<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15 (D)
For Quarter Ended May 11, 1997 Commission file number 0-11514
-------------- ---------
Max & Erma's Restaurants, Inc.
- ------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware No. 31-1041397
- ------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4849 Evanswood Drive, Columbus, Ohio 43229
- ------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (614) 431-5800
----------------
Indicate by checkmark 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, and (2) has been subject to the filing
requirements for at least the past 90 days.
YES __X__ NO _____
As of the close of the period covered by this report, the registrant had
outstanding 4,148,390 common shares.
1
<PAGE> 2
PART I - FINANCIAL INFORMATION / ITEM 1 - FINANCIAL STATEMENTS
MAX & ERMA'S RESTAURANTS, INC. - BALANCE SHEETS (UNAUDITED)
ASSETS
<TABLE>
<CAPTION>
May 11, October 27,
Current Assets: 1997 1996
------------ ------------
<S> <C> <C>
Cash $ 1,656,786 $ 927,261
Inventories 752,635 641,196
Other Current Assets 1,459,568 1,546,881
------------ ------------
Total Current Assets 3,868,989 3,115,338
Property - At Cost: 74,131,416 70,085,464
Less Accumulated Depreciation and Amortization 19,597,185 17,370,256
------------ ------------
Property - Net 54,534,231 52,715,208
Other Assets 2,742,708 2,653,695
------------ ------------
Total $ 61,145,928 $ 58,484,241
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Current Maturities of Long-Term Obligations $ 1,459,427 $ 1,407,604
Accounts Payable 2,401,849 3,413,340
Accrued Liabilities 3,896,790 3,361,156
------------ ------------
Total Current Liabilities 7,758,066 8,182,100
Long-Term Obligations - Less Current Maturities 34,825,435 32,349,305
Minority Interests in Affiliated Partnerships 67,213 45,288
Stockholders' Equity:
Preferred Stock - $.10 Par Value;
Authorized 500,000 Shares - none outstanding
Common Stock - $.10 Par Value;
Authorized 10,000,000 Shares,
Issued and Outstanding 4,148,390 Shares
at 5/11/97 and 4,226,497 Shares at 10/27/96 414,839 422,650
Additional Capital 10,923,244 11,432,112
Retained Earnings 7,157,131 6,052,786
------------ ------------
Total Stockholders' Equity 18,495,214 17,907,548
------------ ------------
Total $ 61,145,928 $ 58,484,241
============ ============
</TABLE>
(See notes to financial statements)
2
<PAGE> 3
MAX & ERMA'S RESTAURANTS, INC.
STATEMENTS OF INCOME (UNAUDITED)
<TABLE>
<CAPTION>
Twelve Weeks Ended Twenty-eight Weeks Ended
------------------ ------------------------
May 11, May 12, May 11, May 12,
1997 1996 1997 1996
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
REVENUES: $ 21,099,072 $ 18,263,248 $ 47,608,936 $ 41,341,749
COSTS AND EXPENSES:
Costs of Goods Sold 5,661,952 4,851,329 12,808,939 10,960,278
Payroll and Benefits 6,541,666 5,541,559 14,767,384 12,726,289
Other Operating Expenses 6,068,672 5,321,655 13,910,163 12,340,613
Administrative Expenses 1,276,536 1,201,638 3,017,515 2,774,573
------------ ------------ ------------ ------------
Total Operating Expenses 19,548,826 16,916,181 44,504,001 38,801,753
------------ ------------ ------------ ------------
Operating Income 1,550,246 1,347,067 3,104,935 2,539,996
Interest Expense 644,748 473,889 1,440,912 1,052,747
Minority Interest in Income
of Affiliated Partnerships 23,237 24,451 79,678 57,134
------------ ------------ ------------ ------------
INCOME BEFORE INCOME TAXES 882,261 848,727 1,584,345 1,430,115
INCOME TAXES 269,000 269,000 480,000 435,000
------------ ------------ ------------ ------------
NET INCOME $ 613,261 $ 579,727 $ 1,104,345 $ 995,115
============ ============ ============ ============
NET INCOME
PER COMMON SHARE $ 0.15 $ 0.14 $ 0.26 $ 0.23
============ ============ ============ ============
WEIGHTED AVERAGE COMMON
AND COMMON EQUIVALENT
SHARES OUTSTANDING 4,175,031 4,249,410 4,203,588 4,247,076
============ ============ ============ ============
</TABLE>
(See notes to financial statements)
3
<PAGE> 4
MAX & ERMA'S RESTAURANTS, INC.
STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
Twenty-Eight Weeks Ended
------------------------
May 11, May 12,
1997 1996
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,104,345 $ 995,115
Depreciation and amortization 3,115,538 2,965,775
Minority interest in income of Affiliated Partnerships 79,680 57,134
Changes in other assets and liabilities 595,809 100,555
------------ ------------
Net cash provided by operating activities 4,895,372 4,118,579
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions (5,726,314) (7,827,034)
Decrease (increase) in other assets 25,345 (102,494)
Proceeds from sale of assets 1,250 214,400
------------ ------------
Net cash used by investing activities (5,699,719) (7,715,128)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments under long-term obligations (30,634,483) (20,261,132)
Proceeds from long-term obligations 32,829,165 23,713,606
Proceeds from sale of common stock 61,869 18,117
Cash paid for Purchase of Common stock (664,924)
Distributions to minority interests in Affiliated Partnership (57,755) (96,258)
------------ ------------
Net cash provided by financing activities 1,533,872 3,374,333
------------ ------------
NET INCREASE (DECREASE) IN CASH & EQUIVALENTS 729,525 (222,216)
CASH & EQUIVALENTS BEGINNING OF PERIOD 927,261 1,102,060
------------ ------------
CASH & EQUIVALENTS AT END OF PERIOD $ 1,656,786 $ 879,844
============ ============
SUPPLEMENTAL DISCLOSURES:
Cash paid during the period for:
Interest $ 1,290,022 $ 954,658
Income taxes $ 498,631 $ 313,908
Non-cash activities:
Property additions financed by capital leases $ 227,263 $ 463,465
Property additions financed by accounts payable $ 193,015 $ 891,443
Tax benefit of stock exercised & sold within one year $ 44,249 $ 13,399
</TABLE>
(See notes to financial statements) 4
<PAGE> 5
MAX & ERMA'S RESTAURANTS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
1. Presentation
The accompanying unaudited condensed financial statements have been
prepared in accordance with the instructions to Form 10-Q and include
all of the information and disclosures required by generally accepted
accounting principles for interim reporting, which are less than those
required for annual reporting. In the opinion of management, all
adjustments, consisting of only normal recurring accruals, considered
necessary for a fair presentation have been included.
The Company's year consists of one sixteen-week and three twelve-week
quarters.
2. Basic and Diluted Earnings Per Share
Financial Accounting Standard No. 128 (FAS 128) "Earnings Per Share",
becomes effective for periods ending after December 15, 1997, which
for the Company will be the first quarter of fiscal 1998. FAS 128
requires the calculation of earnings per share (EPS) under two
methods, basic and diluted. Basic EPS is calculated as income
available to common shareholders divided by the weighted-average
common shares outstanding. Diluted EPS is calculated giving effect to
all dilutive potential common shares, such as options and various
convertible securities. Once adopted, FAS 128 requires restatement of
EPS for all periods presented. The following pro forma information
presents the second quarter and six months of 1997 and 1996 EPS
calculated in accordance with FAS 128.
