<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
( X ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For Second Quarter Ending June 30, 1999
OR
( ) TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 1-9035
POPE RESOURCES, A DELAWARE
LIMITED PARTNERSHIP
(Exact name of registrant as specified in its charter)
DELAWARE 91-1313292
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
19245 10TH AVENUE NE, POULSBO, WA 98370
Telephone: (360) 697-6626
(Address of principal executive offices including zip code)
(Registrant's telephone number including area code)
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
----------- ------------
<PAGE>
P A R T I
ITEM 1
FINANCIAL STATEMENTS
<PAGE>
CONSOLIDATED BALANCE SHEETS
Pope Resources
June 30, 1999 and December 31, 1998
<TABLE>
<CAPTION>
(Unaudited)
(Thousands) 1999 1998
- ------------------------------------------------------------------
<S> <C> <C>
Assets
Current assets:
Cash $ 2,862 $ 2,666
Accounts receivable 2,601 639
Work in progress 12,525 11,199
Current portion of contracts receivable 578 611
Prepaid expenses and other 234 368
------- -------
Total current assets 18,800 15,483
------- -------
Properties and equipment at cost:
Land and land improvements 16,217 16,701
Roads and timber (net of
accumulated depletion) 12,255 11,272
Buildings and equipment (net of
accumulated depreciation) 16,147 16,028
------- -------
44,619 44,001
------- -------
Other assets:
Contracts receivable, net of current portion 1,790 1,780
Unallocated amenities and project costs 1,115 1,073
Loan fees and other 344 369
------- -------
3,249 3,222
------- -------
$66,668 $62,706
------- -------
------- -------
Liabilities and Partners' Capital
Current liabilities:
Accounts payable $ 763 $ 777
Accrued liabilities 1,651 1,383
Current portion of long-term debt 395 382
Minority interest 85 256
------- -------
Total current liabilities 2,894 2,798
------- -------
Long-term debt, net of current portion 13,522 13,818
Deferred profit 214 194
Partners' capital 50,038 45,896
------- -------
$66,668 $62,706
------- -------
------- -------
</TABLE>
<PAGE>
CONSOLIDATED STATEMENTS OF INCOME (Unaudited)
Pope Resources
For the Three Months and Six Months Ended June 30, 1999 and 1998
<TABLE>
<CAPTION>
(Thousands, except per unit data) Three Months Six months
ended June 30, ended June 30,
1999 1998 1999 1998
------- ------- ------- -------
<S> <C> <C> <C> <C>
Revenues $ 14,228 $ 14,313 $ 26,794 $ 24,261
Cost of sales (4,387) (4,155) (7,450) (6,884)
Operating expenses (4,536) (3,155) (8,780) (5,881)
Selling and administration expenses (2,401) (1,992) (4,666) (3,694)
------- ------- ------- -------
Income from operations 2,904 5,011 5,898 7,802
------- ------- ------- -------
Other income (expense):
Interest expense (331) (366) (655) (724)
Interest income 57 138 87 288
Equity in losses of joint venture -- (51) -- (171)
Minority interest (18) (54) (35) (180)
------- ------- ------- -------
(292) (333) (603) (787)
------- ------- ------- -------
Income before income taxes 2,612 4,678 5,295 7,015
Income tax provision (124) (131) (240) (131)
------- ------- ------- -------
Net income $ 2,488 $ 4,547 $ 5,055 $ 6,884
------- ------- ------- -------
------- ------- ------- -------
Allocable to general partners $ 33 $ 60 $ 67 $ 92
Allocable to limited partners 2,455 4,487 4,988 6,792
------- ------- ------- -------
$ 2,488 $ 4,547 $ 5,055 $ 6,884
------- ------- ------- -------
------- ------- ------- -------
Earnings per unit:
Basic $ 0.55 $ 1.01 $ 1.12 $ 1.52
------- ------- ------- -------
------- ------- ------- -------
Diluted $ 0.55 $ 1.00 $ 1.11 $ 1.52
------- ------- ------- -------
------- ------- ------- -------
Weighted average units outstanding:
Basic 4,519 4,519 4,519 4,519
------- ------- ------- -------
------- ------- ------- -------
Diluted 4,549 4,535 4,549 4,535
------- ------- ------- -------
------- ------- ------- -------
</TABLE>
<PAGE>
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
Pope Resources
Six Months Ended June 30, 1999 and 1998
<TABLE>
<CAPTION>
Six Months
Ended June 30,
(Thousands) 1999 1998
------- -------
<S> <C> <C>
Net cash flows from operating activities $ 4,451 $ 4,608
Cash flows from investing activities:
