UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
{X} QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934.
For the quarterly period ended June 30, 1997
OR
{ }TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________
Commission File No: 0-17895
MESABA HOLDINGS, INC.
Incorporated under the laws of Minnesota
41-1616499
(I.R.S. Employer ID No.)
7501 26th Avenue South
Minneapolis, MN 55450
(612) 726-5151
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
---- ----
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Class Outstanding as of August 8, 1997
---------------- ---------------------------------
Common Stock
par value $.01 per share 12,799,546
<PAGE>
PART I. FINANCIAL INFORMATION
SPECIAL NOTE REGARDING FORWARD-LOOKING STATEMENTS
Statements in the Quarterly Report on Form 10-Q under the caption
"Management's Discussion and Analysis of Financial Condition and Results
of Operations" as well as oral statements that may be made by the Company
or by officers, directors or employees of the Company acting on the
Company's behalf, that are not historical fact constitute "forward looking
statements" within the meaning of Section 27A of the Securities Act of
1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. Such forward looking statements involve factors that could
cause the actual results of the Company to differ materially from
historical results or from any results expressed or implied by such
forward-looking statements. The Company cautions the public not to place
undue reliance on forward-looking statements, which may be based on
assumptions and anticipated events that do not materialize. Factors which
could cause the Company's actual results to differ from forward-looking
statements include material changes in the relationshi between the Company
and Northwest Airlines; changes in regulations affecting the Company,
including DOT and FAA regulations; the acquisition and phase-in of a new
fleet of aircraft; downturns in economic activity; and seasonal factors.
<PAGE>
Item 1. CONSOLIDATED FINANCIAL STATEMENTS
MESABA HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except share information)
ASSETS
June 30, March 31,
1997 1997
----------- -----------
(Unaudited)
CURRENT ASSETS:
Cash and cash equivalents $ 54,441 $ 49,126
Accounts receivable, net 11,338 13,344
Inventories 2,692 2,077
Prepaid expenses and deposits 3,158 3,054
Deferred tax asset 3,600 3,600
-------- --------
Total current assets 75,229 71,201
PROPERTY AND EQUIPMENT:
Facilities under capital lease 9,147 9,147
Flight equipment 23,069 18,655
Other property and equipment 12,974 12,008
Accumulated depreciation and amortization (21,062) (20,038)
-------- --------
Net property and equipment 24,128 19,772
DEFERRED INCOME TAXES 283 283
OTHER ASSETS AND DEFERRED COSTS 11,489 13,310
-------- --------
TOTAL ASSETS $111,129 $104,566
======== ========
The accompanying notes to interim consolidated financial statements are an
integral part of these balance sheets.
<PAGE>
MESABA HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS (Continued)
(in thousands, except share information)
LIABILITIES AND SHAREHOLDERS' EQUITY
June 30, March 31,
1997 1997
-------- --------
(Unaudited)
CURRENT LIABILITIES:
Current maturities of long-term
obligations $ 437 $ 425
Accounts payable 14,248 11,932
Accrued liabilities
Payroll 6,963 6,589
Maintenance 6,199 7,469
Other 8,362 6,978
-------- --------
Total current liabilities 36,209 33,393
LONG-TERM OBLIGATIONS, net of current 5,076 5,194
maturities
DEFERRED CREDITS OTHER LIABILITIES 15,999 16,185
SHAREHOLDERS' EQUITY:
Common stock, $.01 par value; 15,000,000
shares authorized, 12,796,046 and
12,784,046 shares issued and outstanding,
respectively 128 128
Paid-in capital 40,191 40,114
Warrant 3,100 3,100
Retained earnings 10,425 6,452
-------- --------
Total shareholders' equity 53,846 49,794
-------- --------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $111,129 $104,566
======== ========
The accompanying notes to interim consolidated financial statements are
an integral part of these balance sheets.
