SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the period ended March 31, 1998
[ ] 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 1-10720
ILLINOIS CENTRAL RAILROAD COMPANY
(Exact name of registrant as specified in its charter)
Illinois 36-2728842
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
455 North Cityfront Plaza Drive, Chicago, Illinois 60611-5504
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (312) 755-7500
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
As of March 31, 1998, 100 common shares were outstanding.
THE REGISTRANT IS A WHOLLY-OWNED SUBSIDIARY OF ILLINOIS CENTRAL CORPORATION AND
MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTIONS H(1)(a) AND (b) OF THE
FORM 10-Q AND IS THEREFORE FILING THIS FORM WITH THE REDUCED DISCLOSURE FORMAT.
<PAGE>
ILLINOIS CENTRAL RAILROAD COMPANY
AND SUBSIDIARIES
FORM 10-Q
Quarter Ended March 31, 1998
CONTENTS
Part I - Financial Information: Page
Item 1. Financial Statements:
Consolidated Statements of Income 3
Consolidated Balance Sheets 4
Consolidated Statements of Cash Flows 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
Part II - Other Information:
Item 6. Exhibits and Reports on Form 8-K 15
Signatures 16
<PAGE>
ILLINOIS CENTRAL RAILROAD COMPANY AND SUBSIDIARIES
Consolidated Statements of Income
($ in millions)
(Unaudited)
Three Months
Ended March
1998 1997
Revenues $ 163.0 $ 154.2
Operating expenses:
Labor and fringe benefits 46.5 43.5
Leases and car hire 13.3 14.5
Diesel fuel 7.7 9.4
Materials and supplies 9.1 9.2
Depreciation and amortization 8.6 8.2
Casualty, insurance and losses 2.8 4.2
Other taxes 5.3 5.3
Other 8.2 2.2
Special charge 16.4 -
Operating expenses 117.9 96.5
Operating income 45.1 57.7
Other income, net 2.2 0.5
Interest expense, net (6.9) (7.2)
Income before income taxes 40.4 51.0
Provision for income taxes 11.4 19.1
Net income $ 29.0 $ 31.9
The following notes are an integral part of the consolidated financial
<PAGE>
ILLINOIS CENTRAL RAILROAD COMPANY AND SUBSIDIARIES
Consolidated Balance Sheets
($ in millions)
(Unaudited)
ASSETS March 31, 1998 December 31, 1997
Current assets:
Cash and temporary cash investment $ 12.9 $ 28.2
Receivables, net of allowance for doubtful
accounts of $1.1 in 1998 and $.9
in 1997 150.8 100.6
Loans to affiliates 2.8 4.9
Materials and supplies, at average cost 16.5 15.3
Assets held for disposition 0.3 -
Deferred income taxes - current 17.5 17.5
Other current assets 6.2 5.0
Total current assets 207.0 171.5
Investments 12.1 12.1
Loans to affiliates 171.4 160.9
Properties:
Transportation:
Road and structures, including land 1,203.2 1,193.7
Equipment 175.5 173.7
Other, principally land 41.3 41.3
Total properties 1,420.0 1,408.7
Accumulated depreciation (45.5) (45.8)
Net properties 1,374.5 1,362.9
Other assets 24.4 23.6
Total assets $1,789.4 $1,731.0
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Current maturities of long-term de $ 22.8 $ 22.7
Accounts payable 45.5 53.1
Income taxes payable 2.9 -
Casualty and freight claims 12.7 12.7
Employee compensation and vacations 31.7 19.1
Taxes other than income taxes 11.1 16.4
Accrued redundancy reserves 3.8 3.9
Other accrued expenses 81.4 80.1
Total current liabilities 211.9 208.0
Long-term debt 606.1 552.4
Deferred income taxes 308.3 302.9
Other liabilities and reserves 112.6 111.7
Contingencies and commitments
Stockholder's equity:
Common stock authorized, issued and
Oustanding
100 shares, $1 par value - -
Additional paid-in capital 129.6 129.6
Retained income 420.9 426.4
Total stockholder's equity 550.5 556.0
Total liabilities and
stockholder's equity $1,79.4 $1,731.0
The following notes are an integral part of the consolidated financial
statement.
