UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
---------------
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1996
Commission File Number 1-9204
THE PACIFIC LUMBER COMPANY
(Exact name of Registrant as specified in its charter)
DELAWARE 13-3318327
(State or other jurisdiction (I.R.S. Employer
of incorporation or Identification Number)
organization)
P. O. BOX 37 95565
125 MAIN STREET (Zip Code)
SCOTIA, CALIFORNIA
(Address of Principal
Executive Offices)
Registrant's telephone number, including area code: (707) 764-2222
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 / /
Number of shares of common stock outstanding at May 1, 1996: 100
Registrant meets the conditions set forth in General Instruction
H(1)(a) and (b) of Form 10-Q and is therefore filing this Form with the
reduced disclosure format.
THE PACIFIC LUMBER COMPANY
INDEX
PART I. - FINANCIAL INFORMATION PAGE
Item 1. Financial Statements
Consolidated Balance Sheet at March 31, 1996 and
December 31, 1995 3
Consolidated Statement of Operations for the
three months ended March 31, 1996 and 1995 4
Consolidated Statement of Cash Flows for the
three months ended March 31, 1996 and 1995 5
Condensed Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 9
PART II. - OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 12
Signatures S-1
THE PACIFIC LUMBER COMPANY AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(In thousands of dollars, except share amounts)
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
------------ ------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 17,902 $ 26,480
Receivables:
Trade 13,674 19,688
Other 2,214 1,565
Inventories 70,542 75,580
Prepaid expenses and other current assets 6,659 6,933
------------ ------------
Total current assets 110,991 130,246
Timber and timberlands, net of depletion of $207,478 and $204,856 at March 31,
1996 and December 31, 1995, respectively 335,613 337,390
Property, plant and equipment, net of accumulated depreciation of $67,309 and
$65,276 at March 31, 1996 and December 31, 1995, respectively 93,248 93,726
Deferred financing costs, net 21,794 22,397
Deferred income taxes 41,402 41,958
Restricted cash 31,067 31,367
Other assets 5,501 5,502
------------ ------------
$ 639,616 $ 662,586
============ ============
LIABILITIES AND STOCKHOLDER'S DEFICIT
Current liabilities:
Accounts payable $ 4,034 $ 3,898
Accrued compensation and related benefits 7,301 9,241
Accrued interest 7,427 20,666
Deferred income taxes 10,244 10,244
Other accrued liabilities 2,507 3,077
Long-term debt, current maturities 14,415 14,195
------------ ------------
Total current liabilities 45,928 61,321
Long-term debt, less current maturities 563,098 571,812
Other noncurrent liabilities 33,866 33,613
------------ ------------
Total liabilities 642,892 666,746
------------ ------------
Contingencies
Stockholder's deficit:
Common stock, $.01 par value, 100 shares authorized and issued -- --
Additional capital 157,520 157,520
Accumulated deficit (160,796) (161,680)
------------ ------------
Total stockholder's deficit (3,276) (4,160)
------------ ------------
$ 639,616 $ 662,586
============ ============
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
THE PACIFIC LUMBER COMPANY AND SUBSIDARIES
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------------------------
1996 1995
------------ ------------
(In thousands of dollars)
<S> <C> <C>
Net sales:
Lumber and logs $ 50,109 $ 42,518
Other 4,794 4,791
------------ ------------
54,903 47,309
------------ ------------
Operating expenses:
Cost of goods sold (exclusive of depletion and depreciation) 30,612 27,640
Selling, general and administrative 3,424 3,822
Depletion and depreciation 6,557 5,856
------------ ------------
40,593 37,318
------------ ------------
Operating income 14,310 9,991
Other income (expense):
Investment, interest and other income 881 660
Interest expense (13,716) (14,007)
------------ ------------
Income (loss) before income taxes 1,475 (3,356)
Credit (provision) in lieu of income taxes (591) 1,343
------------ ------------
