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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------
FORM 8-K/A
AMENDMENT NO. 1
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT: February 26, 1999
DATE OF EARLIEST EVENT REPORTED: December 11, 1998
LODGIAN, INC.
- --------------------------------------------------------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
Delaware 001-14537 52-2093696
- --------------------------------------------------------------------------------
(STATE OR OTHER JURISDICTION (COMMISSION (IRS EMPLOYER
OF INCORPORATION) FILE NUMBER) IDENTIFICATION NO.)
3445 Peachtree Road N.E., Suite 700, Atlanta, Georgia 30326
- --------------------------------------------------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (404) 364-9400
Not Applicable
- --------------------------------------------------------------------------------
(FORMER NAME OR FORMER ADDRESS, IF CHANGED SINCE LAST REPORT)
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<PAGE>
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
Item 7 is amended to include the pro forma financial information
required by Article 11 of Regulation S-X as follows:
(b) Pro Forma Financial Information.
The pro forma financial information of the Registrant is attached as
Exhibit A to this Form 8-K/A.
<PAGE>
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.
LODGIAN, INC.
By: /s/ Robert S. Cole
--------------------------
Robert S. Cole
Chief Executive Officer
Dated: February 26, 1999
<PAGE>
EXHIBIT A
LODGIAN, INC.
UNAUDITED PRO FORMA COMBINED CONSOLIDATED FINANCIAL STATEMENTS
The following unaudited pro forma combined financial statements of Lodgian give
effect to the Financing Agreement and Merger with Servico acquiring Impac using
the purchase method of accounting, after giving effect to the pro forma
adjustments described in the accompanying notes in the pro forma financial
statements and accompanying notes thereto of Servico and Impac (excluding the
Financing Agreement and Merger). The unaudited pro forma combined consolidated
financial statements have been prepared in accordance with generally accepted
accounting principles in the United States ("GAAP") and should be read in
conjunction with the historical consolidated financial statements of Servico and
Impac including the notes thereto, the pro forma financial statements of Servico
and Impac (excluding the Debt Refinancing and Merger) and other financial
information of Servico and Impac incorporated by reference in this document.
The accompanying unaudited pro forma information is presented for illustrative
purposes only and is based on certain assumptions and adjustments described in
the pro forma financial statements of Servico and Impac (excluding the Financing
Agreement and Merger). Such information is not necessarily indicative of the
operating results or financial position that would have occurred had the
Financing Agreement or the Merger been consummated at the dates indicated, nor
is it necessarily indicative of future operating results or financial position
of the combined companies. No effect has been given in the unaudited pro forma
combined financial statements for operating and synergistic benefits that may be
realized through the Merger. In addition, the unaudited pro forma combined
consolidated financial statements do not reflect any of the initial,
non-recurring costs associated with the Merger, which costs are not currently
estimable.
The accompanying unaudited pro forma combined consolidated balance sheet gives
effect to the Financing Agreement and the Merger as if they had occurred on
September 30, 1998, combining the historical consolidated balance sheet of
Servico and the historical balance sheet of Impac at September 30, 1998. The
accompanying unaudited pro forma combined consolidated statements of operations
give effect to the Financing Agreement and Merger as if they had occurred on
January 1, 1997.
THE UNAUDITED PRO FORMA COMBINED CONSOLIDATED FINANCIAL STATEMENTS DO NOT
PURPORT TO REPRESENT WHAT THE FINANCIAL POSITION OR RESULTS OF OPERATIONS OF
LODGIAN, SERVICO, OR IMPAC WOULD ACTUALLY HAVE BEEN IF THE OFFERING OR THE
MERGER HAD IN FACT OCCURRED ON THE DATES INDICATED OR TO PROJECT THE FINANCIAL
POSITION OR RESULTS OF OPERATIONS FOR ANY FUTURE DATE OR PERIOD.
