<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 March 27, 1999
--------------
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 April 24, 1999 there were 21,548,831 shares of common stock outstanding.
<PAGE>
ADVO, Inc.
Index to Quarterly Report
on Form 10-Q
Quarter Ended March 27, 1999
Part I - Financial Information
------------------------------
Page
----
Item 1. Financial Statements (Unaudited).
Consolidated balance sheets -
March 27, 1999 and September 26, 1998. 2
Consolidated statements of operations -
Six months and three months ended
March 27, 1999 and March 28, 1998. 3
Consolidated statements of cash flows -
Six months ended March 27, 1999
and March 28, 1998. 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 6. Exhibits and Reports on Form 8-K. 10
Signatures 11
<PAGE>
ADVO, Inc.
CONSOLIDATED BALANCE SHEETS (Unaudited)
(In thousands, except share data)
<TABLE>
<CAPTION>
<S> <C> <C>
March 27, September 26,
ASSETS 1999 1998
------------ ------------
Current assets:
Cash and cash equivalents $ 10,265 $ 8,724
Accounts receivable, net 78,656 80,140
Inventories 3,516 3,740
Prepaid expenses and other current assets 4,877 4,886
Deferred income taxes 14,682 13,535
--------- ---------
Total current assets 111,996 111,025
Property, plant and equipment 201,290 189,238
Less accumulated depreciation and amortization (108,524) (103,448)
--------- ---------
Net property, plant and equipment 92,766 85,790
Other assets 22,807 22,391
--------- ---------
TOTAL ASSETS $ 227,569 $ 219,206
========= =========
LIABILITIES
Current liabilities:
Current portion of long-term debt $ 18,225 $ 16,200
Accounts payable 35,528 37,586
Accrued compensation and benefits 25,138 27,473
Other current liabilities 35,460 29,790
--------- ---------
Total current liabilities 114,351 111,049
Long-term debt 168,941 167,766
Deferred income taxes 11,534 12,035
Other liabilities 3,410 3,230
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 29,370,781
and 29,237,700 shares, respectively) 294 292
Additional paid-in capital 175,418 173,433
Accumulated deficit (103,174) (119,473)
--------- ---------
72,538 54,252
Less common stock held in
treasury, at cost (143,205) (129,126)
--------- ---------
Total stockholders' deficiency (70,667) (74,874)
--------- ---------
TOTAL LIABILITIES & STOCKHOLDERS'
DEFICIENCY $ 227,569 $ 219,206
========= =========
</TABLE>
See Accompanying Notes.
-2-
<PAGE>
ADVO, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
(In thousands, except per share data)
<TABLE>
<CAPTION>
Six months ended Three months ended
------------------------------- --------------------------------
March 27, March 28, March 27, March 28,
1999 1998 1999 1998
------------ ------------- -------------- ------------
<S> <C> <C> <C> <C>
Revenues $522,137 $ 515,376 $ 253,488 $ 253,232
Costs and expenses:
Cost of sales 380,434 384,234 186,004 189,305
Selling, general and
administrative 105,614 99,644 52,341 50,344
Provision for bad debts 2,522 1,852 1,663 1,127
------------ ------------- -------------- ------------
Operating income 33,567 29,646 13,480 12,456
Interest expense 7,049 7,229 3,494 3,668
Interest income 305 511 141 257
Other expense 321 281 146 133
------------ ------------- -------------- ------------
Income before income taxes 26,502 22,647 9,981 8,912
Provision for income taxes 10,203 8,832 3,843 3,476
------------ ------------- -------------- ------------
Net income $ 16,299 $ 13,815 $ 6,138 $ 5,436
============ ============= ============== ============
Earnings per common share $ .74 $ .62 $ .28 $ .24
============ ============= ============== ============
Earnings per common share
- assuming dilution $ .73 $ .60 $ .28 $ .24
============ ============= ============== ============
Weighted average common shares 22,022 22,427 21,972 22,435
Weighted average diluted shares 22,339 23,048 22,228 23,037
</TABLE>
See Accompanying Notes.
