<PAGE> 1
UNITED STATES
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, 1999 OR
[ ] TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934.
FOR THE TRANSITION PERIOD FROM _________ TO _________.
COMMISSION FILE NUMBER
PENTEGRA DENTAL GROUP, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
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DELAWARE 76-045043
(STATE OR OTHER JURISDICTION (I.R.S. EMPLOYER
OF INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
2999 NORTH 44TH STREET, SUITE 650, PHOENIX, ARIZONA 85018
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
</TABLE>
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (602) 952-1200
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 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 [ ]
The number of shares of Common Stock of the Registrant, par value $.001
per share, outstanding at August 9, 1999, was 10,845,672.
1
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FORM 10-Q REPORT INDEX
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10-Q PART AND ITEM NO. Page
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PART I - FINANCIAL INFORMATION
Item 1 - Consolidated Financial Statements (unaudited)
Consolidated Balance Sheets as of June 30, 1999 and
March 31, 1999............................................................................ 3
Consolidated Statements of Operations for the Three Months Ended June
30 1999, and June 30, 1998................................................................ 4
Consolidated Statement of Changes in Shareholders'
Equity as of June 30, 1999................................................................ 5
Consolidated Statements of Cash Flows for the Three
Months Ended June 30, 1999 and June 30, 1998.............................................. 6
Notes to Consolidated Financial Statements ............................................... 7
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations....................................................... 9
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings..................................................................... 12
Item 4 - Submission of Matters to a Vote of Security Holders................................... 12
Item 5 - Other Information..................................................................... 12
Item 6 - Exhibits and Reports on Form 8-K...................................................... 12
Signature...................................................................................... 12
</TABLE>
2
<PAGE> 3
PART 1 - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
PENTEGRA DENTAL GROUP, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(unaudited)
(in thousands, except per share data)
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June 30, March 31,
1999 1999
-------- ---------
(Unaudited)
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Assets
------
Current assets:
Cash and cash equivalents $ 1,395 $ 1,047
Receivables from affiliated practices,
net of allowance for doubtful
accounts of $125 at June 30, 1999
and March 31, 1999 6,184 5,659
Prepaid and other current assets 438 465
Notes receivable from affiliated practices -
current 307 286
------- -------
Total current assets 7,324 7,457
Property and equipment, net 6,289 6,171
Intangible assets, net 21,900 21,848
Notes receivable from affiliated practice 923 971
Deferred tax asset 680 680
------- -------
Total assets $37,116 $37,127
======= =======
Liabilities and Shareholders' Equity
------------------------------------
Current liabilities:
Accounts payable and accrued liabilities $ 1,393 $ 1,756
Accrued employment agreement 910 940
Current portion of long term debt - 537
------- -------
Total current liabilities 2,303 3,233
Line of credit 8,500 8,000
Convertible subordinated notes 4,566 4,566
Shareholders' notes 568 568
Commitments and contingencies
Shareholders' equity
Common stock, $.001 par value 40,000,000
shares authorized, 9,102,503 issued
and outstanding at June 30, 1999 and
March 31, 1999 9 9
Additional paid-in capital 21,823 21,823
Accumulated deficit (653) (1,072)
------- -------
Total shareholders' equity 21,179 20,760
------- -------
Total liabilities and shareholders' equity $37,116 $37,127
======= =======
</TABLE>
The accompanying notes are an integral part of the financial statements
3
<PAGE> 4
PENTEGRA DENTAL GROUP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
(in thousands, except per share data)
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<CAPTION>
Three Months Ended
June 30,
1999 1998
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Net revenue $12,449 $7,412
Operating expenses:
Clinical salaries, wages and benefits 5,126 2,836
