UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended December 31, 1996
____TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ TO _______
Commission File No. 0-4678
Pancho's Mexican Buffet, Inc.
(Exact name of registrant as specified in its charter)
DELAWARE 75-1292166
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3500 Noble Avenue, Fort Worth, Texas 76111
(Address of principal executive offices) (Zip Code)
817-831-0081
(Registrant's telephone number,
including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Sections 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
Number of shares of Common Stock outstanding as of February 3,
1996: 4,397,559.
<PAGE>
PANCHO'S MEXICAN BUFFET, INC. AND SUBSIDIARIES
INDEX
Page No.
Part I. Financial Information
Item 1. Financial Statements:
Introduction 1
Consolidated Condensed Balance Sheets,
December 31, 1996 and September 30, 1996 2
Consolidated Condensed Statements of
Operations for the Three-Months Ended
December 31, 1996 and 1995 3
Consolidated Condensed Statements of Cash
Flows for the Three-Months Ended
December 31, 1996 and 1995 4
Notes to Consolidated Condensed Financial
Statements 5
Independent Accountants' Review Report 6
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations 7
Part II. Other Information
Item 1. Legal Proceedings (no response required)
Item 2. Changes in Securities (no response required)
Item 3. Defaults Upon Senior Securities (no
response required)
Item 4. Submission of Matters to a Vote of
Security Holders (no response required)
Item 5. Other Information (no response required)
Item 6. Exhibits and Reports on Form 8-K 11
Signatures 12
<PAGE>
PANCHO'S MEXICAN BUFFET, INC. AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
The consolidated condensed financial statements included herein
have been prepared by the Company without audit as of December
31, 1996 and for the three-month periods ended December 31, 1996
and 1995 pursuant to the rules and regulations of the Securities
and Exchange Commission. Certain information and footnote
disclosures normally included in annual financial statements
prepared in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to such rules
and regulations, although the Company believes that the
disclosures are adequate to make the information presented not
misleading. It is suggested that these condensed financial
statements be read in conjunction with the consolidated
financial statements and the notes thereto included in the
Company's annual report on Form 10-K for the fiscal year ended
September 30, 1996. In the opinion of the Company, all
adjustments, consisting only of normal recurring adjustments,
necessary to present fairly the financial position of the
Company as of December 31, 1996, and the results of operations
and cash flows for the indicated periods have been included.
The results of operations for such interim periods are not
necessarily indicative of the results to be expected for the
fiscal year ending September 30, 1997.
Deloitte & Touche LLP, independent public accountants, has made
a limited review of the consolidated condensed financial
statements as of December 31, 1996 and for the three-month
periods ended December 31, 1996 and 1995 included herein.
page 1
<PAGE>
<TABLE>
PANCHO'S MEXICAN BUFFET, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
(UNAUDITED)
<CAPTION>
December 31, September 30,
1996 1996
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 177,000 $ 145,000
Accounts and notes receivable-current portion 306,000 254,000
Income taxes receivable 273,000 186,000
Inventories 655,000 640,000
Prepaid expenses 206,000 180,000
Deferred income taxes 194,000 206,000
Total current assets 1,811,000 1,611,000
PROPERTY, PLANT AND EQUIPMENT :
Land 3,446,000 3,446,000
Buildings 10,564,000 10,561,000
Leasehold improvements 22,568,000 22,532,000
Equipment and furniture 28,460,000 28,579,000
Construction in progress 7,000 7,000
Total 65,045,000 65,125,000
Less accumulated depreciation and amortization (33,114,000) (32,359,000)
Property, plant and equipment-net 31,931,000 32,766,000
OTHER ASSETS:
Deferred income taxes 3,052,000 2,811,000