Capital expenditures (2,879) (1,686)
Joint venture investment -- (300)
------- -------
Net cash used in investing activities (2,879) (1,986)
------- -------
Cash flows from financing activities:
Cash distributions to minority interest (208) --
Cash distributions to unitholders (904) (1,356)
Repayment of long-term debt (264) (162)
------- -------
Net cash used in financing activities (1,376) (1,518)
------- -------
Net increase (decrease) in cash and cash equivalents 196 1,104
Cash and cash equivalents at beginning of period 2,666 3,950
------- -------
Cash and cash equivalents at end of the period $ 2,862 $ 5,054
------- -------
------- -------
Supplemental disclosure of non-cash investing activity:
Proceeds from land sale held by tax free exchange facilitator $ -- $ 2,666
------- -------
------- -------
</TABLE>
<PAGE>
POPE RESOURCES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
June 30, 1999
1. The consolidated financial statements have been prepared by the
Partnership without an audit and are subject to year-end adjustments.
Certain information and footnote disclosures in accordance with
generally accepted accounting principles have been condensed or
omitted pursuant to the rules and regulations of the Securities and
Exchange Commission. In the opinion of the Partnership, the
accompanying consolidated balance sheets as of June 30, 1999 and
December 31, 1998 and the consolidated statements of income for the
three months and six months ended June 30, 1999 and 1998 and cash
flows for the six months ended June 30, 1999 and 1998 contain all
adjustments necessary to present fairly the financial statements
referred to above. The results of operations for any interim period
are not necessarily indicative of the results to be expected for the
full year.
2. The financial statements in the Partnership's 1998 annual report on Form
10-K include a summary of significant accounting policies of the
Partnership and should be read in conjunction with this Form 10-Q.
3. Diluted earnings per unit include the impact of unit options outstanding.
4. Supplemental disclosure of cash flow information: Interest paid amounted to
approximately $696,000 and $750,000 for the six months ended June 30, 1999
and 1998, respectively.
5. Revenues and operating income by segment for the six months ending June 30
is as follows:
<TABLE>
<CAPTION>
Timberland
(Thousands) Resources Real Estate Administrative Consolidated
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
1999
Revenues $ 20,773 $ 6,021 $ -- $ 26,794
Income (loss) from operations 10,276 (430) (3,948) 5,898
1998
Revenues 16,242 8,019 -- 24,261
Income (loss) from operations $ 8,541 $ 2,453 $ (3,192) $ 7,802
</TABLE>
6. Certain reclassifications have been made to 1998 amounts to conform to
1999 presentation.
<PAGE>
ITEM 2
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(Unaudited)
June 30, 1999
This discussion should be read in conjunction with the Partnership's
consolidated financial statements included with this report.
RESULTS OF OPERATIONS
TIMBERLAND RESOURCES
Timberland Resources revenues for the three months ended June 30,1999 and 1998
were $10.3 million and $8.6 million, respectively. On a year to date basis,
Timberland Resources revenues were $20.8 million and $16.2 million as of June
30, 1999 and 1998, respectively. The increase in revenues resulted primarily
from an accelerated timber harvest schedule from the Partnership's tree farm to
capture higher than anticipated log prices and, to a lesser extent, revenues
from the forestry consulting business acquired in December 1998.
Operating income for the three months ended June 30, 1999 and 1998 was $4.9
million and $4.3 million, respectively. Operating income for the six months
ended June 30, 1999 and 1998 was $10.3 million and $8.5 million,
respectively. The increase in operating income resulted from an increase in
timber harvested from the Partnership's tree farm partially offset by an
increase in operating expenses incurred in the management of Hancock Timber
Resource Group (HTRG) timberlands. Operating income in 1998 reflected the
build-up in infrastructure at the inception of the HTRG contract and,
accordingly, only partially captured the normalized operating level shown in
1999's results.