<PAGE>
LODGIAN, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 1998
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
HISTORICAL HISTORICAL PRO FORMA PRO FORMA
SERVICO IMPAC ADJUSTMENTS (A) LODGIAN
------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Assets
Current Assets:
Cash and cash equivalents $ 26,257 $ 1,010 $ 14,426 B $ 41,693
Cash restricted 0 4,687 0 4,687
Accounts Receivable, net of allowances 16,150 9,821 0 25,971
Inventories 4,931 629 1,938 C 7,498
Other Current Assets 14,816 4,093 8,666 B 27,575
------------------------------------------------------------------------
Total Current Assets 62,154 20,240 25,030 107,424
Property and equipment, net 681,439 454,204 112,653 B,C 1,248,296
Deposits for capital expenditures 12,553 0 23,000 B 35,553
Other assets, net 30,502 13,499 5,997 B 49,998
------------------------------------------------------------------------
$786,648 $487,943 $166,680 $1,441,271
========================================================================
Liabilities and stockholder's equity
Current Liabilities
Accounts payable $ 11,531 $ 27,702 ($737)B $ 38,496
Accrued liabilities 34,303 13,392 (154)B,C 47,541
Current portion of long-term obligations 4,511 0 0 4,511
------------------------------------------------------------------------
Total current liabilities 50,345 41,094 (891) 90,548
Long-term obligations, less current portion 330,062 419,754 80,619 B 830,435
Deferred income taxes 15,213 0 43,476 C 58,689
Commitments and contingencies
Minority interests - other 14,763 171 0 14,934
Minority interest - preferred redeemable securities 175,000 0 0 175,000
Stockholder's equity:
Common Stock, $.01 par value -- 25,000,000
shares authorized; 21,074,872 shares and
20,974,852 shares issued and outstanding
at March 31, 1998 and December 31, 1997,
respectively 184 0 80 C 264
Additional paid in capital 177,292 0 70,320 C 247,612
Retained earnings 23,789 0 0 23,789
Members' equity 0 26,924 (26,924)C 0
------------------------------------------------------------------------
Total stockholder's equity 201,265 26,924 43,476 271,665
------------------------------------------------------------------------
$786,648 $487,943 $166,680 $1,441,271
========================================================================
</TABLE>
<PAGE>
LODGIAN, INC.
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
YEAR ENDED DECEMBER 31, 1997
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
PRO FORMA PRO FORMA PRO FORMA PRO FORMA
SERVICO IMPAC ADJUSTMENTS LODGIAN
---------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues
Rooms $276,257 $105,716 $ 0 $381,973
Food and beverage 108,625 26,545 0 135,170
Other 20,485 7,369 0 27,854
---------------------------------------------------------------
405,367 139,630 0 544,997
Operating expenses:
Direct
Rooms 72,691 32,414 0 105,105
Food and beverage 83,503 22,097 0 105,600
General and administrative 8,973 12,653 0 21,626
Other 141,231 51,231 0 192,462
Depreciation and amortization 30,563 12,173 3,989 D 46,725
---------------------------------------------------------------
336,961 130,568 3,989 471,518
---------------------------------------------------------------
Income from operations 68,406 9,062 (3,989) 73,479
Other income (expenses):
Interest income and other 2,880 271 0 3,151
Interest expense (15,006) (24,028) (8,868)E (47,902)
Minority interest-preferred
redeemable securities (12,794) 0 0 (12,794)
Minority interests-other (779) 263 0 (516)
---------------------------------------------------------------
Income before income taxes and extraordinary item 42,707 (14,432) (12,857) 15,418
Provision for income taxes 17,086 (5,773) (5,143)F 6,170
---------------------------------------------------------------
Income before extraordinary item $ 25,621 ($8,659) ($7,714) $ 9,248
===============================================================
Income before extraordinary item per common share - $1.22 $0.32 G
=============== ===========
basic and diluted
Basic weighted average shares 20,918 28,918 G
</TABLE>
<PAGE>
LODGIAN, INC.
