<PAGE>
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 December 27, 1997
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 2,094,233.44458 shares as of
December 27, 1997
<Page 1>
INDEX
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Financial Information (Part I)
Page
Item 1. Financial Statements (Unaudited)
Consolidated condensed balance sheets - December 27, 1997
and June 28, 1997 3-4
Consolidated condensed statements of operations -
Three months ended December 27, 1997 and
December 28, 1996 5
Consolidated condensed statements of operations -
Six months ended December 27, 1997 and
December 28, 1996 6
Consolidated condensed statement of common
stockholders' deficiency - Six months ended
December 27, 1997 7
Consolidated condensed statement of cash flows -
Six months ended December 27, 1997 and
December 28, 1996 8
Notes to consolidated condensed financial statements 9-13
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 14-18
Other information (Part II)
Item 1. Legal Proceedings 19
Signatures 20
</TABLE>
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<TABLE>
<CAPTION>
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements
MOSLER INC.
CONSOLIDATED CONDENSED BALANCE SHEETS
(in thousands)
<S> <C> <C>
Dec. 27, June 28
1997 1997
(Unaudited) (Derived from Audited
Financial Statements)
Assets
Current assets:
Cash and cash equivalents $ 480 $ 389
Accounts receivable, net 60,693 47,538
Inventories 21,656 23,299
Other current assets 2,112 1,237
Total current assets 84,941 72,463
Facilities:
Land and land improvements 802 802
Buildings 4,739 4,809
Machinery and equipment 33,205 37,852
Improvement in progress 470 296
Gross facilities 39,216 43,759
Less accumulated depreciation 29,840 32,935
Net facilities 9,376 10,824
Other assets:
Service agreements 11,281 13,537
Deferred debt issuance costs 3,004 3,291
Goodwill 3,794 4,548
Other intangible assets 964 964
Sundry 753 1,626
Total Other Assets 19,796 23,966
$ 114,113 $ 107,253
</TABLE>
<Page 3>
<TABLE>
<S> <C> <C>
Dec. 27, June 28,
1997 1997
Liabilities, redeemable stock and common (Unaudited) (Derived from Audited
stockholders' deficiency Financial Statements)
Current liabilities:
Accounts payable $ 12,896 $ 17,574
Accrued liabilities:
Compensation & payroll taxes 5,872 4,274
Product warranty 1,026 857
Accrued workers' compensation 4,387 4,746
Accrued interest 5,987 5,772
Other 6,838 5,858
Unearned revenue 21,034 17,021
Income taxes payable 252 233
Long-term debt due within one year 1,317 1,317
Total current liabilities 59,609 57,652
Long-term debt due after one year 132,484 126,671
Post retirement health benefits 11,991 11,552
Pension liability 1,745 1,745
Commitments and contingencies
Redeemable stock:
Series D increasing rate preferred stock 50,577 47,135
Series C adjustable rate preferred stock 42,112 38,554
Common Stock 409 409
93,098 86,098
Common stockholders' deficiency:
Common stock 254 254
Accumulated deficit (179,023) (170,719)
Excess of additional pension liability over
unrecognized prior service cost (13) (13)
Redemption value of common stock held by ESOP (409) (409)
Foreign currency translation adjustments (1,245) (1,200)
Common stock held in treasury (4,378) (4,378)
Total common stockholders'
deficiency (184,814) (176,465)
$ 114,113 $ 107,253
See accompanying notes to financial statements.
