<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
(Mark One)
{ X } QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1999
------------------------------------------
OR
{ } TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES AND
EXCHANGE ACT OF 1934
For the transition period from to
------------------------ ------------------------
Commission File Number 0-13716
---------------------------------------------------------
NORTH PITTSBURGH SYSTEMS, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Pennsylvania 25-1485389
- ----------------------------------- --------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
4008 Gibsonia Road, Gibsonia, Pennsylvania 15044-9311
-----------------------------------------------------
(Address of principal executive offices)
(Zip Code)
724-443-9600
- ------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
No Change
- -----------------------------------------------------------------------------
(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 and Exchange Act of 1934
during the preceding 12 months, and (2) has been subject to such filing
requirements for the past 90 days.
YES X NO
----- ------
APPLICABLE ONLY TO CORPORATE USERS:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock Outstanding
------------------------
At April 23, 1999, the Registrant had 15,005,000 shares of common stock
outstanding, par value $.15625 per share, the only class of such stock
issued.
<PAGE>
PART I
ITEM 1
FINANCIAL STATEMENTS
NORTH PITTSBURGH SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF EARNINGS (UNAUDITED)
(Thousands -- Except Per Share Amounts)
<TABLE>
<CAPTION>
For the Three Months
Ended March 31
--------------------
1999 1998
------- -------
<S> <C> <C>
Operating revenues:
Local network services $ 3,191 $ 2,825
Long distance and access services 11,748 10,996
Directory advertising, billing & other services 695 621
Telecommunication equipment sales 608 560
Other operating revenues 1,297 1,094
------- -------
Total Operating Revenues 17,539 16,096
------- -------
Operating expenses:
Network and other operating expenses 7,130 6,216
Depreciation and amortization 3,218 2,898
State and local taxes 801 754
Telecommunication equipment expenses 607 537
------- -------
Total Operating Expenses 11,756 10,405
------- -------
Net Operating Revenues 5,783 5,691
Other expense (income), net:
Interest expense 510 462
Interest income (267) (382)
Sundry expense (income), net (155) (904)
------- -------
88 (824)
------- -------
Earnings before income taxes 5,695 6,515
Income taxes 2,279 2,264
------- -------
Net earnings $ 3,416 $ 4,251
======= =======
Weighted average common shares outstanding 15,005 15,005
======= =======
Basic and diluted earnings per share of
common stock $.23 $.28
======= =======
Dividends per share of common stock $.16 $.15
======= =======
</TABLE>
See accompanying notes to condensed consolidated financial statements.
1
<PAGE>
NORTH PITTSBURGH SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Thousands of Dollars)
<TABLE>
<CAPTION>
Mar. 31 Dec. 31
ASSETS 1999 (Unaudited) 1998
------ ---------------- --------
<S> <C> <C>
Current Assets:
Cash and temporary investments $ 12,436 $ 16,786
Marketable securities available for sale 15,531 14,670
Accounts receivable:
Customers 3,312 3,599
Access service settlements and other 7,411 7,310
Prepaid expenses 37 204
Inventories of construction and operating materials and
supplies 3,920 4,019
Prepaid taxes 862 -
-------- --------
Total current assets 43,509 46,588
-------- --------
Property, plant and equipment:
Land 475 475
Buildings 11,115 11,067
Equipment 139,018 136,779
-------- --------
150,608 148,321
Less accumulated depreciation and amortization 81,682 78,854
-------- --------
68,926 69,467
Construction in progress 12,036 6,863
-------- --------
Total property, plant and equipment, net 80,962 76,330
Investments 9,786 9,637
Deferred financing costs 834 857
Prepaid pension cost 1,077 598
Other assets 1,029 1,305
-------- --------
$137,197 $135,315
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
------------------------------------
