<PAGE> 1
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 March 31, 1995
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 0-14380
------------------------------
American Health Services Corp.
- - -------------------------------------------------------------------------------
(Exact name of Registrant as specified in its charter)
Delaware 52-1278857
- - ------------------------------- ---------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) No.)
4440 Von Karman, Suite 320, Newport Beach, CA 92660
- - -------------------------------------------------------------------------------
(Address of principal executive offices) (ZIP Code)
Registrant's telephone number, including area code 714/476-0733
------------
N/A
- - -------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
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
--- ---
The number of shares of the Registrant's common stock outstanding as
of May 1, 1995 was 9,683,647.
The number of pages in this Form 10-Q is 15.
<PAGE> 2
AMERICAN HEALTH SERVICES CORP. AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PART I -- FINANCIAL INFORMATION
ITEM 1. Financial Statements
Consolidated Balance Sheets,
March 31, 1995, and December 31, 1994 3-4
Consolidated Statements of Operations,
for the three months ended March 31, 5
1995 and 1994
Consolidated Statements of Cash Flows,
for the three months ended March 31,
1995 and 1994 6
Notes to Consolidated Financial Statements 7-8
ITEM 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations 8-13
PART II -- OTHER INFORMATION 14
ITEM 6. Exhibits and Reports on Form 8-K 14
</TABLE>
2
<PAGE> 3
PART I -- FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
AMERICAN HEALTH SERVICES CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - MARCH 31, 1995 AND DECEMBER 31, 1994
ASSETS
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
----------- ------------
(unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash $ 4,479,654 $ 3,663,795
Accounts receivable, net of an allowance for doubtful
accounts and contractual discounts of $4,245,671
and $3,691,466 at March 31, 1995 and December 31, 1994
respectively, and an allowance for professional fees of
$1,862,026 and $1,862,399 at March 31, 1995 and
December 31, 1994, respectively 8,566,915 8,587,288
Prepaid expenses and other 358,616 345,040
----------- -----------
Total current assets 13,405,185 12,596,123
PROPERTY AND EQUIPMENT, at cost, net of accumulated
depreciation and amortization of $13,603,160 and
$12,348,486 at March 31, 1995 and December 31, 1994,
respectively 25,020,326 25,521,012
OTHER ASSETS 3,183,939 2,105,802
----------- -----------
$41,609,450 $40,222,937
=========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated balance
sheets.
3
<PAGE> 4
AMERICAN HEALTH SERVICES CORP. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS - MARCH 31, 1995 AND DECEMBER 31, 1994
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
----------- ------------
(Unaudited)
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable and accrued expenses $ 3,830,274 $ 3,319,079
Accrued payroll and related costs 869,229 700,916
Professional fees payable 331,813 306,446
Current portion of deferred rent
expense 608,009 665,343
Current portion of reserve for center
terminations 690,000 690,000
Current portion of long-term debt 15,449,371 4,326,816
----------- -----------
Total current liabilities 21,778,696 10,008,600
----------- -----------
DEFERRED RENT EXPENSE 391,353 443,513
----------- -----------
RESERVE FOR CENTER TERMINATIONS 1,253,130 1,253,130
----------- -----------
LONG-TERM DEBT 28,460,306 39,400,171
----------- -----------
CONTINGENCIES AND COMMITMENTS
MINORITY INTEREST 972,121 81,145
----------- -----------
STOCKHOLDERS' EQUITY (DEFICIT)
10 percent convertible Series B preferred stock with a liquidation
preference of $185 per share plus declared and unpaid dividends
Authorized--5,000,000 shares
Outstanding--37,837.83 at March 31, 1995 and
December 31, 1994 stated at 6,075,107 6,075,107
Common stock, $.03 par value-
Authorized--25,000,000 shares
Outstanding--9,683,647 at March 31, 1995 and December 31, 1994 290,509 290,509
Common stock warrants 1,115,569 1,115,569
Additional paid-in capital 9,343,665 9,343,665
Accumulated deficit (28,071,006) (27,788,472)
----------- -----------
(11,246,156) (10,963,622)
----------- -----------
$41,609,450 $40,222,937
=========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated balance
sheets.