</TABLE>
<Page 4>
<TABLE>
<CAPTION>
MOSLER INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands except per share amounts)
<S> <C> <C>
Three months ended
Dec. 27, Dec. 28,
1997 1996
Net sales: (As restated)
Service $ 26,714 $ 26,702
Product 32,695 26,029
59,409 52,731
Cost of sales:
Service 19,440 19,786
Product 26,152 21,020
45,592 40,806
Gross profit 13,817 11,925
Selling and administrative expense 9,041 9,158
Other (income) expense 497 (88)
9,538 9,070
Operating income 4,279 2,855
Debt expense:
Interest expense 4,877 4,454
Amortization of debt expense 143 144
Interest income 0 (24)
5,020 4,574
Loss before income taxes and preferred
stock charges (741) (1,719)
Provision for income taxes 57 27
Loss before preferred stock charges (798) (1,746)
Preferred stock charges:
Preferred dividends (2,573) (2,151)
Amortization of preferred stock discount (186) (219)
Net loss applicable to common stockholders ($3,557) ($4,116)
Net loss per common share assuming dilution ($1.68) ($1.92)
See accompanying notes to financial statements.
</TABLE>
<Page 5>
<TABLE>
<CAPTION>
MOSLER INC.
CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands except per share amounts)
<S> <C> <C>
Six months ended
Dec. 27, Dec. 28,
1997 1996
Net sales: (As restated)
Service $ 51,935 $ 52,902
Product 59,876 50,287
111,811 103,189
Cost of sales:
Service 38,231 40,973
Product 48,407 39,481
86,638 80,454
Gross profit 25,173 22,735
Selling and administrative expense 17,816 19,066
Other (income) expense 690 (308)
18,506 18,758
Operating income 6,667 3,977
Debt expense:
Interest expense 9,176 8,960
Amortization of debt expense 287 287
Interest income 0 (36)
9,463 9,211
Loss before income taxes, cumulative
effect of change in accounting, and
preferred stock charges (2,796) (5,234)
Provision for income taxes 70 47
Loss before cumulative effect of change
in accounting, and preferred stock charges (2,866) (5,281)
Cumulative effect of change in accounting 7,420
Net income (loss) before preferred
stock charges (2,866) 2,139
Preferred stock charges:
Preferred dividends (5,066) (4,349)
Amortization of preferred stock discount (372) (334)
Net loss applicable to common stockholders ($8,304) ($2,544)
Loss before cumulative effect of change in
accounting ($3.99) ($4.64)
Cumulative effect of change in accounting 3.49
Net loss per common share assuming dilution ($3.99) ($1.15)
See accompanying notes to financial statements.
</TABLE>
<Page 6>
<TABLE>
<CAPTION>
MOSLER INC.
CONSOLIDATED CONDENSED STATEMENT OF COMMON STOCKHOLDERS' DEFICIENCY
SIX MONTHS ENDED DECEMBER 27, 1997
(In thousands of dollars except share data)
<S> <C> <C> <C> <C> <C> <C> <C>
Redemption
Common Value of Foreign
Stock Common Currency
$.10 Par Accumulated Pension Stock held Translation Treasury
Value Deficit Liability by ESOP Adjustments Stock Total
Balance at June 28, 1997 $254 ($170,719) ($13) ($409) ($1,200) ($4,378) ($176,465)
Net loss before preferred stock charges (2,866) (2,866)
Amortization of Series D preferred
stock discount (372) (372)
Dividends on Series D preferred stock (1,423) (1,423)
Dividends on Series C preferred stock (3,643) (3,643)
Foreign currency translation adjustment (45) (45)
Balance at December 27, 1997 $254 ($179,023) ($13) ($409) ($1,245) ($4,378) ($184,814)
See accompanying notes to financial statements.
</TABLE>
<Page 7>
<TABLE>
<CAPTION>
MOSLER INC.
