United States
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------------
FORM 10-Q
-----------------
(Mark One)
X Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange
--- Act of 1934 For the quarterly period ended September 30, 1999
Or
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: 0-11104
NOBLE ROMAN'S, INC.
(Exact name of registrant as specified in its charter)
Indiana 35-1281154
(State or other jurisdiction of organization) (I.R.S. Employer
Identification No.)
One Virginia Avenue, Suite 800
Indianapolis, Indiana 46204
(Address of principal executive offices) (Zip Code)
(317) 634-3377
(Registrant's telephone number, including area code)
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 December 15, 1999, there were 7,000,421 shares of Common Stock, no par
value, outstanding.
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. Financial Statements
The following condensed consolidated financial statements are included
herein:
Note to condensed consolidated financial statements Page 2
Condensed consolidated balance sheets as of December 31, 1998
and September 30, 1999 Page 4
Condensed consolidated statements of operations for the nine and
three months ended September 30, 1998 and 1999 Page 5
Condensed consolidated statements of cash flows for the nine
months ended September 30, 1998 and 1999 Page 6
The interim condensed consolidated financial statements included herein reflect
all adjustments which are, in the opinion of management, necessary for a fair
statement of the results of operations for the interim periods presented and the
balance sheets for the dates indicated, which adjustments are of a normal
recurring nature.
Segment Reporting
In 1998, the Company adopted FAS 131. Prior year information has been restated
to present the Company's reportable segments. The Company is organized into two
segments as follows: traditional full-service restaurants which are primarily
Company-owned and operated, and Noble Roman's Pizza Express which are
franchised.
<TABLE>
<CAPTION>
Depreciation Operating Income tax Expend-
and income (loss) expense Segment itures for
Revenue amortization Interest (benefit) assets property
Nine months ended
June 30, 1998
<S> <C> <C> <C> <C> <C> <C> <C>
Restaurant $17,175,756 511,783 201,121 30,641 68,381 6,877,179 519,162
Express 1,453,758 - 937,336 - 318,694 160,824 -
Corporate 237,891 244,746 (2,237,535) 1,012,131 (1,115,344) 12,811,133 -
----------- --------- ----------- --------- ----------- ---------- ----------
Total $18,867,405 756,529 (1,099,078) 1,042,772 (723,269) 19,849,136 519,162
Nine months ended
June 30, 1999
Restaurant $16,537,741 584,288 (173,997) 41,113 (59,159) 6,425,055 381,991
Express 2,459,474 - 1,273,963 - 433,147 656,928 21,801
Corporate 192,378 217,712 (1,970,950) 1,304,349 (1,127,580) 13,664,185 27,307
------------ ---------- ----------- ---------- ----------- ---------- ----------
Total $19,189,593 802,000 (870,984) 1,345,462 (753,592) 20,746,168 431,099
</TABLE>
<PAGE>
Based on the Company's business plan, the number of Express units now open, the
backlog of units sold to be opened, the backlog of franchise prospects now in
ongoing discussions and negotiations, the Company's trends and the results thus
far in 1999, management determined that it is more likely than not that the
Company's deferred tax asset will be fully realized. Therefore, no valuation
allowance was established for its deferred tax asset. However, there can be no
assurance that the growth of the Express will continue in the future nor can
there be any assurance that the full-service restaurants can be operated
successfully in the future. If negative events should occur in the future in
either the Express or the full-service operations, the realization of all or
some portion of the Company's deferred tax asset could be jeopardized. The
Company will continue to evaluate the need for a valuation allowance on a
quarterly basis in the future.
The statements contained in Management's Discussion and Analysis concerning the
Company's future revenues, profitability, financial resources, market demand and
product development are forward-looking statements (as such term is defined in
the Private Securities Litigation Reform Act of 1995) relating to the Company
that are based on the beliefs of the management of the Company, as well as
assumptions and estimates made by and information currently available to the
Company's management. The Company's actual results in the future may differ
materially from those projected in the forward-looking statements due to risks
and uncertainties that exist in the Company's operations and business
environment including, but not limited to: the operations and results of
operations of the Company as well as its customers and suppliers, including as a
result of competitive factors and pricing pressures, shifts in market demand,
general economic conditions and other factors including but not limited to,
changes in demand, for the Company's products or franchises, the impact of
competitors' actions, and changes in prices or supplies of food ingredients.