4
<PAGE> 5
AMERICAN HEALTH SERVICES CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended Three Months Ended
March 31, 1995 March 31, 1994
------------------ ------------------
(Unaudited) (Unaudited)
<S> <C> <C>
REVENUES:
Center revenues $9,357,901 $9,207,065
EXPENSES:
Center expenses 7,705,466 7,295,381
Provision for center profit
distributions 179,468 232,747
---------- ----------
Income from center operations 1,472,967 1,678,937
CORPORATE OPERATING EXPENSES 880,575 898,595
---------- ----------
Income from operations
before interest 592,392 780,342
INTEREST INCOME AND OTHER 41,267 29,573
INTEREST EXPENSE (916,193) (1,154,030)
---------- ----------
Net loss $ (282,534) $ (344,115)
========== ==========
LOSS PER SHARE:
Loss per common share $ (0.03) $ (0.04)
========== ==========
Weighted average number of common
shares outstanding 9,683,647 9,683,647
========== ==========
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
5
<PAGE> 6
AMERICAN HEALTH SERVICES CORP. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Three Months Ended Three Months Ended
March 31, 1995 March 31, 1994
------------------ ------------------
(Unaudited) (Unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (282,534) $ (344,115)
Adjustments to reconcile net loss to net cash provided
by operating activities:
Depreciation and amortization 1,320,845 1,136,792
Deferred rent expense (109,494) 292,420
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable, net 20,373 (171,062)
Increase in prepaid expenses and other (4,826) (150,909)
Increase in other assets (390,416) (65,046)
Increase in accounts payable and accrued expenses 679,508 197,503
Increase (decrease) in professional fees payable 25,367 (42,948)
Decrease in reserve for center terminations -- (137,012)
---------- ----------
Net cash provided by operating activities 1,258,823 715,623
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (67,578) (131,505)
Investment in a radiation oncology center (408,221) --
---------- ----------
Net cash used in investing activities (475,799) (131,505)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments under long-term obligations (1,063,972) (946,969)
Increase in principal under long-term obligations 1,151,331 634,963
Decrease in minority interest (54,524) (106,459)
---------- ----------
Net cash provided by (used in) financing activities 32,835 (418,465)
---------- ----------
INCREASE IN CASH 815,859 165,653
CASH, beginning of period 3,663,795 4,339,445
---------- ----------
CASH, end of period $4,479,654 $4,505,098
========== ==========
</TABLE>
The accompanying notes are an integral part of these consolidated statements.
6
<PAGE> 7
AMERICAN HEALTH SERVICES CORP. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1995 (UNAUDITED)
1. Basis of Preparation
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles
for interim financial statements and do not include all of the
information and disclosures required for annual financial statements.
These financial statements should be read in conjunction with the
consolidated financial statements and related footnotes for the year
ended December 31, 1994 included as part of the Company's Annual
Report on Form 10-K (File No. 0-14380) filed with the Securities and
Exchange Commission on March 31, 1995.
In the opinion of the Company's management, all adjustments
(consisting of normal recurring accruals) necessary to present fairly
the Company's financial position at March 31, 1995, the results of
operations and changes in cash flows for the three month periods ended
March 31, 1995 and 1994 have been included.
The results of operations of the three month period ended March 31,
1995 are not necessarily indicative of the results to be expected for
the full fiscal year.