Other, including noncurrent portion of receivables 759,000 780,000
Total other assets 3,811,000 3,591,000
TOTAL $ 37,553,000 $ 37,968,000
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 890,000 $ 1,273,000
Accrued wages and bonuses 1,728,000 1,485,000
Other current liabilities 1,705,000 1,398,000
Total current liabilities 4,323,000 4,156,000
OTHER LIABILITIES:
Long-term debt 3,518,000 3,489,000
Accrued insurance costs 3,950,000 3,802,000
Total other liabilities 7,468,000 7,291,000
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock
Common stock 440,000 440,000
Additional paid-in capital 18,633,000 18,633,000
Retained earnings 7,607,000 8,347,000
Cumulative foreign currency translation adjustment (455,000) (436,000)
Stock notes receivable (463,000) (463,000)
Stockholders' equity 25,762,000 26,521,000
TOTAL $ 37,553,000 $ 37,968,000
<FN>
See notes to consolidated condensed financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
PANCHO'S MEXICAN BUFFET, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
<CAPTION>
Three Months Ended
December 31,
1996 1995
<S> <C> <C>
SALES $ 16,574,000 $ 17,460,000
COSTS AND EXPENSES:
Food costs 4,616,000 4,967,000
Restaurant labor and related expenses 6,643,000 6,770,000
Restaurant operating expenses 4,068,000 3,863,000
Depreciation and amortization 934,000 1,014,000
General and administrative expenses 1,252,000 1,356,000
Total 17,513,000 17,970,000
OPERATING INCOME (LOSS) (939,000) (510,000)
INTEREST EXPENSE (77,000) (183,000)
OTHER, INCLUDING INTEREST INCOME 26,000 90,000
EARNINGS (LOSS) BEFORE INCOME TAXES (990,000) (603,000)
PROVISION (BENEFIT) FOR INCOME TAXES (316,000) (247,000)
NET EARNINGS (LOSS) $ (674,000) $ (356,000)
NET EARNINGS (LOSS) PER SHARE $ (0.15) $ (0.08)
<FN>
See notes to consolidated condensed financial statements.
</FN>
</TABLE>
<PAGE>
<TABLE>
PANCHO'S MEXICAN BUFFET, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<CAPTION>
Three Months Ended December 31,
1996 1995
<S> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings (loss) $ (674,000) $ (356,000)
Adjustments to reconcile net earnings (loss) to net
cash provided (used) by operating activities:
Restructuring charges
Depreciation and amortization 934,000 1,014,000
Provision (benefit) for deferred income taxes (229,000) 131,000
Amortization of restaurant start-up costs 0 14,000
Payment of restaurant start-up costs
(Gain) loss on sale of assets (11,000) (38,000)
Minority interest in net earnings (loss)
Changes in operating assets and liabilities:
Accounts and notes receivable (51,000) 40,000
Income taxes receivable (87,000) (391,000)
Inventories, prepaid expenses and other assets (38,000) 185,000
Accounts payable and accrued expenses 373,000 (693,000)
Total adjustments 891,000 262,000
Net cash provided (used) by operating activities 217,000 (94,000)
CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions (152,000) (206,000)
Proceeds from sale of assets 45,000 75,000
Net cash provided (used) by investing activities (107,000) (131,000)
CASH FLOWS FROM FINANCING ACTIVITIES:
Short-term borrowings, net (39,000) (24,000)
Long-term borrowings 6,900,000 7,487,000
Repayments of long-term borrowings (6,871,000) (7,472,000)
Dividends paid (66,000) (66,000)
Net cash provided (used) by financing activities (76,000) (75,000)
EFFECT OF FOREIGN EXCHANGE RATE
CHANGE ON CASH (2,000) (24,000)
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS 32,000 (324,000)
CASH AND CASH EQUIVALENTS,
BEGINNING OF PERIOD 145,000 1,199,000
CASH AND CASH EQUIVALENTS,
END OF PERIOD $ 177,000 $ 875,000
SUPPLEMENTAL INFORMATION:
Income taxes paid $ 14,000
Interest paid, net of capitalized amounts $ 84,000 183,000
<FN>
See notes to consolidated condensed financial statements.
</TABLE>
<PAGE>
PANCHO'S MEXICAN BUFFET, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
(Unaudited)
1. NET LOSS PER SHARE
Net loss per share is based on the weighted average number of
shares and equivalent shares (including stock options, when
dilutive) outstanding during each period. The weighted average
of such shares was 4,398,000 for both the three-months ended
December 31, 1996 and December 31, 1995.
