<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarter ended: MARCH 31, 1998
Commission File Number 1-1003
NOBEL EDUCATION DYNAMICS, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 22-2465204
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
1400 N. PROVIDENCE ROAD, SUITE 3055, MEDIA, PA 19063
(Address of principal executive offices) (Zip Code)
(610) 891-8200
(Registrant's telephone number, including area code)
Indicate by check whether the registrant (1) has filed all report(s) 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__________
-----------
APPLICABLE ONLY TO CORPORATE ISSUERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 6,121,365 shares of Common
Stock outstanding at May 2, 1998.
<PAGE>
INDEX TO FORM 10-Q
Nobel Education Dynamics, Inc.
<TABLE>
<CAPTION>
Page
PART I. FINANCIAL INFORMATION Number
------
<S> <C>
Item 1. Financial Statements
Consolidated Balance Sheets,
March 31, 1998 (unaudited) and December 31, 1997......... 2
Consolidated Statements of Income for the
three months ended March 31, 1998 (unaudited)
and 1997 (unaudited)..................................... 3
Consolidated Statements of Cash Flows for the
three months ended March 31, 1998 (unaudited)
and 1997 (unaudited)..................................... 4
Notes to Consolidated Interim Financial Statements....... 5
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations........... 8
PART II. OTHER INFORMATION
</TABLE>
2
<PAGE>
PART I
FINANCIAL INFORMATION
"SAFE HARBOR" STATEMENT UNDER PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
The Company's 1998 outlook and all other statements in this report other than
historical facts are forward-looking statements that involve risks and
uncertainties and are subject to change at any time. The Company derives its
forward-looking statements from its operating budgets and forecasts, which are
based upon detailed assumptions about many important factors such as market
demand, market conditions and competitive activities. While the Company
believes that its assumptions are reasonable, it cautions that there are
inherent difficulties in predicting the impact of certain factors, especially
those affecting the acceptance of the Company's newly developed and converted
schools and performance of recently acquired businesses, which could cause
actual results to differ materially from predicted results.
1
<PAGE>
NOBEL EDUCATION DYNAMICS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(unaudited)
<TABLE>
<CAPTION>
March 31, December 31,
ASSETS 1998 1997
- ------ -------------------- ---------------------
<S> <C> <C>
Cash and cash equivalents $ 755,477 $ 2,605,219
Accounts receivable, less allowance for doubtful accounts of $133,421
in 1998 and 1997 970,496 1,091,442
Prepaid rent 566,728 1,045,820
Prepaid insurance and other 771,087 951,734
Deferred taxes - -
----------- -----------
Total Current Assets 3,063,788 5,694,215
----------- -----------
Property and equipment, at cost 27,704,644 33,029,720
Accumulated depreciation (8,408,757) (7,856,125)
----------- -----------
19,295,887 25,173,595
Property and equipment held for sale 1,463,767 1,494,736
Cost in excess of net assets acquired 40,104,555 37,439,000
Deposits and other assets 4,656,916 3,288,580
Deferred taxes 900,899 1,308,280
----------- -----------
Total Assets $69,485,812 $74,398,406
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
Current portion of long-term obligations 142,932 $ 150,443
Current portion of subordinated debt 3,092,871 2,561,289
Current portion of capital lease obligations 85,219 81,438
Accounts payable and other current liabilities 8,073,292 7,980,441
Unearned income 3,661,770 2,866,131
----------- -----------
Total Current Liabilities 15,056,084 13,639,742
----------- -----------
Long-term obligations 15,834,869 22,497,019
Capital lease obligations 185,641 208,657
Deferred gain on sale/leaseback 37,332 39,330
Minority interest in consolidated subsidiary 419,880 404,850
Long-term subordinated debt 5,723,762 5,972,873
----------- -----------
Total Liabilities 37,257,568 42,762,471
----------- -----------
Commitments and Contingencies (Notes 2, 5, 8, and 15)
Stockholders' Equity:
Preferred stock, $.001 par value; 10,000,000 shares authorized, issued
and outstanding 4,593,542 in 1998 and 1997, $5,529,712 aggregate
liquidation preference at March 31, 1998 and in 1997 4,593 4,593
Common stock, $.001 par value, 20,000,000 shares authorized, issued and
outstanding 6,121,365 in 1998 and 1997 6,121 6,121
Treasury Stock, cost; 36,810 shares (375,000) (375,000)
Additional paid-in capital 38,339,603 38,339,599
Accumulated deficit (5,747,073) (6,339,378)
----------- -----------
Total Stockholders' Equity 32,228,244 31,635,935
----------- -----------
Total Liabilities and Stockholders' Equity $69,485,812 $74,398,406
=========== ===========
</TABLE>
The accompanying notes and the notes in the financial statements included in the
Registrant's Annual Report on Form 10-K are an integral part of these financial
statements.