CONSOLIDATED CONDENSED STATEMENT OF CASH FLOWS
UNAUDITED
(In thousands)
<S> <C> <C>
Six months ended
Dec. 27, Dec. 28,
1997 1996
(As restated)
Net income (loss) $ (2,866) $ 2,139
Adjustments to reconcile net income (loss) to net
cash provided (used) by operating activities:
Cumulative effect of change in accounting (7,420)
Depreciation 1,320 1,155
Amortization 3,309 3,296
Gain (loss) on disposal of facilities (264) 1
Interest paid in shares of preferred stock 1,079 1,754
Provision for doubtful accounts 67 19
Decrease (increase) in:
Accounts receivable (13,222) (1,112)
Inventories 1,643 2,137
Other current assets (875) (363)
Increase (decrease) in:
Accounts payable (4,678) 1,009
Accrued liabilities 3,770 (1,793)
Unearned revenue 4,013 9,115
Income taxes payable 19 (2)
Net cash provided (used) by operating activities (6,685) 9,935
Cash flows from investing activities:
Proceeds from sale of property and equipment 606 0
Capital expenditures (545) (2,316)
Decrease in other assets 861 680
Net cash provided (used) by investing activities 922 (1,636)
Cash flows from financing activities:
Purchase of common stock (257)
Purchase of preferred stock (1,684)
Net proceeds from (payments on) revolving line of credit 6,399 (5,442)
Principal payment on long-term debt (500) (500)
Net cash provided (used) by financing activities 5,899 (7,883)
Effect of exchange rate changes on cash (45) (15)
Net increase in cash and cash equivalents 91 401
Cash and cash equivalents at beginning of period 389 0
Cash and cash equivalents at end of period $ 480 $ 401
See accompanying notes to financial statements.
</TABLE>
<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 December 27, 1997, and the results of
operations for the three months and six months ended December 27, 1997
and December 28, 1996 and the cash flows for the six months ended
December 27, 1997 and December 28, 1996. 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 28, 1997 has
been derived from the audited consolidated financial statements of the
Registrant. The results of operations for the three months and six
months ended December 27, 1997 and December 28, 1996 and cash flows for
the six months ended December 27, 1997 and December 28, 1996 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 28, 1997, included in the
Registrant's Annual Report on Form 10-K.
2. Accounting Method Changes
During the fourth quarter of fiscal 1997, the Company changed its method
of accounting for service van inventory from immediately expensing the
cost of inventory placed in its service van fleet to that of capitalizing
such inventory and recording its usage through cost of sales. The
cumulative effect of this change as of June 30, 1996 was to increase
inventory and reduce net loss by $7,420,000 (net of reserve of
$1,466,000). The effect of this restatement on the three months and
six months ended December 28, 1996 is as follows (amounts in thousands
except per share amounts):
Six Months Ended December 28, 1996:
As originally
Reported As Restated
Operating income $5,754 $3,997
Net income (loss) before
preferred stock charges ($3,916) $2,139
Net applicable to common
stockholders ($8,187) ($2,544)
Net per common share ($3.82) ($1.15)
<Page 9>
Three Months Ended December 28, 1996:
As originally
Reported As Restated
Operating Income $4,001 $2,855
Net loss before preferred stock
charges ($600) ($1,746)
Net loss applicable to common
stockholders ($2,970) ($4,116)
Net loss per common share ($1.39) ($1.92)
Statement of Financial Accounting Standards (SFAS) No. 130, "Reporting
Comprehensive Income" was issued in June 1997 and is effective for
fiscal years beginning after December 15, 1997. 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 will result in additional financial statement
disclosures.
SFAS No. 131, "Disclosures about Segments of an Enterprise and Related
Information," was issued in June 1997 and is effective for financial
statements for periods beginning after December 15, 1997. 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.
<Page 10>
3. 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:
<TABLE>
<S> <C> <C>
Dec. 27, June 28,
1997 1997
(in thousands)
Finished products and service $20,447 $19,649
Products in Process 2,221 3,996
Raw materials 2,894 3,514
Less Allowance (3,906) (3,860)
Total $21,656 $23,299
</TABLE>
4. Net Loss per share
Net loss per share is computed based on the weighted average number
of common shares outstanding for the period after deducting
preferred dividend requirements including amortization of preferred
stock discount. The average number of shares for the six month
period of fiscal 1998 is 2,080,667 as compared to 2,148,398 shares
for the same period of fiscal 1997. SFAS No. 128, "Earnings Per
Share," was adopted during the quarter ended December 27, 1997. The
adoption of SFAS No. 128 did not have a material effect on previously
reported per share amounts.