2. Canadian Accounting Principles
The Company's common stock is listed with the Ontario Securities
Commission (OSC) and the Company is required to file its financial
statements with OSC. Although the accompanying financial statements
and notes thereto have been prepared in accordance with generally
accepted accounting principles applicable in the United States, the
primary difference between these accounting principles and those
applicable in Canada is as follows:
Currency Translation
The accompanying financial statements are stated in United
States dollars. Translation of the financial statements into
Canadian dollars would be performed using the historical rate
in effect on the dates transactions occurred. No translation
gains or losses would result from the translation. The rates
of exchange in effect at the end of each of the reporting
periods and the average exchange rate for those periods are as
follows:
7
<PAGE> 8
2. Canadian Accounting Principles (cont.)
<TABLE>
<CAPTION>
Exchange Rates
(Canadian Dollars per U.S. Dollar)
----------------------------------
Average for
Three
Months Ended
Year March 31 March 31
---- -------- -------------
<S> <C> <C>
1993 1.258 1.266
1994 1.340 1.356
1995 1.399 1.404
</TABLE>
3. Loss Per Common Share
The number of shares used in computing loss per common share is equal
to the totals of the weighted average number of common and common
equivalent shares outstanding during the period. Common stock
equivalents relating to options, warrants and convertible preferred
stock have not been included in the computation of loss per share in
1995 and 1994 due to their antidilutive effect. Preferred stock
dividends have not been considered in the calculation of loss per
common share since the shares are non-cumulative and no dividends have
been declared.
4. Income Taxes
The Company accounts for income taxes using the liability method in
accordance with Statement of Financial Accounting Standard No. 109,
Accounting for Income Taxes ("FAS No. 109") pursuant to which the
Company recorded the benefit of its net operating loss carryforwards
and also recorded a valuation reserve for the entire amount.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Three Months Ended March 31, 1995 Compared to March 31, 1994
RESULTS OF OPERATIONS
The Company reported revenues from the operation of its diagnostic
imaging and gamma knife centers for the three months ended March 31, 1995 of
approximately $9,358,000 compared to approximately $9,207,000 for the three
months ended March 31, 1994, representing an increase of approximately 2%. The
increase in reported revenues of approximately $151,000 is due primarily to
revenues generated by three new centers (approximately $1,030,000),
8
<PAGE> 9
offset by the sale or closure of two centers and the expiration of operating
agreements relating to five centers subsequent to December 31, 1993
(approximately $847,000). Management believes that any future increases in
revenues from existing centers can only be achieved by higher utilization and
not by increases in procedure prices since reimbursement is declining; however,
excess capacity of diagnostic imaging equipment, increased competition,
anticipated healthcare reform and the expansion of managed care may impact
utilization and make it difficult for the Company to achieve revenue increases
in the future, absent the negotiation of provider agreements with managed care
companies and other payors, acquisition of profitable diagnostic imaging
centers and development of management services which are not capital intensive.
Center expenses for the three months ended March 31, 1995, aggregated
approximately $7,705,000 compared to approximately $7,295,000 for the three
months ended March 31, 1994. This increase of approximately $410,000, or 6%,
is due to (i) expenses related to the Company's three new centers
(approximately $878,000), (ii) an increase in costs at one of the Company's
centers related to contract renegotiations (approximately $46,000), (iii)
increased maintenance costs at two centers which were under warranty in 1994
(approximately $60,000) and, (iv) increased expenses related to the development
of an outside billing service (approximately $58,000). This increase was
offset by the elimination of expenses at the seven terminated centers discussed
above (approximately $632,000).
Provision for center profit distributions was approximately $179,000
for the three months ended March 31, 1995, compared to approximately $233,000
for the three months ended March 31, 1994. This represents a decrease of
approximately $54,000, or 23%. This decrease is due to (i) the purchase of the
physician limited partnership interests in 1994 discussed below, and (ii)
reduced income at the Company's cooperative venture centers. This decrease is
partially offset by income at two of the Company's new cooperative venture
centers.