Should one or more of these risks or uncertainties materialize, or should
underlying assumptions or estimates prove incorrect, actual results may vary
materially from those described herein as anticipated, believed, estimated,
expected or intended.
On April 30, 1999, the Company obtained $2,235,600 in additional funding from
various investors associated with The Geometry Group based in New York City, who
purchased participating income notes of the Company (the "Participating Notes")
and warrants to purchase at any time prior to December 31, 2001 an aggregate of
275,000 shares of the Company's common stock at a price of $.01 per share.
Interest is based on the Company's revenues associated with the Company's Pizza
Express. Such interest is payable in cash monthly, provided, however, that to
the extent that the interest otherwise payable to an investor would exceed such
investor's pro rata share of the sum of $33,534, all interest in excess of such
amount shall be paid in the form of a PIK Note of the Company. Participating
Notes and PIK Notes mature on April 15, 2003 and are payable at that time, at
the option of each investor, in cash, in shares of the Company's common stock
based on a conversion price of $1.375 per share or in a combination thereof.
Subsequent Events
On January 27, 2000 the Company, various investors associated with the Geometry
Group and The Provident Bank signed a three-way term sheet which will provide a
major recapitalization for the Company. This transaction is expected to close in
approximately two weeks.
<PAGE>
Noble Roman's, Inc. and Subsidiaries
Condensed Consolidated Balance Sheets
<TABLE>
<CAPTION>
(Unaudited)
December 31, September 30,
1998 1999
------------ ------------
<S> <C> <C>
Assets
------
Current assets:
Cash $ 28,176 $ 390,299
Accounts receivable 579,841 1,274,559
Inventories 844,783 914,065
Prepaid expenses 185,471 290,943
------------ ------------
Total current assets 1,638,271 2,869,866
Property and equipment, less accumulated depreciation and
amortization of $4,029,228 and $4,471,146 6,657,638 6,172,044
Deferred tax asset 4,442,725 5,196,065
Costs in excess of assets acquired, net 5,944,718 5,757,129
Other assets 459,202 751,064
------------ ------------
$ 19,142,554 $ 20,746,168
------------ ------------
Liabilities and Stockholders' Equity
------------------------------------
Current liabilities:
Accounts payable and accrued expenses $ 1,911,089 $ 2,523,296
Notes payable - current 18,279 18,279
Note payable to officer - current 65,840 65,840
Deferred franchise fees 143,500 255,000
Other current liabilities 1,740,653 1,137,832
------------ ------------
Total current liabilities 3,879,361 4,000,247
Long-term liabilities:
Notes payable to Provident Bank net of warrant valuation of
$653,241 and $553,593, respectively 13,919,125 14,018,773
Notes payable to various funds affiliated with Geometry Group
net of warrant valuation of $246,354 in 1999 -- 1,989,246
PIK notes payable to Provident Bank -- 436,104
Note payable to officer 250,000 250,000
PIK notes payable to officer -- 20,135
Other long-term liabilities 18,339 14,241
------------ ------------
Total long-term liabilities 14,187,464 16,728,499
Stockholders' equity
Common stock (9,000,000 shares authorized, 5,552,390
outstanding in 1998 and 7,000,421 in 1999) 11,869,175 12,273,722
Accumulated deficit (10,793,445) (12,256,300)
------------ ------------
Total stockholders' equity 1,075,730 17,422
------------ ------------
$ 19,142,554 $ 20,746,168
------------ ------------
</TABLE>
See accompanying note to condensed consolidated financial statements
<PAGE>
Noble Roman's, Inc. and Subsidiaries
Condensed Consolidated Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
September 30, September 30,
---------------------------- ----------------------------
1998 1999 1998 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Restaurant revenue $ 17,175,756 $ 16,537,741 $ 5,887,399 $ 5,472,290
Restaurant royalties 102,015 62,345 25,909 19,538
Express royalties and fees 1,453,758 2,459,474 592,541 1,041,101
Administrative fees and other 135,876 130,033 34,643 (5,855)
------------ ------------ ------------ ------------