<PAGE>
MESABA HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(in thousands, except per share information)
Three Months Ended
June 30,
1997 1996
-------- --------
OPERATING REVENUES:
Passenger $ 53,816 $ 41,930
Other 608 491
-------- --------
Total operating revenues 54,424 42,421
OPERATING EXPENSES:
Wages and benefits 14,029 11,898
Aircraft fuel costs 5,527 3,916
Aircraft maintenance costs 7,567 5,357
Aircraft rents 9,625 7,426
Landing fees 1,421 1,129
Insurance and taxes 1,322 1,172
Depreciation and amortization 1,153 980
Administrative and other costs 7,571 5,474
-------- --------
Total operating expenses 48,215 37,352
Operating income 6,209 5,069
NONOPERATING EXPENSE (INCOME):
Interest expense 125 133
Other, net (497) (246)
-------- --------
Other expense, net (372) (113)
Income before income taxes 6,581 5,182
PROVISION FOR INCOME TAXES 2,607 2,181
-------- --------
NET INCOME $ 3,974 $ 3,001
======== ========
NET INCOME PER SHARE:
Fully Diluted $ 0.30 0.23
======== ========
WEIGHTED AVERAGE SHARES OUTSTANDING:
Fully Diluted 13,306 12,977
======== ========
The accompanying notes to interim consolidated financial statements are
an integral part of these statements.
<PAGE>
MESABA HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited, in thousands)
Three Months Ended
June 30,
1997 1996
-------- --------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 3,974 $ 3,001
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 1,153 980
Amortization of deferred credits (186) -
Accrued maintenance, long-term - (278)
Deferred Income tax provision - (180)
Changes in current operating items:
Accounts receivable, net 2,006 2,076
Inventories (615) (499)
Prepaid expenses and deposits (104) (750)
Accounts payable and accrued liabilities 2,803 4,076
-------- --------
Net cash provided by operating activities 9,031 8,426
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (2,501) (486)
Capitalized pre-operating costs (1,186) -
Other, net - (4)
-------- --------
Net cash used for investing activities (3,687) (490)
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock 77 75
Repayment of long-term obligations (106) (105)
-------- --------
Net cash used for financing activities (29) (30)
NET INCREASE IN CASH AND CASH EQUIVALENTS 5,315 7,906
CASH AND CASH EQUIVALENTS:
Beginning of period 49,126 29,428
-------- --------
End of period $ 54,441 37,334
======== ========
SUPPLEMENTARY CASH FLOW INFORMATION:
Cash paid during period for:
Interest $ 126 $ 152
======== ========
Income taxes 1,590 39
======== ========
Noncash investing activities included
the following:
Rotable and spare parts inventory
acquired with integration funds $ 2,879 $ 2,013
======== ========
The accompanying notes to interim consolidated financial statements are
an integral part of these statements.
<PAGE>
MESABA HOLDINGS, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
The consolidated financial statements included herein have been prepared by
Mesaba Holdings, Inc. (the "Company"), without audit, pursuant to the rules
and regulations of the Securities and Exchange Commission. The information
furnished in the consolidated financial statements includes normal recurring
adjustments and reflects all adjustments which are, in the opinion of
management, necessary for a fair presentation of such consolidated financial
statements. The Company's business is seasonal and, accordingly, interim
results are not indicative of results for a full year. Certain information
and footnote disclosures normally included in financial statements prepared
in accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations, although the
Company believes that the disclosures are adequate to make the information
presented not misleading. It is suggested that these consolidated financial
statements be read in conjunction with the financial statements for the year
ended March 31, 1997, and the notes thereto, included in the Company's
Annual Report or Form 10-K filed with the Securities and Exchange
Commission.
1. BASIS OF PRESENTATION
The consolidated financial statements include the accounts of the Company
and its subsidiary, Mesaba Aviation, Inc. ("Mesaba"). All significant
intercompany balances have been eliminated in consolidation.
2. AGREEMENTS WITH NORTHWEST
Mesaba is a regional air carrier providing scheduled passenger and air
freight service to 67 cities in the Upper Midwest and Canada. In 1984,
Mesaba began operating flights from Minneapolis/St. Paul airport as
Mesaba/Northwest Airlink ("Airlink") under a cooperative marketing
agreement with Northwest Airlines, Inc. ("Northwest"). In 1988, the
agreement was restated as the Airline Services Agreement and modified
to add Airlink service for Northwest's hub airport in Detroit, Michigan.