UNAUDITED PRO FORMA STATEMENT OF OPERATIONS
NINE MONTHS ENDED SEPTEMBER, 1998
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
PRO FORMA HISTORICAL PRO FORMA PRO FORMA
SERVICO IMPAC ADJUSTMENTS LODGIAN
------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues
Rooms $213,107 $ 90,763 $ 0 $303,870
Food and beverage 78,614 19,817 0 98,431
Other 15,129 6,944 0 22,073
------------------------------------------------------------
306,850 117,524 0 424,374
Operating expenses:
Direct
Rooms 57,892 21,311 0 79,203
Food and beverage 60,914 16,100 0 77,014
General and administrative 7,237 8,477 0 15,714
Other 103,145 43,619 0 146,764
Depreciation and amortization 23,945 11,177 945 D 36,067
------------------------------------------------------------
253,133 100,684 945 354,762
------------------------------------------------------------
Income from operations 53,717 16,840 (945) 69,612
Other income (expenses):
Interest income and other 1,840 0 0 1,840
Loss on Asset Disposition (432) 0 0 (432)
Interest expense (14,659) (21,563) (6,651)E (42,873)
Settlement on swap transactions (31,492) 0 0 (31,492)
Merger Related Costs 0 (3,084) 0 (3,084)
Minority interest-preferred 0
redeemable securities (9,396) 0 0 (9,396)
Minority interests-other (1,126) 16 0 (1,110)
------------------------------------------------------------
Income before income taxes and extraordinary item (1,548) (7,791) (7,596) (16,935)
Provision for income taxes (619) 0 (6,155)F (6,774)
------------------------------------------------------------
Income before extraordinary item (929) (7,791) (1,441) (10,161)
============================================================
Income before extraordinary item per common share - ($0.05) ($0.36)G
============= =============
basic and diluted
Basic weighted average shares 20,261 28,261 G
</TABLE>
<PAGE>
LODGIAN, INC.
NOTES TO UNAUDITED PRO FORMA FINANCIAL STATEMENTS
A) The unaudited historical Servico and unaudited historical Impac financial
information was derived from information provided by the respective
companies as of September 30, 1998 and December 31, 1997. The pro forma
adjustments reflect the merger of Servico and Impac with Servico (the
Merger) which is accounted for under the purchase method of accounting
whereby Servico is the acquiring company. The pro forma adjustments also
reflect the consummation of a $265 million financing agreement (the
Financing Agreement). All pro forma adjustments in the condensed
consolidated balance sheet give effect to the Merger and the Financing
Agreement as if they had occurred September 30, 1998 and January 1, 1997
for the statements of operations. The pro forma statements are presented
for illustrative purposes only. Such information is not necessarily
indicative of the financial position of Lodgian had these transactions been
consummated at the date indicated.
B) The proceeds from the Financing Agreement were used as follows:
Cash proceeds at closing $14,426
Prepayment of expenses at closing 8,666
Acquisition related closing costs 22,639
Amount placed in required reserve fund
at closing 23,000
Debt related closing costs paid at closing 5,997
Payment of accounts payable at closing 737
Payment of accrued liabilities at closing 5,154
Repayment of long term obligations at closing 184,381
==================
Total debt from Financing Agreement $265,000
==================
C) The purchase price of Impac is estimated to be $556,419 consisting of the
issuance of 8,000,000 shares of stock at $8.80 per share plus the payment
of $15 million in cash and the assumption of $519,324 of Impac debt plus
acquisition related costs of $10 million. Additionally, 1,400,000 shares to
be issued are deferred until the completion of certain developments in
progress. The allocation of the preliminary purchase price is as follows
(in thousands):
<TABLE>
<CAPTION>
Historical Pro Forma
Fair Value Impac Adjustments
---------------- -------------- ------------------
<S> <C> <C> <C>
Assets:
Current assets $ 22,178 $ 20,240 $ 1,938
Property and equipment 544,218 454,204 90,014
Other assets 13,499 13,499 -
================ ============== ==================
$579,895 $487,943 $91,952
================ ============== ==================
Liabilities and equity:
Current liabilities $46,094 $41,094 $5,000
Long-term obligations 419,754 419,754 -
Deferred income taxes 43,476 - 43,476
Minority interests 171 171 -
Paid-in capital 70,400 - 70,400
Members' equity - 26,924 (26,924)
================ ============== ==================
$579,895 $487,943 $91,952
================ ============== ==================
</TABLE>
D) Depreciation expense for the period ending September 30, 1998, and the year
ended December 31, 1997 is recorded to reflect the costs associated with
the acquired Impac assets. The allocation of the cost of the acquired
assets between land, buildings, and furnishings and equipment is based on
the assets' fair value. Depreciation expense of buildings and furnishings
and equipment is based upon an estimated useful life of 40 years and 7
years, respectively. Depreciation is calculated based on a straight line
basis.
