<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(Mark One)
(X) Quarterly Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended June 27, 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 1-11720
ADVO, Inc.
-------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 06-0885252
- ------------------------------ ------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
One Univac Lane, P.O. Box 755, Windsor, CT 06095-0755
- ------------------------------------------ ------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (860) 285-6100
--------------
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
As of July 25, 1998 there were 22,402,505 shares of common stock
outstanding.
<PAGE>
ADVO, Inc.
Index to Quarterly Report
on Form 10-Q
Quarter Ended June 27, 1998
Part I - Financial Information
------------------------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
Item 1. Financial Statements (Unaudited).
Consolidated balance sheets -
June 27, 1998 and September 27, 1997. 2
Consolidated statements of operations -
Nine months and three months ended
June 27, 1998 and June 28, 1997. 3
Consolidated statements of cash flows -
Nine months ended June 27, 1998
and June 28, 1997. 4
Notes to consolidated financial statements. 5
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of
Operations. 7
Part II - Other Information
---------------------------
Item 5. Other Information. 10
Item 6. Exhibits and Reports on Form 8-K. 11
Signatures 12
</TABLE>
<PAGE>
ADVO, Inc.
CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands, except share data)
<TABLE>
<CAPTION>
June 27, September 27,
ASSETS 1998 1997
----------------- ------------
<S> <C> <C>
Current assets:
Cash and cash equivalents (1) $ 14,979 $ 25,963
Accounts receivable, net 62,052 66,664
Inventories 3,414 4,149
Prepaid expenses and other current assets 3,631 4,759
Deferred income taxes 15,610 14,248
------------ ------------
Total current assets 99,686 115,783
Property, plant and equipment 183,970 166,991
Less accumulated depreciation and amortization (105,294) ( 90,899)
---------- -----------
Net property, plant and equipment 78,676 76,092
Other assets 23,583 16,678
------------ -----------
TOTAL ASSETS $ 201,945 $ 208,553
----------- ----------
----------- ----------
LIABILITIES
Current liabilities:
Current portion of long-term debt $ 14,681 $ 10,125
Accounts payable 30,446 44,644
Accrued compensation and benefits 23,770 29,245
Other current liabilities 29,642 31,569
----------- -----------
Total current liabilities 98,539 115,583
Long-term debt 163,116 140,666
Deferred income taxes 9,955 9,589
Other liabilities 3,366 2,636
STOCKHOLDERS' DEFICIENCY
Series A Convertible preferred stock,
$.01 par value (Authorized 5,000,000
shares, none issued) -- --
Common stock, $.01 par value (Authorized
40,000,000 shares, issued 28,940,114
and 28,428,952 shares, respectively) 289 284
Additional paid-in capital 169,435 163,317
Accumulated deficit (129,156) (155,113)
---------- -----------
40,568 8,488
Less common stock held in
treasury, at cost (113,599) (68,409)
---------- -----------
Total stockholders' deficiency (73,031) (59,921)
---------- -----------
TOTAL LIABILITIES & STOCKHOLDERS'
DEFICIENCY $ 201,945 $ 208,553
---------- -----------
---------- -----------
</TABLE>
(1) Includes cash and cash equivalents invested with related party of $5,850,000
at June 27, 1998 and $11,613,000 at September 27, 1997.
See Accompanying Notes.
