U.S. 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
EXCHANGE ACT OF 1934
For the quarterly period ended JUNE 30, 1996
[ ] 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 1-14386
STAT HEALTHCARE, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 76-0496236
(State or other jurisdiction (IRS Employer Identification No.)
of incorporation or organization)
12450 GREENSPOINT DRIVE SUITE 1200 HOUSTON, TEXAS 77060
(Address of principal executive offices)
(713)872-6900
(Issuer's telephone number, including area code)
(Former name, former address and former fiscal year, if changed
since last report)
Check 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: 14,974,412 SHARES OF COMMON
STOCK OUTSTANDING AS OF AUGUST 14, 1996.
<PAGE>
STAT HEALTHCARE, INC.
FORM 10-Q
Quarter Ended June 30, 1996
Table of Contents
PART I
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of
Operations
PART II
Item 1. Legal Proceedings
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
INDEX TO FINANCIAL STATEMENTS
<PAGE>
PART I
Item 1. Financial Statements
The unaudited financial statements commencing on page F-1 include the
accounts of STAT Healthcare, Inc. and all majority owned subsidiaries (the
Company) and have been prepared pursuant to the rules and regulations of the
Securities Exchange Commission. Certain information in footnote disclosures
normally included in financial statements prepared in accordance with generally
accepted accounting principles have been condensed or omitted pursuant to these
rules and regulations. In the opinion of management, all adjustments, consisting
only of normal recurring accruals, considered necessary for a fair presentation
have been included. Operating results for interim periods are not necessarily
indicative of the results that may be expected for a full year. For further
information, reference is made to the supplemental consolidated financial
statements and notes thereto included in the Company's Current Report on Form
8-K dated August 9, 1996.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
General
The following discussion and analysis reviews consolidated financial
data for companies which previously reported separately. The consolidation has
been made because of the June 1996 merger of Old STAT and the AmHealth Companies
into STAT Healthcare, Inc. (the Company). This merger has been accounted for as
a pooling of interests.
Old STAT was incorporated on July 29, 1994, and commenced active
operations effective September 1, 1994, pursuant to a management agreement with
South Texas Acute Trauma Physicians, P.A. (STAT Physicians) which had been in
operations since January 1, 1986.
The AmHealth Companies are comprised of a group of corporations and
partnerships with common ownership which were formed at various dates starting
in October 1992 and which commenced operating activities in April 1993.
From a historical perspective, Old STAT's operations were limited to a
single business segment, emergency medical management services. AmHealth's
operations were focused on integrated disease management services comprised of
two identifiable segments, kidney dialysis services and medical management
services which encompass hyperbaric oxygen (HBO) and home healthcare management
services.
The following discussion should be read in conjunction with the audited
supplemental consolidated financial statements of the Company as filed on Form
8-K dated August 9, 1996.
Results of Operations
Three months Ended June 30, 1996 Compared to Three Months Ended June 30, 1995.
Net Service Revenues. Net service revenues increased by $3.6 million,
or 66%, to $9.1 million in 1996 from $5.5 million in 1995. This increase is
comprised of a $1.3 million (68%) increase in disease management revenues and a
$2.3 million (62%) increase in emergency medical management revenues.
The increase in disease management revenues, to $3.2 million in 1996
from $1.9 million in 1995, is primarily attributable to the introduction of new
services and facilities. Kidney dialysis services accounted for approximately
$1.9 million of 1996 revenues and approximately $1.5 million of 1995 revenues,
while medical management services accounted for $1.3 million of 1996 revenues
compared to $.4 million of 1995 revenues.
At June 30, 1996, the Company operated five kidney dialysis centers
compared with three centers at June 30, 1995. Revenues during 1996 attributable
to the new centers approximate $.3 million while revenues attributable to
centers open during both periods increased to $1.8 million from $1.5 million or
a same store growth rate of approximately 20%. Per patient revenue rates
remained relatively constant between the periods. At June 30, 1996, the Company
had approximately 270 dialysis patients compared with approximately 185 patients
at June 30, 1995.
