<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended SEPTEMBER 26, 1998
-------------------------------------------------
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
------------------------ -----------------------
Commission file number 33-67908
-------------------------------------
MOSLER INC.
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 31-1172814
- ------------------------------- -----------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
8509 BERK BOULEVARD
HAMILTON, OHIO 45015-2213
- ---------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
(513) 870-1900
- -------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Not applicable
- -------------------------------------------------------------------------------
(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 Exchange Act of 1934 during
the preceding 12 months (or for such shorter periods 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
------------------ ------------------
Applicable Only to Corporate Issuers
Indicate the number of shares outstanding of each of the Issuer's classes of
common stock, as of the latest practical date.
Common Stock, $0.10 Par Value 2,080,407.868270 SHARES AS OF SEPTEMBER 26, 1998
- ----------------------------- ------------------------------------------------
<PAGE> 2
INDEX
<TABLE>
<CAPTION>
Financial Information (Part I)
Page
<S> <C> <C>
Item 1. Financial Statements (Unaudited)
Consolidated condensed balance sheets - September 26, 1998
and June 27, 1998 3-4
Consolidated condensed statements of operations - Three months
ended September 26, 1998 and September 27, 1997 5
Consolidated condensed statement of common stockholders'
deficiency - Three months ended September 26, 1998 6
Consolidated condensed statements of cash flows - Three months
ended September 26, 1998 and September 27, 1997 7
Notes to consolidated condensed financial statements 8-11
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 12-15
Other information (Part II)
Item 1. Legal Proceedings 16
Item 4. Submission of Matters to a Vote of Security Holders 17
Item 6. Exhibits and Reports on Form 8-K 17
Signatures 18
</TABLE>
Page 2
<PAGE> 3
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
MOSLER INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
Sep. 26, June 27
1998 1998
======== ========
(Unaudited) (Derived from
Audited
Financial
Statements)
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 417 $ 537
Accounts receivable, net 55,686 56,980
Inventories 22,478 23,183
Other current assets 2,284 1,334
-------- --------
Total current assets 80,865 82,034
Facilities:
Land and land improvements 802 802
Buildings 4,695 4,739
Machinery and equipment 32,668 32,779
Improvement in progress 846 466
-------- --------
Gross facilities 39,011 38,786
Less accumulated depreciation 30,285 29,919
-------- --------
Net facilities 8,726 8,867
Other assets:
Service agreements 7,897 9,025
Deferred debt issuance costs 2,456 2,714
Goodwill 2,662 3,039
Other intangible assets 94 94
Sundry 556 523
-------- --------
Total Other Assets 13,665 15,395
$103,256 $106,296
======== ========
</TABLE>
Page 3
<PAGE> 4
<TABLE>
<CAPTION>
Sep. 26, June 27
1998 1998
========= ==========
Liabilities, redeemable stock and common (Unaudited) (Derived from
stockholders' deficiency Audited
Financial
Statements)
<S> <C> <C>
Current liabilities:
Accounts payable $ 17,821 $ 16,581
Accrued liabilities:
Compensation & payroll taxes 5,780 5,552
Product warranty 899 837
Accrued workers' compensation 4,634 4,488
Accrued interest 2,670 5,832
Other 9,794 5,556
Unearned revenue 11,582 16,894
Income taxes payable 278 284
Long-term debt due within one year 1,294 1,298
--------- ---------
Total current liabilities 54,752 57,322
Long-term debt due after one year 134,544 132,493
Accrued pension and other benefit liabilities 453 453
Commitments and contingencies
Redeemable stock:
Series D increasing rate preferred stock 58,331 55,751
Series C adjustable rate preferred stock 44,415 42,850
Common Stock 362 362
--------- ---------
Total redeemable stock 103,108 98,963
Common stockholders' deficiency:
Common stock 254 254
Accumulated deficit (183,610) (176,970)
Excess of additional pension liability over
unrecognized prior service cost (13) (13)
Redemption value of common stock held by ESOP (362) (362)
