<PAGE>
U. S. SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-QSB
( X ) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
( ) TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT
For the transition period from ______ to ______
Commission file number 1-10324
THE INTERGROUP CORPORATION
- ------------------------------------------------------
(Name of small business issuer in its charter)
DELAWARE
- ------------------------------------------------------
(State or other jurisdiction of incorporation or organization)
13-3293645
-------------------------------------------
(I.R.S. Employer Identification No.)
2121 Avenue of the Stars, Suite 2020
Los Angeles, California 90067
- ------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Issuer's telephone number: (310) 556-1999
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 outstanding of the issuer's Common Stock, $.01 par value,
as of October 31, 1997 was 953,649 shares.
Transitional Small Business Disclosure Format (check one): YES __ NO X
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THE INTERGROUP CORPORATION
INDEX TO FORM 10-QSB
PART I. FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements:
Consolidated Balance Sheet (unaudited)
September 30, 1997 3
Consolidated Statements of Operations (unaudited)
Three Months Ended September 30, 1997 and 1996 4
Consolidated Statements of Cash Flows (unaudited)
Three Months Ended September 30, 1997 and 1996 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 11
Item 1. Legal Proceedings 11
Item 2. Changes in Securities 13
Item 3. Defaults Upon Senior Securities 13
Item 4. Submission of Matters to a Vote of Security Holders 13
Item 5. Other Information 13
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 14
2
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THE INTERGROUP CORPORATION
CONSOLIDATED BALANCE SHEET (Unaudited)
September 30, 1997
---------
ASSETS
Investment in real estate, at cost:
Land $6,442,545
Buildings, improvements and equipment 34,557,282
Property held for sale or development 2,036,393
----------
43,036,220
Less: accumulated depreciation (13,644,243)
----------
29,391,977
Cash and cash equivalents 522,063
Restricted cash 1,977,671
Marketable securities, at market value 23,456,955
Investment in Santa Fe Financial Corporation 6,485,012
Other investments 1,419,201
Rent and other receivables 373,505
Prepaid expenses and other assets 1,181,812
-----------
Total Assets $64,808,196
===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Mortgage notes payable $34,234,933
Due to securities broker 5,802,531
Accounts payable and other liabilities 2,558,401
Deferred income taxes 5,872,332
----------
Total Liabilities 48,468,197
----------
Commitments and Contingencies
Shareholders' Equity:
Preferred stock, $.10 par - 100,000 shares authorized; none issued
Common stock, $.01 par - 1,500,000 shares authorized;
1,494,824 shares issued; 953,649 shares outstanding 14,948
Additional paid-in capital 13,658,449
Retained earnings 3,207,380
Unrealized gain on marketable securities, net of deferred taxes 7,454,920
Note receivable - stock options (1,437,500)
Treasury stock, at cost, 541,175 shares (6,558,198)
-----------
Total Shareholders' Equity 16,339,999
-----------
Total Liabilities and Shareholders' Equity $64,808,196
===========
The accompanying notes are an integral part of the consolidated
financial statements.
3
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THE INTERGROUP CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
For the Three Months Ended September 30, 1997 1996
Real estate operations: ---------- ----------
Rental income $2,951,006 $2,775,238
Rental expenses:
Mortgage interest expense 725,843 682,982
Property operating expenses 1,417,647 1,329,602
Real estate taxes 251,412 226,874
Depreciation 431,388 418,647
---------- ---------
Income from real estate operations 124,716 117,133
---------- ---------
Investment transactions:
Dividend and interest income 102,429 29,347
Investment gains 2,783,895 630,878
Investment losses (445,959) (275,750)
Margin interest, trading and management expenses (216,060) (245,958)
---------- ----------
Income from investment transactions 2,224,305 138,517
---------- ----------
Other income (expenses):
General and administrative expenses (221,498) (222,423)
Miscellaneous income 33,884 43,825
---------- ----------
Other expenses (187,614) (178,598)
---------- ---------
Income before provision for income taxes 2,161,407 77,052
Provision for income taxes 900,896 37,800
---------- ---------
Net Income $1,260,511 $39,252
========== =========
Net Income per share $1.32 $0.04
========== =========
Weighted average number of shares outstanding 953,649 959,349
========== =========
The accompanying notes are an integral part of the consolidated
financial statements.
