<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Quarterly Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended September 30, 1996 Commission File Number 0-5206
------------------ ------
EMONS TRANSPORTATION GROUP, INC.
(Exact name of registrant as specified in its charter)
Delaware 23-2441662
-----------------------------------------------------------------
(State of Incorporation) (I. R. S. Employer Identification
No.)
96 South George Street, York, Pennsylvania 17401 (717-771-1700)
-------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code) (Telephone No.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes X No
----- ----
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes X No
----- ----
The number of shares of each class of common stock of the registrant issued
and outstanding as of September 30, 1996 is as follows:
Voting Common Stock 5,742,689
---------
1
<PAGE>
EMONS TRANSPORTATION GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(unaudited)
<TABLE>
<CAPTION>
September 30, June 30,
1996 1996
--------------- ---------------
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 1,324,398 $ 1,265,373
Accounts receivable, net 2,451,132 2,404,730
Materials and supplies 186,998 204,656
Prepaid expenses 269,998 339,523
Deferred income taxes 79,000 79,000
--------------- ---------------
Total current assets 4,311,526 4,293,282
--------------- ---------------
Property, plant and equipment 27,764,174 26,742,868
Less accumulated depreciation (8,788,596) (8,490,416)
--------------- ---------------
Property, plant and equipment, net 18,975,578 18,252,452
--------------- ---------------
Deferred expenses and other assets 234,094 244,180
--------------- ---------------
TOTAL ASSETS $ 23,521,198 $ 22,789,914
=============== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current portion of long-term debt $ 1,003,824 $ 967,837
Accounts payable 1,674,766 1,806,969
Accrued payroll and related expenses 897,928 876,472
Income taxes payable 73,788 84,108
Other accrued expenses 1,175,930 1,203,876
--------------- ---------------
Total current liabilities 4,826,236 4,939,262
Long-term debt 10,678,040 10,118,172
Other liabilities 615,824 600,861
Deferred income taxes 1,595,000 1,513,000
--------------- ---------------
Total Liabilities 17,715,100 17,171,295
--------------- ---------------
Stockholders' Equity:
Cumulative convertible preferred stock 16,802 16,802
Common stock 57,427 57,037
Additional paid-in capital 23,395,102 23,281,993
Deficit (17,387,367) (17,562,914)
--------------- ---------------
6,081,964 5,792,918
Unearned compensation - restricted stock awards (275,866) (174,299)
--------------- ---------------
Total Stockholders' Equity 5,806,098 5,618,619
--------------- ---------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 23,521,198 $ 22,789,914
=============== ===============
</TABLE>
See accompanying notes to consolidated financial statements.
2
<PAGE>
EMONS TRANSPORTATION GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended
September 30,
----------------------------------------------
1996 1995
--------------- ---------------
<S> <C> <C>
Operating revenues $ 3,929,894 $ 3,686,403
Operating expenses:
Cost of operations 2,675,913 2,485,693
Selling and administrative 735,370 657,867
--------------- ---------------
Total operating expenses 3,411,283 3,143,560
--------------- ---------------
Income from operations 518,611 542,843
Other income (expense):
Interest income 21,444 18,222
Interest expense (251,508) (271,181)
Other, net - 58,770
--------------- ---------------
Total other income (expense) (230,064) (194,189)
--------------- ---------------
Income before income taxes 288,547 348,654
Provision for income taxes 113,000 131,000
--------------- ---------------
Net income 175,547 217,654
Preferred dividend requirements 58,808 60,119
--------------- ---------------
Income applicable to common shareholders $ 116,739 $ 157,535
=============== ===============
Average common shares and common
share equivalents (Note 2) 6,169,742 6,074,527
=============== ===============
Earnings per common share and
common share equivalent (Note 2) $ 0.02 $ 0.03
=============== ===============
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE>
EMONS TRANSPORTATION GROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended
September 30,
----------------------------------------------
1996 1995
--------------- ---------------
<S> <C> <C>
Cash flow from operating activities:
Net income $ 175,547 $ 217,654
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation 298,180 283,833
Amortization 31,209 31,744
Gain on sale of assets - (58,770)
Increase in deferred income taxes 82,000 90,000
Changes in assets and liabilities:
Accounts receivable, materials and