Foreign currency translation adjustments (1,391) (1,365)
Common stock held in treasury (4,479) (4,479)
--------- ---------
Total common stockholders' deficiency (189,601) (182,935)
--------- ---------
$ 103,256 $ 106,296
========= =========
</TABLE>
See accompanying notes to financial statements
Page 4
<PAGE> 5
MOSLER INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands except per share amounts)
<TABLE>
<CAPTION>
Three months ended
=======================
Sept. 26, Sept. 27,
1998 1997
======== ========
<S> <C> <C>
Net sales:
Service $ 24,245 $ 25,221
Product 33,136 27,181
-------- --------
57,381 52,402
Cost of sales:
Service 18,378 18,791
Product 26,720 22,255
Plant Closing 1,589 0
-------- --------
46,687 41,046
-------- --------
Gross profit 10,694 11,356
Selling and administrative expense 9,107 8,775
Other expense 107 193
-------- --------
9,214 8,968
-------- --------
Operating income 1,480 2,388
Debt expense:
Interest expense (Includes non cash interest on preferred
stock of $1,617 and $824 respectively) 5,343 4,299
Amortization of debt expense 258 144
Interest income (5) 0
-------- --------
5,596 4,443
-------- --------
Loss before income taxes and preferred stock charges (4,116) (2,055)
Provision for income taxes (1) 13
-------- --------
Loss before preferred stock charges (4,115) (2,068)
Preferred dividends (2,416) (2,496)
Amortization of preferred stock discount (109) (186)
-------- --------
Net loss applicable to common stockholders ($6,640) ($4,750)
======== ========
Basic and diluted net loss per common share ($3.19) ($2.28)
======== ========
</TABLE>
See accompanying notes to financial statements.
Page 5
<PAGE> 6
MOSLER INC.
CONSOLIDATED CONDENSED STATEMENT OF COMMON STOCKHOLDERS' DEFICIENCY
THREE MONTHS ENDED SEPTEMBER 26, 1998
(Unaudited)
(In thousands of dollars)
<TABLE>
<CAPTION>
Redemption
Common Value of Foreign
Stock Common Currency
$.10 Par Accumulated Pension Stock held Translation Treasury
Value Deficit Liability by ESOP Adjustments Stock Total
----------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance at June 27, 1998 $254 ($176,970) ($13) ($362) ($1,365) ($4,479) ($182,935)
Net loss before preferred
stock charges (4,115) (4,115)
Amortization of Series D
preferred stock discount (109) (109)
Dividends on Series D
preferred stock (855) (855)
Dividends on Series C
preferred stock (1,561) (1,561)
Foreign currency translation
adjustment (26) (26)
----------------------------------------------------------------------------------------
Balance at September 26, 1998 $254 ($183,610) ($13) ($362) ($1,391) ($4,479) ($189,601)
========================================================================================
</TABLE>
See accompanying notes to financial statements.
Page 6
<PAGE> 7
MOSLER INC.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
Three months ended
========================
Sept. 26, Sep 27,
1998 1997
========= ========
<S> <C> <C>
Net loss $(4,115) $(2,068)
Adjustments to reconcile loss to net cash
provided (used) by operating activities:
Depreciation 623 691
Amortization 1,511 1,511
Loss on disposal of facilities 7
Interest paid in shares of preferred stock 1,695 825
Provision for doubtful accounts 4
Decrease (increase) in:
Accounts receivable 1,290 3,539
Inventories 705 346
Other current assets (950) (925)
Increase (decrease) in:
Accounts payable 1,240 (2,851)
Accrued liabilities 1,512 (1,620)
Unearned revenue (5,312) (5,339)
Income taxes payable (6) 24
------- -------
Net cash used by operating activities (1,796) (5,867)
Cash flows from investing activities:
Capital expenditures (489) (783)
Decrease in other assets (39) 771
------- -------
Net cash used by investing activities (528) (12)
Cash flows from financing activities
Purchase of preferred stock (75)
Net proceeds from revolving line of credit 2,297 5,811
Deferred debt issuance costs 258 144
Principal payment on long-term debt (250) (250)
------- -------
Net cash provided by financing activities 2,230 5,705
Effect of exchange rate changes on cash (26) 55
------- -------
Net decrease in cash and cash equivalents (120) (119)
Cash and cash equivalents at beginning of period 537 389
------- -------
Cash and cash equivalents at end of period $ 417 $ 270
======= =======
</TABLE>
See accompanying notes to financial statements.