4
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THE INTERGROUP CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(Unaudited)
For the Three Months Ended September 30, 1997 1996
Cash flows from operating activities: ---------- ----------
Net Income $1,260,511 $39,252
Adjustments to reconcile net income to cash
provided by (used for) operating activities:
Depreciation of real estate 431,388 418,647
Amortization of other assets 36,058 39,764
Equity in net income from Santa Fe Financial Corp. (47,054) (65,284)
Changes in assets and liabilities:
Receivables 17,954 (63,963)
Prepaid expenses and other assets (137,993) (152,089)
Accounts payable and other liabilities 423,030 (247,644)
Income taxes payable 818,320 (9,793)
---------- ----------
Net cash provided by (used for) operating activities 2,802,214 (41,110)
---------- ----------
Cash flows from investing activities:
Additions to buildings, improvements and equipment (1,157,978) (296,596)
Investment in real estate (265,371) 0
Investment in Santa Fe Financial Corporation 0 (370,503)
Reduction (investment) in marketable securities (3,861,631) 173,860
Reduction in other investments 863,965 684,784
---------- ----------
Net cash provided by (used for) investing activities (4,421,015) 191,545
---------- ----------
Cash flows from financing activities:
Principal payments on mortgage notes payable (120,680) (85,893)
Decrease (increase) in restricted cash (34,554) 114,824
(Decrease) increase in due to securities broker 885,291 (474,671)
Decrease in accounts payable related to
other investments (400,000) 0
---------- ----------
Net cash provided by (used for) financing activities 330,057 (445,740)
---------- ----------
Net decrease in cash and cash equivalents (1,288,744) (295,305)
Cash and cash equivalents at beginning of period 1,810,807 933,937
---------- ----------
Cash and cash equivalents at end of period $522,063 $638,632
========== ==========
The accompanying notes are an integral part of the consolidated
financial statements.
5
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
For the three months ended September 30, 1997
1. General:
The interim financial information is unaudited; however, in the opinion of
The Intergroup Corporation (the "Company"), the interim financial
information contains all adjustments, including normal recurring
adjustments, necessary to present fairly the results for the interim period.
These consolidated financial statements should be read in conjunction with
the Company's June 30, 1997 audited consolidated financial statements and
notes thereto.
2. Marketable Securities:
All securities are classified as available-for-sale except short positions,
which represent obligations of the Company and are classified as trading
activity. At September 30, 1997, marketable securities included $1,843,968
of debt securities. At September 30, 1997, the aggregate market value of
marketable securities exceeded the aggregate cost by $12,283,972. The net
unrealized gain is comprised of gross unrealized gains of $13,139,985
reduced by gross unrealized losses of $856,013. The net unrealized gain,
net of deferred taxes of $7,454,920, is included as a separate item in
shareholders' equity. During the three months ended September 30, 1997,
proceeds from sales of securities were $9,336,951. Gross realized gains and
losses are determined using FIFO costs. At September 30, 1997, the Company
had no naked short positions. Any unrealized gains or losses relating to
naked short positions are recognized in earnings in the current period. The
dividends on short positions are recorded on the ex-dividend date.
3. Investment in Santa Fe Financial Corporation:
As of September 30, 1997, the Company owned 37.5% and the Company's chairman
and president owned an additional 3.9% of the outstanding common stock of
Santa Fe Financial Corporation ("Santa Fe"). Revenues and net income for
Santa Fe for the quarter ended September 30, 1997, were $634,354 and
$125,613, respectively, and $831,133 and $188,788 for the prior year,
respectively. The Company records its investment in Santa Fe on the equity
basis and recorded earnings of $47,054 and $65,284 for the three months
period ended September 30, 1997 and 1996, respectively.
Santa Fe's revenue is primarily generated through its 65.2% interest in
Portsmouth Square, Inc. ("PSI"), which derives its revenue primarily through
its 49.8% interest in Justice Investors ("Justice"), a limited partnership.
Justice owns the land, improvements and leasehold known as the Financial
District Holiday Inn, a 556-room hotel in San Francisco, California. PSI is
both a limited and general partner in Justice and records its investment in
Justice on the equity basis.