<TABLE>
<CAPTION>
Twelve Weeks Ended Twenty-Eight Weeks Ended
May 11, 1997 May 12, 1996 May 11, 1997 May 12, 1996
--------------- -------------- -------------- ---------------
<S> <C> <C> <C> <C>
Income available to common shareholders $ 613,261 $ 579,727 $ 1,104,345 $ 995,115
=============== ============== ============== ===============
Number of shares for computation of basic EPS 4,147,064 4,124,919 4,165,202 4,122,170
=============== ============== ============== ===============
Pro forma basic EPS $ .15 $ .14 $ .27 $ .24
=============== ============== ============== ===============
Income for computation of diluted EPS $ 613,261 $ 579,727 $ 1,104,345 $ 995,115
=============== ============== ============== ===============
Number of shares for computation of diluted
EPS 4,175,031 4,249,410 4,203,588 4,247,076
=============== ============== ============== ===============
Pro forma diluted EPS $ .15 $ .14 $ .26 $ .23
=============== ============== ============== ===============
</TABLE>
5
<PAGE> 6
Item 2 - MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
REVENUES
Revenues for the second quarter of 1997 rose $2,836,000 or 16% from
the second quarter of 1996. The increase was a result of i) the opening of two
restaurants during the second quarter of 1996, ii) the opening of one
restaurant during each of the third and fourth quarters of 1996, iii) the
opening of two restaurants during each of the first and second quarters of
1997, iv) an increase of approximately 0.6% or $82,000 in same-store sales at
restaurants opened for at least 18 months from $13,611,000 for the second
quarter of 1996 to $13,693,000 for the second quarter of 1997, and v) higher
sales at restaurants not included in same-store sales.
Year-to-date revenues also increased 15% due to i) the openings
referred to above, ii) two additional restaurant openings during the first
quarter of 1996, iii) an increase in same-store sales of 0.3% or $98,000 from
$31,784,000 for the first half of 1996 to $31,882,000 for the first half of
1997, and iv) the higher average sales at recent openings also referred to
above.
In light of the intense level of competition currently existing in the
casual dining segment of the restaurant industry, management is encouraged by
the second consecutive quarter of positive same-store sales and the sales
performance of newer restaurants.
Management believes programs to build dinner check average and
increase beverage sales, along with an approximate 1% price increase, have all
contributed to the quarterly and year-to-date same-store sales gains. At the
start of 1996 the Company began to introduce higher priced entrees in an effort
to increase its dinner check average, which management considered to be at the
lower end of the range of its competitors. As a result, the dinner check
average rose from $9.27 in 1995 to $9.58 for all of 1996. During the second
quarter of 1997 a new menu introduced several new items and deleted certain
lower priced menu items. This resulted in an increase in the dinner check
average to $9.95 per person by the end of the quarter. Additionally, the
beverage program introduced in 1996 has stabilized the food to beverage sales
mix, with beverage sales representing approximately 18% of total revenues in
both 1996 and 1997.
The Company's newer restaurants significantly outperformed older
restaurants during the quarter. During the second quarter of 1997 the 14
restaurants opened less than 18 months reported average weekly sales of
$45,516, a 14% increase over average weekly sales of the restaurants included
in same-store sales. The four restaurants opened during 1997 reported average
weekly sales of $55,486 during the quarter, an increase of 38% over the
same-store sales group. Sales of newer restaurants also compare favorably with
chain-wide average weekly sales of $41,753 during the second quarter.
Management believes better site selection, capacity and appeal of the Company's
new prototype building, and the menu changes discussed above are all factors
contributing to the performance of newer restaurants.
6
<PAGE> 7
COSTS AND EXPENSES
Cost of goods sold, as a percentage of revenues, increased slightly
from 26.6% for the second quarter of 1996 to 26.8% for the second quarter of
1997. Year-to-date cost of goods sold, as a percentage of revenues, increased
from 26.5% in 1996 to 26.9% in 1997. The increases were a result of higher beef
and pork prices through much of l997 and the introduction of higher priced
entrees, which have been introduced to build check average, but generally sell
at a higher cost of sales and produce more gross margin dollars. The overall
acceptance of these new menu items has been high and thus put upward pressure
on cost of goods sold as they have become a larger percentage of the sales mix.
The continued improvement in same-store sales is, to some extent, a result of
the acceptance of these new items.
Payroll and benefits, as a percentage of revenues, increased from
30.3% for the second quarter of 1996 to 31.0% for the second quarter of 1997.