-3-
<PAGE>
ADVO, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited)
(In thousands)
<TABLE>
<CAPTION>
Six months ended
---------------------------
March 27, March 28,
1999 1998
------------- ----------
<S> <C> <C>
Net cash provided by operating activities $ 30,335 $ 24,424
Cash flows from investing activities:
Acquisition of property, plant and equipment (18,611) (11,374)
Proceeds from disposals of property and equipment 12 --
Acquisitions, net of cash acquired (300) (10,720)
-------- --------
Net cash used by investing activities (18,899) (22,094)
Cash flows from financing activities:
Revolving line of credit - net 13,300 41,500
Payments of long-term borrowings (10,100) (7,462)
Payment of debt issue costs -- (1,349)
Proceeds from exercise of stock options 983 1,818
Purchase of common stock for treasury (14,079) (39,476)
Other 1 1
-------- --------
Net cash used by financing activities (9,895) (4,968)
-------- --------
Increase (decrease) in cash and cash equivalents 1,541 (2,638)
Cash and cash equivalents at beginning of period 8,724 25,963
-------- --------
Cash and cash equivalents at end of period $ 10,265 $ 23,325
======== ========
</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 six month period ended March 27, 1999
are not necessarily indicative of the results that may be expected for the
fiscal year ending September 25, 1999. 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 26, 1998.
Certain reclassifications have been made in the fiscal 1998 financial statements
to conform with the fiscal 1999 presentation.
2. EARNINGS PER SHARE
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.
<TABLE>
<CAPTION>
Six months ended Three months ended
--------------------------------------- --------------------------------------
March 27, March 28, March 27, March 28,
1999 1998 1999 1998
----------------- ---------------- --------------- -----------------
<S> <C> <C> <C> <C>
Net income $ 16,299 $ 13,815 $ 6,138 $ 5,436
Weighted average common shares 22,022 22,427 21,972 22,435
Effect of dilutive securities:
Stock options 301 600 245 579
Restricted stock 16 21 11 23
----------------- ---------------- --------------- -----------------
Dilutive potential common shares 317 621 256 602
Weighted average diluted shares 22,339 23,048 22,228 23,037
================= ================ =============== =================
Earnings per common share $ .74 $ .62 $ .28 $ .24
================= ================ =============== =================
Earnings per common share - assuming
dilution $ .73 $ .60 $ .28 $ .24
================= ================ =============== =================
</TABLE>
-5-
<PAGE>
3. SEGMENT REPORTING
Statement of Financial Accounting Standards No. 131 "Disclosures about Segments
of an Enterprise and Related Information" establishes standards for the way that
business enterprises report information about operating segments in financial
statements, as well as information about products and services, geographic areas
and major customers. The Company operates principally under one segment, direct
mail marketing, and, therefore, no additional disclosure is required.
-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 for the second quarter of fiscal 1999 remained consistent with the
prior year second quarter results, increasing $.3 million or .1%. Year to date
revenues through March 27, 1999 as compared to the same period of the prior year
increased $6.8 million or 1.3%. Contributing to the revenue increases were the
pricing gains achieved on many of the Company's shared mail products, as
evidenced by the increase in quarter and year to date revenue per thousand
pieces from $36.07 to $36.54 and $36.82 to $37.17, respectively. Offsetting
these gains were decreases in pieces per package from 8.55 to 8.24 and 8.66 to
8.54 for the quarter and six months ended March 27, 1999, respectively, as well
as a decline in packages mailed due to the Company's elimination of mailings in
selected markets. The acquisition of MailCoups, the Company's targeted coupon
envelope distributor, which occurred in March 1998; the Company's A.N.N.E. (ADVO
National Network Extension) brokered distribution program; as well as targeting
revenues associated with the Company's ATZ (ADVO Targeting Zones) distribution
platform significantly contributed to the quarter and year to date revenue.
Cost of sales as a percentage of revenue declined 1.4 percentage points to 73.4%
for the fiscal 1999 second quarter and 1.7 percentage points to 72.9% for fiscal
1999 year to date as compared to the same periods of the prior year. In absolute
terms, cost of sales decreased for the period ended March 27, 1999, $3.3 million
and $3.8 million in relation to the same three and six month periods of the
prior year, respectively. The cost of sales declines are attributable to lower
postage expense due to shifts in product mix and declines in packages mailed;
lower print costs due to turnkey product revenue decreases and favorable paper
prices; as well as continued improvement in operating efficiencies in the
Company's branch operations. These decreases were partially offset by
incremental distribution and delivery costs associated with MailCoups and
A.N.N.E.