- 2 -
<PAGE>
ADVO, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In thousands, except per share data)
<TABLE>
<CAPTION>
Nine months ended Three months ended
---------------------------- -----------------------------
June 27, June 28, June 27, June 28,
1998 1997 1998 1997
---------- ---------- ----------- ---------
<S> <C> <C> <C> <C>
Revenues $ 784,397 $ 755,868 $ 269,021 $ 258,243
Costs and expenses:
Cost of sales 578,389 565,541 194,155 188,929
Selling, general and
administrative 150,368 145,562 50,725 48,190
Provision for bad debts 2,790 3,674 937 1,993
------------ ------------- ------------- -----------
Operating income 52,850 41,091 23,204 19,131
Interest expense 10,631 11,211 3,402 3,631
Interest income (1) 774 486 262 149
Other expense 441 490 160 167
------------ ------------ ------------- -----------
Income before income taxes 42,552 29,876 19,904 15,482
Provision for income taxes 16,596 11,651 7,762 6,038
------------ ------------- ------------- -----------
Net income $ 25,956 $ 18,225 $ 12,142 $ 9,444
------------ ------------- ------------- -----------
------------ ------------- ------------- -----------
Earnings per common share (2) $ 1.16 $ .75 $ .54 $ .39
------------ ------------- ------------- -----------
------------ ------------- ------------- -----------
Earnings per common share
- assuming dilution (2) $ 1.12 $ .74 $ .52 $ .38
------------ ------------- ------------- -----------
------------ ------------- ------------- -----------
Weighted average common shares 22,452 24,324 22,502 24,406
Weighted average diluted shares 23,095 24,636 23,189 24,671
</TABLE>
(1) Includes interest income from a related party of $512,000 and $176,000 for
the nine months and three months ended June 27, 1998 and $356,000 and $117,000
for the nine months and three months ended June 28, 1997, respectively.
(2) The Company adopted Statement of Financial Accounting Standards No. 128,
"Earnings Per Share" ("EPS") during the first quarter of fiscal 1998. Prior year
EPS amounts have been restated to conform to the provisions of the new
statement.
See Accompanying Notes.
-3-
<PAGE>
ADVO, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
<TABLE>
<CAPTION>
Nine months ended
------------------------------------
June 27, June 28,
1998 1997
--------------- -------------
<S> <C> <C>
Net cash provided by operating activities $ 32,786 $ 33,726
Cash flows from investing activities:
Acquisition of property, plant and equipment (15,799) (20,914)
Proceeds from disposals of property and equipment 6 19
Acquisitions, net of cash acquired (10,720) --
------- ---------
Net cash used by investing activities (26,513) (20,895)
Cash flows from financing activities:
Revolving line of credit - net 37,000 2,000
Payments of long-term borrowings (9,994) (15,744)
Payment of debt issue costs (1,349) -
Proceeds from exercise of stock options 2,365 2,162
Purchase of common stock for treasury (45,280) (2,619)
Other 1 (1)
-------- ---------
Net cash used by financing activities (17,257) (14,202)
-------- ---------
Decrease in cash and cash equivalents (10,984) (1,371)
Cash and cash equivalents at beginning of period 25,963 13,303
-------- ---------
Cash and cash equivalents at end of period $ 14,979 $ 11,932
-------- ---------
-------- ---------
</TABLE>
See Accompanying Notes
-4-
<PAGE>
ADVO, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
1. Basis of presentation
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the nine month period ended June 27, 1998
are not necessarily indicative of the results that may be expected for the
fiscal year ending September 26, 1998. For further information, refer to the
consolidated financial statements and footnotes thereto included in ADVO's
annual report on Form 10-K for the fiscal year ended September 27, 1997. Certain
reclassifications have been made in the fiscal 1997 financial statements to
conform with the fiscal 1998 presentation.
2. Earnings per share
In 1997, the Financial Accounting Standards Board issued Statement of Financial
Accounting Standards No. 128, "Earnings Per Share" ("EPS"). Statement No. 128
replaced the previously reported primary and fully diluted earnings per share
with earnings per common share (basic) and earnings per common share - assuming
dilution (diluted). Earnings per common share excludes common stock equivalents,
such as stock options, and is computed by dividing earnings by the weighted
average number of common shares outstanding for the period. Earnings per common
share - assuming dilution reflects the potential dilution that could occur if
common stock equivalents, such as stock options, were exercised. All earnings
per share amounts for all periods have been restated to conform to the Statement
No. 128 requirement.
