<PAGE>
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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, 1998
OR
[X] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from __________________ to _____________________
Commission file number 1-6123
CRAIG CORPORATION
(Exact name of Registrant as specified in its charter)
DELAWARE 95-1620188
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
550 South Hope Street 90071
Suite 1825 Los Angeles CA (Zip Code)
(Address of principal executive offices)
Registrant's telephone number, including area code: (213) 239-0555
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 twelve 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. There were 3,762,912 shares of
Common Stock, $0.25 par value per share, and 7,058,412 shares of Class A Common
Preference Stock, $0.01 par value per share, as of August 12, 1998.
================================================================================
<PAGE>
CRAIG CORPORATION AND SUBSIDIARIES
INDEX
-----
<TABLE>
<CAPTION>
Page
----
<S> <C>
PART 1. Financial Information
- ------
Item 1. Financial Statements
Consolidated Balance Sheets as of June 30, 1998 (Unaudited)
and December 31, 1997........................................ 3
Consolidated Statements of Operations for the Three and
Six Months Ended June 30, 1998 and 1997 (Unaudited)........... 4
Consolidated Statements of Cash Flows for Three and
Six Months Ended June 30, 1998 and 1997 (Unaudited).......... 5
Notes to Consolidated Financial Statements..................... 6
Item 2. Management's Discussion and Analysis of the Consolidated
Statements of Operations..................................... 12
PART 2. Other Information
- ------
Item 1. Legal Proceedings.............................................. 18
Item 2. Changes in Securities.......................................... 18
Item 3. Defaults Upon Senior Securities................................ 18
Item 4. Submission of Matters to a Vote of Security Holders............ 18
Item 5. Other Information.............................................. 18
Item 6. Exhibits and Reports on Form 8-K............................... 18
Signatures.............................................................. 19
</TABLE>
<PAGE>
CRAIG CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
JUNE 30, 1998 DECEMBER 31, 1997
-------------------- -------------------
ASSETS (In thousands of dollars)
- ---------------------------------------------- --------------------------------------------
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 81,092 $ 98,202
Restricted cash 1,191 4,755
Receivables, net 1,542 1,206
Note receivable -- 720
Inventories 235 194
Prepayments and other current assets 872 589
-------- --------
Total current assets 84,932 105,666
Investments in unconsolidated affiliates 13,663 8,603
Notes receivable from joint venture partners 2,314 1,771
Net investment in leased equipment 2,128 2,125
Property and equipment, net 49,524 35,658
Other assets 2,065 2,067
Excess of cost over net assets acquired 10,931 11,235
-------- --------
Total assets $165,557 $167,125
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
CURRENT LIABILITIES:
Accounts payable $ 2,468 $ 2,513
Film rental payable 1,590 1,637
Accrued property costs 1,904 3,319
Property purchase commitment 6,264 3,516
Accrued taxes 465 987
Note payable, including $1,998 to affiliate 2,143 2,643
Other accrued expenses and liabilities 1,335 1,286
-------- --------
Total current liabilities 16,169 15,901
Capitalized lease, less current portion 506 509
Note payable 1,004 1,100
Other long-term liabilities 4,079 3,735
Deferred tax liabilities 8,368 8,368
Minority interests in equity of subsidiaries 31,481 32,273
Redeemable Preferred stock of Reading 7,000 7,000
SHAREHOLDERS' EQUITY
Preferred stock, par value $.25, 1,000,000 shares
authorized, none issued -- --
Class A common preference stock, par value $.01,
10,000,000 shares authorized, 8,734,065 issued and
7,058,412 outstanding 71 16
Class B common stock, par value $.01, 20,000,000
shares authorized, none issued -- --
Common Stock, par value $.25, 7,500,000 shares
authorized, 5,444,065 shares issued and 3,762,912
outstanding 1,361 1,361
Additional paid-in capital 31,392 30,828
Accumulated other comprehensive income (5,917) (4,323)
Retained earnings 89,797 90,111
Cost of treasury shares, 3,356,806 shares including
1,675,653 Class A shares (19,754) (19,754)
--------- ---------
Total shareholders' equity 96,950 98,239
--------- ---------
Total liabilities and shareholders' equity $165,557 $167,125
========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE>
CRAIG CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
------------------------------- ------------------------------
1998 1997 1998 1997
--------------- -------------- --------------- -------------
(IN THOUSANDS OF DOLLARS, EXCEPT PER SHARE AMOUNTS)
------------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues:
Theater admissions $ 6,187 $4,807 $12,597 $ 9,059
Theater concessions 1,874 1,542 3,930 2,852
Theater advertising and other 328 224 565 433
Real estate 170 63 212 100
Dividend income from Stater -- 1,816 -- 3,612
Service income from Stater -- 375 -- 750
------- ------ ------- -------
8,559 8,827 17,304 16,806
------- ------ ------- -------
Expenses:
Theater costs 6,130 4,769 12,357 9,145
Theater concession costs 420 328 857 626
Depreciation and amortization 633 355 1,220 711
General and administrative
expenses 2,843 3,209 5,378 5,210
------- ------ ------- -------
10,026 8,661 19,812 15,692
------- ------ ------- -------
Earnings (loss) before minority
interest, other income and taxes (1,467) 166 (2,508) 1,114
Equity in earnings (losses) of
affiliates (1) 101 130 166
Other income (expense) 215 8 (417) 238
Interest income, net 1,138 615 2,490 1,290
------- ------ ------- -------
Earnings (loss) before taxes and
minority interest (115) 890 (305) 2,808
Minority interest in (income) losses
of consolidated subsidiaries 302 70 626 (104)
------- ------ ------- -------
Earnings (loss) before taxes 187 960 321 2,704
Provision for taxes 214 162 407 406
------- ------ ------- -------
Net earnings (loss) (27) 798 (86) 2,298
Dividends paid on subsidiary
redeemable preferred stock (114) (114) (228) (228)
------- ------ ------- -------
Net earnings (loss) applicable to
common shareholders $ (141) $ 684 $ (314) $ 2,070
======= ====== ======= =======
Basic and diluted earnings (loss) per
share $ (0.01) $ 0.06 $ (0.03) $ 0.19
======= ====== ======= =======