Selling, general and administrative expenses (including the provision for bad
debts) increased $2.5 million for the quarter ended and $6.6 million for the
year to date period ended March 27, 1999 to $54.0 million and $108.1 million,
respectively. Selling costs remained relatively flat in comparison to the prior
year. The increase in general and administrative costs is mainly attributable
to Year 2000 remediation costs, as well as a one time severance charge taken
during the fiscal 1999 second quarter.
As a result of the above, operating income increased 8.2% to $13.5 million
during the second quarter, and 13.2% to $33.6 million during the first six
months of fiscal 1999, as compared to the prior year. Excluding the one time
severance charge of $1.8 million, operating income increased 22.7% and 19.3% for
the fiscal 1999 second quarter and six month year to date period, respectively.
Interest expense for the three and six months ended March 27, 1999 decreased
slightly as compared to the same periods of the prior year. The effects of
lower interest rates offset the impact of the increase in the outstanding debt
balance.
The effective income tax rate for the three and six months ended March 27, 1999
and March 28, 1998 was approximately 39% for both periods.
Earnings per share - assuming dilution increased over the prior year period from
$.24 to $.28 for the quarter ended and from $.60 to $.73 for the six month
period ended March 27, 1999. Excluding the one time severance charge, earnings
per share assuming dilution was $.33 and $.78 for the current three and six
month periods. This increase was reflective of the Company's improved earnings,
as well as the decrease in weighted average diluted shares as a result of the
Company's common stock buyback program.
-7-
<PAGE>
FINANCIAL CONDITION
- -------------------
Working capital decreased approximately $2.3 million from September 26, 1998.
The decline in working capital was primarily related to an increase in current
liabilities of approximately $3.3 million as a result of increased scheduled
debt repayment levels and increased taxes payable associated with the Company's
improved earnings. Partially offsetting these increases were reductions in
accounts payable associated with the timing of vendor payments and a decline in
accrued compensation and benefits due to the payout of the fiscal 1998 incentive
award in 1999.
Stockholders' deficiency decreased $4.2 million to a net deficiency of $70.7
million at March 27, 1999 from $74.9 million at September 26, 1998. The
decrease in the net deficiency was primarily the result of the Company's net
income of $16.3 million for the six month period ended March 27, 1999, offset by
treasury stock purchases of $14.1 million. The treasury stock purchases
consisted of $13.1 million of open market purchases associated with the
Company's buyback program and $1.0 million pursuant to elections by employees to
satisfy withholding requirements under the Company's restricted stock and stock
option plans. In March 1999, the Company increased its authorization under its
stock buyback program by 1.0 million shares to be repurchased through March 30,
2000.
PROPERTY, PLANT AND EQUIPMENT
- -----------------------------
Property, plant and equipment investments were $18.6 million for the six month
period ended March 27, 1999. These capital expenditures were mainly for the
development of financial and operational software, and the purchase of
computerized mail sorters for the Company's production facilities. Of the total
year to date fiscal 1999 capital expenditures, approximately $1.3 million
relates to the development of the human resource / payroll system, which was
accelerated in order to be Year 2000 compliant. The project was completed during
the second quarter of fiscal 1999. Total capitalized project costs were
approximately $3.5 million since inception in fiscal 1998.
LIQUIDITY
- ---------
The Company's main source of liquidity continues to be funds generated from
operating activities. In addition, the Company has available unused credit
commitments of $80.2 million which may be used to fund working capital.
The net cash provided by operating activities for the six months ended March 27,
1999 was $30.3 million versus $24.4 million for the same period of the prior
year. The year over year increase was primarily the result of improved
operating results and changes in taxes payable, accounts payable and accrued
compensation and benefits discussed above.
The overall increase in year to date fiscal 1999 cash and cash equivalents of
$1.5 million was comprised of net cash provided by operating activities of
$30.3 million offset by investing activities of $18.9 million and net financing
activities of $9.9 million. Investing activities consisted primarily of the
capital expenditures detailed above. Financing activities included treasury
stock purchases of $14.1 million partially offset by net borrowings under the
credit facility of $3.2 million. In the prior year period, investing activities
included $10.7 million for the acquisition of Mailhouse, Inc. and $11.4 million
in capital purchases. Financing activities for the prior year period included
treasury stock purchases of $39.5 million due primarily to the 1.9 million
shares of the Company's common stock purchased from Warburg, Pincus Capital
Partners, L.P., offset by net borrowings under the credit facilities of $34.0
million.