Dental supplies and lab fees 2,225 1,220
Rent 833 550
Advertising and marketing 269 111
General and administrative 1,005 876
Other operating expenses 1,554 751
Depreciation and amortization 532 171
-------- --------
Total operating expenses 11,544 6,515
-------- --------
Earnings from operations 905 897
Interest expense 246 3
Interest income (39) (43)
-------- --------
Income before income taxes 698 937
Income taxes 279 263
-------- --------
Net income $ 419 $ 674
======== ========
Basic and diluted earnings per share $ 0.05 $ 0.10
======== ========
Weighted average number of shares
outstanding - basic and diluted 9,103 6,886
======== ========
</TABLE>
The accompanying notes are an integral part of the financial statements
4
<PAGE> 5
PENTEGRA DENTAL GROUP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(UNAUDITED)
(in thousands)
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<CAPTION>
Additional Total
Common Stock Paid-In Accumulated Shareholders'
Shares Amount Capital Deficit Equity
<S> <C> <C> <C> <C> <C>
Balances, March 31, 1999 9,103 $ 9 $21,823 $(1,072) $20,760
Net income -- -- -- 419 419
----- --- ------- ------- -------
Balance, June 30, 1999 9,103 $ 9 $21,823 $ (653) $21,179
===== === ======= ======= =======
</TABLE>
The accompanying notes are an integral part of the financial statements
<PAGE> 6
PENTEGRA DENTAL GROUP, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
(in thousands)
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Three Months Ended
June 30,
1999 1998
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Net cash provided by (used in) operating activities...................... $ 1,060 $(2,792)
Cash flows from investing activities
Capital expenditures................................................ (390) (252)
Acquisitions of affiliated dental practices, net of cash acquired... (849) (2,782)
Issuance of notes receivable........................................ -- (718)
Repayment of notes receivable....................................... 27 --
------ -------
Net cash used in investing activities.......................... (1,212) (3,752)
======= =======
Cash flows from financing activities
Proceeds from issuance of common stock.............................. -- 2,930
Proceeds from line of credit........................................ 500 --
------ -------
Net cash provided by financing activities...................... 500 2,930
======= =======
Net change in cash and cash equivalents.................................. 348 (3,614)
Cash and cash equivalents, beginning of period........................... 1,047 6,708
------ -------
Cash and cash equivalents, end of period................................. $ 1,395 $ 3,094
======= =======
</TABLE>
The accompanying notes are an integral part of the financial statements
6
<PAGE> 7
PENTEGRA DENTAL GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. ORGANIZATION AND BASIS OF PRESENTATION
Pentegra Dental Group, Inc. (the "Company") provides practice management
services to dental practices throughout the United States. As of June 30, 1999,
the Company managed 85 affiliated practices ("Affiliated Practices") in 27
states.
The unaudited consolidated financial statements included herein have been
prepared by the Company, pursuant to the rules and regulations of the Securities
and Exchange Commission (the "SEC"). Pursuant to such regulations, certain
information and footnote disclosures normally included in financial statements
prepared in accordance with generally accepted accounting principles have been
condensed or omitted. The Company believes the presentation and disclosures
herein are adequate to make the information not misleading, but do not purport
to be a complete presentation inasmuch as all note disclosures required by
generally accepted accounting principles are not included. In the opinion of
management, the consolidated financial statements reflect all elimination
entries and normal adjustments that are necessary for a fair presentation of the
results for the interim periods ended June 30, 1999 and 1998.
Fiscal operating results for interim periods are not necessarily indicative of
the results for full years. It is suggested that these consolidated financial
statements be read in conjunction with the financial statements of Pentegra
Dental Group, Inc., and related notes thereto, and management's discussion and
analysis related thereto, all of which are included in the Company's annual
report on Form 10-K for the year ended March 31, 1999, as filed with the SEC.
2. SIGNIFICANT ACCOUNTING POLICIES
EARNINGS PER SHARE
Earnings per share are computed based upon the weighted average number of shares
of Common Stock and Common Stock equivalents outstanding during each period.