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE>
CRAIG CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30,
-----------------------------------------
1998 1997
---------------- ----------------
(In thousands of dollars)
<S> <C> <C>
OPERATING ACTIVITIES
Net earnings (loss) $ (86) $ $2,298
Adjustments to reconcile net earnings (loss) to net cash
provided by (used in) operating activities:
Depreciation 906 375
Amortization 314 336
Deferred rent expense 56 484
Undistributed earnings (losses) of affiliates (130) (166)
Loss on disposal of assets 423 --
Minority interest (626) 104
Changes in operating assets and liabilities:
(Increase) decrease in receivables (317) 1,973
(Increase) decrease in affiliate receivables -- (3,619)
(Increase) decrease in other current assets 932 (171)
Increase (decrease) in payables (2,925) (5,784)
Increase (decrease) in accrued film rental (40) 352
Increase (decrease) in other liabilities 20 (3)
Other, net -- (398)
-------- --------
Net cash provided by (used in) operating activities (1,473) (4,219)
INVESTING ACTIVITIES
Purchase of stock of subsidiary--minority interest -- (819)
Purchase of Citadel Stock (1,425) (1,998)
Purchase of property and equipment (16,609) (2,314)
Decrease in restricted cash 2,970 1,596
Investment in joint ventures (3,508) --
Other investments -- (145)
Increase in purchase commitment 3,056 --
-------- --------
Net cash provided by (used in) investing activities (15,516) (3,680)
FINANCING ACTIVITIES
Distributions to minority partner (161) (181)
Note payable to Citadel -- 1,998
Payment of Reading preferred dividends (228) (227)
Decrease in note payable (574) (1,500)
-------- --------
Net cash provided by (used in) financing activities (963) 90
EFFECT OF FOREIGN EXCHANGE RATE CHANGES 842 (1,039)
-------- --------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (17,110) (8,848)
CASH AND CASH EQUIVALENTS AT BEGINNING OF THE PERIOD 98,202 52,172
-------- --------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 81,092 $ 43,324
======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE>
CRAIG CORPORATION AND SUBSIDIARIES
Notes to Condensed Financial Statements (unaudited)
June 30, 1998
(amounts in tables in thousands)
NOTE 1 -- BASIS OF PRESENTATION
BASIS OF CONSOLIDATION: The consolidated financial statements include the
accounts of Craig Corporation ("Craig") and its wholly owned subsidiaries
(collectively, the "Company") and its majority owned subsidiaries (collectively,
the "Consolidated Company"). Such majority owned subsidiaries include the
accounts of Reading Entertainment, Inc. ("REI" and together with its
consolidated subsidiaries, "Reading"). Reading is in the business of developing
and operating multi-plex cinemas in the United States, Puerto Rico and Australia
and of developing, and eventually operating, entertainment centers in Australia.
Reading operates its cinemas through various subsidiaries under the Angelika
Film Centers and Reading Cinemas names in the mainland United States (the
"Domestic Cinemas"); through Reading Cinemas of Puerto Rico, Inc., a wholly
owned subsidiary of Reading, under the CineVista name in Puerto Rico
("CineVista" or the "Puerto Rico Circuit"); and through Reading Australia Pty.,
Limited (collectively with its subsidiaries referred to herein as "Reading
Australia") under the Reading Cinemas name in Australia (the "Australia
Circuit"). Reading's entertainment center development activities in Australia
are also conducted through Reading Australia, under the Reading Station name. In
April 1998, Reading entered the New Zealand market through investments
representing a 50% ownership in certain joint ventures ("NZ JV's) for
approximately $2,930,000.
Investments in which the Consolidated Company holds a 20 to 50 percent
interest are accounted for using the equity method. All significant
intercompany transactions and accounts have been eliminated in consolidation.
Minority interest in equity of subsidiaries reflects the minority stockholders'
proportionate share of REI and the Consolidated Company's other joint ventures.
As of June 30, 1998, the Company held approximately 78% of the outstanding
voting securities of REI.
The financial statements have been prepared in accordance with generally
accepted accounting principles for interim information and, therefore, do not
include all information and footnotes required by generally accepted accounting
principles for complete financial statements. The financial information
provided herein, including the information under the heading, "Management's
Discussion and Analysis of Financial Condition and Results of Operations," is
written with the presumption that the users of the interim financial statements
have read, or have access to, the most recent Annual Report on Form 10-K which
contains the latest audited financial statements and notes thereto, together
with Management's Discussion and Analysis of Financial Condition and Results of
Operations as of December 31, 1997 and for the year then ended. In the opinion
of management, all adjustments of a recurring nature considered necessary for a
fair presentation of the results for the interim periods presented have been
included. Operating results for the three and six months ended June 30, 1998 are
not necessarily indicative of the results that may be expected for the year
ending December 31, 1998.
Certain amounts in previously issued financial statements have been
reclassified to conform with the current period presentation.
BASIC AND DILUTED EARNINGS (LOSS) PER COMMON SHARE: Basic earnings per
share is calculated by dividing net earnings (loss) available to common
shareholders by the weighted average shares outstanding during the period. The
weighted average number of shares outstanding for the three months ended June
30, 1998 and 1997 were 10,811,137 and 10,769,824, respectively. The weighted
average number of shares outstanding for the six months ended June 30, 1998 and
1997 were $10,790,595 and $10,769,824, respectively. Basic and diluted earnings
per share for the three months and six months ended June 30, 1998 and 1997 were
calculated based on net earnings available to common stock shareholders, which
includes a reduction for dividends declared on the redeemable preferred stock in
REI held by Citadel Holding Corporation ("CHC" and collectively with its
consolidated subsidiaries, "Citadel") amounting to approximately $114,000 for
each of the three month periods and $228,000 for each of the six month periods,
respectively.
