<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(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, 1995
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: 0-17969
NEXTHEALTH, INC.
------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Delaware 86-0589712
- ------------------------------- ------------------------------------
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
16600 N. Lago Del Oro Parkway, Tucson, Arizona 85739
- ---------------------------------------------- ----------
(Address of Principal Executive Offices) (Zip Code)
(520) 792-5800
----------------------------------------------------
(Registrant's Telephone Number, including Area Code)
Sierra Tucson Companies, Inc.,
16500 N. Lago Del Oro Parkway, Tucson, Arizona 85739
----------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report).
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. /X/ YES / / NO
On November 1, 1995, there were 8,555,938 shares of the registrant's Common
Stock outstanding.
Reference is made to the listing beginning on page 12 of all exhibits filed as a
part of this report.
1
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NEXTHEALTH, INC.
FORM 10-Q
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION PAGE
- ------------------------------ ----
<S> <C>
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of September 30, 1995 (unaudited)
and December 31, 1994................................................................... 3
Unaudited Condensed Consolidated Statements of Operations for the three and
nine month periods ended September 30, 1995 and 1994.................................... 4
Unaudited Condensed Consolidated Statements of Cash Flows for the nine
month periods ended September 30, 1995 and 1994......................................... 5
Unaudited Notes to the Condensed Consolidated Financial Statements........................ 6
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations........................................................................... 7
PART II - OTHER INFORMATION
Item 1. Legal Proceedings......................................................................... 12
Item 6. Exhibits and Reports on Form 8-K.......................................................... 12
Signatures........................................................................................... 13
</TABLE>
2
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
NEXTHEALTH, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, December 31,
1995 1994
------------- ------------
(Unaudited)
<S> <C> <C>
Assets
Current Assets:
Cash and cash equivalents .................. $ 5,276,487 $ 11,741,278
Accounts receivable, net ................... 579,014 1,115,941
Accounts receivable in settlement .......... - 1,667,055
Deferred income taxes ...................... 315,000 315,000
Income taxes receivable .................... - 4,507,575
Prepaid and other assets ................... 1,094,056 563,210
------------ ------------
Total current assets ..................... 7,264,557 19,910,059
Property and equipment, net .................. 29,639,492 22,075,192
Long-term investments ........................ 13,930,260 8,799,363
Long-term receivables, net ................... 243,511 185,277
Other assets and deposits .................... 324,163 1,986
------------ ------------
Total assets ............................. $ 51,401,983 $ 50,971,877
============ ============
Liabilities and Stockholders' Equity
Current Liabilities:
Accounts payable and accrued liabilities ... $ 6,800,234 $ 1,603,689
Other current liabilities .................. 291,248 231,175
------------ ------------
Total current liabilities ................ 7,091,482 1,834,864
Long-term debt and financing obligation ...... 1,073,065 1,181,714
------------ ------------
Total liabilities ........................ 8,164,547 3,016,578
------------ ------------
Commitments and contingent liabilities ....... - -
Stockholders' Equity:
Common stock ............................... 85,514 84,969
Additional paid-in capital ................. 43,440,977 43,262,927
Retained earnings (deficit) ................ (182,873) 5,006,457
Unrealized investment losses ............... (106,182) (399,054)
------------ ------------
Total stockholders' equity ............... 43,237,436 47,955,299
------------ ------------
Total liabilities and stockholders' equity $ 51,401,983 $ 50,971,877
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
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NEXTHEALTH, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
---------------------------- ----------------------------
1995 1994 1995 1994
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenue:
Net revenue - Sierra Tucson, Inc. ................ $ 2,626,291 $ 2,407,217 $ 8,347,590 $ 7,631,355
Net revenue - Onsite Workshops, Inc. ............. 379,092 - 1,020,874 -
Other revenue .................................... 332,817 322,377 1,710,697 1,059,996
