<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
X QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended March 31, 1999
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 001-14171
C2, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter.)
Wisconsin 39-1915787
(State of Incorporation) (IRS Employer Identification No.)
700 N. Water Street, Suite 1200, Milwaukee, Wisconsin 53202
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (414) 291-9000
---------------
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock $1.00 par value 5,202,664
- ---------------------------- ---------------------------------
(Class) (Outstanding at May 14, 1999.)
Page 1 of 13 total pages No exhibits are filed with this report.
1
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
C2, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
(UNAUDITED) (AUDITED)
MARCH 31, DECEMBER 31,
1999 1998
------------------- ------------------
<S> <C> <C>
ASSETS:
Current Assets:
Cash and cash equivalents $ 6,085,000 $ 9,000
Accounts receivable, net 12,061,000 9,411,000
Inventories 6,279,000 2,346,000
Prepaids and other 1,005,000 85,000
------------------ ------------------
Total Current Assets 25,430,000 11,851,000
------------------ ------------------
Long-Term Assets:
Fixed assets, net 74,255,000 68,996,000
Goodwill 18,009,000 5,357,000
Other assets 1,761,000 857,000
------------------ ------------------
Total Long-Term Assets 94,025,000 75,210,000
------------------ ------------------
$119,455,000 $87,061,000
================== ==================
LIABILITIES AND SHAREHOLDERS' EQUITY:
Current Liabilities:
Accounts payable $ 7,665,000 $ 6,519,000
Accrued liabilities 8,644,000 4,630,000
Current portion of long-term debt 245,000 1,848,000
------------------ ------------------
Total Current Liabilities 16,554,000 12,997,000
------------------ ------------------
Due to Christiana Companies, Inc. -- 3,000,000
Long-Term Liabilities:
Long-term debt 71,194,000 35,277,000
Other liabilities -- 330,000
------------------ ------------------
Total Long-Term Liabilities 71,194,000 38,607,000
------------------ ------------------
Total Liabilities 87,748,000 51,604,000
------------------ ------------------
Minority Shareholders' Interests 7,318,000 --
Shareholders' Equity:
Preferred stock, par value $.01 per share, -- --
10,000 shares authorized, none issued or outstanding
Common stock, par value $.01 per share;
50,000 shares authorized, 5,202,664 issued and
outstanding 52,000 --
Additional paid-in capital 20,358,000 --
Members equity -- 35,457,000
Retained earnings 3,979,000 --
------------------ ------------------
Total Shareholders' Equity 24,389,000 35,457,000
------------------ ------------------
$119,455,000 $87,061,000
================== ==================
</TABLE>
See notes to consolidated financial statements.
2
<PAGE> 3
C2, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
-----------------------------------------
1999 1998
------------------- ------------------
<S> <C> <C>
Revenues:
Logistic revenues $23,747,000 $21,865,000
Product sales 2,127,000 --
------------------- ------------------
25,874,000 21,865,000
------------------- ------------------
Costs and Expenses:
Logistic expenses 19,073,000 16,991,000
Cost of product sales 1,744,000 --
Depreciation and amortization 1,749,000 1,808,000
Selling, general and administrative 2,334,000 1,629,000
------------------- ------------------
24,900,000 20,428,000
------------------- ------------------
Earnings from Operations 974,000 1,437,000
Other Income (Expense):
Interest expense, net (827,000) (705,000)
Merger-related expense (326,000) --
Other income (expense) -- 8,000
Minority interest (10,000) --
------------------- -- ------------------
(1,163,000) (697,000)
------------------- ------------------
Earnings before income taxes (189,000) 740,000
Income tax provision (11,000) --
------------------- ------------------
Net Earnings (Loss) $ (178,000) $ 740,000
=================== ==================
Basic Earnings (Loss) per Share ($0.03) $0.14
=================== ==================
Diluted Net Earnings (Loss) per Share ($0.03) $0.14
=================== ==================
Average number of shares outstanding 5,202,664 5,202,664
=================== ==================
</TABLE>
See notes to consolidated financial statements.