6
<PAGE>
CRAIG CORPORATION AND SUBSIDIARIES
Notes to Condensed Financial Statements (unaudited)
June 30, 1998
(amounts in tables in thousands)
Diluted earnings per share is calculated by dividing net earnings (loss)
available to common shareholders by the weighted average common shares
outstanding plus the dilutive effect of stock options. During the three and six
months ended June 30, 1998, the Company recorded a net loss and, therefore, the
stock options were anti-dilutive. At June 30, 1998, stock options to purchase
654,940 shares of Common Stock and 60,000 shares of Class A Common Stock at
average exercise prices of $6.20 and $7.20 per share, respectively, were
outstanding. The weighted average number of shares used in calculating diluted
earnings per share for the three months and six months ended June 30, 1997 were
10,961,060 and 10,945,989, respectively.
NOTE 2 -- COMPREHENSIVE INCOME
As of January 1, 1998, the Company adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income" ("SFAS 130").
SFAS 130 establishes rules for the reporting and presentation of comprehensive
income and its components. SFAS 130 requires foreign currency translation
adjustments, which prior to adoption were reported separately in stockholders'
equity, to be included in other comprehensive income. The accumulated foreign
currency translation adjustment as of December 31, 1997 has been reclassified to
conform to the requirements of SFAS 130 and has been reflected as "Accumulated
other comprehensive income" in the Consolidated Balance Sheets. The adoption of
SFAS 130 did not impact the Company's net loss or total stockholders' equity.
The following sets forth the company's comprehensive (loss) income for the
periods shown:
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1998 1997 1998 1997
-------------- ------------- ---------------- --------------
<S> <C> <C> <C> <C>
Net earnings (loss) $ (27) $ 798 $ (86) $ 2,298
Other comprehensive (loss), net of tax (2,088) (1,058) (1,594) (1,383)
------- -------- ------- --------
Comprehensive earnings (loss) $(2,115) $ (260) $ (1,680) $ 915
======= ======== ======== ========
</TABLE>
NOTE 3 -- INVESTMENTS IN UNCONSOLIDATED AFFILIATES
The carrying value of each of the Company's equity investments which are
included in the accompanying Balance Sheet as "Investments in unconsolidated
affiliates" are as follows:
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1998 1997
------------ -----------
<S> <C> <C>
Citadel $ 8,731 $6,612
Big 4 Ranch, Inc. ("BRI") 394 383
Whitehorse Property Group ("WPG")* 1,608 1,608
New Zealand Joint Ventures ("NZ JV's")** 2,930 0
------- ------
Total $13,663 $8,603
======= ======
</TABLE>
*Does not include loan to joint venture partner of approximately $1,362,000 as
of June 30, 1998.
**Does not include loan to joint venture partner of approximately $578,000 as of
June 30, 1998.
7
<PAGE>
CRAIG CORPORATION AND SUBSIDIARIES
Notes to Condensed Financial Statements (unaudited)
June 30, 1998
(amounts in tables in thousands)
The carrying value of the Company's foreign currency denominated assets
will fluctuate due to changes in the exchange rate between the Australian, New
Zealand and U.S. dollar.
At December 31, 1997, the Consolidated Company's interest in Citadel was
approximately 33.4%. On April 21, 1998, Craig purchased 430,106 shares of CHC
Common Stock in a private transaction increasing the Consolidated Company's
holdings in CHC to approximately 39.9%. In addition to the 430,106 shares of
CHC securities purchased, Craig also purchased as part of the transaction,
430,106 shares of Big 4 Ranch, Inc. ("BRI"). The purchase price of the CHC
securities and BRI securities were $4.625 per share and $0.125 per share,
respectively. The purchase of such shares was consummated pursuant to the
delivery by Craig of $1,425,000 and the issuance of 51,500 treasury shares of
Craig Corporation Class A Common Preference Stock. The issuance of the Company's
Class A Common Shares was reflected in the Balance Sheet as an increase to
shareholders' equity in the amount of $619,000 as of June 30, 1998.
In December 1997 Citadel distributed 100% of the stock in BRI to its
shareholders. The Consolidated Company received 2,230,473 shares of BRI
representing an ownership interest of approximately 33.4%. As described above,
in April 1998, the Company increased its ownership in BRI to approximately
39.9%. BRI owns a 40% interest in three agricultural partnerships which own
agricultural land located in California. Citadel also owns a 40% interest in
the partnerships. The Company accounts for its investment in the Citadel and
BRI common stock by the equity method.
Citadel's net earnings for the three and six months ended June 30, 1998
were $192,000 and $563,000, respectively, and the Company's share of such
earnings for the three and six months ended June 30, 1998 were $43,000 and
$129,000, respectively, which amounts are included in the Condensed Consolidated
Statement of Operations for the three and six months ended June 30, 1998 as
"Equity in earnings (losses) of affiliates." The Consolidated Company's share
of Citadel's net earnings for the three and six months ended June 30, 1997 were
$101,000 and $166,000, respectively. Citadel's assets and liabilities totaled
$29,340,000 and $10,723,000, respectively, at June 30, 1998. The closing price
of Citadel's common stock on the American Stock Exchange at June 30, 1998 was
$4.94 per share, approximately $4,412,000 in excess of the Consolidated
Company's carrying value at June 30, 1998.
BRI's net loss for the three and six months ended June 30, 1998 totaled
approximately $43,000 and $170,000, respectively, and the Consolidated Company's
share of such losses for the respective periods totaled $13,000 and $53,000, and
have been included in the Condensed Consolidated Statement of Operations for the
three months ended June 30, 1998 as "Equity in earnings (losses) of affiliates."
BRI's assets are principally comprised of its 40% interest in the agricultural
partnerships and totaled $1,041,000 at June 30, 1998. At June 30, 1998, BRI
liabilities amounted to approximately $10,000. Management believes that the
June 30, 1998 carrying value of the BRI investment amounting to approximately
$394,000 approximates its fair value.
