----
Operating $2,924,993 $2,668,872
Selling, general and administrative 2,342,458 2,449,906
Depreciation and amortization 1,532,565 1,555,515
Network operating 3,161,221 2,773,786
Corporate realignment - 700,875
--------- ----------
Pro forma expenses 9,961,237 10,148,954
Financial statement reporting adjustment
for operations prior to the Merger - (3,825,506)
--------- ----------
Expenses per statements of operations $9,961,237 $ 6,323,448
========= ==========
ILLUMINET's primary costs are network operating expenses followed by personnel
costs, depreciation and amortization of hardware, software and facilities
assets, and software maintenance expenses.
9
<PAGE>
Operating expenses increased $256,121, or 10%, for 1997 primarily to support the
growth of Illuminet's SS7 network. The increase was comprised of increased
personnel expenses related to new positions, and increased maintenance costs for
new hardware and software.
Selling, general and administrative expenses decreased $107,448, or 4%, from
1996 levels due to a reduction in personnel expenses resulting from Merger-
related position reductions. Selling, general and administrative expenses
savings were offset by increased travel expenses and new marketing material
costs related to increased sales and marketing efforts.
Depreciation and amortization expenses were comparable for 1996 and 1997 but are
expected to increase with the placing into service of new network equipment.
Such equipment has been installed to expand network capacity.
Network operating expenses increased $387,435, or 14%, for 1997 due to increased
leased network connectivity, link, and LATA access charges incurred to support
growth in customer connectivity to the SS7 network.
Corporate realignment expenses were comprised primarily of non-recurring
Merger-related severance expenses incurred in the first quarter of 1996.
INTEREST INCOME/INTEREST EXPENSE. Interest income increased by $41,931, or 47%,
from $89,090 for the three months ended March 31, 1996, to $131,021 for the
comparable 1997 period. This increase resulted primarily from an increase in
available cash balances over the two periods resulting from the Merger.
On a pro forma basis, interest income increased by $24,526, or 23%, from
$106,495 for the 1996 period to $131,021 for the 1997 period.
Interest expense increased $173,629, or 96%, from $180,070 for the three months
ended March 31, 1996 to $353,699 for the 1997 period. The increase reflects
three months of combined interest expense resulting from the Merger and a higher
aggregate outstanding debt balance resulting from an additional loan for a total
of approximately $2.7 million obtained from Rural Telephone Finance Cooperative
in December, 1996.
On a pro forma basis, interest expense decreased $40,803, or 10%, from $394,502
for the 1996 period to $353,699 for the comparable 1997 period.
INCOME TAXES. ILLUMINET has Federal income tax net operating loss carryforwards
available to offset future taxable income for Federal income tax purposes
totaling $20,964,492. These carryforwards expire in various amounts from 2006
through 2011. ILLUMINET's ability to utilize such net operating loss
carryforwards is dependent on ILLUMINET's ability to generate sufficient taxable
income from its operations. The current 1997 tax provision is comprised of
Federal alternative minimum taxes which cannot be completely offset by tax loss
carryforwards.
EARNINGS
ILLUMINET's net income increased $1,807,733 from a net loss of $(447,517) for
the three months ended March 31, 1996, to net income of $1,360,216 for the
comparable 1997 period. This increase primarily reflects an increase in network
usage measurement revenues, the effect of non-recurring corporate realignment
costs incurred during the 1996 period, and the impact of the post-
10
<PAGE>
Merger operational efficiencies that have reduced costs as a percentage of
revenues.
On a pro forma basis, ILLUMINET's net income increased $2,102,729 from a net
loss of $(742,513) to net income of $1,360,216 for the three months ended March
31, 1996 and 1997, respectively, primarily resulting from positive revenue
trends and by the completion of the Merger in 1996.
ILLUMINET believes that it will continue to have positive earnings in the future
through new product and customer diversification and expansion into related
telecommunications markets. ILLUMINET anticipates that increased expenditures in
the development of services and products will continue over the next several
years. While it is anticipated that the existing primary services and products
will continue to be profitable, overall profitability in the immediate future
could be negatively impacted by delays in obtaining new product revenues coupled
with related increases in new product start-up costs. A general downward
pressure on price caused by increased competition may also negatively impact
profitability.