The Company reported income from center operations of approximately
$1,473,000 for the three months ended March 31, 1995 compared to approximately
$1,679,000 for the three months ended March 31, 1994 representing a decrease of
approximately $206,000, or 12%. This decrease in income from center operations
is due primarily to (i) the loss of income from center operations at the seven
terminated centers discussed above and, (ii) increased expenses related to
contract renegotiations, the development of an outside billing service and
maintenance costs related to equipment under warranty in 1994, partially offset
by (i) income from center operations at the Company's three new centers and
(ii) the reduction of provision for center profit distributions.
For the three month period ended March 31, 1995, the Company
9
<PAGE> 10
recorded corporate operating expenses of approximately $881,000 compared to
corporate operating expenses of approximately $899,000 for the three month
period ended March 31, 1994, a decrease of approximately 2%. This decrease of
$18,000 is due primarily to a reduction in personnel costs offset by an
increase in consulting costs.
Interest expense was approximately $916,000 during the three months
ended March 31, 1995, compared to approximately $1,154,000 for the three months
ended March 31, 1994. This decrease of approximately $238,000, or 21%, was
primarily related to (i) reduced interest as a result of the April 12, 1994
restructuring agreement discussed below and (ii) reduced interest expense
related to amortization of long-term obligations, offset by long-term
obligations incurred at the Company's three new centers.
For the three months ended March 31, 1995, the Company reported a net
loss of approximately $283,000 compared to a net loss of approximately $344,000
for the three months ended March 31, 1994. This decrease in net loss of
approximately $61,000 is the result of (i) decreased corporate operating
expense and (ii) reduced interest expense, offset by decreased income from
center operations.
Net loss per share for the three months ended March 31, 1995, was
$(0.03) compared to a net loss per share of $(0.04) for the three months ended
March 31, 1994. As discussed in "Liquidity and Capital Resources", dividends
on the Series B Senior Convertible Preferred stock are non-cumulative. Since
the Board of Directors has not declared a dividend for the quarters ended March
31, 1995 and 1994, respectively, no dividend has been subtracted from net loss
to determine loss per share for each of the three months ended March 31, 1995
and 1994, respectively.
LIQUIDITY AND CAPITAL RESOURCES
Working capital decreased to a deficit of approximately $8,374,000 at
March 31, 1995 from approximately $2,588,000 at December 31, 1994. This
decrease of $10,962,000 is primarily due to the reclassification of long-term
obligations to current liabilities as a result of scheduled debt maturities and
principal payments on long-term obligations offset by net income before
depreciation and amortization. During the past three years, the Company has
financed its operations primarily through internally generated funds and the
credit arrangements discussed below.
Cash increased to approximately $4,480,000 at March 31, 1995 from
approximately $3,664,000 at December 31, 1994, an increase of approximately
$816,000, or 22%. This increase resulted from (i) net income before
depreciation and amortization and deferred rent expense (approximately
$929,000), (ii) an increase in accounts payable and accrued expenses
(approximately $680,000), and (iii) a
10
<PAGE> 11
net increase in long-term debt obligations including the deferred payment
discussed below (approximately $87,000). This increase was offset by (i) an
increase in other assets (approximately $390,000), (ii) the investment in a
radiation oncology treatment center (approximately $408,000), and (iii)
purchases of property and equipment (approximately $68,000). Except for the
deferred payments discussed below, the Company currently has no lines of credit
available to borrow against for working capital purposes except for two working
capital loans advanced to Radiosurgery Centers, Inc., the Company's wholly
owned subsidiary ("RCI"), in connection with its operation of two Gamma Knife
centers as discussed below.