Current liabilities:
Current portion of long-term debt $ 1,864 $ 1,850
Accounts payable 6,196 6,756
Dividend payable 2,401 2,251
Other accrued liabilities 2,278 2,616
Federal and state income taxes 2,576 920
-------- --------
Total current liabilities 15,315 14,393
-------- --------
Long-term debt 31,720 32,196
Deferred income taxes 8,340 8,060
Accrued postretirement benefits 5,040 5,002
Other liabilities 1,772 1,858
Shareholders' equity:
Capital stock/Common stock 2,350 2,350
Capital in excess of par value 2,215 2,215
Retained earnings 70,280 69,265
Less cost of treasury stock (1999 and 1998-35,000 shares) (508) (508)
Accumulated other comprehensive income-unrealized gain
on available for sale securities, net 673 484
-------- --------
Total shareholders' equity 75,010 73,806
-------- --------
$137,197 $135,315
======== ========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
2
<PAGE>
NORTH PITTSBURGH SYSTEMS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(Thousands of Dollars)
<TABLE>
<CAPTION>
For the Three Months
Ended Mar. 31
--------------------
1999 1998
------- --------
<S> <C> <C>
Cash from operating activities:
Net earnings $ 3,416 $ 4,251
Adjustments to reconcile net earnings to net cash from
operating activities:
Depreciation and amortization 3,218 2,898
Gain on sale of marketable securities (12) (1)
Equity (income) losses of affiliated companies (149) (234)
Changes in assets and liabilities:
Accounts receivable 186 250
Inventories of construction and operating materials
& supplies 99 (95)
Deferred financing costs, prepaid pension cost
and other assets (180) 353
Prepaid federal and state taxes (862) (755)
Accounts payable (560) 751
Other accrued liabilities (424) (205)
Accrued postretirement benefits 38 62
Federal and state income taxes 1,806 1,776
Other, net 185 41
------- -------
Total adjustments 3,345 4,841
------- -------
Net cash from operating activities 6,761 9,092
------- -------
Cash used for investing activities:
Expenditures for property and equipment (7,766) (3,136)
Net salvage on retirements (102) 164
------- -------
Net capital additions (7,868) (2,972)
------- -------
Purchase of marketable securities available for sale (2,514) -
Proceeds from sale of marketable securities available for sale 1,984 105
Proceeds from sale of investment - 13,561
------- -------
Net cash used for investing activities (8,398) 10,694
------- -------
Cash used for financing activities:
Cash dividends (2,251) (2,102)
Retirement of debt (462) (194)
------- -------
Net cash used for financing activities (2,713) (2,296)
------- -------
Net (decrease) increase in cash and temporary investments (4,350) 17,490
Cash and temporary investments at beginning of period 16,786 15,938
------- -------
Cash and temporary investments at end of period $12,436 $33,428
======= =======
Interest paid $ 488 $ 439
======= =======
Income taxes paid $ 342 $ 489
======= =======
</TABLE>
See accompanying notes to condensed consolidated financial statements.
3
<PAGE>
NORTH PITTSBURGH SYSTEMS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(1) GENERAL
-------
The condensed consolidated financial statements included herein have been
prepared by the Registrant, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Consolidated herein
are the financial results of the Registrant's wholly-owned subsidiaries,
North Pittsburgh Telephone Company (North Pittsburgh), Penn Telecom, Inc.
(Penn Telecom) and Pinnatech, Inc. (Pinnatech). Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations. Nevertheless,
the Registrant believes that its disclosures herein are adequate to make
the information presented not misleading and, in the opinion of management,
all adjustments (which consisted only of normal recurring accruals)
necessary to present fairly the results of operations for the interim
periods have been reflected. It is suggested that these condensed
consolidated financial statements be read in conjunction with the financial
statements and the notes thereto included in the Registrant's latest annual
report to the Securities and Exchange Commission on Form 10-K .