Mesaba and Northwest subsequently amended the Airline Services Agreement
(as amended, the "Airlink Agreement") to provide, among other things, an
extension to March 31, 1997, exclusive rights to designated service areas
and support in acquiring new aircraft and equipment. Either party may
terminate the agreement on eight months' notice.
On June 4, 1997, Mesaba signed a Memorandum of Understanding ("MOU") with
Northwest on a long-term contract for Mesaba to continue operating as
Northwest Airlink. The MOU grants all Airlink flying out of Northwest's
Minneapolis/St. Paul hub to Mesaba effective August 1, 1997. As
consideration for the additional flights, the Company will issue a warrant
to allow Northwest to purchase 880,000 shares of the Company's common
stock at an exercise price of $14.125 per share. The warrant will have a
term of ten years. The MOU continues the existing compensation
methodology set forth in the amendmended Airlink Agreement. Additionally,
the MOU continues Northwest's current right to approve any new Chief
Executive Officer.
<PAGE>
Mesaba, through the Airlink Agreement and other agreements, receives
ticketing and certain check-in, baggage and freight handling services from
Northwest at certain airports. In addition, Mesaba receives its
computerized reservation services from Northwest. Northwest also performs
all marketing schedules and yield management and pricing services for
Mesaba's flights. Approximately 72% of Mesaba's passengers connected with
Northwest in fiscal 1997. Substantially all accounts receivable balances
in the accompanying balance sheets are due from Northwest. Loss of
Mesaba's affiliation with Northwest or Northwest's failure to make timely
payments of amounts owed to Mesaba or to otherwise materially perform
under the Airlink Agreement for any reason would have a material adverse
effect on the Company's operations and financial position.
Mesaba and Northwest entered into a Regional Jet Services Agreement dated
October 25, 1996 (the "Jet Agreement"), under which Mesaba will operate 12
Avro/Ai(R) RJ85 ("RJ85") regional jets for Northwest. The aircraft will
be subleased from Northwest and will be operated as Northwest Jet Airlink
from Minneapolis/St. Paul and Detroit hubs according to routes and
schedules determined by Northwest. Jet service began June 6, 1997.
3. EARNINGS PER SHARE
Net income per share has been computed based upon the weighted average
number of common and common equivalent shares outstanding during each
period. The equivalent shares include all shares issuable upon the
exercise of stock options.
4. AIRCRAFT ADDITIONS
On March 7, 1996, Mesaba entered into a preliminary agreement with Saab
Aircraft of America, Inc. ("Saab") for the acquisition of 30 new Saab
340BPlus aircraft and 20 used Saab 340A aircraft. The Company also entered
into an option agreement for 10 additional new Saab 340BPlus aircraft and
12 additional used Saab 340A aircraft. As of June 30, 1997, Mesaba has
taken delivery of 13 Saab 340A and 17 Saab 340BPlus aircraft. The balance
of the aircraft order is expected to be phased into service over the next
15 months to replace Mesaba's existing fleet of 25 deHavilland Dash 8
aircraft.
The Jet Agreement provides for the delivery of 12 RJ85 regional jets to
Mesaba, at a rate of approximately one aircraft per month, beginning in
April 1997. Mesaba leases or will lease the RJ85 aircraft under
operating leases from Northwest with terms up to 10 years. As of June 30,
1997, Mesaba had taken delivery of three RJ85 aircraft.
On January 29, 1997, Mesaba entered into a preliminary agreement with Saab
to lease four used Saab 340B aircraft. Mesaba leases or will lease the
Saab 340B aircraft under operating leases from aircraft leasing companies
with terms up to one year. As of June 30, 1997, Mesaba had taken delivery
of three Saab 340B aircraft.
5. DEFERRED CREDITS
In order to assist the Company in integrating new aircraft into its fleet,
certain manufacturers provide the Company with spare parts or other
credits. The Company has deferred these amounts and amortizes them over
the terms of the related aircraft leases as a reduction of rent expense.
$186 and $4 was amortized during the period ended June 30, 1997 and 1996
respectively.