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4. Commitments and Contingencies:
On February 22, 1995, Guinness Peat Group plc ("GPG") and its subsidiary
("plaintiffs") filed a complaint in the Superior Court of the State of
California, County of San Diego (Case No. 685760) against the Company, Santa
Fe Financial Corporation ("Santa Fe") and certain directors of Santa Fe,
arising out of the Company's investment in Santa Fe. The initial claims
against the Company were dismissed on the Company's motion for summary
judgment in April 1996, but the court permitted plaintiffs to replead.
Plaintiffs subsequently filed an amended complaint charging the Company with
fraud in allegedly promising Santa Fe's management that they would maintain
their positions in return for approving the investment. A second summary
judgment was granted in favor of the Company, which became final on December
31, 1996. Plaintiffs then sought expedited review and a reversal of this
determination by a petition for writ filed with the Court of Appeal. That
writ was denied, but plaintiffs filed an appeal of the summary judgment with
the Court of Appeal. On June 9, 1997, the trial court filed an order
awarding the Company $295,964 in attorney's fees and costs as the prevailing
party, effective as of April 25, 1997. That award was also appealed by
plaintiffs and the Court of Appeal has ordered the consolidation of the two
appeals. The action will continue to be vigorously defended and every
effort will be made by the Company to recover as much of the fees and costs
it incurred as is possible.
On July 3, 1997, the Court of Appeal granted a petition for a writ of
mandate brought by the director defendants of Santa Fe and directed the
trial court to enter summary judgment in favor of those defendants.
Plaintiffs filed a petition for review to the California Supreme Court of
that decision which was denied on October 15, 1997. The Court of Appeal's
decision disposed of the remaining claims brought by GPG and its subsidiary.
Santa Fe and the director defendants are now in a position, as prevailing
parties, to seek recovery from plaintiffs of their attorneys' fees and costs.
In March 1996, a complaint was filed by 7709 Lankershim Ltd., a California
Limited Partnership ("plaintiff") in the Superior Court of the State of
California, County of Riverside (Case No. 088325) against the Company and
others for damages allegedly suffered by plaintiff arising out of alleged
construction defects in two Indio, California apartment complexes formerly
owned by the Company. Plaintiff acquired the properties from a financial
institution to whom the properties were returned by the Company. The
complaint alleges damages in the amount of $2,000,000. The case is in its
early stages and only limited discovery has taken place. Accordingly, it is
not possible to assess what exposure, if any, the Company may have at this
time. There may be insurance coverage for all or a part of the costs of
defense and indemnification for all or part of any liabilities suffered by
the Company. The insurance carrier is currently providing a defense, under
a reservation of rights, with respect to one of the properties, Carreon
Villa I, but so far has denied coverage with respect to the other property,
Carreon Villa II. The Company has filed an answer denying liability and
7
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asserting numerous defenses. The action will be vigorously defended.
The Company is a defendant or co-defendant in various legal actions
involving various claims incident to the conduct of its businesses.
Management does not expect the Company to suffer any material liability by
reason of such actions.
5. Related Party Transactions:
In May 1996, the Company's president exercised an option to purchase 125,000
shares of common stock at a price of $11.50 per share through a full
recourse note due the Company on demand, but in no event later than May
2001. The note bears interest floating at the lower of 10% or the prime
rate (8.50% at September 30, 1997) with interest payable quarterly. The
balance of the note receivable of $1,437,500 is reflected as a reduction of
shareholders' equity at September 30, 1997.
The Company's Chief Executive Officer directs the investment activity of the
Company in public and private markets pursuant to the authority granted by
the Board of Directors. Mr. Winfield also serves as Chief Executive Officer
of Santa Fe Financial Corporation and Portsmouth Square, Inc., and directs
the investment activity of those Companies. Depending on certain market
conditions and various risk factors, the Chief Executive Officer, members of
his immediate family, Santa Fe and Portsmouth may at times, invest in the
same companies in which the Company has invested. The Company encourages
such investments because it places personal resources of the Chief Executive
Officer and his family members, and the resources of Santa Fe and
Portsmouth, at risk in connection with investment decisions made on behalf
of the Company. Following allegations concerning the Chief Executive
Officer made by a former officer and director of the Company, the Board of
Directors authorized committees of the Board to conduct a thorough and
independent review of such matters, including the Company's practices in
this regard. That review has not been completed (see Report on Form 8-K
dated August 4, 1997).
