FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON D.C. 20549
(Mark One)
[X] Quarterly Report Pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934 for the period ended March 31,
1996
or
[ ] Transition Report Pursuant to Section 13 or 15 (d) of the
Securities Exchange Act of 1934
Commission file number 33-99844
BALLY TOTAL FITNESS HOLDING CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 36-3228107
(State or other jurisdiction of (IRS Employer
of incorporation) Identification No.)
8700 West Bryn Mawr Avenue
Chicago, IL 60631
(Address of principal executive (Zip Code)
offices)
Registrant's telephone number, including area code: (312) 380-3000
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 April 30, 1996, 12,495,161 shares of the registrant's common
stock were outstanding.<PAGE>
BALLY TOTAL FITNESS HOLDING CORPORATION
INDEX
PART I. FINANCIAL INFORMATION
Item 1. Financial statements:
Condensed consolidated balance sheet (unaudited)
March 31, 1996 and December 31, 1995
Consolidated statement of operations (unaudited)
Three months ended March 31, 1996 and 1995
Consolidated statement of stockholders' equity (unaudited)
Three months ended March 31, 1996
Consolidated statement of cash flows (unaudited)
Three months ended March 31, 1996 and 1995
Notes to condensed consolidated financial statements
(unaudited)
Item 2. Management's discussion and analysis of financial
condition and results of operations
PART II. OTHER INFORMATION
Item 1. Legal proceedings
Item 6. Exhibits and reports on Form 8-K
SIGNATURE PAGE<PAGE>
BALLY TOTAL FITNESS HOLDING CORPORATION
Condensed Consolidated Balance Sheet
(In thousands)
(Unaudited)
March 31, December 31,
1996 1995
---------- -----------
ASSETS
Current assets:
Cash and equivalents $ 9,746 $ 21,263
Installment contracts receivable, net 156,398 155,504
Other current assets 21,021 20,216
---------- ----------
Total current assets 187,165 196,983
Long-term installment contracts
receivable, net 157,711 147,856
Property and equipment, less accumulated
depreciation and amortization of
$294,390 and $293,698 344,449 348,468
Intangible assets, less accumulated
amortization of $46,244 and $45,117 109,100 110,227
Other assets 38,906 42,760
---------- ----------
$ 837,331 $ 846,294
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 35,700 $ 43,740
Income taxes payable 1,811 2,241
Deferred income taxes 2,948 11,112
Deferred revenues 61,293 61,881
Accrued liabilities 60,388 64,978
Current maturities of long-term debt 17,581 1,481
---------- ----------
Total current liabilities 179,721 185,433
Long-term debt, less current maturities 363,817 368,032
Tax obligation to Bally Entertainment
Corporation 15,200 15,200
Other liabilities and deferred credits 40,617 37,282
Stockholders' equity 237,976 240,347
---------- ----------
$ 837,331 $ 846,294
========== ==========
See accompanying notes.<PAGE>
BALLY TOTAL FITNESS HOLDING CORPORATION
Consolidated Statement of Operations
(In thousands, except per share data)
(Unaudited)
Three months ended
March 31,
-------------------------
1996 1995
---------- ----------
Net revenues:
Membership revenues -
New $ 112,804 $ 117,206
Dues 45,388 45,144
Finance charges earned 9,595 8,919
Fees and other 3,294 5,226
---------- ----------
171,081 176,495
Operating costs and expenses:
Fitness center operations 94,905 100,996
Member processing and collection
centers 12,212 12,791
Advertising 12,611 10,969
General and administrative 7,183 6,503
Provision for doubtful receivables 20,902 20,625
Depreciation and amortization 13,676 14,395
---------- ----------
161,489 166,279
---------- ----------
Operating income 9,592 10,216
Interest expense 11,849 10,049
---------- ----------
Income (loss) before income taxes (2,257) 167
Income tax provision 200 50
---------- ----------
Net income (loss) $ (2,457) $ 117
========== ==========
Per common share:
Net income (loss) - proforma for 1995 $ (.20) $ .01
