U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-QSB
__
X QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
- --
1934 FOR THE QUARTERLY PERIOD ENDED March 31, 1996
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__
__ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
1934 FOR THE TRANSITION PERIOD FROM ____________
TO ____________
Commission file number 0-5887
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RTI INC.
------------------------------------------
(Exact name of small business issuer as specified in its charter)
NEW YORK 11-2163152
------------------------ ------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
108 Lake Denmark Road, Rockaway, New Jersey 07866
-------------------------------------------------
(Address of principal executive offices) (Zip Code)
(201) 625-8400
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(Issuer's telephone number, including area code)
Check whether the issuer (1) filed all reports required to be filed by
Section l3 or l5(d) of the Exchange Act during the past 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 90days. Yes x
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No
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State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date.
May 2, 1996 - 1,076,883 shares of common stock
------------------ -----------
Transitional Small Business Disclosure Form Yes No x
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Exhibit Index on sequentially numbered page 15
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Total number of pages 16
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Part I. Financial Information
Item I. Financial Statements
RTI Inc. and Subsidiaries
Consolidated Balance Sheets
March 31, December 31,
1996 1995
Assets (unaudited)
----------------------------------------- ----------- ----------
Current:
Cash and cash equivalents $ 290,422 $ 77,631
Accounts receivable, net of allowance
for doubtful accounts of $10,000
in 1996 and 1995 566,264 562,811
Prepaid expenses and other 50,545 31,949
Restricted deposits 15,771 15,771
----------- ----------
Total current assets 923,002 688,162
Property, plant, equipment and Cobalt 60,
net of accumulated depreciation and
amortization 7,374,520 7,006,886
Certificates of financial assurance -
restricted 150,000 150,000
Deferred financing costs 33,828 36,960
----------- ----------
Total assets $8,481,350 $7,882,008
=========== ===========
See accompanying notes to consolidated financial statements.
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RTI Inc. and Subsidiaries
Consolidated Balance Sheets
March 31, December 31,
1996 1995
Liabilities and Stockholders' Equity (unaudited)
----------------------------------------- ----------- ----------
Current:
Current portion of long-term debt
(Note 5 ) $ 851,973 $ 1,047,264
Accounts payable 193,534 138,178
Accrued expenses (Note 4) 630,016 618,748
Current portion of redeemable
preferred stock, Series A (Note 8(b)) 236,000 --
----------- ----------
Total current liabilities 1,911,523 1,804,190
Long-term debt, net of current portion
and discount of $38,500 and $44,000
(Note 5) 2,107,769 2,024,050
Preferred stock, $.05 par value,
Series A, shares authorized 200,000;
issued and outstanding, 118,000,
net of current portion (Note 8(b)) -- --
Other liabilities (Note 6) 1,335,383 883,713
----------- -----------
Total liabilities 5,354,675 4,711,953
----------- -----------
Commitments and contingencies
(Notes 2,3,4,5,6 and 8)
Stockholders' equity (Note 8):
Preferred stock, $.05 par value -
shares authorized 2,000,000;
issued and outstanding, 118,000 Series A -- --
Common stock, $.08 par value -
shares authorized 15,000,000;
issued and outstanding, 1,076,887 86,151 86,153
Additional paid-in capital 16,013,798 16,013,851
Deficit (12,973,274) (12,929,949)
----------- -----------
Total stockholders' equity 3,126,675 3,170,055
----------- ----------
Total liabilities and
stockholders' equity $ 8,481,350 $ 7,882,008
=========== ===========
See accompanying notes to consolidated financial statements.
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RTI Inc. and Subsidiaries
Consolidated Statements of Operations
(unaudited)
Three Months Ended March 31,
1996 1995
--------- ---------
Net sales $1,086,171 $1,122,480
Cost of sales 740,264 705,227
--------- ---------
Gross profit 345,907 417,253
Operating expenses:
Selling, general and
administrative expenses 414,231 407,204
--------- ---------
Income (loss) from operations (68,324) 10,049
Other income (expense):
Investment income, net 3,095 3,894
Expenses of Rockaway Industrial
Park - Parcel I, including
interest expense of $5,500
in 1996 and 1995 (Notes 2 and 3) (21,257) (34,003)
Environmental investigation and
remediation (Note 3) (480,000) --
Other interest expense (Note 7) (68,419) (58,385)
Other income (Note 9) 591,580 --
---------- ----------
Net loss $ (43,325) $ (78,445)
========== ==========
Net loss per share $ (.04) $ (.07)
========== ==========
Weighted average number of common
shares outstanding (Note 8(c)) 1,076,887 1,077,185
========== ==========
See accompanying notes to consolidated financial statements.
