<PAGE>
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 February 28, 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 1-8654
------
Unitel Video, Inc.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 23-1713238
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
555 West 57th Street--New York, New York 10019
- -------------------------------------------------------------------------------
(Address of principal executive offices)
(212) 265-3600
- -------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
- -------------------------------------------------------------------------------
(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 twelve months and (2) has been subject to such
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.
2,674,665 Common shares outstanding as of April 7, 1997.
(Number of shares) (Date)
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UNITEL VIDEO, INC.
FORM 10-Q
QUARTER ENDED FEBRUARY 28, 1997
<TABLE>
<CAPTION>
PAGE
INDEX NUMBER
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Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets
February 28, 1997 (Unaudited) and
August 31, 1996 3-4
Consolidated Statements of Operations
February 28, 1997 (Unaudited) and
February 29, 1996 (Unaudited) 5
Consolidated Statements of Cash Flows
February 28, 1997 (Unaudited)
and February 29, 1996 (Unaudited) 6-7
Notes to Consolidated Financial
Statements (Unaudited) 8-10
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of
Operations 11-13
Part II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of
Security-Holders 14
Item 6. Exhibits and Reports on Form 8-K 14
</TABLE>
2
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UNITEL VIDEO, INC.
FORM 10-Q
QUARTER ENDED FEBRUARY 28, 1997
Part 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
FEBRUARY 28, 1997 AUGUST 31, 1996
----------------- ----------------
(UNAUDITED) (NOTE)
ASSETS
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Current Assets:
Cash....................................................... $ 32,000 $ 192,000
Accounts receivable,
less allowance for doubtful accounts
of $435,000 and $712,000................................ 6,958,000 8,701,000
Other receivables......................................... 186,000 333,000
Prepaid income taxes...................................... 140,000 142,000
Prepaid expenses.......................................... 740,000 735,000
Net assets held for sale.................................. -- 1,587,000
Deferred tax asset........................................ 844,000 844,000
------------ ------------
Total current assets......................................... 8,900,000 12,534,000
Property and equipment--at cost
Land, buildings and improvements........................... 20,314,000 19,915,000
Video equipment............................................ 98,832,000 97,023,000
Furniture and fixtures..................................... 3,381,000 3,502,000
------------ ------------
122,527,000 120,440,000
Less accumulated depreciation................................ 73,496,000 69,974,000
------------ ------------
49,031,000 50,466,000
Deferred tax asset........................................... 1,625,000 1,625,000
Goodwill..................................................... 1,790,000 1,859,000
Other assets................................................. 1,148,000 1,134,000
------------ ------------
$ 62,494,000 $ 67,618,000
------------ ------------
</TABLE>
Note: The balance sheet at August 31, 1996 has been taken from the audited
consolidated financial statements at that date.
See notes to consolidated financial statements.
3
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UNITEL VIDEO, INC.
FORM 10-Q
CONSOLIDATED BALANCE SHEETS
(Continued)
<TABLE>
<CAPTION>
February 28, 1997 August 31, 1996
----------------- ---------------
(Unaudited) (Note)
LIABILITIES AND STOCKHOLDERS' EQUITY
- ------------------------------------
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Current liabilities:
Accounts payable $ 4,284,000 $ 4,967,000
Accrued expenses 967,000 1,450,000
Payroll, benefits and related taxes 1,719,000 2,947,000
Current maturities of long-term debt 6,485,000 8,362,000
Current maturities of subordinated debt 1,167,000 1,166,000
Current maturities of ESOP loan 75,000 166,000
Current maturities of capital lease obligations 1,870,000 1,832,000
------------ ------------
Total current liabilities 16,567,000 20,890,000
Deferred rent 110,000 325,000
Long-term debt, less current maturities 19,859,000 19,706,000
Subordinated debt, less current maturities 1,771,000 1,979,000
Long-term leases, less current maturities 4,657,000 5,604,000
Accrued retirement 1,240,000 1,304,000
Stockholders' equity:
Common stock, par value
$.01 per share
Authorized 5,000,000 shares
Issued 3,540,954 and 3,532,554 shares
respectively, and outstanding 2,674,665
and 2,666,265 shares respectively 27,000 26,000
Additional paid-in capital 27,552,000 27,545,000
Accumulated deficit (1,229,000) (1,592,000)
Common stock held in treasury,
at cost (866,289 shares) (7,974,000) (7,974,000)
------------ ------------
18,376,000 18,005,000
Unearned employee benefit expense (86,000) (195,000)
------------ ------------
Total stockholders' equity 18,290,000 17,810,000
------------ ------------
$ 62,494,000 $ 67,618,000
------------ ------------
</TABLE>
Note: The balance sheet at August 31, 1996 has been taken from the audited
consolidated financial statements at that date.
See notes to consolidated financial statements.
4
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UNITEL VIDEO, INC.
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FORM 10-Q
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CONSOLIDATED STATEMENTS OF OPERATIONS
-------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
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<S> <C> <C> <C> <C>
FEBRUARY 28, FEBRUARY 29, FEBRUARY 28, FEBRUARY 29,
1997 1996 1997 1996
------------- ------------- ------------- -------------
Sales............................................... $ 15,000,000 $ 20,529,000 $ 31,370,000 $ 43,469,000
Cost of sales:
Production costs............................... 10,228,000 15,585,000 20,944,000 30,987,000
Depreciation................................... 2,258,000 1,773,000 4,309,000 3,506,000
------------- ------------- ------------- -------------
12,486,000 17,358,000 25,253,000 34,493,000
------------- ------------- ------------- -------------
Gross profit........................................ 2,514,000 3,171,000 6,117,000 8,976,000
Operating expenses:
Selling........................................ 509,000 660,000 994,000 1,336,000
General and administrative..................... 1,751,000 2,543,000 3,121,000 4,987,000
Interest....................................... 933,000 923,000 1,774,000 1,771,000
Impairment charge.............................. -- 886,000 -- 1,739,000
------------- ------------- ------------- -------------
3,193,000 5,012,000 5,889,000 9,833,000
------------- ------------- ------------- -------------
Earnings (loss) from operations..................... (679,000) (1,841,000) 228,000 (857,000)
Other income........................................ 76,000 -- 154,000 --
------------- ------------- ------------- -------------
Earnings (loss) before income taxes................. (603,000) (1,841,000) 382,000 (857,000)
Income taxes........................................ (31,000) (462,000) 19,000 --
------------- ------------- ------------- -------------
Net earnings (loss) applicable for common stock..... $ (572,000) $ (1,379,000) $ 363,000 $ (857,000)
------------- ------------- ------------- -------------
Earnings (loss) Per Common Share
Net earnings (loss)................................. $ (.21) $ (0.53) $ .13 $ (0.33)
------------- ------------- ------------- -------------
Weighted average of common and common equivalent
shares outstanding................................ 2,695,000 2,591,000 2,694,000 2,580,000
------------- ------------- ------------- -------------
</TABLE>
See notes to consolidated financial statements.