Diluted earnings per share are not separately presented because such amounts
would be the same as amounts computed for basic earnings per share.
Outstanding options to purchase approximately 596,666 and 686,666 shares of
Common Stock at exercise prices above the market value of Common Stock were
excluded from the calculation of earnings per share for the three months ended
June 30, 1999 and 1998, respectively, because their effect would have been
antidilutive.
USE OF ESTIMATES
The preparation of financial statements in conformity with generally accepted
accounting principles requires the use of estimates and assumptions by
management in determining the reported amounts of liabilities and disclosures of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of expenses during the reporting period. Actual results
could differ from those estimates.
3. ACQUISITION OF OMEGA ORTHODONTICS, INC.
In March 1999, the Company entered into a merger agreement with Omega
Orthodontics, Inc. ("Omega"). On July 1, 1999, this transaction closed and each
of the approximately 5.0 million shares of Omega was exchanged for 0.356 share
of the Company (approximately 1.75 million shares). Approximately $1.1 million
of Omega debt was assumed by Pentegra. The merger will be accounted for under
the purchase method of accounting.
4. ACQUISITION OF LIBERTY DENTAL ALLIANCE, INC.
On November 13, 1998 the Company and Liberty Dental Alliance, Inc. ("Liberty")
entered into an Agreement pursuant to which Liberty will become a wholly owned
subsidiary of the Company. As of June 30, 1999, the Company had completed
Liberty affiliations with 17 dental practices. These dental practices generated
aggregate annual patient revenue of approximately $13 million during their most
recently completed fiscal year, and include dentists treating patients in 17
dental offices. The aggregate consideration paid by Pentegra for these practices
consisted of approximately $5.6 million in cash, 1,295,298 shares of Pentegra
common stock and approximately $3.6 million aggregate principal amount of 6%
Series A convertible subordinated notes, one-half payable November 2002 and
one-half payable November 2003 and one-half payable April 1, 2004.
7.
<PAGE> 8
The Company expects the Liberty merger to close in September 1999. The
consideration to be paid based on the Liberty affiliations as of June 30, 1999
consisted of approximately $585,000 in cash, 109,000 shares of Pentegra common
stock, and 74,000 options to purchase Pentegra common stock.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
THE FOLLOWING DISCUSSION AND ANALYSIS CONTAINS CERTAIN FORWARD-LOOKING
STATEMENTS WITHIN THE MEANING OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995. THESE STATEMENTS ARE BASED ON CURRENT PLANS AND EXPECTATIONS OF THE
COMPANY AND INVOLVE RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL FUTURE
ACTIVITIES AND RESULTS OF OPERATIONS TO BE MATERIALLY DIFFERENT FROM THAT SET
FORTH IN THE FORWARD-LOOKING STATEMENTS. IMPORTANT FACTORS THAT COULD CAUSE
ACTUAL RESULTS TO DIFFER INCLUDE, AMONG OTHERS, RISKS ASSOCIATED WITH
AFFILIATIONS, FLUCTUATIONS IN OPERATING RESULTS BECAUSE OF AFFILIATIONS AND
VARIATIONS IN STOCK PRICE, CHANGES IN GOVERNMENT REGULATIONS, COMPETITION, RISKS
OF OPERATIONS AND GROWTH OF EXISTING AND NEW AFFILIATED DENTAL PRACTICES, AND
RISKS DETAILED IN THE COMPANY'S SEC FILINGS.
OVERVIEW
The Company provides practice management services to fee-for-service dental
practices in the United States. On March 30, 1998, the Company acquired
simultaneously with the closing of its initial public offering ("IPO"),
substantially all of the tangible and intangible assets, and assumed the
liabilities, of the 51 Founding affiliated practices. The Company also began to
provide practice management services to professional corporations or
associations owned by the dentist-owners of those affiliated practices (one of
which split into two separate dental practices immediately after the IPO)
pursuant to long-term management service agreements entered into at the time of
the Affiliations. Since the IPO, the Company has affiliated with 34 additional
practices.
