<PAGE>
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- -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------------
FORM 10-Q
-------------------------------
(Mark one)
[X] Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities and Exchange Act of 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997
or
[ ] Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the transition period from __________ to __________
COMMISSION FILE NUMBER 1-14020
CASTLE & COOKE, INC.
(Exact name of registrant as specified in its charter)
HAWAII 77-0412800
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10900 WILSHIRE BOULEVARD, 16TH FLOOR
LOS ANGELES, CA 90024
(Address of principal executive offices and zip code)
(310) 208-3636
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes [X] No [ ]
Indicate the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date.
Class Shares Outstanding at November 7, 1997
- ------------------------------ --------------------------------------
Common Stock, without par value 19,996,288 shares
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<PAGE>
CASTLE & COOKE, INC.
FORM 10-Q
FOR THE QUARTER ENDED
SEPTEMBER 30, 1997
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
NUMBER
------
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets -- September 30, 1997 and December 31, 1996 . . . . . . . . . . . . . . 3
Consolidated Statements of Operations -- Quarter and nine months ended September 30, 1997
and September 30, 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Consolidated Statements of Cash Flows -- Nine months ended September 30, 1997
and September 30, 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Notes to Consolidated Financial Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K. . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
</TABLE>
2
<PAGE>
CASTLE & COOKE, INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
September 30, December 31,
1997 1996
(Unaudited) (Audited)
------------ ------------
Cash and cash equivalents $ 1,283 $ 5,663
Receivables, net 36,725 32,567
Real estate developments 517,070 511,358
Property and equipment, net 453,761 444,435
Income tax receivable - 9,209
Other assets 17,803 16,590
------------ ------------
Total assets $ 1,026,642 $ 1,019,822
------------ ------------
------------ ------------
Notes payable $145,106 $142,130
Note payable to Dole 10,000 10,000
Accounts payable 18,292 16,630
Accrued liabilities 28,671 30,150
Deferred income taxes 177,349 172,819
Deferred income and other liabilities 28,127 29,086
------------ ------------
Total liabilities 407,545 400,815
------------ ------------
Redeemable preferred stock 36,225 35,700
Common shareholders' equity
Common stock 511,510 511,075
Retained earnings 71,362 72,232
------------ ------------
Total common shareholders' equity 582,872 583,307
------------ ------------
Total liabilities and shareholders' equity $ 1,026,642 $ 1,019,822
------------ ------------
------------ ------------
The accompanying notes are an integral part of these
consolidated balance sheets.
3
<PAGE>
CASTLE & COOKE, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(IN THOUSANDS, EXCEPT EARNINGS (LOSS) PER COMMON SHARE AMOUNTS)
<TABLE>
<CAPTION>
Quarter Ended Nine Months Ended
September 30, September 30,
----------------------- -------------------------
1997 1996 1997 1996
--------- --------- --------- ----------
<S> <C> <C> <C> <C>
REVENUES
Residential property sales $ 28,521 $ 31,011 $ 82,494 $ 131,301
Resort revenues 13,027 10,431 43,311 40,919
Commercial and other revenues 12,913 13,236 37,891 40,151
Gain on sale of income producing properties - 4,207 - 4,207
--------- --------- --------- ----------
Total revenues 54,461 58,885 163,696 216,578
COST OF OPERATIONS
Cost of residential property sales 25,677 27,844 74,143 114,860
Cost of resort operations 17,900 16,228 54,061 52,364
Cost of commercial and other operations 7,149 8,358 21,963 25,609
General and administrative expenses 3,304 3,158 10,596 10,048
--------- --------- --------- ----------
Total cost of operations 54,030 55,588 160,763 202,881
--------- --------- --------- ----------
Operating income 431 3,297 2,933 13,697
Interest and other income, net 463 419 1,527 1,240
Interest expense, net 105 220 689 1,852
--------- --------- --------- ----------
Income before income taxes 789 3,496 3,771 13,085
Income tax provision (310) (1,381) (1,491) (5,169)
--------- --------- --------- ----------
Net income 479 2,115 2,280 7,916
Preferred stock dividend and accretion (1,050) (1,046) (3,150) (3,153)
--------- --------- --------- ----------
Net income (loss) available to
common shareholders $ (571) $ 1,069 $ (870) $ 4,763
--------- --------- --------- ----------
Earnings (loss) per common share $ (0.03) $ 0.05 $ (0.04) $ 0.24
--------- --------- --------- ----------
--------- --------- --------- ----------
Average number of common shares outstanding 19,978 19,955 19,964 19,954
--------- --------- --------- ----------
--------- --------- --------- ----------
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
4
<PAGE>
CASTLE & COOKE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(IN THOUSANDS)
<TABLE>
<CAPTION>
Nine Months Ended
---------------------------
September 30, September 30,
1997 1996
------------- ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 2,280 $ 7,916