Reading Australia owns a 50% interest in the Whitehorse Property Group Unit
Trust ("WPG"). In conjunction with the acquisition of WPG, Reading Australia
loaned approximately $1,400,000 to that joint venture partner. WPG owns a
shopping center located near Melbourne, Australia. WPG's net earnings (loss) for
the three and six months ended June 30, 1998 were approximately $(63,000) and
$108,000 and the Company's net operations amounting to $(31,000) and $54,000 has
been included in the Condensed Consolidated Statement of Operations for the
three and six months ended June 30, 1998 as "Equity in earnings (loss) of
affiliate." WPG's assets and liabilities totaled $10,611,000 and $7,621,000,
respectively, at June 30, 1998.
During the second quarter, Reading formed certain 50/50 joint ventures with
two companies
8
<PAGE>
CRAIG CORPORATION AND SUBSIDIARIES
Notes to Condensed Financial Statements (unaudited)
June 30, 1998
(amounts in tables in thousands)
doing business in New Zealand (the "NZ JV's"). These joint ventures either
operate existing cinemas, own land on which existing cinemas are currently
operating, or own land (or options to acquire land) on which it is currently
anticipated that cinemas or entertainment centers will be constructed. In
connection with one of these real estate joint ventures, the Company has made a
loan to one of its joint venture partners of $578,000. The results of operations
of these joint ventures were not material to operating results of the
Consolidated Company for the three and six month period ending June 30, 1998.
NOTE 4 -- PROPERTY AND EQUIPMENT
Property and equipment consisted of the following:
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1998 1997
--------- -------------
<S> <C> <C>
Property held for development* $23,523 $14,714
Land-cinemas 382 401
Property development costs* 1,128 1,440
Buildings 1,878 1,959
Capitalized premises lease 538 538
Leasehold improvements 16,328 9,007
Equipment 9,275 8,074
Construction-in-progress 868 3,159
------- -------
50,920 39,292
Less: Accumulated depreciation (4,396) (3,634)
------- -------
$49,524 $35,658
------- -------
</TABLE>
___________________________
* Represents land held for development and property development costs
capitalized with respect to potential Reading Australia projects. The
carrying value of the Company's foreign currency denominated assets will
fluctuate due to changes in the exchange rate between the Australian, New
Zealand and U.S. dollars.
NOTE 5 -- INCOME TAXES
Craig and Reading file separate consolidated federal and state income tax
returns. One company's net operating loss and capital loss carryforwards,
therefore, cannot be used to offset the other company's tax liabilities. Income
tax expense amounted to approximately $214,000 and $407,000 during the three and
six months ended June 30, 1998 and amounted to $162,000 and $406,000 for the
three and six months ended June 30, 1997, respectively. Income tax expense for
the six months ended June 30, 1998 reflects current estimated tax liabilities,
including federal and state income tax expense of $31,000 and $376,000 of
foreign withholding taxes which will be due if certain intercompany loans are
repaid.
NOTE 6 -- PURCHASE COMMITMENTS
In April, 1998, Reading Australia entered into a purchase agreement to
acquire a twelve acre site in the Melbourne metropolitan area for a total
purchase price of approximately $7 million. Pursuant to the sale agreement, a
deposit has been made and closing is scheduled to occur in September, 1998.
Under the provisions of the purchase agreement, all risks of ownership have
passed to Reading Australia. Accordingly, the land has been reflected in the
Company's June 30, 1998 Consolidated Balance Sheet as "Property held for
development" with the remaining purchase price of approximately $6,264,000
presented as "Purchase commitment" in the Consolidated Balance Sheet.
In May, 1998, Reading Australia entered into an agreement with a
transportation authority pursuant to which Reading Australia agreed to make
certain infrastructure improvements to the Frankston Train Station located in
the Melbourne, Australia metropolitan area. Reading Australia has been granted
the right to construct a combination 12 screen cinema and retail entertainment
center together with certain parking facilities on the site and will receive
title to the site upon completion of the improvements. Pursuant to its agreement
with the authority, Reading
9
<PAGE>
CRAIG CORPORATION AND SUBSIDIARIES
Notes to Condensed Financial Statements (unaudited)
June 30, 1998
(amounts in tables in thousands)
Australia is required to post a letter of credit totaling approximately $3
million to guarantee completion of the improvements. In addition to the
Frankston construction commitment Reading has six committed lease agreements for
theater facilities with a total of approximately 60 screens which are under
construction or for which construction is anticipated to be completed in the
year 2000. The aggregated anticipated costs remaining to complete construction
for the seven facilities totaled approximately $54 million, inclusive of
approximately $36 million related to five Australian projects. The U.S. dollar
cost of such Australian projects was based on a conversion rate of .62 U.S.
dollars to each Australian dollar.
NOTE 7 -- PARENT COMPANY CONDENSED FINANCIAL STATEMENTS
As described in Note 1, the accompanying consolidated financial statements,
include the accounts of Craig and its majority owned subsidiaries. The following
information reflects only the accounts of Craig and its wholly owned
subsidiaries. Craig and Reading are separate public companies and each entity's
capital resources and liquidity is legally independent of the other and any
intercompany loans or receivables would require approval of each separate
company's Board of Directors. Accordingly, the future working capital of Craig
will be primarily dependent on Reading's ability to pay dividends in accordance
with the terms of the Series B Preferred Stock.
