<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarter Ended March 31, 1996 Commission File Number 1-8226
DI INDUSTRIES, INC.
(Exact name of registrant as specified in its charter)
TEXAS 74-2144774
(State or jurisdiction of (I.R.S. employer
incorporation or organization) identification number)
450 GEARS ROAD, SUITE 625
HOUSTON, TEXAS 77067
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (713) 874-0202
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 [_]
The number of shares of the Registrant's Common Stock, par value $.10 per
share, outstanding at May 14, 1996, was 38,669,378.
<PAGE>
DI INDUSTRIES, INC.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
PART I. Financial Information
Consolidated Balance Sheets 3
Consolidated Statements of Operations 4
Consolidated Statements of Stockholders' Equity 5
Consolidated Statements of Cash Flows 6
Notes to Consolidated Financial Statements 7
Management's Discussion and Analysis of Financial
Condition and Results of Operations 10
PART II. Other Information 13
Signatures 14
</TABLE>
2
<PAGE>
DI INDUSTRIES, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands)
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
----------- -------------
(Unaudited) (Audited)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 996 $ 1,859
Restricted cash - insurance deposits 1,862 1,612
Accounts receivable, net of allowance of $1,935 and $1,951
at March 31, 1996 and December 31, 1995, respectively 17,789 19,423
Rig inventory and supplies 2,902 2,498
Assets held for sale 2,398 2,398
Prepaids and other current assets 2,815 3,806
-------- --------
Total current assets 28,762 31,596
-------- --------
Property and Equipment:
Land, buildings and improvements 3,523 3,523
Drilling and well service equipment 39,910 39,039
Furniture and fixtures 1,094 1,136
-------- --------
Total Property and Equipment 44,527 43,698
Less: Accumulated depreciation and amortization (18,797) (17,788)
-------- --------
Net property and equipment 25,730 25,910
-------- --------
Other Noncurrent Assets 277 277
-------- --------
$ 54,769 $ 57,783
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current maturities of long-term debt $ 1,644 $ 1,315
Accounts payable - trade 10,246 12,529
Accrued workers' compensation 2,672 3,357
Payroll and related employee costs 4,029 3,172
Customer advances 60 116
Other accrued liabilities 3,862 3,604
-------- --------
Total current liabilities 22,513 24,093
-------- --------
Long-term debt less current maturities 10,379 11,146
-------- --------
Other long-term liabilities and minority interest 2,774 1,950
-------- --------
Series A preferred stock - mandatory redeemable 900 900
-------- --------
Commitments and contingent liabilities
Stockholders' equity:
Series B Preferred stock, $1 par value; 10 shares authorized
4 shares subscribed 4,150 4,000
Common stock, $.10 par value; 75,000 shares authorized
38,669 issued and outstanding at March 31, 1996 and
December 31, 1995 3,867 3,867
Additional paid-in capital 46,458 46,458
Deficit (36,272) (34,631)
-------- --------
Total stockholders' equity 18,203 19,694
-------- --------
$ 54,769 $ 57,783
======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE>
DI INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands except per share data)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
--------------------
1996 1995
---- ----
(Unaudited)
<S> <C> <C>
Revenues:
Contract drilling $ 20,102 $ 22,344
--------- ---------
Costs and Expenses:
Drilling operations 18,936 22,524
Depreciation and amortization 1,097 1,113
General and administrative 720 653
Employment severance 602 -
-------- --------
Total costs and expenses 21,355 24,290
-------- --------
Operating Loss (1,253) (1,946)
-------- --------
Other Income (expense):
Interest income 11 30
Interest expense (262) (346)
Gain on sale 15 43
Minority Interest (2) -
-------- --------
Other income (expense), net (238) (273)
-------- --------
Net Loss From Continuing Operations (1,491) (2,219)
Discontinued Operations:
Income (loss) from oil and gas operations - (11)
Loss from sale of oil and gas properties - -
-------- --------
Income (loss) from discontinued operations - (11)
-------- --------
Net Loss Before Income Taxes (1,491) (2,230)
Income Taxes - -
-------- --------
Net Loss (1,491) (2,230)
Series B preferred stock
subscription dividend requirement (150) -
--------- ---------
