<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
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 1-8063
CALIFORNIA REAL ESTATE INVESTMENT TRUST
(Exact name of registrant as specified in its charter)
CALIFORNIA 94-6181186
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
131 STEUART STREET, SUITE 200, SAN FRANCISCO, CA
(Address of principal executive offices)
94105
(Zip Code)
(415) 905-0288
(Registrant's telephone number, including area code)
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 [ ]
<PAGE> 2
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's
classes of common stock as of the close of the latest practicable date.
<TABLE>
<CAPTION>
Class Outstanding at March 31, 1996
- ------------------------------------ -----------------------------
<S> <C>
Common Shares of Beneficial Interest 9,156,970
$1.00 par value ("Common Shares")
</TABLE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements Item 2. Management's Discussion and
Provide the Information required by Rule Analysis of Financial Condition and
of Regulation S-X (17 CFR Part 210). Results Of Operations.
Furnish the information required by
Item 303 Regulation S-K
(SECTION 229.303 of this chapter).
<PAGE> 3
- ------------------------------------------------------------------------------
CALIFORNIA REAL ESTATE INVESTMENT TRUST
- ------------------------------------------------------------------------------
<TABLE>
<CAPTION>
INDEX PAGE
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1: Financial Statements
Consolidated Balance Sheets -
March 31, 1996 and December 31, 1995 1
Consolidated Statements of Operations -
For the Three Months Ended
March 31, 1996 and 1995 2
Consolidated Statements of Cash Flows -
For the Three Months Ended
March 31, 1996 and 1995 3
Notes to Consolidated Financial Statements 4 - 8
Item 2: Management's Discussion and Analysis of the
Financial Condition and Results of Operations 9 - 13
PART II. OTHER INFORMATION
Item 1: Legal Proceedings 14
Item 2: Changes in Securities 14
Item 3: Defaults Upon Senior Securities 14
Item 4: Submission of Matters to a Vote of Security Holders 14
Item 5: Other Information 14
Item 6: Exhibits and Reports on Form 8-K 14
</TABLE>
<PAGE> 4
PART I. FINANCIAL INFORMATION
CALIFORNIA REAL ESTATE INVESTMENT TRUST
AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1996 1995
(UNAUDITED) (AUDITED)
------------ ------------
<S> <C> <C>
ASSETS
INVESTMENTS, GENERALLY HELD FOR SALE:
Rental properties $ 13,354,000 $ 17,215,000
Notes receivable, net of deferred gains of
$1,121,000 at March 31, 1996,
and December 31, 1995 10,490,000 10,502,000
------------ ------------
23,844,000 27,717,000
Cash 5,060,000 4,778,000
Receivables, net of allowance of $890,000 and $700,000
at March 31, 1996 and December 31, 1995, respectively 1,709,000 680,000
Other assets 365,000 357,000
------------ ------------
Total Assets $ 30,978,000 $ 33,532,000
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
LIABILITIES:
Long-term notes payable, collateralized by deeds of trust
on rental properties $ 5,224,000 $ 8,335,000
Accounts payable and accrued expenses 335,000 209,000
Other liabilities 72,000 81,000
------------ ------------
Total Liabilities 5,631,000 8,625,000
------------ ------------
Commitments
SHAREHOLDERS' EQUITY:
Shares of beneficial interest, par value $1 a share; unlimited
authorization, 9,157,000 shares outstanding at
March 31, 1996 and December 31, 1995 9,157,000 9,157,000
Additional paid-in capital 55,098,000 55,098,000
Accumulated deficit (38,908,000) (39,348,000)
------------ ------------
Total Shareholders' Equity 25,347,000 24,907,000
------------ ------------
Total Liabilities and Shareholders' Equity $ 30,978,000 $ 33,532,000
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
1
<PAGE> 5
CALIFORNIA REAL ESTATE INVESTMENT TRUST
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
1996 1995
---- ----
<S> <C> <C>
REVENUES:
Rent $569,000 $536,000
Interest 302,000 343,000
-------- --------
871,000 879,000
-------- --------
EXPENSES:
Operating expenses 148,000 133,000
Property management 27,000 23,000
Depreciation and amortization 5,000 132,000
Interest 137,000 228,000
General and administrative 413,000 187,000
-------- --------
730,000 703,000
-------- --------
Income before gain on foreclosure
or sale of investments 141,000 176,000
Gain on foreclosure or sale of investments 299,000 66,000
-------- --------
Net income $440,000 $242,000
======== ========
Net income per share of beneficial interest $ 0.05 $ 0.03
======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
2
<PAGE> 6
CALIFORNIA REAL ESTATE INVESTMENT TRUST
AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31,
1996 1995
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 440,000 $ 242,000
----------- -----------
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 5,000 132,000
Gain on foreclosure or sale of investments (299,000) (66,000)
Changes in assets and liabilities:
(Increase) decrease in receivables, net (9,000) 102,000