<PAGE>
ILLINOIS CENTRAL RAILROAD COMPANY AND SUBSIDIARIES
Consolidated Statements of Cash Flows
($ in millions)
(Unaudited)
Three Months Ended
March 31,
1998 1997
Cash flows from operating activities :
Net income $ 29.0 $ 31.9
Reconciliation of net income to net cash
provided by (used for) operating activities :
Depreciation and amortization 8.6 8.2
Deferred income taxes 5.4 7.9
Equity in undistributed earnings of
affiliates,
net of dividends received (0.2) (0.1)
Net gains on sales of real estate (0.5) 0.1
Cash changes in working capital (49.1) (7.6)
Changes in other assets (0.8) (0.3)
Changes in other liabilities and reserves 0.9 (4.1)
Net cash provided by (used for)
operating activities (6.7) 36.0
Cash flows from investing activities :
Additions to properties (18.0) (19.5)
Proceeds from real estate sales 0.5 0.3
Proceeds from equipment sales 0.5 0.2
Loans to affiliated companies (8.4) 25.7
Other (2.3) 0.2
Net cash provided by (used for)
investing actiities (27.7) 6.9
Cash flows from financing activities :
Proceeds from issuance of debt - -
Principal payments on debt (0.6) (0.6)
Net proceeds (payments) in commercial paper 54.3 (20.0)
Dividends paid (34.6) (17.8)
Net cash provided by (used for)
financing activities 19.1 (38.4)
Changes in cash and temporary cash investments (15.3) 4.5
Cash and temporary cash investments at
beginning of period 28.2 46.3
Cash and temporary cash investments at end of
Period $ 12.9 $ 50.8
Supplemental disclosure of cash flow information :
Cash paid during the year for:
Interest (net of amount capitalized) $ 13.9 $ 10.2
Income taxes $ 2.6 $ 0.4
The following notes are an integral part of the consolidated financial
statements.
<PAGE>
ILLINOIS CENTRAL RAILROAD COMPANY
AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
1. Merger Agreement and Special Charge
On February 10, 1998, ICR's parent, Illinois Central Corporation (the
"Corporation") and Canadian National Railway Company ("CN") entered into an
Agreement and Plan of Merger (the "Merger Agreement"), pursuant to which
Blackhawk Merger Sub, Inc. (the "Corporation's Purchaser"), a wholly owned
subsidiary of CN, commenced a tender offer (the "Offer") to purchase 46,051,761
of the outstanding shares of the Corporation's Common Stock (the "Shares") at a
price of $39.00 per share. The Corporation's Board of Directors unanimously
approved the Merger Agreement and the transactions contemplated. Subject to
satisfaction of customary conditions, the Purchaser will be merged with and into
the Corporation (the "Merger") and each Share not purchased in the Offer will be
converted into an amount of CN common stock equal to the fraction obtained by
dividing (1) $39.00 by (2) the average closing price of the CN common stock (the
"Average Closing Price") over the 20 day trading period ending two trading days
prior to the effective time of the Merger; provided that if such Average Closing
Price is less than $43.00, then the Average Closing Price will be deemed to be
$43.00 and if such Average Closing Price is greater than $64.50, then the
Average Closing Price will be deemed to be $64.50.
The 46,051,761 shares purchased pursuant to the Offer, which closed March
13, 1998, were deposited in an independent, irrevocable voting trust while CN
and the Corporation await review of the transaction by the STB. Additionally,
the Corporation's shares received by CN in the conversion will be placed in the
voting trust.