5
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UNITEL VIDEO, INC.
------------------
FORM 10-Q
---------
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
----------------------------------
<S> <C> <C>
FEBRUARY 28, 1997 FEBRUARY 29, 1996
------------------- -------------------
Cash Flows From Operating Activities:
Net income (loss)......................................... $ 363,000 $ (857,000)
Adjustments to reconcile net income (loss) to net cash provided
by operating activities:
Depreciation and amortization............................. 4,505,000 3,525,000
Net gain on disposal of equipment......................... (196,000) (19,000)
Deferred financing costs.................................. -- (570,000)
Amortization of deferred financing costs.................. 74,000 89,000
Deferred rent............................................. (215,000) 8,000
Accrued retirement expense................................ (64,000) 82,000
Deferred income taxes..................................... -- (79,000)
Impairment charge......................................... -- 1,739,000
Decrease (Increase) in:
Accounts receivable....................................... 2,020,000 1,875,000
Allowance for doubtful accounts............................ (277,000) (73,000)
Other receivables.......................................... 147,000 11,000
Prepaid expenses........................................... (5,000) 148,000
Prepaid taxes.............................................. 2,000 126,000
Other assets................................................ (88,000) (131,000)
Increase (Decrease) in
Accounts payable............................................ (683,000) (2,715,000)
Accrued expenses............................................ (483,000) (382,000)
Payroll and related taxes.................................. . (1,228,000) 470,000
---------------- ----------------
Total adjustments....................................... 3,509,000 4,104,000
----------------- ----------------
Net cash provided by operating activities.................... 3,872,000 3,247,000
Cash Flows From Investing Activities:
Capital expenditures....................................... (3,422,000) (4,464,000)
Proceeds from disposal of equipment........................ 2,204,000 23,000
----------------- ----------------
Net cash used in investing activities............................. (1,218,000) (4,441,000)
(Continued)
</TABLE>
6
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UNITEL VIDEO, INC.
------------------
FORM 10-Q
---------
CONSOLIDATED STATEMENTS OF CASH FLOWS
-------------------------------------
(Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
----------------------------------
FEBRUARY 28, 1997 FEBRUARY 29, 1996
----------------- -----------------
<S> <C> <C>
Cash Flows From Financing Activities:
Proceeds from long-term financing.......................... 2,091,000 $ 22,520,000
Proceeds from issuance of common stock..................... 39,000 181,000
Repayment of loan to ESOP.................................. (91,000) (82,000)
Principal repayments....................................... (4,931,000) (21,130,000)
Release of ESOP quarterly shares........................... 78,000 97,000
---------------- ----------------
Net cash (used) provided by financing activities......... (2,814,000) 1,586,000
---------------- ----------------
Net (Decrease)/Increase in Cash.......................... (160,000) 392,000
Cash Beginning of Year........................................... 192,000 161,000
---------------- ----------------
Cash End of Six Months.......................................... $ 32,000 $ 553,000
---------------- ----------------
Schedule of income taxes and interest paid:
Income Taxes Paid........................................... $ 17,000 $ 68,000
Interest Paid............................................... 1,757,000 1,555,000
---------------- ----------------
$ 1,774,000 $ 1,623,000
---------------- ----------------
</TABLE>
See notes to consolidated financial statements.
7
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UNITEL VIDEO, INC.
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FORM 10-O
---------
SIX MONTHS ENDED FEBRUARY 28, 1997
----------------------------------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
-------------------------------------------
(Unaudited)
1. CONSOLIDATED FINANCIAL STATEMENTS
- -------------------------------------
The condensed consolidated balance sheet as of February 28, 1997, the
consolidated statements of operations for the six months and quarters ended
February 28, 1997 and February 29, 1996, and the consolidated statements of
cash flows for the six months then ended have been prepared by the Company
without audit. In the opinion of management, all adjustments (which include
only normal recurring adjustments) necessary to present fairly the financial
position, results of operations, and cash flows at February 28, 1997 and for
all periods presented have been made.
Certain information and footnote disclosure normally included in the
financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted. It is suggested that
these condensed consolidated financial statements be read in conjunction with
the financial statements and notes thereto in the Company's August 31, 1996
Form 10-K filed with the Securities and Exchange Commission. The results of
operations for the six months ended February 28, 1997 are not necessarily
indicative of the operating results for the full year.
2. STOCKHOLDERS' EQUITY
During the six months ended February 28, 1997, stockholders' equity
increased due to:
<TABLE>
<S> <C>
Net income........................................................ $ 363,000
Reduction in unearned employee benefit expense.................... 109,000
Reduction in additional paid in capital resulting from the
allocation of ESOP shares....................................... (31,000)
Purchase of stock under the Unitel Video, Inc. Employee Stock
Purchase Plan................................................... 39,000
---------
Total increase in stockholders' equity............................ $ 480,000
---------
</TABLE>
3. PER SHARE DATA
Per share data for the quarter and six months ended February 28, 1997 and
February 29, 1996 is based on the weighted average number of common shares
outstanding. In the quarter and six months ended February 28, 1997 and
February 29, 1996 unreleased Employee Stock Ownership Plan shares are not
considered outstanding for earnings per share calculations. (See Note 4).
