SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly Report under Section 13 or 15 (d)
of the Securities Exchange Act of 1934
For Quarter Ended September 30, 1995
Commission File Number 0-15405
Data Transmission Network Corporation
(Exact name of registrant as specified in its charter)
Delaware 47-0669375
(State of Incorporation) (I.R.S. Employer ID Number)
9110 West Dodge Road, Suite 200, Omaha, Nebraska 68114
(Address of principal executive office) (Zip Code)
(402) 390-2328
(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 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 November 8, 1995...3,312,784.
1
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<TABLE>
<CAPTION>
FINANCIAL STATEMENTS
- -----------------------------------------------------------------------------------------
BALANCE SHEETS
- -----------------------------------------------------------------------------------------
September 30, 1995 December 31, 1994
(Unaudited) (Audited)
- -----------------------------------------------------------------------------------------
ASSETS
<S> <C> <C>
Current Assets
Cash $ 322,077 $ 720,343
Accounts receivable, net of allowance for
doubtful accounts of $220,000 4,986,011 3,297,773
Prepaid expenses 439,316 189,332
Deferred commission expense 1,470,271 629,925
-------------- --------------
Total Current Assets 7,217,675 4,837,373
Equipment Used By Subscribers, net of accumulated
depreciation of $56,271,087 and $43,710,079 66,144,113 61,449,931
Equipment and Leasehold Improvements, net of
accumulated depreciation of $6,538,193
and $4,729,831 5,285,748 4,666,742
Intangible Asset, net of accumulated
amortizationn of $103,540 4,866,460 --
Other Assets 552,775 505,310
-------------- --------------
$ 84,066,771 $ 71,459,356
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities
Accounts payable $ 9,009,702 $ 4,493,796
Accrued expenses 1,702,656 1,117,206
Current portion of long-term debt 8,750,000 9,463,541
-------------- --------------
Total Current Liabilities 19,462,358 15,074,543
Long-Term Debt 26,437,499 19,578,124
Subordinated Long-Term Notes, net of unamortized
discount of $535,775 and $595,310 14,464,225 14,404,690
Equipment Deposits 521,228 542,102
Unearned Revenue 10,336,618 9,152,919
Stockholders' Equity
Common stock, par value $.001, authorized
20,000,000 shares, issued 3,375,408 3,375 3,375
Paid-in capital 14,302,689 14,302,689
Retained earnings (deficit) (364,962) (217,501)
Treasury stock, at cost, 63,490 and 83,723 shares (1,096,259) (1,381,585)
-------------- --------------
Total Stockholders' Equity 12,844,843 12,706,978
-------------- --------------
$ 84,066,771 $ 71,459,356
<FN>
See notes to interim financial statements.
</FN>
</TABLE>
2
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<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
STATEMENT OF OPERATIONS
- -------------------------------------------------------------------------------------------------------
Quarter Ended Nine Months Ended
Unaudited Sept. 30, 1995 Sept. 30, 1994 Sept. 30, 1995 Sept. 30, 1994
- -------------------------------------------------------------------------------------------------------
REVENUES
<S> <C> <C> <C> <C>
Subscriptions $ 12,110,885 $ 8,684,429 $ 32,817,168 $ 24,608,994
Additional services 1,004,800 913,940 2,868,210 2,640,032
Communication services 1,832,330 1,238,393 4,961,047 3,270,698
Advertising 377,808 358,084 1,573,950 1,422,989
Service initiation fees 842,428 489,824 2,304,536 1,686,733
------------- ------------- ------------- -------------
16,168,251 11,684,670 44,524,911 33,629,446
EXPENSES
Selling, general and administrative 8,619,155 7,159,337 24,159,435 19,706,681
Sales commissions 1,375,229 1,009,274 3,631,816 2,589,586
Depreciation and amortization 4,901,641 3,866,967 13,784,386 10,914,966
------------- ------------- ------------- -------------
14,896,025 12,035,578 41,575,637 33,211,233
------------- ------------- ------------- -------------
OPERATING INCOME 1,272,226 (350,908) 2,949,274 418,213
Interest expense 1,135,981 956,136 3,219,503 2,118,754
Other income, net 14,311 11,369 45,615 30,879
------------- ------------- ------------- -------------
INCOME (LOSS) BEFORE