Page 7
<PAGE> 8
FINANCIAL INFORMATION
Item 1. Notes to Consolidated Condensed Financial Statements
----------------------------------------------------
1. Basis of Presentation
---------------------
In the opinion of management, the unaudited consolidated financial
statements include all adjustments (which consist of only normal, recurring
accruals) necessary to present fairly the consolidated financial position
as of September 26, 1998, and the results of operations for the three
months ended September 26, 1998 and September 27, 1997 and the cash flows
for the three months ended September 26, 1998 and September 27, 1997. In
accordance with generally accepted accounting principles for interim
financial information, these statements do not include all of the
information and footnotes required by generally accepted accounting
principles for complete annual financial statements. Financial information
as of June 27, 1998 has been derived from the audited consolidated
financial statements of the Registrant. The results of operations and cash
flows for the three months ended September 26, 1998 and September 27, 1997
are not necessarily indicative of the results to be expected for the full
year. For further information, refer to the consolidated financial
statements and footnotes thereto for the year ended June 27, 1998, included
in the Registrant's Annual Report on Form 10-K.
2. Inventories
-----------
The Company's inventories are stated at the lower of cost (determined using
the first-in, first-out method) or market.
The components of inventories are as follows:
Sept. 26, June 27,
1998 1998
---- ----
(in thousands)
--------------
Finished products and service $23,044 $23,342
Products in Process 2,117 2,031
Raw materials 2,488 2,698
Less Allowance (5,171) (4,888)
--------------------------
Total $22,478 $23,183
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<PAGE> 9
3. Net Loss per share
------------------
Net loss per share is computed based on the weighted average number of
shares Common outstanding for the period after deducting preferred dividend
requirements including amortization of preferred stock discount. The
average number of shares of common stock outstanding for the first quarter
of fiscal 1999 is 2,080,408 as compared to 2,100,847 shares for the same
period of fiscal 1998.
4. Contingencies
-------------
The Internal Revenue Service (IRS) has conducted examinations of the
Company's federal income tax returns for fiscal years 1988 through 1993 and
has proposed various adjustments to increase taxable income. The Company
has agreed to certain adjustments and has previously recorded a provision
for additional income tax and interest in the accompanying consolidated
financial statements. Two issues remain unresolved, and the IRS has issued
deficiency notices on these issues. The issues related to 1) the allocation
of the Company's purchase price of assets from American Standard Inc. and
2) the value of the Company's Series C preferred stock contributed to its
ESOP.
The Company allocated approximately $70 million of the purchase price of
assets from American Standard to intangible assets which are being
amortized over a period of generally 14 years. The IRS proposes to reduce
this allocation to approximately $45 million and increase the amortization
period to generally 45 years.
In 1990 and 1993, the Company contributed to its ESOP, and claimed a tax
deduction for, shares of Series C preferred stock having a value
aggregating approximately $9.6 million. The IRS proposes to reduce this
value to approximately $7.1 million.
Previously the IRS had informed the Company that if their proposed
adjustments are sustained, the Company would be liable for additional
income taxes of approximately $3.7 million plus interest through 1993.
However the IRS recently informed the Company that the additional income
taxes, for which the Company would be liable, is approximately $4.1
million. The Company would have a future tax liability of approximately
$2.4 million for the same issues carrying forward into, as yet, unaudited
years.