Neither the acquisition of the Corporation shares pursuant to the Offer nor
the Merger will be subject to STB approval of the combination. Pursuant to the
Merger Agreement, subject to consultations with the Corporation and after giving
good faith consideration to the views of the Corporation, CN shall have final
authority over the development, presentation and conduct of the STB case,
including decisions as to whether to agree to or acquiesce in conditions. The
Corporation shall take no regulatory or legal action in connection with the STB
without CN's consent. The STB could impose conditions or restrictions as it
relates to CN's acquisition of control of the Corporation. If the STB does not
approve CN's acquisition of control of the Corporation or CN deems any
conditions imposed by the STB unacceptable, CN would have the obligation to sell
all the Corporation common shares held by the voting trust.
The Corporation and ICR recorded a special charge ("Special Charge") in the
first quarter of 1998 for costs associated with the CN Merger Agreement. The
Special Charge includes $16.4 million for costs relating to payments under
various ICR compensation plans payable following a change in control at the
Corporation. Included in the Special Charge is $11 million for payments under
Plan 2000. A number of executive officers of the Corporation who are covered by
Employment Security Agreements will be entitled to receive between two or three
years of severance benefits if within two years after the change in
<PAGE>
control, their employment is terminated by ICR without cause or they resign with
good reasons. The amount that may be paid under Employment Security Agreements,
if any, is not determinable and has not been recorded in the Special Charge.
The Corporation's Employee Stock Purchase Plan and Management Employee
Discounted Stock Purchase Plan were terminated following the closing of the
Offer.
2. Basis of Presentation
Except as described below, the accompanying unaudited consolidated
financial statements have been prepared in accordance with accounting policies
described in the 1997 Annual Report on Form 10-K and should be read in
conjunction with the disclosures therein.
In the opinion of management, these interim financial statements reflect
all adjustments, consisting of normal recurring accruals, necessary to present
fairly the financial position, results of operations and cash flows for the
periods presented. Interim results are not necessarily indicative of results for
the full year.
Income Per Share
Income per common share has been omitted as ICR is a wholly-owned
subsidiary of the Corporation.
3. Equity and Restrictions on Dividends
For the three month period ended March 31, 1998, ICR has paid cash
dividends of $34.6 million and declared no dividends to the Corporation.
Covenants of the ICR Revolver require specified levels of tangible net worth. At
March 31, 1998, ICR exceeded its tangible net worth covenant by $12.0 million.
<PAGE>
4. Receivable Sales Agreement
On January 8, 1998, ICR terminated its revolving agreement to sell
undivided percentage interests in certain of its accounts receivable, with
recourse, to a financial institution.
5. Litigation
ICR is one of several defendants in a New Orleans class action in which a
jury has returned a verdict against the ICR for $125 million in punitive damages
as a result of a tank car fire. The Louisiana Supreme Court has vacated the
judgment for technical reasons and remanded the case to the trial court for
further proceedings.
While the final outcome of this proceeding cannot be determined, in the
opinion of management, based on present information, the ultimate resolution of
this case will not have a material adverse effect on ICR's financial position,
results of operations, cash flow or liquidity.
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Results of Operations
Three Months Ended March 31, 1998 Compared to Three Months Ended
March 31, 1997
Total revenues for 1998 increased from the prior year quarter by $8.8
million or 5.7% to $163.0 million.
Decreased revenues from very weak export demand for grain (corn, soybeans
and wheat) continued as a result from a milder winter in the north which
benefitted the Mississippi River as an alternative mode of transportation. This
was offset by gains in domestic and export demand for milled grain (including
vegetable oils and meal), metals (reflecting a newly constructed steel melt-shop
and an expanded pipe manufacturer), and increased revenues from providing
terminal and other rail services.
Operating expenses increased $21.4 million or 22.2% to $117.9 million.
Labor and fringe benefits reflected more normal levels of expense this year
compared to last year which benefitted from the reduction of certain
compensation related accruals. The $16.4 million Special Charge is discussed in
Note 1. Other expenses returned to more normal levels of expense contrasted with
last year which benefitted from the recovery of prior period expenses.
Net interest expense of $6.9 million for 1998 decreased 4.2% compared to
$7.2 million in 1997.
Provision for income taxes includes a benefit from additional deductions
resulting from exercise of stock options by ICR employees.