========== ==========
See accompanying notes.<PAGE>
BALLY TOTAL FITNESS HOLDING CORPORATION
Consolidated Statement of Stockholders' Equity
(In thousands, except share data)
(Unaudited)
Common Stock Unearned Total
------------------- compensation stock-
Number Stated Contributed Accumulated -restricted holders'
of shares value capital deficit stock equity
---------- ------- --------- ------------ ---------- ---------
Balance at
December
31, 1995 11,845,161 $ 118 $ 293,062 $ (52,833) $ $ 240,347
Net loss (2,457) (2,457)
Stock awards
under long-
term incentive
plan 650,000 7 4,389 (4,396) -
Amortization
of unearned
compensation 86 86
--------- ------ --------- --------- -------- ----------
Balance at
March 31,
1996 12,495,161 $ 125 $ 297,451 $ (55,290) $ (4,310) $ 237,976
========== ====== ========= ========= ========= ==========
See accompanying notes.<PAGE>
BALLY TOTAL FITNESS HOLDING CORPORATION
Consolidated Statement of Cash Flows
(In thousands)
(Unaudited)
Three months ended
March 31,
-----------------------
1996 1995
--------- ---------
OPERATING:
Net income (loss) $ (2,457) $ 117
Adjustments to reconcile to cash
used -
Depreciation and amortization,
including amortization included
in interest expense 14,552 14,985
Provision for doubtful receivables 20,902 20,625
Deferred income taxes (450) 4,648
Change in operating assets and
liabilities (47,685) (42,314)
--------- ---------
Cash used in operating activities (15,138) (1,939)
INVESTING:
Purchases of property and equipment (7,172) (6,412)
Other, net 747 (459)
--------- ---------
Cash used in investing activities (6,425) (6,871)
FINANCING:
Net borrowings under revolving
credit agreement 9,000 4,875
Net borrowings (repayments) of other
long-term debt 1,190 (786)
Debt issuance costs (144) (137)
--------- ---------
Cash provided by financing
activities 10,046 3,952
--------- ---------
Decrease in cash and equivalents (11,517) (4,858)
Cash and equivalents, beginning
of period 21,263 12,804
--------- ---------
Cash and equivalents, end of period $ 9,746 $ 7,946
========= =========
See accompanying notes.<PAGE>
BALLY TOTAL FITNESS HOLDING CORPORATION
Consolidated Statement of Cash Flows-(Continued)
(In thousands)
(Unaudited)
Three months ended
March 31,
------------------------
1996 1995
---------- ----------
SUPPLEMENTAL CASH FLOWS INFORMATION:
Changes in operating assets and
liabilities were as follows -
Increase in installment contracts
receivable $ (31,601) $ (29,770)
Increase in other current and
other assets (747) (3,437)
Increase (decrease) in accounts
payable (8,344) 2,372
Increase in due to Bally
Entertainment Corporation 45
Decrease in income taxes payable (430) (298)
Decrease in accrued and other
liabilities (4,753) (6,776)
Decrease in deferred revenues (1,810) (4,450)
---------- ----------
$ (47,685) $ (42,314)
========== ==========
Cash payments for interest and income
taxes were as follows-
Interest paid $ 17,352 $ 16,490
Interest capitalized (55) (56)
Income taxes paid (refunded), net 1,080 (4,300)
Investing and financing activities exclude
the following non-cash transaction -
Acquisition of equipment through
capital leases $ 1,999 $
See accompanying notes.<PAGE>
BALLY TOTAL FITNESS HOLDING CORPORATION
Notes to Condensed Consolidated Financial Statements
(All dollar amounts in thousands, except share data)
(Unaudited)
Basis of presentation
The accompanying condensed consolidated financial statements include
the accounts of Bally Total Fitness Holding Corporation (_the
Company_) and the subsidiaries which it controls. The Company,
through its subsidiaries, is a nationwide commercial operator of
fitness centers with 323 facilities concentrated in 27 states and
Canada. The Company operates in one industry segment, and all
significant revenues arise from the commercial operation of fitness
centers, primarily in major metropolitan markets in the United States.
