SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------
FORM 10-QSB
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1998
( ) 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 0-17018
STRATFORD AMERICAN CORPORATION
(Exact name of small business issuer as specified in its charter)
Arizona 86-0608035
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
2400 E. Arizona Biltmore Circle, Building 2, Suite 1270, Phoenix, Arizona 85016
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (602) 956-7809
(Former name, former address and former fiscal year, if changed since last
report.)
Check whether the issuer: (1) filed all reports required to be filed by Section
13 or 15(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 90 days. Yes [X] No [ ]
At September 30, 1998, 5,871,787 shares of the issuer's common stock were issued
and outstanding.
<PAGE>
STRATFORD AMERICAN CORPORATION
INDEX
-----
PART I. FINANCIAL INFORMATION
ITEM I. FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheet as of September 30, 1998 3
Condensed Consolidated Statements of Operations for the three and nine months
ended September 30, 1998 and 1997 4
Condensed Consolidated Statements of Cash Flows for the nine months
ended September 30, 1998 and 1997 5
Notes to Condensed Consolidated Financial Statements 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 8
PART II. OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES 9
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 10
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 10
Signatures 11
2
<PAGE>
STRATFORD AMERICAN CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
SEPTEMBER 30, 1998
(unaudited)
<TABLE>
<CAPTION>
ASSETS
<S> <C>
Cash and cash equivalents $ 34,000
Mortgage receivables 60,000
Prepaid expenses 23,000
Property and equipment, net 30,000
Other assets 47,000
------------
Total assets $ 194,000
============
LIABILITIES AND SHAREHOLDERS' EQUITY
Accounts payable 38,000
Notes payable and other debt 383,000
Accrued liabilities 36,000
Net liabilities of discontinued operations 832,000
------------
Total liabilities 1,289,000
------------
Shareholders' equity (deficiency):
Nonredeemable preferred stock, par value $.01 per share;
authorized 50,000,000 shares, none issued
Common stock, par value $.01 per share; authorized 100,000,000 shares;
issued 5,871,787 shares 59,000
Additional paid-in capital 26,803,000
Retained earnings (deficit) (27,946,000)
Treasury stock, 29,500 shares at cost (11,000)
------------
Total shareholders' equity (deficiency) (1,095,000)
------------
Total liabilities and shareholders' equity (deficiency) $ 194,000
============
</TABLE>
See accompanying notes to condensed consolidated financial statements.
3
<PAGE>
STRATFORD AMERICAN CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
<TABLE>
<CAPTION>
For the three months For the nine months
ended September 30, ended September 30,
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUES:
Interest and other income 11,000 14,000 44,000 46,000
EXPENSES:
General and administrative 174,000 152,000 398,000 443,000
Depreciation and amortization 6,000 4,000 16,000 13,000
Interest 12,000 7,000 32,000 31,000
----------- ----------- ----------- -----------
192,000 163,000 446,000 487,000
----------- ----------- ----------- -----------
LOSS FROM CONTINUING OPERATIONS (181,000) (149,000) (402,000) (441,000)
INCOME (LOSS) FROM DISCONTINUED
OPERATIONS (151,000) (272,000) 1,109,000 39,000
----------- ----------- ----------- -----------
NET INCOME (LOSS) $ (332,000) $ (421,000) $ 707,000 $ (402,000)
=========== =========== =========== ===========
Net income (loss) per share
Basic:
From continuing operations $ (0.03) $ (0.03) $ (0.07) $ (0.08)
From discontinued operations $ (0.03) $ (0.04) $ 0.19 $ 0.01
----------- ----------- ----------- -----------
Net income (loss) per share $ (0.06) $ (0.07) $ 0.12 $ (0.07)
=========== =========== =========== ===========
Weighted average number of common shares outstanding 5,871,787 5,826,135 5,871,787 5,766,781
=========== =========== =========== ===========
Diluted:
From continuing operations $ (0.03) $ (0.03) $ (0.07) $ (0.08)
From discontinued operations $ (0.03) $ (0.04) $ 0.19 $ 0.01
----------- ----------- ----------- -----------
Net income (loss) per share $ (0.06) $ (0.07) $ 0.12 $ (0.07)
=========== =========== =========== ===========
Weighted average number of common and common
equivalent shares outstanding 5,871,787 5,826,135 5,905,120 5,766,781
=========== =========== =========== ===========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
4
<PAGE>
STRATFORD AMERICAN CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(unaudited)
<TABLE>
<CAPTION>
Nine months ended September 30,
-------------------------------
1998 1997
---- ----
<S> <C> <C>
CASH FLOWS FROM CONTINUING OPERATING ACTIVITIES:
Loss from continuing operations $(402,000) $(441,000)
Adjustments to reconcile loss from continuing operations to net cash
provided by continuing operating activities:
Depreciation and amortization 16,000 13,000
Changes in assets and liabilities:
Decrease (Increase) in accounts and mortgages receivable 26,000 (24,000)
Increase (Decrease) in other assets 5,000 (1,000)
Decrease in accounts payable (65,000)
Increase (Decrease) in accrued liabilities (32,000) 19,000
--------- ---------
NET CASH USED IN CONTINUING OPERATING ACTIVITIES (452,000) (434,000)
--------- ---------
CASH FLOWS FROM CONTINUING INVESTING ACTIVITIES:
Purchases of property and equipment (20,000) (3,000)
--------- ---------
NET CASH USED IN CONTINUING INVESTING ACTIVITIES (20,000) (3,000)
--------- ---------
CASH FLOWS FROM CONTINUING FINANCING ACTIVITIES:
Payments on other debt (25,000) (350,000)
Proceeds from issuance of common stock 80,000
--------- ---------
NET CASH USED IN CONTINUING FINANCING ACTIVITIES (25,000) (270,000)
--------- ---------
CASH PROVIDED BY DISCONTINUED OPERATIONS 495,000 710,000
--------- ---------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (2,000) 3,000
CASH AND CASH EQUIVALENTS, beginning of period 36,000 8,000
--------- ---------
CASH AND CASH EQUIVALENTS, end of period $ 34,000 $ 11,000
========= =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Interest paid during the period $ 29,000 $ 14,000
========= =========
</TABLE>
See accompanying notes to condensed consolidated financial statements.
5
<PAGE>
STRATFORD AMERICAN CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
1. The accompanying financial statements have been prepared pursuant to rules
and regulations of the Securities and Exchange Commission. In the opinion
of the Company, the accompanying unaudited condensed consolidated financial
statements contain all adjustments, consisting of normal recurring
adjustments, necessary for a fair presentation of the results of the
interim periods presented. Certain information and footnote disclosures
normally included in financial statements have been condensed or omitted
pursuant to such rules and regulations. Therefore, it is recommended that
these accompanying statements be read in conjunction with the notes to
consolidated financial statements appearing in the Company's Form 10-KSB
for the year ended December 31, 1997.
2. The results of operations for the three and nine months ended September 30,
1998 are not indicative of the results to be expected for the full year.
The Company has disposed of assets and terminated agreements accounting for
over 99% of its total revenues for the nine months ended September 30,
1998. See Note 4 below.
3. On April 17, 1998, the Company's Board of Directors approved, subject to
shareholder approval, a fifteen-to-one reverse stock split of the Company's
common stock. Upon shareholder approval on July 8, 1998, the reverse stock
split became effective on July 20, 1998. All share amounts, share prices
and net income (loss) per share have been retroactively adjusted to reflect
this fifteen-to-one reverse stock split.
4. On October 1, 1998 (the "Closing Date"), Stratford American Car Rental
Systems, Inc. ("SCRS"), a subsidiary of the Company, sold the personal
property, equipment, improvements, fixtures, gasoline inventory, goodwill
and general intangibles used in or related to SCRS's business to Dollar
Rent A Car Systems, Inc., an Oklahoma corporation ("Dollar"), pursuant to
the terms of the Acquisition Agreement (the "Acquisition Agreement")
between SCRS and Dollar. Additionally, pursuant to the Acquisition
Agreement, SCRS terminated the Master Lease Agreement by and between SCRS
and Dollar, dated June 1, 1994, under which SCRS leased vehicles for use in
its business, as well as other agreements related to the Master Lease
Agreement.
The Acquisition Agreement provides for the payment by Dollar to SCRS of the
sum of $3,835,000 as the purchase price. The purchase price consisted of
the sum of $3,635,000 paid to SCRS on the Closing Date net of any
obligations, actual or estimated, owed to and by Dollar under the normal
course of operations of SCRS, and a holdback amount of $200,000 related to
any obligations or indemnities of SCRS, under the Acquisition Agreement.
The assets sold and agreements terminated pursuant to the Acquisition
Agreement accounted for over 99% of the Company's total revenues in the
first nine months of 1998 and, as of the Closing date, were the most
significant revenue source for the Company.
On the same day as the closing date, SCRS exercised an option to purchase
the property which includes the Phoenix Dollar Rent A Car base operation
facilities located near Sky Harbor International Airport. Simultaneously,
Dollar entered into a long term lease with SCRS to utilize the base
operations.