8
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4. 401(k) Employee Savings and Stock Ownership Plan
- ----------------------------------------------------
The Company sponsors a 401(k) savings and stock ownership plan (the
"Plan") which requires the Company to match employee contributions to the
401(k) portion of the Plan in shares of the Company's Common Stock up to the
maximum amount set forth in the Plan. Effective September 1, 1994, the
Company has adopted the provisions of Statement of Position 93-6, "Employer's
Accounting for Employee Stock Ownership Plans" ("SOP 93-6").
In 1987, to purchase 115,849 shares of the Company's stock, the Plan
obtained financing from a bank amounting to $1,250,000. In 1991 the Plan
purchased 25,810 shares of the Company's stock financed by a $229,193 loan
from the Company. The Plan is funded by the Company as required to provide
the Plan with the funds necessary to meet its debt service requirements. The
loan obligations of the Plan are considered unearned employee benefit expense
and are recorded as a separate reduction of the Company's shareholders'
equity. The bank financing is guaranteed by the Company.
The Plan's shares are released and allocated to participant accounts
based upon Company contributions and certain payments made to reduce the Plan
debt. The Company reports compensation expense based on the dollar value of
the 401(k) match expense.
The Plan's compensation expense was $69,000 and $39,000 for the six
months and quarter ended February 28, 1997, respectively. A summary of the
Plan's shares as of February 28, 1997 is as follows:
<TABLE>
<S> <C>
Allocated shares.................................................. 96,666
Shares released for allocation.................................... 11,836
Unreleased shares................................................. 24,347
---------
132,849
---------
Fair value of unreleased shares at February 28, 1997.............. $ 158,000
---------
</TABLE>
Prior to adoption of SOP 93-6, the unreleased shares were considered
outstanding for the earnings per share computation. Accordingly, for the six
months ended February 28, 1997, 24,347 shares were no longer considered
outstanding. The effect of adopting SOP 93-6 was not material on the net
income, and resulted in an increase of approximately 1% on the net income per
share for the six months ended February 28, 1997.
5. IMPAIRMENT AND RESTRUCTURING CHARGES
- ---------------------------------------
In March 1995, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-Lived Assets to be Disposed Of" ("FASB
Statement No. 121") which provides guidance on when to assess and how to
measure impairment of long-lived assets, certain intangibles and goodwill
related to those assets to be held and used, and for long-lived assets and
certain identifiable intangibles to be disposed of. The Company adopted FASB
Statement No. 121 as of August 31, 1995.
9
<PAGE>
In fiscal 1995 the Company determined to focus its resources toward
providing services to the entertainment and corporate communications areas,
which represent the Company's strength, and decided to sell its three Editel
divisions which did not specialize in these areas. The Company recorded the
carrying value of the assets related to these divisions as net assets held
for sale, and a corresponding impairment charge, since these assets were no
longer needed for the current and future operations of the Company.
In fiscal 1996 the Company began marketing these divisions to potential
buyers. In the first six months of fiscal 1996 the Company recorded an
impairment charge of $1,739,000 relating to the assets at all three Editel
divisions. The impairment charge recorded represented management's estimate
of the decrease in value of these assets during the period such assets were
held for sale based upon the depreciation method which the Company has found
to be reasonable and appropriate.
In February 1996 the Company closed its Editel Chicago division,
distributed the majority of its assets to other divisions throughout the
Company and sold the remaining assets at an auction held in May 1996. Also in
May 1996, after reevaluating the potential of the Editel Los Angeles
division, the Company decided to retain and expand this division.
Management's decision to retain and expand the Editel Los Angeles division
was based on several factors including an improving business trend, new lines
of business, new management, and increased cash flow. Based on these factors,
management believes this division has positive growth potential. As a result,
a determination was made to transfer to Editel Los Angeles equipment from the
Editel New York and Editel Chicago divisions and upgrade the creative and
technical staff at this facility. This was accomplished to enable the
division to provide additional services for customers and expand into new
areas of business. In August of 1996 the Company closed its Editel New York
division and distributed the majority of its editorial and computer graphics
assets throughout the Company. In November 1996 the Company sold the majority
of this division's remaining net assets held for sale of $1,587,000 to an
unrelated third party for $1,400,000. In February 1997 the remaining Editel
New York assets were sold at auction or redeployed throughout the Company.
Proceeds from the sale of assets are used by the Company to repay outstanding
debt.
6. STOCK BASED COMPENSATION
- ---------------------------
Statement of Financial Accounting Standards No. 123 ("SFAS No. 123"),
"Accounting for Stock Based Compensation," provides companies a choice in the
method of accounting used to determine stock-based compensation. Companies
may account for such compensation either by using the intrinsic value-based
method provided by APB Opinion No. 25 ("APB No. 25"), "Accounting for Stock
Issued to Employees," or the fair market value based method provided in SFAS
No. 123. This statement is required to be adopted by the Company during its
fiscal year ending August 31, 1997. The Company intends to use the intrinsic
value-based method provided in APB No. 25 to determine stock-based
compensation. The sole effect of the adoption of SFAS No. 123 is the
obligation imposed on the Company to comply with the new disclosure
requirements provided thereunder.
10
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
- ------ -----------------------------------------------------------------------
OF OPERATIONS.
-------------
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The Company is committed to keeping pace with technological developments
as well as taking advantage of new business opportunities in the video
communications industry. Capital expenditures were $3,422,000 during the six
months ended February 28, 1997, and consisted of the purchase of production,
post production and graphics equipment for use throughout the Company.
Net cash provided by operating activities during the six months ended
February 28, 1997 was $3,872,000 and during the six months ended February 29,
1996 was $3,247,000. Net cash provided by operating activities for the six
months ended February 28, 1997 was offset by $1,218,000 of cash used in
investing activities, which consisted primarily of capital expenditures (net
of proceeds from asset dispositions of $2,204,000), and by net cash used in
financing activities of $2,814,000 for debt repayment, resulting in a net
decrease in cash available of $160,000.