supplies and prepaid expenses 40,781 (261,720)
Accounts payable and accrued expenses (149,013) 790,015
Other assets and liabilities, net 14,963 19,167
--------------- ---------------
Net cash provided by operating activities 493,667 1,111,923
--------------- ---------------
Cash flow from investing activities:
Proceeds from sale of assets - 66,310
Additions to property, plant and equipment (1,021,306) (1,382,656)
Increase in deferred expenses (13,316) -
--------------- ---------------
Net cash used in investing activities (1,034,622) (1,316,346)
--------------- ---------------
Cash flow from financing activities:
Proceeds from issuance of long-term debt 857,407 418,796
Reduction in long-term debt (261,552) (131,402)
Proceeds from issuance of common stock 4,125 -
--------------- ---------------
Net cash provided by financing activities 599,980 287,394
--------------- ---------------
Net increase in cash and cash equivalents 59,025 82,971
Cash and cash equivalents at beginning of period 1,265,373 1,232,859
--------------- ---------------
Cash and cash equivalents at end of period $ 1,324,398 $ 1,315,830
=============== ===============
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE>
EMONS TRANSPORTATION GROUP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
For the Three Months Ended September 30, 1996
(unaudited)
Note 1. The information furnished herein has been prepared in accordance with
generally accepted accounting principles. In the opinion of the
management of Emons Transportation Group, Inc. (the "Company" or "Emons
Transportation Group"), all adjustments (which include only normal
recurring adjustments) considered necessary to present a fair statement
of the results for the periods covered by this report have been made.
Note 2. Earnings per common share is computed by dividing net earnings by the
weighted average number of common shares and common share equivalents
for the period. Earnings per common share for the three month periods
ended September 30, 1996 and 1995 does not include conversion of
convertible preferred stock because the effect of such inclusion would
be anti-dilutive.
Note 3. Emons Transportation Group is not currently a party to any legal
proceedings. However, Emons Industries, Inc. ("Industries"), a
subsidiary of the Company, is currently a defendant in 551 product
liability actions. The Company is in the process of cleaning up a fuel
oil leak at its locomotive maintenance facility in York, Pennsylvania.
Product Liability Actions
-------------------------
Prior to March 1971, under previous management, Industries (then known
as Amfre-Grant, Inc.) was engaged in the business of distributing (but
not manufacturing) various generic and prescription drugs. Industries
sold and discontinued these business activities in March 1971 and
commenced its railcar leasing and railroad operations in October 1971.
One of the drugs which had been distributed was diethylstilbestrol
("DES"), which was taken by women during pregnancy to prevent
miscarriage.
As of September 30, 1996, Industries was one of numerous defendants
(including many of the largest pharmaceutical manufacturers) in 551
lawsuits in which the plaintiffs allege that DES caused adenosis,
infertility, cancer or birth defects in the offspring or grandchildren
of women who ingested DES during pregnancy. In these actions, liability
is premised on the defendant's participation in the market for DES, and
liability is several and limited to the defendant's share of the
market. Of these lawsuits, 545 were commenced after the confirmation of
Industries' Reorganization Plan in December 1986 (the "Plan"), while
the remaining 6 lawsuits are claims which will be treated under the
Plan. In one action, Industries is allegedly identified as the sole
defendant. These actions are currently in various stages of litigation.
Industries has filed a motion in Bankruptcy Court seeking a judgment
declaring that the 545 post-confirmation lawsuits represent claims
which should be asserted against Industries' Chapter 11 estate and are
not post-reorganization liabilities. In November 1994, the Bankruptcy
Court, in the context of a motion for a preliminary injunction, held
that it was likely that Industries would prevail on the merits of this
claim. Counsel has advised the Company that the Bankruptcy Court should
grant Industries' application to classify all of these cases as
bankruptcy claims. In addition, on February 14, 1995, the Bankruptcy
Court advised Industries that it would sign an order which would stay
execution of any judgment rendered against Industries pending
determination of Indus-
5
<PAGE>
tries' application. The order, which was submitted to the Court in
March 1995, has not yet been signed.