Net income (loss) $ 884 $ (2,013)
============ ============
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
THE PACIFIC LUMBER COMPANY AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------------------------
1996 1995
------------ ------------
(In thousands of dollars)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ 884 $ (2,013)
Adjustments to reconcile net income (loss) to net cash provided by
operating activities:
Depletion and depreciation 6,557 5,856
Amortization of deferred financing costs 603 558
Decrease in receivables 5,365 12,555
Decrease in inventories, net of depletion 3,179 3,172
Decrease (increase) in accrued and deferred income taxes 591 (1,216)
Decrease (increase) in prepaid expenses and other current assets 274 (1,285)
Increase in accounts payable 136 223
Decrease in accrued interest (13,239) (13,458)
Decrease in other liabilities (2,292) (1,609)
Other (4) 205
------------ ------------
Net cash provided by operating activities 2,054 2,988
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Net proceeds from sale of assets 42 14
Capital expenditures (2,480) (1,743)
------------ ------------
Net cash used for investing activities (2,438) (1,729)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Restricted cash deposits, net 300 77
Principal payments on long-term debt (8,494) (8,237)
Dividends paid -- (5,000)
------------ ------------
Net cash used for financing activities (8,194) (13,160)
------------ ------------
NET DECREASE IN CASH AND CASH EQUIVALENTS (8,578) (11,901)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 26,480 24,330
------------ ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 17,902 $ 12,429
============ ============
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid, net of capitalized interest $ 26,352 $ 26,907 <PAGE>
<FN>
The accompanying notes are an integral part of these financial statements.
</TABLE>
THE PACIFIC LUMBER COMPANY AND SUBSIDIARIES
CONDENSED NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(In thousands of dollars)
1. GENERAL
The information contained in the following notes to the
consolidated financial statements is condensed from that which would appear
in the annual consolidated financial statements; accordingly, the
consolidated financial statements included herein should be reviewed in
conjunction with the consolidated financial statements and related notes
thereto contained in the Annual Report on Form 10-K filed by The Pacific
Lumber Company with the Securities and Exchange Commission for the fiscal
year ended December 31, 1995 (the "Form 10-K"). All references to the
"Company" include The Pacific Lumber Company and its subsidiary companies
unless otherwise indicated or the context indicates otherwise. Accounting
measurements at interim dates inherently involve greater reliance on
estimates than at year end. The results of operations for the interim
periods presented are not necessarily indicative of the results to be
expected for the entire year.
The consolidated financial statements included herein are
unaudited; however, they include all adjustments of a normal recurring
nature which, in the opinion of management, are necessary to present fairly
the consolidated financial position of the Company at March 31, 1996 and
the consolidated results of operations and cash flows for the three months
ended March 31, 1996 and 1995. Certain reclassifications of prior period
information have been made to conform to the current presentation. The
Company is a wholly owned indirect subsidiary of MAXXAM Group Inc. ("MGI"),
which is a wholly owned subsidiary of MAXXAM Inc. ("MAXXAM").
2. RESTRICTED CASH
Restricted cash represents the amount deposited into an account
held by the Trustee under the indenture governing the Timber Notes of the
Company's wholly owned subsidiary, Scotia Pacific Holding Company ("Scotia
Pacific").
At March 31, 1996 and December 31, 1995, cash and cash
equivalents also includes $4,578 and $19,742, respectively, which is
restricted for debt service payments on the succeeding Note Payment date
for the Timber Notes.