2
<PAGE>
NOBEL EDUCATION DYNAMICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
for the three months ended March 31, 1998 and 1997
--------------------------------------------------
(unaudited)
<TABLE>
<CAPTION>
1998 1997
---- ----
<S> <C> <C>
Revenues $23,706,406 $19,027,241
Operating Expenses 20,138,208 15,608,241
----------- -----------
School operating profit 3,568,198 3,419,000
General and administrative expenses 1,653,416 1,322,399
New School development costs 404,460 81,032
----------- -----------
Operating Profit 1,510,322 2,015,569
Interest Expense 435,688 459,717
Other Income (5,523) (70,247)
Minority interest in earnings of consolidated subsidiary 15,032 25,063
----------- -----------
Income before income taxes 1,065,124 1,601,036
Income tax expense 447,318 672,433
----------- -----------
Net income $ 617,806 $ 928,603
=========== ===========
Preferred stock dividends $ 25,500 $ 25,500
----------- -----------
Net income available to common stockholders $ 592,306 $ 903,103
=========== ===========
Basic earnings per share $0.10 $0.15
=========== ===========
Dilutive earnings per share $0.08 $0.12
=========== ===========
</TABLE>
The accompanying notes and the notes in the financial statements included in the
Registrant's Annual Report on Form 10-K are an integral part of these financial
statements.
3
<PAGE>
NOBEL EDUCATION DYNAMICS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the three months ended March 31, 1998 and 1997
--------------------------------------------------
(unaudited)
<TABLE>
<CAPTION>
1998 1997
------------------- -----------------
<S> <C> <C>
Net Cash (Used in) Provided by Operating Activities $ 2,973,797 $ 2,548,161
Cash flows from Investing Activities:
Proceeds from the sale of real estate 6,848,337 ----
Capital expenditures (2,080,348) (1,117,652)
Payment for acquisitions (2,677,206) (3,857,877)
----------- -----------
Net Cash Provided by (Used in) Investing Activities: 2,090,783 (4,975,529)
Cash Flows from Financing Activities:
Repayment of long-term debt (8,691,661) (773,153)
Repayment of subordinated debt (177,929) (422,478)
Repayment of capital lease obligation (19,232) (17,440)
Payments of dividends on preferred stock (25,500) (25,500)
Proceeds from exercise of stock options --- 2,199
Borrowing on line of credit 2,000,000 ---
----------- -----------
Net Cash Used in Financing Activities: (6,914,322) (1,236,372)
----------- -----------
Net increase (decrease) in cash and
cash equivalents: (1,849,742) (3,663,740)
Cash and cash equivalents at
the beginning of year: 2,605,219 5,251,555
----------- -----------
Cash and cash equivalents at end of the period: $ 755,477 $ 1,587,815
=========== ===========
</TABLE>
The accompanying notes and the notes in the financial statements included in the
Registrant's Annual Report
Form 10-K are an integral part of these consolidated financial statements.
4
<PAGE>
NOBEL EDUCATION DYNAMICS, INC. AND SUBSIDIARIES
Notes to Consolidated Interim Financial Statements
for the three months ended March 31, 1998 and 1997
(unaudited)
Note 1 - Basis of Presentation
- ------------------------------
The consolidated financial statements have been prepared by the Registrant
pursuant to the rules and regulations of the Securities and Exchange Commission
("SEC") and, in the opinion of management, include all adjustments, consisting
of normal recurring adjustments, necessary to present fairly the financial
position and results of operations. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with the generally accepted accounting principals have been condensed or omitted
pursuant to such SEC rules and regulations. It is suggested that these
financial statements are read in conjunction with the consolidated financial
statements and notes thereto included in the Registrant's Annual Report on Form
10-K for the year ended December 31, 1997.