INCOME TAXES 150,556 (1,295,675) (224,614) (1,669,662)
Income tax (benefit) provision 54,000 (453,000) (81,000) (584,000)
------------- ------------- ------------- -------------
NET INCOME (LOSS) $ 96,556 $ (842,675) $ (143,614) $ (1,085,662)
- -------------------------------------------------------------------------------------------------------
EARNINGS (LOSS) PER SHARE $ 0.03 $ (0.26) $ (0.04) $ (0.34)
- -------------------------------------------------------------------------------------------------------
Weighted Average Number of Shares
Outstanding 3,501,476 3,253,761 3,299,353 3,240,681
- -------------------------------------------------------------------------------------------------------
<FN>
See notes to interim financial statements
</FN>
</TABLE>
3
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<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------
STATEMENTS OF CASH FLOWS
- -------------------------------------------------------------------------------------------------
Nine Months Ended
Unaudited Sept. 30, 1995 Sept. 30, 1994
- --------------------------------------------------------------------------------------------------
Cash Flows From Operating Activities
<S> <C> <C>
Net loss $ (143,614) $ (1,085,662)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization 13,784,386 10,914,966
Amortization of debt issue costs and discount 96,570 32,190
Deferred income taxes (84,500) (566,000)
Change in assets and liabilities:
Accounts receivable (1,688,238) (460,504)
Prepaid expenses (249,984) (330,708)
Deferred commission expense (840,346) (44,461)
Deferred debt issuance costs -- (395,000)
Accounts payable (51,048 890,765
Accrued expenses 585,450 75,039
Equipment deposits (20,874) (25,381)
Unearned revenue 1,183,699 1,229,211
------------- -------------
Net Cash Provided By Operating Activities 12,571,501 10,234,455
Cash Flows From Investing Activities
Capital expenditures:
Equipment used by subscribers (15,801,619) (22,488,658)
Equipment and leasehold improvements (1,961,415) (2,024,904)
Acquisition of Subscribers (1,634,046) --
------------- -------------
Net Cash Used By Investing Activities (19,397,080) (24,513,562)
Cash Flows From Financing Activities
Proceeds from long-term debt 13,250,000 16,500,000
Principal payments on long-term debt (7,104,166) (18,062,500)
Proceeds from subordinated long-term debt -- 15,000,000
Proceeds from the exercise of stock
options and warrants 281,479 1,265,040
Purchase of treasury stock -- (534,000)
------------- -------------
Net Cash Provided By Financing Activities 6,427,313 14,168,540
------------- -------------
Net Decrease in Cash (398,266) (110,567)
Cash at Beginning of Period 720,343 648,391
------------- -------------
Cash at End of Period $ 322,077 $ 537,824
------------- -------------
</TABLE>
4
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DATA TRANSMISSION NETWORK CORPORATION
NOTES TO INTERIM FINANCIAL STATEMENTS
1. GENERAL AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES:
The information furnished herein relating to interim periods
has not been audited by independent Certified Public
Accountants. The interim financial information in this report
reflects any adjustments which are, in the opinion of
management, necessary for a fair statement of results for the
interim periods presented in accordance with generally
accepted accounting principles. All such adjustments are of a
normal recurring nature. The accounting policies followed by
the company, and additional footnotes, are set forth in the
audited financial statements included in the company's 1994
Annual Report, which report was incorporated by reference in
Form 10-K for the fiscal period ended December 31, 1994.
2. LONG-TERM DEBT AND LOAN AGREEMENTS:
The company has a senior loan agreement with a group of seven
regional banks (the "senior loan agreement"). The senior loan
agreement, which expires June 30, 1996 unless extended,
provides for a total commitment of up to $34,500,000 in new
borrowings. As of September 30, 1995, $13,250,000 of the total
commitment had been borrowed, with the remaining $21,250,000
available to the company subject to certain restrictions as
discussed below.