3. INVENTORIES
Inventories consist of the following:
March 31, December 31,
1996 1995
------------ ------------
Lumber $ 57,114 $ 57,905
Logs 13,428 17,675
------------ ------------
$ 70,542 $ 75,580
============ ============
4. LONG-TERM DEBT<PAGE>
Long-term debt consists of the following:
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
------------ ------------
<S> <C> <C>
7.95% Scotia Pacific Timber Collateralized Notes due July 20, 2015 $ 341,740 $ 350,233
10-1/2% Pacific Lumber Senior Notes due March 1, 2003 235,000 235,000
Other 773 774
------------ ------------
577,513 586,007
Less: current maturities (14,415) (14,195)
------------ ------------
$ 563,098 $ 571,812
============ ============
</TABLE>
5. CONTINGENCIES
The Company's operations are subject to a variety of California
and federal laws and regulations dealing with timber harvesting, endangered
species and critical habitat, and air and water quality. While the Company
does not expect that compliance with such existing laws and regulations
will have a material adverse effect on its consolidated financial position,
results of operations or liquidity, the Company is subject to certain
pending matters, including the pending final designation of critical
habitat for the marbled murrelet (described below), which could have a
material adverse effect on the Company's consolidated financial position,
results of operations or liquidity. Moreover, the laws and regulations
relating to the Company's operations are modified from time to time and are
subject to judicial and administrative interpretation. There can be no
assurance that certain pending or future governmental regulations,
legislation or judicial or administrative decisions would not materially
and adversely affect the Company or its ability to sell lumber, logs or
timber (see below).
In 1995, the U.S. Fish and Wildlife Service (the "USFWS")
published its proposed final designation ("Proposed Designation") of
critical habitat for the marbled murrelet, seeking to designate over four
million acres as critical habitat for the marbled murrelet, including
approximately 33,000 acres of the Company's timberlands. The Proposed
Designation was subject to a 60-day comment period and the Company filed
comments vigorously opposing the Proposed Designation. The USFWS has not
yet published its final designation of critical habitat for the marbled
murrelet but is under court order to do so by May 15, 1996. The Company is
unable to predict when or if it will be able to harvest on any acreage
finally designated as critical habitat. Furthermore, it is impossible for
the Company to determine the potential adverse impact of such designation
on the Company's consolidated financial position, results of operations or
liquidity until such time as the Proposed Designation is finalized and
related regulatory and legal issues are fully resolved. However, if the
Company is unable to harvest, or is severely limited in harvesting, on
timberlands designated as marbled murrelet critical habitat, such
restrictions could have a material adverse effect on its consolidated
financial position, results of operations or liquidity. If the Company is
unable to harvest or is severely limited in harvesting, it intends to seek
full compensation from the appropriate governmental agencies on the grounds
that such restrictions constitute a governmental taking.
There continue to be other regulatory actions and lawsuits
seeking to have various other species listed as threatened or endangered
under the federal Endangered Species Act and/or the California Endangered
Species Act and to designate critical habitat for such species. It is
uncertain what impact, if any, such listings and/or designations of
critical habitat would have on the Company's consolidated financial
position, results of operations or liquidity.
In 1994, the California Board of Forestry ("BOF") adopted certain
regulations regarding compliance with long-term sustained yield objectives.
These regulations require timber companies to project the average annual
growth they will have on their timberlands during the last decade of a 100-
year planning period ("Projected Annual Growth"). During any rolling ten-
year period, the average annual harvest over such ten-year period may not
exceed Projected Annual Growth. The first ten-year period began in May
1994. The Company is required to submit, by October 1996, a plan setting
forth, among other things, its Projected Annual Growth. The Company has
not completed its analysis of the projected productivity of its timberlands
and is therefore unable to predict the impact that these regulations will
have on its future timber harvesting practices; however, the final results
of this analysis could require the Company to reduce (or permit it to
increase) its timber harvest in future years from the average annual
harvest that it has experienced in recent years. The Company believes that
it would be able to mitigate the effect of any required reduction in
harvest level by acquisitions of additional timberlands and by increasing
the productivity of its timberlands, although there can be no assurance
that it would be able to do so. The Company is unable to predict the
ultimate impact the sustained yield regulations will have on its future
consolidated financial position, results of operations or liquidity.
