<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
----------
FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1998
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 1-8789
AMERICAN SHARED HOSPITAL SERVICES
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
CALIFORNIA 94-2918118
------------------------------- ------------------------------------
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
FOUR EMBARCADERO CENTER, SUITE 3620, SAN FRANCISCO, CALIFORNIA 94111
- -------------------------------------------------------------- ----------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (415) 788-5300
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL
REPORTS REQUIRED TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS. YES X NO
AS OF NOVEMBER 6, 1998: THERE ARE OUTSTANDING 4,769,384 SHARES OF THE
REGISTRANT'S COMMON STOCK.
<PAGE> 2
AMERICAN SHARED HOSPITAL SERVICES
PART I - FINANCIAL INFORMATION - CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(unaudited) (audited)
ASSETS Sept. 30, 1998 Dec. 31, 1997
-------------- -------------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 106,000 $ 17,000
Restricted cash 1,028,000 651,000
Receivables, less allowance for
uncollectible accounts of $1,465,000
($1,302,000 in 1997)
Trade accounts receivable 6,909,000 6,658,000
Other 566,000 472,000
------------ ------------
7,475,000 7,130,000
Prepaid expenses, inventories and other
current assets 639,000 708,000
------------ ------------
TOTAL CURRENT ASSETS 9,248,000 8,506,000
Property and equipment:
Land, buildings & improvements 1,622,000 1,572,000
Medical, transportation & office equipment 19,275,000 12,202,000
Capitalized leased medical and
transportation equipment 27,011,000 26,410,000
Deposits and construction in progress 1,103,000 1,901,000
------------ ------------
49,011,000 42,085,000
Accumulated depreciation & amortization (26,397,000) (21,983,000)
------------ ------------
Net property & equipment 22,614,000 20,102,000
Other assets 1,497,000 563,000
Intangible assets, less accumulated amortization 888,000 1,038,000
------------ ------------
TOTAL ASSETS $ 34,247,000 $ 30,209,000
============ ============
LIABILITIES AND
STOCKHOLDERS' EQUITY (unaudited) (audited)
(NET CAPITAL DEFICIENCY) Sept. 30, 1998 Dec. 31, 1997
------------ ------------
Current liabilities:
Accounts payable $ 7,246,000 $ 3,693,000
Accrued interest 90,000 32,000
Employee compensation and benefits 1,162,000 1,050,000
Other accrued liabilities 1,067,000 841,000
Current portion of long-term debt 7,919,000 4,784,000
Current portion of obligations
under capital leases 6,005,000 6,145,000
------------ ------------
TOTAL CURRENT LIABILITIES 23,489,000 16,545,000
Long-term debt, less current portion 11,619,000 11,936,000
Obligations under capital leases,
less current portion 6,024,000 9,633,000
Deferred gain on early lease termination 263,000 296,000
Deferred income taxes 164,000 164,000
Minority interest 685,000 588,000
Stockholders' equity (net capital deficiency):
Common stock, without par value:
authorized shares - 10,000,000; issued
& outstanding shares, 4,769,000
in 1998 and 1997 11,089,000 11,089,000
Common stock options issued to officer 2,414,000 2,414,000
Additional paid-in capital 930,000 930,000
Accumulated deficit (22,430,000) (23,386,000)
------------ ------------
Total stockholders' equity
(net capital deficiency) (7,997,000) (8,953,000)
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS'
EQUITY (NET CAPITAL DEFICIENCY) $ 34,247,000 $ 30,209,000
============ ============
</TABLE>
See Accompanying Notes
<PAGE> 3
AMERICAN SHARED HOSPITAL SERVICES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months ended September 30 Nine Months ended September 30
-------------------------------- --------------------------------
1998 1997 1998 1997
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
REVENUES:
Medical services $ 10,402,000 $ 9,361,000 $ 29,581,000 $ 27,702,000
COSTS AND EXPENSES:
Costs of operations:
Medical services payroll 2,080,000 1,943,000 6,098,000 5,747,000
Maintenance and supplies 1,582,000 1,499,000 4,489,000 4,458,000
Depreciation and amortization 1,650,000 1,524,000 4,604,000 4,793,000
Equipment rental 1,239,000 637,000 3,341,000 1,930,000
Other 1,183,000 1,172,000 3,418,000 3,362,000
------------ ------------ ------------ ------------
7,734,000 6,775,000 21,950,000 20,290,000
Selling and administrative 1,274,000 1,478,000 4,095,000 4,428,000
Interest 910,000 871,000 2,637,000 2,797,000
------------ ------------ ------------ ------------