FORWARD LOOKING INFORMATION
ILLUMINET is including the following cautionary statement to make applicable and
take advantage of the new "safe harbor" provisions of the Private Securities
Litigation Reform Act of 1995 for any forward-looking statement made by or on
behalf of, ILLUMINET. The factors identified in this cautionary statement are
important factors (but not necessarily all of the important factors) that could
cause actual results to differ materially from those expressed in any
forward-looking statement made by, or on behalf of, ILLUMINET.
Where any such forward-looking statement includes a statement of the assumptions
or basis underlying such forward-looking statement, ILLUMINET cautions that,
while it believes such assumptions or basis to be reasonable and makes them in
good faith, assumed facts or basis almost always vary from actual results, and
the differences between assumed facts or basis and actual results can be
material, depending upon the circumstances. Where, in any forward-looking
statement, ILLUMINET, or its management, expresses an expectation or belief as
to future results, such expectation or belief is expressed in good faith and
believed to have a reasonable basis, but there can be no assurance that the
statement of expectation or belief will result or be achieved or accomplished
Taking into account the foregoing, the following are identified as important
factors that could cause actual results to differ materially from those
expressed in any forward-looking statement made by, or on behalf of, ILLUMINET:
a) Future operating results will be affected by the costs of continuing to
develop and expand ILLUMINET's business which may be higher than ILLUMINET's
expectations, and ILLUMINET may be required to raise additional capital or to
borrow funds to complete such activities. There can be no assurance that
additional funding will be available if such funding requirements exceed
existing financing arrangements.
b) ILLUMINET's advanced data base, billing and collection, and network services
are offered directly by other companies or groups of companies, many of which
are significantly larger and better financed than ILLUMINET. Future operating
results will be affected by ILLUMINET's ability to adjust to competitive
pressures impacting ILLUMINET's market acceptance or prices.
c) Many of ILLUMINET's customers are regulated directly by the Federal
Communications Commission or other state public utility commissions. Changes in
regulations, or in interpretation of existing regulations, may affect
ILLUMINET's current or planned product and service offerings.
d) ILLUMINET's SS7 network traffic tracking and measurement software products
were developed under ILLUMINET's patents in the United States and Canada. Future
11
<PAGE>
operating results are subject to unforeseen events such as the cost, or failure,
to defend the validity of such patents.
LIQUIDITY AND CAPITAL RESOURCES
ILLUMINET relies on a combination of cash generated from operations, debt and
equity to fund service development and expansion activities. Currently,
ILLUMINET's operating activities are generating positive cash flows. However, as
ILLUMINET broadens its services and products to those requiring larger
investments coupled with longer periods before subsequent revenues are
generated, ILLUMINET believes there may be increased pressure on cash generated
from operations. ILLUMINET anticipates continued high levels of investment in
the development of new services and products over the next several years as
ILLUMINET processes increased volumes relating to its network, data base, and
billing-and-collection services, and broadens its product base to keep pace with
changing markets and customer needs.
ILLUMINET's working capital (current assets minus current liabilities) was
$7,964,882 as of March 31, 1997. ILLUMINET's cash and cash equivalent balances
included $6,803,000 required as working capital to service ILLUMINET's
clearinghouse customers. Such funds are received and disbursed on a monthly
basis. The increase in working capital of $3,801,615 from $4,163,267 at March
31, 1996, reflects the increase in cash balances from operating activities,
increased accounts receivable, and reductions in liabilities assumed in the
Merger. These positive changes were offset by increased payables related to
ILLUMINET's growing clearinghouse program, and the increased current portion
of long-term debt. ILLUMINET believes that its existing cash balances,
funds generated from its operations and borrowings available under its
existing credit agreements will be sufficient to meet existing capital
expenditure and working capital needs for the immediate future.
ILLUMINET's expenditures for property and equipment were $2,565,711 for the
three months ended March 31, 1997. Expenditures for property and equipment were
primarily for network equipment.
