<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 1998
------------------
or
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from ____________ to _____________
Commission File Number 0-20272
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RESOURCE CAPITAL GROUP, INC.
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(Exact name of small business issuer as specified in its charter)
Delaware 13-3617377
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(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
419 Crossville Road, Suite 204 Roswell, GA 30075
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
770-649-7000
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(Issuer's telephone number, including area code)
- --------------------------------------------------------------------------------
(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.
X Yes [ ] No
APPLICABLE ONLY TO CORPORATE ISSUERS:
As of September 30, 1998, 404,942 shares of common stock of the Registrant were
outstanding.
<PAGE> 2
INDEX
RESOURCE CAPITAL GROUP, INC.
<TABLE>
<CAPTION>
Page
Number
------
<S> <C> <C> <C>
Part I. Financial Information
Item 1. Consolidated Financial Statements (Unaudited)
Consolidated Balance Sheet - September 30,
1998 and December 31, 1997 3
Consolidated Statement of Operations - For
the Three Months and Nine Months Ended
September 30, 1998 and 1997 4
Consolidated Statement of Cash Flows - For the
Nine Months Ended September 30, 1998
and 1997 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis or
Plan of Operation 9
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K 13
</TABLE>
<PAGE> 3
PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
a) Consolidated Balance Sheet
RESOURCE CAPITAL GROUP, INC.
CONSOLIDATED BALANCE SHEET
(Unaudited)
<TABLE>
<CAPTION>
ASSETS
SEPTEMBER 30, DECEMBER 31,
1998 1997
------------- ------------
<S> <C> <C>
Cash and cash equivalents $ 693,885 $ 673,725
Investment in marketable equity securities - at market 19,705 22,063
Deposit on property acquisition 200,000
Investments in and receivables from partnerships 1,146,713 2,841,452
Real and personal property, at cost
Land 2,305,365 1,437,426
Buildings and improvements 5,558,583 2,937,581
Furniture and equipment 301,007 164,482
------------ ------------
8,164,955 4,539,489
Less accumulated depreciation (280,080) (163,294)
------------ ------------
Net real and personal property 7,884,875 4,376,195
Deferred charges-net of accumulated amortization 129,900 114,270
Other assets 139,164 130,136
------------ ------------
$ 10,014,242 $ 8,357,841
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities
Note payable $ 20,307 $ 85,258
Accounts payable 112,932 16,110
Accrued expenses
Interest 30,266 22,620
Payroll 33,644 84,405
Professional fees 36,750 41,000
Taxes 154,126 19,534
Other 29,038 17,132
------------ ------------
283,824 184,691
Security deposits 64,287 34,262
Mortgages payable 4,136,347 2,972,354
Deferred tax liability 219,188 171,237
------------ ------------
Total Liabilities 4,836,885 3,463,912
Stockholders' equity
Common stock - authorized 1,000,000 shares
$.01 par value per share, issued 508,608 shares 5,086 5,086
Additional paid-in capital 4,607,494 4,607,494
Retained earnings 753,330 408,624
Less treasury stock, at cost, 103,666 shares (190,632) (131,712)
Unrealized gain on investment 2,079 4,437
------------ ------------
Total Stockholders' Equity 5,177,357 4,893,929
------------ ------------
$ 10,014,242 $ 8,357,841
============ ============
</TABLE>
See notes to consolidated financial statements
3
<PAGE> 4
b) Consolidated Statement of Operations
RESOURCE CAPITAL GROUP, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------------------- -------------------------------
1998 1997 1998 1997
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenue
Rental operations $ 320,033 $ 195,642 $ 779,674 $ 931,021
Interest - affiliated entity 8,723 53,145 371,265 159,436
Equity in earnings (loss) of
unconsolidated partnerships (2,151) 19,670 331,230 57,555
Management fees - affiliated entity 5,067 19,342 71,723 47,342
Interest - investments 17,838 3,701 54,963 12,761
Gain on sale of marketable securities 18,521
Gain on sale of property 525,779
Other income 61,587 1,730 68,303 5,240
----------- ----------- ----------- -----------
Total Revenue 411,097 293,230 1,677,158 1,757,655
----------- ----------- ----------- -----------
Expenses
Rental operations 85,153 69,217 197,674 439,565
General and administrative 175,453 126,432 549,143 394,847
Interest 90,625 54,944 260,882 284,219
Depreciation and amortization 50,415 28,758 147,177 339,443
----------- ----------- ----------- -----------
Total Expenses 401,646 279,351 1,154,876 1,458,074
----------- ----------- ----------- -----------