In December 1998 the Partnership acquired the assets comprising Simons Reid
Collins, a division of H.A. Simons Ltd. of Vancouver, British Columbia. The
acquired business, which now operates as ORM Resources Canada Ltd., is
expected to expand the Partnership's ability to market timberland management
and forestry consulting services globally to owners and managers of
timberlands. Year to date Timberland Resources revenues include $1.6 million
earned from ORM Resources Canada Ltd.
The HTRG contract to provide timberland management services currently covers
over 500,000 acres in Washington, Oregon, California, and British Columbia.
Total acres under management for HTRG is subject to change from time to time
as HTRG's client portfolios are adjusted. As such changes occur, Timberland
Resources revenues will fluctuate with an increase in acres bringing a
positive impact and a decrease in acres producing an adverse effect. An
example of such a portfolio change occurred recently when HTRG, on behalf of
one of its pension fund clients, chose to sell 25,000 acres of timberland in
northern California.
Other changes can potentially occur if existing HTRG clients choose to select
an investment manager other than HTRG. An example of such a change occurred
recently when HTRG was notified of the State Teachers Retirement System of
Ohio's (STRSO) plan to change investment managers in 1999. This will affect
the Partnership inasmuch as the Timberland Resources business segment has
been managing 97,000 acres of STRSO's portfolio on behalf of the current
investment manager, HTRG. The decrease in acres under management is expected
to have an adverse effect on revenues in the later part of 1999.
<PAGE>
The Partnership harvested and sold the following timber from its fee timberland
ownership for the six months ended June 30:
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------
Year Softwood Hardwood
Sawlogs Pulp Logs and Other Totals
- -----------------------------------------------------------------------
Volume Price Volume Price Volume Price Volume Price
MMBF $/MBF MMBF $/MBF MMBF $/MBF MMBF $/MBF
- -----------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1999 21.8 622 5.0 211 0.3 520 27.1 547
1998 17.4 581 5.7 259 0.6 468 23.8 503
- -----------------------------------------------------------------------
</TABLE>
MMBF = million board feet
MBF = thousand board feet
Log revenues from the Partnership's fee timberland ownership are significantly
affected by export log market conditions. The majority of the Partnership's
export log volume is sold to Japan. The Japanese export market showed some signs
of recovery in the first half of 1999. As a result, management accelerated the
timing of planned 1999 log production into the first half of the year and, to
the extent possible, focused more heavily on timber stands with a higher mix of
export-suitable logs. Total 1999 volumes are not expected to change
significantly from 1998. Export log volumes sold through domestic intermediaries
for the six months ended June 30, 1999 and 1998 were 8.0 MMBF and 4.4 MMBF,
respectively, while the proportion of export volume to total volume harvested
increased from 19% in 1998 to 29% in 1999. In addition to the increase in
volume, the average price of export logs sold year to date in 1999 increased 5%
from the comparable period in 1998 to $693 per MBF.
The average price of domestic logs sold was $581 and $554 per MBF for the
first six months of 1999 and 1998, respectively. Domestic conifer sawlog
volumes for the six months ended June 30, 1999 and 1998 were 13.8 MMBF and
13.0 MMBF, respectively. Domestic log demand is affected by the level of new
home construction, repair and remodel expenditures, weather, and market
conditions in foreign markets (especially Asia). Interest rate fluctuations,
population demographics, and changes in general economic conditions are
factors that influence housing starts. The level of existing homes sold,
together with interest rate movements, heavily influence repair and remodel
expenditures. In combination these forces affect the demand for lumber which
in turn drives the demand for logs. All of these factors affect the price the
Partnership receives from the sale of its log production.
Pulp log volumes for the six months ended June 30, 1999 and 1998 were 5.0
MMBF and 5.7 MMBF, respectively. Pulp log markets were relatively weak in the
second quarter of 1999. The average price of pulp logs sold was $211 and $259
per MBF for the first six months of 1999 and 1998, respectively. As
management shifted log production to capitalize on the relatively strong
export log market, the proportion of the total harvest mix attributable to
pulp log volume declined from 24% in 1998 to 19% in 1999.