At March 31, 1997, ILLUMINET had a secured line of credit expiring August, 2001,
with RTFC that permits ILLUMINET to borrow up to $7,300,000, not to exceed 80%
of accounts receivable. There were no borrowings against the line of credit at
March 31, 1997. Additionally at March 31, 1997, ILLUMINET had $5,188,007 of
unused loan facilities established or committed with RTFC, maturing in the years
2000 and 2001.
12
<PAGE>
PART II
OTHER INFORMATION
ITEM 1: LEGAL PROCEEDINGS
None
ITEM 2: CHANGES IN SECURITIES
None
ITEM 3: DEFAULTS UPON SENIOR SECURITIES
Not applicable
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS
None
ITEM 5: OTHER INFORMATION
None
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS REQUIRED TO BE FILED BY ITEM 601
OF REGULATION S-B
Exhibit 11 - Computation of Earnings Per Share
Exhibit 27 - Financial Data Schedule
(b) REPORTS ON FORM 8-K
No reports on Form 8-K were filed during the three months ended
March 31, 1997.
13
<PAGE>
SIGNATURES
In accordance with requirements of the Exchange Act, the Registrant caused this
report to be signed on its behalf by the undersigned, thereunto duly authorized.
USTN HOLDINGS, INC.
Date: May 12, 1997 By: /s/ Daniel E. Weiss
-------------------------------------
Daniel E. Weiss, Vice President - Finance
and Treasurer
(Principal Accounting Officer)
14
<PAGE>
EXHIBIT 11
USTN HOLDINGS, INC.
COMPUTATION OF EARNINGS PER SHARE
Three Months Ended
March 31,
1997 1996
--------- ---------
Primary:
Average common shares
outstanding 5,277,226 4,215,300
========= =========
Net income (loss) $1,360,216 $ (447,517)
========= =========
Per share amount $ 0.26 $ (0.11)
========= =========
Fully diluted:
Primary average common shares
outstanding 5,277,226 4,215,300
Assumed conversion of USTN Debentures 914,901 -
Assumed conversion of USTN
Series A Preferred Stock 224,315 -
--------- ---------
Totals 6,416,442 4,215,300
========= =========
Net income (loss) $1,360,216 $ (447,517)
Add USTN Debenture
interest, net of federal
income tax effect 130,875 -
--------- ---------
Totals $1,491,091 $ (447,517)
========= =========
Per share amount $ 0.23 $ (0.11)
========= =========
<PAGE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
EXHIBIT 27
USTN HOLDINGS, INC.
FINANCIAL DATA SCHEDULE
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED FINANCIAL STATEMENTS OF USTN HOLDINGS, INC. AS OF MARCH 31,
1997, AND FOR THE THREE MONTHS THEN ENDED, AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. Dollars
<S> <C>
<FISCAL-YEAR-END> Dec-31-1997
<PERIOD-START> Jan-01-1997
<PERIOD-END> Mar-31-1997
<PERIOD-TYPE> 3-mos
<EXCHANGE-RATE> 1
<CASH> 9,756,514
<SECURITIES> 0
<RECEIVABLES> 24,350,445
<ALLOWANCES> (410,000)
<INVENTORY> 0
<CURRENT-ASSETS> 34,115,127
<PP&E> 58,965,770
<DEPRECIATION> 28,067,237
<TOTAL-ASSETS> 69,813,509
<CURRENT-LIABILITIES> 26,150,245
<BONDS> 20,486,739
0
26
<COMMON> 52,784
<OTHER-SE> 23,123,715
<TOTAL-LIABILITY-AND-EQUITY> 69,813,509
<SALES> 0
<TOTAL-REVENUES> 11,571,891
<PAGE>
<CGS> 0
<TOTAL-COSTS> 9,861,237
<OTHER-EXPENSES> 0
<LOSS-PROVISION> (100,000)
<INTEREST-EXPENSE> 353,699
<INCOME-PRETAX> 1,387,976
<INCOME-TAX> 27,760
<INCOME-CONTINUING> 1,360,216
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,360,216
<EPS-PRIMARY> 0.26
<EPS-DILUTED> 0.23
</TABLE>