Net Loss Applicable to Common Stock $ (1,641) $ (2,230)
========= =========
Loss per common share
Loss from continuing operations $ (.04) $ (.06)
Loss from discontinued operations $ - $ -
--------- ---------
Net loss per share $ (.04) $ (.06)
========= =========
Average common and common equivalent shares
outstanding 38,669 38,669
========= =========
</TABLE>
4
<PAGE>
DI INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
(In thousands)
<TABLE>
<CAPTION>
Series B
Common Preferred
Stock Stock Additional
$.10 par $1 par Paid-in
Value Value Capital Deficit Total
----- ----------- ----------- -------- -----
<S> <C> <C> <C> <C> <C>
Balance, December 31, 1994 $ 3,867 - $46,458 $(21,184) $29,141
Net loss (Unaudited) - - - (2,230) (2,230)
-------- ------ ------- -------- -------
Balance, March 31,1995 $ 3,867 - $46,458 $(23,414) $26,911
======== ====== ======= ======== ========
Balance, December 31, 1995 $ 3,867 $4,000 $46,458 $(34,631) $19,694
Net Loss (Unaudited) - - - (1,491) (1,491)
Series B Preferred Stock
Dividend Requirement - 150 - (150) -
-------- ------ ------- -------- -------
Balance, March 31,1996 $ 3,867 $4,150 $46,458 $(36,272) $18,203
======== ====== ======= ======== =======
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE>
DI INDUSTRIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
--------------------
1996 1995
--------- ---------
<S> <C> <C>
(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(1,491) $(2,230)
Adjustments to reconcile net loss to net cash provided by
(used in) operating activities:
Depreciation and amortization 1,097 1,113
Gain on sale of assets (15) (16)
Provision for doubtful accounts - 45
Net effect of changes in assets and liabilities
related to operating accounts 886 3,266
Discontinued operations - 180
------- -------
Cash provided by operating activities 477 2,358
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Property and equipment additions (921) (1,207)
Proceeds from disposal of property 19 28
------- -------
Cash used in investing activities (902) (1,179)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Debt borrowings 167 -
Debt repayments (605) (2,348)
------- -------
Cash used in financing activities (438) (2,348)
------- -------
Net decrease in cash and cash equivalents (863) (1,169)
Cash and cash equivalents, beginning of period 1,859 2,141
------- -------
Cash and cash equivalents, end of period $ 996 $ 972
======= =======
</TABLE>
See accompanying notes to consolidated financial statements.
6
<PAGE>
DI INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(1) GENERAL
The accompanying unaudited consolidated financial statements have been
prepared by DI Industries, Inc. (the "Company") in accordance with the rules and
regulations of the Securities and Exchange Commission. In the opinion of
management, the accompanying unaudited consolidated financial statements contain
all adjustments, which are of a normal recurring nature, necessary to present
fairly the Company's financial position as of March 31, 1996, and the results of
operations and cash flows for the periods indicated. The results of operations
for the three months ended March 31, 1996 and 1995 are not necessarily
indicative of the results for any other period or for the year as a whole.
These consolidated financial statements should be read in conjunction with the
Company's audited consolidated financial statements and notes thereto included
in the Company's Annual Report on Form 10-K for the year ended December 31,
1995.
Consolidated financial statement balances for 1995 have been reclassified to
treat as Discontinued Operations the Company's oil and gas producing properties
which were sold on August 9, 1995.
(2) LOSS PER COMMON STOCK SHARE
The following table presents the weighted average number of shares of common
stock and common stock equivalents outstanding for the three months ended March
31, 1996 and 1995.
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------
1996 1995
-------- --------
(In thousands)
<S> <C> <C>
Weighted Average Shares of Common Stock Outstanding 38,669 38,669
Stock Options (Treasury Method) - -
------ --------
38,669 38,669
====== ========
</TABLE>
Stock options are not included in the computation for the three months
ended March 31, 1996 and 1995 since such inclusion would be antidilutive.
(3) ACCOUNTING FOR INCOME TAXES
The Company adopted Statement of Financial Accounting Standards (SFAS) No.