Unless otherwise specified in the text, references to the Company
include the Company and its subsidiaries. These condensed
consolidated financial statements should be read in conjunction with
the consolidated financial statements included in the Company's Annual
Report on Form 10-K for the year ended December 31, 1995.
The Company was a wholly owned subsidiary of Bally Entertainment
Corporation (_Bally_) until the consummation of Bally's spin-off (the
_Spin-off_) of the Company on January 9, 1996. On that date,
11,845,161 shares of Company common stock were distributed to holders
of record of Bally's common stock as of November 15, 1995. For
financial accounting purposes, the Company has reflected the effect of
the Spin-off as of December 31, 1995.
All adjustments have been recorded which are, in the opinion of
management, necessary for a fair presentation of the condensed
consolidated balance sheet of the Company at March 31, 1996, its
consolidated statements of operations and cash flows for the three
months ended March 31, 1996 and 1995, and its consolidated statement
of stockholders' equity for the three months ended March 31, 1996.
All such adjustments were of a normal recurring nature.
The accompanying condensed consolidated financial statements have been
prepared in conformity with generally accepted accounting principles
which require the Company's management to make estimates and
assumptions that affect the amounts reported therein. Actual results
could vary from such estimates. In addition, certain
reclassifications have been made to prior period financial statements
to conform with the 1996 presentation.
Seasonal factors
The Company's operations are subject to seasonal factors and,
therefore, the results of operations for the three months ended March
31, 1996 and 1995 are not necessarily indicative of the results of
operations for the full year.<PAGE>
Installment contracts receivable
March 31, December 31,
1996 1995
---------- -----------
Current:
Installment contracts $ 246,794 $ 244,522
Less --
Unearned finance charges 28,505 27,128
Allowance for doubtful receivables
and cancellations 61,891 61,890
---------- -----------
$ 156,398 $ 155,504
========== ===========
Long-term:
Installment contracts $ 222,651 $ 211,549
Less --
Unearned finance charges 14,301 13,055
Allowance for doubtful receivables
and cancellations 50,639 50,638
---------- -----------
$ 157,711 $ 147,856
========== ===========
Long-term debt
The Company is restricted from paying cash dividends by the terms of
its 13% Senior Subordinated Notes due 2003 and its revolving credit
agreement. The covenants also limit the amounts available for capital
expenditures and additional borrowings, and require maintenance of
certain financial ratios. The Company's revolving credit agreement
provides for a $15,000 line of credit, which is reduced by the amount
of any outstanding letters of credit in excess of $15,000 (which
excess may not exceed $5,000). The maximum amount available under
this revolving credit agreement, including letters of credit, is
$30,000. At March 31, 1996, outstanding letters of credit totaled
approximately $17,300 and approximately $3,700 of the line of credit
remained unused.
Income taxes
Taxable income or loss of the Company is included in the consolidated
federal income tax return of Bally through January 9, 1996. The
Company is required to file its own separate consolidated federal
income tax return for periods after January 9, 1996. The income tax
provision for the first quarter of 1996 reflects state income taxes
only, as no federal benefit has been provided due to the uncertainty
of its realization.
Earnings (loss) per common share
Loss per common share for the three months ended March 31, 1996 was
computed by dividing net loss by the weighted average number of shares
of common stock outstanding during the period, which totalled
12,170,161 shares. 325,000 shares of restricted stock were issued
subject to forfeiture unless certain conditions are met. These
contingent shares are considered common stock equivalents and are<PAGE>
excluded from the loss per share computation because their effect
would be anti-dilutive. Proforma earnings per common share for the
three months ended March 31, 1995 was $.01 per share, and gives effect
to (i) adjustments made to reflect the income tax provision as if the
Company had filed its own separate consolidated income tax returns for
the period and (ii) a distribution of 11,845,161 shares of Company
common stock to Bally shareholders, as if such distribution had taken
place as of the beginning of the period.
Impact of recently issued accounting standards
In March 1995, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards (_SFAS_) No. 121,
_Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of_ which requires impairment losses to be
recorded on long-lived assets used in operations when indicators of
impairment are present and the undiscounted cash flows estimated to be
generated by those assets are less than the assets' carrying amount.