3
<PAGE> 4
C2, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
ADDITIONAL
PAID-IN RETAINED MEMBER'S
SHARES AMOUNT CAPITAL EARNINGS EQUITY TOTAL
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1998 -- $ -- $ -- $ -- $35,457,000 $35,457,000
Distribution to Christiana Companies, Inc. -- -- -- -- (13,312,000) (13,312,000)
Sale of common stock 5,202,664 52,000 20,358,000 -- -- 20,410,000
Adjustments related to the -- -- -- 4,157,000 (22,145,000) (17,988,000)
acquisition of Total Logistic Control
Net (loss) for the three months
ended March 31, 1999 (unaudited) -- -- -- (178,000) -- (178,000)
--------------------------------------------------------------------------------------
Balance, March 31, 1999 5,202,664 $ 52,000 $20,358,000 $3,979,000 $ -- $24,389,000
======================================================================================
</TABLE>
See notes to consolidated financial statements.
4
<PAGE> 5
C2, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
---------------------------------------------
1999 1998
---------------------- --------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings (loss) $(178,000) $ 740,000
Adjustments to reconcile net earnings to net
cash (used in) provided by operating activities:
Depreciation and amortization 1,749,000 1,808,000
(Loss) on sale of fixed assets (12,000) --
Minority interest in consolidated income of subsidiaries 10,000 --
Changes in assets and liabilities:
(Increase) decrease in accounts receivable (943,000) 1,110,000
(Increase) in other assets (1,407,000) (721,000)
(Decrease) in accounts payable and accrued liabilities (134,000) (455,000)
---------------------- --------------------
Net cash (used in) provided by operating activities (915,000) 2,482,000
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of fixed assets (1,985,000) (402,000)
Proceeds from sale of assets 34,000 207,000
Businesses acquired, net of cash received (13,089,000) --
---------------------- --------------------
Net cash (used in) investing activities (15,040,000) (195,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from sale of stock 20,410,000 --
Net borrowings on credit lines 1,939,000 159,000
Net (payments) borrowings on notes and loans payable 12,994,000 (2,450,000)
Distributions to Christiana Companies, Inc. (13,312,000) --
---------------------- --------------------
Net cash provided by (used in) financing activities 22,031,000 (2,291,000)
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 6,076,000 (4,000)
BEGINNING CASH AND CASH EQUIVALENTS, January 1 9,000 388,000
---------------------- --------------------
ENDING CASH AND CASH EQUIVALENTS, March 31 $ 6,085,000 $ 384,000
====================== ====================
Supplemental disclosures of cash flow information:
Interest paid $755,000 $596,000
Income taxes paid $73,000 $292,000
</TABLE>
See notes to consolidated financial statements.
5
<PAGE> 6
C2, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
NOTE 1 -- ACCOUNTING POLICIES
The accompanying unaudited financial statements reflect all adjustments which
are, in the opinion of management, necessary to present fairly the results for
the interim periods presented and should be read in conjunction with the
Company's 1998 Annual Report on Form 10-K.
NOTE 2 -- INITIAL PUBLIC OFFERING AND ACQUISITION OF TOTAL LOGISTIC CONTROL, LLC
On March 4, 1999, C2, Inc. common shares were issued to subscribers
contemporaneous with the distribution of the cash merger consideration
attributable to the Christiana Companies, Inc. (formerly NYSE:CST) and
Weatherford International, Inc. (NYSE:WFT) transaction which closed on February
8, 1999. The stock offering was fully subscribed and 5,202,664 shares were
issued at $4.00 per share. Total proceeds to the Company were $20,410,000, net
of offering costs of $400,000.
Also in conjunction with the above-mentioned merger, C2, Inc. acquired a
two-thirds interest in Total Logistic Control, LLC ("TLC") for $10,667,000. TLC
provides integrated third party logistic services which include refrigerated and
non-refrigerated warehousing, transportation, transportation management, food
distribution, international freight forwarding and packaging.
NOTE 3 -- ACQUISITION OF ZERO ZONE, INC.
