<PAGE>
==============================================================================
UNITED STATES
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 February 28, 1998
OR
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934.
Commission File Number
333-33751
----------------------
ARCHIBALD CANDY CORPORATION
Incorporated in the IRS Employer Identification No.
State of Illinois 36-0743280
1137 West Jackson Boulevard
Chicago, Illinois 60607
(312) 243-2700
Indicate by 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
--- ---
As of February 28, 1998, the number of shares outstanding of the
registrant's Common Stock was 19,200 shares, all of which is held by
Fannie May Holdings, Inc.
==============================================================================
<PAGE>
ARCHIBALD CANDY CORPORATION
FORM 10-Q
FOR THE QUARTER ENDED FEBRUARY 28, 1998
INDEX
-----
<TABLE>
<CAPTION>
PAGE NO.
--------
<S> <C>
PART I - FINANCIAL INFORMATION:
- ------------------------------
ITEM 1 - FINANCIAL STATEMENTS
BALANCE SHEETS - FEBRUARY 28, 1998 (UNAUDITED) AND
AUGUST 30, 1997 1
STATEMENTS OF OPERATIONS - THREE MONTH PERIODS
ENDED FEBRUARY 28, 1998 (UNAUDITED) AND
MARCH 01, 1997 (UNAUDITED) 3
STATEMENTS OF OPERATIONS - SIX MONTH PERIODS
ENDED FEBRUARY 28, 1998 (UNAUDITED) AND
MARCH 01, 1997 (UNAUDITED) 4
STATEMENTS OF CASH FLOWS - SIX MONTH PERIODS
ENDED FEBRUARY 28, 1998 (UNAUDITED) AND
MARCH 01, 1997 (UNAUDITED) 5
NOTES TO 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>
THIS REPORT UPDATES ARCHIBALD CANDY CORPORATION'S ANNUAL REPORT ON FORM
10-K FOR THE FISCAL YEAR ENDED AUGUST 30, 1997, IN ACCORDANCE WITH THE
INSTRUCTIONS TO FORM 10-Q. IT IS PRESUMED THAT THE READER HAS READ THE
ANNUAL REPORT ON FORM 10-K.
SOME INFORMATION INCLUDED IN THIS REPORT MAY CONSTITUTE
FORWARD-LOOKING STATEMENTS THAT INVOLVE A NUMBER OF RISKS AND UNCERTAINTIES.
FROM TIME TO TIME, INFORMATION PROVIDED BY ARCHIBALD CANDY CORPORATION OR
STATEMENTS MADE BY ITS EMPLOYEES MAY CONTAIN OTHER FORWARD-LOOKING
STATEMENTS. FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM
THE FORWARD-LOOKING STATEMENTS INCLUDE, BUT ARE NOT LIMITED TO: GENERAL
ECONOMIC CONDITIONS INCLUDING INFLATION, INTEREST RATE FLUCTUATIONS, TRADE
RESTRICTIONS, AND GENERAL DEBT LEVELS; COMPETITIVE FACTORS INCLUDING PRICE
PRESSURES, TECHNOLOGICAL DEVELOPMENTS, AND PRODUCTS OFFERED BY COMPETITORS;
INVENTORY RISKS DUE TO CHANGES IN MARKET DEMAND OR BUSINESS STRATEGIES; AND
CHANGES IN EFFECTIVE TAX RATES. READERS ARE CAUTIONED NOT TO PLACE UNDUE
RELIANCE ON THESE FORWARD-LOOKING STATEMENTS, WHICH SPEAK ONLY AS OF THE DATE
MADE. ARCHIBALD CANDY CORPORATION UNDERTAKES NO OBLIGATION TO PUBLICLY
UPDATE OR REVISE ANY FORWARD-LOOKING STATEMENTS, WHETHER AS A RESULT OF NEW
INFORMATION, FUTURE EVENTS, OR OTHERWISE.
<PAGE>
PART 1 - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
Archibald Candy Corporation
(A Wholly Owned Subsidiary of Fannie May Holdings, Inc.)