6. RECLASSIFICATIONS
Certain balances in the fiscal 1997 consolidated financial statements have
been reclassified to conform to the fiscal 1998 presentation. These
reclassifications had no impact on net income or shareholders' equity.
7. RECENTLY ISSUED ACCOUNTING STANDARDS
Financial Accounting Standards Board Statement No. 128, "Earnings per
Share" ("Statement No. 128"), issued in February 1997 and effective for
fiscal years ending after December 15, 1997, establishes and simplifies
standards for computing and presenting earnings per share ("EPS").
Implementation of Statement No. 128 will not have a material impact on
the Company's computation or presentation of EPS, as the Company's common
stock equivalents either have had no material effect on earnings per
share amounts or have been anti-dilutive with respect to losses.
Financial Accounting Standards Statement No. 130, "Reporting Comprehensive
Income" ("Statement No. 130"), issued in June 1997 and effective for
fiscal years beginning after December 15, 1997, establishes standards of
reporting and display of the total of net income and all nonowner changes
in equity, or comprehensive income, either below the net income (loss) in
the statement of operations, in a separate statement of comprehensive
income (loss) or within the statement of changes in shareholders'
equity. The Company has had no significant items of other comprehensive
income.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
Item 2.
RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED JUNE 30, 1997 and 1996
(dollars in thousands)
EARNINGS SUMMARY. The Company reported net income of $3,974 or $0.30 per
share for the three months ended June 30, 1997, compared to $3,001 or
$0.23 per share in the same period of fiscal 1997. Weighted average
shares outstanding increased to 13,306 from 12,977.
OPERATING REVENUES. Total operating revenues increased 28.3% in the first
quarter of fiscal 1998 to $54,424 from $42,421 in the year earlier quarter,
and revenue passenger miles increased 39.6% to 145,485 from 104,212.
Passenger revenue per available seat mile ("RASM") decreased to $0.204 from
$0.215 in the previous year's first quarter. Mesaba's average load factor
was 55.1% in the current quarter compared to 53.4% during the same period a
year ago. The improvement in traffic and load factor are attributable to
the inclusion of Mesaba's fares in Northwest's discount fare programs as
well as overall increases in passenger travel within the industry.
OPERATING EXPENSES. Total operating expenses increased 29.1% to $48,215 in
the current quarter compared to $37,352 in the prior year's first quarter.
Available seat miles flown for Mesaba increased 35.3% to 263,851 in the
first quarter of fiscal 1998 from 195,018 in the year earlier quarter. The
increase in ASMs was primarily accomplished by the replacement of Metro III
aircraft with Saab 340A and 340B\BPlus aircraft and an incremental increase
of four Saab 340BPlus and three RJ85 aircraft to the fleet when compared to
one year ago. As of June 30, 1997, all of the Metro III aircraft have been
removed from revenue service and 15 have been returned to lessors. A
discussion of the changes in Mesaba's operating expense line items follows:
Wages and benefits increased 17.9% to $14,029 in the first quarter of
fiscal 1998 from $11,898 in the first quarter of fiscal 1997. The majority
of the increase is a result of higher cost of flight crews due to a 16.7%
increase in block hours and the addition of flight crews to support the
introduction of the RJ85 as well as the continuing Saab fleet transition
program. Mesaba also experienced an increase in wage and benefit costs
paid to support personnel due to a 15.6% increase in scheduled
operations. The remaining increase was due to normal escalation in base
wage and benefit levels.
Fuel costs increased 41.1% to $5,527 in this year's first quarter compared
to $3,916 in last year's first quarter. The increase is primarily
attributable to a 34.4% increase in consumption. The remainder of the
increase was due to credits in the prior year as a result of certain
provisions of the Airlink Agreement which lowered the effective price per
gallon. These provisions of the Airlink Agreement with Northwest protect
Mesaba from future increases in fuel prices. The actual cost of fuel,
including taxes and pumping fees, was 83.5 cents per gallon both in the
current quarter and a year ago.