On March 12, 1999, C2, Inc. purchased 70.6% of the common stock of Zero Zone,
Inc. ("Zero Zone") in connection with a $19,500,000 recapitalization plan. C2,
Inc. invested $3,000,000 in common stock and $1,500,000 in capital notes.
Zero Zone, headquartered in North Prairie, Wisconsin, manufactures frozen and
refrigerated reach-in display cases used by grocery, convenience and drug store
chains for retail manufacturing of food, beverage and floral products.
NOTE 4 -- PRO FORMA RESULTS
C2, Inc. was organized to acquire 66.7% of Total Logistic Control, LLC in
connection with a merger transaction between Christiana Companies, Inc. and
Weatherford International, Inc. which was completed on February 8, 1999. On
March 12, 1999, C2, Inc. acquired 70.6% of Zero Zone, Inc. The consolidated
financial statements for the three months ended March 31, 1999 included herein
reflect the results of TLC from January 1, 1999 and of Zero Zone from March 12,
1999. The consolidated financial statements for the three months ended March 31,
1998 included herein reflect only the results of TLC for this period. The
following unaudited pro forma results of operations have been prepared assuming
the acquisitions had occurred at the beginning of each period. This pro forma
information is not necessarily indicative of results of operations that would
have occurred had the acquisitions been made on those dates, or of results which
may occur in the future.
6
<PAGE> 7
<TABLE>
<CAPTION>
PRO FORMA
THREE MONTHS ENDED
MARCH 31,
--------------------------------------------
1999 1998
-------------------- --------------------
<S> <C> <C>
Net revenues $31,642,000 $25,171,000
==================== ====================
Earnings from operations $1,568,000 $1,207,000
==================== ====================
Net (loss) $(111,000) $(79,000)
==================== ====================
Basic (loss) per share $(0.02) $(0.02)
==================== ====================
</TABLE>
NOTE 5 -- EARNINGS PER SHARE
The following is a reconciliation of basic and diluted earnings per share for
the quarters ended March 31, 1999 and 1998. The calculations are based on the
common shares outstanding since the offering and assumes that such shares were
issued and outstanding for each of the quarters ended March 31, 1999 and 1998.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
--------------------------------------
1999 1998
----------------- -----------------
<S> <C> <C>
Basic Earnings per Share:
Net income available to common shareholders $(178,000) $740,000
Average shares of common stock outstanding 5,202,664 5,202,664
----------------- -----------------
Basic earnings per share ($0.03) $0.14
================= =================
Diluted Earnings per Share:
Average shares of common stock outstanding 5,202,664 5,202,664
Incremental common shares applicable to common stock options -- * 107,710
----------------- -----------------
Average common shares assuming full dilution 5,202,664 5,310,374
----------------- -----------------
Diluted earnings per share ($0.03) $0.14
================= =================
</TABLE>
* No shares are included because the impact is anti-dilutive.
7
<PAGE> 8
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
General Business
C2, Inc. ("C2 or the Company") was formed to facilitate the separation of
Christiana Companies, Inc.'s ("Christiana") warehousing and logistics business
from its holding of common stock of Weatherford International, Inc.
("Weatherford"). This separation was accomplished through the purchase by C2 of
66.7% of Christiana's operating unit, Total Logistic Control, LLC ("TLC") and
the subsequent merger of a subsidiary of Weatherford with and into Christiana,
whose assets then consisted of 33.3% of Total Logistic Control, LLC and
4,386,762 shares of Weatherford common stock. These transactions were completed
on February 8, 1999 and on that date, Christiana ceased trading of its common
stock.
C2, Inc. completed an offering of 5,202,664 shares of its common stock to the
former shareholders of Christiana on March 4, 1999. The shares were priced at
$4.00 per share and were fully subscribed. Total proceeds to the Company were
$20,410,000, net of offerings costs of $400,000.
On March 12, 1999, C2 purchased 70.6% of the common stock of Zero Zone, Inc.,
("Zero Zone") a Wisconsin based manufacturer of frozen and refrigerated display
cases in connection with a $19,500,000 recapitalization plan.