In January of 1999, the Partnership acquired 512 acres of timberland for $1.3
million. The property acquired is contiguous to the Partnership's Hood Canal
tree farm and will be managed with the Partnership's other properties in
western Washington.
In the operation and management of its tree farm, the Partnership is subject
to federal, state and local laws that govern land use. Management's objective
is to be in compliance with such laws and regulations at all times.
Management anticipates that increasingly strict governmental requirements and
a growing social concern relating to environmental and endangered species
issues may result in additional restrictions on the timber operations of the
Partnership.
The risk of loss from fire, while possible on any timberland, is minimized on
Partnership lands by maintaining a well-developed road system, and an
established fire monitoring and suppression plan. The Washington State
Department of Natural Resources is ultimately responsible for all fire
suppression activities in the state.
<PAGE>
REAL ESTATE
Real Estate revenues for the three months ended June 30, 1999 and 1998
were $3.9 million and $5.7 million, respectively. On a year to date basis, Real
Estate revenues as of June 30, 1999 and 1998 were $6.0 million and $8.0 million,
respectively. Operating income for the three months ended June 30, 1999 and 1998
was $13 thousand and $2.5 million, respectively. On a year to date basis,
operating losses were $0.4 million. During the same period in 1998 the Real
Estate segment earned operating income of $2.5 million. The majority of the
decrease in revenues and operating income is due to a $2.8 million undeveloped
acreage sale during the second quarter of 1998 which resulted in $2.6 million in
operating income. The Partnership did not have any significant undeveloped
acreage sales during the first six months of 1999.
Real Estate consists of residential development and income-producing
properties. Residential development consists of the sale of single-family
homes, finished lots and undeveloped acreage. Income-producing properties
center around the Port Ludlow resort community and consist of the 36-room
Heron Beach Inn on Ludlow Bay, a 27-hole championship golf course, a 300-slip
saltwater marina, a restaurant/lounge, commercial center, recreational
vehicle park, and water and sewer facilities to service Port Ludlow residents
and businesses. Income-producing properties also include properties in Port
Gamble and Kingston.
Revenues from residential development for the three months ended June 30,
1999 and 1998 were $2.2 million and $4.4 million, respectively. On a year to
date basis residential development revenues as of June 30,1999 and 1998 were
$3.0 million and $5.8 million, respectively. The majority of the decrease in
residential development revenues is due to a $2.8 million sale of undeveloped
acreage in the second quarter of 1998.
The Partnership's largest development is in Port Ludlow, Washington. During
the three months ending June 30, 1999, the Partnership's development at Port
Ludlow generated revenues of $1.4 million on 5 dwellings and 1 lot. During
the three months ended June 30, 1998, the Partnership earned $2.2 million on
the sale of 2 dwellings and 2 lots. On a year to date basis as of June 30,
1999 the Partnership's development at Port Ludlow generated revenues of $1.7
million on 2 finished lot sales and 7 home sales. This compares to the prior
year's comparable period revenue of $2.2 million on 8 finished lot sales and
4 home sales. Revenue realized per sale depends on the quality and size of
the home, the subdivision, and the location of the lot.
Revenue from income-producing properties for the three months ended June 30,
1999 and 1998 were $1.7 million and $1.3 million, respectively. On a year to
date basis for June 30, 1999 and 1998 revenue totaled $3.0 million and $2.2
million, respectively. The increase resulted from revenue earned by the Heron
Beach Inn on Ludlow Bay. Prior to 1999 the Partnership held a 50% interest in
the joint venture that owned the Inn. In December 1998, the Partnership
increased its ownership interest in the Inn to 100% through a buyout of its
partner. As a result of the acquisition, revenues and expenses from the Inn
are now included in the Partnership's operating income.