Adjustments to reconcile net income to cash flow
provided by operating activities:
Gain on sale of income producing properties - (4,193)
Depreciation and amortization 13,109 12,908
Other 40 75
Changes in operating assets and liabilities:
(Increase) decrease in receivables, net (4,158) 5,317
(Increase) decrease in real estate developments (5,519) 27,786
Decrease in income tax receivable 9,209 -
Increase (decrease) in accounts payable 1,662 (1,790)
Decrease in accrued liabilities (1,479) (4,323)
Increase (decrease) in deferred income taxes 4,530 (16,298)
Net change in other assets and liabilities (2,017) 1,008
------------- ------------
Net cash provided by operating activities 17,657 28,406
------------- ------------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from sale of income producing properties - 36,231
Acquisition of property and equipment (22,783) (21,157)
------------- ------------
Net cash (used in) provided by investing activities (22,783) 15,074
------------- ------------
CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (reduction) under revolving loan agreement 2,976 (41,864)
Proceeds from exercise of stock options 395 47
Preferred stock dividends paid (2,625) (2,897)
------------- ------------
Net cash provided by (used in) financing activities 746 (44,714)
------------- ------------
Net decrease in cash and cash equivalents (4,380) (1,234)
Cash and cash equivalents at beginning of period 5,663 4,781
------------- ------------
Cash and cash equivalents at end of period $ 1,283 $ 3,547
------------- ------------
------------- ------------
SUPPLEMENTAL CASH FLOW DATA
Interest paid, net of amount capitalized $ 671 $ 1,357
Income taxes (refunded) paid (12,204) 21,466
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
5
<PAGE>
CASTLE & COOKE, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. BASIS OF PRESENTATION
The consolidated financial statements included herein have been prepared by
Castle & Cooke, Inc. ("the Company"), without audit, and include all adjustments
which are, in the opinion of management, necessary for a fair presentation of
the results of operations for the quarters and nine months ended September 30,
1997 and September 30, 1996, pursuant to the rules and regulations of the
Securities and Exchange Commission. 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 such rules and regulations, although the Company believes that the
disclosures in such financial statements are adequate to make the information
presented not misleading. The consolidated financial statements should be read
in conjunction with the Company's consolidated financial statements and the
notes thereto for the year ended December 31, 1996, included in the Company's
Annual Report on Form 10-K filed with the Securities and Exchange Commission.
The Company was formed on October 10, 1995 to be the successor of the
assets and related liabilities of the real estate and resorts business of Dole
Food Company, Inc. and its subsidiaries ("Dole"). On December 28, 1995, Dole
completed the separation of its real estate and resorts business from its food
business through a pro rata distribution of the stock of the Company to its
shareholders.
The Company's operating results are subject to significant variability as
a result of, among other things, the receipt of regulatory approvals, status
of development in particular projects and the timing of sales in developed
projects, income producing properties, and non-income producing properties.
The results of operations for the quarter and nine months ended September 30,
1997, are not necessarily indicative of the results to be expected for the
full year. In addition, the statements contained herein which are not
historical facts, are forward-looking statements based on economic forecasts,
strategic plans and other factors that, by their nature, involve risk and
uncertainties. Potential risks and uncertainties include, but are not
limited to, such things as product demand, the Company's lack of experience
in operating in markets outside of its current markets or in developing
products that are different from its current products, the effect of
geographic concentration of assets or markets, the impact of competitive
products and pricing, and govermental regulations and the need for
governmental approvals. Other factors that could cause actual future results
to differ materially from past results include the following: business
conditions and general economy; competitive factors; political decisions
affecting land use, capital resources, interest rates and other risks
inherent in the real estate business.
Certain reclassifications have been made to the 1996 consolidated financial
statements to conform to the 1997 presentation.
NOTE 2. COMMITMENTS AND CONTINGENCIES
The Company and its subsidiaries are contingently liable as joint
indemnitors to surety companies for subdivision, off-site improvement and
construction bonds issued on their behalf.
The Company is involved from time to time in various claims and legal
actions arising in the normal course of business. In the opinion of
management, the final resolution of these matters is not expected to have a
material adverse effect on the Company's financial position or results of
operations.