In August 1995 the Company recorded a deferred tax asset related to the
pre-tax losses and impairment charges incurred by the Company's Editel
divisions. During fiscal 1996, the Company incurred additional pre-tax losses
related to the operations and closure of the Editel New York and Editel
Chicago divisions. It is management's determination that the deferred tax
asset will be realized in future years based upon the Company's historical
record of pre-tax profits prior to the last two fiscal years of pre-tax
losses and based on the Company's current and projected pre-tax earnings.
In December 1995, the Company entered into a $26 million revolving credit
and term loan agreement with a financial institution, consisting of an $11
million revolving credit facility and two $7.5 million term loans. Term loan
A is payable in 59 monthly principal payments of $89,000 through November
2000 and a payment of $2,249,000 at December 2000. Term loan B is repayable
from the proceeds of sales of fixed assets. As of February 28, 1997,
$2,804,000 has been repaid leaving a balance of $4,696,000 for term loan B.
The remaining balance of term loan B is due in full on June 30, 1997. The
Company anticipates that any remaining balance of term loan B which has not
been repaid by the sale of fixed assets will be rescheduled to amortize over
a period of time equal to the remaining term of term loan A. At February 28,
1997 $6,697,000 was outstanding under the revolving portion of the credit
facility.
RESULTS OF OPERATIONS
- ---------------------
Sales were $15,000,000 and $20,529,000 for the quarters ended February
28, 1997 and February 29, 1996, respectively. Sales were $31,370,000, and
$43,469,000 for the six months ended February 28, 1997 and February 29, 1996,
respectively. The decrease in sales in the six month period ending February
28, 1997 was due primarily to the closure of the Company's Editel Chicago and
Editel New York divisions in fiscal 1996. Also contributing to lower sales
was the cancellation of the "Rush Limbaugh" and "Mark Walberg" talk shows,
which had been produced at Unitel studios during the majority of fiscal 1996,
and the out of service status of one of the Mobile division's most
11
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sophisticated units during a substantial portion of the first quarter of
fiscal 1997 while being digitally retrofitted by Company engineers. The sales
decrease in the first six months of fiscal 1997 was partially offset by a
significant increase in sales at the Company's Editel Los Angeles division.
The Company's net loss for the quarter ended February 28, 1997 was
$(572,000), compared to the net loss of $(1,379,000) for the comparable
quarter of fiscal year 1996. The Company's net income was $363,000 for the
six months ended February 28, 1997, compared with a net loss of $(857,000)
for the same period of the prior fiscal year. The second quarter of the
fiscal year has historically resulted in a loss which was minimized in fiscal
1997 by the closure of the Editel New York and Editel Chicago divisions
during fiscal 1996. The loss in the second quarter of fiscal 1996 included
severance costs associated with the closure of the Editel Chicago division
and the restructuring of the Editel New York division. The effective tax rate
for the first six months of fiscal 1997 was 5% as compared with 47% for the
same period in the prior fiscal year. The effective rate for the first six
months of fiscal 1997 was less than the prior period tax rate due to the
utilization of net operating loss carryforwards generated by the losses
incurred in fiscal 1995 and 1996.
Production costs, the main component of cost of sales, consist primarily
of direct labor, equipment maintenance expenses and occupancy costs. The
Company's production costs, as a percentage of sales, were 68% for the
quarter ended February 28, 1997, as compared to 76% for the quarter ended
February 29, 1996 and were 67% and 71% for the first six months of fiscal
years 1997 and 1996, respectively. The decrease in production expenses as a
percentage of sales in the quarter and six months ended February 28, 1997 as
compared with the same period in the prior year, is primarily due to the
closure of the Company's Editel Chicago and Editel New York divisions which
had been incurring these expenses at a higher percent of sales compared with
the Company's other divisions. Also included in the decrease in production
expenses from the comparable period in the prior year is the impact of the
reduction of certain cost estimates related to the closure of the Editel New
York and Editel Chicago divisions.
Depreciation, as a percentage of sales, was 15% and 9% for the quarters
ended February 28, 1997 and February 29, 1996, respectively, and 14% and 8%
for the first six months of the 1997 and 1996 fiscal years, respectively. The
increase in the quarter and six months ended February 28, 1997 as compared
with the same period in the prior year, was a result of the reclassification
of the net property and equipment of the Company's three Editel divisions to
net assets held for sale at August 31, 1995 with the corresponding
depreciation expense recorded as impairment charges. In May 1996, the Company
determined to retain its Editel Los Angeles division and, accordingly,
resumed recording depreciation expense for this division. The impairment
charge recorded in the first six months of fiscal 1996 represents
management's estimate of the decrease in value of these assets based upon the
depreciation method which the Company has used in the past and which
management has found to be reasonable and appropriate. Of the $1,739,000
impairment charge recorded in the first six months of fiscal 1996, $777,000
related to the Editel Los Angeles division, which if recorded as depreciation
expense in 1996 would have resulted in depreciation as a percentage of sales
of 12% as compared to 8% in the first six months of fiscal 1996. In addition,
the majority of the assets of the Editel Chicago
12
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and Editel New York divisions were redistributed throughout the Company which
contributed to the increase in depreciation expense in fiscal 1997.
Selling expenses for the quarters ended February 28, 1997 and February
29, 1996 were 3.4% and 3.2% of sales, respectively, and 3.2% and 3.1% for the
six months ended February 28, 1997 and February 29, 1996, respectively. The
increase in the quarter and six months ended February 28, 1997 as compared
with the same period in the prior year, is mainly due to an increase in the
sales staff at the New York divisions and at Editel Los Angeles.
General and administrative expenses, as a percentage of sales, for the
quarters ended February 28, 1997 and February 29, 1996 were 11.7% and 12.4%,
respectively, and 9.9% and 11.5% for the six months ended February 28, 1997
and February 29, 1996, respectively. The decrease in general and
administrative expenses as a percentage of sales is primarily due to the
closure of the Company's Editel Chicago and Editel New York divisions which
had been incurring these expenses at a higher percent of sales compared with
the Company's other divisions. Also included in the decrease in general and
administrative expenses from the comparable period in the prior year is the
impact of the reduction of certain cost estimates related to the closure of
the Editel New York and Editel Chicago divisions.
