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, 1997
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 1-10670
HANGER ORTHOPEDIC GROUP, INC.
--------------------------------------------------------------------
(Exact name of registrant as specified in its charter.)
Delaware 84-0904275
---------------------------------- ----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
7700 Old Georgetown Road, Bethesda, MD 20814
---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
Registrant's phone number, including area code: (301) 986-0701
-----------------------------------------------------------------------------
Former name, former address and former fiscal year, if changed since last
report.
Indicate by check 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 [ ]
APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares
outstanding of each of the issuer's classes of common stock, as of May 8,
1997; 9,377,743 shares of common stock, $.01 par value per share.
<PAGE>
HANGER ORTHOPEDIC GROUP, INC.
<TABLE>
INDEX
<CAPTION>
Page No.
--------
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets - March 31, 1997
(unaudited) and December 31, 1996 2
Consolidated Statements of Operations for the three
months ended March 31, 1997 and 1996 (unaudited) 4
Consolidated Statements of Cash Flows for the three
months ended March 31, 1997 and 1996 (unaudited) 5
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 14
SIGNATURES 15
</TABLE>
<PAGE>
HANGER ORTHOPEDIC GROUP, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
-------------------------------------
(unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 6,720,021 $ 6,572,402
Accounts receivable less allowances for
doubtful accounts of $3,052,000
and $2,478,000 in 1997 and 1996 respectively 24,528,348 24,321,872
Inventories 15,650,023 15,916,638
Prepaid expenses and other assets 2,756,664 1,595,169
Deferred income taxes
3,159,280 3,159,280
------------- -------------
Total current assets 52,814,336 51,565,361
------------- -------------
PROPERTY, PLANT AND EQUIPMENT
Land 4,269,045 4,269,045
Buildings 8,168,006 8,017,547
Machinery and equipment 6,466,540 6,275,307
Furniture and fixtures 2,124,041 2,095,900
Leasehold improvements 2,287,630 2,139,207
------------- -------------
23,315,262 22,797,006
Less accumulated depreciation and amortization 6,027,606 5,497,809
------------- -------------
17,287,656 17,299,197
------------- -------------
INTANGIBLE ASSETS
Excess of cost over net assets acquired 66,405,465 63,935,447
Non-compete agreements 2,031,329 1,981,329
Other intangible assets 6,192,616 6,152,607
------------- -------------
74,629,410 72,069,383
Less accumulated amortization 7,548,143 6,917,960
------------- -------------
67,081,267 65,151,423
OTHER ASSETS
Other 975,083 925,446
------------- -------------
TOTAL ASSETS $138,158,342 $134,941,427
============= =============
</TABLE>
2
<PAGE>
HANGER ORTHOPEDIC GROUP, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
-------------------------------------
(unaudited)
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long-term debt $ 6,052,939 $ 4,902,572
Accounts payable 2,834,080 4,141,993
Accrued expenses 9,222,640 7,815,028
Customer deposits 706,173 578,219
Accrued wages and payroll taxes 4,887,416 8,321,395
Deferred revenue 286,512 306,998
------------- -------------
Total current liabilities 23,989,760 26,066,205
------------- -------------
Long-term debt 68,815,270 64,297,801
Deferred income taxes 2,377,627 2,377,627
Other liabilities and accrued dividends 2,260,854 2,188,278
Mandatorily redeemable preferred stock, class C, 300
shares authorized, liquidation preference of $500 per 283,996 277,701
share
Mandatorily redeemable preferred stock, class F,
100,000 shares authorized, liquidation preference of
$500 per share
SHAREHOLDERS' EQUITY
Common stock, $.01 par value; 25,000,000 shares
authorized, 9,493,766 and 9,449,129 shares issued
and 9,360,270 and 9,315,634 shares outstanding
in 1997 and 1996, respectively 94,938 94,492
Additional paid-in capital 41,087,021 41,008,363
Accumulated deficit (95,562) (713,478)
------------- -------------
41,086,397 40,389,377
Treasury stock - (133,495 shares) (655,562) (655,562)
------------- -------------
40,430,835 39,733,815
------------- -------------
TOTAL LIABILITIES & SHAREHOLDERS EQUITY
$138,158,342 $134,941,427
============= =============
</TABLE>
3
<PAGE>
HANGER ORTHOPEDIC GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED March 31, 1997 and 1996
(unaudited)
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Net Sales $ 30,949,614 $ 12,229,029
Cost of products and services sold 16,229,929 5,884,724
------------- -------------
Gross profit 14,719,685 6,344,305
Selling, general & administrative 10,924,635 4,997,078
Depreciation and amortization 749,305 476,155
Amortization of excess cost over net assets acquired 409,512 169,615
------------- -------------