<TABLE>
<CAPTION>
Nine months ended Three months ended
---------------------------------- ----------------------------
June 27, June 28, June 27, June 28,
1998 1997 1998 1997
------------ ------------- ------------ -----------
<S> <C> <C> <C> <C>
Net income $ 25,956 $ 18,225 $ 12,142 $ 9,444
Weighted average common shares 22,452 24,324 22,502 24,406
Effect of dilutive securities:
Stock options 617 300 652 255
Restricted stock 26 12 35 10
------------ ----------- ----------- ----------
Dilutive potential common shares 643 312 687 265
Weighted average diluted shares 23,095 24,636 23,189 24,671
------------ ----------- ----------- ---------
------------ ----------- ----------- ---------
Earnings per common share $ 1.16 $ .75 $ .54 $ .39
------------ ----------- ----------- ---------
------------ ----------- ----------- ---------
Earnings per common share - assuming
dilution $ 1.12 $ .74 $ .52 $ .38
------------ ----------- ----------- ---------
------------ ----------- ----------- ---------
</TABLE>
-5-
<PAGE>
ADVO, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (continued)
3. Acquisitions
On February 27, 1998, the Company acquired The Mailhouse, Inc., a cooperative
coupon envelope mail company, for approximately $10.7 million. This acquisition
has been accounted for under the purchase method of accounting and, accordingly,
the results of operations of the acquired company have been included in the
consolidated statements of operations from its acquisition date. The acquired
assets have been recorded at their estimated fair values. This acquisition did
not have a material pro forma effect on operations for periods prior to the
acquisition.
-6-
<PAGE>
ADVO, Inc.
Management's Discussion and Analysis of
Financial Condition and Results of Operations
This section should be read in conjunction with the consolidated financial
statements of the Company and the notes thereto.
RESULTS OF OPERATIONS
Revenues increased $10.8 million or 4.2% during the third quarter of fiscal 1998
and increased $28.5 million or 3.8% for the nine months ended June 27, 1998 when
compared to the same periods of the prior year. The revenue growth for both the
three and nine month periods was attributable to rising revenue per piece as a
result of increases in product weights associated with the Company's preprint
customers and volume shifts in product mix, as well as revenues associated with
the Company's acquisition of MailHouse, Inc. To a lesser extent, price increases
also contributed to the revenue growth for the third quarter of fiscal 1998.
Offsetting these increases was approximately a 2% strategically driven reduction
in shared mail packages for both the three and nine months ended June 27, 1998
when compared to the same periods of the prior year. The Company's pieces per
package increased from 8.67 to 8.76 for the third quarter of fiscal 1998 and
from 8.48 to 8.69 for the nine months ended June 27, 1998.
Cost of sales as a percentage of revenue decreased approximately 1% to 72.2% and
73.7%, respectively, for the three and nine months ended June 27, 1998. This
decrease was the result of favorable operating efficiencies and cost controls in
the branch operations of the Company and postage savings. In absolute terms,
cost of sales increased $5.2 million for the three months ended June 27, 1998
and $12.8 million for the first nine months of fiscal 1998 when compared to the
same periods of the prior year. The increase for both the three and nine month
period was mainly attributable to increased print expense, higher distribution
and delivery costs partially offset by the strategic reduction in shared mail
packages and branch operating efficiencies.
For the quarter and nine months ended June 27, 1998 selling, general and
administrative costs, including the provision for bad debts, increased $1.5
million and $3.9 million, respectively. As a percentage of revenue, selling,
general and administrative costs decreased approximately .2% to 19.2% and to
19.5 %, respectively, for the third quarter and nine months of fiscal 1998 when
compared to the same periods of fiscal 1997. Strict cost controls in place by
the Company and lower bad debt expense contributed to the $ 2.1 million and $3.8
million decrease in selling expense during the third quarter and nine months of
fiscal 1998. The increases in general and administrative costs of $3.6 million
and $7.7 million for the three and nine months ended June 27, 1998,
respectively, were due to the amortization of costs associated with new
financial systems, software development and other technological enhancements, as
well as compensation related expenses. In addition, remediation costs associated
with the Year 2000 issue also contributed to the increase in general and
administrative costs for the quarter and year to date periods. These increases
were somewhat offset by the Company's strong cost control focus.