------------ ------------ ------------ ------------
Total revenue .............................. 3,338,200 2,729,594 11,079,161 8,691,351
------------ ------------ ------------ ------------
Operating expenses:
Salaries and related benefits .................... 1,953,021 1,761,535 5,783,716 5,687,198
General and administrative ....................... 1,892,660 2,000,470 5,799,193 5,458,145
Business expansion costs ......................... 2,601,459 - 3,429,785 -
Interest expense ................................. 21,404 3,266 71,245 11,064
Depreciation and amortization .................... 401,711 375,838 1,184,552 1,094,295
------------ ------------ ------------ ------------
Total operating expenses ................... 6,870,255 4,141,109 16,268,491 12,250,702
------------ ------------ ------------ ------------
Loss before income tax benefit ...................... (3,532,055) (1,411,515) (5,189,330) (3,559,351)
Income tax benefit .................................. - 462,000 - 1,174,558
------------ ------------ ------------ ------------
Net loss ............................................ $ (3,532,055) $ (949,515) $ (5,189,330) $ (2,384,793)
============ ============ ============ ============
Weighted average shares of common
stock outstanding ................................ 8,548,712 8,496,884 8,545,119 8,496,884
============ ============ ============ ============
Net loss per share of common stock .................. $ (.41) $ (.11) $ (.61) $ (.28)
============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
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NEXTHEALTH, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
----------------------------
1995 1994
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net loss ....................................................... $ (5,189,330) $ (2,384,793)
Adjustments to reconcile net loss to cash provided
by (used in) operating activities:
Depreciation and amortization ................................ 1,184,552 1,106,152
Provision for bad debts ...................................... 154,775 611,987
Changes in operating assets and liabilities net of effects
from acquisitions:
Decrease (increase) in assets:
Accounts receivable and long-term receivables ................ 1,990,973 2,167,064
Prepaid and other assets ..................................... (494,869) 143,985
Income taxes receivable ...................................... 4,507,575 89,456
Increase (decrease) in liabilities:
Accounts payable and accrued liabilities ..................... 5,155,685 (690,980)
Reserve for litigation charges ............................... - (5,696,768)
------------ ------------
Net cash provided by (used in) operating activities .............. 7,309,361 (4,653,897)
------------ ------------
Cash flows from investing activities:
Purchases of property and equipment ............................ (8,709,618) (526,600)
Business acquisitions, net of cash acquired .................... (129,687) -
Purchase of long-term investments .............................. (14,162,563) (3,806,188)
Sale of long-term investments .................................. 9,324,538 5,965,511
------------ ------------
Net cash provided by (used in) investing activities .............. (13,677,330) 1,632,723
------------ ------------
Cash flows from financing activities:
Exercise of common stock options ............................... 22,345 -
Reduction of long-term debt and financing obligation ........... (119,167) (8,049)
------------ ------------
Net cash used in financing activities ............................ (96,822) (8,049)
------------ ------------
Net decrease in cash and cash equivalents ........................ (6,464,791) (3,029,223)
Cash and cash equivalents at beginning of period ................. 11,741,278 13,990,245
------------ ------------
Cash and cash equivalents at end of period ....................... $ 5,276,487 $ 10,961,022
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
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NEXTHEALTH, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The unaudited condensed consolidated financial statements presented herein
should be read in conjunction with the Consolidated Financial Statements and
Notes thereto incorporated in NextHealth, Inc.'s (formerly known as Sierra
Tucson Companies, Inc.) Annual Report on Form 10-K for the year ended December
31, 1994. The accompanying unaudited condensed 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 notes required by generally accepted accounting principles for
complete financial statements, but reflect, in the opinion of management, all
adjustments (consisting of normal recurring adjustments) considered necessary to
fairly present the results for such periods. Operating results for the three and
nine-month periods ended September 30, 1995 are not necessarily indicative of
the results that may be expected for the year ended December 31, 1995.