(2) COMPREHENSIVE INCOME
--------------------
Statement of Financial Accounting Standards No. 130, "Reporting
Comprehensive Income" ("SFAS 130"), establishes requirements for disclosure
of comprehensive income. The objective of SFAS 130 is to report all changes
in equity that result from transactions and economic events other than
transactions with owners. Comprehensive income is the total of net income
and all other non-owner changes in equity. The reconciliation of net income
to comprehensive income (loss) is as follows (in thousands):
<TABLE>
<CAPTION>
For the Three Months
Ended Mar. 31
---------------------
1999 1998
--------- ----------
<S> <C> <C>
Net income $3,416 $4,251
Unrealized gain (loss) on
marketable securities 189 (2)
------ ------
Comprehensive income $3,605 $4,249
====== ======
</TABLE>
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
1. Financial Condition
-------------------
(a) General
-------
There were no material changes in the Registrant's consolidated general
financial condition from the end of its preceding fiscal year on December
31, 1998 to March 31, 1999, the end of the three-month period reported
herein.
4
<PAGE>
(b) Liquidity and Capital Resources
-------------------------------
Consolidated capital expenditure commitments for the purchase and
installation of communications and other equipment at March 31, 1999
amounted to approximately $2,369,000, with such amount being part of the
1999 construction program, which is expected to be in excess of $20
million. Funds for financing construction expenditures in the three-month
period ended March 31, 1999 were generated from internal sources. Based on
its 1999 construction budget and projected cash flows, the Registrant
anticipates cash flows provided by operating activities and cash reserves
in 1999 to be sufficient to service long-term debt, to pay dividends and to
finance approximately 25% to 50% of capital additions. The balance of
capital additions will be financed from debt financing available from the
Rural Utilities Service. At March 31, 1999, construction work in progress
was $11,461,000. An additional $5,393,000 is expected to be expended to
complete these projects.
The Registrant and its subsidiaries have not experienced any difficulty in
the past meeting either long-term or short-term cash commitments. Cash
flow generated through regular operations has been adequate to not only
finance a significant portion of the capital requirements of the Registrant
as discussed above but also to meet principal and interest payments on
long-term debt and all working capital requirements. It is anticipated
that future long-term interest and principal payments will be made from the
same source of internally generated funds.
(c) Regulatory/Competition
----------------------
North Pittsburgh, under Chapter 30 of the Pennsylvania Public Utility Code,
filed a petition with the PA PUC, on July 31, 1998, seeking approval of an
alternative form of regulation to replace traditional rate base/rate of
return regulation or be subject to a show cause proceeding. The petition
also included a proposed network modernization plan. In the filing, North
Pittsburgh proposed a price cap plan whereby rates for noncompetitive
services are allowed to be increased based on an index that measures
general economy wide price increases. This petition is still pending
before the PA PUC and may be modified in the final order. However, it is
not possible at this time to determine the PA PUC's disposition of this
petition or the effect on North Pittsburgh's financial position or results
of operations.
The Federal Communications Commission (FCC) continues to work on
Rulemakings that will further spell out the specifics of the
Telecommunications Act of 1996 (the 1996 Act). The PA PUC must then
finalize its course of action to fully implement the 1996 Act, or to the
extent possible and permissible, change the manner in which such
regulations are implemented in Pennsylvania before the impact on North
Pittsburgh, a Rural Telephone Company under the 1996 Act, can be fully
understood and measured. However, the clear intent of the 1996 Act is to
open up the local exchange market to competition. The 1996 Act appears to
mandate, among other items, that North Pittsburgh, at some point in time,
permit the resale of its services at wholesale rates, provide number
portability, if feasible, provide dialing parity, provide interconnection
to any requesting carrier for the transmission and routing of telephone
exchange service and exchange access and provide access to network
elements. The Company joined with 17 other rural companies in Pennsylvania
to file a petition with the PA PUC requesting a temporary suspension of the
interconnection requirements of Section 251 of the 1996 Act for a two-year
period following resolution of the FCC's Universal Service and Access
Reform Orders. The Petition was filed February 20, 1997 and the PA PUC
approved the Petition on July 10, 1997. This initial two-year suspension
expires July 10, 1999. In January, 1999, North Pittsburgh filed for a one-
year extension of the suspension until July 10, 2000. A decision by the PA
PUC is expected in the second quarter of 1999.