Interest expense, as a percentage of sales, for the quarters ended
February 28, 1997 and February 29, 1996 was 6.2% and 4.5%, respectively, and
5.7% and 4.1% for the six months ended February 28, 1997 and February 29,
1996. Since the level of outstanding debt in the first six months of fiscal
1997 remained constant with the same period of the prior year and sales
decreased in the first six months of fiscal 1997, interest expense as a
percentage of sales increased in fiscal 1997 when compared with the same
period of the prior year.
The Company's effective tax rate was 5% and 47% for the first six months
of fiscal years 1997 and 1996, respectively. The effective tax rate for the
first six months of fiscal 1997 is less than the federal statutory rate of
34% due to the utilization of net operating loss carryforwards generated by
the losses incurred in fiscal 1995 and 1996. The effective tax rate exceeded
the federal statutory rate of 34% in fiscal 1996 due to state and local taxes.
13
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PART II OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS
(a) The Annual Meeting of Stockholders of the Company was held on February
5, 1997.
(b) At the Annual Meeting, Herbert Bass and Alex Geisler were elected as
Directors for terms expiring in 2000. The term of office as a Director of
Walter G. Arader, Philip S. Birsh, Barry Knepper and Richard Clouser
continued after the meeting.
(c) The total votes cast for, withheld or against, as well as the number
of abstentions and broker non-votes, as to the election of Directors, were as
follows:
<TABLE>
<CAPTION>
TOTAL VOTES TOTAL VOTES
NOMINEE FOR WITHHELD
- --------------------------------------------------------- -------------- -------------------
<S> <C> <C>
Herbert Bass............................................. 2,234,712 184,242
Alex Geisler............................................. 2,234,712 184,242
</TABLE>
There were no abstentions or broker non-votes for the election of Directors.
(d) In addition, at the Annual Meeting an amendment (the "Amendment") to
the Company's 1992 Stock Option Plan (the "Plan") was approved providing for
each non-employee Director to receive an automatic grant on each May 1st
during the term of the Plan of an option to purchase 3,000 shares of the
Company's stock, increased from the 1,000 shares of stock subject to the
automatic grant prior to approval of the Amendment.
(e) The total votes cast for, withheld or against, as well as the number
of abstentions and broker non-votes, as to the approval of the Amendment,
were as follows:
<TABLE>
<CAPTION>
TOTAL VOTES FOR TOTAL VOTES AGAINST ABSTENTIONS
- --------------- -------------------- -----------
<S> <C> <C>
2,003,072 239,692 10,146
</TABLE>
There were 166,044 broker non-votes for the approval of the Amendment.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits required to be filed by item 601 of Regulation S-K.
(1) Exhibit 10. Amended 1992 Stock Option Plan.
(2) Exhibit 27. Financial Data Schedule.
(b) There were no reports filed on Form 8-K during the six month period
ended February 28, 1997.
14
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this amendment to be signed on its behalf by the
undersigned thereunto duly authorized.
UNITEL VIDEO, INC.
By: /s/ Barry Knepper
-----------------------------------------
Barry Knepper
President and Chief Executive Officer
By: /s/ George Horowitz
------------------------------------------
George Horowitz
Chief Financial Officer
Dated: April 7, 1997
15
<PAGE>
As amended through November 1, 1996
1992 STOCK OPTION PLAN
of
UNITEL VIDEO, INC.
1. PURPOSES OF THE PLAN. This stock option plan (the "Plan") is
designed to provide an incentive to key employees (including officers and
directors who are key employees) and to directors who are not employees of
Unitel Video, Inc., a Delaware corporation (the "Company"), and its present and
future subsidiary corporations, as defined in Paragraph 18 ("Subsidiaries"), and
to offer an additional inducement in obtaining the services of such individuals.
The Plan provides for the grant of "incentive stock options" ("ISOs") within the
meaning of Section 422 of the Internal Revenue Code of 1986, as amended (the
"Code"), and nonqualified stock options ("NQSOs"), but the Company makes no
warranty as to the qualification of any option as an "incentive stock option"
under the Code.
2. STOCK SUBJECT TO THE PLAN. Subject to the provisions of
Paragraph 12, the aggregate number of shares of Common Stock, $.01 par value per
share, of the Company ("Common Stock") for which options may be granted under
the Plan shall not exceed 350,000. Such shares of Common Stock may, in the
discretion of the Committee (as defined in Paragraph 3), consist either in whole
or in part of authorized but unissued shares of Common Stock or shares of Common
Stock held in the treasury of the Company. The Company shall at all times
during the term of the Plan reserve and keep available such number of shares of
Common Stock as will be sufficient to satisfy the requirements of the Plan.
Subject to the provisions of Paragraph 13, any shares of Common Stock subject to
an option which for any reason expires, is cancelled, is terminated unexercised
or which ceases for any reason to be exercisable shall again become available
for the granting of options under the Plan.
3. ADMINISTRATION OF THE PLAN. The Plan shall be administered by
the Company's Board of Directors which, to the extent that it may determine, may
delegate its powers with respect to the administration of the Plan to a
committee of the Board of Directors of the Company (the "Committee") consisting
of not less than two directors, each of whom shall be a "Non-Employee Director"
within the meaning of Rule 16b-3 (or any successor rule or regulation)
promulgated under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"). References in the Plan to determinations or actions by the Committee
shall be deemed to include determinations and actions by the Board of Directors.