NOTE 2 - CHANGE IN NAME OF REGISTRANT
Effective September 28, 1995, the Company changed its name from Sierra Tucson
Companies, Inc. to NextHealth, Inc. This change was effected through a short
form merger pursuant to Delaware law whereby Sierra Tucson Companies, Inc.
merged with Sierra Tucson / Arizona Holding, Inc. ( a wholly owned subsidiary of
Sierra Tucson Companies, Inc.). As part of the merger, the surviving entity's
name was changed to NextHealth, Inc. The sole purpose of the name change was to
establish separate identities for the parent company and each of its operating
subsidiaries.
6
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
General
NextHealth, Inc., formerly known as Sierra Tucson Companies, Inc., (the
"Company") conducts its operations through separate operating divisions and
wholly owned subsidiaries. A subsidiary, Sierra Tucson, Inc. ("STI"), operates
an inpatient treatment center specializing in treating substance abuse and a
broad range of mental health disorders. Onsite Workshops, Inc. ("Onsite"), the
Arizona subsidiary formed to succeed Onsite Training and Consulting, Inc., a
Minnesota corporation acquired in January 1995, offers short-term therapeutic
workshops. Each line of business offers safe, expertly staffed treatment
experiences; integrates philosophies and methodologies from psychological,
family systems and self-help approaches into comprehensive and effective
treatment experiences.
As announced in April 1995, the Company is expanding its business to include a
new division called MiravalTM. Miraval will be a luxury wellness facility which
educates guests on "life-balancing" techniques. The Miraval experience will
provide a leisure and educational vacation alternative in a resort-like setting.
Personal guides will assist guests in designing their own personally-tailored
programs of stress management, self discovery and recreational activities.
Miraval will commence operations in mid-November.
The following discussion and analysis relates to factors which have affected the
consolidated financial condition and results of operations of the Company for
the three and nine-month periods ended September 30, 1995 and 1994. Certain
prior year amounts have been reclassified to conform to the presentation used in
1995. Reference should also be made to the Company's unaudited condensed
consolidated financial statements and related notes included elsewhere in this
document.
Results of Operations
Three-Month Period Ended September 30, 1995 Compared to the Three-Month Period
Ended September 30, 1994
The significant changes in results of operations and net cash provided by
operating activities for the three-month period ended September 30, 1995
compared to the same period in 1994 are discussed below. Total operating
expenses, the loss before income tax benefit, the net loss and the net loss per
share of common stock exclude approximately $2.6 million in 1995 business
expansion costs for purposes of this presentation.
<TABLE>
<CAPTION>
Three Months Ended
September 30,
-------------------------------------
1995 1994 Change
------------ ------------ --------
<S> <C> <C> <C>
FINANCIAL RESULTS:
Total revenue ...................................... $ 3,338,200 $ 2,729,594 22.3 %
Total operating expenses ........................... 4,268,796 4,141,109 3.1
Loss before income tax benefit ..................... (930,596) (1,411,515) 34.1
Net loss ........................................... (930,596) (949,515) 2.0
Net loss per share of common stock ................. (.11) (.11) -
Net cash provided by operating activities .......... 333,996 1,143,491 (70.8)
OPERATING DATA:
Patient days - Sierra Tucson, Inc. ................. 4,266 3,873 10.2
Average daily census - Sierra Tucson, Inc. ......... 46.4 42.1 10.2
Participant days - Onsite Workshops, Inc. .......... 2,137 - -
Average daily census - Onsite Workshops, Inc. ...... 23.2 - -
Combined patient and participant days .............. 6,403 3,873 65.3
Combined average daily census ...................... 69.6 42.1 65.3
</TABLE>
7
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Total revenue increased approximately $609,000 to approximately $3.3 million for
the three-month period ended September 30, 1995 compared to the same period in
1994. The growth in total revenue was primarily attributable to a 10% increase
in patient census levels at STI and the addition of net revenue related to
Onsite.