The consolidated financial statements of C2, Inc. presented herein reflect the
results of operations of TLC for the full three month period ended March 31,
1999; those of C2 for the period February 8 to March 31, 1999 and those of Zero
Zone for the period March 12 - 31, 1999. Because the controlling ownership of
TLC is deemed to be substantially the same before and after its acquisition by
C2, comparable historical financial statements present the results of operations
of TLC only, without regard to minority interest or capital structure changes.
The Company is comprised of two operating companies, TLC and Zero Zone. TLC,
based in Zeeland, Michigan, is a national provider of integrated third party
logistic services which include refrigerated and dry warehousing,
transportation, transportation management, international freight forwarding,
food distribution and packaging. Operations are conducted through a network of
12 distribution warehouses of which seven are refrigerated or frozen facilities
with an aggregate capacity of 34 million cubic feet. TLC also operates a
transportation fleet of 190 refrigerated units.
Zero Zone, based in North Prairie, Wisconsin, manufactures refrigerated and
freezer display cases used in grocery, convenience and drug store chains for
retail merchandising of food, beverage and floral products.
Results of Operations
Consolidated revenues for the three months ended March 31, 1999 totaled
$25,874,000 compared to $21,865,000 reflecting an increase of 18.3%. Revenues
for the quarter attributable to warehousing and logistics operations of TLC grew
8.6% to $23.7 million
8
<PAGE> 9
due to increased utilization of refrigerated warehousing capacity, growth in
logistic services and food distribution. Included in the first quarter's
consolidated financial results are two and one half weeks of Zero Zone's
operations which contributed revenues of $2.1 million. If Zero Zone's operations
for the full quarter were included, its revenue contribution would have been
$7.9 million.
Earnings from operations for the quarter were $974,000 compared to $1,437,000
for the same period last year. Operating earnings contributed by TLC for the
quarter were $1,097,000 compared to $1,436,000 recorded in the same period last
year. Overhead expenses at TLC increased approximately $300,000 quarter to
quarter largely due to infrastructure investment in information systems and
logistics personnel needed to support the Company's growth strategy in
developing high volume logistic management services. In the quarter, TLC
announced the execution of a five-year $135 million logistic services agreement
with WLR Foods, Inc., a leading poultry processor based in Broadway, Virginia.
Net interest expense in the quarter was $827,000 compared to $705,000 in the
same period last year. Interest expense increased primarily due to the payment
of a $20 million dividend to Christiana in connection with the
Christiana/Weatherford merger transaction which was funded by increased
borrowings under TLC's revolving credit facility at higher rates.
Including non-recurring charges incurred by TLC related to the Christiana merger
transaction of $326,000 and purchase accounting charges related to acquired
finished goods inventory of Zero Zone of $198,000, the Company reported a net
loss of $178,000 or $0.03 per share compared to net earnings of $740,000 or
$0.14 per share for TLC in the previous year. The after tax and minority
interest effect of these non-recurring charges on net earnings totaled $337,000
or $0.06 per share.
Liquidity and Capital Resources
The Company's ongoing liquidity requirements arise primarily from its need to
service debt, fund working capital, service lease commitments, maintain and
improve warehouse, transportation and manufacturing facilities and equipment,
and make other investments. The company is active in the acquisition, leasing or
new construction of warehouse facilities, particularly refrigerated facilities.
Historically, bank financing, leasing and internally generated cash have
provided funding for these activities. Currently, the Company has significant
subsidiary level lending relationships with four major commercial banks. At
March 31, 1999, the Company had outstanding debt of $71,439,000, all of which is
borrowed under various facilities with these banks.
TLC entered into a new $70 million credit agreement, dated November 2, 1998.