Liquidity and Capital Resources
Operating Data ($ in millions): Three Months Ended March 31,
----------------------------
1998 1997
---- ----
Cash flows provided by (used for):
Operating activities............... $ (6.7) $36.0
Investing activities............... (27.7) 6.9
Financing activities............... 19.1 (38.4)
----- ------
Net change in cash and
temporary cash investments $(15.3) $ 4.5
======= =====
Cash used for operating activities in 1998 was primarily the termination of
the receivable sales agreement and cash from operating
<PAGE>
activities in 1997 was primarily net income before depreciation and
deferred taxes.
Investing Data ($ in millions):
Additions to property were as follows:
Three Months Ended March 31,
1998 1997
---- ----
Communications and signals...........$ 2.2 $ 4.2
Equipment/rolling stock.............. 3.1 -
Track and bridges.................... 10.9 15.1
Other................................ 1.8 .2
----- -----
Total............................$18.0 $19.5
===== =====
Property retirements and removals generated proceeds of $1.0 million and
$.5 million in 1998 and 1997, respectively.
ICR anticipates that capital expenditures for 1998 will be approximately
$88.6 million. Replacement expenditures of $79.3 million will concentrate on
track maintenance, bridges and freight car upgrades. Productivity and expansion
expenditures will total $9.3 million. These expenditures are expected to be met
from current operations or other available sources.
Financing Activities
In January 1998 and 1997, ICR paid $19.0 million and $14.5 million,
respectively, in cash dividends to the Corporation. In March 1998 and April
1997, ICR paid $15.6 million in cash dividends to the Corporation.
ICR has a commercial paper program whereby a total of $200 million can be
issued and outstanding at any one time. The program is supported by a $250
million ICR Revolver (see below). At March 31, 1998, $54.3 million was
outstanding. The average interest rate on commercial paper for the quarter ended
March 31, 1998, was 5.73% with a range of 5.71% to 5.81%. ICR's public debt is
rated Baa2 by Moody's and BBB by S&P. ICR's debt is on credit watch negative as
a result of the recently announced merger of the Corporation and CN.
In 1994, ICR entered into a revolving agreement to sell undivided
percentage interests in certain of its accounts receivable, with recourse, to a
financial institution. This agreement was terminated on January 8, 1998. ICR
services the accounts receivable sold under the
<PAGE>
agreement and retains the same exposure to credit loss as existed prior to the
sale. Costs related to the agreement fluctuated with changes in prevailing
interest rates. These costs, which are included in Other Income (Expense), Net,
were $.2 and $.8 million for the quarters ended March 31, 1998, and 1997,
respectively.
ICR has a $250 million Revolver with its bank lending group, which expires
in 2001. Fees and borrowing spreads are predicated on ICR's long-term credit
ratings. Currently, the annual facility fee is 15 basis points and borrowings
under this agreement are at Eurodollar offered rate plus 22.5 basis points. The
Revolver is used primarily for backup for ICR's commercial paper program but can
be used for general corporate purposes. The available amount is reduced by the
outstanding amount of commercial paper borrowings and any letters of credit
issued on behalf of ICR under the facility. No amounts have been drawn or
letters of credit issued under the Revolver. At March 31, 1998, $195.7 million
was available.
Certain covenants of ICR's debt agreements require among others specific
levels of tangible net worth but not a specific dividend restriction. At March
31, 1998, ICR exceeded its tangible net worth covenants by $12.0 million. ICR
was in compliance with all covenants at March 31, 1998, and does not contemplate
any difficulty maintaining such compliance.
ICR has a shelf registration from 1996 which can be used to issue an
additional $70 million in MTN's or other debt until 2000. Currently, there are
no plans to issue additional debt but replacing maturing MTN's, capital
investments in the terminal facilities and other ventures could necessitate use.
ICR believes that its available cash, cash generated by its operations and
cash available from the facilities described above will be sufficient to meet
foreseeable liquidity requirements. Additionally, ICR believes it has access to
the public debt market if needed.