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RTI Inc. and Subsidiaries
Consolidated Statements of Cash Flows
(unaudited)
( Note 10 )
Three Ended March 31,
1996 1995
Cash flows from operating activities: ---------- ----------
Net loss $ (43,325) $ (78,445)
---------- ----------
Adjustments to reconcile net loss to
net cash provided by operating activities:
Depreciation and amortization 209,237 210,458
Discount of note payable 5,500 5,500
(Increase) decrease in:
Accounts receivable (3,453) 21,187
Prepaid expenses and other (15,464) 27,022
Restricted deposits -- 23,257
Increase (decrease) in:
Accounts payable 55,356 (68,062)
Accrued expenses 11,268 (72,218)
Other liabilities 480,000 --
---------- ----------
Total adjustments 742,444 147,144
---------- ----------
Net cash provided by operating activities 699,119 68,699
---------- ----------
Cash flows from investing activities:
Purchases of fixed assets (306,097) (5,514)
---------- ----------
Net cash used in
investing activities (306,097) (5,514)
---------- ----------
Cash flows from financing activities:
Payments on short-term borrowings (200,000) --
Payments on long-term debt (187,847) (32,870)
Payments on other liabilities (28,329) (35,000)
Proceeds from sale of preferred
stock (Note 8(b)) 236,000 --
Payments for fractional shares
of common stock (Note 8(a)) (55) --
---------- ----------
Net cash used in
financing activities (180,231) (67,870)
---------- ----------
Net increase (decrease) in cash and
cash equivalents 212,791 (4,685)
Cash and cash equivalents, beginning
of year 77,631 172,198
---------- ----------
Cash and cash equivalents, end of quarter $ 290,422 $ 167,513
========== ==========
See accompanying notes to consolidated financial statements.
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<PAGE>
RTI Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Information as of March 31, 1996 and 1995, and
for the three months then ended is unaudited)
1. Unaudited Information
In the opinion of management of RTI Inc. (with its Subsidiaries, the
"Company"), the accompanying unaudited consolidated financial statements include
all adjustments necessary to present fairly, in all material respects, the
Company's financial position as of March 31, 1996, its results of operations and
its cash flows for the three months ended March 31, 1996 and 1995. Results of
operations for the three month period ended March 31, 1996 are not necessarily
indicative of the results to be expected for the year ending December 31, 1996.
Information included in the consolidated balance sheet as of December 31, 1995
has been derived from the Company's audited consolidated financial statements in
its Annual Report on Form 10-KSB for the year ended December 31, 1995, to which
reference is made. Certain information included in the audited consolidated
financial statements and related notes prepared in accordance with generally
accepted accounting principles may have been condensed or omitted.
2. Rockaway Industrial Park
The Company owns a 248 acre parcel of land ("Parcel I") in Rockaway, New
Jersey, that is contiguous to the 15 acre operating parcel that is the site of
one of its irradiation processing facilities ("Parcel II" and, with Parcel I,
the "Rockaway Industrial Park"). Since 1985, the Company has been seeking a
buyer for Parcel I. However, the Company's ability sell Parcel I is impaired
until the completion of an environmental cleanup and remediation program (Note
3), and its ability to recover its net investment in Parcel I is impaired by
liabilities accruing from outstanding property taxes on approximately 222 acres
of Parcel I for the years 1993, 1994, 1995, and 1996.