Total costs and expenses 9,918,000 9,124,000 28,682,000 27,515,000
Gain on sale of assets and
early termination of capital leases 18,000 178,000 114,000 705,000
Interest and other income (expense) (45,000) 41,000 (50,000) 135,000
------------ ------------ ------------ ------------
Income before income taxes 457,000 456,000 963,000 1,027,000
Income tax expense 6,000 10,000 7,000 10,000
------------ ------------ ------------ ------------
Net income $ 451,000 $ 446,000 $ 956,000 $ 1,017,000
============ ============ ============ ============
Net income per share:
Net income per common share $ 0.09 $ 0.09 $ 0.20 $ 0.21
Net income per common
share assuming dilution $ 0.07 $ 0.07 $ 0.15 $ 0.16
</TABLE>
See Accompanying Notes
-3-
<PAGE> 4
AMERICAN SHARED HOSPITAL SERVICES
Condensed Consolidated Statement of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Nine Months ended September 30
------------------------------
1998 1997
----------- -----------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 956,000 $ 1,017,000
Adjustment to reconcile net income to net cash
provided by (used in) operating activities:
Loss (gain) on sale of assets 5,000 (155,000)
Gain on early termination of capital leases (119,000) (551,000)
Depreciation and amortization 4,835,000 5,055,000
Changes in operating assets and liabilities:
(Increase) in restricted cash (377,000) (489,000)
(Increase) decrease in accounts receivable (345,000) 115,000
Decrease in prepaid expenses, inventories and other assets 69,000 52,000
Increase in accounts payable and accrued liabilities 3,949,000 1,013,000
----------- -----------
Net cash provided by operating activities 8,973,000 6,057,000
INVESTING ACTIVITIES:
Purchase of property and equipment (net of financing) 481,000 (237,000)
Deposits on Gamma Knife units (500,000) 0
Proceeds from sale of property and equipment 3,000 56,000
Deferred costs on potential sale of subsidiaries (1,024,000) 0
Increase (decrease) in minority interest 97,000 (39,000)
Other 85,000 (75,000)
----------- -----------
Net cash used in investing activities (858,000) (295,000)
FINANCING ACTIVITIES:
Net (payments) proceeds under revolving line of credit (1,072,000) 543,000
Principal payments on long-term debt and capitalized leases (6,954,000) (6,650,000)
----------- -----------
Net cash used in financing activities (8,026,000) (6,107,000)
----------- -----------
Net increase (decrease) in cash and cash equivalents 89,000 (345,000)
Cash and cash equivalents at beginning of period 17,000 368,000
----------- -----------
Cash and cash equivalents at end of period $ 106,000 $ 23,000
=========== ===========
SUPPLEMENTAL CASH FLOW DISCLOSURE:
Cash paid during the period for:
Interest $ 2,579,000 $ 2,787,000
=========== ===========
Income taxes $ 30,000 $ 25,000
=========== ===========
</TABLE>
See Accompanying Notes
-4-
<PAGE> 5
AMERICAN SHARED HOSPITAL SERVICES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Note 1. Basis of Presentation
In the opinion of management, the accompanying unaudited condensed consolidated
financial statements contain all adjustments (consisting of only normal
recurring accruals) necessary to present fairly American Shared Hospital
Services' (the "Company") consolidated financial position as of September 30,
1998 and the results of its operations for the three and nine month periods
ended September 30, 1998 and 1997, which results are not necessarily indicative
of results on an annualized basis. Consolidated balance sheet amounts as of
December 31, 1997 have been derived from audited financial statements. These
financial statements include the accounts of the Company and its wholly- owned
subsidiaries: CuraCare, Inc.; MMRI, Inc.; European Shared Medical Services
Limited; American Shared Radiosurgery Services; African American Church Health
and Economic Services, Inc.; ACHES Insurance Services, Inc.; and the Company's
majority-owned subsidiary, GK Financing, LLC. All significant intercompany
accounts have been eliminated.
At September 30, 1998, the Company had a working capital deficiency of
$14,241,000 and a net capital deficiency of $7,997,000. These conditions raise
substantial doubt about the Company's ability to continue as a going concern.
These financial statements do not include any adjustments to reflect the
possible future effects on the recoverability and classification of assets or
the amounts and classification of liabilities that may result from the possible
inability of the Company to continue as a going concern.