SFAS No. 121 also addresses the accounting for long-lived assets that
are expected to be disposed of. SFAS No. 121 requires assets to be
evaluated for impairment by disaggregation and grouping at the lowest
level for which there are identifiable cash flows that are largely
independent of the cash flows of other groups of assets, which is a
different calculation than the Company currently uses to evaluate the
recoverability of consolidated goodwill. The Company applied the
standards of SFAS No. 121 in the first quarter of 1996 and the
adoption had no effect on results of operation.<PAGE>
BALLY TOTAL FITNESS HOLDING CORPORATION
Management's Discussion and Analysis of Financial Condition and
Results of Operations
Comparison of the three months ended March 31, 1996 and 1995
Net revenues for the first quarter of 1996 were $171.1 million
compared to $176.5 million in 1995. New membership revenue decreased
$4.4 million (4%) primarily due to a 17% decline in the number of
contracts sold offset, in part, by a 16% increase in the average
selling price. Results for January and February 1996 reflected a 6%
year-to-year improvement in new member sales. However, March results
more than offset the improvement. Net revenues for the same fitness
centers selling memberships throughout both periods decreased $4.3
million (3%) as a result of the aforementioned decline in the number
of contracts sold offset, in part, by the increase in the average
selling price. The number of fitness centers decreased from 333 at
March 31, 1995 to 323 at March 31, 1996, representing the closure of
thirteen older, typically smaller facilities and the sale of the
Vertical Club in New York City to Bally offset, in part, by the
opening of four new, larger facilities. Dues revenue increased $.2
million over 1995. Finance charges earned increased $.7 million (8%)
in the 1996 period compared to 1995 reflecting a larger receivable
portfolio. Fees and other revenues decreased $1.9 million (37%)
primarily due to non-recurring income in the first quarter of 1995
pertaining to insurance recoveries and a reduction of personal trainer
income in the 1996 period as a result of outsourcing the service.
Operating income for the first quarter of 1996 was $9.6 million
compared to $10.2 million in 1995. The decrease of $.6 million (6%)
is primarily due to the aforementioned decrease in revenues offset, in
part, by a $4.8 million (3%) decrease in operating costs and expenses.
Excluding the provision for doubtful receivables, operating costs and
expenses decreased $5.1 million (3%) in the first quarter of 1996
compared to 1995. The decrease was primarily due to reductions in
salaries and other variable costs (including consolidations of member
service operations and reductions in personal trainer salaries) and,
to a lesser extent, commissions as a result of the aforementioned
decline in new membership sales.
Fitness center operating expenses for the first quarter of 1996
decreased $6.1 million (6%) from 1995 primarily due to a reduction in
payroll and related costs ($4.1 million) and other variable costs as a
result of the continuing cost reduction program. As a percentage of
net revenues, fitness center operating expenses decreased from 57% in
the 1995 period to 55% in 1996.<PAGE>
Member processing and collection center expenses decreased $.6 million
(5%) primarily due to the completion in late 1995 of the consolidation
of three regional service centers (_RSCs_) into two and the completion
of a computer conversion project. With the addition of new hardware
and software, the Company is able to streamline its processing
procedures and develop efficiencies that will enable the RSCs to
better service membership accounts while reducing costs in the future.
Member processing and collection center expenses as a percentage of
net revenues was 7% for both periods.
Advertising costs for the first quarter of 1996 increased $1.6 million
(15%) over 1995 primarily due to increased media and production costs.
This is consistent with the Company's belief that strong marketing
support is critical to attracting new members both at existing and new
fitness centers. Advertising expenses as a percentage of net revenues
increased from 6% in the 1995 period to 7% in 1996.
General and administrative expenses increased $.7 million (10%)
primarily due to increased legal costs and, as a percentage of net
revenues, were 4% for each period.
The provision for doubtful receivables for the first quarter of 1996
was $20.9 million compared to $20.6 million for 1995, an increase of
$.3 million (1%). The provision for doubtful receivables as a
percentage of net financed sales was 25% in both periods.