-8-
<PAGE>
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 March 27, 1999 there was $187.2
million of debt outstanding, with $18.2 million classified as current. The
Company anticipates it will be able to meet its long-term debt obligations
through funds generated from operations. As of April 24, 1999, the Company had
additional net borrowings of $20 million under the revolving line of credit.
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
- --------------------
As discussed in the Financial Report contained in the Company's Annual Report on
Form 10-K for the year ended September 26, 1998, under the caption ,"Year 2000
Readiness", the Company outlined its program to become Year 2000 compliant by
discussing the following matters: state of readiness, costs, and risks and
contingency plans. During the first half of fiscal 1999, the Company continued
on track with its program to become Year 2000 compliant. Below is a summary of
the matters which have changed since the disclosures made at year end.
State of Readiness
The Company continues to work on the various identified phases concurrently.
The Company is currently proceeding on schedule in its overall Year 2000 program
and is approximately 75% complete as of April 30, 1999. The estimated
completion date of the project remains no later than September 1999.
Costs
The Company's total cost of modifying the required systems for Year 2000
compliance is currently estimated from inception in fiscal 1998 through
completion in September 1999 to be approximately $12 million and will be
expensed as incurred. Of these costs, $3.2 million were incurred during fiscal
1998 and $4.7 million during the first and second quarters of fiscal 1999.
Risks and Contingency Plans
The Company continues to develop formal contingency plans for non-compliance and
continues to refine these plans as the Company completes the evaluation,
modification and /or replacement of its Information Technology ("IT") and non-
IT systems and as it receives and evaluates information from third parties.
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 subject to cautionary factors which could 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, the possibility of consolidation throughout the retail
sector, 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 and estimated costs of the Year 2000
program, fluctuations in interest rates related to the outstanding debt and
other general economic factors.
-9-
<PAGE>
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibit Index
Exhibit No. Exhibits
----------- --------
10 Amendment to Executive Severance Agreements.
27 Financial Data Schedule.
(b) Reports on Form 8-K
-------------------
A report on Form 8-K dated March 15, 1999 was filed by the Company. The
Form reported under Item 5 thereof, that its Board of Directors authorized
a new stock repurchase program for up to 1,420,000 shares through March
30, 2000. As of the report date, this new program added one million
shares to the approximate remaining 420,000 shares from its previous
buyback program.
- --------------------------------------------------------------------------------
Omitted from this Part II are items which are inapplicable or to which the
answer is negative for the period covered.
-10-
<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: May 7, 1999 By: /s/ JULIE A. ABRAHAM
----------- ----------------------------
Julie A. Abraham
Vice President and Controller
(Principal Accounting Officer)
-11-
<PAGE>
Exhibit 10
----------
Following is an amendment to Paragraph 1(d) Change of Control of each of the
Executive Severance Agreements identified below. The amendments were signed and
dated May 6, 1999 by and between ADVO, Inc. and each of the executive officers.
Executive Severance Agreements
------------------------------
Executive Officer Where Located
- ----------------- -------------
Gary M. Mulloy Incorporated by reference to
Exhibit 10(m) to the Company's
Annual Report on Form 10-K
for the fiscal year ended
September 28, 1996.
Myron L. Lubin Incorporated by reference to
Rick Kurz Exhibit 10(m) to the Company's
Annual Report on Form 10-K
for the fiscal year ended
September 30, 1995.
Donald E. McCombs Incorporated by reference to
Exhibit 10(m) to the Company's
Annual Report on Form 10-K
for the fiscal year ended
September 27, 1997.
A. Brian Sanders Incorporated by reference to
Exhibit 10(k) to the Company's
Annual Report on Form 10-K
for the fiscal year ended
September 27, 1997.
Julie A. Abraham Incorporated by reference to
Vincent Giuliano Exhibit 10(n) to the Company's
Annual Report on Form 10-K
for the fiscal year ended
September 26, 1998.
<PAGE>
B. Kabe Woods Incorporated by reference to
Exhibit 10(r) to the Company's
Annual Report on Form 10-K
for the fiscal year ended
September 26, 1998.
