SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X ] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended March 31, 1998
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 1-12271
CARSON, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 06-1428605
(State or other jurisdiction of incorporation (I.R.S. Employer Identification
or organization) Number)
64 Ross Road, Savannah Industrial Park
Savannah, Georgia 31405
(Address, including zip code, of principal executive offices)
Registrant's telephone number, including area code:(912) 651-3400
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
At May 1, 1998, 5,005,003 shares of the registrant's Class A Common Stock,
par value $0.01 per share, 1,859,677 shares of the registrant's Class B Common
Stock, par value $0.01 per share, and 8,127,937 shares of the registrant's Class
C Common Stock, par value $0.01 per share were outstanding.
<PAGE>
CARSON, INC.
INDEX
Part I. Financial Information Page
Item 1.
Condensed Consolidated Balance Sheets
March 31, 1998 and December 31, 1997................................3
Condensed Consolidated Statements of Operations
Three Months Ended March 31, 1998 and 1997.........................4
Condensed Consolidated Statements of Cash Flow
Three Months Ended March 31, 1998 and 1997.........................5
Notes to Condensed Consolidated Financial Statements................6-7
Item 2.
Management's Discussion and Analysis of Financial Condition
and Results of Operations......................................... 8-11
Part II. Other Information................................................. 12
Signatures......................................................... 13
2
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<TABLE>
CARSON, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
MARCH 31, 1998 AND DECEMBER 31, 1997
(In thousands)
<S> <C> <C>
March 31, December 31,
ASSETS 1998 1997
------------- -------------
(Unaudited)
CURRENT ASSETS:
Cash and cash equivalents ..................................................................... $ 5,184 $ 14,043
Accounts receivable (less allowance for doubtful accounts and returns of $2,307
and $3,881 at March 31, 1998 and December 31, 1997, respectively) .................... 30,111 28,148
Inventories, net .............................................................................. 28,936 24,861
Other current assets .......................................................................... 905 832
------------- -------------
Total current assets ................................................................. 65,136 67,884
PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation ................................... 22,288 22,202
INVESTMENT IN AM COSMETICS ....................................................................... 3,695 3,587
INTANGIBLES, net ................................................................................. 99,700 100,385
OTHER ASSETS ..................................................................................... 7,427 7,366
------------- -------------
TOTAL ASSETS ................................................................... $ 198,246 $ 201,424
============= =============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable ............................................................................... $ 10,152 $ 8,567
Due for A&J Cosmetics .......................................................................... 4,003 5,416
Accrued expenses ............................................................................... 9,426 7,413
Income taxes payable ........................................................................... 1,927 1,544
------------- -------------
Total current liabilities ............................................................. 25,508 22,940
LONG-TERM DEBT ................................................................................... 102,534 103,623
DUE FOR A&J COSMETICS ............................................................................ -- 4,088
DEFERRED INCOME TAXES AND OTHER LIABILITIES ...................................................... 1,705 1,742
MINORITY INTEREST IN SUBSIDIARY .................................................................. 7,636 7,500
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value, 10,000,000 shares authorized, none outstanding ............... -- --
Common stock:
Class A, voting, $.01 par value, 150,000,000 shares authorized and 5,018,248 shares
issued ................................................................................ 50 50
Class B, nonvoting, $.01 par value, 2,000,000 shares authorized and 1,859,677 shares
issued and outstanding ................................................................ 19 19
Class C, voting, $.01 par value, 13,000,000 shares authorized and 8,127,937 shares
issued and outstanding ................................................................ 81 81
Paid-in capital ............................................................................... 69,018 69,022
Accumulated deficit ........................................................................... (4,512) (4,011)
Accumulated other comprehensive losses ........................................................ (2,308) (2,170)
Note receivable from employee shareholders, net of discount ................................... (1,378) (1,353)
Treasury stock, 13,245 shares of Class A common stock ......................................... (107) (107)
------------- -------------
Total stockholders' equity ............................................................... 60,863 61,531
------------- -------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY ..................................... $ 198,246 $ 201,424
============= =============
See notes to condensed consolidated financial statements.