Depreciation and amortization expenses decreased $.7 million (5%) from
1995 and, as a percentage of net revenues, was 8% in both periods.
Interest expense, net of capitalized interest, was $11.8 million for
the first quarter of 1996 compared to $10.0 million in 1995, an
increase of $1.8 million (18%) principally reflecting a higher average
level of debt offset, in part, by lower average interest rates.
For periods commencing after the Spin-off, the Company is required to
file its own separate consolidated federal income tax return. The
income tax provision for the first quarter of 1996 reflects state
income taxes only, as no federal benefit has been provided due to the
uncertainty of its realization.
Liquidity and capital resources
The Company has no scheduled principal payments under its subordinated
indebtedness until 2003, no scheduled principal payments under its
securitization facility until January 1997 and its scheduled principal
payments under other indebtedness outstanding at March 31, 1996 are
not significant. The Company's debt service payments for the next
twelve months, principally for interest, are expected to be
approximately $44.6 million. Additionally, approximately $15.6
million principal amount of the $150.0 million securitization facility
will be amortized unless the financing is renewed or replaced. The
Company plans to offer a new series of securitization certificates to
replace the current issue during the last quarter of 1996. However,
there can be no assurance that such a replacement series will be sold<PAGE>
or that the terms of such series will be as favorable as the existing
series.
The Company's recent losses and the terms of its revolving credit
agreement limit the Company's ability to borrow significant amounts of
additional funds. Consequently, the Company is dependent on its
operations and availability under its revolving credit agreement for
its cash needs. At March 31, 1996, approximately $9.0 million was
outstanding on the borrowing portion of the line of credit.
The Company has managed in recent years and expects to continue to
manage near-term liquidity requirements utilizing, in addition to the
occasional sale of non-strategic assets, a variety of techniques to
increase the cash sales and down payments and to accelerate
collections and dues payments to increase available cash reserves.
For example, during late 1995 the Company initiated a program which
allowed members to transfer the balance of their installment contracts
to a credit card sponsored by a third party bank which results in the
payment of the full principal amount of the installment contract
without the need for a discount to the member. For the three months
ended March 31, 1996, approximately $8 million of such payment
accelerations were generated. A similar program tested during the
last six months of 1994 and the first three months of 1995 generated
$9 million of payment accelerations.
Management plans to make capital expenditures of approximately $5.0
million to $10.0 million over the next twelve months to maintain, and
in many cases upgrade, its existing facilities as funds are available.
In recent years, the Company has also spent $10.0 million to $15.0
million annually, as funds were available, to build new or replacement
facilities. The Company expects to continue those expenditures if
operations generate sufficient cash flows. The Company believes it
will be able to satisfy its cash needs over the next twelve months.<PAGE>
Cash Earnings Before Interest, Taxes, Depreciation And Amortization
(_Cash EBITDA_)
The indenture governing the Company's 13% Senior Subordinated Notes
due 2003 (the _13% Notes_) requires the disclosure of information with
respect to Cash EBITDA (as calculated using accounting principles in
effect at the time the 13% Notes were issued) in the Company's
quarterly report. Cash EBITDA should not be considered as an
alternative to any measure of performance or liquidity as promulgated
under generally accepted accounting principles (such as net income
(loss) or cash provided by (used in) operating, investing and
financing activities) nor should it be considered as an indicator of
the Company's overall financial performance.
Cash EBITDA is calculated as follows (in millions):
Three months ended
March 31,
------------------------
1996 1995
---------- ---------
Income (loss) before income taxes $ (2.3) $ .2
Adjustments to reconcile to Cash EBITDA:
Interest expense (excluding $3.6
million of interest on the
securitization certificates in 1996) 8.3 10.1
Depreciation and amortization 13.7 14.4
Provision for doubtful receivables 20.9 20.6
Increase in installment contracts
receivable (31.6) (29.8)
Decrease in deferred revenues (1.8) (4.4)
--------- ---------
Cash EBITDA $ 7.2 $ 11.1
========= =========
Cash EBITDA was $7.2 million for the first quarter of 1996 compared to
$11.1 million for 1995, a decrease of $3.9 million (35%), primarily
attributable to interest expense on the securitization certificates.