At June 30, 1996, the Company provided management services to one home
healthcare agency, which services commenced in June 1995, and operated two HBO
facilities, one opened in May 1995 and the second opened in April 1996. The
increase in comparative revenues of $.9 million is attributable to a combination
of the short operating history as of June 30, 1995 and the opening of the second
HBO facility in April 1996. In July 1996, the Company announced contracts for
three additional HBO facilities which are expected to be opened during the
fourth quarter of 1996.
The increase in emergency medical management revenues, to $5.9 million
in 1996 from $3.6 million in 1995, is primarily attributable to an increase in
the number of patients treated in 1996 (70,000) compared with 1995 (46,000). The
increase in patients relates to an increase in the number of emergency
departments being served, 18 as of June 30, 1996 compared with 13 at June 30,
1995. During the 1996 period, the Company started providing services at four
additional emergency departments. In July 1996, the Company announced contracts
for services to five additional emergency departments, two of which commenced
July 1 with the remaining three to commence during the fourth quarter of 1996.
Services were terminated by the Company at 4 emergency departments (2 in April
1996 and 2 during the second half of 1995) which were served at June 30, 1995.
Also contributing to the increase in revenues is a 6.8% increase, to $84.50 in
1996 from $79.15 in 1995, in average revenue per patient. The increase in per
patient revenue is due to a pricing increase implemented in February 1996.
Operating Expenses. Operating expenses increased by $2.9 million, or
63%, to $7.5 million in 1996 from $4.6 million in 1995. This percentage increase
closely parallels the comparative increase in net service revenues.
Significant elements comprising operating expenses include: (1)
professional medical fees which increased $1.5 million or 65%; (2) human
resources costs which increased $.8 million or 90%; (3) billing and collection
costs which increased $.2 million or 45%; and (4) supplies costs which increased
$.1 million or 30%. Other combined costs accounted for the remaining increase of
$.3 million. Comments relating to the four identified costs are as follows:
Professional medical fees and billing and collection costs which
increased by 65% and 45%, respectively, are all directly related to emergency
medical services, which revenues increased by 62%. The percentage increase in
professional medical fees slightly exceeded the percentage increase in related
revenues because of rate increases in fees paid to independent contract
physicians. The rate of increase in billing and collection costs was slightly
less than the rate of increase in revenues because of a May 1996 negotiated
reduction in the cost of this contracted service which is based on a percentage
of collections.
The rate of increase in human resources costs exceeded the rate of
increase in revenues. Such costs increased by 90% vs. a revenue increase of 66%.
The disproportionate percentage increase is attributable to the hiring of
administrative and support personnel to accommodate the expanded operations and
contracted future business. Additionally, the home healthcare and HBO services
businesses which were started late in the 1995 period are highly labor intensive
and contribute to an increase in these costs as a percentage of revenues.
Reorganization Costs. The reorganization costs incurred during 1996
relate entirely to the merger between Old STAT and the AmHealth Companies and
consist of transactional costs associated with the process.
Six months Ended June 30, 1996 Compared to Six Months Ended June 30, 1995.
Net Service Revenues. Net service revenues increased by $6.3 million,
or 61%, to $16.7 million in 1996 from $10.4 million in 1995. This increase is
comprised of a $3.2 million (93%) increase in disease management revenues and a
$3.1 million (45%) increase in emergency medical management revenues.
The increase in disease management revenues, to $6.7 million in 1996
from $3.5 million in 1995, is primarily attributable to the introduction of new
services and facilities. Kidney dialysis services accounted for approximately
$3.8 million of 1996 revenues and approximately $2.6 million of 1995 revenues,
while medical management services accounted for $2.9 million of 1996 revenues
compared to $.9 million of 1995 revenues.
At June 30, 1996, the Company operated five kidney dialysis centers
compared with three centers at June 30, 1995. Revenues during 1996 attributable
to the new centers approximate $.6 million while revenues attributable to
centers open during both periods increased to $3.2 million from $2.6 million or
a same store growth rate of approximately 19%. Per patient revenue rates
remained relatively constant between the periods. At June 30, 1996, the Company
had approximately 270 dialysis patients compared with approximately 185 patients
at June 30, 1995.