The increase was a result of two restaurant openings during the quarter, where
labor is typically inefficient, as compared to one opening during the second
quarter of 1996 and higher hourly pay rates brought on by a shortage of
restaurant workers. Year-to-date payroll and benefits, as a percentage of
revenues, increased from 30.8% in 1996 to 31.0% in 1997. The increase was a
result of the factors discussed above but mitigated somewhat by a higher than
normal payroll and benefits percentage during the first quarter of 1996
resulting from harsh winter weather and related sales declines during that
quarter.
Other operating expenses, as a percentage of revenues, declined from
29.1% for the second quarter of 1996 to 28.8% for the second quarter of 1997.
Year-to-date other operating expenses, as a percentage of revenues, declined
from 29.9% for 1996 to 29.2% for 1997. The decreases were primarily a result of
slightly reduced advertising expenditures and reduced rental expense and
depreciation expense due to the Company's increased ownership of real estate.
ADMINISTRATIVE EXPENSES
Administrative expenses, as a percentage of revenue, declined from
6.6% for the second quarter of 1996 to 6.1% for the second quarter of 1997. For
the year-to-date period administrative expenses declined from 6.7% in 1996 to
6.3% in 1997. The declines were a result of revenue increases in excess of the
growth in administrative expenses. In dollar terms, administrative expenses
increased 6% and 9% for the quarter and year-to-date periods, respectively. The
increase was a result of two additional regional managers to support the
increased number of restaurants, an additional MIS staff person and raises for
corporate employees.
INTEREST EXPENSE
Interest expense increased 36% from the second quarter of 1996 to the
second quarter of 1997. Year-to-date interest expense increased 37% from 1996
to 1997. The increase was a
7
<PAGE> 8
result of a 17% or $5.0 million increase in long-term obligations from the end
of the second quarter of 1996 to the end of the second quarter of 1997, a
slight increase in interest rates on the Company's revolving credit line from
8.5% at May 12, 1996 to 9.0% at May 11, 1997 and a reduction in the
capitalization of construction period interest. The Company capitalized
$120,000 of construction period interest during the first 28 weeks of 1997 as
compared to $246,000 during the comparable 1996 period.
INCOME TAXES
The Company's effective tax rate remained constant at approximately
30.4% for the 28 weeks of 1996 and 1997.
LIQUIDITY AND CAPITAL RESOURCES
The Company's working capital ratio increased from .4 to 1 at October
27, 1996 to .5 to 1 at May 11, 1997. Historically, the Company has been
able to operate with a working capital deficiency because 1) restaurant
operations are primarily conducted on a cash basis, 2) high turnover (about
once every 10 days) permits a limited investment in inventory, and 3) trade
payables for food purchases usually become due after receipt of cash from the
related sales.
During the first 28 weeks of 1997, the Company expended approximately
$5,726,000 for property additions, $30,634,000 to reduce long-term obligations
and $665,000 to repurchase approximately 100,000 shares of common stock;
distributed $58,000 to minority interests in the affiliated partnerships, and
increased cash $729,000. Funds for such expenditures were provided primarily by
$32,829,000 from proceeds of long-term obligations, and $4,895,000 from
operations. The Company routinely draws down and repays balances under its
revolving credit agreement, the gross amounts of which are included in the
above numbers.
At May 11, 1997, a restaurant was under construction in Greenville,
South Carolina, which will open during the fourth quarter of 1997. In addition,
contracts for the purchase of ground have been entered into for sites in
Hilliard, Ohio, a suburb of Columbus and Maumee, Ohio, a suburb of Toledo. The
Company is also negotiating for additional locations in Columbus, Ohio,
Charlotte, North Carolina and Chicago, Illinois. The Company expects to open
the five sites under contract or negotiation during 1998.
Funding for new restaurants will be provided primarily by cash flow
from operations and equipment leasing and, to the extent necessary, the
Company's revolving credit line. During the second quarter of 1997 the
Company's revolving credit line was increased from $15.0 million to $18.0
million. At May 11, 1997, the Company had approximately $3.0 million available
under its credit line and approximately $1.0 million available under equipment
lease commitments.