Direct maintenance expense, excluding wages and benefits, increased 41.3%
to $7,567 in the first quarter of fiscal 1998 from $5,357 in the first
quarter of fiscal 1997. This increase was primarily attributable to the
addition of 33 Saab 340 and three RJ85 aircraft to the fleet and
<PAGE>
higher heavy maintenance costs associated with the Dash 8 fleet. The
additional maintenance costs for the Saab 340, RJ85 and Dash 8 aircraft
were partially offset by lower maintenance costs related to the phase-
out of the Metro III fleet resulting from the return of 15 aircraft to
lessors.
Aircraft rents increased 29.6% to $9,625 in the first quarter of fiscal
1998 from $7,426 in the first quarter of fiscal 1997. This increase is
primarily attributable to the addition of 33 Saab 340 and three RJ85
aircraft while returning 15 of 26 Metro III aircraft to lessors. The Saab
340 and RJ85 aircraft have higher lease rates compared to the Metro III.
Mesaba has taken delivery of six Saab 340BPlus, three 340B and three RJ85
aircraft during the current period.
Total landing fees increased 25.9% to $1,421 in the first quarter of fiscal
1998 compared to $1,129 for the first quarter of fiscal 1997. The increase
is attributable to a 14.7% increase in departures and a 36.5% increase in
the average gross landing weight due to the mix of the aircraft in the
fleet and offset by a 7.8% decrease in the overall effective landing fee
rate.
Insurance and taxes increased 12.8% to $1,322 in the first quarter of
fiscal 1998 compared to $1,172 for the first quarter of fiscal 1997. This
is due primarily to an increase in passenger liability insurance
associated with increased passenger volume and increased hull values
associated with the Saab 340 and RJ85 aircraft (compared to the Metro III)
offset by a reduction in passenger liability insurance rates and reduced
amounts paid for hull insurance caused by the normal decline in fleet
values.
Depreciation and amortization increased 17.7% to $1,153 in the first
quarter of fiscal 1998 compared to $980 in the first quarter of fiscal
1997. The higher level of depreciation and amortization resulted from the
acquisition of spare parts to support the Saab fleet, which are generally
funded by credits issued by the manufacturer. In October 1996, the
Company paid a contract rights fee in the form of a stock purchase
warrant issued to Northwest as a part of the Regional Jet Service Agreement
("Jet Agreement"). Contract rights are being amortized on a straight-line
basis over the minimum term of the Jet Agreement through October 2002. The
increases were partially offset by a reduction in warrant amortization
related to previous warrants issued to Northwest that were fully amortized
as of March 31, 1997.
Administrative and other costs increased 38.3% to $7,571 in the first
quarter of fiscal 1998 compared to $5,474 in the first quarter of fiscal
1997. This increase is primarily attributable to higher crew related
expenses excluding wages and benefits associated with increased flying and
increased airport and passenger related expenses due to an increase in
traffic and the number of cities served.
OPERATING INCOME. Operating income totaled $6,209 in the current period,
an increase of 22.5% from $5,069 a year ago. Mesaba's operating margin
decreased to 11.4% from 11.9% in the prior year's first quarter.
NONOPERATING INCOME. Nonoperating income increased to $372 in the current
quarter from $113 in the prior year's first quarter as a result of higher
levels of interest income.
<PAGE>
PROVISION FOR INCOME TAXES. The Company's effective tax rate was 39.6% in
the first quarter of fiscal 1997 and 42.1% in fiscal 1997 reflecting lower
levels of nondeductible expenses in the current period.
A quarter-to-quarter comparison of operating costs per available seat mile
is shown in the following table.