Increase in other assets (59,000) (118,000)
Increase in accounts payable
and accrued expenses 258,000 15,000
Increase in other liabilities 2,000 2,000
----------- -----------
Total adjustments to net income (102,000) 67,000
----------- -----------
Net cash provided by operating activities 338,000 309,000
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Improvements to rental properties (45,000) --
Collections on notes receivable 12,000 818,000
----------- -----------
Net cash (used in) provided by investing activities (33,000) 818,000
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on long-term notes payable (23,000) (17,000)
----------- -----------
Net cash used in financing activities (23,000) (17,000)
----------- -----------
Net increase in cash 282,000 1,110,000
Cash, beginning of period 4,778,000 3,366,000
----------- -----------
Cash, end of period $ 5,060,000 $ 4,476,000
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE> 7
CALIFORNIA REAL ESTATE INVESTMENT TRUST
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
----------
1. Organization and Basis of Presentation:
Organization
California Real Estate Investment Trust was organized under the laws of
the State of California pursuant to a Declaration of Trust dated
September 15, 1966.
The Trust became a partner of Totem Square, L. P. (Totem), a Washington
Limited Partnership in which the Trust owns a 59% interest, on November
30, 1990. The Trust also formed CalREIT Totem Square, Inc. (Cal-CORP)
to act as general partner of Totem. Cal-CORP has a 1% interest in
Totem, and Totem Square Associates, an unrelated party, has the
remaining 40%.
On April 14, 1994, The Peregrine Real Estate Trust (formerly
Commonwealth Equity Trust) as majority shareholder owning 76% of the
Trust's outstanding Shares of Beneficial Interest, voted its shares to
replace the Board of Trustees. At that time, the Trust elected a new
Board of Trustees all of whom were key management personnel of The
Peregrine Real Estate Trust (Peregrine). Subsequently, the Board has
grown to five Trustees of which two are independent. Of the three
remaining Trustees, one is the Chief Executive Officer of CalREIT and
was the Chief Executive Officer of Peregrine until January 1996; one is
Chairman of the Board of Trustees and interim Chief Executive Officer
of Peregrine and one is a former officer of CalREIT and Peregrine.
At March 31, 1996, the Trust owned three commercial/retail properties
located in three market areas in the Western United States. The Trust
also owned a mortgage note portfolio comprised of $19,641,000 in loans,
with book values of $10,490,000, which bears interest at an overall
effective rate of approximately 8% and is collateralized by mortgages
on real property. Most of the investments in the seven loans were
originated by the Trust in connection with the disposition of Trust
properties prior to 1996.
4
<PAGE> 8
CALIFORNIA REAL ESTATE INVESTMENT TRUST
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
----------
1. Organization and Basis of Presentation, continued:
Basis of Presentation
The accompanying financial statements are unaudited; however, they have
been prepared in accordance with generally accepted accounting
principles for interim financial information and in conjunction with
the rules and regulations of the Securities and Exchange Commission.
Accordingly, they do not include all of the disclosures required by
generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments (consisting
solely of normal recurring matters) necessary for a fair presentation
of the financial statements for these interim periods have been
included. The results for the interim period ended March 31, 1996 are
not necessarily indicative of the results to be obtained for the full
fiscal year. These financial statements should be read in conjunction
with the December 31, 1995 audited financial statements and notes
thereto, included in the California Real Estate Investment Trust Annual
Report on Form 10-K.
The accompanying unaudited consolidated financial statements of
California Real Estate Investment Trust include the accounts of the
Trust, Cal-Corp and Totem.
Stock-Based Compensation
In 1995, Statement of Financial Accounting Standards No. 123 (SFAS
123), "Accounting for Stock-Based Compensation" was issued. This
statement requires either recognition or disclosure of a hypothetical
charge for stock options. SFAS 123 also establishes fair value as the
measurement basis for transactions in which an entity acquires goods or
services from nonemployees in exchange for equity instruments. This
statement is effective for transactions entered into after December 15,
1995. The Trust does not intend to record this hypothetical charge for
stock options, but will instead provide required disclosures beginning
with the Form 10-K for the year ended December 31, 1996.
Reclassifications
Certain reclassifications have been made in the presentation of the
1995 financial statements to conform to the 1996 presentation.