Due to the inherent seasonal nature of the education and child care businesses,
annualization of amounts in these interim financial statements may not be
indicative of the actual operating results for the full year.
Note 2 - Earnings Per Share
- ---------------------------
In February 1997, the Financial Accounting Standards Board issued Statement No.
128, "Earnings Per Share", which established new standards for computations for
earnings per share. The Company adopted the new standard effective December 31,
1997 and restated the prior year calculation accordingly.
Earnings per share are based on the weighted average number of shares
outstanding and common stock equivalents during the period. In the calculation
of dilutive earnings per share, shares outstanding are adjusted to assume
conversion of the Company's non-interest bearing convertible preferred stock if
they are dilutive. In the calculation of basic earnings per share, weighted
average number of shares outstanding are used as the denominator.
Earnings per share amounts have been restated in accordance with Statement of
financial Accounting Standards No. 128, "Earnings per Share". This restatement
resulted in no material change from amounts previously reported. Earnings per
share are computed as follows:
<TABLE>
<CAPTION>
1998 1997
------------------- -----------------
Basic earnings per share:
<S> <C> <C>
Net income $ 617,806 $ 928,603
Less Preferred Stock dividends 25,500 25,500
---------- ----------
Net Income available for Common Stockholders $ 592,306 $ 903,103
Average Common Stock outstanding 6,121,365 5,831,405
Basic earnings per share $ 0.10 $ 0.15
</TABLE>
5
<PAGE>
<TABLE>
<S> <C> <C>
Diluted earnings per share:
Net income available for common stock and
dilutive securities $ 617,806 $ 928,603
Average Common Stock outstanding 6,121,365 5,831,405
Additional common shares resulting
from dilutive securities:
Options, Warrants and Convertible Preferred Stock 1,394,007 1,656,136
---------- ----------
Average Common Stock and dilutive
securities outstanding 7,515,372 7,487,541
Diluted earnings per share $ 0.08 $ 0.12
</TABLE>
Note 3 - Acquisitions:
- ---------------------
In March 1998, the Company completed the acquisition of three elementary
schools. The Company acquired the assets of Touchstone Elementary School in
Lake Oswego, Oregon, which has a capacity for 150 students. The Company
acquired the stock of Lake Forrest Park Montessori School, Inc., owner of Lake
Forest Park Montessori School, in Seattle, Washington, which has a capacity for
250 students. Lastly, the Company acquired the assets of the Western School,
located in North Lauderdale, Florida which has a capacity for 350 children. The
aggregate purchase price for the three acquisitions equaled $2,677,206 in cash,
$960,400 in subordinated notes payable over five years, and a non-
compete/consulting agreement and approximately $730,869 in assumed liabilities.
The acquisitions were recorded using the purchase method of accounting.
Note 4 - Sale/Leaseback
- -----------------------
In February 1998, the Company entered into a sale/leaseback agreement relating
to the real estate for one of its Las Vegas campuses, located on Durango Road.
The Company sold the property for $4.4 million and simultaneously entered into a
fifteen year lease agreement. There was no gain or loss on the sale of the real
estate. Proceeds from the sale were used to reduce amounts outstanding under
the Revolving and Term Credit Facilities.
Note 5 - Commitments and Contingencies
- ---------------------------------------
The Company is engaged in legal actions arising in the ordinary course of its
business. The Company believes that the ultimate outcome of all such matters
above will not have a material adverse effect on the Company's consolidated
financial position. The significance of these matters on the Company's future
operating results and cash flows depends on the level of future results of
operations and cash flows as well as on the timing and amounts, if any, of the
ultimate outcome.
The Company carries fire and other casualty insurance on its centers and
liability insurance in amounts which management believes are adequate for its
operations. As is the case with other entities in the education and preschool
industry, the Company cannot effectively insure itself against certain risks
inherent in its operations. Some forms of child abuse have sublimits per claim
in the general liability coverage.