8
<PAGE> 9
INVESTMENT CONSIDERATIONS
The Company desires to take advantage of the "safe harbor" provisions
of the Private Securities Litigation Reform Act of 1995 (the "Reform Act"). The
Reform Act only became law in late December 1995 and, except for the Conference
Reports, no official interpretations of the Reform Act's provisions have been
published. Many of the following important factors have been discussed in the
Company's prior filings with the Securities and Exchange Commission.
In addition to the other information in this Report, readers should
carefully consider that the following important factors, among others, in some
cases have affected, and in the future could affect, the Company's actual
results and could cause the Company's actual consolidated results of operations
for the Fiscal Year ended October 26, 1997 and beyond, to differ materially
from those expressed in any forward-looking statements made by, or on behalf of
the Company.
1. Dependence on Management - The Company's senior management has over 60
years experience with the Company. The loss of one or more key executives
could have an adverse effect on the Company.
2. Competition - The casual dining segment of the restaurant industry is
highly competitive. Many of the Company's competitors are larger national
chains with greater financial resources.
3. Restaurant Industry - The restaurant industry is affected by changing
trends, economic conditions, traffic patterns and weather. Increases in
food, labor and benefits costs along with the availability of employees
and suitable restaurant sites could affect future operating results.
4. Legal - The Company is exposed to various tort and other claims, most
notably liability claims resulting from the sale of alcoholic beverages.
While the Company currently maintains insurance for such claims, there is
no assurance of its adequacy or future availability. An uninsured or
excess claim could have a material adverse affect on the Company.
5. Government Regulation - The restaurant industry is subject to extensive
government regulations relating to the sale of food and alcoholic
beverages, and sanitation, fire and building codes. Suspension or
inability to renew any of the related licenses and permits could adversely
affect the Company's operations. Further more, government actions
affecting minimum wage rates, payroll tax rates and mandated benefits
could affect operating results.
PART II
Item 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The Company held its Annual Meeting of Stockholders on April 10, 1997
for the purpose of electing three Class I directors for three-year terms
expiring in 2000 and ratifying Deloitte & Touche LLP as the Company's
independent auditors for the 1997 fiscal year.
9
<PAGE> 10
Each nominee to the Company's Board of Directors was elected by the
following vote:
<TABLE>
<CAPTION>
Votes For Votes Withheld
--------- --------------
<S> <C> <C>
Roger D. Blackwell 3,326,206 15,694
William C. Niegsch, Jr. 3,326,866 15,034
Robert A. Rothman 3,323,001 18,899
</TABLE>
Additionally, Deloitte & Touche LLP was ratified as the Company's
independent auditors for the 1997 fiscal year by a vote of 3,320,711 shares
for, 14,963 against, and 6,226 shares abstained.
Item 6 - EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
The exhibits listed in the accompanying index to exhibits on page 12
are filed as part of this report.
(b) Reports on Form 8-K
None
10
<PAGE> 11
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.
MAX & ERMA'S RESTAURANTS, INC.
------------------------------
Registrant
/s/ Todd B. Barnum
--------------------------------------
Todd. B. Barnum
Chairman of the Board
(Chief Executive Officer)
/s/ William C. Niegsch, Jr.
--------------------------------------
William C. Niegsch, Jr.
Executive Vice President &
Chief Financial Officer
June 10, 1997
---------------------
Date
11
<PAGE> 12
MAX & ERMA'S RESTAURANTS INC.
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Exhibit Page No.