Various groups and individuals have filed objections with the
California Department of Forestry ("CDF") and the BOF regarding the CDF's
and the BOF's actions and rulings with respect to certain of the Company's
timber harvesting plans ("THPs"), and the Company expects that such groups
and individuals will continue to file objections to certain of the
Company's THPs. In addition, lawsuits are pending which seek to prevent
the Company from implementing certain of its approved THPs and other
harvesting operations. These challenges have severely restricted the
Company's ability to harvest old growth timber on its property. To date,
challenges with respect to the Company's THPs relating to young growth
timber have been limited; however, no assurance can be given as to the
extent of such challenges in the future. The Company believes that
environmentally focused challenges to its THPs are likely to occur in the
future, particularly with respect to virgin and residual old growth timber.
Although such challenges have delayed or prevented the Company from
conducting a portion of its operations, they have not had a material
adverse effect on the Company's consolidated financial position, results of
operations or liquidity. It is, however, impossible to predict the future
nature or degree of such challenges or their ultimate impact on the
Company's consolidated financial position, results of operations or
liquidity.
The Company is also involved in various claims, lawsuits and
proceedings relating to a wide variety of other matters. While there are
uncertainties inherent in the ultimate outcome of such matters and it is
impossible to determine the ultimate costs that may be incurred, management
believes that the resolution of such uncertainties and the incurrence of
such costs should not have a material adverse effect on the Company's
consolidated financial position, results of operations or liquidity.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following should be read in conjunction with the response to
Part I, Item 1 of this Report and Items 7 and 8 of the Form 10-K. Any
capitalized terms used but not defined in this Item have the same meaning
given to them in the Form 10-K.
RESULTS OF OPERATIONS
The Company's business is seasonal in that the Company generally
experiences lower first quarter sales due largely to the general decline in
construction-related activity during the winter months. Accordingly, the
Company's results for any one quarter are not necessarily indicative of
results to be expected for the full year. The following table presents
selected operational and financial information for the three months ended
March 31, 1996 and 1995.
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------------------
1996 1995
-------------- --------------
(In millions of dollars,
except shipments and prices)
<S> <C> <C>
Shipments:
Lumber: (1)
Redwood upper grades 10.4 10.7
Redwood common grades 38.1 32.1
Douglas-fir upper grades 2.2 1.8
Douglas-fir common grades and other 21.2 16.5
-------------- --------------
Total lumber 71.9 61.1
============== ==============
Logs (2) 14.2 8.7
============== ==============
Wood chips (3) 43.5 44.0
============== ==============
Average sales price:
Lumber: (4)
Redwood upper grades $ 1,386 $ 1,544
Redwood common grades 505 441
Douglas-fir upper grades 1,153 1,368
Douglas-fir common grades 378 379
Logs (4) 453 369
Wood chips (5) 92 91
Net sales:
Lumber, net of discount $ 43.7 $ 39.3
Logs 6.4 3.2
Wood chips 4.0 4.0
Cogeneration power .4 .5
Other .4 .3
-------------- --------------
Total net sales $ 54.9 $ 47.3
============== ==============
Operating income $ 14.3 $ 10.0
============== ==============
Operating cash flow (6) $ 20.9 $ 15.8
============== ==============
Income (loss) before income taxes $ 1.5 $ (3.4)
============== ==============
Net income (loss) $ .9 $ (2.0)
============== ==============
- ---------------
<FN>
(1) Lumber shipments are expressed in millions of board feet.
(2) Log shipments are expressed in millions of feet, net Scribner scale.
(3) Wood chip shipments are expressed in thousands of bone dry units of 2,400 pounds.
(4) Dollars per thousand board feet.
(5) Dollars per bone dry unit.
(6) Operating income before depletion and depreciation, also referred to as "EBITDA."
</TABLE>
Shipments
Lumber shipments to third parties for the three months ended
March 31, 1996 increased by 18% from the three months ended March 31, 1995,
principally due to increased shipments of redwood common lumber and common
and upper grade Douglas-fir lumber. Log shipments for the same periods were
14.2 million feet (net Scribner scale) and 8.7 million feet, respectively.