3. Environmental Investigation and Remediation
As a result of engineering tests that commenced in 1981, the New Jersey
Department of Environmental Protection (the "DEP") issued a directive in 1986
ordering a remedial investigation and feasibility study (the "Study") designed
to determine the nature and extent of contamination on the Rockaway Industrial
Park property. The Company agreed to pay the costs of the Study and entered
into an Administrative Consent Order with the DEP. In 1989, the DEP issued a
Second Directive to pay for an additional environmental study and DEP oversight
costs. In 1993, the Company entered into an Administrative Consent Order
("ACO") with the DEP. Cost reimbursement to the DEP under the ACO includes
applicable DEP expenditures beginning July 1, 1982 and future DEP oversight
costs. At March 31, 1996, the total
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RTI Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Information as of March 31, 1996 and 1995, and
for the three months then ended is unaudited)
accrued for reimbursement due the DEP under the ACO was $720,306, which
consisted of outstanding billed DEP expenditures for the period July 1, 1982 to
January 20, 1995, and estimated unbilled DEP expenditures (Notes 4 and 6). In
April 1996 the DEP agreed to accept an aggregate payment of $575,000 as
settlement of all outstanding claims asserted under ACO, as well as all claims
which could be asserted for the period ending June 30, 1996.
In April 1996, the DEP responded to the Company's petition to change the
Remedial Action Work Plan under the Record of Decision, and advised the Company
that a pilot test of the CleanOx remediation program, undertaken by the Company
on its Rockaway property, was not considered conclusive. As a result, the
Company has increased its estimate of groundwater remediation programs by
$460,000 to provide for a second pilot test and the possible implementation of a
groundwater remediation plan required by the DEP's Record of Decision.
In addition, the Company has been named a respondent in an environmental
proceeding relating to a New Jersey disposal site ("Nascolite") to which the
Company shipped a small amount of materials in 1978. The Company has recorded
an accrual of $50,000 for such potential liability.
As a result of ongoing remediation and DEP involvement in these matters, there
can be no assurances that the cleanup, remediation, and DEP oversight accruals
will represent the Company's ultimate liability.
4. Accrued Expenses
Accrued expenses consist of the following at March 31, 1996:
Property taxes (Note 2) $ 216,366
Current portion of remedial
investigation and environmental
cleanup costs (Note 3) 175,911
Professional fees and other 152,926
Payroll and related costs 54,980
Interest expense 29,833
----------
Total $ 630,016
==========
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RTI Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Information as of March 31, 1996 and 1995, and
for the three months then ended is unaudited)
5. Long-term Debt
Long-term debt, net of discount of $38,500, consisted of the
following at March 31, 1996:
City of Salem Municipal Port Authority,
Port Development Revenue Bonds $1,000,000
Notes payable 273,524
Secured Cobalt 60 financing and
capital lease agreements 1,686,218
----------
Total 2,959,742
Less: Current portion 851,973
----------
Total long-term debt $2,107,769
==========
6. Other Liabilities
Other liabilities of $1,335,383 at March 31, 1996 consisted of the
aggregate accrual of $1,511,294 for outstanding billed and estimated DEP ACO
costs, estimated costs of site remediation to be performed at the Company's
Rockaway property, and a reserve related to involvement with the Nascolite site,
less the current portion of $175,911 included in accrued expenses (Notes 3 and
4).
7. Other Interest Expense
Other interest expense is primarily related to long-term debt and includes
amortization of deferred financing costs.
8. Stockholder's Equity
(a) Common Stock Authorized, Issued and Outstanding
Effective May 25, 1995, the Company's Certificate of Incorporation was amended
to effect a one for eight reverse stock split of the common stock. The
outstanding common stock at March 31, 1996 was an estimate (since fractional
shares were not issuable) based on the actual number of shares converted one for
eight and the remaining shares to be converted.
(b) Preferred Stock Authorized, Issued and Outstanding
Effective May 25, 1995, the Company's Certificate of Incorporation was amended
to authorize 2,000,000 shares of preferred stock. Effective February 27, 1996
the Company's Certificate of Incorporation was
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RTI Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Information as of March 31, 1996 and 1995, and
for the three months then ended is unaudited)
amended to designate 200,000 of such shares as Series A Preferred Stock and to
establish the relative rights, preferences, and limitations, of the Series A
Preferred Stock, which include;
(i) the shares of Series A Preferred Stock, upon issuance for a consideration
of $2.00 per share, shall be fully-paid and non-assessable,
(ii) the holders of Series A Preferred Stock shall be entitled to receive,
when and as declared by the Board of Directors out of funds legally available
for the purpose, dividends in cash at the rate of $0.16 per share per annum.
