UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
[ ] 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: 1-11782
ESQUIRE COMMUNICATIONS LTD.
( Exact name of Small Business issuer as specified in its charter)
Delaware 13-3703760
(State or other jurisdiction (I.R.S Employer
of incorporation or organization) Identification No.)
750 "B" Street, Suite 2350, San Diego, Ca 92101
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code: (619) 515-0811
216 East 45th Street, New York, New York 10017
_____________________________________________________________________________
(Former name, former address and former fiscal year, if changed from
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 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 November 14, 1997 there were outstanding 5,182,225 shares of Common
Stock, $.01 par value.
<PAGE>
INDEX
Page
Part I. Financial Information
Item 1. Financial Statements
Condensed Consolidated Balance Sheets 1
Condensed Consolidated Statements of Operations 2
Condensed Consolidated Statements of Cash Flows 3
Notes to Condensed Consolidated Financial Statements 4
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
Part II. Other information 10
Signatures 11
<PAGE>
<TABLE>
<CAPTION>
ESQUIRE COMMUNICATIONS LTD.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands, Except Share Data)
September 30, December 31,
1997 1996 (1)
============= =============
(Unaudited)
ASSETS
Current Assets:
<S> <C> <C>
Cash $251 $165
Accounts receivable, less allowance
for doubtful accounts 9,604 6,764
Prepaid expenses and other current assets 1,497 894
---------- ----------
Total current assets 11,352 7,823
Property and equipment, net 2,452 1,946
Other assets:
Costs in excess of fair value of net identifiable
assets of acquired businesses, net 48,493 19,681
Other assets, net 1,551 885
----------- ------------
50,044 20,566
Total assets $63,848 $30,335
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable $2,053 $1,708
Accrued expenses and other current liabilities 4,190 1,307
Current portion of long-term debt 1,681 1,394
---------- -----------
Total current liabilities 7,924 4,409
Long-term debt 33,888 12,891
Other liabilities 356 267
Stockholder's equity:
Preferred stock, $.01 par value, 1,000,000 shares
authorized in series:
Series A convertible preferred stock,
authorized 22,500 and 15,000 shares,
15,000 and 7,500 shares issued and
outstanding, aggregate liquidation
preference $15,000,000 and $7,500,000 in
1997 and 1996, respectively - -
Common stock, $.01 par value, 25,000,000 authorized,
5,365,725 and 4,330,829 shares issued, respectively,
5,182,225 and 3,897,329 shares
outstanding in 1997 and 1996 respectively 55 43
Additional paid-in capital 25,313 14,911
Treasury stock, at cost -183,500 and 433,500 shares
in 1997 and 1996, respectively (550) (1,300)
Note receivable (781) -
Accumulated deficit (2,357) (886)
---------- ----------
Total stockholders' equity 21,680 12,768
---------- ----------
Total liabilities and stockholders' equity $63,848 $30,335
=========== ===========
(1) The balance sheet at December 31, 1996 is derived from audited
financial statements at that date.
See notes to condensed consolidated financial statements.
</TABLE>
<TABLE>
<CAPTION>
ESQUIRE COMMUNICATIONS LTD.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
UNAUDITED
(Dollars in Thousands, Except Share Data)
For the Three Months Ended For the Nine Months Ended
September 30, September 30, September 30, September 30,
1997 1996 1997 1996
============ ============= ============= =============
<S> <C> <C> <C> <C>
Revenues $12,431 $5,645 $31,385 $17,391
Costs and expenses:
Operating expenses 6,655 3,244 17,708 9,778
General and administrative expenses 4,402 1,949 11,759 5,769
Depreciation and amortization 801 292 1,784 811
---------- --------- -------- --------
11,858 5,485 31,251 16,358
Income from operations 573 160 134 1,033
Other income (expense):
Interest expense (774) (286) (1,667) (824)
Interest income 15 1 26 4
Other income 0 2 0 2
----------- ----------- --------- ---------
(759) (283) (1,641) (818)
(Loss) income before provision
for income taxes (186) (123) (1,507) 215
Income Taxes - Provision (benefit) (10) 12 (434) 281
------------ ------------ ----------- --------
Net (loss) income (176) (135) (1,073) (66)
Dividends on preferred stock (159) 0 (398) 0
------------ ----------- ----------- --------
Net (loss) income applicable to
common stockholders ($335) ($135) ($1,471) ($66)
=========== ============ =========== ===========
(Loss) earnings per common share:
Net (loss) income ($0.06) $0.03 ($0.33) $0.02
============ ============== ============== ============
Weighted average common
shares outstanding 5,182,225 4,126,823 4,510,291 4,126,823
============ ============== ============= ============
See notes to condensed consolidated financial statements.