5
<PAGE> 9
CALIFORNIA REAL ESTATE INVESTMENT TRUST
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
----------
2. Investments:
At March 31, 1996 and December 31, 1995, the Trust was in the process
of repositioning or monetizing its assets, principally investments.
Therefore, all investments are classified as held for sale.
In 1995, Statement of Financial Accounting Standards No. 121,
"Accounting for the Impairment of Long-Lived Assets to Be Disposed Of",
(SFAS 121) was issued. SFAS 121, requires that an impairment be
recognized to reduce the carrying amount of long-lived assets to their
estimated fair value whenever events or changes in circumstances
indicate that such carrying amount may not be recoverable. After an
impairment is recognized, the reduced carrying amount of the asset is
accounted for as its new cost. During the quarter ended March 31, 1996,
the Trust adopted the provisions of SFAS 121. Generally, fair values
are estimated using discounted cash flow, direct capitalization, and
market comparison analyses.
3. Income Taxes:
The Trust has elected to be taxed as a real estate investment trust and
as such, is not taxed on that portion of its taxable income which is
distributed to shareholders, provided that at least 95% of its real
estate trust taxable income is distributed and that the Trust meets
certain other REIT requirements.
4. Related-Party Transactions:
The Trust and Peregrine are both self-administered. However, they share
certain costs, including personnel costs, for which the Trust
reimburses Peregrine pursuant to a cost allocation agreement based on
each trust's respective asset values (real property and notes
receivable) that is subject to renegotiation annually. During the three
month periods ended March 31, 1996 and March 31, 1995, reimbursable
costs charged to the Trust by Peregrine approximated $71,000 and
$108,000, respectively.
At March 31, 1996 and December 31, 1995, the Trust had $26,000 and
$45,000, respectively, due to Peregrine.
6
<PAGE> 10
CALIFORNIA REAL ESTATE INVESTMENT TRUST
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
----------
5. Statement of Cash Flows Supplemental Information:
In connection with the sale and foreclosure of properties, the Trust
entered into various non-cash transactions as follows:
<TABLE>
<CAPTION>
For the Three Months Ended
March 31,
1996 1995
---- ----
<S> <C> <C>
Sales price less selling costs $ 1,033,000 $ --
Amount due from buyer
(received in April 1996) (1,033,000) --
----------- ---------------
Cash received $ -- $ --
=========== ===============
</TABLE>
One property which collateralized notes payable of $3,089,000 was
foreclosed upon during the quarter ended March 31, 1996, resulting in
no gain or loss as the net book value of the property was equal to its
debt.
Cash paid for interest during the three month periods ended March 31,
1996 and March 31, 1995, was $139,000 and $227,000, respectively.
6. Per Share Data:
Per share data for the three month periods ended March 31, 1996 and
March 31, 1995 is based on the weighted average number of common shares
outstanding during each period. The weighted average number of shares
used in the computations was 9,157,000. At March 31, 1996 there were no
outstanding stock options.
7
<PAGE> 11
CALIFORNIA REAL ESTATE INVESTMENT TRUST
AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
----------
7. Gain on Foreclosure or Sale of Investments:
Components of the gain on foreclosure or sale of investments for
the three months ended March 31, 1996 and March 31, 1995 were as
follows:
<TABLE>
<CAPTION>
For the Three Months Ended
March 31,
Component 1996 1995
--------- ---- ----
<S> <C> <C>
Sale of Redfield property $299,000 $ --
Recognition of deferred gains -- 66,000
-------- -------
$299,000 $66,000
======== =======
</TABLE>
8
<PAGE> 12
- ------------------------------------------------------------------------------
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
- ------------------------------------------------------------------------------
The following discussion should be read in conjunction with the consolidated
financial statements and notes thereto appearing elsewhere in this Form 10-Q.
Historical results set forth are not necessarily indicative of future financial
position and results of operations of the Trust.
Overview
During the latter part of 1995 and the first quarter of 1996, California Real
Estate Investment Trust began to implement its strategy to expand the Trust both
to enhance share value and increase cash available for distribution. Management
began a program to reposition the Trust's assets to implement a growth strategy
through merger or acquisitions.
As part of the Trust's strategy, the Trustees reviewed the past, present and
expected future performance of the Casa Grande Motor Inn in Arroyo Grande,
California. Despite significant improvements in operations under a professional
management company, the hotel's current and projected financial performance was
insufficient to cover its debt service requirements. The Trust suspended debt
service payments and contacted the lender on the property with a proposal to
renegotiate financing. The proposal was rejected and in February 1996, the Casa
Grande Motor Inn was returned to the lender through foreclosure.