Dividends on shares of Series A Preferred Stock will be payable annually on
December 31 of each year. Dividends on shares of Series A Preferred Stock will
be cumulative whether or not earned or declared and whether or not there shall
be funds of the Company legally available for the payment of such dividends,
(iii) in the event of any liquidation, dissolution, or winding up of the
Company, whether voluntary or involuntary, after payment or provision for the
payment of the debts and other liabilities of the Company, the Company shall pay
to the holders of Series A Preferred Stock, before any distribution shall be
made to the holders of any other capital stock of the Company, an amount equal
to $2.00 per share of Series A Preferred Stock held by each such holder, plus an
amount equal to all accrued dividends unpaid thereon to the date of final
distribution to such holders,
(iv) the holders of record of Series A Preferred Stock shall be entitled to
vote at any election of directors and on any other matter submitted to the
holders of common shares voting together with the holders of common shares as a
single class, and shall be entitled to one vote per share of Series A Preferred
Stock held by them,
(v) each share of Series A Preferred Stock shall be convertible at any time,
at the option of the holder thereof, into one common share,
(vi) a holder of Series A Preferred Stock shall have the option, but not the
obligation, to require the Company to redeem all, but not less than all, of such
holder's shares of Series A Preferred Stock at a redemption price of $2.00 per
share. Such redemption price is payable in cash, except that if redemption is
made before January 31, 1997, the Company may, at its option, pay the redemption
price by delivery of a note in the principal amount of the redemption price,
payable ten days after demand, which may not be made prior to January 31, 1997.
(vii) the Series A Preferred Stock may be redeemed, at the option of the
Company, in whole but not in part, at any time after January 31, 1997, at a
price of $2.00 per share, in cash.
On March 4, 1996, the Company issued 118,000 shares of Series A Preferred Stock
at $2.00 per share. Since the issued Series A Preferred Stock is redeemable for
cash at any time on and after January 31, 1997, the aggregate redemption price
is considered to be a current liability.
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RTI Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Information as of March 31, 1996 and 1995, and
for the three months then ended is unaudited)
(c) Weighted Average Number of Common Shares Outstanding
The computation of the weighted average number of common shares outstanding for
the three month periods ended March 31, 1996 and 1995 considered the one for
eight reverse stock split, and excluded outstanding preferred stock, options,
and warrants, which were considered antidilutive.
(d) Warrants
On November 29, 1995, the Company granted to Frellum Corporation (an affiliated
party), in connection with a short-term credit line provided to the Company, a
warrant for the purchase of 25,000 shares of common stock at the exercise price
of $1.75 per share. The warrant, if not exercised, will expire on November 28,
1997.
(e) Stock Options
The Company's 1987 stock option plan (the "Plan") authorizes the issuance of
options for common stock until November 3, 1997. The options granted may be
either incentive stock options which are exercisable one year or more from the
date of grant or nonqualified stock options which may be exercisable
immediately. Details of stock option transactions for the three month period
ended March 31, 1996 under the Plan are as follows:
Price per Exercisable
Options Share Options
------------------------ ----------------------------------
Outstanding at
December 31, 1995 4,936 $4.00 - $7.76 3,686
Granted --
Exercised --
Canceled --
--------
Outstanding at
March 31, 1996 4,936 $4.00 - $7.76 3,686
========
9. Other Income
Other income of $591,580 in 1996 resulted primarily from a $580,000
settlement of prior environmental insurance claims.
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RTI Inc. and Subsidiaries
Notes to Consolidated Financial Statements
(Information as of March 31, 1996 and 1995, and
for the three months then ended is unaudited)
10. Statement of Cash Flows
Supplemental disclosures of cash flow information are as follows:
Three months ended March 31,
1996 1995
----------- -----------
Interest paid $ 62,497 $ 42,576
Income taxes paid 5,499 4,985
The Company financed a purchase of Cobalt 60 amounting to approximately $314,000
in the first quarter of 1996.
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<PAGE>
Item 2.
Management's Discussion and Analysis or Plan of Operation
Reference is made to Item 6 - "Management's Discussion and Analysis or Plan
of Operation" contained in the Company's Annual Report on Form l0-KSB for its
fiscal year ended December 31, 1995 (the "1995 Form 10-KSB") for a discussion of
the Company's financial condition as of December 31, 1995, including a
discussion of the Company's anticipated liquidity and working capital
requirements during 1996.