</TABLE>
3
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<TABLE>
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CARSON, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
(In thousands, except per share data)
Three Months Ended March 31,
1998 1997
------------- -------------
Net sales ............................................................................ $ 31,797 $ 17,932
Cost of goods sold ................................................................... 15,378 7,880
------------- -------------
Gross profit ......................................................................... 16,419 10,052
Expenses:
Marketing and selling ....................................................... 8,691 5,724
General and administrative .................................................. 5,948 2,729
------------- -------------
14,639 8,453
------------- -------------
Operating income ..................................................................... 1,780 1,599
Interest expense ..................................................................... (2,837) (604)
Other income, net .................................................................... 221 223
------------- -------------
(Loss) income before income taxes .................................................... (836) 1,218
Benefit from (provision for) income taxes ............................................ 335 (536)
------------- -------------
Net (loss) income .................................................................... $ (501) $ 682
============= =============
Basic and diluted net (loss) income per common share ................................. $ (0.03) $ 0.05
============= =============
Weighted average common
shares outstanding .......................................................... 14,993 14,984
============= =============
See notes to condensed consolidated financial statements.
</TABLE>
4
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<TABLE>
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CARSON, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
FOR THE THREE MONTHS ENDED MARCH 31, 1998 AND 1997
(In thousands)
Three months ended March 31,
1998 1997
-------- --------
OPERATING ACTIVITIES:
Net (loss) income .................................................................... $ (501) $ 682
Adjustments to reconcile net (loss) income to
net cash used in operating activities:
Depreciation and amortization .................................................... 1,608 544
Provision for doubtful accounts .................................................. 103 112
Other, net ....................................................................... 20 6
Changes in operating assets and liabilities,
net of acquisitions:
Accounts receivable .......................................................... (2,066) (154)
Inventories .................................................................. (4,075) (4,685)
Other current assets ......................................................... (7) 1,021
Accounts payable ............................................................. 1,585 (518)
Income taxes payable ......................................................... 383 869
Accrued expenses ............................................................. 2,013 (2,286)
-------- --------
Total adjustments ........................................................ (436) (5,091)
-------- --------
Net cash used in operating activities ............................................ (937) (4,409)
-------- --------
INVESTING ACTIVITIES:
Additions to property, plant and equipment ........................................... (1,090) (1,188)
Acquisitions of business assets, net of cash acquired ................................ -- 107
-------- --------
Net cash used in investing activities ............................................ (1,090) (1,081)
-------- --------
FINANCING ACTIVITIES:
Proceeds from long-term borrowings ................................................... 2,000 5,113
Principal payments on long-term debt ................................................. (3,089) (650)
Payment on A&J Cosmetics payable ..................................................... (5,416) --
Other, net ........................................................................... (327) (23)
-------- --------
Net cash (used in) provided by financing activities ................................ (6,832) 4,440
-------- --------
NET DECREASE IN CASH AND CASH EQUIVALENTS .............................................. (8,859) (1,050)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD ....................................... 14,043 4,191
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD ............................................. $ 5,184 $ 3,141
======== ========
See notes to condensed consolidated financial statements.
</TABLE>
5
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CARSON, INC
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. Basis of Presentation
The accompanying condensed consolidated interim financial statements of
Carson, Inc. (the "Company") presented herein have been prepared by the Company,
without audit, pursuant to the rules and regulations of the Securities and
Exchange Commission. Certain information and footnote disclosures normally
included in annual financial statements prepared in accordance with generally
accepted accounting principles have been omitted from these consolidated
financial statements pursuant to applicable rules and regulations of the
Securities and Exchange Commission. These financial statements should be read in
conjunction with the audited Consolidated Financial Statements and the notes
thereto of the Company's 1997 Annual Report on Form 10-K. In the opinion of
management, the accompanying unaudited financial statements contain all normal
recurring adjustments necessary to present fairly the Company's financial
position, results of operations and cash flows at the dates and for the periods
presented. Interim results of operations are not necessarily indicative of the
results to be expected for a full year. Certain prior period amounts have been
reclassified to conform with the current period presentation.