- ----------- ------- --------
<S> <C> <C>
2 Not applicable
3 Not applicable
4 Not applicable
10 Fourth Amendment to Revolving Credit Agreement 13
11 Not applicable
15 Not applicable
18 Not applicable
19 Not applicable
22 Not applicable
23 Not applicable
24 Not applicable
27 Financial Data Schedule
</TABLE>
12
<PAGE> 1
EXHIBIT 10
Fourth Amendment to
Revolving Credit Agreement
This Fourth Amendment to the Revolving Credit Agreement, dated as of March 7,
1997 is made by and between The Provident Bank (the "Bank"), an Ohio banking
corporation, doing business at One East Fourth Street, Cincinnati, Ohio 45202,
and Max & Erma's Restaurants, Inc. (the "Borrower"), a Delaware corporation,
doing business at 4849 Evanswood Drive, Columbus, Ohio 43229.
WITNESSETH
WHEREAS, the parties hereto have previously entered into that certain Revolving
Credit Agreement dates as of October 25, 1993, which has been amended three
times on January 17, 1994, August 25, 1995, and February 17, 1996 (hereinafter
the "RCA"), whereby the Bank made certain loans to Borrower.
WHEREAS, the parties wish to further amend the RCA to provide for changes in
covenants and certain other provisions.
NOW, THEREFORE, in consideration of the premises and the mutual promises
contained herein, the parties hereto agree as follows:
1. The date in the last line of Section 1.1(a) shall be amended to read
"January 1, 2004".
2. The second sentence of Section 1.1(b) shall be deleted and the following
inserted in its place: The initial Baseline Commitment of the Bank is
$18,000,000 which Baseline Commitment shall decrease by $900,000 every three
months, with the first decrease to occur on March 1, 1999.
3. The ratio referred to in the last line of Section 6.2(b) shall be amended to
read "1 to 1".
4. Insert after "$100,000", within the fourth line of section 6.1(c) the
following: except for those liabilities associated with the establishment of a
new wholly owned subsidiary the sole purpose of which is to operate one or more
Italian theme restaurants,
5. Delete the word "and" in the seventh line of Section 6.1(g) and insert the
word "or".
6. Replace the period at the end of Section 6.1(g) with a semicolon and after
the semicolon insert the following: or (iii) the investment or capital
contribution of up to $2,500,000 in a new wholly owned subsidiary established
to operate one or more Italian restaurants. The investment limitation for this
subsidiary shall no longer apply after the Company has provided certification
to the Bank along with any supporting documentation which the Bank may
reasonably request that for the six months immediately preceding the date of
such certification (A) a minimum of four such restaurants have been in
existence; and (B) the aggregate Net Income for all such restaurants as
evidenced by the restaurant Income Statements for the six month period prepared
in the form attached hereto as Exhibit 6.1(g) is equal to or in excess of
$250,000.
<PAGE> 2
IN WITNESS WHEREOF, the parties have executed this Fourth Amendment to the
Revolving Credit Agreement as of the date first set forth above.
MAX & ERMA'S RESTAURANTS, INC. THE PROVIDENT BANK
BY: /s/ William C. Niegsch, Jr. BY: /s/ Michael G. Giulioli
--------------------------------- --------------------------------
William C. Niegsch, Jr. Michael G. Giulioli
Executive Vice President Regional Vice President
M&E4AMD.MGG
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> OCT-27-1997
<PERIOD-START> OCT-28-1996
<PERIOD-END> MAY-11-1997
<CASH> 1,656,786
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 752,635
<CURRENT-ASSETS> 3,868,989
<PP&E> 74,131,416
<DEPRECIATION> 19,597,185
<TOTAL-ASSETS> 61,145,928
<CURRENT-LIABILITIES> 7,758,066
<BONDS> 34,825,435
0
0
<COMMON> 414,839
<OTHER-SE> 18,080,375
<TOTAL-LIABILITY-AND-EQUITY> 61,145,928
<SALES> 0
<TOTAL-REVENUES> 47,608,936
<CGS> 12,808,939
<TOTAL-COSTS> 41,486,486
<OTHER-EXPENSES> 3,017,515
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,440,912
<INCOME-PRETAX> 1,584,345
<INCOME-TAX> 480,000
<INCOME-CONTINUING> 1,104,345
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,104,345
<EPS-PRIMARY> .26
<EPS-DILUTED> .26
</TABLE>