Year 2000 Conversion
The Year 2000 Issue is the result of computer programs being written using
two digits rather than four to define the applicable year. Many of ICR's
computer programs that have date-sensitive software may recognize a date using
"00" as the year 1900 rather than the year 2000. This could result in a system
failure or miscalculations causing disruptions of operations, including, among
other things, a temporary inability to process transactions, send invoices, or
engage in similar normal business activities.
<PAGE>
Based on recent assessments, ICR determined that it will be required to
modify or replace portions of its software so that its computer systems will
properly utilize dates beyond December 31, 1999. ICR presently believes that
with modifications to existing software and conversions to new software, the
Year 2000 Issue can be mitigated. However, if such modifications and conversions
are not made, or are delayed, the Year 2000 Issue could have a material impact
on the operations of ICR.
ICR has initiated formal communications with all of its suppliers and large
customers to determine the extent to which ICR is vulnerable to those third
parties' failure to remediate their own Year 2000 Issue. There can be no
guarantee that the systems of other companies on which ICR's systems rely will
be converted on a timely basis, or that a failure to convert by another company,
or a conversion that is incompatible with ICR's systems, would not have material
adverse effect on ICR.
In October 1997, ICR entered into an agreement to replace approximately 40
percent of its non-Year 2000 compliant programs with new software and will
utilize both internal and external resources to replace and test the software
for Year 2000 modifications. ICR began converting its remaining computer systems
with internal resources earlier in 1997. ICR expects to spend approximately $8.5
million to $10.0 million from 1997 through 1999 to modify and replace its
computer systems. Of the total project cost, approximately $3.0 million is
attributable to the purchase of new software. ICR plans to complete conversion
of non-Year 2000 compliant programs during 1998. However, user acceptance
testing will continue into 1999. Installation of new software programs should be
completed during the first quarter of 1999. The total cost of the project is
being funded through operating cash flows. Maintenance or modification costs
will be expensed as incurred, while the costs of new software will be
capitalized and amortized over the software's useful life. Accordingly, ICR does
not expect the amounts required to be expensed over the next two years to have a
material effect on its financial position or results of operations. The amount
of spending to date was approximately $2.7 million.
The costs of the project and the date on which ICR plans to complete the
Year 2000 modifications are based on management's best estimates, which were
derived utilizing numerous assumptions of future events including the continued
availability of certain resources, third party modification plans and other
factors. However, there can be no guarantee that these estimates will be
achieved and actual results could differ materially from those plans. Specific
factors that might cause such material differences include, but are not limited
to, the availability and cost of personnel trained in this area, the ability to
locate and correct all relevant computer codes, and similar uncertainties.
<PAGE>
Miscellaneous
In April 1998, the Corporation announced a 15-year marketing alliance with
CN and Kansas City Southern Railway Company. The alliance will offer shippers
new competitive options in a rail freight transportation network linking key
north-south continental freight markets. In addition, the marketing alliance
will give shippers access to Mexico's largest rail system. Under terms of the
marketing alliance, the companies will coordinate sales and marketing,
operations, fleets, and information systems, but not for traffic movements where
any two of them provide the only direct rail service.
ICR has entered into various diesel fuel collar agreements designed to
mitigate significant changes in fuel prices. As a result, approximately 50% of
the Corporation's short-term diesel fuel requirements through June 1998 are
protected against significant price changes
Environmental Liabilities
ICR's operations are subject to comprehensive environmental regulation by
federal, state and local authorities. Compliance with such regulation requires
the Corporation to modify its operations and expend substantial manpower and
financial resources.
Under the federal Comprehensive Environmental Response, Compensation and
Liability Act of 1980 ("Superfund"), and similar state and federal laws, ICR is
potentially liable for the cost of clean-up of various contaminated sites. ICR
generally participates in the clean-up at sites where other substantial parties
share responsibility through cost-sharing arrangements, but under Superfund and
other similar laws ICR can be held jointly and severally liable for all
environmental costs associated with such sites.