The expenses incurred by the Company in fulfilling its obligations under the
management service agreements will be generally of the same nature as the
operating costs and expenses that would have otherwise been incurred by the
affiliated practices, including salaries, wages and benefits of practice
personnel (excluding dentists and certain other licensed dental care
professionals), dental supplies and office supplies used in administering their
practices and the office (general and administrative) expenses of their
practices. In addition to the operating costs and expenses discussed above, the
Company incurs personnel and administrative expenses in connection with
maintaining a corporate office, which provides management, practice
enhancements, administrative and business development services.
RESULTS OF OPERATIONS (UNAUDITED)
Following completion of the IPO on March 30, 1998, the Company began operations
effective April 1, 1998. Management service fee recognition and related expenses
began April 1, 1998, and the Company began managing 51 dental practices in 18
states. At June 30, 1999, the Company managed 85 practices in 27 states.
COMPONENTS OF REVENUES AND EXPENSES
Under the terms of the typical management services agreement with an affiliated
practice, the Company becomes the exclusive manager and administrator of all
non-dental services relating to the operation of an affiliated practice. The
obligations of the Company include assuming responsibility for the operating
expenses incurred in connection with managing the dental centers. These expenses
include salaries, wages and related costs of non-dental personnel, dental
supplies and laboratory fees, rental and lease expenses, promotion and marketing
costs, management information systems and other operating expenses incurred at
the affiliated practices. In addition, the Company incurs general and
administrative expenses related to the financial and administrative management
of dental operations, insurance, training and development and other typical
corporate expenditures. As compensation for its services under the typical
services agreement and subject to applicable law, the Company is paid a
management fee comprised of two components: (1) the costs incurred by it on
behalf of the affiliated practice, and (2) a management fee either fixed in
amount, an amount usually approximating 35% of the affiliated practice's
operating profit, before dentist compensation or 15% of the Affiliated
practice's collected gross revenue ("Service Fee"). Therefore, net revenues
represent amounts earned by the Company under the terms of its management
services agreements with the Affiliated Practices, which generally equate to the
sum of the Service Fees and the operating expenses that the affiliated practices
paid to the Company under the service agreements.
8.
<PAGE> 9
NET REVENUE
Net revenue generated for the three months ended June 30, 1999 and 1998 were
approximately $12.4 million and $7.4 million, respectively. For the three months
ended June 30, 1999 and 1998, dental center revenues aggregated to approximately
$16.9 million and $10.9 million, respectively. The dental center revenue and net
revenue increases resulted substantially through additional practice
affiliations.
OPERATING EXPENSES
The Company incurred operating expenses of approximately $11.5 million and $6.5
million for the three months ended June 30, 1999 and 1998, respectively.
Operating expenses consisted primarily of salaries, wages and benefits, dental
supplies and laboratory fees, rent, advertising and marketing, and general and
administrative expenses.
General and administrative expenses consist of the corporate expenses of the
Company. These corporate expenses include salaries, wages and benefits, rent,
consulting fees, travel (primarily related to practice development), office
costs and other general corporate expenses. For the three months ended June 30,
1999, general and administrative expenses were approximately $1.0 million, which
represented 8.1% of net revenue. For the three months ended June 30, 1998,
general and administrative expenses were approximately $876,000, representing
about 11.8% of net revenue.
INCOME TAX EXPENSE
Income tax expense for the three months ended June 30, 1999 and 1998 totaled
approximately $279,000 and $263,000, or 40% and 28%, respectively, of income
before income taxes. The Company expects the effective tax rate for income
generated during fiscal 2000 will be 40%.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1999 the Company had a working capital balance of approximately $5.0
million. Current assets included approximately $1.4 million in cash and $5.2
million in accounts receivable, due from Affiliated Practices. June 30, 1999
current liabilities consisted of approximately $1.4 million in accounts payable
and accrued liabilities, mostly related to expenses of the Affiliated Practices.