5
<PAGE>
The 1996 Act, FCC and PA PUC regulatory proceedings and the thrust towards
a fully competitive marketplace have created some uncertainty in respect to
the levels of North Pittsburgh's revenue growth in the future. However,
its unique location in a growing commercial/residential suburban traffic
corridor to the north of the City of Pittsburgh, its state-of-the-art
switching transmission and transport facilities and its extensive fiber
network place North Pittsburgh in a solid position to meet competition and
minimize any loss of revenues. In addition, North Pittsburgh continues to
make its network flexible and responsive to the needs of its customers to
meet competitive threats. New services, access line growth and anticipated
usage growth are expected to lessen or offset any reductions in North
Pittsburgh's revenue sources.
2. Results of Operations
---------------------
Total operating revenues increased $1,443,000 (9.0%) in the three-month
period ended March 31, 1999 over the comparable period in 1998. This
change was due to an increase in local network services of $366,000
(13.0%), an increase in long distance and access services of $752,000
(6.8%) and an increase in other operating revenues of $203,000 (18.6%).
Increased local network service revenues were attributable to customer
growth, growth in second lines and expanded penetration of enhanced
services. Higher long distance and access services were generally the
result of an increase in the number of customers and minutes of use. The
increase in other operating revenues is primarily due to an increase in
Internet-related revenues.
Total operating expenses for the three-month period ended March 31, 1999
increased $1,351,000 (13.0%) over the preceding year. That change is
principally the result of an increase in network and other operating
expenses of $914,000 (14.7%), and an increase in depreciation and
amortization of $320,000 (11.0%). The increase in network and other
operating expenses consists of an increase in personnel costs due to an
expansion of existing business and an increase in personnel and other
expenses due to start-up activities of CLEC and Internet-related services.
Temporary increases in data processing expenses currently being experienced
are necessary to maintain both existing and new systems during conversion
activities and will cease beginning in the third quarter. The increase in
depreciation and amortization is the direct result of the growth in fixed
assets to serve current and future customer needs. The increase in total
operating revenues discussed above coupled with the increase in total
operating expenses resulted in net operating revenues increasing $92,000
(1.6%) between 1999 and 1998.
Interest income decreased $115,000 primarily due to a shift in investments
to available for sale securities. The net decrease in Sundry income (non-
operating) of $749,000 is primarily due to receipts from a one-time
insurance settlement in 1998, offset by an increase in cellular partnership
income in 1999 over 1998.
The increase in net operating revenues for the three-month period ended
March 31, 1999, in conjunction with the decrease in Sundry income, net,
resulted in a decrease of $820,000 (12.6%) in earnings before income taxes.
The Registrant's effective tax rate was 40% and 35% for the quarters ended
March 31, 1999 and 1998 respectively. The increase in the effective tax
rate results from receipt of a non-taxable life insurance settlement in the
quarter ended March 31, 1998.
3. Adoption of New Accounting Pronouncements
-----------------------------------------
In June, 1998, the Financial Accounting Standards Board issued SFAS No.
133, "Accounting for Derivative Instruments and Hedging Activities". The
Registrant does not expect this pronouncement to impact the consolidated
financial statements because the Registrant has not entered into derivative
or hedging transactions.
Statement of Position 98-1 (SOP 98-1), "Accounting for the costs of
Computer Software Developed or Obtained for Internal Use," has been adopted
by the Registrant effective January 1, 1999. SOP 98-1 provides guidance on
capitalizing costs of computer software developed or obtained for internal
use. The Registrant does not expect SOP 98-1 to have a material effect on
its financial statements.