2. Inventories
Inventories are summarized as follows (in thousands):
March 31, 1998 December 31, 1997
------------------------------ ---------------------------
Raw materials $12,468 $10,873
Work-in-process 1,871 1,651
Finished goods 14,597 12,337
------------------------------ ---------------------------
$28,936 $24,861
============================== ===========================
6
<PAGE>
3. Acquisition
On April 30, 1997, the Company purchased the rights to sell,
distribute, package, manufacture and market Cutex nail polish remover, nail
enamel, nail care treatment products and nail care implements in the United
States and Puerto Rico. Unaudited pro forma results have been prepared for
comparative purposes only and include certain adjustments, such as an adjustment
to cost of goods sold per a manufacturing agreement between the Company and
Chesebrough-Pond's USA Co., additional goodwill amortization, additional selling
expenses related to an agreement between the Company and AM Cosmetics and
additional interest expense on acquisition debt, among others. The following
unaudited pro forma results are not necessarily indicative of what the actual
consolidated results of operations might have been if the Cutex acquisition had
been in effect as of the beginning of fiscal 1997, or of future results of
operations of the consolidated Company (in thousands except per share amounts):
Three Months Ended
March 31, 1997
(Pro forma)
-------------------------
Net sales $21,981
Net (loss) income $742
Basic and diluted (loss) income per share $0.05
4. New Accounting Pronouncements
Statement of Financial Accounting Standards No. 130, "Reporting
Comprehensive Income" ("SFAS No. 130") is effective for the Company's fiscal
year ending December 31, 1998. SFAS No. 130 establishes standards for reporting
and displaying comprehensive income and its components (revenues, expenses,
gains and losses) in a full set of general- purpose financial statements. The
Company has adopted SFAS No. 130 in the current fiscal year as required.
Comprehensive income for the three months ended March 31, 1998 was a loss of
$639,000 and included a net loss of $501,000 and a loss of $138,000 for the
effects of foreign currency translation adjustments. Comprehensive income for
the three months ended March 31, 1997 was $661,000 and included net income of
$682,000 and a loss of $21,000 for the effects of foreign currency translation
adjustments.
Statement of Financial Accounting Standards No. 131, "Disclosures about
Segments of an Enterprise and Related Information" ("SFAS No. 131") is also
effective for the Company's fiscal year ending December 31, 1998. SFAS No. 131
establishes standards for the way that public business enterprises report
information about operating segments in annual financial statements and requires
that those enterprises report selected information about operating segments in
interim financial reports issued to shareholders. This statement does not
significantly alter the segment disclosures the Company provides.
7
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Management's Discussion and Analysis of
Results of Operations and Financial Condition
OVERVIEW
Forward-looking Statements
This report on Form 10-Q as well as other public documents of the
Company contain forward-looking statements which involve risks and
uncertainties, including (i) the Company's plans to introduce new products and
product enhancements, (ii) the Company's plans to make selective acquisitions,
(iii) the Company's marketing, distribution and manufacturing expansion plans,
(iv) future financial performance, (v) cash flows from operations, (vi) capital
expenditures, (vii) the availability of funds from currently available credit
facilities and (viii) the cost and timely implementation of the Company's Year
2000 compliance modifications. The Company's actual results may differ
materially from those discussed in such forward-looking statements. When used
herein and in the Company's future filings, the terms "expects", "plans",
"intends", "estimates", "projects", or "anticipates" or similar expressions are
intended to identify forward-looking statements (within the meaning of Section
21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act")).