The Company believes that cash on hand, together with the availability under the
revolving line of credit will be sufficient to continue execution of its
affiliation strategy.
On June 1, 1998 the Company closed a revolving bank credit facility with Bank
One, Texas, N.A., which provides the Company with a revolving line of credit of
up to $15.0 million, to be used for general corporate purposes including
financing of acquisitions, capital expenditures and working capital. The credit
facility is collateralized by liens on certain of the Company's assets,
including its rights under the management service agreements and accounts
receivable. The credit facility contains restrictions on the incurrence of
additional indebtedness and payment of dividends on the Common Stock.
Additionally, compliance with certain financial covenants is required and the
lender has approval rights with respect with acquisitions exceeding certain
limits. At June 30, 1999 $8.5 million was outstanding under the revolving line
of credit.
On July 1, 1999, the revolving bank credit facility was amended to permit the
acquisition of Omega Orthodontics, Inc. In connection with the approval by
the bank, the Company paid $100,000 as an amendment fee, and the term of the
credit facility was shortened by one year. The term of the credit facility now
will expire on May 31, 2000.
Cash used in investing activities for the three months ended June 30, 1999 and
1998 included approximately $390,000 and $252,000, respectively, for purchases
of capital equipment and approximately $849,000 and $2.8 million, respectively,
for the purchase of intangibles associated with those new practice affiliations,
respectively.
For the three months ended June 30, 1998, notes receivable were issued totaling
approximately $718,000, which represented payment of dental practice affiliation
debts, which will be repaid by the affiliated practices over future years.
Cash generated from financing activities for the three-month period ended June
30, 1999 included draws on the revolving line of credit of $500,000. During the
quarter ended June 30, 1998, 375,000 shares of common stock were sold with the
exercise of the underwriter's over-allotment option that provided net proceeds
to the company of approximately $2.9 million
9.
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YEAR 2000 ISSUE
A number of computer programs and other equipment with embedded chips or
processors ("Systems") use two digits rather than four digits to define the
applicable year. Any Systems that are date sensitive may recognize a date of
"00" as the year 1900 rather than the year 2000. This could result in
miscalculations or system failures causing disruptions of operations, as well as
potentially exposing the Company to third party liability. This issue is
commonly referred to as the year 2000 ("Y2K") problem.
The Company has initiated a Y2K compliance program to ensure that all of the
critical Systems and processes that are under its direct control remain
functional. The Company completed the installation of year 2000 compliant
software for its operations prior to the IPO. Accordingly the Company does not
expect the year 2000 issue to have a material adverse effect on its financial
position, results of operations or cash flows.
Although the Company's Y2K compliance program will attempt to determine the Y2K
readiness of key third parties, there may be certain Systems or processes relied
on by the Company that are outside of its control, and there can be no assurance
that these Systems or processes will remain functional. Non-compliance by key
third parties could have a material adverse effect on the operations of the
Company. To date, the costs incurred by the Company that relate solely to the
Y2K compliance program have been minimal. In the opinion of management, the
costs to complete the Company's Y2K compliance program will not have a material
adverse effect on the Company's consolidated financial position, results of
operations or cash flows.
The Company has received assurance that the systems implemented prior to the IPO
are Y2K compliant. In addition, the Company has inventoried all hardware and
software at the affiliated practices that process information related to
practice management. The Company has estimated it will incur approximately
$250,000 in affiliate practice computer upgrades for Y2K compliance. These
upgrades are estimated to be completed by September 1999.
The failure to correct a material year 2000 problem could possibly result in an
interruption in or failure of, certain normal business activities operations.