8
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THE INTERGROUP CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FORWARD-LOOKING STATEMENTS AND PROJECTIONS
The Company may from time to time make forward-looking statements and
projections concerning future expectations. When used in this discussion,
the words "estimate", "project", "anticipate" and similar expressions, are
subject to certain risks and uncertainties, such as changes in general
economic conditions, local real estate markets, and competition, as well as
uncertainties relating to uninsured losses, securities markets, and
litigation, including those discussed below that could cause actual results
to differ materially from those projected. Readers are cautioned not to
place undue reliance on these forward-looking statements, which speak only
as to the date hereof. The Company undertakes no obligation to publicly
release the results of any revisions to those forward-looking statements
which may be made to reflect events or circumstances after the date hereof
or to reflect the occurrence of unanticipated events.
RESULTS OF OPERATIONS
For the three months ended September 30, 1997 vs. 1996
Income from real estate operations for the three months ended September 30,
1997, as compared to the three months ended September 30, 1996, was impacted
primarily by increased revenues and expenses associated with the acquisition
of the Houston, Texas property during the third quarter of fiscal 1997,
offset by reduced revenues and expenses in connection with the disposition
of the Atlanta, Georgia property in December 1996.
Rental income from real estate operations increased 6% to $2,951,006 from
$2,775,238. The increase was primarily due to increased revenues at the
Houston, Texas property, the New Jersey and the Missouri properties. The
increase was primarily offset by a decrease in revenues associated with the
Atlanta, Georgia property disposed in December 1996, one of the San Antonio,
Texas properties and to a lesser extent, a decrease in revenues at one of
the Ohio properties.
Mortgage interest expense increased 6% to $725,843 from $682,982 primarily
due to the mortgage interest expenses associated with the Houston, Texas
property.
Property operating expenses increased 6% to $1,417,647 from $1,329,602
primarily due to increased expenses in connection with the Houston, Texas
property, offset primarily by reduced operating expenses associated with the
disposition of the Atlanta, Georgia property.
Real estate taxes increased 10% to $251,412 from $226,874 due to the
9
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acquisition of the Houston, Texas property, offset by lower real estate
taxes at the Irving, Texas, the Parsippany, New Jersey and the Atlanta,
Georgia properties.
Depreciation increased 3% to $431,388 from $418,647 due to the acquisition
of the Houston, Texas property and the capitalized property improvements
throughout the real estate portfolio, but primarily at the Irving, Texas
property. The increase was offset by the disposition of the Atlanta,
Georgia property in December 1996.
Investment gains increased 341% to $2,783,895 from $630,878 and investment
losses increased 62% to $445,959 from $275,750 as a result of the sale of
securities which generated higher net investment gains during the three
months ended September 30, 1997. Realized investment gains and losses may
fluctuate significantly from period to period, with a meaningful effect upon
the Company's net earnings. However, the amount of realized investment gain
or loss for any given period has no predictive value, and variations in
amount from period to period have no practical analytical value,
particularly in view of the net unrealized gain in the Company's overall
investment portfolio. Margin interest, trading and management expenses
decreased 14% to $216,060 from $245,958 due primarily to a decrease of
$56,437 in trading related and management expenses, offset by an increase in
margin interest expense of $26,539. The overall investment portfolio, which
includes marketable securities, investment in Santa Fe and other
investments, had a positive return of 25.0% for the three months ended
September 30, 1997 and a positive return of 38.8% for the three months ended
September 30, 1996, based on the net realized and unrealized gains and
losses and after expenses over the monthly average investment balance of the
overall investment portfolio. For the five years ended September 30, 1997,
the overall investment portfolio achieved a positive average annual
compounded return of 20.7%. It should be noted that other investments are
investments that are not traded on any exchange and, accordingly, the return
calculations do not reflect any increases or decreases in value of other
investments until such gains or losses are realized or there is an other
than temporary decline in value below the cost of the investment.