Industries has product liability insurance and defense coverage for
nearly all the claims which fall within the policy period 1948 to 1970
up to varying limits by individual and in the aggregate for each policy
year. To date, Industries has not exhausted insurance coverage in any
policy year. During the period July 1, 1996 through September 30, 1996,
6 lawsuits were settled or dismissed at no material liability to
Industries.
Management intends to vigorously defend all of these actions. In the
event that the post-reorganization lawsuits described above are not
treated under the Plan, it is possible that Industries could ultimately
have liability in these actions in excess of its product liability
insurance coverage described above. However, based on Industries'
experience in prior DES litigation, including the proceedings before
the Bankruptcy Court, and its current knowledge of pending cases, the
Company believes that it is unlikely that Industries' ultimate
liability, if any, in excess of insurance coverage and existing
reserves in the pending cases will be in an amount sufficient to have a
material adverse effect upon the Company's consolidated financial
position or results of operations.
Environmental Liability
-----------------------
During fiscal 1994, the Company discovered a diesel fuel oil leak at
its locomotive maintenance facility in York, Pennsylvania resulting
from the fueling of its locomotives. The Company is currently working
with the Pennsylvania Department of Environmental Protection to clean
up the contaminated area. Based upon information currently available,
the Company believes it has provided adequate reserves as of September
30, 1996 for the estimated clean up costs.
6
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS
------------------------------------
Liquidity and Capital Resources
The Company's primary sources of liquidity include its cash and accounts
receivable, which aggregated $3,776,000 and $3,670,000 at September 30, 1996 and
June 30, 1996, respectively, and the remaining balance under a $750,000 Senior
Secured Term Loan Agreement (the "Agreement") issued by a local bank to a
subsidiary. The Company borrowed an additional $225,000 under this Agreement in
August 1996 to finance the acquisition of locomotives for the York, PA
operations, leaving a $325,000 remaining balance available which may be borrowed
through June 30, 1997. The Company intends to use the balance remaining under
this Agreement to finance other projects to generate additional business and for
other business opportunities which may arise.
The Company's cash and cash equivalents increased $59,000 for the three
month period ended September 30, 1996. The net increase includes $494,000 of
cash provided by operations, and $596,000 of additional net borrowings, offset
by $1,021,000 of capital investments.
The Company generated $494,000 of cash from operations for the three month
period ended September 30, 1996 as compared to $1,112,000 for the corresponding
period in the prior year. Excluding changes in assets and liabilities, cash
provided by operations increased from $564,000 for the three months ended
September 30, 1995 to $587,000 for the three months ended September 30, 1996.
Cash was reduced by $93,000 for changes in assets and liabilities in the three
months ended September 30, 1996, primarily as a result of a reduction in
accounts payable and accrued expenses during the quarter.
The Company invested $1,021,000 in capital expenditures during the first
three months of fiscal 1997, including $776,000 of investments in railroad track
structures (net of $330,000 of government grants) in connection with the
Company's continuing extensive track rehabilitation program, and a $224,000
investment in four locomotives for the York, PA operations. As of September 30,
1996, the Company has approximately $1 million of government grants for track
rehabilitation projects and almost $800,000 of government funding under no and
low interest loan programs for future track rehabilitation projects.
The Company's long-term debt obligations increased $596,000 during the
three month period ended September 30, 1996 including $261,000 of scheduled debt
repayments offset by $857,000 of additional borrowings. Additional borrowings
include $225,000 of borrowings under the $750,000 Senior Secured Term Loan to
finance the acquisition of four locomotives for the York, PA operations, and
$632,000 of borrowings under government funded no and low interest loan track
rehabilitation programs.