</TABLE>
<TABLE>
<CAPTION>
ESQUIRE COMMUNICATIONS LTD.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
UNAUDITED
(Dollars in Thousands)
For the Nine Months Ended
September 30 September 30
1997 1996
============ ============
Cash flows from operating activities:
<S> <C> <C>
Net (loss) income ($1,471) ($66)
Adjustments to reconcile net (loss)
income to net cash
provided by operating activities:
Depreciation and amortization 1,784 811
Deferred income tax expense (benefit) 25 (56)
(Increase) decrease in assets:
Accounts receivable (205) (324)
Prepaid expenses and other current assets (406) 27
Increase (decrease) in liabilities:
Accounts payable and accrued expenses 1,456 146
Other long-term liabilities (32) 65
----------- ---------
Net cash provided by operating activities 1,151 603
----------- ----------
Cash flows from investing activities:
Purchase of property and equipment (465) (747)
Increase in other assets (322) (477)
Acquisition of businesses (25,981) (291)
------------ ----------
Net cash used in investing activities (26,768) (1,515)
------------ ----------
Cash flows from financing activities:
Borrowing under line of credit net 19,947 1,864
Principal payments on long-term debt (1,169) (1,025)
Proceeds from private placement of stock net 7100
Warrant exchange related cost (175)
------------ ----------
Net cash provided by financing activities 25,703 839
------------ ----------
Net increase (decrease) in cash 86 (73)
Cash - beginning of period 165 95
Cash - end of period $251 $22
============ ============
Supplemental information:
Approximate interest paid during the period $1,653 $839
============ ============
Approximate income taxes paid during the period $52 $696
============ ============
Approximate preferred stock dividends
accrued and unpaid $398 -
============ ============
The Company incurred capital lease obligations of approximately
$176,000 during the nine month period ended September 30 1996.
See notes to condensed consolidated financial statements.
</TABLE>
ESQUIRE COMMUNICATIONS LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
September 30, 1997.
NOTE A--BASIS OF PRESENTATION
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-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 management, all adjustments
(consisting of normal recurring accruals) considered necessary for fair
presentation have been included. The results of operations for the interim
periods are not necessarily indicative of the results that may be attained for
an entire year. For further information, refer to the Financial Statements and
footnotes thereto in the Company's annual report on Form 10-KSB for the fiscal
year ended December 31, 1996.
The condensed consolidated financial statements include the accounts
of the Company and its subsidiaries. All significant intercompany accounts and
transactions have been eliminated.
NOTE B--EARNINGS PER COMMON SHARE
Earnings per common share are computed on the basis of weighted
average number of shares outstanding. No effect has been given to outstanding
warrants and options since their assumed exercise would be antidilutive.
NOTE C--RECENT ACCOUNTING PRONOUNCEMENTS
FASB Statement No.128 "Earnings Per Share"
In February 1997, the Financial Accounting Standards Board (FASB)
issued Statement of Financial Accounting Standards No. 128, "Earnings Per Share"
(Statement 128). Statement 128 supersedes APB Opinion No. 15, "Earnings Per
Share", and specifies the computation, presentation, and disclosure requirements
for earnings per share (EPS) for entities with publicly held common stock or
potential common stock. Statement 128 replaces Primary EPS and Fully Diluted EPS
with Basic EPS and Diluted EPS, respectively. Statement 128 also requires dual
presentation of Basic and Diluted EPS on the face of the income statement for
entities with complex capital structures and reconciliation of the information
utilized to calculate Basic EPS to that used to calculate Diluted EPS.