Balance Sheets
As of February 28, 1998 and August 30, 1997
<TABLE>
<CAPTION>
FEBRUARY 28, AUGUST 30,
1998 1997
------------- ------------
(DOLLARS IN THOUSANDS)
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 27,805 $ 15,801
Accounts receivable, net 4,382 576
Inventories 17,647 18,965
Prepaid expenses and other
current assets 1,198 791
------------- ------------
Total current assets 51,032 36,133
Due from affiliate 825 825
Property, plant, and equipment 20,559 20,330
Goodwill 31,493 31,960
Noncompete agreements and other
intangibles 118 127
Deferred financing fees 3,951 4,166
Other assets 2,021 2,119
------------- ------------
Total assets $ 109,999 $ 95,660
------------- ------------
------------- ------------
</TABLE>
-1-
<PAGE>
<TABLE>
<CAPTION>
FEBRUARY 28, AUGUST 30,
1998 1997
------------- ------------
(DOLLARS IN THOUSANDS)
(Unaudited)
<S> <C> <C>
LIABILITIES AND SHAREHOLDER'S EQUITY (DEFICIT)
Current liabilities:
Accounts payable $ 5,019 $ 4,769
Accrued liabilities 6,554 4,964
Payroll and related liabilities 2,287 2,025
Current portion of capital lease
obligations 203 376
------------- ------------
Total current liabilities 14,063 12,134
Long-term debt 100,000 100,000
Capital lease obligations, less
current portion 73 145
Shareholder's equity (deficit):
Common stock, $0.01 par value:
Authorized -- 25,000 shares
Issued and outstanding --
19,200 shares -- --
Additional paid-in-capital 18,700 18,700
Accumulated deficit (22,837) (35,319)
------------- ------------
Total shareholder's equity
(deficit) ( 4,137) (16,619)
------------- ------------
Total liabilities and shareholder's
equity (deficit) $ 109,999 $ 95,660
------------- ------------
------------- ------------
</TABLE>
See accompanying notes.
-2-
<PAGE>
Archibald Candy Corporation
(A Wholly Owned Subsidiary of Fannie May Holdings, Inc.)
Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
----------------------------
FEBRUARY 28, MARCH 01,
1998 1997
------------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Net sales $ 58,397 $ 56,180
Cost of sales, excluding depreciation 19,375 18,858
Selling, general, and administrative
expenses, excluding depreciation and
amortization 19,373 19,413
Depreciation and amortization expense 1,191 1,155
Amortization of goodwill and other
intangibles 420 402
Management fees and other fees 129 117
------------- -------------
Operating income 17,909 16,235
Other (income) and expense:
Interest expense 2,630 2,203
Interest and other income and
expense (385) (135)
------------- -------------
Income before income taxes 15,664 14,167
Provision for income taxes 79 86
------------- -------------
Net Income $ 15,585 $ 14,081
------------- -------------
------------- -------------
</TABLE>
See accompanying notes.
-3-
<PAGE>
Archibald Candy Corporation
(A Wholly Owned Subsidiary of Fannie May Holdings, Inc.)
Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
----------------------------
FEBRUARY 28, MARCH 01,
1998 1997
------------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Net sales $ 85,570 $ 81,072
Cost of sales, excluding depreciation 29,970 27,568
Selling, general, and administrative
expenses, excluding depreciation and
amortization 34,823 34,457
Depreciation and amortization expense 2,382 2,310
Amortization of goodwill and other
intangibles 840 805
Management fees and other fees 258 234
------------- -------------
Operating income 17,297 15,698
Other (income) and expense:
Interest expense 5,259 4,605
Interest and other income and
expense (610) (177)
------------- -------------
Income before income taxes 12,648 11,270
Provision for income taxes 166 283
------------- -------------
Net Income $ 12,482 $ 10,987
------------- -------------
------------- -------------
</TABLE>
See accompanying notes.
-4-
<PAGE>
Archibald Candy Corporation
(A Wholly Owned Subsidiary of Fannie May Holdings, Inc.)
Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
----------------------------
FEBRUARY 28, MARCH 01,
1998 1997
------------- -------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 12,482 $ 10,987
Adjustments to reconcile net income to
net cash provided by operating
activities:
Depreciation and amortization 3,222 3,115
Changes in operating assets and
liabilities:
Accounts receivable, net (3,806) (3,197)
Inventories 1,318 2,674
Prepaid expenses and other
current assets (408) (198)
Other assets 98 95
Accounts payable and accrued
liabilities 2,102 757
------------- -------------
Net cash provided by operating activities 15,008 14,233
INVESTING ACTIVITIES
Purchase of property, plant, and
equipment (2,377) (1,180)
------------- -------------
Net cash used in investing activities (2,377) (1,180)
FINANCING ACTIVITIES
Net increase (decrease)in revolving line of
credit -- (9,100)
Repayments of long-term debt -- (1,393)
Principal payments of capital lease
obligations (245) (165)
Costs related to refinancing (382) --
------------- -------------
Net cash used in
financing activities (627) (10,658)
------------- -------------
Net increase in cash and cash
equivalents 12,004 2,395
Cash and cash equivalents beginning of
period 15,801 380
------------- -------------
Cash and cash equivalents end of
period $ 27,805 $ 2,775
------------- -------------
------------- -------------
SUPPLEMENTAL SCHEDULE OF CASH
TRANSACTIONS
Interest paid $ 4,705 $ 1,747
------------- -------------
------------- -------------
</TABLE>
See accompanying notes.