Note 2. Per Share Amounts
Per share information has been computed based on the weighted average number of
common shares and dilutive common share equivalents outstanding.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Medical Services revenues increased $1,041,000 and $1,879,000 for the three and
nine month periods ended September 30, 1998 from $9,361,000 and $27,702,000 for
the three and nine month periods ended September 30,1997. Revenues from Magnetic
Resonance Imaging (MRI) services increased $491,000 and $1,656,000 for the three
and nine month periods ended September 30, 1998 compared to the same periods in
the prior year. The increase reflects the addition of two MRI units and
performance of more diagnostic procedures per MRI unit due to enhanced sales and
marketing efforts.
Computed Tomography (CT) revenues decreased $201,000 and $735,000 for the three
and nine month periods ended September 30, 1998 compared to the same periods in
the prior year primarily due to the termination of one in-house customer
following the first quarter of 1997, and one less CT unit and fewer interim
rental customers in 1998. Nuclear Medicine and Ultrasound revenues decreased
$58,000 and $341,000 for the three and nine month periods ended September 30,
1998
-5-
<PAGE> 6
compared to the same periods in the prior year due primarily to the termination
of an in-house nuclear medicine contract in March, 1997 and one less mobile
SPECT unit in 1998.
Contract Service revenues consisting of respiratory therapy services and cardiac
catheterization laboratory revenues decreased $32,000 and increased $26,000 for
the three and nine month periods ended September 30, 1998 compared to the same
period in the prior year. The third quarter 1998 decrease was due to decreased
utilization at one of the Company's Cardiac Catheterization laboratories. The
nine month 1998 increase was due to increased revenues under the Company's
Respiratory Therapy contract.
Gamma Knife revenues increased $844,000 and $1,279,000 for the three and nine
month periods ended September 30, 1998 compared to the same periods in the prior
year. The revenue increase was due to the commencement of the Company's third
Gamma Knife unit in late September 1997, the Company's fourth Gamma Knife unit
in late March 1998, and the company's fifth Gamma Knife unit in July 1998. The
increase in revenues was partially offset by a volume associated rate decrease
on the Company's first Gamma Knife unit. The Company extended its first Gamma
Knife unit Agreement through September 2008. The Company has entered into Gamma
Knife agreements with five additional medical centers, which are expected to
become operational at various times during 1999.
Total costs of operations increased $959,000 and $1,660,000 for the three and
nine month periods ended September 30, 1998 compared to the same periods in the
prior year. Medical services payroll increased $137,000 and $351,000 for the
three and nine month periods ended September 30, 1998 compared to the same
periods in the prior year. The increase is primarily attributable to increased
MRI staffing due to an increase in MRI units and utilization. Maintenance and
supplies increased $83,000 and $31,000 for the three and nine month periods
ended September 30, 1998 compared to the same periods in the prior year
primarily due to an increase in MRI units. Depreciation and amortization
increased $126,000 and decreased $189,000 for the three and nine month periods
ended September 30, 1998 compared to the same periods in the prior year. The
increase in third quarter 1998 is primarily attributable to the increase in
Gamma Knife units. The nine month 1998 decrease reflects fewer MRI units
accounted for as capitalized leases in 1998. Equipment rental increased $602,000
and $1,411,000 for the three and nine month periods ended September 30, 1998
compared to the same period in the prior year. The increase is primarily due to
two replacements and three new MRI units accounted for as operating leases
during 1998 and fourth quarter 1997. Other operating costs increased $11,000 and
$56,000 for the three and nine month periods ended September 30, 1998 compared
to the same periods in the prior year. The increase is primarily due to
increased marketing costs related to the Gamma Knife units and increased
insurance costs.
Selling and Administrative costs decreased $204,000 and $333,000 for the three
and nine month periods ended September 30, 1998 compared to the same periods in
the prior year. The decrease was primarily due to decreased salary, investor
relations and legal expenses.
Interest expense increased $39,000 and decreased $160,000 for the three and nine
month periods ending September 30, 1998 compared to the same periods in the
prior year. The increase in the third quarter is primarily due to the addition
of three Gamma Knife units. The nine month decrease was the result of decreased
capitalized lease related interest.
-6-
<PAGE> 7
Gain (loss) on sale of assets and early termination of capital leases decreased
in the third quarter from a gain of $178,000 to a gain of $18,000 and in the
nine month period from a gain of $705,000 to a gain of $114,000, as compared to
the three and nine month periods ended September 30, 1997. The 1997 gains were
the result of a gain on the early termination of a capital lease ($141,000) when
the customer's in-house nuclear medicine contract was terminated during March of
1997, an insurance settlement ($388,000) following the loss of a mobile MRI Unit
in an accident during second quarter 1997, and a gain on the sale of another MRI
unit of $140,000. The gain in 1998 was primarily due to an early termination of
capital lease. The Company can experience material fluctuations in this item
depending on the timing of asset dispositions.