At June 30, 1996, the Company provided management services to one home
healthcare agency, which services commenced in June 1995, and operated two HBO
facilities, one in May 1995 and the second opened in April 1996. The increase in
comparative revenues of $2.0 million is attributable to a combination of the
short operating history as of June 30, 1995 and the opening of the second HBO
facility in April 1996.
The increase in emergency medical management revenues, to $10.0 million
in 1996 from $6.9 million in 1995, is primarily attributable to an increase in
the number of patients treated in 1996 (124,000) compared with 1995 (90,000).
The increase in patients relates to an increase in the number of emergency
departments being served, 18 as of June 30, 1996 compared with 13 at June 30,
1995. Also contributing to the increase in revenues is a 5% increase, to $80.31
in 1996 from $76.27 in 1995, in average revenue per patient. The increase in per
patient revenue is due to a pricing increase implemented in February 1996.
Operating Expenses. Operating expenses increased by $5.2 million, or
60%, to $13.8 million in 1996 from $8.6 million in 1995. This percentage
increase closely parallels the comparative increase in net service revenues.
Significant elements comprising operating expenses include: (1)
professional medical fees which increased $2.1 million or 47%; (2) human
resource costs which increased $1.9 million or 116%; (3) billing and collection
costs which increased $.3 million or 43%; (4) supplies costs which increased $.3
million or 38%; and (5) liability insurance which increased $.2 million or 54%.
Other combined costs accounted for the remaining increase of $.4 million.
Comments relating to the five identified costs are as follows:
Professional medical fees, liability insurance, and billing and
collection costs which increased by 47%, 54% and 43%, respectively, are all
directly related to emergency medical services, which revenues increased by 45%.
The percentage increase in professional medical fees exceeded the percentage
increase in related revenues because of rate increases in fees paid to
independent contract physicians. The percentage increase in liability insurance
exceeded the percentage increase in patients treated (38%) because of an
increase in premium which is paid on a per patient basis. The average cost for
1996 was approximately $4.00 per patient compared to approximately $3.60 per
patient in the 1995 period. The increase in billing and collection costs was
slightly less than the increase in revenues because of a May 1996 negotiated
reduction in the cost of this contracted service which is based on a percentage
of collections.
The rate of increase in human resource costs exceeded the rate of
increase in revenues. Such costs increased by 75% (vs. revenue increase of 45%)
or $.5 million in emergency medical services and by 146% (vs. revenue increase
of 93%) or $1.4 million in disease management services. The disproportionate
percentage increases are attributable to the hiring of administrative and
support personnel to accommodate the expanded operations and contracted future
business. Additionally, the home healthcare and HBO services businesses which
were started late in the 1995 period are highly labor intensive and contribute
to an increase in these costs as a percentage of revenues.
The increase in supply costs, 38%, is most directly related to the
dialysis business which had increased revenues of 46%. These costs did not
increase at as great a rate as revenues because of economies of scale in
purchasing supplies for expanded operations.
Income Taxes and Proforma Income Taxes. Combined income taxes and
proforma income taxes have been calculated using estimated effective tax rates
of 36% for 1996 and 34% for 1995. Because the AmHealth Companies were S
corporations or partnership entities for federal income tax purposes, no income
taxes were provided on their pre merger incomes. Proforma income taxes represent
the additional taxes which would have been provided had they been subject to
income taxes at the established rates.
Shares Used in Computing Net Income Per Share. Shares used in computing
net income per share are based on the weighted average common shares and common
share equivalents outstanding during the periods presented. For 1996, this
includes 14,888,992 shares outstanding plus approximately 431,000 common share
equivalents relating to warrants and options. For 1995, there were no common
share equivalents because the warrants and options were anti dilutive.
Additionally, merger shares allocable to AmHealth business units included in the
merger but not yet operational as of June 30, 1995 or operational for only a
portion of the period were excluded from or weighted into the 1995 average.
Liquidity and Capital Resources.
Capital requirements of the Company relate principally to three areas.