5. Contingencies
The Internal Revenue Service (IRS) has conducted examinations of the
Company's income tax returns for fiscal years 1988 through 1993 and
has proposed various adjustments to increase taxable income. The
Company has agreed to certain issues 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, 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.
<Page 11>
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.
If the IRS's proposed adjustments are sustained, the Company would be
liable for additional income taxes of approximately $3.7 million plus
interest through 1993. 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 adjustments
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 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.
The Company has responded to these and several other questions from the
Internal Revenue Service but no substantive changes in this matter have
occurred.
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.
<Page 12>
6. Reclassification
Certain prior quarter and prior year's data has been reclassified to
conform to current presentation.
<Page 13>
MOSLER INC.
Item 2
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Management's Discussion and Analysis of Financial Condition and Results 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.
Results of Operations:
Three months Ended December 27, 1997 Compared to the Three Months
Ended December 28, 1996
Sales
The Company's sales increased during the three months ended December 27,
1997 by 12.7% to $59.4 million from $52.7 million. Service sales remained
constant over the two periods at $26.7 million. Product net sales
increased during the three months ended December 27, 1997 by 25.6% to
$32.7 million from $26.0 for the three months ended December 28, 1996.
Electronic Security Systems sales increased in the period by 45.1% and
Physical Security Systems sales increased by 13.2%.
Gross Profit
Gross profit for the three months ended December 27, 1997 increased to
$13.8 million from $11.9 million for the same period in the prior year.
Gross profit as a percentage of sales increased to 23.3% for the three
months ended December 27, 1997 from 22.6% for the three months ended
December 28, 1996. The increase in gross margin dollars and percentages
are a result of improved volumes and efficiencies.
<Page 14>
Selling and Administrative Expense
Selling and administrative expense decreased in the three months ended
December 27, 1997 by 1.2% to $9.0 million from $9.2 million. The decrease
was a result of cost cutting measures implemented by the Company. Selling
and administrative expense as a percentage of net sales decreased to 15.2%
for the three months ended December 27, 1997 from 17.4% for the same period
in the prior year.
Operating Income
The Company's operating income for the three months ended December 27, 1997
of $4.3 million is $1.4 million more than for the three months ended
December 28, 1996. Included in operating income for the three months ended
December 27, 1997 were plant closing costs of $.2 million. These costs
relate to the closing of the Company's counter services operation in
Buffalo, NY.
Debt Expense
Debt expense increased for the three months ended by 9.7% to $5.0 million
from $4.6 million for the three months ended December 28, 1996. The
increase was due to an increase in the interest on the unpaid dividends
for preferred stock.
Net Loss
Net loss before preferred stock charge decreased $.9 million for the three
months ended December 27, 1997 to $.8 million as compared to $1.7 million
for the three months ended December 28, 1996.
Six Months Ended December 27, 1997 Compared to the
Six Months Ended December 28, 1996.
Sales
The Company's sales increased by 8.3% during the six months ended December
27, 1997 to $111.8 million from $103.2 million for the same period in 1996.
<Page 15>
Service sales decreased by $1.0 million or 1.9% for the period ending
December 27, 1997 to $51.9 million from $52.9 million for the six months
ended December 28, 1996. The decrease was due to lower time and material
sales of $1.2 million offset by an increase in service agreement sales of
$.2 million. The decline in time and material sales is a result of a
refinement in the Company's method of recording certain revenues and costs
formally classified as service and now allocated directly to product lines.