Additional borrowings under the senior loan agreement are
available to the company, so long as at the time of the
advance, no default exists under the senior loan agreement or
under the subordinated notes agreement (see Note 3), and total
debt outstanding (including term notes outstanding but
excluding long-term subordinated debt) does not exceed
thirty-six times monthly operating cash flow (as defined). As
of September 30, 1995, based on its current operating cash
flow, the company would be able to borrow all of the
$21,250,000 remaining commitment available.
Substantially all of the company's assets are pledged as
collateral under the senior loan agreement. In addition to the
restrictions mentioned above with respect to advances, total
debt outstanding (excluding long-term subordinated debt) is
limited to forty-eight times monthly operating cash flow or
three and one-half times stockholders' equity (defined to
include long-term subordinated debt), whichever is less.
Additionally, total debt outstanding (including subordinated
debt) is limited to sixty times monthly operating cash flow.
The company is also required to maintain total stockholders'
equity of at least $11,000,000, a ratio of quarterly
5
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operating cash flow to interest expense (as defined) of at
least 2.25 to 1, and is restricted to paying no cash dividends
in excess of 25% of the prior years net operating income after
taxes.
Interest on the outstanding borrowings (prior to when the
borrowings might be converted to term loans, as discussed
below) is at a variable rate, depending on the ratio of the
company's total borrowings (excluding long-term subordinated
debt) to stockholders equity (including long-term subordinated
debt) (the "Ratio"). So long as the Ratio is below 2.0 to 1,
interest is at prime. When the Ratio is between 2.0 to 1 and
2.49 to 1, the interest rate is at prime plus 1/4%. When the
Ratio is between 2.50 to 1 and 2.99 to 1, the interest rate is
at prime plus 3/4%. When the Ratio is at or above 3.0 to 1,
the interest rate is at prime plus 1 1/4%. The prime rate is
adjusted monthly, with the interest rate adjustment (as
defined above) changed quarterly. As of November 1, 1995, the
variable rate borrowings outstanding are accruing interest at
the prime rate of 8.75%.
The company has the option to convert the outstanding
borrowings to term loans at any time, payable in forty-eight
equal principal installments, plus interest. Interest on the
converted term loans is at the greater of, a variable rate of
.75% over the base rate (as determined in the preceding
paragraph) or, 2.50% above the average of the yields on
constant maturity treasury bonds with maturities of three and
five years. As of September 30, 1995, $13,250,000 of the total
borrowings outstanding had not been converted to term loans.
The remainder of the borrowings were term loans with interest
rates ranging from 6.75% to 9.25%.
The company pays a commitment fee of 1/4% on all unused
portion of the total commitment. Additionally, once the Ratio
(as described previously) reaches 2.50 to 1, the company will
be required to pay a closing fee of 1/2% on all new borrowings
made after that point in time.
3. SUBORDINATED LONG-TERM NOTES:
On June 30, 1994, the company sold to one investor $15,000,000
of its 11.25% subordinated long-term notes in a private
placement transaction (the "subordinated debt"). The
subordinated debt is subordinate in right of payment to all
current and future senior debt. Interest on the subordinated
debt is to be paid quarterly, with principal due in five equal
annual installments beginning on June 30, 2000.
The company has the option to prepay the subordinated debt on
any date after June 30, 1997 at a premium beginning at 7.5% of
the principal prepaid, and decreasing by 1.5% per year until
June 30, 2002 when no premium is required. There are also
provisions for mandatory prepayment upon a change in ownership
control (as defined), at a premium beginning at 12.0% of the
principal prepaid during the period ended June 30, 1995 and
decreasing by 1.5% per year until June 30, 2002 when no
premium is required.
6
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The subordinated debt agreement contains a cross-acceleration
clause, whereby the subordinated debt will become immediately
due and payable upon a payment default on the senior debt
outstanding. Other subordinated debt financial covenants and
restrictions are generally less restrictive than those of the
senior loan agreement.
The company also issued a warrant to the investor to purchase
25,000 shares of the company's $.001 par value common stock at
$22.17 per share on or before June 30, 2004. In connection
with the issuance of the warrant to purchase common stock, the
company recorded a $635,000 credit to additional paid in
capital and a related debt discount, which represents an
estimate of the fair value of the warrant issued.
Expenses of the subordinated debt offering have been
capitalized and are being amortized, along with the debt
discount mentioned in the previous paragraph, over the life of
the subordinated debt using a level-yield method.