These are (1) funds required to purchase capital assets for dialysis centers and
equipment for the expansion of existing and opening of new hyperbaric oxygen
facilities; (2) working capital needs associated with the start-up of new
emergency department contracts; and (3) availability of funds for acquisitions
which complement the Company's growth strategy.
Management is actively evaluating new markets for the expansion of the
Company's disease management business and considers either dialysis centers or
hyperbaric oxygen facilities to be the optimum vehicles for market entry. These
ventures are the most capital intensive of the Company's businesses and require
funds to purchase dialysis and hyperbaric oxygen equipment. At July 31, 1996,
the Company had commitments for approximately $0.5 million of hyperbaric oxygen
equipment for new facilities expected to open during the fourth quarter of 1996.
In evaluating individual business segments of the Company, working
capital needs are most extensive as they relate to increases in emergency
department contracts. Experience indicates that upon commencement of new
contracts, periods ranging from 90 to 150 days are required to achieve normal
cash flows. Accordingly, the more rapidly the Company is able to add new
contracts, the greater the working capital needs.
In evaluating growth opportunities, Management expects to consider
acquisitions as well as growth through internal development. Some acquisitions
may be accomplished through the issuance of additional stock; however, it is
expected that cash will be a significant medium in the Company's acquisition
strategy.
Historically, capital requirements have been met through a combination
of sources including: (1) operating cash flows; (2) Old STAT's initial public
offering in April 1995; and (3) lease and bank financings. To posture the
Company for future growth, a new bank credit facility totaling $6.5 million was
negotiated in August 1996. Upon opening of this new facility, $1.5 million will
be utilized to pay off borrowings under the Company's existing credit facility.
Additionally, discussions have just commenced to increase the amount of this new
facility and the Company is considering a secondary public offering of its
common stock. No assurances can be made that the Company will be able to achieve
these latter objectives.
Inflation has not had, nor is it expected to have, a material impact on
the operations and financial condition of the Company.
PART II
Item 1. Legal Proceedings
The Company is not presently a party to any material litigation, nor,
to the knowledge of Management, is any such litigation presently threatened.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
27.1 Financial Data Schedule.
(b) Reports on Form 8-K.
The registrant filed a Current Report on Form 8-K dated June
24, 1996 (Items 1,2 and 7) to report the closing of the
transactions (the "Exchange") contemplated by that certain
Amended and Restated Agreement and Plan of Reorganization,
dates as of March 15, 1996, among the registrant, Old STAT,
Inc. (named "STAT Healthcare, Inc." prior to such
transactions), STAT Acquisition Corp. and the AmHealth
Corporations and AmHealth Partnerships named therein. Such
report incorporated by reference (i) historical financial
statements of Old STAT, Inc., South Texas Acute Trauma
Physicians, P.A. and AmHealth Corporation and its related
healthcare entities, and (ii) unaudited pro forma combined
financial statements of the registrant.
The registrant filed a Current Report on Form 8-K dated August
9, 1996 (Item 5) to include therein the supplemental
consolidated financial statements of the registrant required
following the consummation of the Exchange which was accounted
for using the pooling of interests method.
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
STAT HEALTHCARE, INC.
Date: August 14, 1996 By: Russell D. Schneider
Chairman of the Board and Chief
Executive Officer
(Principal Executive Officer)
Date: August 14, 1996 By:
Ned E. Chapman
Chief Financial Officer
(Principal Financial and Accounting Officer)
STAT HEALTHCARE, INC.