6
<PAGE>
STRATFORD AMERICAN CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
5. The vehicle rental business of SCRS has been accounted for as a
discontinued operation and, accordingly, its net liabilities, results of
operations and cash flows are segregated for all periods presented in the
condensed consolidated financial statements.
The components of Net Liabilities of Discontinued Operations as of
September 30, 1998 are as follows:
September 30, 1998
------------------
Cash and cash equivalents $ 275,000
Accounts receivable, net 271,000
Prepaid expenses 178,000
Revenue earning vehicles, net 33,000
Property and equipment, net 266,000
Deposits 345,000
Other assets 138,000
Franchise rights, net 249,000
Accounts payable (614,000)
Notes payable and other debt (1,500,000)
Accrued interest (194,000)
Accrued liabilities (279,000)
-----------
(832,000)
===========
Following is a summary of the operating results of the Discontinued
Operations for the periods ended September 30, 1998 and 1997:
<TABLE>
<CAPTION>
Three Months Ended September 30, Nine Months Ended September 30,
-------------------------------- -------------------------------
1998 1997 1998 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues 2,289,000 2,342,000 9,517,000 10,493,000
Expenses 2,440,000 2,614,000 8,408,000 10,454,000
----------- ----------- ----------- -----------
Income (loss) from
Discontinued Operations $ (151,000) $ (272,000) $ 1,109,000 $ 39,000
=========== =========== =========== ===========
</TABLE>
There was no income tax expense or benefit associated with the income or
loss from discontinued operations for the periods ended September 30, 1998
and 1997 as the income or loss for those same periods served to reduce or
increase net operating loss carry forwards attributable to the Company.
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
GENERAL
The Company recognized a consolidated loss for the third quarter
of 1998 due primarily to an expected seasonal decline in the vehicle rental
business during that period of time. However, due to the ability to pass through
airport access charges to its car rental customers as discussed in previous
reports, the Company continued to maintain consolidated profitability for the
nine month period ended September 30, 1998.
LIQUIDITY, CAPITAL RESOURCES AND DISPOSITION OF ASSETS
On October 1, 1998 (the "Closing Date"), Stratford American Car
Rental Systems, Inc. ("SCRS"), a subsidiary of the Company, sold the personal
property, equipment, improvements, fixtures, gasoline inventory, goodwill and
general intangibles used in or related to SCRS's business to Dollar Rent A Car
Systems, Inc., an Oklahoma corporation ("Dollar"), pursuant to the terms of the
Acquisition Agreement (the "Acquisition Agreement") between SCRS and Dollar.
Additionally, pursuant to the Acquisition Agreement, SCRS terminated the Master
Lease Agreement by and between SCRS and Dollar, dated June 1, 1994, under which
SCRS leased vehicles for use in its business, as well as other agreements
related to the Master Lease Agreement.
The Acquisition Agreement provides for the payment by Dollar to
the Subsidiary of the sum of $3,835,000 as the purchase price. The purchase
price consisted of the sum of $3,635,000 paid to SCRS on the Closing Date net of
any obligation, actual or estimated, owed to and by Dollar under the normal
course of operations of SCRS, and a holdback amount of $200,000 related to any
obligations or indemnities of SCRS, under the Acquisition Agreement. The assets
sold and agreements terminated pursuant to the Acquisition Agreement accounted
for over 99% of the Company's total revenues in the first nine months of 1998
and, as of the Closing date, were the most significant revenue source for the
Company. The Company anticipates that with its current cash position due to the
related sale, it should meet its operational cash flow needs for the remainder
of 1998. However, due to any unforeseen circumstances that could occur outside
the Company's control, there can be no assurance that adequate cash flows from
the Company's present operations will be achieved.
On the same day as the closing date, SCRS exercised an option to
purchase the property which includes the Phoenix Dollar Rent A Car base
operation facilities located near Sky Harbor International Airport.
Simultaneously, Dollar entered into a long term lease with SCRS to utilize the
base operations.
The Company continues to aggressively seek potential acquisitions
in establishing its future direction. There can be no assurance that it will be
able to locate suitable acquisition candidates or make any such acquisitions.