Simultaneously, the Trust's four commercial properties were readied for sale.
Leasing, capital and tenant improvement expenditures were approved as they
related to their impact on potential sales prices. As of the end of the first
quarter of 1996, Redfield Commerce Center in Scottsdale, Arizona was sold and
the three other commercial properties had been listed with real estate brokerage
firms. Also during the first quarter, a contract for the sale of the Bekins
Storage Facility was approved by the Board of Trustees and a portion of the
Trust's portfolio of seven mortgage loans were packaged for sale; events
expected to be completed in the second or third quarter of 1996.
After the above activities are completed, the Trust expects to have a
substantial amount of cash with which to pursue an expansion transaction. With a
strong cash position, coupled with New York Stock Exchange and Pacific Stock
Exchange listings, the Trust will be well-positioned to entertain any number of
business opportunities. Concurrent with the search for merger or acquisition
candidates, the Trust has pursued discussions with outside financing sources,
including investment banking firms, to provide either debt or equity financing
for CalREIT's expansion plans. At this time, the Trust believes if a potential
transaction were to enter the final stages of negotiation such financing would
be available.
9
<PAGE> 13
It should be noted, however, that any significant transaction proposed by
CalREIT will require the approval of the Board of Trustees of Peregrine and that
trust's Senior Lender Group. Any additional action that Peregrine, as the
majority shareholder in the Trust might take is unclear.
10
<PAGE> 14
Comparison of the Three Months Ended March 31, 1996 to the Three Months Ended
March 31, 1995
Net income of $440,000 was reported by the Trust for the three months ended
March 31, 1996, an improvement of $198,000 over the net income of $242,000 for
the three months ended March 31, 1995. This increase was primarily the result of
a gain on the sale of the Redfield Commerce Center in March 1996.
Total Revenues decreased $8,000, or 1%, to $871,000 for the three months ended
March 31, 1996, down from $879,000 for the three months ended March 31, 1995.
This decrease was primarily attributable to a decrease in interest revenue
offset by an increase in rental revenues.
Rental revenues increased by $33,000, or 6%, to $569,000 for the three months
ended March 31, 1996, up from $536,000 for the three months ended March 31,
1995. This increase was primarily the result of increases in rental revenue
produced by Totem Square which offset decreases in rental revenue from the
Bekin's Storage Facility.
Interest revenue decreased by $41,000, or 12%, to $302,000 for the three months
ended March 31, 1996, down from $343,000 for the three months ended March 31,
1995. This decrease was primarily due to the decrease in interest received from
one mortgage noteholder offset by the collection of delinquent interest received
from another noteholder.
Total Expenses increased by $27,000, or 4%, to $730,000 for the three months
ended March 31, 1996, up from $703,000 for the three months ended March 31,
1995. This increase in total expenses resulted primarily from the increase in
general and administrative expenses which offset the decreases in depreciation
and amortization and interest expenses.
General and administrative expenses increased by $226,000, or 121%, from
$187,000 for the three months ended March 31, 1995, to $413,000 for the three
months ended March 31, 1996. These changes were due to the net effect of
increases and decreases in various expense categories. The largest increases
were generated by additional Trustee fees paid for expansion transaction
development services, the fee paid to Secured Capital Corporation for Phase I of
the packaging and disposition of certain of the Trust's mortgage notes, as well
as by an increase in shareholder servicing costs.
Depreciation and amortization expense decreased $127,000 from the first quarter
of 1996 compared to that of the first quarter of 1995. The decrease in
depreciation and amortization is a direct result of the cessation of
depreciation of the Trust's rental properties held for sale.
Dispositions. During the first quarter of 1996, the Trust sold an
office/warehouse property in Scottsdale, Arizona and its only hotel property in
Arroyo Grande, California, was allowed to be foreclosed upon after the lender
refused a proposal from the Trust to restructure the debt terms. The net
gain recognized from the sale of the Redfield Commerce Center in Scottsdale was
$299,000.
11
<PAGE> 15
Liquidity and Capital Resources
At March 31, 1996, the Trust had $5,060,000 in cash. Its three properties had a
net book value of $13,354,000 at that date with collateralized indebtedness
against rental properties totaling $5,224,000 (39%). CalREIT's $19,641,000 note
portfolio is carried at a book value of $10,490,000 due primarily to cumulative
write downs in valuation. The primary sources of liquidity for the Trust in the
remainder of 1996, which management believes will adequately meet its future
liquidity and capital resource requirements, will be its cash on hand, cash
generated from operations, interest payments on its notes, and cash generated
from asset dispositions. The primary demands on the Trust's capital resources
will be debt service payments and expenses associated with the search for,
analysis of and negotiations with respect to potential expansion transactions.