Income from operations 2,636,233 701,457
Other expense:
Interest expense, net (1,527,269) (393,236)
Other (43,749) (45,512)
------------- -------------
Income from operations before income taxes 1,065,215 262,709
Provision for income taxes 447,300 112,700
------------- -------------
Net income $ 617,915 $ 150,009
============= =============
Income per common share:
Net income per share $ .06 $ .02
============= =============
Weighted average number of common shares
outstanding 9,977,853 8,324,263
</TABLE>
4
<PAGE>
HANGER ORTHOPEDIC GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED March 31, 1997 and 1996
(unaudited)
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income $ 617,915 $ 150,008
Adjustments to reconcile net income to net
cash provided by operating activities:
Provision for bad debt 999,208 236,503
Depreciation and amortization 749,305 476,155
Amortization of excess cost over net
assets acquired 409,512 169,615
Amortization of Debt Discount 318,515
Changes in assets and liabilities,net
of effect from acquired companies:
Accounts receivable (1,145,684) 789,170
Inventory 274,166 (122,556)
Prepaid and other assets (1,161,495) (413,599)
Other assets (49,638) 8,341
Accounts payable (1,314,988) 194,358
Accrued expenses 1,407,612 131,530
Accrued wages and payroll taxes (3,433,979) (177,539)
Customer deposits 127,954 (183,771)
Deferred revenue (20,486) 3,833
Other liabilities 72,577 (85,955)
------------- -------------
Total adjustments (2,767,421) 1,026,085
------------- -------------
Net cash provided by (used in) operating activities (2,149,506) 1,176,093
------------- -------------
Cash flows from investing activities:
Purchase of fixed assets, net (495,970) (158,891)
Acquisition, net of cash (2,301,618)
Purchase of patents (40,009) (10,513)
Purchase of non-compete agreements (50,000)
Other intangibles (1,045)
------------- -------------
Net cash used in investing activities (2,887,597) (170,449)
------------- -------------
</TABLE>
Continued
5
<PAGE>
HANGER ORTHOPEDIC GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED March 31, 1997 and 1996
(unaudited)
<TABLE>
<CAPTION>
1997 1996
---- ----
<S> <C> <C>
Cash flows from financing activities:
Net borrowings (repayments) under revolving
credit facility $ 500,000 $ (900,000)
Proceeds from long-term debt 5,500,000
Repayment of long-term debt (900,678) (415,639)
Proceeds from the sale of common stock 85,400
------------- -------------
Net cash provided by (used in) financing activities 5,184,722 (1,315,639)
------------- -------------
Net change in cash and cash equivalents
for the period 147,619 (309,995)
Cash and cash equivalents at beginning of
period 6,572,402 1,456,305
------------- -------------
Cash and cash equivalents at end of period $ 6,720,021 $ 1,146,310
============= =============
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ 641,926 $ 542,255
============= =============
Taxes $ 207,780
=============
Non-cash financing and investing activities:
Issuance of notes in connection with acquisitions $ 250,000
=============
Dividends declared - preferred stock $ 6,295 $ 5,755
============= =============
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
6
<PAGE>
NOTE A -- BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in
accordance with Rule 10-01 of Regulation S-X. They do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. In the opinion of management, all
adjustments, consisting of a normal recurring nature, considered necessary for
a fair presentation have been included.
These financial statements should be read in conjunction with the
financial statements of Hanger Orthopedic Group, Inc. (the "Company"), as of
December 31, 1996, and notes thereto included in the Annual Report on Form
10-K for the year December 31, 1996, filed by the Company with the Securities
and Exchange Commission.
NOTE B - NEW ACCOUNTING STANDARD - EARNINGS PER SHARE
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards (SFAS) No. 128, "Earnings per
Share," which will replace the current rules for earnings per share
computations, presentation and disclosure. Under the new standard, basic
earnings per share excludes dilution and is computed by dividing income
available to common shareowners by the weighted-average number of common
shares outstanding for the period. Diluted earnings per share reflects the
potential dilution that could occur if securities or other contracts to issue
common stock were exercised or converted into common stock. SFAS No. 128
requires a dual presentation of basic and diluted earnings per share on the
face of the income statement.
The Company will be required to adopt SFAS No. 128 in the fourth quarter
of this year and, as required by the standard, we will restate all prior
period earnings per share data. Our new earnings per share amounts are not
expected to be materially different from those computed under the present
accounting standard.