Statement 128 is effective for financial statements periods ending
after December 15, 1997. Earlier application is not permitted. After adoption,
all prior period EPS is required to be restated to conform to the Statement 128.
The Company expects that the adoption of Statement 128 would not have resulted
in Basic EPS being different from Primary EPS.
FASB Statement No. 129 "Disclosure of Information about Capital
Structure"
Statement of Financial Accounting Standards No.129, "Disclosure of
Information about Capital Structure" (Statement 129) was issued in February
1997. Statement 129 is effective for periods ending after December 15, 1997.
Statement 129 lists required disclosures about capital structure that had been
included in a number of separate statements and opinions of authoritative
accounting literature. As such, the adoption of Statement 129 is not expected to
have a significant impact on the disclosures in financial statements of the
Company.
<PAGE>
ESQUIRE COMMUNICATIONS LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
September 30, 1997
FASB Statement No. 130 "Reporting Comprehensive Income"
In June 1997, the FASB issued Statement of Financial Accounting
Standards No. 130, "Reporting Comprehensive Income" (SFAS 130). SFAS 130
establishes standards for reporting and display of comprehensive income and its
components in a full set of general purpose financial statements. Under SFAS
130, comprehensive income is divided into net income and other comprehensive
income. Other comprehensive income includes items previously recorded directly
in equity. SFAS 130 is effective for interim and annual periods beginning after
December 15, 1997. Comparative financial statements provided for earlier periods
are required to be reclassified to reflect application of the provisions of the
Statement.
FASB Statement No. 131 "Disclosures about Segments of an Enterprise
and Related Information"
In June 1997, the FASB issued Statement of Financial Accounting
Standards No. 131, "Disclosures about Segments of an Enterprise and Related
Information" (SFAS 131). SFAS 131 establishes standards for the way public
business enterprises are to report information about operating segments in
annual financial statements and requires those enterprises to report selected
financial information about operating segments in interim financial reports to
shareholders. SFAS 131 is effective for financial statements for periods
beginning after December 15, 1997.
NOTE D-- BUSINESS COMBINATIONS
On January 3, 1997, the Company acquired the assets and liabilities of
Nevill & Swinehart and Pelletier & Jones, both Southern California-based court
reporting companies, and entered into consulting and non competition agreements
for an aggregate consideration of $2,710,000 consisting of cash in the amount of
$1,550,000, subordinated promissory notes and installment payments in the
aggregate amount of $885,000 payable in equal quarterly installments over a
period of six years and 100,000 unregistered shares of the Company's common
stock valued at $275,000. The business combinations are accounted for under the
purchase method of accounting, and accordingly, the results of the acquisitions
have been included from the date of acquisition. The excess cost over the fair
value of acquired assets and liabilities assumed approximated $2,050,000 and
other intangible assets of approximately $375,000 were recognized. The Company
borrowed approximately $1,500,000 under its revolving credit agreement to
finance the acquisitions.
On May 28,1997, the Company acquired the assets and liabilities of
Wolfe, Rosenberg & Associates, Inc. (WRA), a court reporting agency based in
Chicago, Illinois. The acquisition, accounted for under the purchase method of
accounting, resulted in the inclusion of the results of operations of WRA from
the date of acquisition. The purchase price, inclusive of associated costs,
approximated $6,069,000, paid in cash. The purchase price is subject to revision
based upon the revenue derived from WRA's business for 24 months commencing June
1997. The Company will account for any such revisions as an adjustment to
goodwill, when such contingencies are resolved. The excess of the cost of the
Company's investment over the fair values of the assets acquired and liabilities
assumed approximated $6,207,000.
On June 13, 1997, the Company acquired the assets and liabilities of
Krauss, Katz & Ackerman, Inc. (KKA), a court reporting agency based in
Philadelphia, Pennsylvania. The acquisition, accounted for under the purchase
method of accounting, resulted in the inclusion of the results of operations of
KKA from the date of acquisition. The purchase price, inclusive of
<PAGE>
ESQUIRE COMMUNICATIONS LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
September 30, 1997
associated costs, consisted of approximately $9,404,000 in cash. The
purchase price is subject to an increase based upon the revenue derived from
KKA's business for the 36 months ending December 31, 1999. The increase is
payable in unregistered shares of the Company's common stock, up to a maximum of
300,000 shares. The Company will account for any such revisions as an adjustment
to goodwill, when such contingencies are resolved. The excess of the cost of the
Company's investment over the fair values of the assets acquired and liabilities
assumed approximated $9,059,000.