Management believes that it has meritorious defenses to the adjustment
proposed by the IRS and that the ultimate liability, if any, resulting from
this matter will have no material effect on the Company's consolidated
financial position. The significance of this matter on the Company's future
operating
Page 9
<PAGE> 10
results depends on the level of future results of operations as well as on
the timing and amount of the ultimate outcome. On December 9, 1994 and
October 6, 1995, the Company filed a protest to the proposed adjustments of
the IRS for the tax years ended June 1988 through June 1993. An informal
initial conference with the Northeast Region office of the Internal Revenue
Service was held on March 6, 1996. As a result of this meeting, letters
were issued on April 10, 1996 and April 29, 1996, from the Internal Revenue
Service Appeal Officer requesting additional information on several issues.
On February 10, 1998 the Company met with the Internal Revenue Appeals
Officer to provide additional information to support its position and to
attempt to resolve the matter. No resolution was reached, and subsequent to
that meeting the Company received a Final Deficiency Notice from the IRS.
The Company filed an appeal with the U.S. Tax Court on July 13, 1998 of the
statutory Notice of Deficiency. The Company expects the Tax Court to assign
the briefing schedule within the next couple of months and further expects
the Internal Revenue Service District Counsel to be in contact with the
Company to begin their review as well as reinstate settlement discussions
with the Company. The Company maintains its position that it has a
meritorious defense to the adjustment, proposed by the IRS.
The Company is involved in an audit by the Department of Labor ("DOL") of
its Employee Stock Ownership Plan. On June 23, 1995, the Department of
Labor issued an audit letter claiming the Company's Employee Stock
Ownership Plan engaged in a prohibited transaction. Essentially, the DOL
alleges that Series C Preferred Stock contributed to the Plan was not a
proper investment since it was neither stock nor a qualified equity as
required by ERISA. The Company has responded to the claim and intends to
pursue the matter vigorously as it believes the Series C Preferred Stock is
stock and, therefore, constitutes a proper investment for the Plan.
Various lawsuits and claims arising during the normal course of business
are pending against the Company. In the opinion of management, the ultimate
liability, if any, resulting from these matters will have no significant
effect on the Company's consolidated financial position, results of
operations or cash flows.
5. Acquisition
-----------
On October 9, 1998 the Company purchased substantially all the assets of
the LeFebure Division (LeFebure) of De La Rue Cash Systems Inc. and De La
Rue Systems Americas Corporation (De La Rue). The total consideration paid
by the Company was $34 million subject to a working capital adjustment to
be paid within 90 days. LeFebure specializes in the manufacture,
distribution and service of security equipment for financial institutions.
Page 10
<PAGE> 11
6. Reclassification
----------------
Certain prior year's data has been reclassified to conform to current
presentation.
7. Accounting Pronouncements
-------------------------
SFAS No. 130, "Reporting Comprehensive Income" was issued in June 1997 and
is effective for the Company's 1999 fiscal year. Reclassification of
financial statements for earlier periods provided for comparative purposes
is required. The statement requires that an enterprise classify items of
other comprehensive income by their nature in a financial statement and
display the accumulated balance of other comprehensive income separately
from retained earnings and additional paid-in capital in the equity section
of the balance sheet. Adoption of this new standard in the first quarter of
fiscal 1999 was not material to the condensed consolidated financial
statements.
SFAS No. 131, "Disclosures about Segments of an Enterprise and Related
Information," was issued in June 1997 and is effective for the Company's
1999 fiscal year. In the initial year of application, comparative
information for earlier years is to be restated. The statement requires
that a public business enterprise report financial and descriptive
information about its reportable operating segments. Adoption of this new
standard may result in additional financial statement disclosures.
SFAS No. 132, "Employers' Disclosures about Pensions and Other
Postretirement Benefits," was issued in February 1998 and is effective for
the Company's 1999 fiscal year. Disclosures for earlier periods provided
for comparative purposes is required. The statement revises employer'
disclosures about pension and other postretirement benefit plans. Adoption
of this new standard will result in additional financial statement
disclosures.
Page 11
<PAGE> 12
MOSLER INC.