ICR is aware of approximately 22 contaminated sites at which it is probably
liable for some portion of any required clean-up. Of these, 14 involve
contamination primarily by diesel fuel which can be remediated without material
cost. Five other sites are expected to require more than $1 million each in
clean-up costs. At three of these sites other parties are expected to contribute
the majority of the costs incurred.
For all known sites of environmental contamination where ICR loss or
liability is probable, ICR has recorded an estimated liability at the time when
a reasonable estimate of remediation cost and ICR liability can first be
determined. Adjustments to initial estimates are recorded as necessary based
upon additional information developed in subsequent periods. Estimates of ICR`s
potential financial exposure for environmental claims or incidents are
necessarily imprecise because of the difficulty of determining in advance the
nature and extent of contamination, the varying costs of alternative methods of
remediation, the regulatory clean-up standards which will be applied, and the
appropriate allocation of liability among multiple responsible parties. At March
31, 1998, ICR estimated the probable range of its liability to be $8.7 million
to $45 million, and in accordance with the provisions of SFAS No. 5 had a
reserve of $8.7 million for environmental contingencies. This amount is not
reduced for potential insurance recoveries or third-party contributions.
The risk of incurring environmental liability in connection with both past
and current activities is inherent in railroad operations. Decades-old railroad
housekeeping practices were not always consistent with contemporary standards,
historically ICR leased substantial amounts of property to industrial tenants,
and ICR continues to haul hazardous materials which are subject to occasional
accidental release. Because the ultimate cost of known contaminated sites cannot
be definitively established and because additional contaminated sites yet
unknown may be discovered or future operations may result in accidental
releases, no assurance can be given that ICR will not incur material
environmental liabilities in the future. However, based on its assessments of
the facts and circumstances now known, management believes that it has recorded
adequate reserves for known liabilities and does not expect future environmental
charges or expenditures, based on these known facts and circumstances, to have a
material adverse effect on ICR`s financial position, results of operations, cash
flow or liquidity.
Litigation
ICR is one of several defendants in a New Orleans class action in which a
jury has returned a verdict against the ICR for $125 million in punitive damages
as a result of a tank car fire. The Louisiana Supreme Court has vacated the
judgment for technical reasons and remanded the case to the trial court for
further proceedings.
While the final outcome of this proceeding cannot be determined, in the
opinion of management, based on present information, the ultimate resolution of
this case will not have a material adverse effect on the Company's financial
position, results of operations, cash flow or liquidity.
<PAGE>
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
See Exhibit Index on page E-1
<PAGE>
ILLINOIS CENTRAL RAILROAD COMPANY
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, ICR
has duly caused this report to be signed on its behalf by the undersigned
hereto duly authorized.
ILLINOIS CENTRAL RAILROAD COMPANY
/s/ John V. Mulvaney
John V. Mulvaney
Vice President & Chief Financial Officer
/s/ Douglas A. Koman
Douglas A. Koman
Controller
Date: May 7, 1998
<PAGE>
ILLINOIS CENTRAL RAILROAD COMPANY AND SUBSIDIARIES
EXHIBIT INDEX
Exhibit Sequential
No. Description Page No.
27 Financial Data Schedule (This exhibit is
required to be submitted electronically
pursuant to the rules and regulations of
the Securities and Exchange Commission and
shall not be deemed filed for the purposes
of Section 11 of the Securities Act of 1933
or Section 18 of the Securities Exchange
Act of 1934).
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> MAR-31-1998
<CASH> 12900
<SECURITIES> 0
<RECEIVABLES> 150800
<ALLOWANCES> 1100
<INVENTORY> 16500
<CURRENT-ASSETS> 207000
<PP&E> 1420000
<DEPRECIATION> 45500
<TOTAL-ASSETS> 1789400
<CURRENT-LIABILITIES> 211900
<BONDS> 606100
<COMMON> 0
0
0
<OTHER-SE> 550500
<TOTAL-LIABILITY-AND-EQUITY> 1789400
<SALES> 163000
<TOTAL-REVENUES> 163000
<CGS> 117900
<TOTAL-COSTS> 117900
<OTHER-EXPENSES> (2200)
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