E) Interest expense for the period ending September 30, 1998, and the year
ending December 31, 1997 is based on the incremental debt related to the
Financing Agreement at 11% to reflect the interest rate and any
amortization of loan costs less any amounts that would have been expensed
during the year as a result the debt being written off as of January 1,
1997.
F) Provision for income taxes in the pro forma adjustments is recorded using
Lodgian's effective tax rate of 40%.
G) The following table sets forth the pro forma computation of basic and
diluted earnings per share:
<TABLE>
<CAPTION>
Nine Months Ended Year
September 30, Ended
1998 December 31,
1997
------------------ -----------------
<S> <C> <C>
Numerator - basic and diluted per share:
Income before extraordinary items ($10,161) $ 9,248
Effect of dilutive securities:
Minority interest- preferred redeemable securities 0 0
================== =================
Diluted earnings numerator ($10,161) $ 9,248
================== =================
Denominator:
Denominator for basic earnings per share -
weighted average shares * 28,261 28,918
Effect of dilutive securities:
Employee stock options 0 0
Convertible preferred securities 0 0
Denominator for diluted earnings per share -
================== =================
adjusted weighted average shares 28,261 28,918
================== =================
Earnings per share - basic and diluted ($0.36) $0.32
</TABLE>
- ----------
NOTE: No effect has been given to employee stock options and preferred
redeemable securities for the 1998 period and the year ended December 31, 1997
as they are anti-dilutive.
* Includes 8,000 shares issued in connection with the Merger.
<PAGE>
SERVICO, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA STATEMENTS OF INCOME
EXCLUDING THE MERGER AND FINANCING AGREEMENT
The accompanying unaudited pro forma statements of income are presented as if
the hotels acquired by Servico in 1997, hotels acquired by Servico in 1998, the
shares of Common Stock issued by Servico in a public offering in June 1997, and
the convertible redeemable equity structured trust securities of June 1998 had
occurred on January 1, 1997. All of Servico's acquisitions have been accounted
for using the purchase method of accounting. Accordingly, assets acquired and
liabilities assumed have been recorded at their estimated fair values based on
their purchase price and other analyses.
The pro forma statements of income do not purport to present the results of
operations of Servico had the transactions and events assumed therein occurred
on the dates specified, nor is it necessarily indicative of the results of
operations that may be achieved in the future. The pro forma statements of
income do not reflect cost savings and revenue enhancements which management
believes have been and may continue to be realized following the hotel
acquisitions. These cost savings and revenue enhancements have been and are
expected to be realized primarily through the restructuring of operations. No
assurances can be made as to the amount of cost savings or revenue enhancements,
if any that actually will be realized.
The pro forma statements of income are based on certain assumptions and
adjustments described in the Notes to unaudited pro forma statements of income
and should be read in conjunction therewith and with the consolidated financial
statements and related notes thereto of Servico incorporated by reference in
this document.
THE UNAUDITED PRO FORMA FINANCIAL STATEMENTS DO NOT PURPORT TO REPRESENT WHAT
THE RESULTS OF OPERATIONS OF SERVICO WOULD ACTUALLY HAVE BEEN IF THE EVENTS
NOTED ABOVE HAD IN FACT OCCURRED ON THE DATES INDICATED OR TO PROJECT THE
RESULTS OF OPERATIONS FOR ANY FUTURE DATE OR PERIOD.