Net sales
Net sales for the three months ended March 31, 1996 increased
from the three months ended March 31, 1995, principally due to increased
shipments and higher average realized prices of redwood common lumber,
higher average realized prices and increased shipments of logs, and
increased shipments of Douglas-fir common lumber, offset by lower average
realized prices for upper grade redwood and Douglas-fir lumber. Shipments
of fencing and other value-added common lumber products from the Company's
new remanufacturing facility were a contributing factor in the improved
redwood common lumber realizations.
Operating income
Operating income for the three months ended March 31, 1996, which
increased from the three months ended March 31, 1995, reflects the
improvement in net sales as discussed above.
Income (loss) before income taxes
Income before income taxes for the three months ended March 31,
1996, compared to the loss before income taxes for the three months ended
March 31, 1995, resulted principally from an increase in operating income
as discussed above.
FINANCIAL CONDITION AND INVESTING AND FINANCING ACTIVITIES
The indentures governing the Senior Notes and the Timber Notes
and the Company's Revolving Credit Agreement contain various covenants
which, among other things, limit the payment of dividends and restrict
transactions between the Company and its affiliates. As of March 31, 1996,
under the most restrictive of these covenants, approximately $21.5 million
of dividends could be paid by the Company.
As of March 31, 1996, $46.9 million of borrowings was available
under the Company's Revolving Credit Agreement, of which $3.4 million was
available for letters of credit and $30.0 million for timberland
acquisitions. No borrowings were outstanding as of March 31, 1996, and
letters of credit outstanding amounted to $11.6 million.
As of March 31, 1996, the Company had consolidated long-term debt
of $532.0 million (net of current maturities and restricted cash deposited
in the Liquidity Account) as compared to $540.4 million at December 31,
1995. The decrease in long-term debt was due to principal payments on the
Timber Notes. The Company anticipates that cash flow from operations,
together with existing cash, cash equivalents and available sources of
financing, will be sufficient to fund its working capital and capital
expenditure requirements for the next year. With respect to its long-term
liquidity, the Company believes that its existing cash and cash
equivalents, together with its ability to generate sufficient cash flow
from operations and obtain both short and long-term financing, should
provide sufficient funds to meet its working capital and capital
expenditure requirements. However, due to its highly leveraged condition,
the Company is more sensitive than less leveraged companies to factors
affecting its operations, including litigation and governmental regulation
affecting its timber harvesting practices, increased competition from other
lumber producers or alternative building products and general economic
conditions.
TRENDS
The Company's operations are subject to a variety of California
and federal laws and regulations dealing with timber harvesting, endangered
species and critical habitat, and air and water quality. While the Company
does not expect that compliance with such existing laws and regulations
will have a material adverse effect on its consolidated financial position,
results of operations or liquidity, the Company is subject to certain
pending matters, including the pending final designation of critical
habitat for the marbled murrelet (see Note 5 to the Consolidated Financial
Statements set forth in Part I, Item 1 of this Report), which could have a
material adverse effect on the Company's consolidated financial position,
results of operations or liquidity. Moreover, the laws and regulations
relating to the Company's operations are modified from time to time and are
subject to judicial and administrative interpretation. There can be no
assurance that certain pending or future governmental regulations,
legislation or judicial or administrative decisions would not materially
and adversely affect the Company or its ability to sell lumber, logs or
timber. See also Note 5 to the Consolidated Financial Statements set forth
in Part I, Item 1 of this Report.
Judicial or regulatory actions adverse to the Company, increased
regulatory delays and inclement weather in northern California,
independently or collectively, could impair the Company's ability to
maintain adequate log inventories and force the Company to temporarily idle
or curtail operations at certain of its lumber mills from time to time.
See also Part II, Item 1. "Legal Proceedings -- Timber Harvesting
Litigation" regarding a government takings action recently filed by a
subsidiary of the Company and additional takings claims which could
be filed by the Company and its subsidiaries.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Reference is made to Item 3 of the Form 10-K for information
concerning material legal proceedings with respect to the Company. The
following material developments have occurred with respect to such legal
proceedings.