Index to Consolidated Financial Statements
Consolidated Balance Sheets
Consolidated Statements of Income
Consolidated Statement of Cash Flows
Notes to Consolidated Financial Statements
STAT HEALTHCARE, INC. AND SUBSIDIARIES
BALANCE SHEETS
JUNE 30, 1996 AND DECEMBER 31, 1995
<TABLE>
<CAPTION>
June 30, December 31,
1996 1995
(unaudited) (audited)
----------- -----------
<S> <C> <C>
ASSETS
Cash and cash equivalents .......................................................... $ 1,324,000 $ 2,538,000
Accounts receivable, net ........................................................... 7,109,000 4,565,000
Notes receivable ................................................................... 200,000 266,000
Inventories ........................................................................ 78,000 103,000
Prepaid and other current assets ................................................... 132,000 709,000
----------- -----------
Total current assets ..................................................... 8,843,000 8,181,000
Property and equipment, net ........................................................ 3,149,000 2,261,000
Intangible assets, net ............................................................. 1,408,000 --
Other non-current assets ........................................................... 220,000 133,000
----------- -----------
Total assets ............................................................. $13,620,000 $10,575,000
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of long-term debt .................................................. $ 1,486,000 $ 88,000
Current portion of capital lease obligations ....................................... 72,000 48,000
Accrued physicians' fees ........................................................... 1,095,000 706,000
Accounts payable ................................................................... 1,314,000 925,000
Accrued liabilities ................................................................ 436,000 513,000
Distributions payable .............................................................. 861,000 283,000
----------- -----------
Total current liabilities ................................................ 5,264,000 2,563,000
Long-term debt ..................................................................... 289,000 156,000
Long-term capital lease obligations ................................................ 1,993,000 1,484,000
----------- -----------
Total liabilities ........................................................ 7,546,000 4,203,000
----------- -----------
Stockholders' equity:
Preferred stock, $.01 par value. Authorized 5,000,000
shares; Series A convertible, no shares outstanding ......................... -- --
Common Stock, $.01 par value. Authorized 40,000,000
shares; issued and outstanding, 14,902,472
and 14,823,332, respectively ................................................ 149,000 148,000
Capital in excess of par value ................................................ 5,731,000 4,204,000
Retained earnings ............................................................. 194,000 2,020,000
----------- -----------
Total stockholders' equity ............................................... 6,074,000 6,372,000
----------- -----------
Commitments and contingencies
Total liabilities and stockholders' equity ............................... $13,620,000 $10,575,000
=========== ===========
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
STAT HEALTHCARE, INC. AND SUBSIDIARIES
STATEMENTS OF INCOME
QUARTERS ENDED JUNE 30, 1995 AND 1996
SIX MONTHS ENDED JUNE 30, 1995 AND 1996
(UNAUDITED)
<TABLE>
<CAPTION>
Quarter Quarter Six months Six months
ended ended ended ended
June 30, 1996 June 30, 1995 June 30, 1996 June 30, 1995
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Net service revenues ......................... $ 9,114,000 $ 5,502,000 $ 16,663,000 $ 10,375,000
------------ ------------ ------------ ------------
Operating expenses:
Professional medical fees ............... 3,871,000 2,348,000 6,695,000 4,548,000
Human resources ......................... 1,769,000 929,000 3,516,000 1,625,000
Supplies ................................ 570,000 440,000 1,136,000 822,000
Billing and collection costs ............ 551,000 381,000 996,000 697,000
Liability insurance ..................... 259,000 181,000 499,000 324,000
Other costs ............................. 474,000 318,000 938,000 575,000
------------ ------------ ------------ ------------
Total operating expenses ........... 7,494,000 4,597,000 13,780,000 8,591,000
------------ ------------ ------------ ------------
Operating income ................... 1,620,000 905,000 2,883,000 1,784,000
Interest income .............................. 5,000 28,000 17,000 31,000
Interest expense ............................. (86,000) (27,000) (150,000) (60,000)
Reorganization costs ......................... (1,269,000) -- (1,269,000) --
------------ ------------ ------------ ------------
Income before income taxes ......... 270,000 906,000 1,481,000 1,755,000
Income taxes ................................. (121,000) 104,000 (44,000) 181,000