Excluding approximately $2.6 million in 1995 business expansion costs, total
operating expense increased approximately $128,000 to approximately $4.3 million
for the three-month period ended September 30, 1995 compared to the same period
in 1994. The significant components of this increase are discussed in the
following two paragraphs.
Salaries and related benefits increased approximately $191,000 primarily due to
market related compensation adjustments made for certain members of STI's
clinical staff, additional full and part-time staffing required to facilitate
the increase in STI's patient census levels and additional staffing required as
a result of the Onsite acquisition somewhat offset by a decrease in corporate
salaries and related benefits. Although salaries and related benefits
increased as a period cost, they have declined as a percentage of total revenue
to approximately 59% of total revenue for the three-month period ended September
30, 1995 compared to 65% for the comparable period of 1994.
General and administrative expenses decreased approximately $108,000 for the
three-month period ended September 30, 1995 compared to the same period in 1994.
The decrease was primarily attributable to a decrease in the provision for bad
debts to reflect the Company's collection experience and a decrease in
consulting expense related to the Company retaining full-time employees to
fulfill its labor requirements. These decreases were somewhat offset by an
increase in advertising costs resulting from intensified marketing efforts for
STI; increases in contract labor, professional fees, travel and entertainment
and operating supplies, all of which are attributable to the Company's growth
efforts including the acquisition of Onsite. General and administrative expenses
have also continued to decline as a percentage of total revenue as a result of
the Company's cost control programs. General and Administrative expenses as a
percentage of total revenue were approximately 57% for the three-month period
ended September 30, 1995 compared to 73% for the comparable period of 1994.
The Company incurred approximately $2.6 million in business expansion costs
during the three-month period ended September 30, 1995. These costs are related
to the Company's Miraval division. Approximately $87,000 of these expenditures
are related to pilot program research and development activities. Specific areas
of expenditures under the pilot program include labor related costs, operating
supplies, travel and entertainment, repairs and maintenance, utilities and legal
expenditures. In addition to costs incurred in the pilot program research and
development activities, the Company made additional period expenditures of
approximately $2.5 million for the continued development and promotion of
Miraval. Specific areas of expenditures include advertising, labor related costs
(including consulting arrangements and contract labor) and other miscellaneous
operating expenditures. These operating expenditures, which are intended to
provide support for the commencement of operations, will continue during the
fourth quarter of 1995 and into 1996 but at a somewhat higher rate than that
which occurred through September 30, 1995.
8
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Nine-Month Period Ended September 30, 1995 Compared to the Nine-Month Period
Ended September 30, 1994
The significant changes in results of operations and net cash provided by (used
in) operating activities for the nine-month period ended September 30, 1995
compared to the same period of 1994 are discussed below. Total operating
expenses, the loss before income tax benefit, the net loss and the net loss per
share of common stock exclude approximately $3.4 million in 1995 business
expansion costs for purposes of this presentation.
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
----------------------------------------
1995 1994 Change
------------ ------------ --------
<S> <C> <C> <C>
FINANCIAL RESULTS:
Total revenue ........................................ $ 11,079,161 $ 8,691,351 27.5 %
Total operating expenses ............................. 12,838,706 12,250,702 4.8
Loss before income tax benefit ....................... (1,759,545) (3,559,351) 50.6
Net loss ............................................. (1,759,545) (2,384,793) 26.2
Net loss per share of common stock ................... (.21) (.28) 25.0
Net cash provided by (used in) operating activities... 7,309,361 (4,653,897) -
OPERATING DATA:
Patient days - Sierra Tucson, Inc. ................... 13,182 12,302 7.1
Average daily census - Sierra Tucson, Inc. ........... 48.3 45.1 7.1
Participant days - Onsite Workshops, Inc. ............ 5,862 - -
Average daily census - Onsite Workshops, Inc. ........ 21.5 - -
Combined patient and participant days ................ 19,044 12,302 54.8
Combined average daily census ........................ 69.8 45.1 54.8
</TABLE>
The net loss decreased approximately $625,000 and net cash provided by operating
activities increased approximately $12.0 million for the nine-month period ended
September 30, 1995 compared to the same period in 1994. The improvement in the
net loss is primarily related to a higher census level at STI, increased
earnings on the Company's long-term investments and the Company's success in
implementing and maintaining cost controls. The increase in net cash provided by
operating activities is primarily attributable to the receipt of a significant
income tax refund, the settlement of litigation and the settlement of certain
long outstanding disputed accounts.