NOTE C -- INVENTORY
Inventories at March 31, 1997 and December 31, 1996 were comprised of the
following:
<TABLE>
<CAPTION>
March 31, 1997 December 31, 1996
(unaudited)
<S> <C> <C>
Raw materials $ 7,592,991 $ 7,504,442
Work-in-process 916,755 831,632
Finished goods 7,140,277 7,570,564
----------- ------------
$15,650,023 $15,916,638
</TABLE>
7
<PAGE>
NOTE D - ACQUISITIONS
On November 1, 1996, Hanger acquired J.E. Hanger, Inc. of Georgia
("SEH"), in a merger transaction effected pursuant to an Agreement and Plan of
Merger, dated as of July 29, 1996 (the "Merger Agreement"), by and among
Hanger, SEH and JEH Acquisition Corporation, a Georgia corporation
("Acquisition") wholly-owned by Hanger. The Merger Agreement provided for the
merger of Acquisition with and into SEH (the "Merger"), as a result of which
SEH became a wholly-owned subsidiary of Hanger, effective November 1, 1996.
Pursuant to the Merger Agreement, Hanger paid a total of $44 million and
issued a total of approximately one million shares of Hanger common stock in
exchange for all of SEH's outstanding common stock on November 1, 1996, and
paid an additional $1,783,000 to former SEH shareholders on March 27, 1997
pursuant to provisions in the Merger Agreement calling for a post-closing
adjustment.
During the first three months of 1996, the Company acquired one orthotic
and prosthetic company. The aggregate purchase price was $500,000, comprised
of $250,000 in cash and $250,000 in promissory notes. The cash portion of this
acquisition was borrowed under the Company's acquisition loan facility.
NOTE E - SUBSEQUENT EVENT
On April 2, 1997 and May 9, 1997, the Company purchased the net assets of
two orthotic and prosthetic facilities. The total consideration to acquire
these companies, excluding potential earn-out provisions, is expected to total
approximately $9,200,000.
8
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The following table sets forth for the periods indicated certain items of
the Company's statements of operations and their percentage of the Company's
net sales:
<TABLE>
<CAPTION>
For The Three
Months Ended
March 31,
------------------
1997 1996
---- ----
<S> <C> <C>
Net sales 100.0% 100.0%
Cost of products and services sold 52.4 48.1
Gross profit 47.6 51.9
Selling, general & administrative expenses 35.3 40.9
Depreciation and amortization 2.4 3.9
Amortization of excess cost over net assets acquired 1.3 1.4
Income from operations 8.5 5.7
Interest expense 4.9 3.2
Provision for income taxes 1.4 .9
Net income 2.0 1.2
</TABLE>
FOR THE THREE MONTHS ENDED MARCH 31, 1997 COMPARED TO THE
THREE MONTHS ENDED MARCH 31, 1996
NET SALES
Net sales for the three months ended March 31, 1997, amounted to
approximately $30,950,000, an increase of approximately $18,721,000 or 153%,
over net sales of approximately $12,229,000 for the three months ended March
31, 1996. Contributing to the increase were sales attributable to Hanger's
acquisition of J.E. Hanger, Inc. of Georgia ("SEH") on November 1, 1996, as
well as an 11% increase in sales by those Hanger patient-care centers
operating during both quarters ("same store sales"). The Company believes that
its net sales during the balance of 1997 will continue to substantially exceed
1996 net sales.
GROSS PROFIT
Gross profit during the three months ended March 31, 1997 amounted to
approximately $14,720,000, an increase of approximately $8,375,000, or 132%
over gross profit of approximately $6,344,000 for the three months ended March
31, 1996. Gross profit as a percent of net sales decreased from 51.9% in the
first quarter of 1996 to
9
<PAGE>
47.6% in the first quarter of 1997. The 4% decrease in gross profit as a
percent of net sales is primarily attributable to the acquisition effective
November 1, 1996, of SEH which operated a large distribution division that had
lower gross profit margins than patient care services.
SELLING, GENERAL AND ADMINISTRATIVE
Selling, general and administrative expenses in the three months ended
March 31, 1997 increased by approximately $5,923,000, or 118.5%, compared to
the three months ended March 31, 1996. The increase in selling, general and
administrative expenses was primarily a result of the acquisition of SEH in
November 1996. Selling, general and administrative expenses as a percent of
net sales decreased to 35.3% from 40.9% for the same period a year ago. The
decrease in selling, general and administrative expenses as a percent of net
sales decreased primarily as a result of cost cutting measures completed
during the fourth quarter of 1996 and the first quarter of 1997.