Subject to the express provisions of the Plan, the Committee shall
have the authority, in its sole discretion, with respect to Key Employee Options
(as defined in Paragraph 18): to determine the key employees who shall receive
options; the times when they shall receive options; whether an option shall be
an ISO or a NQSO; the number of shares of Common Stock to be subject
<PAGE>
to each option; the term of each option; the date each option shall become
exercisable; whether an option shall be exercisable in whole, in part or in
installments, and, if in installments, the number of shares of Common Stock
to be subject to each installment; whether the installments shall be
cumulative; the date each installment shall become exercisable and the term
of each installment; whether to accelerate the date of exercise of any
installment; whether shares of Common Stock may be issued on exercise of an
option as partly paid, and, if so, the dates when future installments of the
exercise price shall become due and the amounts of such installments; the
exercise price of each option; the form of payment of the exercise price;
whether to restrict the sale or other disposition of the shares of Common
Stock acquired upon the exercise of an option and to waive any such
restriction; whether to subject the exercise of all or any portion of an
option to the fulfillment of contingencies as specified in the contract
referred to in Paragraph 11 (the "Contract"), including without limitation,
contingencies relating to entering into a covenant not to compete with the
Company and its Parent (as defined in Paragraph 18) and Subsidiaries,
financial objectives for the Company, a Subsidiary, a division, a product
line or other category, and/or the period of continued employment of the
optionee with the Company or its Subsidiaries, and to determine whether such
contingencies have been met; and with respect to Key Employee Options and
Outside Director Options (as defined in Paragraph 18): to construe the
respective Contracts and the Plan; to determine the amount, if any, necessary
to satisfy the Company's obligation to withhold taxes; with the consent of
the optionee, to cancel or modify an option, provided such option as modified
would be permitted to be granted on such date under the terms of the Plan; to
prescribe, amend and rescind rules and regulations relating to the Plan; and
to make all other determinations necessary or advisable for administering the
Plan. The determinations of the Committee on the matters referred to in this
Paragraph 3 shall be conclusive.
No member or former member of the Committee shall be liable for any
action or determination made in good faith with respect to the Plan or any
option granted hereunder.
4. ELIGIBILITY; GRANTS. The Committee may, consistent with the
purposes of the Plan, grant Key Employee Options from time to time, to key
employees of the Company or any of its Subsidiaries. Key Employee Options
granted shall cover such number of shares of Common Stock as the Committee may
determine; provided, however, that the aggregate fair market value (determined
at the time the option is granted) of the shares of Common Stock for which any
eligible person may be granted ISOs under the Plan or any other plan of the
Company, or of a Parent or a Subsidiary of the Company, which are exercisable
for the first time by such optionee during any calendar year shall not exceed
$100,000. The $100,000 ISO limitation shall be applied by taking ISOs into
account in the order in which they were granted. Any option (or the portion
thereof) granted in excess of such amount shall be treated as a NQSO.
On the date the Plan is adopted by the Board of Directors, each
member of the Board of Directors who is not on such date an employee of the
Company or any of its Subsidiaries shall be granted an Outside Director Option
to purchase 1,000 shares of Common Stock. In addition, on each anniversary of
the date the Plan is adopted by the Board of Directors, each member of the Board
of Directors who is not on that anniversary date an employee of the Company or
any of its Subsidiaries shall be granted an Outside Director Option to purchase
5,000 shares of Common Stock.
-2-
<PAGE>
In the event the remaining shares available for grant under the Plan are not
sufficient to grant the Outside Director Options to such non-employee
directors in any year, the number of shares subject to each Outside Director
Option for such year shall be reduced proportionately. The Committee shall
have no discretion with respect to the selection of directors to receive
Outside Director Options or the amount, the price or the timing with respect
thereto. A director who is not an employee of the Company or any of its
Subsidiaries shall not be entitled to receive any options other than Outside
Director Options as provided herein.
5. EXERCISE PRICE. The exercise price of the shares of Common Stock
under each Key Employee Option shall be determined by the Committee; provided,
however, that the exercise price shall not be less than the fair market value of
the Common Stock subject to such option on the date of grant; and further,
provided, that if, at the time an ISO is granted, the optionee owns (or is
deemed to own under Section 424(d) of the Code) stock possessing more than 10%
of the total combined voting power of all classes of stock of the Company, of
any of its Subsidiaries or of a Parent, the exercise price of such ISO shall not
be less than 110% of the fair market value of the Common Stock subject to such
ISO on the date of grant. The exercise price of the shares of Common Stock
under each Outside Director Option shall be equal to the fair market value of
the Common Stock subject to such option on the date of grant.
The fair market value of the Common Stock on any day shall be (a) if
the principal market for the Common Stock is a national securities exchange, the
average of the highest and lowest sales prices of the Common Stock on such day
as reported by such exchange or on a composite tape reflecting transactions on
such exchange, (b) if the principal market for the Common Stock is not a
national securities exchange and the Common Stock is quoted on the National
Association of Securities Dealers Automated Quotations System ("NASDAQ"), and
(i) if actual sales price information is available with respect to the Common
Stock, the average of the highest and lowest sales prices of the Common Stock on
such day on NASDAQ, or (ii) if such information is not available, the average of
the highest bid and lowest asked prices for the Common Stock on such day on
NASDAQ, or (c) if the principal market for the Common Stock is not a national
securities exchange and the Common Stock is not quoted on NASDAQ, the average of
the highest bid and lowest asked prices for the Common Stock on such day as
reported on the NASDAQ OTC Bulletin Board Service or by National Quotation
Bureau, Incorporated or a comparable service; provided, however, that if clauses
(a), (b) and (c) of this Paragraph are all inapplicable, or if no trades have
been made or no quotes are available for such day, the fair market value of the
Common Stock shall be determined by the Committee by any method consistent with
applicable regulations adopted by the Treasury Department relating to stock
options. The determination of the Committee shall be conclusive in determining
the fair market value of the stock.
6. TERM. The term of each Key Employee Option shall be such term as
is established by the Committee, in its sole discretion, at or before the time
such option is granted. Notwithstanding the foregoing, the term of each ISO
granted pursuant to the Plan shall be for a period not exceeding 10 years from
the date of grant thereof, and further provided, that if, at the time an ISO is
granted, the optionee owns (or is deemed to own under Section 424(d) of the
Code) stock
-3-
<PAGE>
possessing more than 10% of the total combined voting power of all classes of
stock of the Company, of any of its Subsidiaries or of a Parent, the term of
the ISO shall be for a period not exceeding five years from the date of
grant. Each Outside Director Option shall have a term of ten years
commencing on the date of grant. Options shall be subject to earlier
termination as hereinafter provided.