-5-
<PAGE>
Archibald Candy Corporation
(A Wholly Owned Subsidiary of Fannie May Holdings, Inc.)
Notes to Financial Statements
February 28, 1998
(DOLLARS IN THOUSANDS)
1. DESCRIPTION OF BUSINESS AND BASIS OF PRESENTATION
Archibald Candy Corporation (the "Company") is a manufacturer and
retailer of boxed chocolates and other confectionery items. The Company sells
its Fannie May and Fanny Farmer brand candies in over 300 Company-operated
stores and approximately 6,000 third-party grocery stores, drug stores and
independent retail accounts as well as through a variety of non-retail
programs, including quantity order, mail order and fundraising programs. The
Company is a wholly owned subsidiary of Fannie May Holdings, Inc.
The interim financial statements included herein have been prepared
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 condensed or omitted pursuant to such rules
and regulations, although the Company believes these disclosures are adequate
to make the information presented not misleading. In the opinion of
management, all adjustments necessary for fair presentation for the periods
presented have been reflected and are of a normal recurring nature. These
financial statements should be read in conjunction with the financial
statements and notes thereto for the year ended August 30, 1997.
Results of operations for the period from August 30, 1997 to February
28, 1998 are not necessarily indicative of the results that may be achieved for
the entire year.
2. INVENTORIES
Inventories at February 28, 1998 and August 30, 1997 are comprised of
the following:
<TABLE>
<CAPTION>
FEBRUARY 28, AUGUST 30,
1998 1997
------------ ----------
<S> <C> <C>
Raw materials .................. $ 8,792 $ 7,688
Work in process ................ 275 218
Finished goods ................. 8,580 11,059
------------ ----------
$17,647 $18,965
------------ ----------
------------ ----------
</TABLE>
3. DEBT
Debt at February 28, 1998 and August 30, 1997 is comprised of $100
million of 10.25% senior secured notes due July 1, 2004.
-6-
<PAGE>
4. INCOME TAXES
The provision for income taxes differs from the amount of income tax
expense computed by applying the United States federal income tax rate due
to the benefit of the net operating losses that were not recognized in
prior periods.
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
THREE MONTHS ENDED FEBRUARY 28, 1998 COMPARED TO THE THREE MONTHS ENDED
MARCH 01, 1997
NET SALES. Net sales for the three months ended February 28, 1998 were
$58.4 million, an increase of $2.2 million, or 3.9%, from $56.2 million for
the three months ended March 01, 1997. Pounds sold were 5.3 million for
the three months ended February 28, 1998, an increase of .1 million, or .6%,
from 5.2 million pounds sold for the three months ended March 01, 1997.
The growth in pounds came in Company-Operated Retail (1). Company-Operated
Retail sales were $41.3 million for the three months ended February 28, 1998, an
increase of $1.9 million, or 4.9%, from $39.4 million for the three months ended
March 01, 1997. This increase was primarily a result of same store sales growth
of 5.7%, partially offset by 14 fewer Company-operated stores open at February
28, 1998 compared to March 01, 1997. For the three months ended February 28,
1998, Third-Party Retail sales were $7.7 million, a decrease of $.1 million, or
1.7%, from $7.8 million for the three months ended March 01, 1997. Non-Retail
sales were $9.4 million, an increase of $.4 million, or 4.6%, from $ 9.0 million
for the three months ended March 01, 1997. The increase was primarily a result
of the growth in the fundraising boxed chocolate business.
GROSS PROFIT. Gross profit for the three months ended February 28,
1998 was $39.0 million, an increase of $1.7 million, or 4.6%, from $37.3
million for the three months ended March 01, 1997. Gross profit as a
percentage of net sales increased to 66.8% for the three months ended
February 28, 1998 from 66.4% for the three months ended March 01, 1997. This
increase in gross profit was due primarily to an overall increase in net
sales and product mix.
SELLING, GENERAL AND ADMINISTRATIVE. SG&A expenses were $19.4 million
for the three months ended on each of February 28, 1998, and March 01, 1997.
As a percentage of net sales, SG&A expenses decreased to 33.2% for the three
months ended February 28, 1998 from 34.6% for the three months ended March 01,
1997.