NOTE 3. NEW ACCOUNTING PRONOUNCEMENT
In February, 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, Earnings Per Share ("SFAS
No. 128"). SFAS No. 128 revises and simplifies the computation for earnings per
share and requires certain additional disclosures. The Company will adopt this
standard in the fourth quarter of 1997. The adoption of this standard is not
expected to have an effect on the Company's earnings per share.
6
<PAGE>
CASTLE & COOKE, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
REVENUES
Third quarter consolidated revenues decreased from $58.9 million in 1996 to
$54.5 million in 1997, and consolidated revenues for the first nine months of
the year decreased from $216.6 million in 1996 to $163.7 million in 1997. Third
quarter residential property sales decreased from $31.0 million in 1996 to $28.5
million in 1997. Residential property sales for the first nine months of the
year decreased from $120.1 million in 1996 to $82.5 million in 1997, excluding
the sale of approximately 3,000 acres of agricultural land in Bakersfield for
$11.2 million in the second quarter of 1996. Third quarter deliveries decreased
from 112 homes in 1996 to 95 homes in 1997 and deliveries for the first nine
months decreased from 408 homes in 1996 to 256 in 1997. The average price per
home increased in the quarter from $246,000 in 1996 to $258,000 in 1997. The
decrease in residential property sales and deliveries was primarily due to a
soft residential market on Oahu. The increase in the third quarter average
price per home in 1997 compared to the same period in 1996 was primarily due to
product mix. Third quarter resort revenues increased from $10.4 million in 1996
to $13.0 million in 1997. This increase was primarily due to improved occupancy
and room rates at the resorts and increased luxury resort residential sales of
$627,000. The $4.2 million gain on sale of income producing properties in the
third quarter of 1996 is due to the sale of three Mississippi Apartment
complexes and a Bakersfield office building which generated an aggregate of
$37.5 million in revenues partially offset by $33.3 million in capitalized
and selling cost.
COST AND EXPENSES
Third quarter consolidated cost of operations decreased from $55.6
million in 1996 to $54.0 million in 1997, and consolidated cost of operations
for the first nine months decreased from $202.9 million in 1996 to $160.8
million in 1997. The cost of residential property sales as a percentage of
residential property sales increased from 88% in the first nine months of
1996 to 90% in the first nine months of 1997, excluding the 1996 agricultural
land sale. The increase is primarily due to aggressive marketing programs
and sales incentives used in the Oahu residential operations, which have been
necessary to stimulate activity in the soft market. The 1996 agricultural
land sale generated approximately $1.9 million in operating income.
Excluding luxury resort residential sales and depreciation, the cost of
resort operations as a percentage of resort revenues improved from 136% in
the third quarter of 1996 to 120% in the third quarter of 1997. This
improvement is primarily due to increased occupancy and average daily room
rates. Since a significant portion of the resort operations' costs are fixed
costs, these costs will not increase or decrease proportionately as occupancy
and resort revenues increase or decrease. The third quarter luxury resort
residential operating margin decreased from a loss of $188,000 in 1996 to a
loss of $296,000 in 1997. The luxury resort residential operating margin
improved from $460,000 in the first nine months of 1996 to $609,000 in the
first nine months of 1997. Resort depreciation increased from $2.0 million
in the third quarter of 1996 to $2.2 million in the third quarter of 1997.
Resort depreciation increased from $6.3 million in the first nine months of
1996 to $7.0 million in the first nine months of 1997.
Third quarter cost of commercial and other operations as a percentage of
commercial and other operations revenues improved from 63% in 1996 to 55% in
1997. This improvement is primarily due to the opening of the Marketplace
shopping center in the forth quarter of 1996 and the sale of two
industrial/commercial land parcels in Bakersfield in 1996. These sales had a
combined profit margin of 10%.
7
<PAGE>
CASTLE & COOKE, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
COST AND EXPENSES (CONTINUED)
Total interest incurred in the third quarter and the first nine months of
1997 was $2.8 million and $8.7 million, respectively. Total interest
capitalized into real estate development and property and equipment in the
third quarter and first nine months of 1997 was $2.7 million and $8.0 million,
respectively. Total interest incurred in the third quarter and the
first nine months of 1996 was $2.9 million and $9.7 million, respectively.