7. EXERCISE. An option (or any part or installment thereof), to the
extent then exercisable, shall be exercised by giving written notice to the
Company at its principal office (at present 555 West 57th Street, New York, New
York 10019, Attn: Barry Knepper, Executive Vice President), stating which ISO,
NQSO or Outside Director Option is being exercised, specifying the number of
shares of Common Stock as to which such option is being exercised and
accompanied by payment in full of the aggregate exercise price therefor (or the
amount due on exercise if the Contract permits installment payments) (a) in cash
or by certified check, or (b) with the consent of the Committee (in the Contract
or otherwise), with previously acquired shares of Common Stock having an
aggregate fair market value, on the date of exercise, equal to the aggregate
exercise price of all options being exercised, or with any combination of cash,
certified check or shares of Common Stock.
A person entitled to receive Common Stock upon the exercise of an
option shall not have the rights of a stockholder with respect to such shares of
Common Stock until the date of issuance of a stock certificate to him for such
shares; provided, however, that until such stock certificate is issued, any
option holder using previously acquired shares of Common Stock in payment of an
option exercise price shall continue to have the rights of a stockholder with
respect to such previously acquired shares.
In no case may a fraction of a share of Common Stock be purchased or
issued under the Plan.
8. TERMINATION OF RELATIONSHIP WITH COMPANY. Any holder of a Key
Employee Option whose employment with the Company (and its Parent and
Subsidiaries), and any holder of an Outside Director Option whose status as a
director of the Company, has terminated for any reason other than his death or
Disability (as defined in Paragraph 18) may exercise such option, to the extent
exercisable on the date of such termination, at any time within three months
after the date of termination, but not thereafter and in no event after the date
the option would otherwise have expired; provided, however, that if his
employment or status as a director shall be terminated either (a) for cause, or
(b) without the consent of the Company, said option shall terminate immediately.
Key Employee Options granted under the Plan shall not be affected by any change
in the status of the holder so long as he continues to be a full-time employee
of the Company, its Parent or any of the Subsidiaries (regardless of having been
transferred from one corporation to another).
Nothing in the Plan or in any option granted under the Plan shall
confer on any individual any right to continue in the employ of the Company, its
Parent or any of its Subsidiaries, or as a director of the Company, or interfere
in any way with the right of the Company, its Parent or
-4-
<PAGE>
any of its Subsidiaries to terminate the employee's employment at any time
for any reason whatsoever without liability to the Company, its Parent or any
of its Subsidiaries.
9. DEATH OR DISABILITY OF AN OPTIONEE. If an optionee dies (a)
while he is employed by the Company, its Parent or any of its Subsidiaries, or
while he is a director of the Company, (b) within three months after the
termination of such relationship (unless such termination was for cause or
without the consent of the Company) or (c) within one year following the
termination of such relationship by reason of Disability, the Key Employee
Options and Outside Director Options, respectively, may be exercised, to the
extent exercisable on the date of his death, by his executor, administrator or
other person at the time entitled by law to his rights under such option, at any
time within one year after death, but not thereafter and in no event after the
date the option would otherwise have expired.
Any optionee whose employment or status as a director has terminated
by reason of Disability may exercise his Key Employee Options and Outside
Director Options, respectively, to the extent they are exercisable upon the
effective date of such termination, at any time within one year after such date,
but not thereafter and in no event after the date the option would otherwise
have expired.
10. COMPLIANCE WITH SECURITIES LAWS. The Committee may require, in
its discretion, among other things, as a condition to the exercise of any option
that either (a) a Registration Statement under the Securities Act of 1933, as
amended (the "Securities Act"), with respect to the shares of Common Stock to be
issued upon such exercise shall be effective and current at the time of
exercise, or (b) there is an exemption from registration under the Securities
Act for the issuance of shares of Common Stock upon such exercise. Nothing
herein shall be construed as requiring the Company to register shares subject to
any option under the Securities Act.
The Committee may require the optionee to execute and deliver to the
Company his representation and warranty, in form and substance satisfactory to
it, that the shares of Common Stock to be issued upon the exercise of the option
are being acquired by the optionee for his own account, for investment only and
not with a view to the resale or distribution thereof. In addition, the
Committee may require the optionee to represent and warrant in writing that any
subsequent resale or distribution of shares of Common Stock by such optionee
will be made only pursuant to (i) a Registration Statement under the Securities
Act which is effective and current with respect to the shares of Common Stock
being sold, or (ii) a specific exemption from the registration requirements of
the Securities Act, but in claiming such exemption, the optionee shall, at the
request of the Committee and prior to any offer of sale or sale of such shares
of Common Stock, provide the Company with a favorable written opinion of
counsel, in form and substance satisfactory to the Company, as to the
applicability of such exemption to the proposed sale or distribution.
11. STOCK OPTION CONTRACTS. Each option shall be evidenced by an
appropriate Contract which shall be duly executed by the Company and the
optionee, and shall contain such terms and conditions not inconsistent herewith
as may be determined by the Committee.
-5-
<PAGE>
12. ADJUSTMENTS UPON CHANGES IN COMMON STOCK. Notwithstanding any
other provisions of the Plan, in the event of any change in the outstanding
Common Stock by reason of a stock dividend, recapitalization, merger or
reorganization, split-up, combination or exchange of shares or the like, (a) the
aggregate number and kind of shares subject to the Plan, (b) the aggregate
number and kind of shares subject to each outstanding option and the exercise
price thereof and (c) the aggregate number and kind of shares to be granted
pursuant to Paragraph 4 to directors who are not employees of the Company shall
each be appropriately adjusted by the Committee, whose determination shall be
conclusive.