-7-
<PAGE>
EBITDA. Earnings before interest, income taxes, depreciation, and
amortization ("EBITDA") was $19.6 million for the three months ended February
28, 1998 and $17.9 million for the three months ended March 01, 1997, an
increase of $1.7 million or 9.5%. As a percentage of net sales, EBITDA was
33.5% for the three months ended February 28, 1998 as compared to 31.8% for
the three months ended March 01, 1997.
- ----------------------------
(1) Company-Operated Retail includes sale of Company branded products through
Company-Operated Fannie May and Fanny Farmer stores.
OPERATING INCOME. Operating income was $17.9 million for the three
months ended February 28, 1998, an increase of $1.7 million, or 10.3%, from
income of $16.2 million for the three months ended March 01, 1997. This
increase was a result of an overall increase in gross profit.
NET INCOME. Net income was $15.6 million for the three months ended
February 28, 1998 and $14.1 million for the three months ended March 01, 1997,
an increase of $1.5 million or 10.7%. Interest expense was $2.6 million for the
three months ended February 28, 1998, an increase of $.4 million or 19.3% from
$2.2 million for the three months ended March 01, 1997. This increase is a
result of the increase in long-term debt.
-8-
<PAGE>
ITEM 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
SIX MONTHS ENDED FEBRUARY 28, 1998 COMPARED TO THE SIX MONTHS ENDED
MARCH 01, 1997
NET SALES. Net sales for the six months ended February 28, 1998 were
$85.6 million, an increase of $4.5 million, or 5.5%, from $81.1 million for
the six months ended March 01, 1997. Each of the Company-Operated Retail,
Third-Party Retail (2) and Non-Retail (3) channels showed an increase in pounds
sold over the prior six month period. Company-Operated Retail sales were
$57.5 million for the six months ended February 28, 1998, an increase of $2.1
million, or 3.9%, from $55.4 million for the six months ended March 01, 1997.
This increase was primarily the result of same store sales growth of 5.2%,
partially offset by 14 fewer Company-operated stores open at February 28,1998
compared to March 01, 1997. For the six months ended February 28, 1998,
Third-Party Retail sales were $13.8 million, an increase of $1.1 million, or
8.1%, from $12.7 million for the six months ended March 01, 1997. This
increase reflects the continued results of management's strategy to expand
Third-Party Retail sales into new markets, including providing Fanny Farmer
branded products to mass merchandisers and developing Fannie May product line
extensions. For the six months ended February 28, 1998, Non-Retail sales
were $14.3 million, an increase of $1.3 million, or 10.1%, from $ 13.0
million for the six months ended March 01, 1997. This increase was primarily
a result of the growth in the fundraising boxed chocolate business. Pounds
sold were 8.3 million for the six months ended February 28, 1998, an increase
of .3 million, or 3.9%, from 8.0 million pounds sold for the six months ended
March 01, 1997.
GROSS PROFIT. Gross profit for the six months ended February 28,
1998 was $55.6 million, an increase of $2.1 million, or 3.9%, from $53.5
million for the six months ended March 01, 1997. Gross profit as a
percentage of net sales decreased to 65.0% for the six months ended
February 28, 1998 from 66.0% for the six months ended March 01, 1997.
This decrease in gross profit was due primarily to an increase in product
costs and a continuing shift from Company-Operated Retail sales to lower
margin Third-Party Retail and Non-Retail sales.
SELLING, GENERAL AND ADMINISTRATIVE. SG&A expenses were $34.8 million
for the six months ended February 28, 1998, an increase of $.4 million, or
1.1%, from $34.4 million for the six months ended March 01, 1997. This
increase in SG&A expenses was due primarily to (i) an increase in Third-Party
Retail operating expenses resulting from growth of the Fanny Farmer mass
merchandising programs and (ii) the development of retail licensing and
specialty markets programs. The retail licensing program markets nationally to
licensed kiosk holders a variety of boxed and novelty items which are
sold to consumers on a seasonal holiday basis. The specialty markets
program markets nationally to department stores, card and gift stores and
direct mail catalog companies a variety of boxed and novelty items intended
to meet consumer demand in the mid-priced segment of the specialty markets.
The increase in SG&A expenses was partially offset by lower store operating
costs resulting from store closings. As a percentage of net sales, SG&A
expenses decreased to 40.7% for the six months ended February 28, 1998
from 42.5% for the six months ended March 01, 1997.
-9-
<PAGE>
EBITDA. EBITDA was $20.6 million for the six months ended February 28,
1998 and $18.9 million for the six months ended March 01, 1997, an increase
of $1.7 million or 9.0%. As a percentage of net sales, EBITDA was 24.1% for
the six months ended February 28, 1998 as compared to 23.4% for the six
months ended March 01, 1997.