TIMBER HARVESTING LITIGATION
In connection with the Kayes/Miller actions and the DOL civil
action, a definitive agreement has been reached and approved by the Board
of Directors of the Company and MAXXAM. The principal terms of the
proposed settlement involve the payment to the class plaintiffs and their
counsel of $7.0 million in cash by the Company in exchange for full
releases by the plaintiffs of defendants and dismissal of the Kayes/Miller
and DOL actions. In addition, the Court has scheduled a hearing for
preliminary approval of the settlement agreement on May 10, 1996, and a
final hearing on the settlement agreement on July 12, 1996.
In connection with the Marbled Murrelet action, on April 3, 1996,
the Court granted a preliminary injunction preventing harvesting on the
eight THPs to the extent each relies on the Owl Plan; the Company is
appealing the preliminary injunction.
On April 22, 1996, Salmon Creek Corporation, a wholly owned
subsidiary of the Company ("Salmon Creek"), filed a lawsuit entitled Salmon
Creek Corporation v. California State Board of Forestry, et al. (No.
96CS01057) in the Superior Court of Sacramento County. This action seeks
to overturn the BOF's decision denying approval of a THP for approximately
8 acres of virgin old growth timber in the area commonly known as the
Headwaters Forest. Salmon Creek seeks a court order requiring approval of
the THP so that it may harvest in accordance with the THP. Salmon Creek
also seeks constitutional "just compensation" damages to the extent that
its old growth timber within and surrounding the THP has been "taken" by
reason of this regulatory denial and previous actions of governmental
authorities. In addition, on May 7, 1996, the Company, Scotia Pacific and
Salmon Creek filed a lawsuit entitled The Pacific Lumber Company, et. al.
v. The United States of America in the United States Court of Federal
Claims. The suit alleges that the federal government has "taken" over
3,800 acres of the Company's old growth timberlands through its application
of the ESA (including the Headwaters Forest). The Company, Scotia
Pacific and Salmon Creek seek constitutional "just compensation" damages
for the taking of these timberlands by the federal government's actions.
The Company is uncertain as to the timing or the ultimate resolution of the
foregoing actions. The Company and its subsidiaries intend to file
additional takings claims with respect to any of their timberlands which
are finally designated as critical habitat for the marbled murrelet.
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
A. EXHIBITS:
27 Financial Data Schedule
B. REPORTS ON FORM 8-K:
None.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized, who has signed this report on
behalf of the Registrant and as the principal accounting officer of the
Registrant.
THE PACIFIC LUMBER COMPANY
Date: May 8, 1996 By: /S/ GARY L. CLARK
----------------------------------------
Gary L. Clark
Vice President - Finance and Administration<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Company's consolidated balance sheet and consolidated statement of operations
and is qualified in its entirety by reference to such consolidated financial
statements together with the related footnotes thereto.
</LEGEND>
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<EXCHANGE-RATE> 1
<CASH> 17,902
<SECURITIES> 0
<RECEIVABLES> 13,674
<ALLOWANCES> 0
<INVENTORY> 70,542
<CURRENT-ASSETS> 110,991
<PP&E> 160,557
<DEPRECIATION> 67,309
<TOTAL-ASSETS> 639,616
<CURRENT-LIABILITIES> 45,928
<BONDS> 577,513
0
0
<COMMON> 0
<OTHER-SE> (3,276)
<TOTAL-LIABILITY-AND-EQUITY> 639,616
<SALES> 54,903
<TOTAL-REVENUES> 54,903
<CGS> 30,612
<TOTAL-COSTS> 30,612
<OTHER-EXPENSES> 9,981
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 13,716
<INCOME-PRETAX> 1,475
<INCOME-TAX> 591
<INCOME-CONTINUING> 884
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 884
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