Item 2 Management's Discussion and Analysis of
---------------------------------------
Financial Condition and Results of Operations
---------------------------------------------
Management's Discussion and Analysis of Financial Condition and Result of
Operations contains forward looking statements that are subject to risks
and uncertainties, including, but not limited to, the impact of competitive
products and pricing, product demand and market acceptance, fluctuations in
operating results and other risks detailed from time to time in the
Company's fillings with the Securities and Exchange Commission.
Result of Operations
- --------------------
Three Months Ended September 26, 1998 Compared to the
- -----------------------------------------------------
Three Months Ended September 27, 1997
- -------------------------------------
Sales
- -----
The Company's sales increased during the three months ended September 26,
1998 by 9.5% to $57.4 million from $52.4 million. Service Sales decreased
by 3.9% to $24.2 million from $25.2 million due to a decline in time and
material sales of $1.1 million offset by an increase in service agreement
revenue of $.1 million.
Product net sales increased during the three months ended September 26,
1998 by 21.9% to $33.1 million from $27.2 million. Electronic Security
product sales increased by 69.6% to $16.1 million from $9.5 million.
Physical Security product sales remained constant at $15.3 million.
Gross Profit
- ------------
Gross profit decreased during the three months ended September 26, 1998 by
5.8% percent. Gross profit as a percentage of sales decreased to 18.6% from
21.7% for the three months ended September 26, 1998. Included in gross
profit was a one time charge of $1.6 million associated with the future
closing of the Company's Wayne, NJ manufacturing facility. The Company will
outsource the
Page 12
<PAGE> 13
manufacturing of certain products produced in Wayne, while the remainder
will be produced by it's newly acquired Mexico, MO manufacturing plant. It
is expected that the Wayne facility will close during the Company's third
quarter.
Selling and Administrative Expenses
- -----------------------------------
Selling and administrative expenses increased during the three months ended
September 26, 1998 by 3.8% to $9.1 million from $8.8 million for the three
months ended September 27, 1997.
Operating Income
- ----------------
The Company's operating income for the three months ended September 26,
1998 decreased by 38.0% to $1.5 million from $2.4 million for the three
months ended September 27, 1997. Included in operating income was a one
time charge of $1.6 million associated with the future closing of the
Company's Wayne, NJ manufacturing facility. The Company will outsource the
manufacturing of certain products produced in Wayne, while the remainder
will be produced by its newly acquired Mexico, MO manufacturing plant. It
is expected that the Wayne facility will close during the Company's third
quarter of fiscal 1999.
Debt Expense
- ------------
Debt expense increased for the three months ended September 26, 1998 by
25.9% to $5.6 million from $4.4 million. The increase was primarily due to
higher interest costs on higher bank debt.
Net Loss
- --------
Net loss before preferred stock charges increased by $2.0 million for the
three months ended September 26, 1998 to $4.1 million from $2.1 million for
the three months ended September 27, 1997. Included in net loss was a one
time charge of $1.6 million associated with the future closing of the
Company's Wayne, NJ manufacturing facility.
Page 13
<PAGE> 14
Inflation
- ---------
The Company believes that its business is affected by inflation to
approximately the same extent as the national economy. Generally, the
Company has been able to offset the inflationary impact of wages and other
costs through a combination of improved productivity, cost reduction
programs and price increases. The Company has had difficulty in effecting
significant price increases because of the discounting practices of its
competitors.
Liquidity and Capital Resources
- -------------------------------
As more fully described in Item I, Note 5, the Company on October 9, 1998
acquired substantially all the assets of the LeFebure division of De La Rue
Cash Systems Inc. and De La Rue Systems Americas Corporation. Coincident
with the acquisition the Company entered into a Financing Agreement with a
group of lenders, led by Fleet National Bank, to finance the acquisition
and provided working capital for operations. Under the terms of the
Financing Agreement, a Credit facility was established at $85.0 million.
The Company also agreed to certain financial covenants. The Company
believes that this facility will provide adequate financial resources for
its operations. Borrowing under the credit facility bears interest at LIBOR
plus 2.625% or at the prime lending rate plus 1.625%.