Total interest capitalized into real estate development in the third quarter
and first nine months of 1996 was $2.7 million and $7.8 million,
respectively. Total borrowings were $155.1 million at September 30, 1997
compared to $153.1 million at September 30, 1996. Amortization in cost of
sales of previously capitalized interest totaled approximately $921,000 and
$410,000 for the third quarters of 1997 and 1996, respectively.
NET INCOME AND EARNINGS PER SHARE
Preferred stock dividend and accretion relates to the $35 million
cumulative preferred stock issued in connection with the Company's separation
from Dole in December of 1995.
Third quarter net loss available to common shareholders was $571,000
compared to third quarter net income available to common shareholders of $1.1
million in 1996. The net loss available to common shareholders for the first
nine months of 1997 was $870,000 compared to net income available to common
shareholders of $4.8 million for the first nine months in 1996. These
decreases are primarily due to lower operating results described above.
BACKLOG
The Company's new orders and backlog for homes for 1997 compared to 1996
were as follows:
Quarter Ended Nine Months Ended
September 30, September 30,
----------------- -----------------
1997 1996 1997 1996
------- ------- ------- --------
Units
Backlog at beginning of the period 82 121 55 133
Add: new orders 131 139 319 423
Less: deliveries (95) (112) (256) (408)
------- ------- ------- --------
Backlog at end of the period 118 148 118 148
------- ------- ------- --------
------- ------- ------- --------
Dollars (in thousands)
Backlog at beginning of the period $24,134 $33,801 $15,143 $34,298
Add: new orders 31,644 36,627 82,086 114,765
Less: deliveries (24,496) (27,604) (65,947) (106,239)
------- ------- ------- --------
Backlog at end of the period $31,282 $42,824 $31,282 $42,824
------- ------- ------- --------
------- ------- ------- --------
The decrease in new orders and deliveries for the first nine months of 1997 as
compared to 1996 is primarily due to a soft residential housing market on Oahu.
8
<PAGE>
CASTLE & COOKE, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
The Company requires capital to operate its resorts, to purchase and
develop land, to construct homes and homesites and to acquire, develop and
operate commercial property.
On May 16, 1997, the Company's existing credit agreement with a syndicate
of banks was amended and restated (the "Credit Agreement"). Pursuant to this
Credit Agreement, the banks agreed to provide a three- year revolving credit
facility of up to $250 million, based upon a percentage of value of certain
commercial properties and home building inventory (the "Borrowing Base"). At
September 30, 1997, the Borrowing Base allows the Company to borrow up to
$250 million. The Credit Agreement bears interest at a variable rate based
on the London Interbank Offered Rate ("LIBOR") or at an alternative rate
based upon a designated bank's prime rate or the federal funds rate. At
September 30, 1997, total borrowings under the Credit Agreement were $145
million and the weighted average interest rate was 7.14%. Effective October 1,
1997, the Company entered into two five year interest rate contracts to hedge
against rising interest rates. These contracts effectively convert $80 million
of the Company's variable rate debt to fixed rated debt at an average rate
of 7.26%, as adjusted based on the Company's total debt outstanding. Market
risk exposure is limited to the net interest differential between the variable
rate debt under the credit facility and the fixed rate debt, which is reflected
in interest incurred. At September 30, 1997, the Company is in compliance
with the various financial covenants of the Credit Agreement.
On Oahu, the Leilehua, Verifone, Cannery Development, Town Center of
Mililani and Dole Plantation properties are pledged as collateral pursuant to
the Credit Agreement. On the mainland, the Marketplace, Schirra Court, 10000
Ming, Premier Plaza, Landmark Center, Horizon at Six Forks, Regents Center and
One Norman Square properties are also pledged as collateral. In connection with
this agreement, independent third parties performed an appraisal of each pledged
property in the first quarter of 1997. The total appraised value of these
properties was $261.9 million. The undeveloped land associated with these
properties was not valued in connection with these appraisals.
The Company believes that funds available under the Credit Agreement and
cash generated from operations combined with selective sales of commercial
and other properties from time to time will be adequate for its short-term
and long-term cash needs. There can be no assurance, however, that the
amounts available from such sources will be sufficient. The Company may be
required to seek additional capital in the form of public equity or debt
offerings or from a variety of potential sources, including additional bank
financing.
Residential development spending was $58.5 million in the first nine
months of 1997. Spending during the first nine months of 1997 at the
Mililani, Royal Kunia and Lalea residential developments on Oahu was
approximately $29.1 million, $8.9 million and $6.0 million, respectively.