The Company had net income of $451,000 ($0.09 per common share) and $956,000
($0.20 per common share) for the three and nine month periods ended September
30, 1998 compared to net income of $446,000 ($0.09 per common share) and
$1,017,000 ($.21 per common share) for the same periods in the prior year.
LIQUIDITY AND CAPITAL RESOURCES
The Company had cash and cash equivalents of $106,000 at September 30, 1998
compared to $17,000 at December 31, 1997. The Company's cash position increased
$89,000 due primarily to the Company's extension of payment terms on certain
payables and leases. The Company's accounts payable increased due to costs
associated with the potential sale of subsidiaries ($1,024,000) in addition to
the extension of payment terms on certain payables and leases.
Restricted cash at September 30, 1998 and December 31, 1997 reflects cash that
may only be used for the operations of GK Financing, LLC ("GKF") without the
approval of both members. The increase of $377,000 in restricted cash is
primarily due to cash flow from Gamma Knife operations. The increase in minority
interest reflects that portion of profit attributable to the Company's minority
member in GKF.
On May 17, 1995, the Company repurchased (the "Notes Repurchase") for cash and
securities approximately 96% of its outstanding Senior Subordinated Notes
("Subordinated Notes"). The Notes Repurchase, together with a December 1994
lease restructuring and the availability of up to $8,000,000 of new debt
financing, concluded a broad restructuring of the Company's obligations as more
fully explained in the Company's 1996 Form 10-K.
On December 29, 1995 and March 1, 1996, the Company further restructured certain
of its medical equipment leases and related notes (the "GE Notes") to extend the
terms of the leases for periods of up to an additional 26 months, to defer
certain monthly lease payments and to defer certain installment payments due at
the beginning of 1996. This further restructuring resulted in payment reductions
of approximately $1,200,000 for the Company in 1996 and subsequent years.
The various restructuring transactions described above cured all of the
Company's then-outstanding defaults relating to its debt and lease obligations.
The Company nevertheless remains highly leveraged and has significant cash
payment requirements under its equipment leases and credit facilities. Scheduled
equipment capital lease payments and operating lease payments during the 12
months ending December 31, 1998 are $7,318,000 and $3,093,000, respectively,
with related maintenance commitments of approximately $1,916,000. Scheduled
interest and principal payments
-7-
<PAGE> 8
under the Company's other debt obligations during such period are approximately
$4,669,000 which excludes the Company's revolving line of credit balance of
$4,366,000 at September 30, 1998, which matures on May 31, 1999. Current portion
of long-term debt increased $3,135,000 in the third quarter 1998 due to a
reclassification of a portion of the revolving line of credit as a short term
obligation because it is now due in less than one year and the incurrence of
Gamma Knife related debt. Although the Company's operating performance has
improved, the Company is uncertain it will have the cash resources to pay all of
its obligations when they are due. Accordingly, the Company will continue its
program of expense reductions, revenue enhancements and asset sales as well as
refinancing or renegotiating the terms of its fixed obligations ("Program"). The
Company's ability to meet its obligations when due are dependent upon the
success of the Company's Program. The inability of the Company to meet its
obligations when due would result in a default which would permit the relevant
obligor to accelerate the obligations and seek other remedies including seizure
of the Company's medical imaging equipment. In such event, the Company would be
forced to seek liquidation under Chapter 7 or reorganization under Chapter 11 of
the United States Bankruptcy Code, if it could not satisfactorily restructure
its obligations with creditors outside of bankruptcy proceedings.
As part of the Program, the Company in March 1996 sold its Modesto buildings for
$650,000 in cash, and negotiated an increase in its working capital line of
credit to $5,500,000 and extended its maturity date by two years to May 31,
1999. The Company also completed in August 1996 an exchange offer (the "Exchange
Offer") for the Subordinated Notes. The purpose of the Exchange Offer was to
improve the Company's capital structure and relieve the Company of the
requirement to pay $836,000 of principal and interest in October, 1996 when the
Subordinated Notes were to mature. In the Exchange Offer, the Company issued
approximately 287,000 additional shares of Common Stock for $413,000 principal
amount of Subordinated Notes. The remaining $360,000 of the Subordinated Notes
was paid at maturity on October 16, 1996.
In the long term, the Company believes that it must respond to fundamental
changes in the industry. The medical diagnostic imaging business, both mobile
and fixed, is in a period of consolidation as a result of the growth of managed
care and other competitive forces. Smaller companies, such as the Company, must
either grow through acquisitions or become part of larger enterprises in order
to compete successfully and achieve acceptable returns for their shareholders.