2. LONG-TERM DEBT
The Company's revolving credit and term loan agreement ("Loan
Agreement") with a bank includes various financial covenants.
Due to the net loss incurred by the Company in the current
quarter, the Company violated a covenant. The bank has
subsequently granted a permanent waiver for this covenant
violation. The requirement to comply with an earnings-related
covenant has been suspended by the bank through May 1997.
In February 1997, the Company reached an agreement with the Bank
to amend the Loan Agreement limit-reduction schedule and
covenants. Under the amended agreement, the credit line limit
is $4.5 million until June 30, and is reduced by $500,000 then
and each subsequent quarter end. The termination date is
January 31, 1998. Cash capital expenditures are limited by the
amendment to $500,000 each of the first three fiscal quarters
and $1,900,000 for the fiscal year. Cash dividends are limited
to $150,000 per fiscal year, respectively.
At December 31, 1996, the Company had $1,020,000 of credit
available under the bank line of credit.
3. CASH DIVIDEND
On October 18, 1996, the Company's board of directors declared a
$.015 per common share semi-annual cash dividend. The dividend
was paid on December 10, 1996 to holders of record on November
26, 1996.
<PAGE>
INDEPENDENT ACCOUNTANTS' REVIEW REPORT
Pancho's Mexican Buffet, Inc.:
We have reviewed the accompanying consolidated condensed balance
sheet of Pancho's Mexican Buffet, Inc. and subsidiaries as of
December 31, 1996 and the related consolidated condensed
statements of operations and cash flows for the three-month
periods ended December 31, 1996 and 1995. These consolidated
condensed financial statements are the responsibility of the
Company's management.
We conducted our review in accordance with standards established
by the American Institute of Certified Public Accountants. A
review of interim financial information consists principally of
applying analytical review procedures to financial data and of
making inquiries of persons responsible for financial and
accounting matters. It is substantially less in scope than an
audit in accordance with generally accepted auditing standards,
the objective of which is the expression of an opinion regarding
the financial statements taken as a whole. Accordingly, we do
not express such an opinion.
Based on our review, we are not aware of any material
modifications that should be made to the consolidated condensed
financial statements referred to above for them to be in
conformity with generally accepted accounting principles.
We previously audited, in accordance with generally accepted
auditing standards, the consolidated balance sheet as of
September 30, 1996, and the related consolidated statements of
operations, stockholders' equity and cash flows for the year
then ended (not presented herein), and in our report dated
November 13, 1996 (December 16, 1996 as to the second paragraph
of Note 3 to those statements), we expressed an unqualified
opinion on those consolidated financial statements. In our
opinion, the information set forth in the accompanying
consolidated condensed balance sheet as of September 30, 1996,
is fairly stated in all material respects in relation to the
consolidated balance sheet from which it has been derived.
DELOITTE & TOUCHE LLP
Fort Worth, Texas
January 20, 1997
(February 11, 1997 as to Note 2)
<PAGE>
PART I. FINANCIAL INFORMATION
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
Financial Condition
As of December 31, 1996, the Company's current ratio was 0.4 to
1, unchanged from September 30, 1996. Cash and cash equivalents
increased $32,000 during the three-month period to a balance of
$177,000 at December 31, 1996, as cash provided by operations
was mostly offset by property additions and dividend payments.
Operating activities provided $217,000 cash for the three-month
period ended December 31, 1996, compared to using net cash of
$94,000 for the same period last year. The Company incurred a
net loss of $674,000 in the first quarter of fiscal 1996, versus
a net loss of $356,000 a year earlier. Operating cash flow
increased due largely to the increase in accrued liabilities,
primarily payroll-related liabilities due to the timing of
payday.
Investing activities used $107,000 of cash in the current
quarter, primarily for remodeling existing restaurants. In the
first quarter of fiscal 1996, investing activities used $131,000
for remodeling of existing restaurants and completion of the
Guadalajara restaurant, which opened in October 1995. No other
locations have been opened since.