Total revenue increased approximately $2.4 million to approximately $11.1
million for the nine-month period ended September 30, 1995 compared to the same
period in 1994. The changes in total revenue were primarily attributable to the
net revenue related to Onsite; an increase in investment income resulting from
the combination of higher investment yields, an increase in the average
investment balance and the recognition of net gains resulting from the sale of
certain of the Company's long-term investments; an increase in miscellaneous
income related to a negotiated settlement of disputed receivables for the
reimbursement of collection costs; and an increase in patient revenue resulting
from a higher census level at STI.
Excluding approximately $3.4 million in 1995 business expansion costs, total
operating expenses increased approximately $588,000 to approximately $12.8
million for the nine-month period ended September 30, 1995 compared to the same
period in 1994. The significant components of this increase are discussed in the
following two paragraphs.
Salaries and related benefits increased approximately $97,000 primarily due to
additional staffing required as a result of the Onsite acquisition somewhat
offset by a decrease in corporate salaries and related benefits. While salaries
and related benefits increased as a period cost, they have declined as a
percentage
9
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of total revenue to approximately 52% of total revenue for the nine-month period
ended September 30, 1995 compared to 65% for the comparable period of 1994.
General and administrative expenses increased approximately $341,000 for the
nine-month period ended September 30, 1995 compared to the same period in 1994
primarily due to an increase in advertising costs, including postage and mailing
list costs, resulting from intensified marketing efforts for STI; increases in
contract labor, professional fees, operating and office supplies, repairs and
maintenance and travel and entertainment, all of which are attributable to the
Company's growth efforts including the acquisition of Onsite. These increases
were somewhat offset by a decrease in the provision for bad debts to reflect the
Company's collection experience and a decrease in consulting expense related to
the Company retaining full-time employees to fulfill its labor requirements.
Although there was an overall increase in these costs, general and
administrative expenses have continued to decline as a percentage of total
revenues as a result of the Company's cost control programs. General and
administrative expenses as a percentage of total revenues were approximately 52%
for the nine-month period ended September 30, 1995 compared to 63% for the
comparable period of 1994.
The Company incurred approximately $3.4 million in business expansion costs
during the nine-month period ended September 30, 1995. See page 8 of this
document for a detailed discussion of these costs.
Liquidity & Capital Resources
The Company's sources of liquidity and capital resources historically have been
net cash provided by operating activities, funds available from the liquidation
of short and long-term investments and proceeds from offerings of equity
securities. In the past, these sources have been sufficient to meet the needs
and finance the growth of the Company's business. Net cash provided by operating
activities has been primarily affected by census levels and net revenue per
patient day.
As of September 30, 1995 the Company expended or was committed to expend
approximately $15.5 million of its existing cash reserves to complete
construction of the Miraval property. At September 30, 1995, the Company has
expended approximately $8.2 million of this commitment. Additionally,
significant expenditures will be required to support the operations of Miraval
up until the time of self-sufficiency. As a result of these capital and
operating expenditures, the Company's current cash reserves will decrease. The
Company is assessing future liquidity requirements related to supporting its
operational needs and plans for future growth. Management believes that
available cash and investments will be sufficient to meet the Company's existing
normal operating requirements over the near term. Management is investigating
available alternatives to secure additional capital to meet its future liquidity
needs and to fund growth opportunities.