Analysis of Operations for the three months ended September 30, 1996
compared to the three months ended September 30, 1995
Results of Operations
The Company generated net income of $176,000 for the three month period
ended September 30, 1996 as compared to net income of $218,000 for the three
month period ended September 30, 1995. Excluding a $60,000 gain on sale of
property recorded in the first quarter of the prior year, income before income
taxes totaled $289,000 for both the quarter ended September 30, 1996 and the
corresponding quarter in the prior year. Operating revenues and operating
expenses increased $244,000 and $267,000, respectively, over the prior year,
while interest ex-
7
<PAGE>
pense decreased $20,000 from the prior year. The provision for income taxes
decreased $18,000 from the prior year.
Revenues
Operating revenues increased $244,000, or 6.6%, from $3,686,000 for the
three months ended September 30, 1995 to $3,930,000 for the corresponding period
in the current year. This increase consists of $192,000 additional freight and
haulage revenues (excluding intermodal freight), $29,000 additional logistics
revenues, $50,000 additional intermodal freight and handling revenues, and
$27,000 less other operating revenues.
Freight and haulage revenues increased $192,000, or 7.5%, consisting of an
11% increase in the number of carloads handled partially offset by a 3% decrease
in average revenues per carload. The total number of carloads handled increased
approximately 1,000 carloads from 8,700 for the three months ended September 30,
1995 to 9,700 for the three months ended September 30, 1996. The net increase
includes 200 additional agricultural carloads in York, PA resulting from local
supply conditions, 115 additional carloads generated by continued growth in the
Company's logistics operations in York, PA, 55 carloads relating to a new local
oil move on the St. Lawrence & Atlantic Railroad ("SLR"), 700 additional bridge
carloads in York, PA, and a net increase in a variety of other business. These
increases were partially offset by a decrease of approximately 175 paper related
carloads on SLR as a result of lost business due to customers using alternative
pulpwood supply sources and routings. The 3% decrease in average revenues per
carload is attributable to mix of business which includes a greater percentage
of bridge carloads handled by York, PA operations during the current quarter
which are generally at lower rates.
Logistics revenues generated by the Company's operations in York, PA
increased $29,000, or 9.6%, for the quarter ended September 30, 1996 as compared
to the prior year quarter. This increase includes a 19% net increase in the
number of railcars handled including additional building products transfer
business at the Company's new lumber transload and storage facility, paper
transfer and storage business, and bulk products transfer business, partially
offset by a decrease in cross dock canned goods transfer and truck brokerage
business. In addition, freight and haulage revenues generated by the Company's
logistics operations increased by over $40,000 from the prior year.
The Company's rail intermodal terminal, which commenced operations on SLR
in September 1994, generated an additional $50,000 of freight and intermodal
handling revenues during the quarter ended September 30, 1996 as compared to the
corresponding quarter in the prior year. Intermodal volume increased by
approximately 1,100 trailers and containers, or 48%, from 2,250 trailers and
containers during the three month period ended September 30, 1995 to 3,350
trailers and containers during the three months ended September 30, 1996.
Other operating revenues decreased $27,000 in the current quarter as
compared to the prior year as a result of a decrease in demurrage revenues,
partially offset by increases in railcar storage and other miscellaneous
operating revenues.
The $56,000 decrease in interest and other non-operating income is
attributable to a $60,000 gain on the sale of non-essential real estate in the
prior year.
Expenses
Operating expenses increased $267,000, or 8.5%, from $3,144,000 for the
three month period ended September 30, 1995 to $3,411,000 for the three month
period ended September 30, 1996. The increase consists of $190,000 additional
cost of operations and $77,000 additional selling and administrative expenses.
8
<PAGE>
Cost of operations increased $190,000, or 7.7%, from $2,486,000 for the
three month period ended September 30, 1995 to $2,676,000 for the corresponding
period in the current year. The increase includes $151,000 additional railroad
operating expenses and $32,000 additional intermodal operating expenses, while
total logistics operating expenses remained at approximately the same level in
the current year quarter as compared to the prior year quarter.