Financing activities used cash of $76,000 and $75,000 during the
first quarter of fiscal 1997 and 1996, respectively, due
primarily to the payment of a cash dividend of $66,000 in each
quarter.
No new restaurants are currently planned, as management intends
to focus on improving sales and profitability and reducing debt.
Capital expenditures to remodel existing restaurants and to
install restaurant computer systems will continue within the
constraint of available operating cash flow and the loan
agreement restrictions (see Note 2 to the consolidated condensed
financial statements). The Company may also enter into lease
agreements to acquire restaurant computer systems.
The Company's revolving credit and term loan agreement ("Loan
Agreement") with a bank includes various financial covenants.
As a result of the net losses incurred by the Company in the
current quarter, the Company violated a covenant. The bank has
subsequently granted a permanent waiver for this covenant
violation. The requirement to comply with an earnings-related
covenant has been suspended by the bank through May 1997
In February 1997, the Company reached an agreement with the Bank
to amend the Loan Agreement limit-reduction schedule and
covenants. Under the amended agreement, the credit line limit
is $4.5 million until June 30, and is reduced by $500,000 then
and each subsequent quarter end. The termination date is
January 31, 1998. Cash capital expenditures are limited by the
amendment to $500,000 each of the first three fiscal quarters
and $1,900,000 for the fiscal year. Cash dividends are limited
to $150,000 per fiscal year, respectively.
At December 31, 1996, the Company had $1,020,000 of credit
available under the bank line of credit.
Management is taking steps to ensure that the Company will be
able to comply with all of its covenants under the Loan
Agreement in the future. However, if the bank declined to waive
a future covenant violation, the bank would be required under
the Loan Agreement to give the Company 15 days written notice of
the violation, after which time the Company would be in default.
At the bank's option, it could then declare the loan principal
and all accrued interest current and payable and/or refuse to
make additional advances on the credit line. The Company could
then be forced to seek alternative sources of financing.
On October 18, 1996, the Company's board of directors declared a
$.015 per common share semi-annual cash dividend. The dividend
was paid on December 10, 1996 to holders of record on November
26, 1996. Future cash dividends will depend on earnings,
financial position, capital requirements and other relevant
factors.
The Company believes it will realize substantial benefits from
the use of federal employer tax credits and state net operating
loss (NOL) carryforwards to reduce future federal and state
income tax liabilities. If the Company's results of operations
continue to decline or do not timely achieve levels needed to
use the employer tax credits or the state NOL carryforwards,
they could expire before use, resulting in a charge against
income.
Results of Operations
Sales decreased $886,000 (5.1%) for the three-months ended
December 31, 1996 compared to the same period last year. The
decrease is due to 5% lower same-store sales. Average sales for
restaurants open throughout the current three-month period were
$255,000 compared to $270,000 for the same period a year ago.
The 5.7% decrease in average-store sales is less severe than the
7.5% decrease in the first quarter of fiscal 1996. The company
is addressing sales with a focused neighborhood marketing
program which includes detailed market research and analysis and
intensive planning and training. The implementation stage is
scheduled to begin in March 1997.
With effective purchasing and menu management, the Company was
able to reduce food costs 0.5% of sales for the current quarter
versus the quarter ended December 31, 1995.
Restaurant labor and related expenses increased 1.3% of sales
for the current quarter compared to the same period in fiscal
1996. The increase was caused by the combination of the higher
federal minimum wage and lower sales.
Restaurant operating expenses increased 2.4% of sales for the
current three-month period versus the same quarter last year.
The Company spent $200,000 more on marketing this year,
primarily for newspaper ads and other costs related to price
promotions. These costs and the additional costs of market
research and consulting were partially offset by the elimination
of broadcast advertising. The remainder of the increase in
operating costs as a percentage of sales is due to the effect of
lower sales on relatively fixed costs such as occupancy costs,
utilities and other operating expenses.
Depreciation and amortization decreased $80,000 for the
three-months ended December 31, 1996 compared to the prior year
due to limited capital additions in the current quarter.
General and administrative expenses decreased 0.2% of sales
versus the prior year quarter due to staff reductions and other
cost cutting measures.