Total revenue 18,867,405 19,189,593 6,540,492 6,527,103
Restaurant operating expenses:
Cost of revenue 3,384,917 3,369,331 1,177,439 1,191,960
Salaries and wages 6,285,320 6,316,118 2,137,158 2,113,731
Rent 1,660,109 1,679,078 556,614 554,324
Advertising 858,777 827,546 291,980 286,668
Other 4,273,729 3,935,377 1,530,748 1,321,483
Depreciation and amortization 756,529 802,000 260,226 282,084
Express operating expenses 516,422 1,185,511 234,741 422,579
General and administrative 2,230,680 1,945,616 752,739 632,546
------------ ------------ ------------ ------------
Operating loss (1,099,078) (870,984) (401,153) (278,302)
Interest and other expense 1,042,772 1,345,462 413,698 520,471
------------ ------------ ------------ ------------
Loss before income tax and extraordinary
item (2,141,850) (2,216,446) (814,851) (798,773)
Income tax benefit (728,269) (753,592) (277,089) (271,583)
------------ ------------ ------------ ------------
Loss before extraordinary item (1,413,581) (1,462,855) (419,047) (527,191)
Extraordinary item, net of tax expense of
$183,468 and $61,156 356,146 -- 118,715 --
------------ ------------ ------------ ------------
Net loss $ (1,057,435) $ (1,462,855) $ (419,047) $ (527,191)
------------ ------------ ------------ ------------
Net loss per share $ (.26) $ (.26) $ (.10) $ (.09)
Weighted average number of common
shares outstanding 4,131,324 5,678,848 4,131,324 5,921,661
</TABLE>
See accompanying note to condensed consolidated financial statements.
<PAGE>
Noble Roman's, Inc. and Subsidiaries
Condensed Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
---------------------------
1998 1999
---- ----
<S> <C> <C>
OPERATING ACTIVITIES
Net loss $(1,057,435) $(1,462,855)
Adjustments to reconcile net loss to net cash provided by
(used in) operating activities:
Depreciation and amortization 774,244 983,482
Non-cash interest -- 456,239
Deferred federal income taxes (544,800) (753,340)
Changes in operating assets and liabilities (increase) decrease in:
Accounts receivable (292,351) (694,718)
Inventory (33,816) (69,282)
Prepaid expenses (677,123) (105,472)
Other assets (45,864) (34,195)
Increase (decrease) in:
Accounts payable (291,477) 612,207
Other current liabilities (602,820)
Deferred franchise fee 82,500 111,500
----------- -----------
NET CASH USED IN OPERATING ACTIVITIES (2,086,222) (1,559,254)
INVESTING ACTIVITIES
Purchase of fixed assets (519,162) (431,099)
Sale of fixed assets -- 260,325
Issuance of common stock -- 139,129
Legal fees associated with exchange of debt for equity -- (9,582)
----------- -----------
NET CASH USED IN INVESTING ACTIVITIES (519,162) (41,227)
FINANCING ACTIVITIES
Proceeds from long-term debt, net of debt issue costs 2,592,366 1,966,703
Principal payments on long-term debt and capital lease obligations (15,210) (4,098)
----------- -----------
NET CASH PROVIDED BY FINANCING ACTIVITIES 2,577,156 1,962,605
----------- -----------
INCREASE (DECREASE) IN CASH (28,228) 362,123
Cash at beginning of period 68,136 28,176
----------- -----------
Cash at end of period $ 39,908 $ 390,299
----------- -----------
</TABLE>
Supplemental Schedule of non-cash investing and financing activities
As a result of the Company's debt restructurings with Provident Bank, the
Company was not required to pay interest on $11,000,000 note payable to
Provident Bank for the period November 1, 1997 through October 31, 1998.. The
computed interest cost for the nine-month period ended September 30, 1998 was
$539,615.
The Company's loan agreement provides that interest on certain of its notes
payable is to be paid by the issuance of PIK notes. The amount of such non-cash
interest for the nine month period ended September 30, 1999 was $456,239.
See accompanying note to condensed consolidated financial statements.
<PAGE>
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Noble Roman's, Inc. and Subsidiaries
Results of Operations - Nine-month and three-month periods ended September 30,
1998 and 1999
The following table sets forth the percentage relationship to total revenue of
the listed items included in Noble Roman's condensed consolidated statement of
operations. Certain items are shown as a percentage of restaurant revenue.