In light of the unavailability of capital to the Company and continuing weakness
in the price of its common stock, the Company has been willing to entertain
acquisition offers. In late 1996 and early 1997, the Company unsuccessfully
pursued a merger with a larger industry participant. In late 1997, the Company
was approached by Alliance Imaging, Inc., another major industry participant,
with respect to a sale of the Company's medical diagnostic imaging business.
On March 12, 1998, the Company and MMRI, Inc. entered into a Securities Purchase
Agreement (the "Purchase Agreement") with Alliance Imaging, Inc., and two of its
subsidiaries (collectively, the "Purchaser"). Pursuant to the Purchase
Agreement, the Purchaser would acquire all of the outstanding common stock of
CuraCare, Inc. and all of the partnership interests in American Shared-CuraCare.
These entities together constitute the Company's diagnostic imaging business
through which it provides MRI, CT, Ultrasound, Nuclear Medicine services, as
well as Cardiac Catheterization Laboratory, and Respiratory Therapy services.
The purchase price is $13,552,000 in cash and the assumption by the Purchaser of
the liabilities of the Company's diagnostic imaging
-8-
<PAGE> 9
business, which at September 30, 1998 consisted of $20,851,000 in debt and
$7,642,000 in other liabilities.
The Company entered into the proposed transaction in response to the industry
trend toward consolidation, the increasingly difficult competitive environment
for smaller participants, such as the Company, and to provide capital for the
expansion of the Company's radiosurgery services business operated through its
81% interest in GK Financing, LLC. The proposed transaction is subject to
customary conditions, including receipt of regulatory approvals and the
approving vote of the holders of a majority of the Company's outstanding common
shares. The Company has scheduled a Special Meeting of Shareholders to be held
on November 13, 1998, to consider approval of the sale. The sale, if approved by
the holders of a majority of the Company's outstanding common shares, is
expected to close promptly after the Special Meeting of Shareholders. There can
be no assurance that the transaction will be consummated. If the transaction is
not consummated, the Company will continue to operate as an independent entity,
and will have to restructure its obligations with creditors or continue to face
the serious liquidity and other problems referred to above.
RECENT DEVELOPMENTS
On November 13, 1998, the shareholders approved and the Company consummated the
sale of its diagnostic imaging business pursuant to the Purchase Agreement.
Additional details regarding the transaction, including the number of votes in
favor and opposed, the consideration received and certain pro forma financial
information, will be provided in a Form 8-K, which will be filed by the Company
pursuant to the requirements of the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as amended.
-9-
<PAGE> 10
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
None.
Item 2. Changes in Securities
None.
Item 3. Defaults upon Senior Securities
None.
Item 4. Submission of Matters to a Vote of Securities Holders.
None.
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
The following exhibit is filed herewith:
<TABLE>
<CAPTION>
Exhibit
Number Description
------ -----------
<S> <C>
27 Financial Data Schedule
</TABLE>
(b) Reports on Form 8-K
None
-10-
<PAGE> 11
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.
AMERICAN SHARED HOSPITAL SERVICES
Registrant
Date: November 13, 1998 /s/ Ernest A. Bates, M.D.
------------------------------------
Ernest A. Bates, M.D.
Chairman of the Board and
Chief Executive Officer
Date: November 13, 1998 /s/Craig K. Tagawa
------------------------------------
Craig K. Tagawa
Senior Vice President
Chief Financial Officer
-11-
<PAGE> 12
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
Exhibit
Number Description
------ -----------
<S> <C>
27 Financial Data Schedule
</TABLE>
-12-
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 1,134
<SECURITIES> 0
<RECEIVABLES> 8,940
<ALLOWANCES> 1,465
<INVENTORY> 0
<CURRENT-ASSETS> 9,248
<PP&E> 49,011
<DEPRECIATION> 26,397
<TOTAL-ASSETS> 34,247
<CURRENT-LIABILITIES> 23,489
<BONDS> 17,643
0
0
<COMMON> 11,089
<OTHER-SE> 3,344
<TOTAL-LIABILITY-AND-EQUITY> 34,247
<SALES> 29,581
<TOTAL-REVENUES> 29,581
<CGS> 0
<TOTAL-COSTS> 21,950
<OTHER-EXPENSES> 4,095
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,637
<INCOME-PRETAX> 963
<INCOME-TAX> 7
<INCOME-CONTINUING> 956
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 956
<EPS-PRIMARY> .20
<EPS-DILUTED> .15
</TABLE>