109, "Accounting for Income Taxes," effective April 1, 1993. This Statement
supersedes Accounting Principles Board Opinion No. 11. Adopting SFAS No. 109
does not effect the Company's loss for the three months ended March 31, 1996,
and 1995, respectively. Based on an analysis of the Company's gross deferred
tax asset (taking into consideration applicable statutory carryforward periods
and other limitations), the Company has determined that the recognition criteria
set forth in SFAS No. 109, "Accounting For Income Taxes", are not met and,
accordingly, the gross deferred tax asset is reduced fully by a valuation
allowance.
Deferred income taxes reflect the gross tax effect of (a) temporary
differences between the carrying amounts of assets and liabilities for financial
reporting purposes, and (b) operating loss and tax credit carryforwards.
7
<PAGE>
DI INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The tax effects of the significant items comprising the Company's net
deferred tax asset as of December 31, 1995 are as follows:
<TABLE>
<CAPTION>
December 31,
1995
------------
(In thousands)
<S> <C>
Deferred tax asset:
Reserves not currently deductible $ 1,804
Operating loss carryforwards 10,438
Tax credit carryforwards 2,400
-------
14,642
Deferred tax liability:
Differences between book and
tax basis of property (5,303)
--------
9,339
Valuation allowance (9,339)
-------
Net deferred tax asset $ -
=======
</TABLE>
The analysis of the likelihood of realizing the gross deferred tax asset
will be reviewed and updated periodically. Any required adjustment to the
valuation allowance will be made in the period in which the developments on
which they are based become known.
(4) CONTINGENT LIABILITIES
The Company is involved in litigation incidental to the conduct of its
business, none of which management believes is, individually or in the
aggregate, material to the Company's consolidated financial condition or results
of operations.
(5) EVENT SUBSEQUENT TO March 31, 1996
On May 7, 1996 the Company entered into two separate definitive merger
agreements to effect a $25 million equity infusion and deep drilling equipment
acquisition transaction.
Under the first agreement, R. T. Oliver, Inc. ("RTO") and Land Rig
Acquisition Corporation ("LRAC") will merge with a new subsidiary of the Company
in exchange for 39,637,378 shares of DI common stock or 31,709,902 if the LRAC
and RTO shareholders exercise an option to receive up to $5 million in cash. In
addition, warrants will also be issued to acquire up to 1,720,000 additional
shares of DI common stock, the exercise of which is contingent upon the
occurrence of certain events. These mergers will result in the acquisition of
18 inactive, deep capacity land drilling rigs which includes five 3,000
horsepower and nine 2,000 horsepower land rigs which are rated for depths of
25,000 feet or greater. The Company believes that these rigs can be brought up
to operating condition within a reasonable time on an economic basis and that
this group of rigs represents a significant concentration of the relatively
small number of such deep drilling land rigs currently available in the market.
Under the second agreement, a subsidiary of Somerset Drilling Associates,
L.L.C. ("Somerset"), a privately-held investment limited liability company, will
be merged into the Company in exchange for 39,637,378 shares of DI common stock
and warrants to acquire up to 1,720,000 shares of DI common stock, the exercise
of which is contingent upon the occurrence of certain events. This merger
transaction will result in a $25 million equity infusion into the Company and it
is anticipated that these funds will be used for combined rig fleet
refurbishment, funding of the above described cash option and general corporate
purposes.
8
<PAGE>
DI INDUSTRIES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
There are certain conditions to closing of these transactions including
approval by the Company's shareholders, the effectiveness of a registration
statement with the Securities and Exchange Commission covering the issuance of
the shares, and the cancellation of the 1995 subscription by Norex Drilling,
Ltd. ("Norex") for 4,000 shares of Series B Preferred Stock and related Series B
Warrants. The $4,000,000 subscription will be repaid to Norex by the Company
with the proceeds from a term loan that will be made by Norex to the Company.
Somerset is currently arranging financing for its equity infusion which it
expects to complete within 30 days.
9
<PAGE>
DI INDUSTRIES, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
INTRODUCTION
The following discussion should be read in conjunction with the
consolidated financial statements of DI Industries, Inc. ("DI" or the "Company")
included elsewhere herein. All significant intercompany transactions have been
eliminated.