8
<PAGE>
RESULTS OF OPERATIONS - NINE MONTHS ENDED SEPTEMBER 30, 1998, COMPARED WITH NINE
MONTHS ENDED SEPTEMBER 30, 1997
The Company reported a net loss of $332,000 and net income of
$707,000 during the three and nine month periods ended September 30, 1998,
respectively, compared to a net loss of $421,000 and $402,000 during the three
and nine month periods ended September 30, 1997, respectively. The 1998 results
include a $151,000 loss and $1,109,000 in income from discontinued operations
for the three and nine month periods ended, respectively, as compared to the
1997 results, which include a $272,000 loss and $39,000 in income from
discontinued operations for the three and nine month periods ended, respectively
(see Note 5 to the Consolidated Financial Statements). The increase in income
from discontinued operations from $39,000 for the nine month period ended
September 30, 1997 to $1,109,000 for the nine month period ended September 30,
1998 was primarily due to the Company's ability to bill and collect airport
access charges from its customers which was not done during the first five
months of 1997. Additionally, the Company recognized greater losses on the sale
of risk vehicles in a weak vehicle wholesale market during 1997 as compared to
minimal losses incurred during 1998.
VEHICLE RENTAL ACTIVITIES. Revenues from rental car activities
accounted for over 99% of total revenues in the first nine months of 1998. As
previously discussed, the rental car business has been sold to Dollar Rent A Car
Systems, Inc. effective October 1, 1998.
OTHER ACTIVITIES. Although insignificant, real estate management
activities represent the Company's only current operations.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION
REFORM ACT OF 1995.
Certain statements contained in this report, including statements
containing the words "believes," "anticipates," "intends," "expects" and words
of similar import, constitute "forward-looking statements" within the meaning of
the Private Securities Litigation Reform Act of 1995 and are subject to the safe
harbors created thereby. Such forward-looking statements involve known and
unknown risks, uncertainties and other factors that may cause the actual results
to be materially different from the forward-looking statements. Such factors
include, among others, the following: the fact that the Company, following the
sale of assets to Dollar, has no significant operations; the risk that the
Company will not be able to complete any acquisitions to re-establish
operations; the risk that all of the foregoing factors or other factors could
cause fluctuations in the Company's operating results and the price of the
Company's common stock; and other risks detailed in this report and from time to
time in the Company's other filings with the Securities and Exchange Commission.
Given these uncertainties, readers should not place undue reliance on such
forward-looking statements.
PART II. OTHER INFORMATION
Responses to Items 1, 3 and 5 are omitted since these items are either
inapplicable or the response thereto would be negative.
9
<PAGE>
Item 2. CHANGES IN SECURITIES
On April 17, 1998, the Company's Board of Directors approved,
subject to shareholder approval, a fifteen-to-one reverse stock split of the
Company's common stock. Upon shareholder approval on July 8, 1998, the reverse
stock split became effective on July 20, 1998.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The 1998 Annual Meeting was held on July 8, 1998.
(b) The following directors were elected:
1) Gerald J. Colangelo
2) David H. Eaton
3) Mel L. Shultz
4) Richard H. Dozer
5) Mitchell S. Vance
6) Dale M. Jensen
(c)i. The votes for the election of directors were cast, as
follows:
Director For Withhold Authority
-------- --- ------------------
Gerald J. Colangelo 49,593,623 136,580
David H. Eaton 49,593,623 136,580
Mel L. Shultz 49,593,623 136,580
Richard H. Dozer 49,584,523 145,680
Mitchell S. Vance 49,581,523 148,680
Dale M. Jensen 49,593,623 136,580
(c)ii. The 1998 Stock Incentive Plan was approved and the votes
were cast as follows: 49,138,406 shares cast for, 371,480
shares cast against and 220,317 shares withheld.
(c)iii.Approval of a 15 to 1 Reverse Stock Split was approved and
the votes were cast as follows: 49,290,790 cast for,
397,013 cast against and 42,400 withheld.
(c)iv. KPMG Peat Marwick LLP was appointed as the Company's 1998
auditors with 49,661,303 shares cast for, 14,800 shares
cast against and 54,100 shares abstaining.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
See index beginning on page 12
(b) REPORTS ON FORM 8-K
There were no reports on Form 8-K filed for the three
months ended September 30, 1998.
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.
STRATFORD AMERICAN CORPORATION
Registrant
Date: November 13, 1998 By /s/ Mel L. Shultz
-------------------------------------------
Mel L. Shultz, President and Director
Date: November 13, 1998 By /s/ Timothy A. Laos
-------------------------------------------
Timothy A. Laos, Chief Financial Officer
(Principal Financial Officer and Principal
Accounting Officer) for the quarter subject
to this report
11
<PAGE>
EXHIBITS INDEX
Exhibits 3.4, 27.1 and 27.2 are the only exhibits originally filed with this
report. The Company hereby incorporates all other exhibits by reference pursuant
to Rule 12b-32, each of which (except Exhibit 3.3) was filed as an exhibit to
the Company's Registration Statement on Form 10 which was filed July 22, 1988,
and amended on October 7, 1988, and December 8, 1988. Exhibit 3.3 was filed with
the Company's Registration Statement on Form S-1 on June 12, 1989.