6
<PAGE>
Note 5 - Subsequent Events
- --------------------------
ACQUISITION OF BRIGHTON SCHOOLS
On May 8, 1998, the Company acquired the assets of the Bright and Early Primary
Schools located in Seattle, Washington, consisting of a preschool and an
elementary school, with a capacity of 300 children.
7
<PAGE>
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Results of Operations
- ---------------------
The Company experienced a decrease in net income in the third and fourth quarter
of 1997, which continued to impact the first quarter of 1998. In order to show
certain positive trends in the Company's results of operations since such
periods, certain comparable information as to the first quarter of 1998 (ended
March 31, 1998) and the fourth quarter of 1997 is set forth below under
"Trends".
Revenues increased $4,679,165 or 25% in the first quarter ended March 31, 1998
as compared to the same period in 1997. The increase in revenues was a result
primarily of the acquisition of ten schools, the opening of twelve new schools
and, to a lesser extent, tuition and enrollment increases.
The increase in revenues relating to acquisitions of ten schools that occurred
between the period March 31, 1997 through March 31, 1998 totaled $2,647,003.
The increase in revenues relating to the opening and growth of twelve schools
during 1997 and the first quarter of 1998 totaled $1,580,698. The remainder of
the increase in revenues totaling $451,464 is related to the growth of the
baseline schools as a result of both tuition and enrollment increases.
School operating profit increased $149,198 or 4.4% to $3,568,198 for the three
months ended March 31, 1998. The increase was the result of the combination of
several factors, including: (1) a $493,906 increase related to the operating
profit of the schools acquired after March 31, 1997, (2) a $202,830 decrease
related to start-up losses in schools opened in 1997 and 1998 and (3) a $141,878
decrease in the remaining schools which was attributed primarily to the decline
in enrollment in the Merryhill Schools. Merryhill's results for the three
months ended March 31, 1998 did show improvement over those for the three months
ended December 31, 1997, increasing 55% in operating profit.
School operating profit margins decreased 2.92% to 15.05% from 17.97% for the
first quarter of 1998 compared to the same period in 1997. The decrease is the
result of (1) the absorption of new school initial losses, (2) higher rent costs
related to replacement schools, (3) higher personnel costs, (4) a decrease in
enrollment in the Merryhill schools as discussed above and (5) amortization of
goodwill related to the acquisitions.
New school development costs increased $323,428 to $404,460 in the first quarter
of 1998 compared to 1997 as a result of the number and type of new schools
opened and the timing of the openings. In the first quarter of 1998, the
Company opened two preschools and two elementary schools compared to one
preschool in 1997.
General and administrative costs increased $331,017 or 25% to $1,653,416. The
increase is related to the addition of management in 1997 necessary to improve
the infrastructure of the Company to support the annual revenue growth of in
excess of 30%, which the Company has experienced. During 1997 and the first
quarter of 1998, the Company added field operations executives and management,
human resource management, marketing management, training management, and an
accounting manager. As a percent of revenue, general and administrative
expenses remained relatively stable
8
<PAGE>
equaling 6.97% for the first quarter of 1998 compared to 6.95% for the first
quarter of 1997.
Operating profit, although decreasing $505,247 or 25% in the first quarter of
1998 versus 1997, increased $623,982 or 70% from the fourth quarter of 1997
(before the restructuring charge) to the first quarter of 1998. The decrease in
first quarter 1998 versus 1997 is a result primarily of the increase in general
and administrative expenses and the increase in new school development costs as
described above.
For the first quarter ended March 31, 1998, EBITDA (defined as earnings before
interest, income taxes, depreciation and amortization) totaled $2,428,812.
EBITDA is not a measure of performance under generally accepted accounting
principals, however the Company and the investment community consider it an
important factor.
Interest expense decreased $24,029 or 5.2% to $435,688 in the first quarter of
1998 compared to 1997. The decrease is a result of (1) lower debt levels as a
result of the sale of real estate and (2) the write off of deferred financing
fees.
Federal income taxes were accrued at a 42% effective tax rate for the first
quarter of 1998 and 1997 equaling $447,318 and $672,433, respectively.
Net income decreased $310,797 or 34% to $617,806 for the first quarter of 1998
compared to the same period in 1997 for reasons as described above.