Pursuant to the terms of an April 12, 1994 agreement between the
Company and its primary lender, GE Capital Corporation and GE Medical Systems
("GE"), the maturity of a balloon principal payment of approximately $9,600,000
which was due in May 1994, was extended until January 1, 1996 and the principal
payment was reduced from $9,600,000 to $8,000,000. In addition, the interest
rate on the note related thereto was reduced from 12.75% per annum to 9.25% per
annum which resulted in monthly cash savings of approximately $140,000. As a
result, the Company is required to make certain balloon principal payments
pursuant to its loan agreements with its primary lender as follows:
$10,050,000 in January 1996 and $1,500,000 in August 1996. GE also agreed to
restructure the monthly payments under a $15,200,000 equipment loan which
resulted in monthly cash savings of $75,000. Finally, GE agreed to provide
three deferred payments to be used through December 31, 1995, under certain
circumstances. Each deferred payment will result in a monthly cash savings of
approximately $700,000. These deferred payments will become due in January
1996. In January 1995, the Company utilized the first of its three deferrals.
Further, the Company is required to maintain, under the terms of its loan
agreements with its primary lender, certain financial covenants and ratios.
The Company is not in compliance with several of these covenants and ratios
but has received a written waiver of the violations from its primary lender
through January 1996.
The Company's ability to borrow under a non-revolving line of credit
with GE to finance corporate growth in connection with the acquisition,
development and improvement of the Company's imaging business terminated on
March 31, 1995. Borrowings under this line in the approximate amount of
$1,359,000 were converted to term notes. In the first quarter of 1995, the
Company entered into a letter of intent with GE to provide up to $3,300,000 to
be utilized in connection with its development and acquisition activities.
The healthcare industry is highly regulated and changes in laws and
regulations can be significant. The Company believes that the expanding
managed care environment accompanied by cost containment pressures may have a
materially adverse impact on the Company's business, since they may directly
affect the utilization
11
<PAGE> 12
of the Company's centers and reimbursement for those procedures performed at
the Company's centers; however, the Company believes that as long as the
Company is able to negotiate provider agreements with the managed care
companies and other payors to provide productive and cost efficient services
with measurable outcomes, the Company's business should not be negatively
impacted.
In addition to the restructuring arrangements discussed above, the
Company is also taking certain other actions to achieve profitability. First,
if utilization at certain underperforming centers continues to deteriorate,
those centers will be considered for closure and/or disposition. Second, the
Company has sold or negotiated the termination of leases of all its idle
diagnostic imaging equipment, has renegotiated its equipment maintenance
contracts and is renegotiating contracts with vendors of medical supplies and
film. Third, the Company is continuing to develop a long-term restructuring
plan which includes (i) changes in the Company's debt and capital structure,
and (ii) raising additional working capital. In this regard, the Company has
engaged outside professional assistance and continues to explore (i)
negotiations with its primary lender, (ii) debt restructuring, (iii)
dispositions of certain assets, (iv) raising new capital for future operations,
and/or (v) a merger. As part of the long-term restructuring plan, the Company
and its primary lender concluded the restructuring arrangements discussed
above.
With the consummation of the April 12, 1994 agreement, the Company
believes that it will be able to meet its long-term debt, operating lease and
other ongoing obligations through January 1996; however, the Company believes
that its ability to meet its long-term debt obligations beyond January 1996 is
contingent upon the consummation of the long-term restructuring plan discussed
above, which may include, among others, refinancing its long-term debt, a
public or private offering, or a merger. However, there can be no assurances
that any of these transactions may be consummated in a timely manner and on
terms reasonably acceptable to the Company.
In connection with the operation of a Gamma Knife center in Seattle,
Washington, RCI has received a working capital loan for an amount up to
$800,000 from the Company's primary lender to fund the operations of the
center, of which $200,000 is still available.
In 1994, in connection with the operation of a Gamma Knife center in
Miami, Florida, RCI entered into a loan agreement ($2,900,000) with a bank
which provided $500,000 of working capital for operations of the center and
which loan was guaranteed by Mr. Cal Kovens, then a director of the Company
(deceased February 6, 1995). In addition, RCI has received a working capital
loan for an amount up to $500,000 from the Company's primary lender to fund the
operations of the center, of which $250,000 is still available, which loan is
secured by the accounts receivable of the center. RCI commenced operations at
the center in March 1994.