Income before minority share of (income) 9,451 13,879 522,282 299,581
Minority share of (income) (3,156) (15,587)
----------- ----------- ----------- -----------
Income before income taxes 9,451 10,723 522,282 283,994
(Provision for) income taxes (3,213) (3,646) (177,576) (96,558)
----------- ----------- ----------- -----------
Net income $ 6,238 $ 7,077 $ 344,706 $ 187,436
=========== =========== =========== ===========
Net income per share $ .02 $ .02 $ .83 $ .46
=========== =========== =========== ===========
Weighted Average Shares Outstanding 415,701 406,726 416,381 406,726
=========== =========== =========== ===========
</TABLE>
See notes to consolidated financial statements
4
<PAGE> 5
b) Consolidated Statement of Cash Flows
RESOURCE CAPITAL GROUP, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
-------------------------------
1998 1997
----------- -----------
<S> <C> <C>
Cash flows from operating activities
Net Income $ 344,706 $ 187,436
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation and amortization 147,177 339,443
Equity in (earnings) of unconsolidated partnerships (331,230) (57,555)
Minority share of income 15,587
Gain on sale of property (525,779)
Gain on sale of marketable equity securities (18,521)
Provision for deferred income taxes 47,951 23,445
Issuance of stock warrants 24,690
Changes in certain other accounts
Deferred charges and other assets 109,526 282,117
Accounts payable 96,822 3,848
Accrued expenses 99,133 (99,260)
Security deposits 30,025 (40,779)
----------- -----------
Net cash provided by operating activities 544,110 134,672
----------- -----------
Cash flows from investing activities
Purchase of subsidiaries (3,470,683) (938,417)
Additions to real and personal property (154,783) (142,365)
Proceeds from sale of property 4,866,684
Proceeds from mortgage note receivable 1,657,947
Repayments (advances) to investees, net 203,447 (47,000)
Receipt from sale of marketable securities 89,024
Deposit on property purchase 200,000
----------- -----------
Net cash provided (used) by investing activities (1,564,072) 3,827,926
----------- -----------
Cash flows from financing activities
Payments on mortgage payable (906,007) (3,765,733)
Proceeds of mortgage payable 2,070,000
Receipt from minority interest 50
Payments on note payable (64,951) (52,529)
Distribution to minority interest (20,850)
Purchase of treasury stock (58,920)
----------- -----------
Net cash provided by financing activities 1,040,122 (3,839,062)
----------- -----------
Net increase in cash and cash equivalents 20,160 123,536
Cash and cash equivalents at beginning of period 673,725 298,655
----------- -----------
Cash and cash equivalents at end of period $ 693,885 $ 422,191
=========== ===========
</TABLE>
See notes to consolidated financial statements
5
<PAGE> 6
RESOURCE CAPITAL GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
(Unaudited)
NOTE 1 BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements of Resource Capital
Group Inc. have been prepared in accordance with generally accepted accounting
principles for interim financial information and with the instructions to Form
10-QSB and Item 310(b) of Regulation S-B. Accordingly, they do not include all
of the information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of the management
of Resource Capital Group Inc., all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the three and nine month periods ended September 30, 1998,
are not necessarily indicative of the results that may be expected for the
fiscal year ending December 31, 1998. For further information, refer to the
financial statements and footnotes thereto included in the Company's annual
report on Form 10-KSB for the fiscal year ended December 31, 1997.
NOTE 2 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Principles of Consolidation
The consolidated financial statements of Resource Capital Group, Inc. have been
prepared in accordance with generally accepted accounting principles and reflect
the policies detailed below.
The consolidated financial statements of the Company include the accounts of
Resource Capital Group, Inc. and its subsidiaries: 8050 Roswell Associates, LLC,
(Roswell); 419 Crossville Associates, LLC (Crossville); Colonial Park Commons,
LLC (Colonial Park); Heide Lot, LLC (Heide); Meggan Lot, LLC (Meggan); Woodstock
Office One, LLC (Woodstock); 8046 Roswell Road, LLC (8046); 920 Holcomb Bridge,
LLC (Holcomb); RCGI Montclair I, LLC (Montclair); RCGI Oakmont, LLC (Oakmont)
and Hunter Management Company (Hunter). Where subsidiaries were acquired or
disposed of during the period the operating results are included from the date
of acquisition or the date of sale. All intercompany transactions and balances
have been eliminated in consolidation.