LIQUIDITY AND CAPITAL RESOURCES
Management is continuing to pursue a three-pronged growth strategy to expand the
Company which includes (1) internal growth of existing schools through the
expansion of certain facilities and increased enrollments, (2) new school
development in both existing and new markets and (3) consolidation through
strategic acquisitions. The Company intends to fund its growth strategy and its
cash needs through (1) the available balance of its $25,000,000 revolving line
of credit, (2) the use of site developers to build schools and lease them to the
Company, and (3) issuance of subordinated indebtedness or shares of common stock
to sellers in acquisition transactions. If the need arises, the Company may
also effect additional debt or equity financings. The Company anticipates that
its existing available principal credit facilities, cash generated from
operations, and continued support of site developers to build and lease schools
will be sufficient to satisfy the working capital needs of the Company and the
building of new schools in the near term future. The Company is continuing to
look for quality acquisition candidates. The Company identifies growth markets
through both extensive demographic studies and an analysis of the existing
educational systems in the area. The Company seeks to grow through a cluster
approach whereby several preschools feed into an elementary school. In order
for the Company to continue its acquisition strategy, the Company will, in the
current year, require raising additional funds through debt or equity financing.
On December 22, 1997, the Company entered into the Seventh Amendment and
Modification of its Loan and Security Agreement with its primary lender. The
Amendment replaced existing term loans and revolving loans with $25,000,000
Revolving and Term Facilities. Two facilities are established: a $3,000,000
facility (Revolving and Term Facility A) and a $22,000,000 facility (Revolving
and Term Facility B). Amounts outstanding under term loans at the time of
restructuring were treated as initial
9
<PAGE>
outstanding balances under the new Revolving and Term Facilities. Under the new
arrangements, no principal payments are required until January 1, 2001.
Commencing on January 1, 2001, the Company must pay outstanding principal
balance of the Revolving and Term Facilities in 60 equal monthly installments.
Interest on the unpaid principal of Revolving and Term Facility A accrues at a
variable interest rate ("Floating Rate") equal to the base rate of Summit Bank
plus 25 basis points (subject to reduction, based on performance). Interest on
the unpaid principal balance of Revolving and Term Facility B accrues at a
variable interest rate equal to the Floating Rate or a LIBOR-based rate (at the
Company's option, chosen at the beginning of any interest rate period).
The Company may elect to convert to a term loan portions of the Revolving and
Term Facility B in increments of $2,500,000. Such term loans would be payable
over sixty months.
At March 31, 1998, the principal amounts outstanding under the Revolving and
Term Facility B was $15,226,451, and no amounts were outstanding under the
Revolving and Term Facility A. By postponing the dates of required principal
payments under the Company's loans, the Seventh Amendment has significantly
improved the Company's cash flow requirements under these loans. The
restructuring allows the Company greater flexibility in managing its cash flow
and allows greater ability to use available funds to grow the Company.
The Revolving and Term Facilities are collateralized by liens in favor of Summit
Bank on the Company's real and personal properties and all future assets
acquired.
The Company's debt agreements contain restrictive covenants regarding the
payment of common stock dividends and the maintenance of ratios related to debt
to earnings before interest, taxes, depreciation and amortization.
Total cash and cash equivalent decreased $1,849,742 for the first quarter ended
March 31, 1998, equaling $755,477. The decrease is a function of the Company
repaying the revolving credit line with excess working capital and funds used
for capital expenditures and land for development.
The net cash flow from operations increased $425,636 or 16.7% as a result of (1)
and increase in depreciation and amortization related to acquisitions, (2) a
decrease in prepaid assets and (3) an increase in unearned income.
The working capital deficit equaled $11,992,296 for the first quarter ended
March 31, 1998 compared to $7,945,527 for the year ended December 31 1997 or an
increase of $4,046,769. The increase in the deficit was the result primarily of
the decrease in the cash balance related to paying down debt and the acquisition
of three schools, and to a lesser extent, a decrease in prepaid rent, and
deferred taxes. Excess working capital (cash) was used to pay down the
revolving line of credit, as well as the acquisition of three schools during the
first quarter of 1998 as discussed above.
TRENDS
Because the first quarter of 1998 is part of the 1997-1998 school year, the last
quarter of 1997 should be reviewed and compared to the first quarter of 1998 to
identify positive trends within the school
10
<PAGE>
year.