6
<PAGE>
4. Year 2000
---------
(a) State of Readiness
------------------
The Registrant has taken actions to understand the nature and extent of the
work required in order to make its systems and infrastructure Year 2000
compliant. The Registrant began work last year to prepare its information
technology (IT) and non-information technology (non-IT) systems, including
updating and/or replacing existing legacy systems. The Registrant has
formed a Corporate Year 2000 Task Force, which is responsible for all Year
2000 activities and is being monitored by senior management and the Board
of Directors.
There are six phases of the Registrant's Year 2000 program: Awareness,
Inventory, Assessment, Renovation, Validation and Implementation. The
Registrant has defined the six phases as follows:
Awareness - Gain the commitment of management and staff to solving the
problem. This phase has been completed.
Inventory - Conduct a thorough inventory of all hardware and software
systems. This phase will run until December, 1999 in order to maintain the
inventory throughout the life of the project.
Assessment and Planning - Decide which systems to retire, repair or
replace. Prepare contingency plans. This phase has been completed.
Renovation - Perform upgrades to hardware and software. This phase is
underway and is scheduled to be completed in June, 1999. The Registrant
has contracted to outsource certain operational support, billing and
accounting systems to a third party vendor. The software and hardware
components of the systems selected have been certified by the vendor as
Year 2000 compliant. Remediation of mission critical systems is ninety
percent complete at this time. The remaining ten percent of mission
critical systems are scheduled to be remediated by June, 1999.
Validation - Test and certify new and renovated systems. This phase is
underway and is scheduled to be completed in April, 1999.
Implementation and Follow-up - New or renovated systems go into service.
This phase is scheduled to be completed in December, 1999, and will include
the resolution of any outstanding problems. The Year 2000 Project will
extend until March, 2000 in order to address the leap day of February 29,
2000 and to address any outstanding issues.
The Registrant's Year 2000 issues related to third parties can be broken
into two categories: third party vendors who supply products to the
Registrant, and other telecommunications companies who provide joint
service to our customers. The third party vendors have been providing the
Registrant with Year 2000 solutions on an on-going basis. Year 2000
upgrades, repairs and testing are being performed as per vendor
specifications. Other telecommunications service providers are
implementing Year 2000 programs in much the same fashion as the Registrant
and industry testing is being performed on an on-going basis.
(b) Cost to Address Year 2000 Issues
--------------------------------
Expenditures related to Year 2000 remediation, the data processing
transition plan, license fees for purchase of software and training and
implementation costs are not expected to exceed $3.5 million, $2.0 million
of which has been incurred through March 31, 1999. Costs related to
implementation of new systems are being capitalized, in accordance with SOP
98-1, and will be amortized over the estimated useful life of the asset
beginning in approximately the second quarter of 1999, the anticipated
completion date of the project. The remainder of these costs, including
Year 2000 remediation costs, will be expensed as incurred.
7
<PAGE>
(c) Risks of Year 2000 Issues
-------------------------
The most reasonably likely worst case scenario is loss of services to other
interconnecting companies who have not attained Year 2000 compliance. This
is unlikely to occur since the interconnecting companies realize their
responsibility to comply. However, should this worst case scenario occur,
the Registrant will give customers the option of rerouting service to a
working carrier.
(d) Contingency Plan
----------------
The Registrant has developed a Corporate Year 2000 Contingency Plan to
cover its primary business activities. This plan outlines the key areas of
business, and the manner in which they will be supported in the event of a
Year 2000 failure. This plan has been developed as a result of research
into United States Telephone Association member telephone company responses
to hurricanes, tornadoes, ice storms and other disasters. The Registrant
has studied and modified these plans to cover operations during potential
Year 2000 related failures. The Registrant has also updated and revised
the existing Emergency Response Plan. The Registrant's Emergency Response
Plan will form the core of the Registrant's Contingency Plan if a major
service outage should occur.