<TABLE>
<CAPTION>
CONDENSED BALANCE SHEET:
JUNE 30, DECEMBER 31,
1998 1997
--------------- ------------------
<S> <C> <C>
Assets:
- -------
Cash and cash equivalents $ 3,817 $ 5,332
Dividend receivable from Reading 894 --
Other current assets 25 31
-------- --------
Total current assets 4,736 5,363
Investment in Common Stock of Reading 65,903 68,055
Investment in Preferred Stock of Reading 55,000 55,000
Investment in Citadel 4,000 1,972
Investment in BRI 155 120
Property and equipment, net 714 788
Other assets 180 203
Excess of cost over net assets acquired 1,130 1,153
-------- --------
Total assets $131,818 $132,654
======== ========
Liabilities and stockholders equity:
- ------------------------------------
Accounts payable and accrued expenses $604 $723
Note payable to Citadel, current 1,998 1,998
Deferred tax liabilities 30,410 30,410
Stockholders' equity 98,806 99,523
-------- --------
Total liabilities and stockholders' equity $131,818 $132,654
======== ========
</TABLE>
10
<PAGE>
CRAIG CORPORATION AND SUBSIDIARIES
Notes to Condensed Financial Statements (unaudited)
June 30, 1998
(amounts in tables in thousands)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
----------------------------- -----------------------------
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
CONDENSED STATEMENT OF OPERATIONS: 1998 1997 1998 1997
------------ ------------ ------------- ------------
<S> <C> <C> <C> <C>
Revenues:
- ---------
Earnings from Reading investment $ 385 $ 881 654 2,376
Equity in losses of BRI (6) -- (19) --
Equity in earnings of Citadel 13 30 39 30
Service income from Stater -- 375 -- 750
Interest income 58 42 125 76
------ ------- -------- -------
450 $1,328 $ 799 3,232
------ ------- -------- -------
Expenses:
- ---------
General and administrative 486 553 904 938
Depreciation and amortization 61 50 122 100
Interest expense 86 38 86 38
------ ------- -------- -------
633 641 1,112 1,076
------ ------- -------- -------
Earnings (loss) before income taxes (183) 687 (313) 2,156
Income taxes -- -- -- (85)
------ ------- -------- -------
Net earnings (loss) $ (183) $ 687 $ (313) $2,071
====== ======= ======== =======
</TABLE>
During the three and six months ended June 30, 1998 the Company earned dividend
income from its preferred stock investment in Reading amounting to approximately
$894,000 and $1,788,000, respectively. Such dividends were in excess of the
Company's share of Reading's operating results for such periods and,
accordingly, the Company recorded the excess of such dividends earned and paid
($509,000 and $1,134,000) as a reduction to its common stock investment.
<TABLE>
<CAPTION>
SIX MONTHS ENDED
-----------------------------------------
JUNE 30, JUNE 30,
CONDENSED STATEMENT OF CASH FLOWS: 1998 1997
--------------- ----------------
<S> <C> <C>
Operating Activities:
- ---------------------
Net earnings (loss) $ (313) $2,071
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Undistributed earnings (losses) of equity affiliates (20) (618)
Increase in receivables from affiliate (894) --
Other 248 221
------ -------
Net cash provided by (used in) operating activities (979) 1,674
------ -------
Investing Activities:
- ---------------------
Dividends received from Reading 894 --
Acquisition of Citadel Stock (1,425) (1,998)
Acquisition of Reading Stock -- (819)
Purchase of equipment (5) --
------ -------
Net cash provided by (used in) investing activities (536) (2,817)
------ -------
Financing Activities:
Note payable to Citadel for stock -- 1,998
------ -------
Net cash provided by financing activities -- 1,998
Increase (decrease) in cash and cash equivalents (1,515) 855
Cash and cash equivalents at beginning of period 5,332 3,492
------ -------
Cash and cash equivalents at end of period $3,817 $4,347
====== =======
</TABLE>
11
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Craig Corporation (Craig and collectively with its wholly owned subsidiaries,
the "Company") is in the business of identifying, acquiring, owning and
strategically managing controlling interests in other operating companies. At
June 30, 1998, the Company owned common stock of Reading Entertainment, Inc.
("REI" and collectively with its consolidated subsidiaries, "Reading") and REI
Series B Preferred Stock representing approximately 78% of the voting power of
that company, and 1,096,106 (approximately 16.4%) shares of Citadel Holding
Corporation ("CHC" and collectively with its consolidated subsidiaries,
"Citadel") Common Stock and 1,096,106 (approximately 16.4%) shares of Big 4
Ranch, Inc. ("BRI"). As used herein, the term the "Consolidated Company" is used
to describe, for accounting purposes, the Company reporting on a consolidated
basis its ownership interest in REI.
REI has elected to focus its theater development and related real estate
development activities in two principal areas, the development and operation of
multiplex motion picture theaters in Puerto Rico, the United States, New Zealand
and Australia; and the development in Australia of entertainment centers
typically existing of a multiplex cinema, complimentary restaurant and retail
uses, and self contained parking.
RESULTS OF OPERATIONS
The following is a comparison of the results of operations for the three
months ended June 30, 1998 ("1998 Quarter") with the three months ended June 30,
1997 ("1997 Quarter") and a comparison of the results of operations for the six
months ended June 30, 1998 ("1998 Six Months") with the six months ended June
30, 1997 ("1997 Six Months"). Due to the nature of the Consolidated Company's
development and acquisition activities and the timing associated with the
results of such activities, the effect of earnings recorded with respect to the
Consolidated Company's previous investment in Stater, the effect of litigation
awards and settlements, and the results of operations of six new cinemas opened
during the last two years, the Consolidated Company's financial position,
results of operations and cash flows have varied significantly and management
believes are not indicative of future operating results. The Consolidated
Company's entertainment center developments are in the early stage of
development and generally will not produce income or cash flow for at least
eighteen to twenty-four months from the time that all land use approvals have
been secured.
The Consolidated Company's net loss applicable to common shareholders for the
1998 Quarter approximated $141,000 or $.01 per basic share as compared to 1997
Quarter net earnings applicable to common shareholders of approximately $684,000
or $.06 per basic share. The Consolidated Company's net loss applicable to
common shareholders for the 1998 Six Months amounted to approximately $314,000
or $0.03 per share as compared to net earnings applicable to common shareholders
of $2,070,000 or $0.19 per basic share for the 1997 Six Months. The net
earnings (loss) applicable to common shareholder has been reduced by the 6.5%
per annum dividend on the $7,000,000 stated value of Reading's convertible
preferred stock outstanding held by Citadel amounting to $114,000 and $128,000
for each of the Quarters and Six Month periods reported on herein.