<PAGE>
SERVICO, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA STATEMENT OF INCOME
NINE MONTHS ENDED SEPTEMBER 30, 1998
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA PRO FORMA
SERVICO ADJUSTMENTS (A) SERVICO
---------------------------------------------------------
<S> <C> <C> <C>
Revenues
Rooms $197,273 $15,834 $213,107
Food and beverage 74,673 3,941 78,614
Other 14,683 446 15,129
---------------------------------------------------------
286,629 20,221 306,850
Operating expenses:
Direct
Rooms 54,015 3,877 57,892
Food and beverage 57,575 3,339 60,914
General and administrative 7,237 0 7,237
Other 93,703 9,442 103,145
Depreciation and amortization 22,528 1,417 23,945
---------------------------------------------------------
235,058 18,075 253,133
---------------------------------------------------------
Income from operations 51,571 2,146 53,717
Other income (expenses):
Interest income and other 1,035 805 1,840
Loss on Asset Disposition (432) 0 (432)
Interest expense (21,893) 7,234 (14,659)
Settlement on swap transactions (31,492) 0 (31,492)
Merger Related Costs 0 0 0
Minority interest-preferred 0
redeemable securities (3,323) (6,073)C (9,396)
Minority interests-other (1,126) 0 (1,126)
---------------------------------------------------------
Income before income taxes and extraordinary item (5,660) 4,112 (1,548)
Provision for income taxes (2,264) 1,645 D (619)
---------------------------------------------------------
Income before extraordinary item ($3,396) $2,467 ($929)
=========================================================
Income before extraordinary item per common share - ($0.16) ($0.05)E
============= =============
basic and diluted
Weighted average shares 20,871 20,261 E
</TABLE>
<PAGE>
SERVICO, INC. AND SUBSIDIARIES
UNAUDITED PRO FORMA STATEMENT OF INCOME
TWELVE MONTHS ENDED DECEMBER 31, 1997
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
HISTORICAL PRO FORMA PRO FORMA
SERVICO ADJUSTMENTS (B) SERVICO
-------------------------------------------------
<S> <C> <C> <C>
Revenues
Rooms $179,956 $ 96,301 $276,257
Food and beverage 80,335 28,290 108,625
Other 16,366 4,119 20,485
-------------------------------------------------
276,657 128,710 405,367
Operating expenses:
Direct
Rooms 49,608 23,083 72,691
Food and beverage 60,919 22,584 83,503
General and administrative 8,973 0 8,973
Other 88,036 53,195 141,231
Depreciation and amortization 23,023 7,540 30,563
-------------------------------------------------
230,559 106,402 336,961
-------------------------------------------------
Income from operations 46,098 22,308 68,406
Other income (expenses):
Interest income and other 1,720 1,160 2,880
Interest expense (25,909) 10,903 (15,006)
Minority interest-preferred
redeemable securities 0 (12,794)C (12,794)
Minority interests-other (960) 181 (779)
-------------------------------------------------
Income before income taxes and extraordinary item 20,949 21,758 42,707
Provision for income taxes 8,379 8,707 D 17,086
-------------------------------------------------
Income before extraordinary item $12,570 $13,051 $25,621
=================================================
Income before extraordinary item per common share - $0.83 $1.22 E
=========== ===============
basic
Income before extraordinary item per common share $0.83 $1.13 E
=========== ===============
assuming dilution
Basic weighted average shares 15,183 20,918 E
Diluted weighted average shares 15,183 29,545 E
</TABLE>
<PAGE>
SERVICO, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA STATEMENTS OF INCOME
A) The historical statement of income of Servico for the period ended
September 30,1998, includes the operations of various properties that it
acquired during 1998 from the date of acquisition through September 30,
1998 and the effect of the convertible redeemable equity structured trust
securities offering completed in June 1998.
The pro forma adjustments include operations of the acquired properties
from the beginning of 1998 through the date of acquisition as follows:
PROPERTY DATE OF ACQUISITION
-------- -------------------
Clarion Hotel, Niagara Falls January 16, 1998
Holiday Inn, Niagara Falls January 16, 1998
Holiday Inn, Grand Island January 16, 1998
Town Center Hotel, Silver Springs February 19, 1998
Holiday Inn, East Hartford May 28, 1998
Holiday Inn, New Haven May 28, 1998
Holiday Inn, Moravia May 28, 1998
Holiday Inn, Inner Harbor May 28, 1998
Holiday Inn, Glen Burnie North May 28, 1998
Holiday Inn, Baltimore International Airport May 28, 1998
Holiday Inn, Frederick May 28, 1998
Holiday Inn, Cromwell Bridge May 28, 1998
Holiday Inn, Belmont May 28, 1998
Holiday Inn, Arsenal Road May 28, 1998
Holiday Inn, Market Street May 28, 1998
Holiday Inn, East Lancaster May 28, 1998
Holiday Inn, North Lancaster May 28, 1998
B) The historical statement of income of Servico for the year ended December
31, 1997, includes the operations of various properties that it acquired
during 1998 from the date of acquisition through December 31, 1997 and the
effect of the convertible redeemable equity structured trust securities
offering completed in June 1998.