The Partnership continues to be in the planning and entitlement phases
for several developments located in the West Puget Sound region. In 1997, the
City of Bremerton approved the Partnership's request for a planned unit
development on a 270-acre property. The industrial portion of the Bremerton
property is 61 acres. Construction of the off-site sewer is completed and the
Partnership is focusing on its marketing plan. With respect to other properties,
the Partnership continues to work with officials in Gig Harbor regarding the
development of a 320-acre mixed-use project located within the Gig Harbor city
limits. The Partnership has two additional ongoing projects in Kitsap County, a
720-acre residential development in Kingston and a 185-acre residential
development in Hansville. Development of these sites has been delayed pending
resolution of a lawsuit, in which the Partnership is not a party that will
establish the appropriate zoning and development regulations applicable to
projects pending throughout the County. In April 1999 State Court of Appeals
rendered a favorable decision but the case has been appealed to the Washington
Supreme Court for further review.
Land holdings throughout Washington State are affected by the state's Growth
Management Act, which requires counties to submit comprehensive plans that
identify the future direction of growth and stipulate where population
densities are to be concentrated. In Jefferson County, in which Port Ludlow
is located, the State Hearings Board approved the County's Comprehensive
Plan. In this plan Port Ludlow was
<PAGE>
granted status as a Master Planned Resort facilitating future build-out and
development of the resort. In July 1999 the Partnership completed a mediation
process with local residents to negotiate a proposed zoning ordinance
necessary to implement the Master Plan Resort Designation and complete
build-out of the resort. The mediation culminated in a proposed draft
ordinance, which was achieved through a consensus process. The draft
ordinance has been forwarded to the County for approval and adoption, which
is expected within 30-60 days. In Kitsap County, where Port Gamble is
located, the State Hearings Board rendered a decision in February 1999
invalidating Port Gamble's designation as an urban growth area and directing
the County to re-designate Port Gamble with an appropriate rural based
zoning. In July 1999, the Partnership obtained approval from Kitsap County to
designate Port Gamble as a "Rural Historic Town." The plan includes
substantial new commercial, industrial and residential development of the
town utilizing historic land use patterns, densities and architectural
character. Kitsap County is forwarding the plan to the State Hearings Board
for review.
OTHER
The following table sets forth expenses as a percentage of revenues for the
period ended June 30, 1999:
<TABLE>
<CAPTION>
Three Months ended Year to Date
1999 1998 1999 1998
------------------- --------------
<S> <C> <C> <C> <C>
Revenues 100% 100% 100% 100%
Cost of sales 31 29 28 28
Operating expenses 32 22 33 24
Selling, general and administrative expenses
17 14 17 15
------------------- --------------
Operating income 20% 35 % 22% 33%
------------------- --------------
------------------- --------------
</TABLE>
Cost of sales as a percentage of revenues on a year to date basis remained
constant from June 30,1998 to June 30, 1999. The quarter ended June 30,1998
included a $2.8 million land sale which produced $2.6 million dollars of
operating income. Cost of sales as a percentage of revenues increased for the
quarter ended June 30, 1999 as a result of not having a comparable land sale in
the second quarter of 1999.
Operating expenses and selling general and administrative expenses as a
percentage of revenues increased on both a year-to-date and second quarter
basis due primarily to the decrease in revenues from land sales. To a lesser
extent, operating expenses and selling general and administrative expenses
increased due to the costs incurred in the newly acquired operations of ORM
Resources Canada and the Heron Beach Inn. Both of these operations have a
higher component of their expenses that are classified as operating expenses
than the Partnership on a consolidated basis which results in an increase in
operating expenses as a percentage of revenues.
The income tax provision for the six months ended June 30, 1999 relates to
taxable income of the Partnership's corporate subsidiaries.
LIQUIDITY AND CAPITAL RESOURCES
Funds generated internally through operations and externally through
financing will provide the required resources for the Partnership's real
estate development and other capital expenditures. Management may also
consider increasing the Partnership's debt to total capitalization ratio to
participate in investments in real property, if the investments meet the
Partnership's return requirements and provide a good fit with the
Partnership's portfolio of properties. Management considers its capital
resources to be adequate for its current plans. At June 30, 1999, the
Partnership had available an unused $20.0 million bank loan commitment.
Management has considerable discretion to increase or decrease the level of
logs cut and thereby may increase or decrease net income and cash flow,
assuming log prices and demand remain stable. Management's current plan is to
harvest approximately 38 million board feet of timber in 1999. Since harvest
plans are based on demand and pricing, actual harvesting may vary subject to
management's ongoing review.