Theater Revenue
- ---------------
Theater Revenue is comprised of Admissions, Concessions and Advertising and
other revenues and totaled the amounts set forth below for each of the three and
six months ended June 30, 1998 and 1997:
1998 1997
---- ----
Three Months $ 8,389,000 $ 6,573.000
Six Months $17,092,000 $12,344,000
Cine Vista's Theater Revenues increased approximately 15% to $8,275,000 in the
1998 Six Months from $7,173,000 in the 1997 Six Months primarily as a result of
more favorable film product in
12
<PAGE>
the first quarter of 1998. CineVista Theater Revenue decreased approximately 5%
to $3,916,000 in the 1998 Six Months from $4,128,000 in the 1997 Six Months
period. The decrease in the current year quarter resulted from a decrease of
approximately $608,000 or 15% due to the closure of four screens during the
second quarter of 1997, and the closure of four additional screens during the
first quarter of 1998; offset by an increase in Theater Revenue of $254,000 or
6% related to the opening of a new eight-plex theater in June, 1998 and an
increase of $146,000 or 4% in cinemas open throughout each of the respective
periods. CineVista is presently in negotiations to build an additional 10
screens at an existing location and will commence construction activities for a
new leased 12 screen multiplex in the San Juan metropolitan area in the third
quarter of 1998. At June 30, 1998 and 1997, CineVista operated 50 screens at 8
locations and 44 screens at 7 locations, respectively.
Domestic Cinemas' Theater Revenues increased approximately 54% to $5,512,000
for six months ended June 30, 1998 from $3,569,000 in the corresponding prior
year period. Two Domestic cinemas commenced operations in December, 1997, and
accounted for 41% of the increase with the other 13% increase resulting from
more favorable film product at the cinema which was open throughout the
respective periods. These same reasons attributed to an increase in Theater
Revenues to approximately 74% to $2,853,000 for the three months ended June 30,
1998 from $1,643,000 in the corresponding prior year period. Reading is
currently constructing a new 12 screen cineplex in New Jersey, scheduled to open
in the second quarter of 1999. At June 30, 1998 and 1997, Reading operated 19
screens at 3 locations and 6 screens at 1 location, respectively.
Theater Revenues for Australian operations increased in excess of 100% to
$3,288,000 for the six months ended June 30, 1998 from $1,602,000 in the
corresponding prior year period, primarily as a result of Reading Australia's
acquisition of a four screen cinema in July 1997 and the opening of an
additional six screen cinema in December, 1997. These same reasons primarily
contributed to an increase in Theater Revenues in excess of 100% to $1,621,000
for the three months ended June 30, 1998 from $801,000 in the corresponding
period. At June 30, 1998 and 1997, Reading Australia operated 16 screens at 3
locations and 6 screens at 1 location, respectively.
Real Estate
- -----------
Real Estate revenues include rental income and the net proceed of sales of
Reading's historic railroad real estate in the United States which Reading is
liquidating. Future real estate revenues may increase as larger properties are
sold, however, Reading anticipates total revenues from such sales will not be
material.
Dividend Income and Service Income from Stater
- ----------------------------------------------
In August 1997, Stater Bros. Holdings Inc. ("SBH") repurchased the
Consolidated Company's investment in SBH Preferred Stock and terminated its
consulting agreement with the Company, and accordingly, the Company no longer
reports Dividend income or Service income from Stater in the 1998 Quarter and
1998 Six Months as compared to the $2,191,000 and $4,362,000 recorded in the
1997 Quarter and 1997 Six Months, respectively.
Interest income
- ---------------
The SBH Preferred Stock, while outstanding, accumulated dividends at a rate of
10.5% on the par value of $69,365,000. Upon redemption of the SBH Preferred
Stock described above, at par plus accumulated dividends, the proceeds were
invested in money market instruments which provided an average yield of
approximately 5.5% during the three months and six months ended June 30, 1998.
Such reinvestment of the SBH proceeds resulted in the elimination of "Dividend
income from Stater" and an overall increase in amounts reported as "Interest
Income" in the Consolidated Statement of Operations in the 1998 periods.
Interest income increased from $615,000 in the 1997 Quarter to $1,138,000 in the
1998 Quarter and increased from $1,290,000 in the 1997 Six Months to $2,490,000
in the 1998 Six Months.
13
<PAGE>
Expenses
- --------
"Theater costs," "Theater concession costs" and "Depreciation and
amortization," collectively "Theater Operating Expenses," reflect the direct
theater costs of CineVista, the Domestic Cinemas and Reading Australia's theater
operations. Theater Operating Expenses increased approximately 38% to
$14,434,000 for the six months ended June 30, 1998 from $10,482,000 in the
corresponding prior year period, due primarily to the inclusion in the current
year of approximately $3,275,000 of Theater Operating Expenses associated with
two Domestic cinemas which opened in December 1997 and the two Australian
cinemas which opened in July 1997 and December 1997. The remaining increase of
$677,000 is attributable to expense items which vary in proportion to increased
Theater Revenues. Theater Operating Expenses increased approximately 32% to
$7,183,000 in the three-month period ended June 30, 1998 from $5,452,000 in the
corresponding prior year period, due primarily to the inclusion in the current
year quarter of Theater Operating Expenses associated with the two additional
Domestic cinemas and the two additional theaters in Australia. Theater Operating
Expenses as a percentage of Theater Revenues remained constant for the three and
six months ended June 30, 1998 as compared to the corresponding prior year
period.