INCOME FROM OPERATIONS
Principally as a result of the above, income from operations in the
quarter ended March 31, 1997 amounted to approximately $2,636,000, an increase
of $1.935,000, or 275.8%, over the prior year's comparable quarter. Income
from operations as a percent of net sales increased to 8.5% in the first
quarter of 1997 from 5.7% for the prior year's comparable period.
INTEREST EXPENSE
Interest expense in the first quarter of 1997 amounted to approximately
$1,527,000, an increase of approximately $1,134,000, or 288.4%, over the
approximately $393,000 of interest expense incurred in the first quarter of
1996. Interest expense as a percent of net sales increased to 4.9% from 3.2%
for the same period a year ago. The increase in interest expense was primarily
attributable to the increase in bank debt resulting from the acquisition of
SEH in November 1996.
INCOME TAXES
The Company's effective tax rate was 42% in the first quarter of 1997
versus 43% in 1996. The provision for income taxes in the first quarter of
1997 amounted to approximately $447,000 compared to approximately $113,000 in
the first quarter of 1996.
NET INCOME
As a result of the above, the Company recorded net income of
approximately $618,000, or $.06 per share on approximately 9,978,000 shares
outstanding for the quarter ended March 31, 1997, compared to net income of
approximately $150,000, or
10
<PAGE>
$.02 per share on approximately 8,324,000 shares outstanding in the quarter
ended March 31, 1996. The Company believes that its profitability during the
balance of 1997 will continue to be enhanced as a result of the integration of
the operations of Hanger and SEH and the cost cutting measures completed by
the Company in late 1996 and early 1997.
LIQUIDITY AND CAPITAL RESOURCES
The Company's consolidated working capital at March 31, 1997 was
approximately $28,825,000. Cash and cash equivalents available at that date
was approximately $6,720,000. The Company's cash resources were satisfactory
to meet its obligations for the three months ended March 31, 1997.
The Company's total long-term debt at March 31, 1997, including a current
portion of approximately $6,053,000, was approximately $74,868,000. Such
indebtedness included: (i) $57,000,000 borrowed under term loan agreements
with Banque Paribas ("the Bank"); (ii) $5,500,000 borrowed under acquisition
loan agreements with the Bank; (iii) $500,000 borrowed under revolving loan
agreements with the Bank; (iv) $6,067,000, net of discount, borrowed under 8%
Senior Subordinated Notes; and (v) a total of $5,801,000 of other
indebtedness.
Under the terms of a new Financing and Security Agreement between the
Bank and the Company, the Bank provided up to $90.0 million principal amount
of senior financing (the "Senior Financing Facilities") that includes: (i) $57
million of term loans (the "Term Loans") for use in connection with Hanger's
acquisition of SEH, (ii) a $8.0 million revolving loan facility (the
"Revolver"), and (iii) up to $25 million principal amount of loans under an
acquisition loan facility (the "Acquisition Loans") for use in connection with
future acquisitions.
The above Senior Financing Facilities are collateralized by a first
priority security interest in all of the common stock of Hanger's subsidiaries
and all assets of Hanger and its subsidiaries. At Hanger's option, the annual
interest rate will be adjusted to be either LIBOR plus 2.75% or a Base Rate
(as defined below) plus 1.75% in the case of the A Term Loan, Acquisition
Loans and Revolver borrowings, and adjusted LIBOR plus 3.25% or a Base Rate
plus 2.25% in the case of the B Term Loan. The "Base Rate" is defined as the
higher of (i) the federal funds rate plus .5%, or (ii) the prime commercial
lending rate of Chase Manhattan Bank, N.A., as announced from time to time.
In addition, on November 1, 1996, the Company borrowed $8.0 million from
the Bank and Chase Venture Capital Associates L.P. in the form of Senior
Subordinated Notes ("Subordinated Notes") with detachable Warrants.
On November 1, 1996, Hanger acquired SEH, in a merger transaction
effected pursuant to an Agreement and Plan of Merger, dated as of July 29,
1996 (the "Merger Agreement"), by and among Hanger, SEH and JEH Acquisition
Corporation, a Georgia
11
<PAGE>
corporation ("Acquisition") wholly-owned by Hanger. The Merger Agreement
provided for the merger of Acquisition with and into SEH (the "Merger"), as a
result of which SEH became a wholly-owned subsidiary of Hanger, effective
November 1, 1996. Pursuant to the Merger Agreement, Hanger paid a total of $44
million and issued a total of approximately one million shares of Hanger
common stock in exchange for all of SEH's outstanding common stock on November
1, 1996, and paid an additional $1,783,000 to former SEH shareholders on March
27, 1997 pursuant to provisions in the Merger Agreement calling for a
post-closing adjustment.