<PAGE>
Cash provided by operating activities was $4.5 million for the first six
months of 1999, and overall cash and cash equivalents increased by $196,000
during the six-month period. The cash generated from operations was primarily
used for capital expenditures of $2.9 million and cash distributions to
unitholders of $0.9 million. Capital expenditures include $1.3 million to
purchase 512 acres of timberland in the first quarter of 1999. The second
quarter 1999 cash distribution of ten cents per unit, payable to unitholders
of record on June 2, 1999, was paid on June 16, 1999.
During the first quarter of 1999, Mr. Adolphus Andrews retired from the
Board of Directors of Pope MGP, the Partnership's General Partner. Mr. Joseph O.
Tobin II was selected to join Pope MGP's Board of Directors and his term expires
on December 31, 2000.
YEAR 2000
The Partnership has hired consultants to help evaluate its exposure related
to year 2000 (Y2K) issues and to develop a plan to fix hardware or software
that is not Y2K compliant. Projected costs of identifying Y2K issues, fixing
software and hardware that is not Y2K compliant, and querying major vendors
and customers to determine their state of readiness are not expected to be
greater than $250,000. Costs incurred through June 30, 1999 total $220,000.
Management has completed the process of identifying the hardware, software,
and related equipment that must be modified, upgraded, or replaced to
minimize the possibility of a material disruption of its business. Management
has essentially achieved Y2K compliance for all of its critical internal
systems, and expects to complete this process for its remaining systems no
later than the third quarter of 1999.
To date, over 80% of the Partnership's suppliers and customers contacted have
confirmed that they will be Y2K compliant prior to January 1, 2000 or have
indicated that the status of their Y2K compliance has yet to be determined.
However, management can give no assurance that the Y2K issue will not
materially affect its suppliers or customers. In the event that a significant
customer or vendor were not able to operate after the year 2000, the
resulting interruption in the Partnership's business could lead to costs in
excess of management's estimate of expenses related to Y2K compliance.
Contingency plans for the event of significant interruptions of internal
systems or our supplier's or customer's businesses are being developed.
Contingency plans are expected to be complete late in 1999. Management
believes that the most reasonably likely worst case scenario relating to Y2K
compliance could relate to a potential disruption in cash processing from
failures of customers and/or financial institutions.
<PAGE>
PART II
Items 1 through 5 are not applicable.
6. EXHIBITS AND REPORTS ON FORM 8-K
None.
Exhibit 27. Financial Data Schedule
<PAGE>
POPE RESOURCES
SIGNATURE
Pursuant to the requirement 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.
POPE RESOURCES,
A Delaware Limited Partnership
Registrant
Date: August 11, 1999 By: POPE MGP, Inc.
Managing General Partner
Date: August 11, 1999 By: /s/ Gary F. Tucker
---------------------------------------
Gary F. Tucker
President and Chief Executive Officer
Date: August 11, 1999 By: /s/ Thomas M. Ringo
---------------------------------------
Thomas M. Ringo
Sr. Vice President Finance & Client Relations
(Principal Financial Officer)
Date: August 11, 1999 By: /s/ Meredith R. Green
---------------------------------------
Meredith R. Green
Vice President Finance and Treasurer
(Principal Accounting Officer)
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 2,862
<SECURITIES> 0
<RECEIVABLES> 2,601
<ALLOWANCES> 0
<INVENTORY> 12,525
<CURRENT-ASSETS> 18,800
<PP&E> 68,008
<DEPRECIATION> 23,389
<TOTAL-ASSETS> 66,668
<CURRENT-LIABILITIES> 2,894
<BONDS> 13,522
0
0
<COMMON> 0
<OTHER-SE> 50,038
<TOTAL-LIABILITY-AND-EQUITY> 66,668
<SALES> 17,848
<TOTAL-REVENUES> 26,794
<CGS> 7,450
<TOTAL-COSTS> 20,896
<OTHER-EXPENSES> 35
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 655
<INCOME-PRETAX> 5,295
<INCOME-TAX> 240
<INCOME-CONTINUING> 5,055
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,055
<EPS-BASIC> 1.12
<EPS-DILUTED> 1.11
</TABLE>