Management continues to focus on managing existing cash reserves and the
Company's overall liquidity position. At September 30, 1995, the Company
had a working capital ratio of 1:1 and working capital of approximately $173,000
and the Company's cash and investments (including short and long-term
investments) were approximately $19.2 million. This represents a decrease of
approximately $1.3 million, or 6.5% when compared to total cash and investments
at December 31, 1994. This decrease is primarily attributable to internally
funded capital expenditures and business expansion costs related to Miraval
which were somewhat offset by net cash provided by operating activities.
At September 30, 1995, the Company had a strong liquidity position with
cash and investments which comprised 37% of the Company's total assets.
10
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STI and its patients continue to experience significant pressure from third
party payors and managed care organizations to restrict access to and payment
for treatment services offered. The Company expects this trend to continue
throughout 1995. The results of the three and nine-month periods ended September
30, 1995 do however, reflect a positive trend to attract and retain a higher
percentage of cash paying customers. For the nine-month period ended September
30, 1995 approximately 65% of patient revenue was derived from individual
patient payments, while only 35% of patient revenue was derived from insurance
companies and other third party payors.
Business Outlook
The operating results for the three and nine-month periods ended September 30,
1995 reflect an increase of 10% and 7%, respectively, in patient census level,
when compared to the corresponding periods in 1994. Management's continued
efforts to maintain expense controls are reflected in the operating results for
both periods. Revenue growth and expense controls, including significant
improvements in operational efficiencies, have resulted in limiting the
Company's net loss (excluding business expansion costs) for the three and
nine-month periods ended September 30, 1995.
In May 1995, construction activities related to Miraval commenced. As a result,
certain of the Company's facilities are being renovated and expanded to
accommodate the lodging requirements and the programs and activities offered by
Miraval. Because of the nature of the construction activities that are currently
underway, certain existing assets and components of existing assets will be
retired. Consequently, the Company will take a charge in the fourth quarter of
1995 when these retirements take place.
11
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PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is involved in various litigation and administrative proceedings
arising in the normal course of business. In the opinion of management, any
liabilities that may result from these claims will not, individually or in the
aggregate, have a material adverse effect on the Company's financial position or
results of operations.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
NONE
(b) Reports on Form 8-K
NONE
12
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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.
NextHealth, Inc.
-------------------------------------
Registrant
DATE: November 14, 1995 BY: /s/ John H. Schmitz
-------------------------------------
JOHN H. SCHMITZ,
President and Chief Executive Officer
DATE: November 14, 1995 BY: /s/ David W. Vreeman
-------------------------------------
DAVID W. VREEMAN
Controller, Sierra Tucson, Inc.
(Principal Accounting Officer, NextHealth, Inc.)
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEET AS OF SEPTEMBER 30, 1995 AND THE
UNAUDITED CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE THREE AND
NINE-MONTH PERIODS ENDED SEPTEMBER 30, 1995 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 375,017
<SECURITIES> 4,901,470
<RECEIVABLES> 1,170,844
<ALLOWANCES> (591,830)
<INVENTORY> 291,578
<CURRENT-ASSETS> 7,264,557
<PP&E> 37,388,723
<DEPRECIATION> (7,749,231)
<TOTAL-ASSETS> 51,401,983
<CURRENT-LIABILITIES> 7,091,482
<BONDS> 1,073,065
<COMMON> 85,514
0
0
<OTHER-SE> 43,151,922
<TOTAL-LIABILITY-AND-EQUITY> 51,401,983
<SALES> 9,368,464
<TOTAL-REVENUES> 11,079,161
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 16,042,471
<LOSS-PROVISION> 154,775
<INTEREST-EXPENSE> 71,245
<INCOME-PRETAX> (5,189,330)
<INCOME-TAX> 0
<INCOME-CONTINUING> (5,189,330)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (5,189,330)
<EPS-PRIMARY> (0.61)
<EPS-DILUTED> (0.61)
</TABLE>