Such statements reflect the current views of the Company with respect to future
events and are subject to certain risks, uncertainties and assumptions. In
addition to risk factors that may be described in the Company's filings with the
Securities and Exchange Commission (the "Commission") (including this filing,
the Company's IPO prospectus dated October 14, 1996,the Company's exchange offer
prospectus dated December 19, 1997 and the Company's 1997 Annual Report on Form
10-K), actual results could differ materially from those expressed in any
forward-looking statements made by the Company. Such risks, uncertainties and
factors include, but are not limited to, foreign business risks, industry
cyclicality, fluctuations in customer demand and order pattern, the seasonal
nature of the business, changes in pricing, the identification of suitable
acquisition candidates, changes in the implementation of the Company's
acquisition plans, the availability of financing, and general economic
conditions, as well as other risks detailed in the Company's filings with the
Securities and Exchange Commission. Additional risk factors include, but are not
limited to, the following: (a) the Company's success in implementing its growth
strategy, including its success in obtaining financing where required, (b)
difficulties or delays in developing and introducing new products or the failure
of consumers to accept new product offerings, (c) changes in consumer
preferences, including reduced consumer demand for the Company's current
products, (d) the nature and extent of future competition in the Company's
principal marketing areas, and (e) political, economic and demographic
developments in the United States, Africa, Brazil, the Caribbean, Europe and
other countries where the Company now does or in the future may do business.
General
The Company is a leading manufacturer and marketer in the United States
of selected personal care products for both the ethnic market and the mass
market. The Company believes that it is one of the leading global manufacturers
and marketers of ethnic hair care products for persons of African descent. The
Company's flagship brand, Dark & Lovely, is the most widely recognized ethnic
brand name in the United States retail ethnic hair care market. The Company
currently sells over 70 different products specially formulated to address the
unique physiological characteristics of persons of African descent under six
principal brand names, including Dark & Lovely, Excelle, Beautiful Beginnings,
Dark & Natural, Magic and Let's Jam. The majority of the Company's net sales
have historically been derived from hair relaxers and texturizers, which are
used to chemically treat and straighten hair ( constituting approximately 50% of
the Company's sales in 1997), hair color, men's depilatory products and hair
care maintenance products, primarily for persons of African descent. The Company
is expanding its product offerings to other segments of the ethnic personal care
market, including cosmetics and skin care products. In addition, the Company is
a leading marketer of nail care products to the United States mass market under
the Cutex brand name.
8
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In the three months ended March 31, 1998, approximately 35.0% of the
net sales of the Company were to customers outside the United States as compared
to 33.9% in the first quarter of the prior fiscal year. The following table
presents the Company's net sales by geographic region for these periods (dollars
are in thousands):
Net sales to: 1998 % 1997 %
--------------- ---------------- ---------------- -----------
United States $20,650 65.0% $11,860 66.1%
Africa 7,805 24.5 2,567 14.3
Other 3,342 10.5 3,505 19.6
--------------- ---------------- ---------------- -----------
Total $31,797 100.0% 17,932 100.0%
=============== ================ ================ ===========
With the exception of sales in South Africa, Botswana, Lesotho, Namibia and
Swaziland, which are denominated in South African Rand, all of the Company's
sales are recorded in U.S. Dollars. The Company does not view the exposure to
Rand exchange rate fluctuations as significant because the South African
subsidiary, Carson Holdings, Limited ("Carson South Africa"), incurs
substantially all of its costs in Rand. Assets and liabilities of Carson South
Africa are translated for consolidation purposes from South African Rand into
U.S. Dollars at the rate of currency exchange at the end of the fiscal period.
Revenues and expenses are translated at average monthly prevailing exchange
rates. Resulting translation differences are recognized as a component of
stockholders' equity.
Results of Operations
Quarter Ended March 31, 1998 Compared to Quarter Ended March 31, 1997
Net Sales. Consolidated net sales for the quarter ended March 31, 1998 of $31.8
million increased $13.9 million, or 77.3%, over quarter ended March 31, 1997.