Interest expense decreased $106,000 for the current quarter
compared to the same period in fiscal 1996 due to lower debt
levels.
The benefit for income taxes was $316,000 for the quarter, an
effective rate of 32%, versus an effective rate of 41% for
fiscal year 1996. The current year benefit rate is low because
no tax benefit is realized for losses in the Mexico operations,
and the prior year benefit was high due to additional federal
refunds receivable.
Due to lower sales and other factors discussed above, the
Company reported a net loss of $674,000 for the quarter ended
December 31, 1996 versus a net loss of $356,000 for the same
period last year. The restaurant industry is intensely
competitive, and the Company's future earnings depend largely on
reversing the trend of declining unit sales.
Other Uncertainties and Trends
The Company opened its first foreign restaurant in Guadalajara,
Mexico near the end of October 1995. Sales, operating results
and cash flow have been below expectations.
Mexico is currently experiencing an economic crisis stemming
from the December 1994 devaluation of the Mexican peso.
Management believes that the economic difficulties in Mexico
will have a long-term negative impact on the Company's
Guadalajara restaurant, and, accordingly, an impairment charge
of $812,000 was recorded during the quarter ended June 30, 1995.
However, the long-term impact of this economic crisis on the
Company's restaurant operations is difficult to estimate. The
Company has invested about $2.1 million in this restaurant and
related operations, and expects that some additional investment
may be required. If the restaurant continues to incur negative
cash flows or operating losses, more operating, impairment or
restaurant closing losses may be recognized in future periods.
Future Company restaurant development in Mexico depends on the
success of the Guadalajara restaurant.
An economy with cumulative inflation over a three-year period of
100% or more is deemed to be highly-inflationary for accounting
purposes as defined by Statement of Financial Accounting
Standards (SFAS) No. 52. The Mexican economy is expected to be
deemed highly-inflationary in 1997 based on the SFAS No. 52
guidelines. Under SFAS No. 52, future gains and losses from
foreign currency exchange rate changes in a highly-inflationary
economy would flow through the income statement.
SFAS No. 121 requires the company to review long-lived assets
for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset or a group of
assets may not be recoverable. The Company considers a history
of operating losses or negative cash flows to be its main
indicators of potential impairment. Assets are generally
evaluated for impairment at the restaurant level. If a
restaurant continues to incur negative cash flows or operating
losses, an impairment or restaurant closing charge may be
recognized in future periods.
Special Note Regarding Forward-Looking Information
The foregoing section contains various forward-looking
statements which represent the Company's expectations or beliefs
concerning future events, including, but not limited to the
following: statements regarding unit growth, future capital
expenditures, future borrowings, future cash flow and future
results of operations. The Company warns that many factors
could, individually or in aggregate, cause actual results to
differ materially from those included in the forward-looking
statements, including, without limitation, the following:
consumer spending trends and habits; increased competition in
the restaurant industry; weather conditions; and laws and
regulations affecting labor and employee benefit costs.
<PAGE>
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits Required by Item 601 of Regulation S-K
Exhibit
Number
2 Not applicable
4 Not applicable
10(x) Amendment to Revolving Credit and Term Loan
Agreement, dated February 11, 1997 -- filed herewith.
11 Not required--explanation of net earnings (loss) per
share computation is contained in notes to consolidated
condensed financial statements.
15 Letter re: unaudited interim financial
information
18 Not applicable
19 Not applicable
22 Not applicable
23 Not applicable
24 Not applicable
27 Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended
December 31, 1996.
<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.
PANCHO'S MEXICAN BUFFET, INC.
February 13, 1997 /s/Hollis Taylor
Hollis Taylor, President and Chief Executive Officer
(Principal Executive Officer)
February 13, 1997 /s/W. Brad Fagan
Brad Fagan, Vice President, Treasurer, Controller and
Assistant Secretary (Principal Financial and
Accounting Officer)
<PAGE>
EXHIBIT 10(x)
February 11, 1997
W. Brad Fagan
Vice President, Treasurer
Pancho's Mexican Buffet
3500 Noble Avenue
Fort Worth, TX 76111-0407
Re: Revolving Credit and Term Loan Agreement ("Agreement")
dated as of February 16, 1994, as amended by and between PMB
Enterprises West, Inc. ("Borrower") and Wells Fargo Bank
("Texas"), National Association, formerly First Interstate Bank
of Texas, N.A. ("Bank").