Number Description Page
- ------ ----------- ----
3.1 Articles of Incorporation N/A
3.2 By-laws N/A
3.3 Articles of Amendment to Articles of Incorporation N/A
3.4 Amendment to Articles of Incorporation 13
4.1 Form of Common Stock Certificate N/A
4.2 Form of Series "A" Preferred Stock Certificate N/A
4.3 Article IV of the Articles of Incorporation N/A
4.4 Article III of the Bylaws N/A
27.1 Financial Data Schedule - September 30, 1998 14
27.2 Financial Data Schedule - September 30, 1997 15
12
AMENDMENT
TO
ARTICLES OF INCORPORATION
OF
STRATFORD AMERICAN CORPORATION
Article IV, Section 1 of the Articles of Incorporation is
amended to read in its entirety as follows:
"IV.
AUTHORIZED CAPITAL
1. Aggregate Capital. The aggregate number of shares which the
corporation shall have authority to issue is One Hundred Fifty Million
(150,000,000) consisting of One Hundred Million (100,000,000) common shares, one
cent ($0.01) par value (the "Common Stock"), and Fifty Million (50,000,000)
preferred shares, one cent ($0.01) par value. Each fifteen (15) shares of the
Corporation's Common Stock issued as of the date and time immediately following
the filing of this Amendment to the Articles of Incorporation (the "Split
Effective Date") shall be automatically changed and reclassified, as of the
Split Effective Date and without further action, into one (1) fully paid and
nonassessable share of the Corporation's Common Stock; provided, however, that
any fractional interest resulting from such change and classification shall be
rounded upward to the nearest whole share."
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED BALANCE SHEET AT SEPTEMBER 30, 1998 AND THE RELATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND CASH FLOWS FOR THE NINE
MONTHS ENDED SEPTEMBER 30, 1998 OF STRATFORD AMERICAN CORPORATION AND ITS
SUBSIDIARIES AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<EXCHANGE-RATE> 1
<CASH> 34,000
<SECURITIES> 0
<RECEIVABLES> 60,000
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 64,000
<PP&E> 82,000
<DEPRECIATION> 52,000
<TOTAL-ASSETS> 194,000
<CURRENT-LIABILITIES> 118,000
<BONDS> 0
0
0
<COMMON> 59,000
<OTHER-SE> (1,154,000)
<TOTAL-LIABILITY-AND-EQUITY> 194,000
<SALES> 2,000
<TOTAL-REVENUES> 44,000
<CGS> 0
<TOTAL-COSTS> 16,000
<OTHER-EXPENSES> 398,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 32,000
<INCOME-PRETAX> (402,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (402,000)
<DISCONTINUED> 1,109,000
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 707,000
<EPS-PRIMARY> .12
<EPS-DILUTED> .12
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED BALANCE SHEET AT SEPTEMBER 30, 1997 AND THE RELATED
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS AND CASH FLOWS FOR THE NINE
MONTHS ENDED SEPTEMBER 30, 1997 OF STRATFORD AMERICAN CORPORATION AND ITS
SUBSIDIARIES AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<EXCHANGE-RATE> 1
<CASH> 11,000
<SECURITIES> 0
<RECEIVABLES> 169,000
<ALLOWANCES> 8,000
<INVENTORY> 0
<CURRENT-ASSETS> 52,000
<PP&E> 64,000
<DEPRECIATION> 34,000
<TOTAL-ASSETS> 626,000
<CURRENT-LIABILITIES> 520,000
<BONDS> 0
0
0
<COMMON> 59,000
<OTHER-SE> 1,064,000
<TOTAL-LIABILITY-AND-EQUITY> 626,000
<SALES> 12,000
<TOTAL-REVENUES> 46,000
<CGS> 2,000
<TOTAL-COSTS> 13,000
<OTHER-EXPENSES> 443,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 31,000
<INCOME-PRETAX> (441,000)
<INCOME-TAX> 0
<INCOME-CONTINUING> (441,000)
<DISCONTINUED> 39,000
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (402,000)
<EPS-PRIMARY> (.07)
<EPS-DILUTED> (.07)
<FN>
EPS - Primary and EPS - Diluted have been restated to reflect the adoption of
Financial Accounting Standards Board Statement No. 128, Earnings Per Share and
the fifteen - to - one reverse stock split effective July 20, 1998. Certain
amounts have been restated to reflect the subsequent sale of the vehicle rental
business as a discontinued operation.
</FN>
</TABLE>