This increase is summarized as follows (dollars are in thousands):
Quarter Ended Quarter Ended
March 31, 1998 March 31, 1997 % Change
----------------- ------------------- ---------
Domestic core $13,336 $11,860 12.5
Cutex 5,481 - -
Let's Jam 1,141 - -
Salon Professional and Cosmetics 692 - -
----------------- ------------------- ---------
Total Domestic 20,650 11,860 74.1
----------------- ------------------- ---------
South Africa 7,805 2,567 204.1
Other International 3,342 3,505 (4.7)
----------------- ------------------- ---------
Total International 11,147 6,072 83.6
----------------- ------------------- ---------
Consolidated $31,797 $17,932 77.3
================= =================== =========
9
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Sales of the Company's domestic core business, ethnic hair care products,
amounted to $13.3 million in the quarter ended March 31, 1998, an increase of
$1.5 million, or 12.5%, compared to the quarter ended March 31, 1997.Despite
this increase,the domestic ethnic hair care industry continues to be soft,
reflecting in part the effects of drug chain consolidation.Drugstores represent
the largest source of retail sales for the domestic core business.
Gross Profit. Gross profit increased to $16.4 million in the quarter ended March
31, 1998 from $10.1 million in the quarter ended March 31, 1997. Gross margin
decreased to 51.6% for the quarter ended March 31, 1998 from 56.1% for the same
quarter in 1997. The decrease in gross margin is due in part to geographic and
product shifts in the sales mix and to decreased production volumes. A
geographic shift has occurred as Carson South Africa's net sales accounted for
25% of consolidated net sales in the quarter ended March 31, 1998, compared to
14% of consolidated net sales in the quarter ended March 31, 1997. The effect of
this shift was to lower consolidated gross margin by 2.5 points, as Carson South
Africa has lower gross margins than in the U.S. Gross margin has also decreased
due to the addition of the Let's Jam products, which generated a relatively low
gross margin, primarily due to high packaging costs. Management is working on
packaging changes and is also considering pricing changes to bring these
products more in line with the Company's normal gross margin. Finally, gross
margin was adversely impacted by reduced production volumes in the Savannah
plant, brought about by the decision to reduce inventory balances.
Marketing and Selling Expenses. Marketing and selling expenses increased to $8.7
million in the quarter ended March 31, 1998 from $5.7 million in the quarter
ended March 31, 1997, an increase of 52.6%. This increase was primarily due to
the additions of Cutex, Let's Jam and Dark & Lovely Cosmetics as well as
expanded marketing to support Carson South Africa sales. As a percentage of net
sales, these expenses decreased to 27.3% during this period from 31.9% during
the comparable period in 1997.
General and Administrative Expense. General and administrative expenses
increased to $5.9 million in the quarter ended March 31, 1998 from $2.7 million
in the quarter ended March 31, 1997, an increase of 118.0%. As a percentage of
net sales, general and administrative expenses increased to 18.7% during this
period from 15.2% during the comparable period in 1997. This increase was due in
part to increased amortization of intangibles related to recent acquisitions
combined with increased professional fees and personnel costs associated with
the enhancement of infrastructure needed to support the Company's anticipated
growth.
Operating Income. As a result of the above changes, operating income increased
to $1.8 million in the quarter ended March 31, 1998 from $1.6 million in the
quarter ended March 31, 1997.
Interest Expense. Interest expense increased significantly to $2.8 million in
the quarter ended March 31, 1998 from $604,000 in the quarter ended March 31,
1997. The increased interest expense was the result of additional debt incurred
in 1997 to finance acquisitions, which was subsequently refinanced with the
proceeds from the sale of $100 million aggregate principal amount of 10 year 10
3/8 % Senior Subordinated Notes.
Other Income. Other income was flat for the quarter ended March 31, 1998
compared to the same quarter of 1997.
Provision for Taxes. The provision for taxes decreased to a benefit of $335,000,
based on an effective rate of 40%, in the quarter ended March 31, 1998 from an
expense of $536,000, based on an effective rate of 44%, in the quarter ended
March 31, 1997. The effective tax rate has decreased from 1997 due to the larger
impact of the earnings of Carson South Africa, which are taxed at lower rates
than the earnings in the United States.