The Trust experienced a net increase in cash of $282,000 for the three months
ended March 31, 1996, compared to a net increase in cash of $1,110,000 for the
three months ended March 31, 1995, a difference of $828,000. For the three
months ended March 31, 1996, cash provided by operating activities was $338,000,
up $29,000 from $309,000 during the same period in 1995. Cash provided by
investing activities during this same period decreased by $851,000 to ($33,000),
down from $818,000, primarily the result of a reduction in collections on notes
receivable; and cash used in financing activities increased by $6,000 from
$17,000 to $23,000.
The note on Totem Square of $4,284,000 was originally scheduled to mature on
April 1, 1996. The Trust has received an extension from the lender to May 30,
1996, under the same terms and conditions as the existing agreement and
anticipates signing an extension to May 1997.
The Trust believes that to facilitate a clear understanding of the operating
results of the Trust, Funds From Operations should be examined in conjunction
with net income. Industry analysts generally define Funds From Operations as net
income adjusted for certain non-cash expenses, primarily depreciation and
amortization. Funds From Operations should not be considered as a substitute for
net income as an indication of the Trust's performance or as a substitute for
cash flow as a measure of its liquidity.
Funds From Operations and Funds Available for Distribution. REIT analysts
generally consider Funds From Operations (FFO) an appropriate measure of
performance in comparing the results of operations of REIT's. FFO is defined by
the National Association of Real Estate Investment Trusts as net income computed
in accordance with generally accepted accounting principles before gains and
losses on sales of property and from debt restructuring plus depreciation and
amortization. Funds Available for Distribution (FAD) is defined as FFO less
capital expenditures funded by operations and loan amortization. The Trust
believes that in order to facilitate a clear understanding of the historical
operating results of the Trust, FFO and FAD should be examined in conjunction
with net income as presented in this report. FFO and FAD should not be
considered as an alternative to net income as an indication of the Trust's
performance or to cash flow as a measure of liquidity.
12
<PAGE> 16
Funds From Operations and Funds Available for Distribution for the three months
ended March 31, 1996 and 1995 are summarized as follows:
Calculation of Funds From Operations and Funds Available for Distribution
<TABLE>
<CAPTION>
For the Three Months Ended
March 31,
1996 1995
---- ----
<S> <C> <C>
Income before gain on
foreclosure or sale of investments $ 141,000 $ 176,000
Depreciation and amortization 5,000 132,000
--------- ---------
Funds From Operations 146,000 308,000
Capital improvements (45,000) --
Loan principal payments (23,000) (17,000)
--------- ---------
Funds Available for Distribution $ 78,000 $ 291,000
========= =========
</TABLE>
13
<PAGE> 17
PART II. OTHER INFORMATION
Item 1: Legal Proceedings
None
Item 2: Changes in Securities
None
Item 3: Defaults Upon Senior Securities
None
Item 4: Submission of Matters to a Vote of Security Holders
None
Item 5: Other Information
None
Item 6: Exhibits and Reports on Form 8-K
None
14
<PAGE> 18
SIGNATURES
Pursuant to the requirement 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.
CALIFORNIA REAL ESTATE INVESTMENT TRUST
May 14, 1996 /s/Frank A. Morrow
- ------------ ------------------
Date Frank A. Morrow
Chairman of the Board and
Chief Executive Officer
15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM (A) THE
CONSOLIDATED BALANCE SHEET AND STATEMENT OF OPERATIONS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH (B) FINANCIAL STATEMENTS
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 4-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<EXCHANGE-RATE> 1
<CASH> 5,060
<SECURITIES> 0
<RECEIVABLES> 14,210
<ALLOWANCES> (2,011)
<INVENTORY> 0
<CURRENT-ASSETS> 17,624
<PP&E> 13,354
<DEPRECIATION> 0
<TOTAL-ASSETS> 30,978
<CURRENT-LIABILITIES> 407
<BONDS> 5,224
<COMMON> 64,255
0
0
<OTHER-SE> (38,908)
<TOTAL-LIABILITY-AND-EQUITY> 30,978
<SALES> 0
<TOTAL-REVENUES> 1,170
<CGS> 0
<TOTAL-COSTS> (175)
<OTHER-EXPENSES> (418)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (137)
<INCOME-PRETAX> 440
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 440
<EPS-PRIMARY> 0.05
<EPS-DILUTED> 0
</TABLE>