"General and administrative" expenses for the three and six months ended June
30, 1998 and 1997 include the following components:
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Cine Vista $ 216,000 $ 161,000 $ 608,000 $ 385,000
Domestic Cinemas 156,000 125,000 288,000 251,000
Australia 720,000 1,214,000 1,383,000 1,555,000
Craig 485,000 554,000 904,000 937,000
Reading, general 1,266,000 1,155,000 2,195,000 2,082,000
---------- ---------- ---------- ----------
Total $2,843,000 $3,209,000 $5,378,000 $5,210,000
========== ========== ========== ==========
</TABLE>
CineVista's "General and administrative" expense in the 1998 Six Months
includes a $165,000 charge relating to the closing of four screens during the
first quarter. The charge is comprised of a $395,000 loss on leasehold
improvements net of the reversal of a $230,000 provision for deferred rent.
Australia's "General and administrative" expenses decreased 11% to
$1,383,000 in the 1998 Six Months from $1,555,000 in the corresponding prior
year period, primarily due primarily to the inclusion in the 1997 Six Months of
approximately $400,000 in write-offs of property development costs, offset by
increased payroll costs, office expenses and carrying costs of land held for
development associated with the continued expansion of operations and
development activities in Australia. Development costs are expenses upon
management's determination that development of the related theater locations
will not be pursued to completion. These same reasons contributed to a decrease
in Australia's General and administrative expenses to $720,000 in the 1998
Quarter from the corresponding 1997 Quarter. Increases in future quarters are
expected to increase as property development activities expand.
Craig's "General and administrative" expenses decreased $69,000 in the 1998
Quarter and increased $47,000 in the 1998 Six Months as compared to the 1997
Quarter and 1997 Six Months, principally as a result of decreased payroll costs
in the 1998 Quarter, offset by increased outside professional and legal costs
during the first quarter of 1998.
"General and administrative" expenses for Domestic Cinemas and Reading in the
1998 Quarter and 1998 Six Months remained consistent with the 1997 Quarter and
1997 Six Months.
14
<PAGE>
Equity in Earnings of Affiliate
- -------------------------------
"Equity in earnings of affiliates" include earnings from the Consolidated
Company's investment in Citadel, BRI, NZ JV's and WPG. The investment in BRI and
WPG was made in the fourth quarter of 1997 and the investment in the NZ JV's was
made in the second quarter of 1998. Accordingly, "Equity in earnings of
affiliates" in the 1997 Quarter and 1997 Six Months was comprised only of
Citadel equity earnings of $101,000 and $166,000, respectively. In the 1998 Six
Months "Equity in earnings of affiliates" included equity earnings of $129,000
from the Company's investment in Citadel, $54,000 from WPG and the NZ JV's and a
loss of $53,000 from BRI. The impact of the results of operations from the NZ
JV's for the 1998 Quarter and 1998 Six Months was not material.
Other Income (Expense)
- ----------------------
"Other income" totaled $215,000 in the 1998 Quarter in comparison to "Other
income" of $8,000 in the 1997 Quarter and amounted to "Other expense" of
$417,000 in the 1998 Six Months as compared to "Other income" of $238,000 in the
1997 Six Months. The 1998 Six Month expense is primarily a result of losses on
foreign currency derivative positions. The Consolidated Company does not
currently have any foreign currency derivative positions. The 1997 Six Month
income is comprised primarily of amounts received from a third party as
reimbursement of certain acquisition related expenditures in the first quarter
of 1997 which were expensed in prior periods.
Minority Interest
- -----------------
"Minority interest in (income) losses of consolidated subsidiaries" amounting
to $626,000 in the 1998 Six Months is comprised of the (i) the Reading minority
interests share (31%) of Reading's losses and dividend payments applicable to
common shareholders amounting to $785,000, offset by $136,000 from Sutton Hills
minority interests share of the NY Angelika earnings and the minority interests
share in a Reading Australia theater's net income.
"Minority interest" amounted to approximately $302,000 for the three months
ended June 30, 1998 and includes the minority interest's share of the Company's
consolidated net losses and dividend payments for such period of Reading
amounting to $367,000 offset by the minority interests share of the NY Angelika
income and the minority interests share of the Australian theater operating
results amounting to $65,000.
Income Tax Provision
- --------------------
Income tax expense in the 1998 Quarter and Six Months was $214,000 and
$407,000, respectively as compared to $162,000 and $406,000 in the 1997 Quarter
and Six Months, respectively. Income tax expense in the 1998 Six Months included
$376,000 representing foreign withholding taxes, and $31,000 of state and local
taxes as compared to $222,000 and $184,000 in the 1997 Six Months. The 1997
Quarter includes a current tax provision for foreign withholding taxes of
$109,000 which will be paid if certain intercompany loans are repaid and
estimated federal and state taxes of $135.000.
Comprehensive Income
- --------------------
The Company had losses in Comprehensive income (Note 3) of $2,115,000 and
$1,680,000 in the three and six month periods ended June 30, 1998. The
Comprehensive income (losses) in the corresponding periods last year were a loss
of $260,000 and income of $915,000, respectively. The losses reflect the change
in Shareholder's equity resulting from changes in the exchange rates between the
U.S. and Australian dollar. Foreign currency exchange rates in general and in
the Pacific Rim countries in particular (including Australia and New Zealand)
have been subject to significant weakness and volatility during 1998 due to the
currency crisis in South East Asia. The Company's business and operating results
may be impacted by the effects of future foreign currency fluctuations.
In the past the Company has utilized derivative contracts in order to offset
the weakening Australian dollar. No such positions are presently in place or
contemplated by management. The Company's foreign investments are long term in
nature and not readily hedged under normal means. Management believes that the
foreign denominated investments which are presently comprised primarily of
undeveloped real estate assets are currently hedged by the anticipated foreign
dollar investments which will be required to develop the assets to income
producing levels and that no further hedging is required at this time.
15
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1998, the Consolidated Company had cash and cash equivalents
totaling approximately $81,092,000 which includes approximately $77,275,000 held
by Reading. At June 30, 1998, Craig had cash and cash equivalents of
approximately $3,817,000. REI is majority owned by the Company and,
accordingly, is included in the consolidated financial statements. However,
Craig and REI are separate public companies and each entity's capital resources
and liquidity is legally independent of the other and any intercompany loans or
receivables would require approval of each separate company's Board of
Directors. Accordingly, the future liquidity of Craig will be principally
dependent on Reading's ability to pay dividends in accordance with the terms of
the Reading Preferred Stock amounting to approximately $3.575 million annually.