As a result of the above, the Company reported operating income of $23.2 million
and $52.8 million for the third quarter and nine months ended June 27, 1998
representing a 21.3% and 28.6% increase, respectively, over the same periods in
the prior year. Operating income as a percentage of revenue increased from 7.4%
to 8.6% for the three months ended June 27, 1998 and increased from 5.4% to 6.7%
for the nine months of fiscal 1998 over the same periods of the prior year.
Lower interest rates under the renegotiated credit agreement resulted in
slightly lower interest expense amounts for the three and nine months ended June
27, 1998 of $3.4 million and $10.6 million, respectively.
The effective income tax rate for the three and nine months ended June 27, 1998
and June 28, 1997 was approximately 39% for both periods.
-7-
<PAGE>
ADVO, Inc.
Management's Discussion and Analysis of
Financial Condition and Results of Operations (continued)
For the three months ended June 27, 1998, the Company reported earnings per
share - assuming dilution of $.52, representing a 36.8% increase from the
comparable period of the prior year. Earnings per share - assuming dilution
increased 51.4% to $1.12 for the nine months ended June 27, 1998 from the same
period of the prior year. The Company adopted Statement of Financial Accounting
Standards No. 128, "Earnings Per Share" ("EPS") during the first quarter of
fiscal 1998. As such, prior year EPS amounts have been restated to conform to
the provisions of the new statement.
Weighted average common and diluted shares decreased from prior periods
primarily due to the Company's stock buyback program, including the purchase of
approximately 1.9 million shares of its common stock from Warburg, Pincus
Capital Partners, L.P ("Warburg") during the first quarter of fiscal 1998.
FINANCIAL CONDITION
The working capital ratio remained relatively flat at 1.01 at June 27, 1998
versus 1.00 at September 27, 1997, however, the components of the ratio
decreased approximately $17 million from the end of fiscal 1997. The decrease in
current assets was primarily the result of the decline in cash and cash
equivalents due to scheduled debt repayments and treasury stock purchases under
the Company's buyback program, in addition to decreases in accounts receivables.
Current liabilities declined primarily as a result of decreases in accounts
payable due to the timing of vendor payments.
Total stockholders' deficiency increased $13.1 million to a net deficiency of
$73.0 million at June 27, 1998. The increase in the net deficiency was primarily
the result of $45.3 million of common stock purchased by the Company, $43.3
million of which was due to purchases under its buyback program and $2.0 million
pursuant to elections by employees to satisfy withholding tax requirements under
the Company's restricted stock and stock option plans. During the first quarter
of fiscal 1998, the Company increased its previously announced stock repurchase
authorization from 2 million to 3.2 million shares. In connection with the
increased authorization, the Company purchased approximately 1.9 million shares
of its common stock from Warburg for $34.8 million. The Company has also
purchased an additional .3 million shares of common stock for treasury for $8.5
million on the open market during the nine months ended June 27, 1998. Overall,
the treasury stock purchases were offset to a degree by the Company's net income
of $26.0 million for the nine months ended June 27, 1998.
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment investments of $15.8 million for the nine months
ended June 27, 1998 include computerized mail sorters for the Company's
production facilities, acquisitions of computer software and hardware, as well
as costs associated with the development of new software in order to improve
operating efficiencies. The Company expects its capital expenditure plan for the
remainder of the year to be approximately $14 million.
The Company has undertaken several projects to improve operating performance and
efficiencies, including several system initiatives. These projects are designed
to address the Company's system needs while simultaneously addressing the Year
2000 issues. To the extent these acquisitions and development of new systems are
being made as an indirect result of Year 2000, they will be capitalized under
the Company's normal capitalization policy.
-8-
<PAGE>
ADVO, Inc.
Management's Discussion and Analysis of
Financial Condition and Results of Operations (continued)
LIQUIDITY
The Company's main source of liquidity continues to be funds from operating
activities. In addition, the Company has available unused credit commitments of
approximately $102.2 million, relating to the Company's revolving line of
credit, which may be used to fund working capital. The net cash provided by
operating activities decreased slightly from $33.7 million at June 28, 1997 to
$32.8 at June 27, 1998.