Except for the historical information contained in this Item 2, the
following discussion contains forward looking statements that involve risks and
uncertainties. The Company's actual results could differ materially from those
discussed herein. Factors that could cause or contribute to such differences
include, but are not limited to, those discussed herein, as well as in the 1995
Form 10-KSB, including Item 1 ("Description of Business") and Item 3 ("Legal
Proceedings") thereof.
Comparison of Operations for the Three Month Periods Ended March 31, 1996 and
1995
Net sales for the three months ended March 31, 1996 (the "1996 period")
were $1,086,171, a decrease of 3% from net sales of $1,122,480 for the three
months ended March 31, 1995 (the "1995 period"). Decreased net sales in the
1996 period were a result of reduced processing fees resulting from competitive
pricing pressures.
Cost of sales in the 1996 period increased 5% to $740,264 from $705,227 in
the 1995 period. The increase was primarily due to increased Cobalt
amortization as a result of Cobalt installations after the end of the 1995
period. Other direct processing costs such as plant labor increased slightly.
As a result, the gross profit percentage in the 1996 period decreased to 32%
from 37% in the 1995 period.
Selling, general and administrative ("SG&A") expenses of $414,231 in the
1996 period increased 2% from $407,204 in the 1995 period. Certain SG&A
expenses, such as executive salaries, were reduced in the 1996 period compared
to the same expenses in the 1995 period, but were offset by increased legal
expenses in the 1996 period resulting from the proposed sale of substantially
all of the Company's assets to SteriGenics International.
As a result of the foregoing, the loss from operations in the 1996 period
was $68,324 as compared to income of $10,049 in the 1995 period.
Investment income was $3,095 in the 1996 period as compared to $3,894 in
the 1995 period, a result of lower amounts available for investing.
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<PAGE>
Expenses of Rockaway Industrial Park - Parcel I decreased to $21,257 in
the 1996 period as compared to $34,003 in the 1995 period. The decrease was due
to lower maintenance and consultant costs incurred in the 1996 period.
Environmental investigation and remediation expenses in the 1996 period of
$480,000 were the result of a $460,000 increase in the Company's estimates of
the costs to be incurred for groundwater remediation programs at the Rockaway,
New Jersey site and a $20,000 increase in the Company's estimate for involvement
at the Nascolite site (Note 3). No such increases occurred in the 1995 period.
Other interest expense of $68,419 in the 1996 period increased by $10,034
over other interest expense in the 1995 period primarily due to the cost of
financing Cobalt acquisitions after the 1995 period.
Other income of $591,580 in the 1996 period was primarily a result of
$580,000 from the settlement of prior environmental insurance claims and the
resale of a small quantity of Cobalt 60 to a Cobalt supplier.
As a result, the Company reported a net loss of $43,325 or $.04 per share
in the 1996 period, as compared to a net loss of $78,445 or $.07 per share in
the 1995 period.
Financial Condition
At March 31, 1996, the Company had a working capital deficit of $988,521,
as compared to a working capital deficit of $1,116,028 at December 31, 1995.
The working capital deficit decrease of $127,507 was primarily the result of
$580,000 received from an insurance settlement of prior environmental claims,
which was partially offset by the purchases of Cobalt 60 and other capital
assets. The Company's ability to further improve its working capital position
is dependent on increasing the current level of sales revenues or obtaining
external financing. Also, Funds received in the 1996 period allowed the Company
to repay its outstanding short-term credit line.
As discussed in the 1995 Form 10KSB, the Company has entered into an Asset
Acquisition Agreement ("Asset Sale") with SteriGenics International to sell
substantially all of the Company's operating assets, subject to a number of
conditions including shareholder approval and removal of Spill Act Liens
obtained by the DEP. In April 1996, as a condition to releasing such liens, the
DEP agreed to accept $575,000 as settlement of all outstanding claims asserted
under ACO, as well as all claims which could be asserted for the period ending
June 30, 1996. The Company does not currently have available funds to pay such
settlement, but would fund such settlement with proceeds from the Asset Sale.
The Company anticipates that no additional financing will be needed for
ongoing operations, other than short-term borrowings under an existing $315,000
credit line, unless the Asset Sale is not consummated within the terms of the
agreement. Based on current
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forecasts, management anticipates that sales revenues for each of the remaining
quarters of 1996 will exceed sales revenues in the first quarter of 1996.