Henry S. Evans Incorporated by reference to
Exhibit 10(q) to the Company's
Annual Report on Form 10-K
for the fiscal year ended
September 26, 1998.
Mardelle Pena Incorporated by reference to
Exhibit 10(p) to the Company's
Annual Report on Form 10-K
for the fiscal year ended
September 26, 1998.
David M. Stigler Incorporated by reference to
Exhibit 10(o) to the Company's
Annual Report on Form 10-K
for the fiscal year ended
September 26, 1998.
<PAGE>
(d) "Change in Control" means the occurrence during the Term of any of the
following events:
(i) Any Person (other than the Company, any trustee or other fiduciary holding
securities under any employee benefit plan of the Company, or any company owned,
directly or indirectly, by the stockholders of the Company immediately prior to
the occurrence with respect to which the evaluation is being made in
substantially the same proportions as their ownership of the common stock of the
Company) acquires securities of the Company and immediately thereafter is the
Beneficial Owner (except that a Person shall be deemed to be the Beneficial
Owner of all shares that any such Person has the right to acquire pursuant to
any agreement or arrangement or upon exercise of conversion rights, warrants or
options or otherwise, without regard to the sixty day period referred to in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities of the
Company representing 30% or more of the combined voting power of the Company's
then outstanding securities (except that an acquisition of securities directly
from the Company shall not be deemed an acquisition for purposes of this clause
(i));
(ii) During any period of two consecutive years, individuals who at the
beginning of such period constitute the Board, and any new director (other than
a director designated by a person who has entered into an agreement with the
Company to effect a transaction described in clause (i), (iii) or (iv) of this
paragraph) whose election by the Board or nomination for election by the
Company's stockholders was approved by a vote of at least two-thirds of the
directors then still in office who either were directors at the beginning of the
two-year period or whose election or nomination for election was previously so
approved by excluding for this purpose any such new director whose initial
assumption of office occurs as a result of either an actual or threatened
election contest (as such terms as used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) or other actual or threatened solicitation
of proxies or consents by or on behalf of an individual, corporation,
partnership, group, associate or other entity or Person other than the Board,
cease for any reason to constitute at least a majority of the Board;
(iii) The consummation of a merger or consolidation of the Company with any
other entity, other than (i) a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving or resulting entity) more than 50% of
the combined voting power of the surviving or resulting entity outstanding
immediately after such merger or consolidation or (ii) a merger or consolidation
in which no premium is intended to be paid to any shareholder participating in
the merger or consolidation;
<PAGE>
(iv) The stockholders of the Company approve a plan or agreement for the sale or
disposition of all or substantially all of the consolidated assets of the
Company (other than such a sale or disposition immediately after which such
assets will be owned directly or indirectly by the stockholders of the Company
in substantially the same proportions as their ownership of the common stock of
the Company immediately prior to such sale or disposition) in which case the
Board shall determine the effective date of the Change in Control resulting
therefrom; or
(v) any other event occurs which the Board determines, in its discretion, would
materially alter the structure or its ownership.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ADVO INC'S
FORM 10Q FOR THE SIX MONTH PERIOD ENDED MARCH 27, 1999 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-25-1999
<PERIOD-START> SEP-27-1998
<PERIOD-END> MAR-27-1999
<CASH> 10,265
<SECURITIES> 0
<RECEIVABLES> 82,902
<ALLOWANCES> 4,246
<INVENTORY> 3,516
<CURRENT-ASSETS> 111,996
<PP&E> 201,290
<DEPRECIATION> 108,524
<TOTAL-ASSETS> 227,569
<CURRENT-LIABILITIES> 114,351
<BONDS> 168,941
0
0
<COMMON> 294
<OTHER-SE> (70,961)
<TOTAL-LIABILITY-AND-EQUITY> 227,569
<SALES> 0
<TOTAL-REVENUES> 522,137
<CGS> 0
<TOTAL-COSTS> 380,434
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 2,522
<INTEREST-EXPENSE> 7,049
<INCOME-PRETAX> 26,502
<INCOME-TAX> 10,203
<INCOME-CONTINUING> 16,299
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 16,299
<EPS-PRIMARY> .74<F1>
<EPS-DILUTED> .73<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>