This credit facility is secured by liens or security interests on substantially
all of the assets of TLC and mortgages on its real estate. This five year
revolving credit facility, by its terms, steps down on November 3 each year
beginning in 1999 through November 2, 2003 by $1.25 million in 1999, $4.4
million in 2000, $5.0 million in 2001, $6.0 million in 2002, and a final
maturity of $53.35 million is due on November 2, 2003. The interest rate on
borrowings under this credit agreement are LIBOR or prime rate, at TLC's option,
and vary pursuant to a pricing grid based on the ratio of TLC's funded debt to
EBITDA, as defined in the credit agreement. At March 31, 1999 TLC had $55.1
million in outstanding borrowings under this facility with an average interest
rate of LIBOR plus 155 or 6.65%.
9
<PAGE> 10
Zero Zone entered into an $11 million, 7 year acquisition term loan facility on
March 12, 1999. Amortization payments begin in May 1999 in the amount of $70,833
per month and increase to $100,000 per month in 2000, $125,000 per month in 2001
and then $155,208 per month thereafter.
Zero Zone also has a $1.4 million term loan facility to finance capital
expenditures, including, but not limited to the expenditures in connection with
its plant expansion and related equipment. Repayment terms are $17,000 per month
beginning October 1999.
Zero Zone also has an outstanding IRB in the amount of $1,520,000. Annual
payments are $245,000 until 2002 and then decline to $135,000 through 2006. The
IRB is supported by a letter of credit from its commercial bank which is secured
by a first mortgage on the headquarters' land and building. The all-in rate on
the IRB is approximately 4.5%.
Zero Zone also has a $2 million working capital line of credit. There were no
borrowings under this facility at March 31, 1999.
The acquisition term loan, working capital line and capital expenditure term
loan are all secured by security interests in its accounts receivable,
inventory, and equipment. The interest rate on these facilities varies based on
a pricing grid based on the ratio of senior debt to EBITDA. At March 31, 1999,
the rate on the acquisition debt and capital expenditure line was LIBOR plus 260
or 7.70%.
Zero Zone has unsecured senior subordinated indebtedness in the amount of
$2,350,000 to former and existing shareholders. Repayment terms are $1,000,000
each on December 31, 2000 and 2001 and a final payment of $350,000 on December
31, 2002. The interest rate is 8%.
Zero Zone also has $3,000,000 of unsecured junior subordinated indebtedness to
existing shareholders. Payments of $1,000,000 per year begin December 31, 2002.
The interest rate is 8.5% of which 3.4% is paid in cash and 5.1% is
payment-in-kind.
On March 4, 1999, C2, Inc. completed an offering of 5,202,664 shares of its
common stock. The offering was fully subscribed by former Christiana Companies,
Inc. shareholders in connection with the previously described merger transaction
between Christiana and Weatherford. Total proceeds to the Company were
$20,410,000, net of offering costs of $400,000.
As of March 31, 1999, the Company had cash and cash equivalents on hand of
$6,085,000 compared to $9,000 at December 31, 1998. Cash flows used in
operations for the quarter ended March 31, 1999, totaled $915,000 compared to
cash flows provided of $2,482,000 in the previous period. Cash flows from
operating activities reflect changes in working capital accounts and other
assets for TLC for the full quarter, C2 corporate from February 8, 1999 and Zero
Zone from March 12, 1999. The decline in cash flow from operating activities is
primarily attributable to an increase in other assets resulting from
Christiana's contribution to TLC of mortgage notes receivable and cash surrender
value of officer's life insurance as well as increased accounts receivable and
inventory related to TLC's expanded food distribution program and revenue growth
at Zero Zone.
Cash flows used in investing activities in the quarter totaled $15,040,000
compared to $195,000 for the same period last year. The significant increased
use of cash was due to the acquisition of 66.7% of TLC for $10,667,000 and the
acquisition of 70.6% of Zero Zone for $3,000,000, net of cash acquired of
$578,000. Higher capital expenditures was also a contributing factor. TLC
invested approximately $1,700,000 during the quarter in refrigerated warehouse
projects, new information technology and transportation equipment.
10
<PAGE> 11
Cash flows from financing activities totaled $22,031,000 compared to a use of
$2,291,000 for the same period last year. Major items included net proceeds of
$20,410,000 from the Company's initial public offering of its common stock and
increased borrowings to fund TLC's distributions to Christiana related to its
merger transaction with Weatherford.