Key components of the Contingency Plan are the preparations to revert to a
manual operation, stockpiling and conservation of materials, increased
staffing levels, data storage for processing at a later date, isolation of
harmful network elements and positioning key personnel in areas where they
will be most effective. Should there be a serious service affecting
problem, the Emergency Response Plan will be activated until all services
are restored. Events, which could trigger activation of the Emergency
Response Plan, include widespread loss of gas or electric service, failures
at various interconnecting companies or failure of internal switching or
transmission systems.
ITEM 3
QUANTITATIVE AND QUALITATIVE DISCLOSURES
ABOUT MARKET RISK
1. There have been no material changes in reported market risks faced by the
Registrant since December 31, 1998.
8
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
NORTH PITTSBURGH SYSTEMS, INC.
------------------------------
(Registrant)
Date April 30, 1999 /s/ H. R. Brown
--------------------- --------------------------------
H. R. Brown, President
Date April 30, 1999 /s/ A. P. Kimble
--------------------- ----------------------------------------
A. P. Kimble, Vice President & Treasurer
9
<PAGE>
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits - Exhibit Index for Quarterly Reports on Form 10-Q.
--------
<TABLE>
<CAPTION>
Exhibit
Number Subject Applicability
- ------- ------- -------------
<S> <C> <C>
(2) Plan of acquisition, reorganization, Not Applicable
arrangement, liquidation or
succession
(3) (i) Articles of Incorporation Provided in Quarterly Report
on Form 10-Q for the quarter
ended June 30, 1996 and
Incorporated Herein by
Reference.
(3) (ii) By-Laws Provided in Annual Report
on Form 10-K for the year
ended December 31, 1998
and Incorporated Herein by
Reference.
(4) Instruments defining the rights of Provided in Registration of
security holders including indentures Securities of Certain
Successor Issuers on Form
8-B filed on June 25, 1985 and
Incorporated Herein by
Reference.
(10) Material Contracts Not Applicable
(11) Statement re computation of per Attached Hereto
share earnings
(15) Letter re unaudited interim financial Not Applicable
information
(18) Letter re change in accounting Not Applicable
principles
(19) Report furnished to security holders Not Applicable
(22) Published report regarding matters Not Applicable
submitted to a vote of security holders
(23) Consents of experts and counsel Not Applicable
(24) Power of attorney Not Applicable
(27) Financial Data Schedule Attached Hereto
(99) Additional exhibits Not Applicable
</TABLE>
(b) Reports on Form 8-K - No reports on Form 8-K were filed during the
-------------------
quarter ended March 31, 1999.
10
<PAGE>
EXHIBIT 11
NORTH PITTSBURGH SYSTEMS, INC. AND SUBSIDIARIES
Statement - computation of per share earnings
Statement of Computations of Earnings per Share
<TABLE>
<CAPTION>
For the Three Months
Ended Mar. 31
-----------------------
1999 1998
----------- -----------
<S> <C> <C>
Net Earnings $ 3,416,000 $ 4,251,000
=========== ===========
Weighted average common shares
outstanding 15,005,000 15,005,000
=========== ===========
Basic and diluted earnings per share
of common stock $ .23 $ .28
=========== ===========
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM MARCH 31,
1999 QUARTERLY REPORT AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 12,436
<SECURITIES> 15,531
<RECEIVABLES> 10,723
<ALLOWANCES> 0
<INVENTORY> 3,920
<CURRENT-ASSETS> 43,509
<PP&E> 162,644
<DEPRECIATION> 81,682
<TOTAL-ASSETS> 137,197
<CURRENT-LIABILITIES> 15,315
<BONDS> 31,720
0
0
<COMMON> 2,350
<OTHER-SE> 72,660
<TOTAL-LIABILITY-AND-EQUITY> 137,197
<SALES> 608
<TOTAL-REVENUES> 17,539
<CGS> 607
<TOTAL-COSTS> 11,756
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 510
<INCOME-PRETAX> 5,695
<INCOME-TAX> 2,279
<INCOME-CONTINUING> 3,416
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,416
<EPS-PRIMARY> .23
<EPS-DILUTED> .23
</TABLE>