13. AMENDMENTS AND TERMINATION OF THE PLAN. The Plan was adopted by
the Board of Directors of the Company on May 1, 1992. No option may be granted
under the Plan after April 30, 2002. The Board of Directors, without further
approval of the Company's stockholders, may at any time and from time to time
suspend or terminate the Plan, in whole or in part, or amend it from time to
time in such respects as it may deem advisable, including without limitation, in
order that ISOs granted hereunder meet the requirements for "incentive stock
options" under the Code, to comply with applicable requirements of the
Securities Act and the Exchange Act, or to conform to any change in applicable
law or to regulations or rulings of administrative agencies; provided, however,
that no amendment shall be effective without the requisite prior or subsequent
stockholder approval which would (a) except as contemplated in Paragraph 12,
increase the maximum number of shares of Common Stock for which options may be
granted under the Plan, (b) materially increase the benefits to participants
under the Plan or (c) change the eligibility requirements for individuals
entitled to receive options hereunder. Notwithstanding the foregoing, the
provisions regarding the selection of directors for participation in, and the
amount, the price or the timing of, Outside Director Options shall not be
amended more than once every six months, other than to comport with changes in
the Code, the Employee Retirement Income Security Act or the rules thereunder.
No termination, suspension or amendment of the Plan shall, without the consent
of the holder of an existing option affected thereby, adversely affect his
rights under such option. The power of the Committee to construe and administer
any options granted under the Plan prior to the termination or suspension of the
Plan nevertheless shall continue after such termination or during such
suspension.
14. NON-TRANSFERABILITY OF OPTIONS. No option granted under the Plan
shall be transferable otherwise than by will or the laws of descent and
distribution, and options may be exercised, during the lifetime of the holder
thereof, only by him or his legal representatives. Except to the extent
provided above, options may not be assigned, transferred, pledged, hypothecated
or disposed of in any way (whether by operation of law or otherwise) and shall
not be subject to execution, attachment or similar process.
15. WITHHOLDING TAXES. The Company may withhold cash and/or shares
of Common Stock to be issued to the optionee having an aggregate fair market
value equal to the amount which it determines is necessary to satisfy its
obligation to withhold Federal, state and local income taxes or other taxes
incurred by reason of the grant or exercise of an option, its disposition, or
the disposition of the underlying shares of Common Stock. Alternatively, the
Company may
-6-
<PAGE>
require the holder to pay to the Company such amount, in cash, promptly upon
demand. The Company shall not be required to issue any shares of Common
Stock pursuant to any such option until all required payments have been made.
Fair market value of the shares of Common Stock shall be determined in
accordance with Paragraph 5.
16. LEGENDS; PAYMENT OF EXPENSES. The Company may endorse such
legend or legends upon the certificates for shares of Common Stock issued upon
exercise of an option under the Plan and may issue such "stop transfer"
instructions to its transfer agent in respect of such shares as it determines,
in its discretion, to be necessary or appropriate to (a) prevent a violation of,
or to perfect an exemption from, the registration requirements of the Securities
Act, (b) implement the provisions of the Plan or any agreement between the
Company and the optionee with respect to such shares of Common Stock, or (c)
permit the Company to determine the occurrence of a "disqualifying disposition,"
as described in Section 421(b) of the Code, of the shares of Common Stock
transferred upon the exercise of an ISO granted under the Plan.
17. SUBSTITUTIONS AND ASSUMPTIONS OF OPTIONS OF CERTAIN CONSTITUENT
CORPORATIONS. Anything in this Plan to the contrary notwithstanding, the
Committee may, without further approval by the stockholders, substitute new
options for prior options of a Constituent Corporation (as defined in Paragraph
18) or assume the prior options of such Constituent Corporation.
18. DEFINITIONS.
a. Subsidiary. The term "Subsidiary" shall have the same
definition as "subsidiary corporation" in Section 424(f) of the Code.
b. Parent. The term "Parent" shall have the same definition as
"parent corporation" in Section 424(e) of the Code.
c. Constituent Corporation. The term "Constituent Corporation"
shall mean any corporation which engages with the Company, its Parent or any
Subsidiary in a transaction to which Section 424(a) of the Code applies (or
would apply if the option assumed or substituted were an ISO), or any Parent or
any Subsidiary of such corporation.
d. Disability. The term "Disability" shall mean a permanent
and total disability within the meaning of Section 22(e)(3) of the Code.
e. Key Employee Option. The term "Key Employee Option" shall
mean an option granted pursuant to the Plan to a person who, at the time of
grant, is a key employee of the Company or a Subsidiary of the Company.
-7-
<PAGE>
f. Outside Director Option. The term "Outside Director Option"
shall mean a NQSO granted pursuant to the Plan to a person who, at the time of
grant, is a director of the Company but is not an employee of the Company or any
of its Subsidiaries.
19. STOCKHOLDER APPROVAL. The Plan shall be subject to approval by a
majority of the votes present in person or by proxy at the next meeting of its
stockholders at which a quorum is present. No options granted hereunder may be
exercised prior to such approval, provided that the date of grant of any options
granted hereunder shall be determined as if the Plan had not been subject to
such approval. Notwithstanding the foregoing, if the Plan is not approved by a
vote of the stockholders of the Company on or before May 1, 1993, the Plan and
any options granted hereunder shall terminate.
-8-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> AUG-31-1997
<PERIOD-START> SEP-01-1996
<PERIOD-END> FEB-28-1997
<CASH> 32
<SECURITIES> 0
<RECEIVABLES> 7,393
<ALLOWANCES> 435
<INVENTORY> 0
<CURRENT-ASSETS> 8,900
<PP&E> 122,527
<DEPRECIATION> 73,496
<TOTAL-ASSETS> 62,494
<CURRENT-LIABILITIES> 16,567
<BONDS> 35,884
0
0
<COMMON> 27
<OTHER-SE> 18,263
<TOTAL-LIABILITY-AND-EQUITY> 62,494
<SALES> 31,370
<TOTAL-REVENUES> 31,370
<CGS> 25,253
<TOTAL-COSTS> 25,253
<OTHER-EXPENSES> 5,889
<LOSS-PROVISION> (118)
<INTEREST-EXPENSE> 1,774
<INCOME-PRETAX> 382
<INCOME-TAX> 19
<INCOME-CONTINUING> 363
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 363
<EPS-PRIMARY> .13
<EPS-DILUTED> 0
</TABLE>