- --------------------------
(2) Third-Party Retail includes grocery stores, drug stores and other
independent retailers that purchase the Company's branded products at
wholesale pricing for resale to the consumer.
(3) Non-Retail includes sale of Company branded product through the
Company's quantity order, mail order and fundraising programs.
OPERATING INCOME. Operating income was $17.3 million for the six
months ended February 28, 1998, an increase of $1.6 million, or 10.2%, from
income of $15.7 million for the six months ended March 01, 1997. This
increase was a result of an overall increase in gross profit.
NET INCOME. Net income was $12.5 million for the six months ended
February 28, 1998, an increase of $1.5 million, or 13.6%, from income of
$11.0 million for the six months ended March 01, 1997. Interest expense was
$5.3 million for the six months ended February 28, 1998, an increase of $.7
million, or 14.2%, from $4.6 million for the six months ended March 01, 1997.
This increase in interest expense is a result of the increase in long-term
debt.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities was $15.0 million for the six
months ended February 28, 1998 compared to $14.2 million for the six months
ended March 01, 1997. Net income was $12.5 million for the six months ended
February 28, 1998 compared to $11.0 million for the six months ended March
01, 1997. Net income included noncash depreciation and amortization charges
of $3.2 million for the six months ended February 28, 1998 and $3.1 million
for the six months ended March 01, 1997.
Net cash used in investing activities increased to $2.4 million for the
six months ended February 28, 1998 from $1.2 million for the six months
ended March 01, 1997. The increase in capital expenditures was primarily
related to the purchase of computer systems during the six months ended February
28, 1998, resulting in an increase in cash usage of $.8 million. Approximately
$1.6 million of additional capital expenditures are expected for the remainder
of fiscal 1998.
As of February 28, 1998, the Company had $20 million available for
borrowings under a $20 million revolving credit facility (the "Credit
Facility"), which matures on July 1, 2000. As of February 28, 1998, the
Company had outstanding $100 million of 10.25% senior secured notes due July
1, 2004.
The Company believes that the Credit Facility and cash flows from
operations will provide sufficient funds to meet the Company's debt service
obligations, projected capital expenditures and working capital requirements
for the foreseeable future.
-10-
<PAGE>
YEAR 2000 COMPLIANCE
In July 1996, the Emerging Issues Task Force of the Financial Accounting
Standards Board reached a consensus on Issue 96-14, Accounting for the Costs
Associated with Modifying Computer Software for the Year 2000, which provides
that costs associated with modifying computer software for the year 2000 be
expensed as incurred. The Company is assessing the extent of the necessary
modifications to its computer software.
The Company is in the process of conducting a comprehensive review of its
computer systems to identify the systems that could be affected by the "Year
2000" issue and is developing an implementation plan to resolve the issue. The
Year 2000 problem is the result of computer programs being written using two
digits (rather than four) to define the applicable year. Any of the Company's
programs that have time-sensitive software may recognize a date using "00" as
the Year 1900 rather than the Year 2000. This could result in a system failure
or miscalculations. Management has not yet assessed the Year 2000 compliance
expense and related potential affect on the Company's earnings.
PART II - OTHER INFORMATION
ITEM 6- EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBIT 27.1 -- FINANCIAL DATA SCHEDULE FOR QUARTER ENDED
FEBRUARY 28, 1998, FILED HEREWITH.
(b) NO REPORTS WERE FILED ON FORM 8-K FOR THE QUARTER ENDED
FEBRUARY 28, 1998.
-11-
<PAGE>
SIGNATURE
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.
ARCHIBALD CANDY CORPORATION
DATE: APRIL 14, 1998. BY: /S/ DONNA M. SNOPEK
-------------------------
DONNA M. SNOPEK
VICE PRESIDENT OF FINANCE
& ACCOUNTING
-12-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> AUG-29-1998
<PERIOD-START> AUG-31-1997
<PERIOD-END> FEB-28-1998
<CASH> 27,805
<SECURITIES> 0
<RECEIVABLES> 4,735
<ALLOWANCES> (353)
<INVENTORY> 17,647
<CURRENT-ASSETS> 51,032
<PP&E> 51,408
<DEPRECIATION> (30,849)
<TOTAL-ASSETS> 109,999
<CURRENT-LIABILITIES> 14,063
<BONDS> 100,000
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 109,999
<SALES> 85,570
<TOTAL-REVENUES> 85,570
<CGS> 29,970
<TOTAL-COSTS> 38,303
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,259
<INCOME-PRETAX> 12,648
<INCOME-TAX> 166
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12,482
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