Spending during the first nine months of 1997 at the Seven Oaks, Brimhall and
Silver Creek residential developments in Bakersfield was approximately $5.9
million, $3.7 million and $1.5 million, respectively. Spending during the
first nine months of 1997 at the Sierra Vista residential development in
Arizona was approximately $1.6 million. The Company expects to spend
approximately $8 million in the fourth quarter of 1997 for the new Keene's
Point development in Orlando, Florida. The initial land purchase, which is
currently in escrow, is expected to close in the fourth quarter of 1997 with
lot sales commencing in the third quarter of 1998.
Total resort development and capital spending was approximately $10.1
million during the first nine months of 1997. Spending at the Manele and
Koele luxury home developments during the first nine months of 1997 was
approximately $5.9 million and $1.2 million, respectively.
9
<PAGE>
CASTLE & COOKE, INC.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
Capital expenditures at the commercial projects totaled $19.8 million
during the first nine months of 1997 and primarily related to the construction
of the 299,000 square foot Marketplace shopping center in Bakersfield,
California ($5.7 million) and the 127,000 square foot Premier Plaza II office
building in Atlanta, Georgia ($8.1 million). During the remainder of 1997, the
Company expects to spend approximately $5.1 million on construction of Premier
II. Phases I & II of the Marketplace, consisting of approximately 214,000
square feet, are 100% leased. Construction on phase III (86,065 square feet) is
expected to occur during 1998 and 1999. Leases have been executed for 56% of
the Premier II building and letters of intent have been signed for an additional
4%. The Company expects to spend approximately $2.8 million during the
remainder of 1997 on the construction of Regents II, a 41,000 square foot
commercial office building adjacent to the Company's fully leased Regents Center
in Tempe, Arizona. Construction is expected to be completed in the fourth
quarter of 1997. In the third quarter of 1997, a single tenant leased the
entire 41,000 square feet. The Company recently began construction on an 18-hole
daily fee golf course adjacent to the Company's existing course in San Jose,
California. Construction costs in 1997, relating to this Jack Nicklaus designed
course, are expected to be approximately $6 million.
Cash flow from operating activities decreased $10.7 million during the
first nine months of 1997 as compared to the corresponding period in 1996.
The decrease is primarily due to a net decrease in real estate projects of
$27.8 million in 1996 compared to a net increase of $5.5 million in 1997.
The decrease in 1996 was primarily due to weak market conditions on Oahu.
The change in real estate developments was partially offset by a decrease in
deferred income taxes of $16.3 million in 1996 compared to an increase of
$5.5 million in 1997. Cash flow used in investing activities increased $37.9
million during the first nine months of 1997 as compared to the corresponding
period in 1996. The change is primarily due to the sale of two income
producing properties in the third quarter of 1996 for $36.2 million. Cash
flow provided by financing activities increased $45.5 million during the
first nine months in 1997 as compared to the corresponding period in 1996.
The change is primarily due to net reductions under the Credit Agreement
(or its predecessor) of $41.9 million during the first nine months of 1996
compared to net borrowings of $3.0 million in 1997.
10
<PAGE>
CASTLE & COOKE, INC.
PART II.
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit
No.
-------
27 Financial Data Schedule
(b) Reports on Form 8-K
THE REGISTRANT FILED NO REPORTS ON FORM 8-K DURING THE QUARTER
ENDED SEPTEMBER 30, 1997.
All other items required under Part II are omitted because they are not
applicable.
11
<PAGE>
CASTLE & COOKE, INC.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CASTLE & COOKE, INC.
Registrant
Date: November 7, 1997 BY /s/ Edward C. Roohan
--------------------------
Edward C. Roohan
Vice President and
Chief Financial Officer
(Principal financial officer)
Date: November 7, 1997 BY /s/ Scott J. Blechman
--------------------------
Scott J. Blechman
Vice President and
Corporate Controller
(Principal accounting officer)
12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 1,283
<SECURITIES> 0
<RECEIVABLES> 517,070
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 607,528
<DEPRECIATION> 153,767
<TOTAL-ASSETS> 1,026,642
<CURRENT-LIABILITIES> 0
<BONDS> 0
36,225
0
<COMMON> 511,510
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 1,026,642
<SALES> 163,696
<TOTAL-REVENUES> 163,696
<CGS> 150,167
<TOTAL-COSTS> 160,763
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 689
<INCOME-PRETAX> 3,771
<INCOME-TAX> 1,491
<INCOME-CONTINUING> 2,280
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,280
<EPS-PRIMARY> (.04)
<EPS-DILUTED> 0
</TABLE>