4. EARNINGS (LOSS) PER SHARE:
Earnings (loss) per share were calculated based on the
weighted average number of shares outstanding. Outstanding
warrants and options are included in the calculation of net
income (loss) per share only when their impact is dilutive.
7
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES
Due to the nature of the Company's business, the majority of it's
assets are invested in equipment used by it's subscribers. As a result,
the Company does not have a significant amount of liquid assets.
The Company's primary commitment for capital expenditures is for
equipment used by it's subscribers. During the first nine months of
1995, the Company purchased $15,802,000 of this equipment compared to
$22,489,000 in 1994. The decrease in purchases was mainly the result of
reducing inventory levels that had been built up by the end of 1994.
These purchases were financed through cash flow from operations and
borrowings under the revolving senior loan agreement.
Effective July 26, 1995, the Company entered into an agreement with
Knight-Ridder Financial (KRF) to acquire 2,900 Knight-Ridder Commodity
News Service subscribers. The Company will pay KRF approximately
$4,970,000 over two years, made up of $3,000,000 for the subscribers
and $1,970,000 for future revenue sharing. The $3,000,000 for the
subscribers is to be paid one-half at closing and the remaining
one-half due one year from closing. The $1,970,000 for future revenue
sharing is based upon a company estimate and is to be paid quarterly.
The purchase price is being capitalized as an intangible asset and
amortized using the straight line method over eight years.
During the first nine months of 1995, net cash provided by operating
activities increased 23% primarily due to the increase in operating
cash flow as previously discussed.
The Company expects to satisfy operating expenses and debt repayment
requirements with internally generated cash flows and the available
credit line under the current senior loan agreement. During the first
nine months of 1995, the Company has borrowed $13,250,000 from the
available credit line.
Stockholders equity increased slightly to $12,844,843 at September 30,
1995, mainly due to the issuance of treasury stock upon the exercise of
options outstanding to purchase common stock. This was offset slightly
by the net loss for the first nine months of 1995.
8
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RESULTS OF OPERATIONS
Revenues:
Total revenues for the third quarter and first nine months of 1995
increased 38% and 32% over the same periods of 1994. The increases can be
attributed to strong growth in subscription, communications and service
initiation fee revenues. A primary factor for the increase was the growth
in total subscribers to 92,400 up from 80,200 one year ago. The main
contributor was the Company's commitment to increasing its means of
distribution by expanding the sales force, which showed positive results
with a strong growth in sales during a normally slower seasonal period. In
addition, the Company acquired 2,900 subscribers from Knight-Ridder
Financial during the third quarter of 1995 which are included in the 1995
figures. On a per subscriber per month basis, operating revenue,
(subscription, communication, additional services, and advertising
revenues) increased to $57.13 and $54.42 for the third quarter and first
nine months of 1995 compared to $46.85 and $45.90 for the same periods in
1994.
Subscriptions:
The 15% growth in total subscribers and the continued increase of
higher revenue services in the subscription mix, contributed to the 39%
and 33% increase in subscription revenue for the third quarter and
first nine months of 1995 compared to 1994.
Communication Services:
The continued strong growth by the DTNergy service resulted in a 48%
and 52% revenue increase for the third quarter and first nine months of
1995 compared to the same periods of 1994. DTNergy transmits refiner's
prices and other communications messages to wholesalers.
Service Initiation Fees:
The increased growth of new subscription sales, due to the reasons
discussed above, and an increase in the standard fee charged to
subscribers contributed to the revenue increase. Service initiation
fees in excess of related marketing and set-up costs, excluding sales
commissions, are deferred, however, currently these revenues do not
exceed the costs and therefore are not deferred. Service initiation fee
revenue was up 72% for the third quarter of 1995 over the same quarter
in 1994 and 37% for the first nine months of 1995 compared to 1994.
Expenses:
Total expenses for the third quarter and first nine months of 1995
increased 24% and 25% compared to 1994. This increase was primarily due to
increased costs to obtain new subscribers, due in part to the sales force
expansion and the subscriber acquisition, and to service and support this
increasing subscriber base.