------------ ------------ ------------ ------------
Net income ......................... $ 391,000 $ 802,000 $ 1,525,000 $ 1,574,000
============ ============ ============ ============
Proforma income taxes ........................ 218,000 204,000 577,000 416,000
------------ ------------ ------------ ------------
Proforma net income ................ $ 173,000 $ 598,000 $ 948,000 $ 1,158,000
============ ============ ============ ============
Proforma net income per common share $ 0.01 $ 0.06 $ 0.06 $ 0.13
============ ============ ============ ============
Number of shares used in computing
proforma net income per share ................ 15,424,275 10,555,628 15,320,433 9,077,613
============ ============ ============ ============
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
STAT HEALTHCARE, INC. AND SUBSIDIARIES
STATEMENT OF CASH FLOWS
SIX MONTHS ENDED JUNE 30, 1996
(UNAUDITED)
Six months
ended
June 30, 1996
-----------
Cash flows from operating activities
Net income .............................................. $ 1,525,000
-----------
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Depreciation and amortization ...................... 238,000
Increase in deferred tax liability ................. 50,000
Changes in assets and liabilities
Increase in net accounts receivable ............ (2,544,000)
Decrease in inventories ........................ 25,000
Decrease in prepaid and other current assets ... 627,000
Increase in other non-current assets ........... (92,000)
Increase in accrued physicians' fees ........... 389,000
Increase in accounts payable ................... 389,000
Decrease in accrued liabilities ................ (127,000)
-----------
Total Adjustments .............................. (1,045,000)
-----------
Net cash provided by
operating activities ...................... 480,000
-----------
Cash flows from investing activities:
Repayment of notes receivable ......................... 66,000
Purchase of HEMA assets ............................... (960,000)
Purchase of Amedica assets ............................ (200,000)
Purchase of property and equipment .................... (243,000)
-----------
Net cash used in investing activities ....... (1,337,000)
-----------
Cash flows from financing activities:
Distributions to AmHealth owners ...................... (1,605,000)
Net borrowings under line of credit agreement ......... 1,250,000
Issuance of long-term debt ............................ 285,000
Repayment of long-term debt ........................... (203,000)
Repayments of capital lease obligations ............... (84,000)
-----------
Net cash used in
financing activities ...................... (357,000)
-----------
Net decrease in cash and cash equivalents .................... (1,214,000)
Cash and cash equivalents at beginning of period ............. 2,538,000
-----------
Cash and cash equivalents at end of period ................... $ 1,324,000
===========
See accompanying notes to unaudited consolidated financial statements.
STAT HEALTHCARE, INC.
Notes to Consolidated Financial Statements
June 30, 1996
(1) Financial Statement Presentation
The accompanying consolidated financial statements of STAT Healthcare,
Inc. (the Company) present financial information as of June 30, 1996 and
December 31, 1995 and for the three and six month periods ended June 30, 1996
and 1995. Because these financial statements are unaudited and do not include
all disclosures required by generally accepted accounting principles, they
should be read in conjunction with the Company's audited summary consolidated
financial statements which were filed on Form 8-K dated August 9, 1996. In the
opinion of management, all adjustments (consisting only of normal recurring
estimates) necessary for a fair presentation of the financial information for
the periods reported have been made. Results of operations for the three and six
month periods ended June 30, 1996 are not necessarily indicative of the results
for the year ending December 31, 1996.
Consolidated income statement and cash flow information combines the
results of operations and cash flows of the Company, its subsidiaries and its
affiliated physician groups.
(2) Net Income Per Common Share
Net income per common share is computed based on the number of common
and common equivalent shares of the Company. Equivalent shares are attributable
to outstanding warrants and options to purchase common shares.
F-5
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 1,324,000
<SECURITIES> 132,000
<RECEIVABLES> 7,309,000
<ALLOWANCES> 0
<INVENTORY> 78,000
<CURRENT-ASSETS> 8,843,000
<PP&E> 4,777,000
<DEPRECIATION> 0
<TOTAL-ASSETS> 13,620,000
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 149,000
<OTHER-SE> 5,925,000
<TOTAL-LIABILITY-AND-EQUITY> 13,620,000
<SALES> 9,114,000
<TOTAL-REVENUES> 9,114,000
<CGS> 0
<TOTAL-COSTS> 8,758,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 86,000
<INCOME-PRETAX> 270,000
<INCOME-TAX> 97,000
<INCOME-CONTINUING> 173,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 173,000
<EPS-PRIMARY> .01
<EPS-DILUTED> .01
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