The Company experienced an $11.0 million decrease in cash and cash equivalents
during the nine months ended June 27, 1998. The overall decrease was a result of
the cash outlay of $43.8 million associated with investing and financing
activities, offset by cash provided by operating activities of $32.8 million.
Investing activities for the nine months included expenditures for property,
plant and equipment of $15.8 million detailed above and $10.7 million for the
acquisition of The Mailhouse, Inc., a cooperative coupon envelope mail company,
purchased during the second quarter of fiscal 1998. The acquisition has been
accounted for under the purchase method of accounting and, accordingly, the
results of operations of the acquired company have been included in the
consolidated statements of operations from its acquisition date. Financing
activities reflect treasury stock purchases of $45.3 million primarily related
to the Company's buyback program, offset by debt borrowings, net of repayments,
of $27.0 million.
FINANCING ARRANGEMENTS
The Company maintains a credit agreement which provides for total credit
facilities of $300 million, consisting of a $135 million term loan and a $165
million reducing revolving line of credit. At June 27, 1998 there was $177.8
million of debt outstanding, with $14.7 million classified as current. The
Company anticipates it will be able to meet its long-term debt obligations
through funds generated from operations. During July 1998, the Company
reborrowed an additional $5 million under the revolving line of credit.
During the second quarter of fiscal 1998 the Company entered into two separate
three year interest rate swap transaction agreements to hedge notional amounts
totaling $100 million. The rate is fixed at approximately 5.7%. These agreements
entitle the Company to pay no more or less than the specified rate plus
applicable margin, as defined. The Company believes the interest rate swap
transaction agreements limit substantial risk should interest rates fluctuate.
These agreements had no material effect on interest expense during the third
quarter and first nine months of fiscal 1998.
Under the terms of the credit agreement, the Company is required to maintain
certain financial ratios. In addition, the credit agreement also places
restrictions on disposals of assets, mergers and acquisitions, dividend
payments, investments and additional debt.
YEAR 2000 COMPLIANCE
The Company recognizes that certain of its systems will have potential
operational problems for Year 2000 and beyond. The Year 2000 issue is the result
of computer programs written in two, rather than four, digits to identify the
applicable year. Based on a recent assessment, the Company has determined it
will be required to modify or replace significant portions of its software so
that its computer and production systems will function properly with respect to
dates in the Year 2000 and thereafter. Replacements of systems will be
capitalized under the Company's normal capitalization policy. (See discussion
under Property, Plant & Equipment).
-9-
<PAGE>
ADVO, Inc.
Management's Discussion and Analysis of
Financial Condition and Results of Operations (continued)
The Company's current estimate of the cost of modifying the required systems to
be Year 2000 compliant is estimated to be between $10 and $11 million and will
be expensed as incurred. These costs will be partially funded through the
shifting of existing resources through 1999. The Company will utilize both
internal and external resources to complete the Year 2000 modifications.
Remediation costs incurred through the third quarter of fiscal 1998 totaled $1.6
million.
The Company currently believes that with timely modifications to existing
software and conversions to new software, the Year 2000 issue will not pose
significant operational problems for its computer and production systems and
will not have a material impact on the Company's consolidated financial position
or results of operations. The project is estimated to be completed no later than
September 1999, which is prior to any anticipated impact on its operating
systems. Further, the Company has also made appropriate inquiries of third
parties to determine the extent to which potential problems may arise from
interfaces as a result of the third parties' failure to remediate their own Year
2000 issues in a timely manner. Such failures of the Company and/or third
parties' computer systems could have a material adverse effect on the operations
and financial condition of the Company and on the Company's ability to engage in
normal business activities.
The estimated cost of the project and date on which the Company believes it will
complete the Year 2000 modifications are based on management's best estimates,
which were derived utilizing numerous assumptions of future events. However, due
to the complexity of the issues and possible unidentified risks there can be no
guarantee that these estimates will be achieved and therefore, actual costs
could materially differ from those estimated.