During the first three months of 1997, the Company acquired one orthotic
and prosthetic company. The aggregate purchase price was $500,000, comprised
of $250,000 in cash and $250,000 in promissory notes. The cash portion of this
acquisition was borrowed under the Company's Acquisition Loan facility.
On April 2, 1997 and May 9, 1997, the Company purchased the net assets of
two orthotic and prosthetic facilities. The total consideration to acquire
these companies, excluding potential earn-out provisions, is expected to total
approximately $9,200,000.
The Company plans to finance future acquisitions through internally
generated funds or borrowings under the Acquisition Loans, the issuance of
notes or shares of common stock of the Company, or through a combination
thereof.
The Company is actively engaged in ongoing discussions with prospective
acquisition candidates. The Company plans to continue to expand its operations
aggressively through acquisitions.
OTHER
Inflation has not had a significant effect on the Company's operations,
as increased costs to the Company generally have been offset by increased
prices of products and services sold.
The Company will be required to adopt SFAS No. 128 in the fourth quarter
of this year and, as required by the standard, we will restate all prior
period earnings per share data. Our new earnings per share amounts are not
expected to be materially different from those computed under the present
accounting standard.
This report contains forward-looking statements setting forth the
Company's beliefs or expectations relating to future revenues and
profitability. Actual results may differ materially from projected or expected
results due to changes in the demand for the Company's O&P services and
products, uncertainties relating to the results of operations or recently
acquired and newly acquired O&P patient care practices, the Company's ability
to attract and retain qualified O&P practitioners, governmental policies
affecting O&P operations and other risks and uncertainties affecting the
health-care industry generally. Readers are cautioned not to put undue
reliance on forward-looking statements. The
12
<PAGE>
Company disclaims any intent or obligation to up-date publicly these
forward-looking statements, whether as a result of new information, future
events or otherwise.
13
<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS -
Exhibit 11 - Computation of Net Income Per Share
Exhibit 27 - Financial Data Schedule
(b) REPORTS ON FORM 8-K
The Company filed a Form 8-K on April 15, 1997 reporting (i) the
Company's acquisition of ACOR Orthopaedic, Inc. on April 1, 1997 under Item 2
thereof; and (ii) the Company's acquisition of Prosthetic Treatment Center,
Inc. on March 5, 1997 under Item 5 thereof.
14
<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.
HANGER ORTHOPEDIC GROUP, INC.
Date: May 12, 1997 /s/IVAN R. SABEL
-----------------------
Ivan R. Sabel, CPO
Chief Executive Officer
Date: May 12, 1997 /s/RICHARD A. STEIN
-----------------------
Richard A. Stein
Vice President - Finance
Principal Financial and
Accounting Officer
15
HANGER ORTHOPEDIC GROUP, INC.
EXHIBIT 11
COMPUTATION OF NET INCOME PER SHARE
FOR THE THREE MONTHS ENDED March 31, 1997 and 1996
<TABLE>
<CAPTION>
------------------
1997 1996
---- ----
<S> <C> <C>
Net income $ 617,915 $ 150,009
Less:
Dividends declared 6,295 5,755
--------- ---------
Total $ 611,620 $ 144,254
Divided by:
Weighted average number of shares outstanding 9,977,853 8,324,263
--------- ---------
Net income per share $.06 $.02
========= =========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0000722723
<NAME> HANGER ORTHOPEDIC GROUP INC
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 6,720,021
<SECURITIES> 0
<RECEIVABLES> 27,580,348
<ALLOWANCES> 3,052,000
<INVENTORY> 52,814,336
<CURRENT-ASSETS> 138,158,342
<PP&E> 23,315,262
<DEPRECIATION> 6,027,606
<TOTAL-ASSETS> 138,158,342
<CURRENT-LIABILITIES> 23,989,760
<BONDS> 68,815,272
283,996
0
<COMMON> 94,938
<OTHER-SE> 40,335,897
<TOTAL-LIABILITY-AND-EQUITY> 138,158,342
<SALES> 0
<TOTAL-REVENUES> 30,949,614
<CGS> 16,229,929
<TOTAL-COSTS> 12,083,452
<OTHER-EXPENSES> 43,749
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,527,269
<INCOME-PRETAX> 1,065,215
<INCOME-TAX> 447,300
<INCOME-CONTINUING> 617,915
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 617,915
<EPS-PRIMARY> .06
<EPS-DILUTED> .06
</TABLE>