Income tax expense of $900,896 and $37,800 were provided for the three months
ended September 30, 1997 and 1996, respectively. The increase was due to
higher income during the current period.
FINANCIAL CONDITION AND LIQUIDITY
The Company's cash flows are generated primarily from its real estate
activities, sales of investment securities and borrowings related to both.
The Company provided net cash flow of $2,802,214 from operating activities,
used net cash flow of $4,421,015 for investing activities and generated
net cash flow of $330,057 from financing activities.
On November 3, 1997, the Company entered into a contract to sell 15.1 acres
of its unimproved land in St. Louis, Missouri for $4,500,000, all cash sale.
10
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The sale will not take place prior to April 1, 1998 or after October 1,
1998. Should the Company consummate a sale, all or a portion of the
proceeds may be utilized to provide additional funds to take advantage of
other real estate investment opportunities.
In July 1997, the Company acquired approximately 5.4 acres of unimproved
land adjacent to the Houston, Texas property for $265,371.
During the three months ended September 30, 1997, the Company improved
properties in the aggregate amount of $1,157,978, which include $802,638 in
connection with the renovation of the Houston, Texas property and $44,768
capitalized costs associated with the property held for sale or development.
The Company is funding the renovation of the Houston, Texas property with
funds from its investment portfolio, and is not utilizing third party
financing. Management believes the improvements to the properties should
enhance market values, maintain the competitiveness of the Company's
properties and potentially enable the Company to obtain a higher yield
through higher rents.
At September 30, 1997, the overall investment portfolio increased
approximately 37% to $23,456,955 from $17,172,066 at June 30, 1997,
primarily due to increased market value of securities and additional
investments. Net unrealized gains increased 25% to $12,283,972 from
$9,860,714 at June 30, 1997.
The Company's outstanding indebtedness includes mortgages on real estate
which amounted to $34,234,933 at September 30, 1997. Management will
pursue additional refinancing activities as considered necessary or when
deemed economically favorable to the Company.
For fiscal 1998, management anticipates that its net cash flow from real
estate operations, securities transactions and real estate financing
activities will be sufficient to fund any property acquisitions, property
improvements, debt service requirements and operating expenses. Management
also anticipates that the net cash flow generated from future operating
activities will be sufficient to meet its long-term debt service
requirements.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
On February 22, 1995, Guinness Peat Group plc ("GPG") and its subsidiary
("plaintiffs") filed a complaint in the Superior Court of the State of
California, County of San Diego (Case No. 685760) against the Company, Santa
Fe Financial Corporation ("Santa Fe") and certain directors of Santa Fe,
11
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arising out of the Company's investment in Santa Fe. The initial claims
against the Company were dismissed on the Company's motion for summary
judgment in April 1996, but the court permitted plaintiffs to replead.
Plaintiffs subsequently filed an amended complaint charging the Company with
fraud in allegedly promising Santa Fe's management that they would maintain
their positions in return for approving the investment. A second summary
judgment was granted in favor of the Company, which became final on December
31, 1996. Plaintiffs then sought expedited review and a reversal of this
determination by a petition for writ filed with the Court of Appeal. That
writ was denied, but plaintiffs filed an appeal of the summary judgment with
the Court of Appeal. On June 9, 1997, the trial court filed an order
awarding the Company $295,964 in attorney's fees and costs as the prevailing
party, effective as of April 25, 1997. That award was also appealed by
plaintiffs and the Court of Appeal has ordered the consolidation of the two
appeals. The action will continue to be vigorously defended and every
effort will be made by the Company to recover as much of the fees and costs
it incurred as is possible.
On July 3, 1997, the Court of Appeal granted a petition for a writ of
mandate brought by the director defendants of Santa Fe and directed the
trial court to enter summary judgment in favor of those defendants.
Plaintiffs filed a petition for review to the California Supreme Court of
that decision which was denied on October 15, 1997. The Court of Appeal's
decision disposed of the remaining claims brought by GPG and its subsidiary.
Santa Fe and the director defendants are now in a position, as prevailing
parties, to seek recovery from plaintiffs of their attorneys' fees and costs.