Accounting principles in January 1993 treated this type of financing
as a sale, and therefore a reduction in receivables, rather than as
indebtedness with related interest expense. Excluding the related
interest expense of $3.6 million, Cash EBITDA decreased by $.3
million. This decrease was principally due to a $3.9 million (3%)
decrease in cash revenue (primarily cash sales) offset, in part, by a
$3.6 million (3%) decrease in cash expenses. The decline in cash sales
reflects management's strategy to reduce the Company's reliance on
highly discounted cash sales as a short-term source of cash flows and,
as a result, to build greater long-term and more consistent cash flows
from financed memberships and dues. The decrease in cash expenses
(primarily payroll and commissions) was principally due to the
aforementioned cost reduction program.<PAGE>
BALLY TOTAL FITNESS HOLDING CORPORATION
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
(a) A suit entitled 25 Broadway Realty Co. v. Health & Tennis
Corporation of New York, Health & Tennis Corporation of
America and Bally's Health & Tennis Corporation has been
settled. The Company signed a modified lease agreement for
that location with the landlord/plaintiff which it believes
to be at least as favorable to the Company as the disputed
lease.
Item 6. Exhibits and reports on Form 8-K
(a) Exhibits:
27 Financial Data Schedule (filed electronically only).
(b) Reports on Form 8-K:
None.<PAGE>
SIGNATURE PAGE
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.
BALLY TOTAL FITNESS HOLDING CORPORATION
---------------------------------------
Registrant
/s/ Julie Adams
-----------------------------
Julie Adams
Vice President and Controller
(Principal Accounting Officer)
Dated: May 15, 1996<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED BALANCE SHEET AT MARCH 31, 1996, THE
CONSOLIDATED STATEMENT OF OPERATIONS AND THE CONSOLIDATED STATEMENT
OF STOCKHOLDERS' EQUITY FOR THE THREE MONTHS ENDED MARCH 31, 1996 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-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 9,746
<SECURITIES> 0
<RECEIVABLES> 469,445<F1>
<ALLOWANCES> 112,530<F1>
<INVENTORY> 0
<CURRENT-ASSETS> 187,165
<PP&E> 638,839
<DEPRECIATION> 294,390
<TOTAL-ASSETS> 837,331
<CURRENT-LIABILITIES> 179,721
<BONDS> 0
0
0
<COMMON> 125
<OTHER-SE> 237,851
<TOTAL-LIABILITY-AND-EQUITY> 837,331
<SALES> 0
<TOTAL-REVENUES> 171,081
<CGS> 0
<TOTAL-COSTS> 107,516<F2>
<OTHER-EXPENSES> 12,212<F3>
<LOSS-PROVISION> 20,902
<INTEREST-EXPENSE> 11,849
<INCOME-PRETAX> (2,257)
<INCOME-TAX> 200
<INCOME-CONTINUING> (2,457)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,457)
<EPS-PRIMARY> (.20)
<EPS-DILUTED> 0
<FN>
<F1>THESE AMOUNTS REFLECT SHORT-TERM AND LONG-TERM BALANCES AS DISCLOSED IN
THE NOTES TO THE CONDENSED CONSOLIDATED FINANCIAL STATEMENTS.
<F2>THIS AMOUNT IS INCLUDED IN THE FITNESS CENTER OPERATIONS LINE AND THE
ADVERTISING LINE IN THE CONSOLIDATED STATEMENT OF OPERATIONS FOR THE
THREE MONTHS ENDEDED MARCH 31, 1996.
<F3>THIS AMOUNT IS INCLUDED IN THE MEMBER PROCESSING AND COLLECTION CENTERS
LINE ON THE CONSOLIDATED STATEMENT OF OPERATION FOR THE THREE MONTHS
ENDED MARCH 31, 1996.
</FN>
</TABLE>