If the Consolidated Company is successful in its efforts to develop all of the
projects which it is presently considering in Australia, New Zealand, Puerto
Rico and the domestic market, its capital requirements over the next two years
will exceed its existing cash balances and existing borrowing arrangements.
However, the Consolidated Company believes that additional funding could be
realized through, among other things, bank borrowings, sale-leaseback
transactions and the issuance/sale of additional equity either of REI or at a
subsidiary or the project level.
The Company has committed development agreements, lease agreements and
purchase commitments for theater facilities, with a total of approximately 72
screens at 7 locations, and entertainment related retail space which are under
construction or for which construction is anticipated to be completed in the
year 2000. The aggregate estimated cost remaining to complete construction for
such facilities totaled approximately $54 million, inclusive of approximately
$36 million related to five Australian projects. The U.S. dollar cost of such
Australian projects was based on a conversion rate of .62 U.S. dollar to each
Australian dollar.
The following summarizes the major sources and uses of cash funds in each of
1998 and 1997 Six Months, respectively:
1998:
- ----
"Unrestricted cash and cash equivalents" decreased $17,110,000 from
$98,202,000 at December 31, 1997 to $81,092,000 at June 30, 1998. Working
capital decreased $21,002,000 from $89,765,000 at December 31, 1997 to
$68,763,000 at June 30, 1998. In addition, to other general and administrative
expenses, other uses in operating activities were a decrease in accounts payable
of $2,925,000.
Net cash used in investing activities amounted to $15,516,000 in the 1998 Six
Months as a result of property purchases of $16,609,000, an investment in joint
venture (inclusive of loans to joint venture partners) of $3,508,000 and the
purchase of Citadel Securities for cash of approximately $1,425,000. Cash used
in investing activities was offset by cash provided through a decrease in
restricted cash amounting to $2,970,000 and a $3,056,000 increase in purchase
commitments.
Cash used in financing activities in the 1998 Six Months amounted to
approximately $963,000 and included a $161,000 distribution to a minority
interest, $228,000 dividend paid to Citadel in connection with their investment
in Reading redeemable stock and a $574,000 decrease in note payables.
1997:
- ----
"Unrestricted cash and cash equivalents" decreased $8,848,000 from $52,172,000
at December 31, 1996 to $43,324,000 at June 30, 1997. Working capital increased
$64,682,000 from $45,787,000 at December 31, 1996 to $110,469,000 principally as
a result of the $67,978,000 reclassification of the Stater Preferred Stock
investment from non-current assets to current based upon the notification by
Stater of their redemption of such Preferred Stock which occurred in August
1997. Net cash operating activities amounted to $4,219,000 in the 1997 Six
Months.
16
<PAGE>
Net cash used in investing activities amounted to approximately $3,680,000 in
the 1997 Six Months including $2,314,000 in the purchase of property and
equipment, $1,998,000 to purchase Citadel Common Stock and $819,000 used to
purchase an additional 78,500 shares (approximately 1% of the outstanding stock)
of REI.
Net cash provided by financing activities amounted to $90,000 in the 1997 Six
Months and was comprised of a $181,000 distribution to a minority partner, a
$1,500,000 note payable payment, a $227,000 dividend paid to Citadel in
connection with their ownership of Reading Preferred Stock, offset by a
$1,998,000 borrowing from Citadel to purchase Citadel Common Stock.
FORWARD-LOOKING STATEMENTS
From time to time, the Company or its representatives have made or may make
forward-looking statements, orally or in writing, including those contained
herein. Such forward-looking statements may be included in, without limitation,
reports to stockholders, press releases, oral statements made with the approval
of an authorized executive officer of the Company and filings with the
Securities and Exchange Commission. The words or phrases "anticipates,"
"expects," "will continue," "estimates," "projects," or similar expressions are
intended to identify "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995.
The results contemplated by the Company's forward-looking statements are
subject to certain risks, trends, and uncertainties that could cause actual
results to vary materially from anticipated results, including without
limitation, delays in obtaining leases and permits for new multiplex locations,
construction risks and delays, the lack of strong film product, the impact of
competition, market and other risks associated with the Company's investment
activities and other factors described herein.
17
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
For a description of legal proceedings, please refer to Item 3
entitled "Legal Proceedings" contained in the Company's Form 10-K for
the fiscal year ended December 31, 1997.
ITEM 2. CHANGES IN SECURITIES
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES.
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDER.
Not applicable.
ITEM 5. OTHER INFORMATION
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27 Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the reporting period.
18
<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.
CRAIG CORPORATION REGISTRANT
Date: August 13, 1998 By: /s/ S. Craig Tompkins
--------------------- ------------------------------
S. Craig Tompkins
President
Date: August 13, 1998 By: Robin W. Skophammer
--------------------- ------------------------------
Robin W. Skophammer
Chief Financial Officer
19
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 81,092
<SECURITIES> 0
<RECEIVABLES> 1,542
<ALLOWANCES> 0
<INVENTORY> 235
<CURRENT-ASSETS> 84,932
<PP&E> 50,920
<DEPRECIATION> (23,532)
<TOTAL-ASSETS> 165,557
<CURRENT-LIABILITIES> 16,169
<BONDS> 7,000
0
71
<COMMON> 1,361
<OTHER-SE> 95,518
<TOTAL-LIABILITY-AND-EQUITY> 165,557
<SALES> 17,092
<TOTAL-REVENUES> 17,304
<CGS> (13,214)
<TOTAL-COSTS> (19,812)
<OTHER-EXPENSES> 2,829
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 321
<INCOME-TAX> (407)
<INCOME-CONTINUING> (86)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (86)
<EPS-PRIMARY> (0.03)
<EPS-DILUTED> (0.03)
</TABLE>