Dear Brad:
This letter will constitute an amendment to the Agreement. The
changes to the Agreement and the effective dates, thereof, are
as follows:
Quarterly Commitment Reduction - March 31, 1997 commitment
reduction is waived, beginning with June 30, 1997 the
commitment will be reduced by $500,000 and by the same amount
for each quarter thereafter.
Section 9.10 - EBITDA Covenant. EBITDA (Operating Income plus
Depreciation and Amortization), on a rolling 3 months,
calculated monthly must be greater than or equal to the
following: for the months January 1997 through and including
May 1997 the covenant is not required; thereafter the
requirement will be $500,000. The effective date is January
31, 1997.
Section 3 of the Agreement is hereby amended as follows:
"Termination Date" shall mean (i) January 31, 1998, or (ii)
such later date to which the Revolving Credit Period is
extended pursuant to section 2.01(b) in the Agreement.
By executing this amendment, the Borrower warrants and
represents that it is not in default of any of the terms under
this Agreement as amended by this letter. The above amendments
are the ONLY changes to the Agreement. The Bank reserves all
its rights and remedies under the Agreement.
Please execute the letter by signing in the "Acceptance" space
indicated on this page and return the original to me. Please
make a copy for your files.
Very Truly Yours,
/s/Susan B. Sheffield
Susan B. Sheffield
Vice President
Accepted and Agreed upon:
By: /s/ W. Brad Fagan
Title: VP - Treasurer & Controller
Company: PMB Enterprises West Inc. & Pancho's Mexican Buffet,
Inc.
Date: 2-12-97
<PAGE>
EXHIBIT 15
Pancho's Mexican Buffet, Inc.:
We have reviewed in accordance with standards established by the
American Institute of Certified Public Accountants the unaudited
interim financial information of Pancho's Mexican Buffet, Inc.
and subsidiaries for the three-months ended December 31, 1996
and 1995, as indicated in our report dated January 20, 1997
(February 11, 1997 as to Note 2); because we did not perform an
audit, we expressed no opinion on that information.
We are aware that our report referred to above, which is
included in your Quarterly Report on Form 10-Q for the quarter
ended December 31, 1996, is incorporated by reference in
Registration Statements No. 2-86238 and No. 33-60178 on Form S-8.
We are also aware that the aforementioned report, pursuant to
Rule 436(c) under the Securities Act of 1933, is not considered
a part of the Registration statement prepared or certified by an
accountant or a report prepared or certified by an accountant
within the meaning of Sections 7 and 11 of that Act.
DELOITTE & TOUCHE LLP
Fort Worth, Texas
February 13, 1997
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated condensed balance sheets as of June 30, 1996 and the consolidated
condensed statement of operations for the nine-months then ended and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> DEC-31-1996
<CASH> 177,000
<SECURITIES> 0
<RECEIVABLES> 306,000
<ALLOWANCES> 0
<INVENTORY> 655,000
<CURRENT-ASSETS> 1,811,000
<PP&E> 65,045,000
<DEPRECIATION> 33,114,000
<TOTAL-ASSETS> 37,553,000
<CURRENT-LIABILITIES> 4,323,000
<BONDS> 0
0
0
<COMMON> 440,000
<OTHER-SE> 23,522,000
<TOTAL-LIABILITY-AND-EQUITY> 37,553,000
<SALES> 16,574,000
<TOTAL-REVENUES> 16,574,000
<CGS> 4,616,000
<TOTAL-COSTS> 16,261,000
<OTHER-EXPENSES> 1,252,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 77,000
<INCOME-PRETAX> (990,000)
<INCOME-TAX> (316,000)
<INCOME-CONTINUING> (674,000)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (674,000)
<EPS-PRIMARY> (0.15)
<EPS-DILUTED> (0.15)
</TABLE>