6
<PAGE> 7
NOTE 3 INVESTMENTS IN AND RECEIVABLES FROM PARTNERSHIPS
The balances are summarized as follows:
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
----------- -----------
<S> <C> <C>
Notes receivable from MLP $ 325,554 $ 1,983,501
Accrued interest receivable from MLP 4,069 24,794
Advances receivable from MLP 1,014,408 1,197,130
Accountability to partnerships 2,682 (163,973)
----------- -----------
1,346,713 3,041,452
Valuation allowance (200,000) (200,000)
----------- -----------
$ 1,146,713 $ 2,841,452
=========== ===========
</TABLE>
In April 1998 MLP sold the Rolling Hills Apartments for a sales price of
$7,544,000. The Company received approximately $2,300,000 in proceeds from the
sale including the principal balance of the $1,657,947 note receivable from MLP,
interest income on the note and the repayment of a portion of the advances to
MLP.
The Company owns a 2.55% general partner interest and a 43.10% limited partner
interest in AGS Meadow Oaks Associates (Meadow) which owns a 345 unit apartment
property located in Kansas City, Kansas.
Management has determined that its interest in Meadow is of little or no value.
The Company has discussed purchasing the first mortgage and note from the
current mortgage holder for approximately $4,200,000. If the lender is unwilling
to sell the note for a reasonable amount, the Company intends to dispose of its
interest in the property. Management believes the value of the property is
between $4,000,000 and $4,500,000 and the total amount owed by Meadow on a
non-recourse basis to the lender is approximately $8,746,000.
At December 31, 1997 the Company's tax basis in Meadow is a negative $1,168,000.
Therefore, if the Company disposes of its interest in Meadow it anticipates that
it will result in a substantial tax liability to the Company. The Company's
current cash balances are more than sufficient to cover this liability.
NOTE 4 ACQUISITION OF PROPERTIES
In February 1998, 920 Holcomb Bridge, LLC (Holcomb) was formed and capitalized
with a $280,000 contribution, $200,000 cash was placed in escrow in 1997 and
$80,000 was paid at closing, for a one hundred percent interest in Holcomb.
Holcomb acquired a 14,500 square foot office building located in Roswell, Fulton
7
<PAGE> 8
County, Georgia for $1,250,000 which was partially funded with a $970,000
mortgage payable. The mortgage bears interest at 8.5% per annum and matures in
March 2018. The terms of the mortgage require monthly payments of $8,418 be
applied first to interest with the balance to reduction of principal.
On July 31, 1998 RCGI Montclair I, LLC (Montclair) was formed and capitalized
with a $1,175,000 cash contribution which was funded by the Company for a one
hundred percent interest. Montclair acquired a 22,248 square foot office
building located in Birmingham, Alabama for $1,175,000 in cash. The Company is
presently negotiating for a $940,000 first mortgage on the property.
On July 31, 1998 RCGI Oakmont, LLC (Oakmont) was formed and capitalized with a
$1,009,000 cash contribution which was funded by the Company for a one hundred
percent interest. Oakmont acquired a 20,000 square foot office building located
in Birmingham, Alabama for $1,009,000 in cash. The Company is presently
negotiating for a $810,000 first mortgage on the property.
The Company has begun the construction of a 10,400 square foot "TurnKey" office
building on the Heide & Meggan Lots adjoining the Colonial Park property. The
Company already owns the land and expects to finance all of the development
costs with a $900,000 construction mini-permanent loan.
NOTE 5 EARNINGS PER SHARE
Net earning per share of Common Stock is computed by dividing net earnings by
the weighted average number of shares outstanding. The dilutive effect of stock
warrants is not significant and is therefore excluded from the calculation.
8
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
LIQUIDITY AND CAPITAL RESOURCES
The Company's liquidity is based primarily on its cash reserves, real estate
operating and investment income, its ability to obtain mortgage financing, and
the interest income and loan repayments received on its notes receivable from
AGS Partners MLP, L.P. (MLP). These funds are used to pay the Company's normal
operating expenses and fund new acquisitions.
As of September 30, 1998, the Company had cash reserves of $693,885. The
Company's cash reserves and current level of income are sufficient to meet the
Company's current level of operating expenses on an ongoing basis.
For the nine months ended September 30, 1998, the Company received $519,615 in
interest income from MLP. During the same period advances to MLP decreased by
$203,447 and the Company was repaid the $1,657,947 note receivable from MLP. MLP
paid these amounts to the Company as a result of its sale in April 1998 of
Rolling Hills Apartments for a sales price of $7,544,000.
MLP plans to continue to make major capital improvements to its remaining
property, Aspen Walk Apartments, in an attempt to maximize the value of the
property and intends to sell it as soon as practicable. The ultimate realization
of the Company's investment in and receivable from MLP is dependent on the
future operations and/or sale of the Aspen Walk Apartments.