In the 1996 period, the Company acquired additional Cobalt 60 under an
existing lease agreement and for cash terms of sixty days. Other capital
expenditures in the 1996 period included a warehouse addition at one facility
and purchases of plant processing equipment.
The Company's net cash provided by operating activities in the 1996 period
was $699,119 as compared to $68,699 in the 1995 period. Cash provided by
operations in the 1996 period increased primarily due to the receipt of $580,000
from an insurance settlement. Investing activities in the 1996 period used net
cash of $306,097 primarily for the purchase of Cobalt 60, a warehouse expansion,
and other plant processing equipment, as compared to net cash used of $5,514 in
the 1995 period. Net cash used in financing activities in the 1996 period was
$180,231 and resulted from a net payoff of $200,000 on the short-term credit
line and $187,847 paid on existing long-term debt, offset by $236,000 received
from the sale of Series A preferred stock, compared to net cash used of $67,870
in the 1995 period. The resulting net increase in cash and cash equivalents for
the 1996 period was $212,791 as compared to a net decrease in cash and cash
equivalents of $4,685 for the 1995 period.
Part II. Other Information
Item 1. Legal Proceedings.
Reference is made to Item 3 - "Legal Proceedings - New Jersey
Environmental Proceedings" contained in the Company's Annual Report on Form
10-KSB for its fiscal year ended December 31, 1995 for a discussion of the
environmental proceedings relating to the Company's Rockaway, New Jersey
property.
As of March 31, 1996, the Company had accrued a total of $720,000 for
New Jersey Department of Environmental Protection (the "DEP") billed
expenditures for the period through January 20, 1995 and the Company's
estimate of unbilled expenditures, which expenditures are in accordance
with a 1992 Administrative Consent Order (the "ACO") between the DEP, the
Company, and Thiokol Corporation. In April 1996, the DEP agreed to accept
an aggregate payment of $575,000 in full satisfaction of all financial
obligations of the Company accrued during the period ending June 30, 1996
under the ACO. The DEP also agreed, upon receipt of such payment, to
initiate proceedings to remove its Spill Act lien on the Company's Rockaway
property.
The DEP also has agreed to permit the Company to expand its pilot
study, utilizing the "Clean-Ox" hydrogen peroxide-based remedial system.
Assuming positive conclusive test results from the expanded pilot test, the
Company may petition the DEP for a
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<PAGE>
change in the Remedial Action Work Plan under the 1995 Record of Decision.
Item 2. Changes in Securities. - none
Item 3. Defaults Upon Senior Securities. - not applicable.
Item 4. Submission of Matters to a Vote of Securityholders. - none
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
-------------------
No reports on Form 8-K were filed during the fiscal quarter with
respect to which this report is filed.
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<PAGE>
Signatures
In accordance with the requirements of the Exchange Act, the registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
RTI INC.
Date: May 14, 1996 /s/ Theo W. Muller
-------------------------
Theo W. Muller
President
Date: May 14, 1996 /s/ R Stephen Maico
-----------------------
R. Stephen Maico
Treasurer
Principal Accounting and
Financial Officer
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
REGISTRANT'S UNAUDITED CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 1996 AND
UNAUDITED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE THREE MONTHS THEN ENDED
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 290,422
<SECURITIES> 0
<RECEIVABLES> 576,264
<ALLOWANCES> 10,000
<INVENTORY> 0
<CURRENT-ASSETS> 923,002
<PP&E> 15,824,146
<DEPRECIATION> 8,449,626
<TOTAL-ASSETS> 8,481,350
<CURRENT-LIABILITIES> 1,911,523
<BONDS> 2,107,769
0
0
<COMMON> 86,151
<OTHER-SE> 16,013,798
<TOTAL-LIABILITY-AND-EQUITY> 8,481,350
<SALES> 1,086,171
<TOTAL-REVENUES> 1,086,171
<CGS> 740,264
<TOTAL-COSTS> 1,154,495
<OTHER-EXPENSES> 501,257
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 68,419
<INCOME-PRETAX> (43,325)
<INCOME-TAX> 0
<INCOME-CONTINUING> (43,325)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (43,325)
<EPS-PRIMARY> (.04)
<EPS-DILUTED> (.04)
</TABLE>