Liquidity and Capital Resources
In the three months ended March 31, 1998, net cash used in operations was
$937,000 largely as a result of a $4.1 million increase in inventory and a $2.1
million increase in accounts receivable offset by a $1.6 million increase in
accounts payable and a $2.0 million increase in accrued expenses. The increase
in inventory is attributable to increased sales of Carson South Africa and
higher cosmetics inventories in preparation for the full launch of Dark & Lovely
Cosmetics.
Net cash used in investing activities for the three months ended March 31,
1998 consisted of capital expenditures of $1.1 million.
10
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Net cash used in financing activities for the three months ended March 31,
1998 totaled $6.8 million primarily as a result of the scheduled payment of $5.4
million for the purchase of A&J Cosmetics and a $1.0 million decrease in the
Company's outstanding revolver balance.
The Company believes that cash flow from operating activities, existing
cash balances and available borrowings under its Amended and Restated Credit
Agreement will be sufficient to fund working capital requirements, capital
expenditures and debt service requirements in the foreseeable future. In
addition, the Company is considering liquidating part of its ownership in Carson
South Africa and thereby generating significant funds which would be available
for a strategic acquisition or repayment of existing debt.
Year 2000 Computer Issue
The Company currently utilizes two computer information systems. The JD Edwards
financial package is used to support several financial applications. In its
distribution and manufacturing operations, the Company uses a software package
known as PRISM developed by MARCAM. The JD Edwards and PRISM packages run on an
IBM AS/400 computer and are currently not year 2000 compliant.
The Company has two options to achieve year 2000 compliance with its core
business information systems. Option 1 is to upgrade the JD Edwards and PRISM
software with the year 2000 compliant releases. The newer release of the PRISM
software has additional features and functionality that would require a
significant amount of consulting to assist with installation and training.
Management estimates the cost of this option at $100,000 to $300,000 and
believes that option 1 could be functional by December 31, 1998.
Option 2 is to install a single vendor solution. This option would achieve both
year 2000 compliance and install a single vendor, integrated business software
package. Management estimates the cost of option 2 to be $500,000 to $750,000.
Management believes that option 2 could be functional by the end of the first
quarter of 1999.
Management will make the final decision on this issue and take action to
implement it in the second quarter of 1998.
11
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CARSON, INC.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
The Company is party to lawsuits incidental to its business. Management
believes that the ultimate resolution of these matters will not have a material
adverse impact on the business or financial condition and operations of the
Company.
Item 2. Changes in Securities
None
Item 3. Defaults upon Senior Securities
None
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 --
27 Financial data schedule.
(b) Reports on Form 8-K --
None
12
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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.
CARSON, INC.
/s/ Roy Keith
Roy Keith Date: May 15, 1998
Chairman and Chief Executive Officer
/s/ Robert W. Pierce
Robert W. Pierce Date: May 15, 1998
Executive Vice President and Chief Financial Officer
(Principal Financial Officer)
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated financial statements of the Company for the period ended March 31,
1998 and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U. S. Dollars
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<EXCHANGE-RATE> 1.0
<CASH> 5,184
<SECURITIES> 0
<RECEIVABLES> 32,418
<ALLOWANCES> 2,307
<INVENTORY> 28,936
<CURRENT-ASSETS> 65,136
<PP&E> 25,508
<DEPRECIATION> 3,220
<TOTAL-ASSETS> 198,246
<CURRENT-LIABILITIES> 25,508
<BONDS> 102,534
0
0
<COMMON> 150
<OTHER-SE> 60,713
<TOTAL-LIABILITY-AND-EQUITY> 198,246
<SALES> 31,797
<TOTAL-REVENUES> 31,797
<CGS> 15,378
<TOTAL-COSTS> 15,378
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 103
<INTEREST-EXPENSE> 2,837
<INCOME-PRETAX> (836)
<INCOME-TAX> (335)
<INCOME-CONTINUING> (501)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (501)
<EPS-PRIMARY> (0.03)
<EPS-DILUTED> (0.03)
</TABLE>