During 1998, the Company completed a comprehensive assessment of Year 2000
issues for both its financial information systems and other non-financial
systems. In the opinion of management, all hardware and software that could have
a significant Year 2000 impact have been identified and a remediation plan has
been implemented. Year 2000 issues for financial information systems are being
corrected through hardware and software upgrades. Non-financial systems,
primarily telephone and security, will be repaired or replaced in order to
achieve Year 2000 compliance. Based upon the Company's current projections, all
Year 2000 compliant systems, both financial and non-financial, will be
implemented no later than June 30, 1999 to allow for sufficient testing. As of
March 31, 1999, the Company was approximately 90% complete with the installation
of its Year 2000 upgrades. By the time these upgrades are completed, the Company
estimates that it will have expended approximately $950,000 to resolve its Year
2000 problems.
The Company believes that its efforts are sufficient to address its Year 2000
problem. However, there can be no assurances that the Company will be successful
in its efforts. Any failure to address the Year 2000 problem may have a
materially adverse effect on the Company's ability to provide its transportation
and warehousing services and process vital financial data. This could result in
material lost revenues to the Company in amounts which are not known at this
time. The Company currently has no contingency plans if its efforts to address
the Year 2000 problem fail. After the Company has completed the upgrades
described above, contingency plans will be developed.
The Company has solicited all of its major service providers concerning their
progress in compliance with the Year 2000 problem. The Company has received
responses and is not aware of the inability of any service provider to address
its Year 2000 problem.
Forward-Looking Statements
This Form 10-Q contains certain forward-looking statements and other statements
that are not historical facts concerning, among other things, market conditions,
the demand for warehousing and transportation services, new building and
refurbishment programs for grocery and retail drug store industry, and future
capital expenditures. Such statements are subject to certain risks,
uncertainties and assumptions, including, without limitation, dependence on
refrigerated food production and the continuation of freezing as a preferred
method of food preparation, risk related to leverage, risks related to
significant new construction of refrigerated warehouses in the Company's
existing markets, and ongoing capital expenditures. There can be no assurance
that the Company has accurately identified and properly weighted all of the
factors which affect market conditions and demand for the Company's services and
products, that the information upon which the Company has relied is accurate or
complete, that the Company's analyses of the market and demand for its services,
particularly in third party transportation management services is correct or
that the strategy based on such analyses will be successful.
11
<PAGE> 12
PART II - OTHER INFORMATION
Item 1. Not applicable.
Item 2. Not applicable.
Item 3. Not applicable.
Item 4. Not applicable.
Item 5. Not applicable.
Item 6. Exhibits and Reports on Form 8-K
None
12
<PAGE> 13
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.
C2, Inc.
(Registrant)
Date: May 14, 1999 /s/ William T. Donovan
-------------------------- ------------------------------------
William T. Donovan
Chairman and Chief Financial Officer
Date: May 14, 1999 /s/ David J. Lubar
-------------------------- ------------------------------------
David J. Lubar
President
13
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001052102
<NAME> C2, INC.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 6,085,000
<SECURITIES> 0
<RECEIVABLES> 12,452,000
<ALLOWANCES> 391,000
<INVENTORY> 6,279,000
<CURRENT-ASSETS> 25,430,000
<PP&E> 109,452,000
<DEPRECIATION> 35,197,000
<TOTAL-ASSETS> 119,455,000
<CURRENT-LIABILITIES> 16,554,000
<BONDS> 0
0
0
<COMMON> 20,410,000
<OTHER-SE> 3,979,000
<TOTAL-LIABILITY-AND-EQUITY> 119,455,000
<SALES> 2,127,000
<TOTAL-REVENUES> 25,874,000
<CGS> 1,744,000
<TOTAL-COSTS> 24,900,000
<OTHER-EXPENSES> 326,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 827,000
<INCOME-PRETAX> (189,000)
<INCOME-TAX> 11,000
<INCOME-CONTINUING> (178,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (178,000)
<EPS-PRIMARY> (0.03)
<EPS-DILUTED> (0.03)
</TABLE>