The operating property of the MLP and the property owned by AGS Meadow Oaks
Associates in which the Company is the general partner are financed with
non-recourse debt. The Company is not liable for the principal or interest on
the mortgages and the other assets of the partnerships are more than adequate to
satisfy other recourse liabilities. Therefore, the Company's liquidity should
not be adversely affected by these general partner obligations.
The Company's business plan includes accelerating its transition from
investments in mortgage receivables and apartment buildings into the ownership
and operation of small properties, primarily suburban office buildings
concentrated in Atlanta, Georgia, Birmingham, Alabama and other fast growing
metropolitan areas in the southeast.
In this regard, the Company has developed a concept it calls ("TurnKey") or
"Smart Space". The TurnKey concept includes the subdividing, upgrading and
prefinishing of office space in small, well located buildings into 500 to 2500
square foot ready to occupy suites. The upgraded suites generally command higher
rental rates because they generally include the addition of private interior
bathrooms, mini kitchens, sheetrock ceilings, recessed lighting, crown moldings,
chair rails, upgraded carpets and upgraded finishes. Expenses are lower because
the concept
9
<PAGE> 10
includes reducing common areas and individually metering each suite for tenant
paid utilities and installing individual HVAC units and controls. Plus the
tenant selects and pays for their own level of janitorial services with third
party contractors.
The Company is presently acquiring buildings for the purpose of converting them
to TurnKey suites. Results indicate that the Company can operate TurnKey
buildings more profitably than its conventional office buildings. Conceptually,
once space has been converted to a TurnKey unit the Company will not be required
to move walls or reconfigure the space again, cutting down on turnover time and
eliminating build-out expenses which historically have been the largest costs of
operating office buildings. The Company is planning the construction of new
TurnKey buildings in well located areas because the conversion period of
existing buildings is long (3 to 5 years), the cost high ($18 to $25 per foot)
and management attention is intensive. The Company has begun the construction of
a 10,400 square foot TurnKey office building on the Heide and Meggan lots
adjoining the Colonial Park property. The Company already owns the land and
expects to finance all of the development costs with a $900,000 construction
mini- permanent loan.
As a result of the Company's success in this niche market, mortgage financing
has been offered to the Company from various sources including a small insurance
company and local and regional banks. With mortgage financing available the
Company intends to continue to expand into other neighboring southeast markets.
The Company expects to be able to fund the expansion of its holdings in this
direction by a combination of mortgage financing and internal funding.
Management believes the Company will be able to expand without seeking financing
other than conventional mortgages for at least the next two years. The proceeds
of the Oakmont & Montclair mortgages ($1,750,000) combined with the proceeds of
the Company's investments in mortgage receivables from MLP and the disposition
of its general and limited partner interests in apartment building is expected
to provide the balance of the funds.
In February 1998, 920 Holcomb Bridge, LLC (Holcomb) was formed and capitalized
with a $280,000 cash contribution, which was funded by the Company for a one
hundred percent interest. Holcomb acquired a 14,500 square foot office building
located in Roswell, Fulton County, Georgia for $1,250,000 which was partially
funded with a $970,000 mortgage payable.
On July 31, 1998 the Company purchased a 22,248 square foot office building
located in Birmingham, Alabama for $1,175,000 in an all cash transaction.
Additionally on July 31, 1998 the Company purchased a 20,000 square foot office
building also located in Birmingham, Alabama for $1,009,000 in a similar all
cash transaction. Payments made to the Company by MLP from the sale of Rolling
Hills Apartments were utilized to close these transactions. The Company is
presently negotiating first mortgages on these properties in the principal
amount of $1,750,000.
10
<PAGE> 11
Based on 1998 and future budgets and recent property valuations it appears the
Company's real estate investments should produce future operating cash flows and
future resale values for the Company.
For the nine months ended September 30, 1998 the Company generated $544,110 in
cash from operations and received $1,040,122 in cash principally from the net
proceeds of mortgages payable. Investing activities utilized $1,564,072 in cash
principally from the purchase of subsidiaries in the amount of $3,470,683 net of
the proceeds of the $1,657,947 note receivable from MLP and repayment of
advances receivable from MLP in the amount of $203,447. The Company generated
a net increase in cash of $20,160 for the period.