FINANCIAL POSITION AND LIQUIDITY
The Company had working capital of $6.2 million and $7.5 million at March
31, 1996 and December 31, 1995, respectively. The Company's current ratio
(current assets to current liabilities) at March 31, 1996 and December 31, 1995,
was 1.28 to 1.00 and 1.31 to 1.00, respectively. Cash and cash equivalents
decreased from $1.9 million at December 31, 1995 to $1.0 million at March 31,
1996, exclusive of $1.9 million and $1.6 million of restricted cash deposits
securing insurance deposits at March 31, 1996 and December 31, 1995,
respectively. Long-term debt was 57.0% and 56.6% of total capital at March 31,
1996 and December 31, 1995, respectively.
During the fourth quarter of 1995, Norex Drilling Ltd. ("Norex") subscribed
to, and paid, $4,000,000 for Preferred Stock of the Company, to be issued
subsequent to December 31, 1995. This stock will be in the form of 4,000 shares
of authorized Series B 15% Senior Cumulative Redeemable Preferred Stock. This
stock has annual dividends of 15% per annum, payable through the issuance of
additional Preferred Shares for the first three years. After December 31, 1998,
dividends are payable in cash, as declared by the Company's Board of Directors.
The $10,000,000 NordlandsBanken AS term loan agreement was amended October
1, 1995 to provide for deferral of monthly principal payments of $277,777 until
January 12, 1997 after which the balance of $9,444,000 will be amortized in 36
equal monthly installments commencing January 12, 1997. As of March 31, 1996,
the Company was not in technical compliance with certain financial covenants in
this loan agreement and is requesting waivers from the Bank.
The Company has an overdraft facility with a bank in Argentina, which is
payable on demand, bearing interest at the current market rate in Argentina and
secured by two drilling rigs. The overdraft facility had an outstanding
balance of approximately $188,000 and $149,000 at March 31, 1996 and December
31, 1995, respectively.
Capital expenditures were approximately $.9 million for the three months
ended March 31, 1996 compared to approximately $1.2 million for the three months
ended March 31, 1995. Capital expenditures for the three months ended March 31,
1995, primarily related to the Company's foreign operations expansion.
Cash provided by operating activities was approximately $.5 million for the
three months ended March 31, 1996 as compared to cash provided by operating
activities of $2.3 million for the three months ended March 31, 1995. The 1995
and 1996 quarters included changes in the accounts receivable, accounts payable,
accrued liabilities, inventory and prepaids generated from international
activity.
As of the current date, management believes the Company will require
additional capital to supplement cash resources available from working capital,
cash flow from operations, proceeds from non-strategic asset sales, and existing
credit facilities to satisfy cash requirements during the next twelve months at
current operating plan levels. Capital requirements for significant new
international projects would require funding from supplemental sources such as
joint venture partner participation, bank project financing or other debt/equity
sources; the availability of which is not assured at this time and which would
be subject to negotiated terms and conditions.
As disclosed in Note 5 to the accompanying Consolidated Financial
Statements, on May 7, 1996, the Company entered into two separate definitive
merger agreements to effect a $25 million cash equity infusion and deep drilling
equipment acquisition transaction. There are certain conditions to closing of
these transactions including approval by the Company's shareholders, the
effectiveness of a registration statement with the Securities and Exchange
Commission covering
10
<PAGE>
the issuance of the shares, and the cancellation of the 1995 subscription by
Norex Drilling, Ltd. ("Norex") for 4,000 shares of Series B Preferred Stock and
related Series B Warrants. The $4,000,000 subscription will be repaid to Norex
by the Company with the proceeds from a term loan that will be made by Norex to
the Company.
RESULTS OF OPERATIONS
The following table highlights revenues and operating expenses, including
relative percentages of revenues, for the Company's operating divisions for the
three months ended March 31, 1996 and 1995.