9
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Selling, General and Administrative:
Selling, general and administrative expenses grew 20% and 23% for the
third quarter and first nine months of 1995, mainly due to the 15%
growth in the subscriber base and the continued investment in new
developmental services. On a per subscriber per month basis, these
costs were $32.12 and $31.14 for the third quarter and first nine
months of 1995, compared to $29.96 and $28.32 one year ago. As a
percentage of revenues, selling, general and administrative expenses
were 53% and 54% for 1995 compared to 61% and 59% for the same periods
in 1994. This trend is consistent with the prior quarters of 1995.
Sales Commissions:
Continued increases in gross subscription sales and strong revenue
growth in DTNergy attributed to the 36% and 40% increase in sales
commissions for the third quarter and first nine months of 1995 over
1994. DTNergy commissions are based on the level of net revenue
generated and not new sales as in other services.
Depreciation and Amortization:
Depreciation and amortization expense for the third quarter and first
nine months of 1995 increased 27% and 26% over 1994 due to the rising
subscriber base and with the change in the percentage mix of the
subscribers receiving their services via the more expensive color
graphics receiver. As a percentage of revenue, depreciation and
amortization expense was slightly lower down to 30% and 31% for the
periods reported compared to 33% and 32% one year ago.
Net Developmental Costs:
As defined, "net developmental costs" include, 1) the costs of market
research activities, 2) the expenses of hardware and software
engineering, and 3) the negative operating cash flow (after interest
expense but prior to corporate allocations) of new products. These
costs for the third quarter of 1995 were $794,000 compared to
$1,279,000 for the same period in 1994. For the first nine months of
1995, these costs were $2,580,000 down from $3,243,000 for the prior
year. The decrease is the direct result of the success of our
developmental services. In effect, the increase in revenues from our
new services have decreased the negative operating cash flow from these
services. Net developmental costs is one measurement of the Company's
investment in new services and technology.
Operating Cash Flow:
Operating cash flow (operating income before depreciation and amortization
expense) grew 76% for the third quarter of 1995 over 1994. For the first
nine months, the growth was at 48% for 1995 over 1994. The rise in
operating cash flow can be attributed primarily to an increase in
subscribers and an increase in subscribers utilizing the higher margin
services. Operating cash flow is a key component management uses to measure
the Company's success.
10
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Interest Expense:
The interest expense increase for the third quarter and first nine months
of 1995 over 1994 was primarily due to higher borrowing requirements needed
to fund purchases of equipment used by subscribers, a rise in the prime
rate that drives the Company's revolving variable rate debt and the
addition of the subordinated debt obtained late in the second quarter of
1994. In addition, borrowings were needed to fund the acquisition of the
2,900 Knight-Ridder Commodity News Service subscribers in the third quarter
of 1995. As a percentage of revenue, interest expense was down at 7% in the
third quarter of 1995 compared to 8% one year ago.
Income Tax (Benefit) Provision:
The Company's effective income tax rate was 36% for the third quarter and
first nine months of 1995 compared to 35% for both periods one year ago.
11
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FORM 10-Q
DATA TRANSMISSION NETWORK CORPORATION
PART II - OTHER INFORMATION
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS:
(a) Date of Annual Meeting of Stockholders - April 26, 1995.
(b) Directors Elected - Roger R. Brodersen, Robert S. Herman,
David K. Karnes, J. Michael Parks, Jay E. Ricks, Greg T.
Sloma and Roger W. Wallace.
(c) Other Matters Voted Upon
- Proposal to amend the Company's Non-Employee
Directors Stock Option Plan, 2,700,301 votes
for, 54,887 votes against, 14,000 broker
non-votes and 19,196 votes abstained.
- Ratification of the appointment of Deloitte
and Touche LLP as independent auditors for
1995, 2,770,192 votes for, 8,635 votes
against and 9,557 votes abstained.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K:
(a) Exhibits - 11 - Statement re computation of per share
earnings.
(b) Reports on Form 8-K
None
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, the
Registrant has duly caused this report to be signed on it's behalf by the
undersigned thereunto duly authorized.