RESULTS OF OPERATIONS
The Company's business plan includes continuing its transition from an asset
base consisting primarily of mortgage receivables from MLP and general and
limited partner interests in apartment buildings located throughout the country,
into small properties, primarily suburban office buildings, located in Atlanta,
Georgia, Birmingham, Alabama and other fast growing metropolitan areas in the
southeast that are easily accessible from Atlanta. Despite the expenses
associated with this transition, for the three months ended September 30, 1998,
the Company recognized approximately the same amount of income as it did during
the same period last year: $6,238 compared to $7,077 for the corresponding
period in 1997. For the nine months ended September 30, 1998 the Company
recognized net income of $344,706 compared to net income of $187,436 for the
corresponding period in 1997.
Total revenue for the three months ended September 30, 1998 was $411,097 versus
$293,230 for the same period in 1997. This increase in revenue was primarily the
result of the 1998 acquisitions of 920 Holcomb, Montclair and Oakmont properties
and the resulting increase in rental operating income associated with these
three properties. Total revenue for the nine months ended September 30, 1998 was
$1,677,158 versus $1,757,655 for the same period in 1997. This decrease in
revenue was primarily the result of the May 1997 sale of Carriage House and
Compass Pointe Apartments and the resulting decrease in rental operating income
associated with these two properties.
Total expenses for the three months ended September 30, 1998 were $401,646
compared to $279,351 for the same period in 1997. The increase in expenses was
primarily the result of the 1998 acquisitions of 920 Holcomb, Montclair and
Oakmont properties and the resulting increase in rental operating expenses,
interest, and depreciation expense associated with these three properties. Total
expenses for the nine months ended September 30, 1998 were $1,154,876 compared
to $1,458,074 for the same period in 1997. This decrease in expenses was the
result, in part, of the 1997 amortization of the remaining loan costs in the
amount of approximately $194,000 for the Carriage and Compass mortgages and
11
<PAGE> 12
the rental operating expenses incurred by the Carriage and Compass properties.
General and administrative expenses for the three months ended September 30,
1998 of $175,453 increased $49,021 from the same period last year. General and
administrative expenses of $549,143 for the nine months ended September 30, 1998
increased $154,296 over the same period in 1997. The increases are attributable
to the September 1997 acquisition of Hunter, increased keyman and directors
insurance, increased staff and legal professional and other expenses relating to
the Company's disposition of its apartments and other investments.
Depreciation and amortization of $50,415 for the three months ended September
30, 1998 increased $21,657 over the same period in 1997 due primarily to the
1998 acquisitions of the 920 Holcomb, Montclair and Oakmont properties and the
resulting increase in depreciation expense. Depreciation and amortization of
$147,177 for the nine months ended September 30, 1998 decreased $192,266 over
the same period in 1997 primarily due to the 1997 amortization of the remaining
loan costs in the amount of approximately $194,000 for the Carriage and Compass
mortgages.
Interest expense increased $35,681 for the three months ended September 30, 1998
as compared to the corresponding period in 1997 due to the mortgages obtained on
the Woodstock and 920 Holcomb Bridge properties. Interest expense of $260,882
for the nine months ended September 30, 1998 decreased $23,337 over the same
period in 1997 due to the mortgages repaid on the May 1997 disposition of
Carriage House and Compass Pointe Apartments.
YEAR 2000 CONVERSION
The Company does not believe that the year 2000 conversion will have a material
adverse effect on the Company's operations.
INFLATION
Inflation in the future may increase rental revenues as well as operating
expenses, all in accordance with general market trends.
12
<PAGE> 13
PART II OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27 Financial Data schedule (for SEC use only)
(b) Reports on Form 8-K
None
13
<PAGE> 14
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the
Registrant caused this Report to be signed on its behalf by the undersigned,
thereunto duly authorized.
Resource Capital Group, Inc.
(Registrant)
By: /s/ Albert G. Schmerge III
--------------------------
Albert G. Schmerge III
President, CEO and
Chairman of the Board
Date: November 13, 1998
14
<TABLE> <S> <C>
<ARTICLE> 5
<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> 693,885
<SECURITIES> 19,705
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 8,164,955
<DEPRECIATION> 280,080
<TOTAL-ASSETS> 10,014,242
<CURRENT-LIABILITIES> 0
<BONDS> 4,136,347
0
0
<COMMON> 5,086
<OTHER-SE> 5,172,271
<TOTAL-LIABILITY-AND-EQUITY> 10,014,242
<SALES> 0
<TOTAL-REVENUES> 1,677,158
<CGS> 0
<TOTAL-COSTS> 197,674
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 260,882
<INCOME-PRETAX> 522,282
<INCOME-TAX> 177,576
<INCOME-CONTINUING> 344,706
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 344,706
<EPS-PRIMARY> .83
<EPS-DILUTED> 0
</TABLE>