Cash used by operating activities was $1.8 million for the three months
ended September 26, 1998 as compared to $5.9 million for the same period of
fiscal 1998 for a favorable improvement of $4.1 million.
The Company's capital expenditures were $.5 million for the first quarter
of fiscal 1999 as compared to $.8 million in the previous year's first
quarter. The Company anticipates capital expenditure for fiscal 1999 will
be approximately $2.5 million.
The Company currently makes cash contributions to the ESOP only to the
extent necessary to fund the cash needs of the ESOP for payments to
retired, terminated and deceased participants and for administrative
expenses.
Page 14
<PAGE> 15
Year 2000
- ---------
The Company is substantially complete with the process of conducting a
comprehensive review of its key internal financial, information and
operational systems to identify the systems that could be materially
affected by the Year 2000 issue. The Company will be making appropriate
modifications and conducting compliance testing on these systems. The
Company believes that with modifications to, or replacement of, existing
systems, the Year 2000 issue will not pose significant operating problems.
Based upon current information, the costs of addressing internal problems
are not expected to have a material adverse impact on the Company's
financial position, results of operations, or cash flows in future periods.
Accordingly, the cost for Year 2000 problems will be funded through
operating cash flows.
The Company is currently engaged in assessing the capability of its
products to handle the transition to and operate in the Year 2000.
The Company is in the process of assessing the readiness of significant
suppliers and customers to determine the extent to which the Company is
vulnerable to those third parties' failure to remediate their own Year 2000
issues. The Company cannot guarantee that the systems of other companies
will be converted in a timely manner, or the conversion or failure to
convert systems, would not have an adverse material effect on the Company.
Page 15
<PAGE> 16
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
-----------------
None
Page 16
<PAGE> 17
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
The following are the results of voting by stockholders present or
represented by proxy at the Annual Meeting of Stockholders held on September 22,
1998.
Election of Directors: The following directors were elected:
<TABLE>
<CAPTION>
Votes For Votes Against Not Voting Term
---------------------------------------------------------------
<S> <C> <C> <C> <C>
Nicolas M. Georgitsis 1,891,097.48732 0 171,420.38095 1999
William A. Marquard 1,891,097.48732 0 171,420.38095 1999
Michel Rapoport 1,887,617.66232 1,179.825 171,420.38095 1999
Thomas R. Wall IV 1,891,097.48732 0 171,420.38095 1999
Robert A. Young III 1,890,897.48732 200.0000 171,420.38095 1999
</TABLE>
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) List of Exhibits
(27) Financial Data Schedule for the three months ended
September 26, 1998.
(b) Reports on Form 8-K
None
Page 17
<PAGE> 18
MOSLER INC.
Signature
Pursuant to the requirements of Securities Exchange Act of 1934, the registrant
has duly caused this report to be signed on its behalf by the undersigned
thereunto duly authorized.
Mosler Inc.
(Registrant)
Date: November 10, 1998 /s/ Thomas J. Bell
----------------- -----------------------
Thomas J. Bell
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-26-1999
<PERIOD-END> SEP-26-1998
<CASH> 417,000
<SECURITIES> 0
<RECEIVABLES> 55,686,000
<ALLOWANCES> 816,000
<INVENTORY> 22,478,000
<CURRENT-ASSETS> 2,284,000
<PP&E> 39,011,000
<DEPRECIATION> 30,285,000
<TOTAL-ASSETS> 103,256,000
<CURRENT-LIABILITIES> 54,752,000
<BONDS> 134,544,000
0
102,746,000
<COMMON> 409,000
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 103,256,000
<SALES> 33,136,000
<TOTAL-REVENUES> 57,381,000
<CGS> 28,309,000
<TOTAL-COSTS> 46,687,000
<OTHER-EXPENSES> 9,467,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 5,343,000
<INCOME-PRETAX> (4,116,000)
<INCOME-TAX> (1,000)
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,115,000)
<EPS-PRIMARY> (3.19)
<EPS-DILUTED> 0
</TABLE>