The pro forma adjustments include operations of the acquired properties
from the beginning of 1997 through the date of acquisition as follows:
PROPERTY DATE OF ACQUISITION
-------- -------------------
Holiday Inn Select, Phoenix February 28, 1997*
Holiday Inn, Manhattan February 28, 1997*
Holiday Inn, Lawrence February 28, 1997*
Crowne Plaza, Cedar Rapids May 29, 1997
Holiday Inn, Dallas July 15, 1997
Sheraton, Concord September 24, 1997
Holiday Inn Select, Windsor October 3, 1997
Comfort Inn, Roseville October 17, 1997
Holiday Inn, Jamestown November 7, 1997
Hilton, Columbia November 7, 1997
Ramada, Houston November 21, 1997
Sheraton, West Palm Beach November 21, 1997
Holiday Inn, Silver Spring November 21, 1997
Holiday Inn, Rolling Meadows November 21, 1997
Holiday Inn, Winter Haven November 21, 1997
- ----------
* Ownership percentage increased from 51% to 100%.
The pro forma adjustments include operations of the properties acquired in
1998 from the beginning of 1997 through December 31, 1997 as follows:
PROPERTY DATE OF ACQUISITION
Clarion Hotel, Niagara Falls January 16, 1998
Holiday Inn, Niagara Falls January 16, 1998
Holiday Inn, Grand Island January 16, 1998
Town Center Hotel, Silver Springs February 19, 1998
Holiday Inn, East Hartford May 28, 1998
Holiday Inn, New Haven May 28, 1998
Holiday Inn, Moravia May 28, 1998
Holiday Inn, Inner Harbor May 28, 1998
Holiday Inn, Glen Burnie North May 28, 1998
Holiday Inn, Baltimore International Airport May 28, 1998
Holiday Inn, Frederick May 28, 1998
Holiday Inn, Cromwell Bridge May 28, 1998
Holiday Inn, Belmont May 28, 1998
Holiday Inn, Arsenal Road May 28, 1998
Holiday Inn, Market Street May 28, 1998
Holiday Inn, East Lancaster May 28, 1998
Holiday Inn, North Lancaster May 28, 1998
C) Minority Interests - preferred redeemable securities represents interest on
the $175 million at 7.0% plus amortization of the Offering costs for the
full year ended December 31, 1997 and the period from January 1, 1998 to
the date of the Offering.
D) To record the provision for income taxes relating to the pro forma
adjustments using Servico's effective rate of 40%.
E) The following table sets forth the pro forma computation of basic and
diluted earnings per share:
<TABLE>
<CAPTION>
Nine Months Ended Year
September 30, Ended
1998 December 31,
1997
------------------ -----------------
<S> <C> <C>
Numerator - basic and diluted per share:
Income before extraordinary items ($929) $25,621
Effect of dilutive securities:
Minority interest- preferred redeemable securities 0 7,676
================== =================
Diluted earnings numerator ($929) $33,297
================== =================
Denominator:
Denominator for basic earnings per share -
weighted average shares 20,261 20,918
Effect of dilutive securities:
Employee stock options 0 457
Convertible preferred securities 0 8,170
Denominator for diluted earnings per share -
================== =================
adjusted weighted average shares 20,261 29,545
================== =================
Basic earnings per share $0.05 $1.22
Diluted earnings per share $0.05 $1.13
</TABLE>
- ----------
NOTE: No effect has been given to employee stock options and preferred
redeemable securities for the 1998 period as they are anti-dilutive.