<TABLE>
<CAPTION>
Nine Months Ended Three Months Ended
September 30, September 30,
----------------------- ----------------------
1998 1999 1998 1999
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenue:
Restaurant revenue 91.0% 86.2% 90.0% 83.8%
Restaurant royalties .5 .3 .4 .3
Express royalties and fees 7.7 12.8 9.1 16.0
Administrative fees and other .7 .7 .5 (.1)
------ ------ ------ ------
100.0 100.0 100.0 100.0
Restaurant operating expenses (1):
Cost of revenue 19.7 20.4 20.0 21.8
Salaries and wages 36.6 38.2 36.3 38.6
Rent 9.7 10.2 9.5 10.1
Advertising 5.0 5.0 5.0 5.2
Other 24.9 23.8 26.0 24.1
Depreciation and amortization 4.0 4.2 4.0 4.3
Express operating expense 2.7 6.2 3.6 6.5
General and administrative 11.8 10.1 11.5 9.7
Restructuring costs - - - -
------ ------ ------ ------
Operating loss (5.8) (4.5) (6.1) (4.3)
Interest 5.5 7.0 6.3 8.0
------ ------ ------ ------
Loss before income taxes (11.4) (11.6) (12.5) (12.2)
Income tax benefit (3.9) (3.9) (4.2) (4.2)
------ ------ ------ ------
Loss before extraordinary item (7.5%) (7.6%) (8.2%) (8.1%)
</TABLE>
(1) As a percentage of restaurant revenue
Total revenue increased approximately $307 thousand and decreased approximately
$28 thousand for the nine month period and three month periods ended September
30, 1999 compared to the same periods in 1998. The primary reason for the
increase was the growth in revenue from the Express business offset by a 2.6%
same store sales decrease in the full-service restaurants and by two fewer
full-service restaurants.
Express royalties and fees were approximately $2,459,474 and $1,041,101 for the
nine month and three month periods ended September 30, 1999 compared to
$1,453,758 and $592,541 for the nine month and three month periods ended
Septmeber 30, 1998. Franchising of Noble Roman's Pizza Express began in early
1997. At September 30, 1999, approximately 291 franchised Express units were
open. Currently
<PAGE>
there are approximately 360 such franchised units open and approximately 125
units sold to be opened over the next several months. In addition, there are
current negotiations for a significant number of new units to be opened in the
next several months.
Cost of revenue as a percentage of restaurant revenue increased to 20.4% and
21.8% for the nine month and three month periods ended September 30, 1999
compared to 19.7% and 20.0% for the nine month and three month periods ended
September 30, 1998. The price of cheese escalated during the period account for
the majority of the increase. Cheese prices have returned to more normal levels
during the fourth quarter.
Salaries and wages as a percentage of restaurant revenue were 38.2% and 38.6%
for the nine and three month periods ended September 30, 1999 compared to 36.6%
and 36.3% for the nine month and three month periods ended June 30, 1998. The
increase was the result of wage rate increases due to increased competition for
restaurant employees and lower same store sales.
Other restaurant expenses as a percentage of restaurant revenue were 23.8% and
24.1% for the nine month and three month periods ended September 30, 1999
compared to 24.9% and 26.0% for the nine month and three month periods ended
September 30, 1998. The decrease was primarily the result of an improvement in
discount cost.
Express operating expenses were $1,185,511 and $422,579 for the nine month and
three month periods ended September 30, 1999 compared to $516,422 and $234,741
for the nine month and three month periods ended September 30, 1998. This
increase was a result of the growth in number of franchised Express units and
the Company's decision to hire additional staff to be prepared for an
accelerated rate of growth in the number of new franchised units to be opened
during the next several quarters.
General and administrative expenses as a percentage of total revenue was 10.1%
and 9.7% for the nine month and three month periods ended September 30, 1999
compared to 11.8% and 11.5% for the nine month and three month periods ended
September 30, 1998. This decrease is primarily attributable to the growth in
revenue from the Express business and reduced training cost as a result of
greater management stability in the full-service restaurants.
Interest expenses were $1,345,462 and $520,471 for the nine month and three
month periods ended September 30, 1999 compared to $1,042,772 and $413,698 for
the nine month and three month periods ended September 30, 1998. The reason for
the increase was a result of increased borrowings.