Product net sales increased by 19.1% to $59.9 million for the six months
ended December 27, 1997 from $50.3 million for the six months ended
December 28, 1996. Electronic Security Sales increased by 30.8% with
increases in Alarm Systems of $.6 million, CCVS of $2.0 million, COMSEC
Systems of $3.2 million and Access Control System of $.3 million. Physical
Security sales increased by 10.6% with increases in Safe products of
$.7 million, Counter products of $.8 million and Remote Transaction Systems
products of $1.8 million offset by decreases in other various products.
Gross Profit
Gross profit increased during the six months ended December 27, 1997 by
10.7% to $25.2 million from $22.7 million for the six months ended
December 28, 1996. Gross profit as a percentage of sales increased to
22.5% from 22.0%. The increase in gross profit dollars was a result of
higher sales volume. The Company experienced improved gross profit
percentages in Service and Physical Security offset by lower gross
profits on Electronic Security Sales.
Selling and Administrative Expense
Selling and Administrative expenses decreased by 6.5% to $17.8 million
for the six months ended December 27, 1997 from $19.0 million for the six
months ended December 28, 1996. The decrease related to cost savings
measures implemented in the fourth quarter of fiscal 1997 offset by higher
commission expenses on an increased orders volume.
Operating Income
The Company's operating income for the six months ended December 27, 1997
of $6.7 million is $2.7 million more than the six months ended December 28,
1996. Included in operating income for the six months ended December 27,
1997 were plant closing costs of $.4 million. These cost related to the
closing of the Counter Systems Operation in Buffalo, NY. A third party
vendor was found to manufacture counter system products for the Company.
<Page 16>
Debt Expense
Debt expense for the six months ended December 27, 1997 increased by
$.3 million to $9.5 million as compared to the previous year of
$9.2 million. The increase was due to an increase in the interest rate
on the unpaid dividends for preferred stock.
Net Loss
Net loss before the cumulative effect of the change in accounting
decreased by $2.4 million for the six months ended December 27, 1997 to
$2.9 million from $5.3 million for the six months ended December 28, 1996.
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
On February 5, 1998 the Company entered into an Amendment to its Financing
Agreement with Star Bank N.A., under which future financial convenants
were set. Under the terms of the Amendment, the credit facility was
increased to $27.75 million. Borrowings under the amended credit facility
will bear interest at the prime lending rate plus 1.5%.
Cash used by operating activities was $6.6 million for the six months ended
December 27, 1997 as compared to cash provided of $9.9 million for the same
period of fiscal 1997 for a decrease of $16.5 million. This variance was a
result of increased working capital requirements due to the increase in
sales volume.
The Company's unfinanced capital expenditures were $.5 million for the
first six months of fiscal 1997 as compared to $1.6 million the six months
end December 28, 1996. The Company anticipates Capital expenditures for
fiscal 1998 will not exceed $2.5 million.
<Page 17>
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 18>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None
<Page 19>
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: February 6, 1998 /s/ Thomas J. Bell
Thomas J. Bell
Chief Financial Officer
<Page 20>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-27-1998
<PERIOD-END> DEC-27-1997
<CASH> 480
<SECURITIES> 0
<RECEIVABLES> 60,693,000
<ALLOWANCES> 946,000
<INVENTORY> 21,656,000
<CURRENT-ASSETS> 2,112,000
<PP&E> 39,216,000
<DEPRECIATION> 29,840,000
<TOTAL-ASSETS> 114,113,000
<CURRENT-LIABILITIES> 59,609,000
<BONDS> 115,000,000
<COMMON> 409,000
0
92,689,000
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 114,113,000
<SALES> 59,876,000
<TOTAL-REVENUES> 111,811,000
<CGS> 48,407,000
<TOTAL-COSTS> 86,638,000
<OTHER-EXPENSES> 18,506,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 9,176,000
<INCOME-PRETAX> (2,796,000)
<INCOME-TAX> 70,000
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,866,000)
<EPS-PRIMARY> (3.99)
<EPS-DILUTED> 0
</TABLE>