12
<PAGE> 13
In connection with the Company's expansion plans, the Company has
reviewed several diagnostic imaging centers as acquisition candidates. In
1994, the Company purchased a majority interest in a diagnostic imaging center
in Monterey Park, California. Additionally, during 1995, the Company purchased
an interest in a radiation oncology treatment facility in Valparaiso, Indiana.
The cash needed to purchase these centers was made available from the
non-revolving line of credit discussed above. The Company continues to review
diagnostic imaging centers as acquisition candidates but has not entered into
any letters of intent or definitive agreements. Approval of the Company's
primary lender is required for any equipment purchase financing in connection
with any acquisitions by the Company.
The Omnibus Budget Reconciliation Act of 1993 ("OBRA") prohibits
referring physician ownership of diagnostic imaging centers after December 31,
1994. In 1994, the Company evaluated its own cooperative ventures and has
purchased the physician limited partnership interests at four of its
cooperative ventures and has dissolved the physician limited partnership
interests at two other ventures. As a result, the Company no longer has any
cooperative ventures with referring physician ownership. The cash needed for
these buyouts was made available from internally generated funds.
Subject to the limitations described above, the Company expects to
finance the development and other start-up costs and the costs of equipment and
site improvements at any new centers through (i) financing arrangements with
the manufacturers of the equipment utilized at such centers, and (ii) other
financing sources utilized by the Company. The ability of the Company to
establish such centers and to expand operations is dependent upon the
availability of financing on terms reasonably acceptable to the Company.
Dividends on the Series B Preferred Stock are non-cumulative so long
as the Series B Preferred Stockholders control a majority of the Board of
Directors of the Company. In addition, any dividends declared on the Series B
Preferred Stock may be paid in cash or shares of common stock at the discretion
of the Board of Directors. No dividend was declared by the Board of Directors
for the quarter ended March 31, 1995.
The Company accounts for income taxes using the liability method in
accordance with Statement of Financial Accounting Standard No. 109, Accounting
for Income Taxes ("FAS No. 109"), pursuant to which the Company recorded the
benefit of its net operating loss carryforwards and also recorded a valuation
reserve for the entire amount.
Inflation has not had a significant impact on the Company's operations
and, in management's opinion, based upon current trends will not have an
adverse impact on operations in the near future.
13
<PAGE> 14
PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27 - Financial Data Schedule.
(b) Reports on Form 8-K
During the quarter ended March 31, 1995, the Company did not file any
current report on Form 8-K with the Securities and Exchange Commission.
14
<PAGE> 15
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 thereto duly authorized.
American Health Services Corp.
- - ------------------------------
(Registrant)
/s/Thomas V. Croal
- - ------------------------------
Thomas V. Croal,
Vice President
Chief Financial Officer
/s/E. Larry Atkins
- - ------------------------------
E. Larry Atkins,
President
Chief Executive Officer
Date: March 12, 1995
15
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 4,479,654
<SECURITIES> 0
<RECEIVABLES> 12,812,586
<ALLOWANCES> 4,245,671
<INVENTORY> 0
<CURRENT-ASSETS> 13,405,185
<PP&E> 38,623,486
<DEPRECIATION> 13,603,160
<TOTAL-ASSETS> 41,609,450
<CURRENT-LIABILITIES> 21,778,696
<BONDS> 0
<COMMON> 290,509
0
6,075,107
<OTHER-SE> (17,611,772)
<TOTAL-LIABILITY-AND-EQUITY> 41,609,450
<SALES> 9,357,901
<TOTAL-REVENUES> 9,357,901
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 7,884,934
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 916,193
<INCOME-PRETAX> (282,534)
<INCOME-TAX> 0
<INCOME-CONTINUING> (282,534)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (282,534)
<EPS-PRIMARY> (0.03)
<EPS-DILUTED> 0
</TABLE>