DATA TRANSMISSION NETWORK CORPORATION
By /s/ Roger R. Brodersen
---------------------------------
Roger R. Brodersen
Chairman, President and CEO
By /s/ Greg T. Sloma
--------------------------------
Greg T. Sloma
Executive Vice President and Chief
Operating Officer
By /s/ Brian L. Larson
---------------------------------
Brian L. Larson
Chief Financial Officer, Secretary
and Treasurer
Dated this 8th day of November, 1995.
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<TABLE>
<CAPTION>
Exhibit 11
- ------------------------------------------------------------------------------------------------------------
COMPUTATION OF NET INCOME PER SHARE
- ------------------------------------------------------------------------------------------------------------
Quarter Ended Nine Months Ended
Sept. 30, 1995 Sept. 30, 1994 Sept. 30, 1995 Sept. 30, 1994
- ------------------------------------------------------------------------------------------------------------
PRIMARY
Computation of income per common
and common equivalent share:
<S> <C> <C> <C> <C>
Net income (loss) $ 96,556 $ (842,675) $ (143,614) $(1,085,662)
=========== =========== =========== ===========
Average shares outstanding 3,307,822 3,253,761 3,299,353 3,240,681
Add shares applicable to stock
options & warrants (1) 192,558 -- -- --
Add shares applicable to stock options
& warrants prior to conversion, using
average market price prior to
conversion (1) 1,096 -- -- --
----------- ----------- ----------- -----------
Total shares 3,501,476 3,253,761 3,299,353 3,240,681
=========== =========== =========== ===========
Per common share:
Net income (loss) (1) $ 0.03 $ (0.26) $ (0.04) $ (0.34)
=========== =========== =========== ===========
- ---------------------------------------------------------------------------------------------------------
<FN>
(1) Shares applicable to warrants and stock options are included in the
calculation only when their impact is dilutive.
</FN>
</TABLE>
13
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<TABLE>
<CAPTION>
Exhibit 11-page 2
- ------------------------------------------------------------------------------------------------------
COMPUTATION OF NET INCOME PER SHARE
- ------------------------------------------------------------------------------------------------------
Quarter Ended Nine Months Ended
Sept. 30, 1995 Sept. 30, 1994 Sept. 30, 1995 Sept. 30, 1994
- -------------------------------------------------------------------------------------------------------
FULLY DILUTED
Computation of income per common and
common equivalent share:
<S> <C> <C> <C> <C>
Net income (loss) $ 96,556 $ (842,675) $ (143,614) $(1,085,662)
=========== =========== =========== ===========
Average shares outstanding 3,307,822 3,253,761 3,299,353 3,240,681
Add shares applicable to stock
options & warrants (1) 232,950 -- -- --
Add shares applicable to stock options
& warrants prior to conversion, using
average market price prior to
conversion (1) 1,175 -- -- --
----------- ----------- ----------- -----------
Total shares 3,541,947 3,253,761 3,299,353 3,240,681
=========== =========== =========== ===========
Per common share:
Net income (loss) (1) $ 0.03 $ (0.26) $ (0.04) $ (0.34)
=========== =========== =========== ===========
- -------------------------------------------------------------------------------------------------------
<FN>
(1) Shares applicable to warrants and stock options are included in the
calculation only when their impact is dilutive.
</FN>
</TABLE>
14
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 322,077
<SECURITIES> 0
<RECEIVABLES> 5,206,011
<ALLOWANCES> 220,000
<INVENTORY> 0
<CURRENT-ASSETS> 7,217,675
<PP&E> 134,239,141
<DEPRECIATION> 62,809,280
<TOTAL-ASSETS> 84,066,771
<CURRENT-LIABILITIES> 19,462,358
<BONDS> 40,901,724
<COMMON> 3,375
0
0
<OTHER-SE> 12,841,468
<TOTAL-LIABILITY-AND-EQUITY> 84,066,771
<SALES> 44,524,911
<TOTAL-REVENUES> 44,524,911
<CGS> 0
<TOTAL-COSTS> 41,575,637
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,219,503
<INCOME-PRETAX> (224,614)
<INCOME-TAX> (81,000)
<INCOME-CONTINUING> (143,614)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (143,614)
<EPS-PRIMARY> (0.04)
<EPS-DILUTED> (0.04)
</TABLE>