<TABLE>
<CAPTION>
For the Three Months
Ending March 31,
--------------------------------------------------------
<S> <C> <C> <C> <C>
Percent of Percent of
1996 Revenues 1995 Revenues
------- ---------- ------- -----------
In thousands
Revenues
- --------
Contract Drilling:
US $10,429 $ 9,832
International
Mexico and Central America 1,261 2,904
South America 8,412 7,004
Export Sales and other - 2,604
------- -------
Consolidated Totals 20,102 22,344
------- -------
Operating Expense
- -----------------
Contract Drilling:
US 9,770 93.7% 9,521 96.8%
International
Mexico and Central America 1,144 90.7% 2,963 102.0%
South America 8,022 95.4% 7,285 104.0%
Export Sales and other - - 2,755 105.8%
------- -------
Consolidated Totals 18,936 22,524
------- -------
Operating Margin (Loss) $ 1,166 $ (180)
- ----------------------- ======= =======
</TABLE>
Comparison of the Three Months Ended March 31, 1996 and 1995
Consolidated revenues decreased 10% to $20.1 million for the three months
ended March 31, 1996 compared to $22.3 million for the three months ended March
31, 1995. This decrease was principally due to the absence of export sales of
materials to Costa Rica in 1996. Revenues from U.S. domestic drilling
activities increased by $.6 million from the 1995 to 1996 quarter due to
increased utilization in the Eastern Division. Revenues from the Company's
South American operations increased by $1.4 million from the 1995 to 1996
quarter due to higher levels of reimbursable costs associated with the
Venezuelan operation. Revenues from the Company's Mexico and Central American
operations decreased by $1.6 million from the 1995 to 1996 quarter due to a
reduction in rig operating levels from four rigs to one rig.
Consolidated operating expenses decreased 15.9% to $18.9 million for the three
months ended March 31, 1996 compared to $22.5 million for the three months ended
March 31, 1995 due primarily to the absence of export sales materials to Costa
Rica in 1996. Operating expenses for U.S. domestic drilling increased $.2
million from the 1995 to 1996 quarter, principally due to increased rig activity
in the Eastern Division. Operating expenses for the Company's South American
operations increased $.7 million from the 1995 to 1996 quarter due primarily to
higher labor costs for the Venezuela operations, which are reimbursable under
the terms of the drilling contracts. Mexico and Central American operations
operating expenses decreased $1.8 million from the 1995 to 1996 quarter due to a
reduction in rig operating levels from four rigs to one rig.
11
<PAGE>
Depreciation and amortization decreased to $1,097,000 for the 1996 quarter
compared to $1,113,000 for the 1995 quarter. This slight decrease was primarily
due to the reduction in the depreciable asset base in 1996 resulting from the
$5,290,000 impairment provision made in the fourth quarter, 1995 to reduce the
carrying value of certain drilling rigs and equipment as provided for in
Statement of Financial Accounting Standard No. 121.
General and administrative expense increased by $67,000 from the 1995 to 1996
quarter due to increased staff requirements for the Company's expanded South
American operations.
Employment severance expense of $602,000 for the March 31, 1996 quarter
represents an accrual of contractual severance costs to be paid over a two year
period to the Company's former President and Chief Executive Officer.
Interest expense decreased by $84,000 for the three months ended March 31,
1996 compared to the three months ended March 31, 1995. The decrease was due to
reduced levels of outstanding debt, principally the retirement of $2.1 million
of bank debt related to the Company's oil and gas properties sold in August
1995.
The loss from discontinued operations of $11,000 for the three months ended
March 31, 1995 was the result of the sale of the Company's oil and gas
properties in August 1995.
INDUSTRY TRENDS
The stabilization of working rig count that began in 1995 has continued into
1996. The weekly national count of working rigs in the United States as
reported by Baker Hughes Incorporated on March 15, 1996 was 693 compared to 687
on March 17, 1995. The 693 working rigs included 592 working land rigs which
are in the Company's area of competition.
The significant decline in oil and gas prices in the mid-1980's severely
depressed oil and gas exploration activities and reduced demand for the
Company's oil and gas drilling services. Although industry conditions have
improved during 1995 and 1996, a reversal of this trend and further
deterioration could have an ongoing negative effect on the Company's future
operating results. The decline in drilling activity resulted in an oversupply of
drilling equipment and created intense competition, particularly in the price
received for contract drilling services by drilling contractors. Demand for oil
and gas drilling services will continue to be dependent upon the present and
anticipated sales price of oil and gas, which is subject to conditions such as
consumer demand, events in the Middle East, weather and other factors that are
not controlled by the Company.
There has been an increase in the demand for oil and gas drilling services in
South America. In response to this, during 1992, the Company commenced drilling
activities in Argentina and expanded into Venezuela during 1994. The Company
also formed a majority-owned subsidiary to perform geothermal drilling in
Central America and has completed projects in Guatemala, El Salvador and is
currently working on projects in Mexico. The Company will continue to market
its services into selected international markets.