In March 1996, a complaint was filed by 7709 Lankershim Ltd., a California
Limited Partnership ("plaintiff") in the Superior Court of the State of
California, County of Riverside (Case No. 088325) against the Company and
others for damages allegedly suffered by plaintiff arising out of alleged
construction defects in two Indio, California apartment complexes formerly
owned by the Company. Plaintiff acquired the properties from a financial
institution to whom the properties were returned by the Company. The
complaint alleges damages in the amount of $2,000,000. The case is in its
early stages and only limited discovery has taken place. Accordingly, it is
not possible to assess what exposure, if any, the Company may have at this
time. There may be insurance coverage for all or a part of the costs of
defense and indemnification for all or part of any liabilities suffered by
the Company. The insurance carrier is currently providing a defense, under
a reservation of rights, with respect to one of the properties, Carreon
Villa I, but so far has denied coverage with respect to the other property,
Carreon Villa II. The Company has filed an answer denying liability and
asserting numerous defenses. The action will be vigorously defended.
12
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In May 1996, the Company initiated an action in the District Court of
Johnson County, Kansas (Case No. 96C6508) against the General Partner, a
number of the Limited Partners, the manager and a prospective purchaser of
the Casa Maria Limited Partnership. Such partnership owns a 442-unit
apartment complex in Houston, Texas. By such complaint, the Company sought
to enforce its right of first refusal under its partnership agreement to
acquire the selling Limited Partners' interests and to preclude the General
Partner from disposing of its 30% interest in the Limited Partnership to a
third party (who was a partner with the then property management company in
this effort) without the Company's consent. The Company also sought to
remove the General Partner and the management company. The Company
subsequently acquired the interests of the General Partner and Limited
Partners, discharged the manager and installed a third party management
company in its stead. As part of its purchase of the interests of certain
limited partners and the General Partner, the Company agreed to indemnify
and hold those limited partners and General Partner harmless from any claims
asserted by the prospective third party purchaser. That prospective
purchaser counter-claimed against the Company for tortious interference with
contractual relations and several other causes of action. The prospective
purchaser also filed cross-claims for specific performance against certain
of the limited partners. On September 15, 1997, a motion for summary
judgment was entered in favor of the Company and a mutual release of all
remaining claims in that action is expected in the near future.
Items 2, 3, 4 and 5 are not applicable.
Item 6. Exhibits and Reports on Form 8-K
On August 4, 1997, the Company filed a Form 8-K with the Securities and
Exchange Commission regarding the resignation of one of its board members
and officers.
13
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SIGNATURES
In accordance with the requirements of the Exchange Act, the
registrant caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
THE INTERGROUP CORPORATION
(Registrant)
Date: November 14, 1997
By /s/ John V. Winfield
- ------------------------------------------------------
John V. Winfield
Chairman, President and Chief Executive Officer
Date: November 14, 1997
By /s/ Gregory C. McPherson
- ------------------------------------------------------
Gregory C. McPherson
Executive Vice President, Assistant Treasurer
and Assistant Secretary
Date: November 14, 1997
By /s/ David C. Gonzalez
- ------------------------------------------------------
David C. Gonzalez
Controller
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-QSB
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1997 AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1998
<PERIOD-END> SEP-30-1997
<CASH> 522,063
<SECURITIES> 23,456,955
<RECEIVABLES> 373,505
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 11,063,696
<PP&E> 43,036,220
<DEPRECIATION> (13,644,243)
<TOTAL-ASSETS> 64,808,196
<CURRENT-LIABILITIES> 14,233,264
<BONDS> 34,234,933
<COMMON> 14,948
0
0
<OTHER-SE> 16,325,051
<TOTAL-LIABILITY-AND-EQUITY> 64,808,196
<SALES> 0
<TOTAL-REVENUES> 5,425,255
<CGS> 0
<TOTAL-COSTS> 2,316,507
<OTHER-EXPENSES> 221,498
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 725,843
<INCOME-PRETAX> 2,161,407
<INCOME-TAX> 900,896
<INCOME-CONTINUING> 1,260,511
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,260,511
<EPS-PRIMARY> 1.32
<EPS-DILUTED> 1.32
</TABLE>