On June 18, 1997, the Company acquired the assets and liabilities of
American Network Services, Inc. (DepoNet), a court reporting referral network,
based in Atlanta, Georgia. The acquisition, accounted for under the purchase
method of accounting, resulted in the inclusion of the results of DepoNet's
operations from the date of acquisition. The purchase price, inclusive of
associated costs, consisted of approximately $6,633,000 in cash and 750,000
unregistered shares of the Company's common stock valued at $3,000,000. The
preliminary estimate of the excess of the cost of the Company's investment over
the fair values of the tangible assets acquired and liabilities assumed
approximated $10,000,000.
The cash portion of the WRA, KKA and DepoNet acquisitions was financed
by the proceeds from the sale of Series A convertible Preferred Stock (see Note
E) and from borrowings under its revolving loan agreement.
On September 5, 1997, the Company acquired the assets and liabilities
of Hyatt Court Reporting and Video, Inc. (Hyatt), a court reporting agency based
in Denver, Colorado. The acquisition, accounted for under the purchase method of
accounting, resulted in the inclusion of the results of Hyatt's operations from
the date of acquisition. The purchase price, inclusive of associated costs,
consisted of approximately $600,000 in cash and a promissory note of $100,000,
payable in equal quarterly installments over a period of two years. The excess
cost over the fair value of acquired assets and liabilities assumed approximated
$447,000, and other intangible assets of approximately $300,000 were recognized.
The Company borrowed approximately $600,000 under its revolving loan agreement
to finance the acquisition.
NOTE E-- STOCKHOLDERS' EQUITY
In April 1997, the Company entered into an agreement with an entity
(the "Manager") affiliated with two of its directors. In accordance with the
agreement, the Manager has agreed to provide the services of one of its officers
to serve as the Chief Executive Officer of the Company. Under the terms of the
agreement, 250,000 shares of the Company's common stock were issued out of its
Treasury Stock to the Manager. In connection with the issuance, the Company
received a note for $781,250 from the Manager. The note is secured by the common
stock issued that generally would vest ratably over four years.
On June 12, 1997 the Company completed an exchange offering pursuant
to which 924,481 warrants were exchanged for 184,896 common shares of the
Company. After the exchange, 513,019 warrants remain outstanding. The warrants
are exercisable until May 18, 1998 at an exercise price of $4.50 per share. The
exercise price and the number of shares of common stock issuable upon the
exercise of the warrants are subject to adjustment in certain circumstances, as
defined. The Company may call the warrants for redemption at a price of $.01 per
warrant, provided the sales price of the common stock has been at least 150% of
the then effective exercise price of the warrants over a specified period of
time. On September 12, 1997,
ESQUIRE COMMUNICATIONS LTD.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
September 30, 1997
the Company announced that it would redeem all of the foregoing warrants.
Costs of approximately $175,000 incurred in connection with the
exchange were charged against Stockholders' Equity.
Pursuant to an agreement (Agreement) dated October 23, 1996 with
certain investors, in June 1997 the Company sold 7,500 additional shares of
Series A convertible preferred stock (the Preferred Stock) for an aggregate
sales price of $7,500,000 and amended the Agreement with the Preferred
Stockholders. The Preferred Stock is convertible to common stock of the Company
at a conversion price of $3.00 per share (subject to antidilution adjustments)
and bears cumulative annual dividends at the rate of 6% per annum. The holders
of Preferred Stock have liquidation preference of $1,000 per share, plus accrued
dividends. Pursuant to the amendment of the Agreement, Preferred Stockholders
will have the right from time to time, on or prior to December 17, 1998, to
acquire an additional 7,500 shares of Series A Convertible Preferred Stock at a
price of $1,000 per share, which shares shall have the same terms as the
existing Series A Convertible Preferred Stock.
In connection with the acquisition of DepoNet in June 1997, the
Company issued 750,000 shares of common stock at a recorded share price of
$4.00.