Although certain consolidations have occurred within the land drilling
industry, an oversupply of land drilling rigs still exists. There is a general
shortage in the industry of used drill pipe, and the cost of obtaining new and
used drill pipe is substantially higher than in prior periods and is currently
escalating. At present, the Company does not have a critical shortage of drill
pipe or other equipment but, depending on rig utilization, will need to purchase
additional drill pipe for rigs in service.
The depressed conditions in the oil and gas drilling industry also caused a
substantial portion of the labor force with drilling experience to leave the
industry. As a result of the continuing overcapacity in the drilling industry
and the Company's practice during recent years of first laying off employees
with the least amount of drilling experience, the Company has not experienced
significant shortages of trained labor. However, an increase in demand for
contract drilling services could cause shortages of trained employees.
12
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- No reports on Form 8-K were filed during the quarter ended March 31,
1996.
(a) Exhibit 11 - Computation of Loss per Common Stock Share.
(b) Exhibit 27 - Financial Data Schedule.
13
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES EXCHANGE ACT OF 1934, THE
COMPANY HAS DULY CAUSED THIS REPORT TO BE SIGNED ON ITS BEHALF BY THE
UNDERSIGNED THEREUNTO DULY AUTHORIZED.
DI INDUSTRIES, INC.
Date: May 15, 1996 By Ivar Siem
-------------------------
Ivar Siem
President and Chief Executive Officer
Date: May 15, 1996 By Thomas L. Easley
-------------------------
Thomas L. Easley
Vice President & Chief Financial Officer
14
<PAGE>
Exhibit 11
DI INDUSTRIES, INC. AND SUBSIDIARIES
COMPUTATION OF LOSS PER COMMON STOCK SHARE
(in thousands except per common stock share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three months ended
March 31,
--------------------
1996 1995
------ ------
<S> <C> <C>
Primary earnings (loss) per share:
Weighted average shares of
common stock outstanding 38,669 38,669
Stock options (treasury
stock method) -(a) -(a)
------- -------
Weighted average shares of common
stock outstanding for
per share computation 38,669 38,669
======= =======
Net loss $(1,491) $(2,230)
Less: Series B Preferred Stock
subscription dividend requirement (150) -
------- -------
Net loss applicable to common stock $(1,641) $(2,230)
======= =======
Loss per common share:
Loss from continuing operations $ (.04) $ (.06)
Loss from discontinued operations - -
------- -------
Net loss per share $ (.04) $ (.06)
======= =======
</TABLE>
Note: Reference is made to Note 2 to Consolidated Financial Statements
regarding computation of per common stock share amounts.
(a) Stock options are not included since inclusion would be antidilutive
for the three months ended March 31, 1996 and 1995, respectively.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1995
<PERIOD-START> JAN-01-1996 JAN-01-1995
<PERIOD-END> MAR-31-1996 MAR-31-1995
<CASH> 996 1,859
<SECURITIES> 0 0
<RECEIVABLES> 17,789 19,423
<ALLOWANCES> 1,935 1,951
<INVENTORY> 2,902 2,498
<CURRENT-ASSETS> 28,762 31,596
<PP&E> 44,527 43,698
<DEPRECIATION> 18,797 17,788
<TOTAL-ASSETS> 54,769 57,783
<CURRENT-LIABILITIES> 22,513 24,093
<BONDS> 0 0
900 900
4,000 4,000
<COMMON> 3,867 3,867
<OTHER-SE> 0 0
<TOTAL-LIABILITY-AND-EQUITY> 54,769 57,783
<SALES> 20,102 22,344
<TOTAL-REVENUES> 20,102 22,344
<CGS> 18,936 22,524
<TOTAL-COSTS> 21,355 24,290
<OTHER-EXPENSES> 238 273
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 262 346
<INCOME-PRETAX> (1,491) (2,230)
<INCOME-TAX> 0 0
<INCOME-CONTINUING> (1,491) (2,219)
<DISCONTINUED> 0 (11)
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> (1,491) (2,230)
<EPS-PRIMARY> (.04) (.06)
<EPS-DILUTED> 0 0
</TABLE>