The increase in railroad operating expenses of $151,000 is primarily
attributable to additional transportation expenses associated with the increased
level of business and, to a lesser extent, additional locomotive maintenance
expenses required on SLR in the current year. The increase in transportation
expenses includes additional labor and benefits, railcar rental, and
subcontracted transload fees associated with a new local oil move on SLR, and
general cost increases, partially offset by a reduction in car hire expenses in
conjunction with the decrease in demurrage revenues.
While total logistics operating expenses remained at approximately the same
level in the current year as compared to the prior year, the mix of expenses
changed in conjunction with the mix in business. Property rent increased
approximately $50,000 as a result of the increase in paper warehousing, while
brokered freight expense decreased approximately $40,000 as a result of a
reduction in canned goods cross dock business which requires truck brokering
services. Other general cost increases associated with the increased level of
business were offset by a $32,000 one time charge recorded last year for the
relocation of a warehouse operation in York, PA.
Rail intermodal operating expenses increased $32,000 primarily due to
additional fees paid to the independent rail intermodal terminal operator as a
result of the 48% volume increase over the prior year.
Selling and administrative expenses increased $77,000, or 11.8%, from
$658,000 for the quarter ended September 30, 1995 to $735,000 for the quarter
ended September 30, 1996. The net increase includes additional salaries and
wages as a result of the addition of a new New England Business Unit Vice
President and wage adjustments, and additional professional fees incurred to
pursue potential business opportunities. These increases were partially offset
by a reduction in the provision for profit sharing and incentive compensation in
the current year.
Interest expense decreased $20,000 for the three month period ended
September 30, 1996 as compared to the prior year despite an increase in the
amount of long-term debt outstanding due to the mix of debt which includes a
greater amount of no and low interest government trackwork loans in the current
year as compared to the prior year.
The provision for income taxes decreased $18,000 from $131,000 for the
quarter ended September 30, 1995 to $113,000 for the quarter ended September 30,
1996 as a result of the $60,000 decrease in income before income taxes.
9
<PAGE>
PART II.
Item 1. Legal Proceedings
As previously reported in Item 3 of the Emons Transportation Group, Inc.
Annual Report on Form 10-K for the fiscal year ended June 30, 1996, in which
reference is hereby made, Emons Transportation Group, Inc. is not currently a
party to any legal proceedings. However, Emons Industries, Inc. is currently a
defendant in approximately 551 product liability actions.
Item 3. Default Upon Senior Securities
On November 15, 1995 and June 19, 1996, the Board of Directors voted to
omit the regular semi-annual dividend of $0.07 per share on its $0.14 Cumulative
Convertible Preferred Stock which would have been payable on January 2, 1996 and
July 1, 1996, respectively. Dividends in arrears as of the date of this report
aggregated $1,411,393.
Item 4. Any Submission of Matters to a Vote of Security Holders
No matters were submitted to a vote of security holders during the three
month period ended September 30, 1996.
Item 6. Exhibit and Reports on Form 8-K
(a) An index to exhibits appears following the signature page to this
report.
(b) No reports on Form 8-K were filed during the three month period
ended September 30, 1996.
10
<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.
EMONS TRANSPORTATION GROUP, INC.
Date: November 12, 1996 By: /s/Scott F. Ziegler
----------- -------------------
Scott F. Ziegler
Vice President-Finance and Controller
(signing on behalf of the registrant
as both its duly authorized officer
and its chief accounting officer)
11
<PAGE>
EXHIBITS
The following exhibits are filed as a part of this report. For convenience
of reference, exhibits are listed according to numbers assigned in the Exhibit
Table of Item 601 of Regulation S-K under the Securities Exchange Act of 1934.
Page in
Exhibit Sequentially
Number Exhibit Numbered Copy
3 (a) Certificate of Incorporation for Emons
Holdings, Inc. dated December 19, 1986
(incorporated by reference from Emons
Holdings, Inc. Report on Form 10-K for
the year ended June 30, 1987) ---
3 (b) Certificate of Amendment of Certificate of
Incorporation of Emons Holdings, Inc. dated
September 26, 1989 (incorporated by reference from
Emons Holdings, Inc. Report on Form 10-Q for the
quarter ended September 30, 1989) ---
3 (c) Amended and Restated By-Laws for Emons Holdings, Inc.