Such failure would materially and adversely affect the Company's financial
position, results of operations and cash flows. Due to the general uncertainty
inherent in the year 2000 problem, including uncertainty regarding the year 2000
readiness of third party suppliers and potential future acquisitions, the
Company is unable to determine at this time whether the consequences of any
possible year 2000 failures will have a material adverse impact on the Company's
financial position, results or operations and cash flows. The Company believes
that, with the scheduled completion of its computer system upgrades, the
possibility of any material interruption to normal operations should be
significantly reduced.
The Company's plans to comply with year 2000 requirements and completion dates
are based on management's best estimates, which were derived utilizing numerous
assumptions of future events including the continued availability of certain
resources and other factors. There can be no assurances; however, that the
estimates will be achieved and actual results could differ from those estimates.
Specific factors that might cause such material difference include, but are not
limited to, the availability and cost of personnel trained in this area, the
ability to identify and correct potential problems and similar uncertainties.
CONTINGENCY PLANS
If during the course of the Company's assessments of its critical Systems it is
determined that the risk of Y2K disruptions is significant, contingency plans
will be developed as appropriate. Such plans might include the use of
alternative service providers or product suppliers should they incur significant
Y2K losses. Currently, the Company does not have any contingency plans in place
based on Y2K readiness assessments.
10.
<PAGE> 11
PART II
ITEM 1. LEGAL PROCEEDINGS - None
ITEM 2. CHANGE IN SECURITIES AND USE OF PROCEEDS - none
ITEM 3. DEFAULTS OF SENIOR SECURITIES - none
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
A Special Meeting of Stockholders of the Company was held in Phoenix,
Arizona on June 30, 1999 for the purpose of approving and adopting an Agreement
and Plan of Merger (the "merger Agreement"), dated as of March 15, 1999, by and
among Pentegra Dental Group, Inc. Special Omega Acquisition Corporation, Omega
Orthodontics, Inc., Robert J. Schulhof, C. Joel Glovsky, David T. Grove, Dean C.
Bellavia and Floyd V. Elliott. Proxies for the meeting were solicited pursuant
to Regulation 14A of the Securities Exchange Act of 1934 and there was no
solicitation in opposition to management's solicitation. Stockholders approved
and adopted the Merger Agreement by the following votes:
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For: ..................................... 5,457,409
Against: ..................................... 81,614
Abstaining:................................... 4,000
</TABLE>
ITEM 5. OTHER INFORMATION - none
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27.1 Financial Data Schedule.
(b) Reports on Form 8-K
None
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant, Pentegra Dental Group, Inc., has duly caused this report to be
signed on its behalf by the undersigned, thereunto duly authorized.
PENTEGRA DENTAL GROUP, INC.
Dated:
/s/ Sam H. Carr
---------------
By: Sam H. Carr
Sr. Vice President - Chief Financial Officer
11.
<PAGE> 12
EXHIBIT INDEX
Number Description
- ------ ---------------------------------------------------
27.1 Financial Data Schedule
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<ARTICLE> 5
<LEGEND>
FROM THE COMPANY'S FORM 10-Q FOR THE PERIOD ENDED JUNE 30, 1999 AND IS THIS
FINANCIAL DATA SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-2000
<PERIOD-START> APR-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 1,395
<SECURITIES> 0
<RECEIVABLES> 5,184
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 7,324
<PP&E> 7,348
<DEPRECIATION> (1,059)
<TOTAL-ASSETS> 37,116
<CURRENT-LIABILITIES> 2,303
<BONDS> 13,634
0
0
<COMMON> 9
<OTHER-SE> 21,170
<TOTAL-LIABILITY-AND-EQUITY> 37,116
<SALES> 12,449
<TOTAL-REVENUES> 12,449
<CGS> 11,544
<TOTAL-COSTS> 11,544
<OTHER-EXPENSES> (1)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 208
<INCOME-PRETAX> 698
<INCOME-TAX> 279
<INCOME-CONTINUING> 419
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 419
<EPS-BASIC> 0.05
<EPS-DILUTED> 0.05
</TABLE>