Net losses before extraordinary item were $1,462,855 and $527,191 for the nine
month and three month periods ended September 30, 1999 compared to $1,413,581
and $537,762 for the nine month and three month periods ended September 30,
1998. The slight increase in net loss before extraordinary item was the result
of the increased interest cost, increased salaries and wages in the full-service
restaurants mostly offset by the increased operating profit from the growth of
the Express business.
Liquidity and Capital Resources
- -------------------------------
During 1995 and 1996, the Company attempted a major acquisition of a 187-unit
pizza restaurant chain operating in seven states in the Northeast as a part of a
strategic decision to acquire and consolidate other regional chains. For a
number of reasons this attempted acquisition failed, despite senior management
devoting substantially all of its attention to that attempt for a period of
almost 18 months. As the Company's focus was increasingly on the acquisition
transaction, the Company's primary market was, as
<PAGE>
a result of several demographic/consumption trends, targeted for expansion by a
large number of mid-scale dining chains for expansion. The unemployment rates in
the Company's labor markets were approaching record lows and the Company's
personnel were aggressively recruited by others. Senior management, due to the
acquisition transaction, were unable to participate in daily operations during
the period.
Because of the Company's dramatic turnover and its inability to stabilize
staffing levels through ordinary recruiting efforts, sales and margins declined.
The Company suffered serious losses and defaulted on its loan agreement with its
primary lender. Due to a lack of staffing and the Company's financial
difficulties, the Company closed 19 of its restaurants in May 1997 and launched
a turnaround strategy consisting of three primary elements:
o Negotiated a series of debt restructurings with its primary lender, The
Provident Bank, whereby the Bank loaned the Company additional funds,
converted a portion of its debt to equity and extended maturity of
remaining debt. The Company also obtained additional funding from
various investors associated with the Geometry Group, New York, in the
form of convertible participating income notes which may, at the option
of the investors, be converted to equity April 15, 2003.
o Restructured the Company's executive staff including the appointment of
Scott Mobley as President, Wade Shanower as Vice President of
Operations, Troy Branson as Vice President of Franchising, Art Mancino
as Vice President of Development and Dan Hutchison as Chief Financial
Officer.
o Began franchising Noble Roman's Pizza Express for non-traditional
locations such as convenience stores, grocery stores, truck stops,
travel centers, universities, bowling centers and to other traditional
restaurants as a Co-Brand.
On April 30, 1999, the Company obtained $2,235,600 in additional funding from
various investors associated with The Geometry Group based in New York City, who
purchased participating income notes of the Company (the "Participating Notes")
and warrants to purchase at any time prior to December 31, 2001 an aggregate of
275,000 shares of the Company's common stock at a price of $.01 per share. The
Participating Notes mature on April 15, 2003 and are payable at that time, at
the option of each investor, in cash, in shares of the Company's common stock
based on a conversion price of $1.375 per share or in a combination thereof.
Interest on the Participating Notes accrues at a rate per annum equal to each
investor's pro rata share of the Company's revenues associated with the
Company's Pizza Express. Such interest is payable in cash monthly, provided,
however, that to the extent that the interest otherwise payable to an investor
would exceed such investor's pro rata share of the sum of $33,534, all interest
in excess of such amount shall be paid in the form of a PIK Note of the Company.
Each PIK Note matures on April 15, 2003 and, similar to the Participating Notes,
is payable at that time, at the option of each investor, in cash, in shares of
the Company's common stock based on a conversion price of $1.375 per share or in
a combination thereof.
As a result of the Company's debt restructuring, the exchange of debt for
equity, the $2.2 million investment on April 30, 1999 by various funds
associated with The Geometry Group, New York in the form of convertible
participating income notes and the recapitalization as described in Subsequent
Events, the Company believes it will have sufficient cash flow to meet its
obligations and to carry out its current business plan. However, there can be no
assurance that the capitalization will occur. Currently, the Company
<PAGE>
anticipates that its capital expenditures for the next twelve months will be
approximately $300 thousand.
Because of the rapid growth of the Company's Express business, management is
currently exploring the possibility of franchising its full-service restaurants
to franchisees in order to better utilize its resources, both management and
capital, to further focus its efforts on growing the Express business.