FORWARD LOOKING STATEMENTS
Except for the historical information stated herein, the matters discussed in
this Management's Discussion and Analysis of Financial Condition and Results of
Operations contain forward looking statements within the meaning of Section 21E
of the Securities Exchange Act of 1934, as amended. Such forward looking
statements are accompanied by cautionary factors which would cause the Company's
actual results to differ materially from those in the forward looking
statements. Such factors include but are not limited to possible governmental
regulation or legislation affecting aspects of the Company's business, changes
in customer demand, postal and paper prices, the efficiencies achieved with
technology upgrades, the amount of shares the Company will purchase in the
future under its buyback program, the successful completion of the Year 2000
transition, and other general economic factors.
Part II - Other Information
Item 5. Other Information
Subsequent to the quarter ended June 27, 1998, Robert Kamerschen, the Company's
Chief Executive Officer, exercised 381,951 options on August 4, 1998 at an
exercise price of $12.875. These options were exercised under the Company's 1988
Non-qualified Stock Option Plan and the 1993 Stock Option Subplan, as amended
and were scheduled to expire in November of 1998. The options were exercised in
a stock for stock transaction, Mr. Kamerschen returned shares to pay for the
exercise price and certain tax withholding obligations. As a result of such
exercise, Mr. Kamerschen received 117,845 shares. The market price on August 4,
1998 was $30.00 .
-10-
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit Index
<TABLE>
<CAPTION>
Exhibit No. Exhibits
<S> <C>
27 Financial Data Schedule.
</TABLE>
(b) Reports on Form 8-K
A report on Form 8-K dated June 23, 1998 was filed by the Company. The Form
reported under Item 5 thereof, that Robert Kamerschen, 62, Chairman of the Board
and Chief Executive Officer for the past ten years, would step aside as CEO
effective January 1, 1999. He will remain as Chairman as part of an orderly
senior management succession plan. Mr. Kamerschen's hand picked successor as
CEO, Gary Mulloy, 53, has been the Company's President and Chief Operating
Officer since 1996.
Omitted from this Part II are items which are inapplicable or to which the
answer is negative for the period covered.
-11-
<PAGE>
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.
ADVO, Inc.
Date: August 10, 1998 By: /s/ DONALD E. MCCOMBS
---------------- ----------------------
Donald E. McCombs
Senior Vice President and
Chief Financial Officer
(Principal Financial Officer)
-12-
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ADVO INC'S
FORM 10Q FOR THE QUARTER ENDED JUNE 27, 1998 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-26-1998
<PERIOD-START> SEP-28-1997
<PERIOD-END> JUN-27-1998
<CASH> 14,979
<SECURITIES> 0
<RECEIVABLES> 67,273
<ALLOWANCES> 5,221
<INVENTORY> 3,414
<CURRENT-ASSETS> 99,686
<PP&E> 183,970
<DEPRECIATION> 105,294
<TOTAL-ASSETS> 201,945
<CURRENT-LIABILITIES> 98,539
<BONDS> 163,116
0
0
<COMMON> 289
<OTHER-SE> (73,320)
<TOTAL-LIABILITY-AND-EQUITY> 201,945
<SALES> 0
<TOTAL-REVENUES> 784,397
<CGS> 0
<TOTAL-COSTS> 578,389
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 2,790
<INTEREST-EXPENSE> 10,631
<INCOME-PRETAX> 42,552
<INCOME-TAX> 16,596
<INCOME-CONTINUING> 25,956
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 25,956
<EPS-PRIMARY> 1.16<F1>
<EPS-DILUTED> 1.12<F2>
<FN>
<F1>THE EPS-PRIMARY TAG REPRESENTS BASIC EPS UNDER SFAS 128.
<F2>THE EPS-DILUTED TAG REPRESENTS DILUTED EPS UNDER SFAS 128.
</FN>
</TABLE>