In the last half of 1997, the Company experienced a decline in operating
profits. This was primarily attributed to the performance of the Merryhill
Schools in California. In 1996 and 1997, the Company experienced a decline in
enrollment in the Merryhill schools which was due to the effect of the
California public school initiative to decrease student/teacher class size
ratios in Kindergarten to third grade. The initiative affected Merryhill by
causing unexpected turnover of contracted teachers and enrollment decline as
parents opted to try the public schools. However in the first quarter of 1998,
the Company has begun to see improvements in enrollment in the Merryhill
Schools.
This decline described above, coupled with the increase in losses due to the
additional number of new schools built over the last year, as well as increased
general and administrative expenses caused a decrease in operating profit in
1997.
Overall, the Company began to see improvement in the results of operations both
in Merryhill and in the other schools of the Company in the first quarter of
1998 as compared to the fourth quarter of 1997. Below are financial highlights
comparing the first quarter of 1998 to the fourth quarter of 1997 without the
restructuring charge in order to show the positive trend related to both overall
performance and seasonality.
<TABLE>
<CAPTION>
1/st/ Qtr. 4/th/ Qtr.
---------- ----------
1998 1997\(A)\ Change
---- --------- ------
($000)
<S> <C> <C> <C>
Revenues $23,706 $22,389 +6%
Operating Profit 1,510 886 +70%
Income before taxes 1,065 293 +263%
</TABLE>
(A) Fourth quarter 1997 results excludes both $2,959,781 in restructuring
charges and $449,000 extraordinary charges.
As shown above operating profit in the first quarter of 1998 before the
restructuring charge increased $623,982 or 70%, to $1,510,319 and pretax income
increased $771,996 or over 200% equaling $1,065,122 compared to the fourth
quarter of 1997 before the restructuring charge. The improvement in performance
from quarter to quarter signifies upward trends in performance related to both
seasonal trends and operational performance. The improvement in operations was
the result of increased enrollment at the Merryhill Schools as well as other
schools in the Company and improved cost controls.
Although there has been significant improvement in the first quarter, results
are still below that of the prior year as discussed in the previous section. It
will take time to fully offset the 1996-1997 effects from the Merryhill
enrollment decline.
11
<PAGE>
Part II
-------
Other Information
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS
Exhibit
Number Description of Exhibit
27 Financial Data Schedule.
(B) REPORTS ON FORM 8-K.
None
12
<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.
NOBEL EDUCATION DYNAMICS, INC.
Dated: May 15, 1998 By: /s/ William E. Bailey
----------------------------------------
William E. Bailey
Vice President/Chief Financial Officer
(duly authorized officer and
principal financial officer)
13
<PAGE>
EXHIBITS
Exhibit
Number Description of Exhibit
27 Financial Data Schedule.
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 3-MOS
<FISCAL-YEAR-END> JUN-30-1998 DEC-31-1997
<PERIOD-START> JAN-01-1998 JAN-01-1997
<PERIOD-END> MAR-31-1998 MAR-31-1997
<CASH> 755 2,605
<SECURITIES> 0 0
<RECEIVABLES> 970 1,091
<ALLOWANCES> 133 133
<INVENTORY> 0 0
<CURRENT-ASSETS> 3,064 5,694
<PP&E> 27,705 33,030
<DEPRECIATION> 8,409 7,856
<TOTAL-ASSETS> 69,486 74,398
<CURRENT-LIABILITIES> 15,056 13,640
<BONDS> 0 0
0 0
5 5
<COMMON> 6 6
<OTHER-SE> 32,217 31,624
<TOTAL-LIABILITY-AND-EQUITY> 69,486 74,398
<SALES> 23,706 19,027
<TOTAL-REVENUES> 23,706 19,027
<CGS> 20,138 15,608
<TOTAL-COSTS> 22,196 17,012
<OTHER-EXPENSES> 9 (45)
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 436 459
<INCOME-PRETAX> 1,065 1,601
<INCOME-TAX> 447 672
<INCOME-CONTINUING> 618 929
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 618 929
<EPS-PRIMARY> 0.10 0.15
<EPS-DILUTED> 0.08 0.12
</TABLE>