The Company developed and began to offer franchises of its Express concept in
early 1997. The Express concept was designed to capitalize on its full-service
products but with minimal labor requirements in the rapidly growing distribution
channel of non-traditional locations. The Company has awarded more than 475
franchises for non-traditional locations and as a co-brand in other traditional
concepts since 1997. The Company plans to continue aggressively franchising its
Express concept and currently has discussions and negotiations ongoing for many
potential franchise locations.
The Express concept is simple and inexpensive to operate, has a low investment
cost for the franchisee (approximately $30,000 each), low cost of sales
(approximately 23%-25% at recommended retail prices), simple product procedures,
low staffing requirements and uses approximately 100 square feet of existing
space. The system is fast and convenient for customers and features fresh-baked,
great tasting individual and large pizzas, breadsticks with dip, buffalo wings,
baked pasta, hot deli sandwiches and cold deli sandwiches plus a breakfast menu
consisting of biscuit sandwiches, Pan One omelets, biscuits and gravy, and
cinnamon rounds. The menu items are all delivered to the franchisee weekly
already pre-prepared in a manner such that the franchisee need only assemble
then bake the products in a small conveyor oven prior to serving fresh to the
customer. Because the Express units are targeted for existing facilities it is
possible to open a unit within two weeks or less from the time the franchise is
sold. The competitors of Express restaurants include fast food restaurants in
general and, more specifically, other pizza restaurants.
The market for Noble Roman's Pizza Express products is primarily the existing
customer traffic in the facility in which the Noble Roman's Pizza Express is
installed. Since franchises are being offered for non-traditional locations as
previously described, we offer products for the convenience of the existing
customer traffic which may also draw new customers to the facility.
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings.
The Company is involved in various litigation relating to claims
arising out of its normal business operations and relating to
restaurant facilities closed in 1997. The Company believes that none of
its current proceedings, individually or in the aggregate, will have a
material adverse effect upon the Company beyond the amount reserved in
its financial statement.
<PAGE>
Legal proceedings against the Company include REH Acquisition, Ltd.
("REH") versus Noble Roman's, Inc. and The Provident Bank., filed July
20, 1998 in the United States District Court for the Southern District
of New York. The complaint alleges that the Company breached agreements
entered into with the Plaintiff to seek to fund and restructure the
Company's bank debt. The Company has denied liability and will defend
vigorously. The Company has filed a counter-claim against REH and
Elliott and Robert Herskowitz, individually, for false and malicious
misrepresentations seeking actual and punitive damages against each of
them.
ITEM 2. Changes in Securities.
None.
ITEM 3. Defaults Upon Senior Securities.
None.
ITEM 4. Submission of Matters to a Vote of Security Holders.
None.
ITEM 5. Other Information.
None.
ITEM 6. Exhibits and Reports on Form 8-K.
Exhibit 27. Financial Data Schedule
<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.
NOBLE ROMAN'S, INC.
Date: -----------------------------
------------------------- Paul W. Mobley, President
(Principal Executive Officer)
Date: -----------------------------
------------------------- Dan Hutchison
(Chief Financial Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> SEP-30-1999
<CASH> 390,299
<SECURITIES> 0
<RECEIVABLES> 1,274,559
<ALLOWANCES> 0
<INVENTORY> 914,065
<CURRENT-ASSETS> 2,869,866
<PP&E> 10,643,190
<DEPRECIATION> (4,471,146)
<TOTAL-ASSETS> 20,746,168
<CURRENT-LIABILITIES> 4,000,247
<BONDS> 16,728,499
0
0
<COMMON> 12,273,722
<OTHER-SE> (12,256,300)
<TOTAL-LIABILITY-AND-EQUITY> 20,746,168
<SALES> 16,537,741
<TOTAL-REVENUES> 19,189,593
<CGS> 3,369,331
<TOTAL-COSTS> 12,758,119
<OTHER-EXPENSES> 3,933,127
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,345,462
<INCOME-PRETAX> (2,216,446)
<INCOME-TAX> (753,592)
<INCOME-CONTINUING> (1,462,855)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,462,855)
<EPS-BASIC> (.26)
<EPS-DILUTED> (.26)
</TABLE>