(incorporated by reference from Emons Holdings, Inc.
Report on Form 10-Q for the quarter ended
September 30, 1989) ---
3 (d) Certificate of Amendment of Certificate of Incorporation
of Emons Holdings, Inc. dated November 18, 1993
(incorporated by reference from Emons Transportation
Group, Inc. Report on Form 10-Q for the quarter ended
December 31, 1993) ---
11 (a) Earnings per share calculation 13
27 (a) Article 5 of Regulation S-X, Financial Data Schedules ---
12
<PAGE>
Exhibit 11 (a)
EMONS TRANSPORTATION GROUP, INC. AND SUBSIDIARIES
EARNINGS PER SHARE CALCULATION
<TABLE>
<CAPTION>
Fully
Primary Diluted
EPS EPS
------- -------
<S> <C> <C>
Three Months Ended September 30, 1996
- -------------------------------------
A. Average number of common shares outstanding 5,709,623 5,709,623
B. Average number of common share equivalents assuming
conversion of options (calculated using the treasury method) 460,119 559,020
------------ ------------
C. Subtotal 6,169,742 6,268,643
D. Average number of common share equivalents assuming
conversion of convertible preferred stock 1,512,207 1,512,207
------------ ------------
E. Total average common share and common share equivalents 7,681,949 7,780,850
F. Net income $ 175,547 $ 175,547
G. Preferred dividend requirements 58,808 58,808
H. Earnings applicable to common stock 116,739 116,739
I. Earnings per share - no conversion of preferred stock (H/C) $ 0.02 $ 0.02 (1)
J. Earnings per share - assuming conversion of preferred stock (F/E) 0.02 (1) 0.02 (1)
Three Months Ended September 30, 1995
- -------------------------------------
A. Average number of common shares outstanding 5,675,075 5,675,075
B. Average number of common share equivalents assuming
conversion of options (calculated using the treasury method) 399,452 428,692
------------ ------------
C. Subtotal 6,074,527 6,103,767
D. Average number of common share equivalents assuming
conversion of convertible preferred stock 1,551,358 1,551,358
------------ ------------
E. Total average common share and common share equivalents 7,625,885 7,655,125
F. Net income $ 217,654 $ 217,654
G. Preferred dividend requirements 60,119 60,119
H. Earnings applicable to common stock 157,535 157,535
I. Earnings per share - no conversion of preferred stock (H/C) $ 0.03 $ 0.03 (1)
J. Earnings per share - assuming conversion of preferred stock (F/E) 0.03 (1) 0.03 (1)
</TABLE>
(1) Not material or anti-dilutive.
13
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE EMONS
TRANSPORTATION GROUP, INC. CONSOLIDATED FINANCIAL STATEMENTS FOR THE THREE
MONTHS ENDED SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO
SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-START> JUL-1-1996
<PERIOD-END> SEP-30-1996
<CASH> 1,324,398
<SECURITIES> 0
<RECEIVABLES> 2,541,741
<ALLOWANCES> 90,609
<INVENTORY> 186,998
<CURRENT-ASSETS> 4,311,526
<PP&E> 27,764,174
<DEPRECIATION> 8,788,596
<TOTAL-ASSETS> 23,521,198
<CURRENT-LIABILITIES> 4,826,236
<BONDS> 10,678,040
0
16,802
<COMMON> 57,427
<OTHER-SE> 5,731,869
<TOTAL-LIABILITY-AND-EQUITY> 23,521,198
<SALES> 0
<TOTAL-REVENUES> 3,929,894
<CGS> 0
<TOTAL-COSTS> 2,675,913
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 251,508
<INCOME-PRETAX> 288,547
<INCOME-TAX> 113,000
<INCOME-CONTINUING> 175,547
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 175,547
<EPS-PRIMARY> .02
<EPS-DILUTED> .02
</TABLE>