Operating Costs Per Three months ended June 30,
Available Seat Mile(1) 1997 1996
- - --------------------------------- -------------- -------------
Wages and benefits 5.3CENTS 6.1CENTS
Aircraft fuel costs 2.1 2.0
Aircraft maintenance costs 2.9 2.8
Aircraft rents 3.7 3.8
Landing fees 0.5 0.6
Insurance and taxes 0.5 0.6
Depreciation and amortization 0.4 0.5
Administrative and other costs 2.9 2.8
-------------- -------------
Total 18.3CENTS 19.2CENTS
(1) Turboprop operations only
Three months ended June 30,
Operating statistics(2) 1997 1996
- - --------------------------------- -------------- -------------
Revenue passengers carried 622,921 470,632
Revenue passenger miles (000) 145,485 104,212
Available seat miles (000) 263,851 195,018
Passenger load factor 55.1% 53.4%
Passenger revenue per available seat mile $0.204 $0 .215
Departures 39,433 34,110
Aircraft in service 61 54
(2) Combined turboprop and jet operations
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
The Company's working capital increased to $39,021 with a current ratio of
2.1 at June 30, 1997 compared to $37,808 and 2.1 at March 31, 1997. Cash
and cash equivalents increased by $5,315 to $54,441 at June 30, 1997. Net
cash flows provided by operating activities totaled $9,031 in the first
quarter of 1998 compared to $8,426 in the first quarter of fiscal 1997.
Net cash flows used for investing activities amounted to $3,687 during the
three months ended June 30, 1997 compared to $490 in the same period last
year. Net cash flows used for financing activities through June 30, 1997
totaled $29 compared to $30 in the same period last year.
Long-term obligations, net of current maturities, totaled $5,076 at June
30, 1997 compared to $5,194 at March 31, 1997. The ratio of long-term
debt to stockholders' equity decreased to .09 at June 30, 1997 from .10 at
March 31, 1997.
As of July, 1997, Mesaba's fleet consisted of 61 aircraft covered under
operating leases with remaining terms of two months to 16 years and an
aggregate monthly lease payments of approximately $4.0 million. Operating
leases have been Mesaba's primary method of acquiring aircraft, and
management expects to continue relying on this method to meet most of its
future aircraft needs. Mesaba leases all of its Saab 340 aircraft, either
directly from aircraft leasing companies or through subleases with
Northwest under operating leases with terms up to 16 years. Mesaba has
negotiated a financing agreement with the airframe manufacturer whereby
operating lease financing for the remaining new and used Saab 340 aircraft
are committed to the Company on competitive rates and terms. Mesaba
leases its RJ85 aircraft from Northwest under operating leases with terms
of up to 10 years. Mesaba will lease from Northwest the remaining
undelivered RJ85 aircraft.
The Company has historically relied upon cash reserves, internally
generated funds and borrowings to support its working capital
requirements. The Company has an approved unsecured agreement with a bank
that provides for borrowings of up to $5,000 under a revolving line of
credit. No amounts were outstanding under the credit agreement.
Management believes that funds from operations and existing credit lines
will provide adequate resources for meeting non-aircraft capital needs in
fiscal 1998.
<PAGE>
Part II.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
a) No exhibits are filed herewith
b) The Company filed an 8-K dated June 4, 1997 to report the
Memorandum of Understanding with Northwest Airlines regarding
operations as Northwest Airlink and expanded Minneapolis service.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
MESABA HOLDINGS, INC.
Date: August 14, 1997 BY: /s/ Robert H. Cooper
----------------------
Robert H. Cooper
Vice President and Chief
Financial Officer
(Principal Financial Officer)
/s/ Jon R. Meyer
----------------------
Jon R. Meyer
Controller
(Principal Accounting Officer)
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-END> JUN-30-1997
<CASH> 54,441
<SECURITIES> 0
<RECEIVABLES> 11,338
<ALLOWANCES> 0
<INVENTORY> 2,692
<CURRENT-ASSETS> 75,229
<PP&E> 45,190
<DEPRECIATION> 21,062
<TOTAL-ASSETS> 111,129
<CURRENT-LIABILITIES> 36,208
<BONDS> 0
0
0
<COMMON> 128
<OTHER-SE> 53,717
<TOTAL-LIABILITY-AND-EQUITY> 111,129
<SALES> 54,424
<TOTAL-REVENUES> 54,424
<CGS> 48,215
<TOTAL-COSTS> 48,215
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 125
<INCOME-PRETAX> 6,581
<INCOME-TAX> 2,607
<INCOME-CONTINUING> 3,974
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,974
<EPS-PRIMARY> .30
<EPS-DILUTED> .30
</TABLE>