NOTE F--OTHER MATTERS
In May 1997, the Company entered into an agreement (the "Buyout
Agreement") with one of its officers pursuant to which the Company terminated
the officer's employment and the related employment agreement. The cost of the
buyout including associated cost was approximately $1.0 million on a pre-tax
basis and was charged to operations in the fiscal quarter ended June 30, 1997.
NOTE G - SUBSEQUENT EVENTS
Subsequent to September 30, 1997, the Company has acquired
substantially all of the assets of five court reporting firms in Fort
Lauderdale, Florida, consisting of Associates/Certified Reporting, County
Reporting, Justice Reporting, Lauderdale Reporting and Merit Reporting, with an
aggregate purchase price of approximately $4,050,000. The Company also acquired
substantially all of the assets of Haynes & Harpster Court Reporters, a southern
California court reporting firm, and Cynthia Varelli, a Chicago, Illinois court
reporting firm, and Kim Tindall & Associates, a San Antonio, Texas court
reporting firm, with an aggregate purchase price of approximately $3,987,000.
The Company acquired the common stock of Jurist-Begley Reporting Services, Inc.,
Jurist, Inc., and Aarons & Associates, Inc., Philadelphia, Pennsylvania based
court reporting firms, for an aggregate purchase price of approximately
$6,195,000.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The Company acquired the assets of Kitlas, Dickman & Associates
("KDA") in July 1996, M&M Reporting Referral Services, Inc. (" M&M" ) in October
1996 and Sherry Roe and Associates, Inc. ("SRA") in November 1996 collectively
referred to as 1996 Acquisitions. The Company acquired the assets of Nevill &
Swinehart and Pelletier & Jones in January of 1997, of Wolfe, Rosenberg &
Associates in May 1997, Krauss, Katz & Ackerman and American Network Services in
June 1997, and Hyatt in September 1997, collectively referred to as 1997
Acquisitions.
Results of Operations
Comparison of the three and nine months ended September 30, 1997 and 1996
Revenues increased for the three and nine month periods ended
September 30,1997 by $6.8 million or 120.2% and $14.0 million or 80.5%,
respectively, over the same periods of the prior year. Excluding revenues from
the 1996 and 1997 Acquisitions, the revenues increased by approximately 5.4% and
6.6% respectively. The Company believes that the increase in revenues was due to
its marketing efforts and partly due to several large multi-party projects
undertaken in 1997.
Operating expenses increased by $3.5 and $8.0 million, from $3.2 and
$9.8 million in 1996 to $6.7 and $17.8 million in 1997 for the three and nine
month periods, respectively. As a percentage of revenues, operating expenses
were 53.5% and 56.4% for the three and nine month periods, compared to 57.5% and
56.2% for the same periods of the prior year. The decrease in the operating
expenses as a percentage of revenues for the three months ended September 30 is
in part due to a greater share of revenues generated in geographic areas with a
higher profit margin in 1997.
General and administrative expenses for the three and nine month
periods ended September 30, 1997 include approximately $1,300,000 primarily
relating to an officer's termination agreement (see Note F) and termination
expenses relating to certain marketing activities. The comparable prior year
periods include $150,000 relating to a sublease loss. Excluding these items,
general and administrative expense increased by $2,453,000 and $4,815,000 for
the three and nine month periods as compared to the prior year. The increases
were largely due to expenses related to the 1996 and 1997 Acquisitions
consisting of payroll and occupancy expenses, as well as increased sales
compensation, marketing and promotional expenses and administrative support
expenses due to increased revenue levels. Excluding the special expenses
described above, general and administrative expense as a percentage of revenue
increased from 34.5% to 35.4% and from 32.3% to 33.2% for three and nine month
periods ended September 30, 1997.
Depreciation and amortization increased by $509,000 and $973,000 for
the three and nine month periods ended September 30, 1997 as compared to the
prior year periods. This increase is due to additional amortization charges
arising from the 1996 and 1997 Acquisitions and due to additional depreciation
arising from the capital expenditures for the Company's new office space for its
New York operations.
Interest expense increased by $488,000 and $843,000 for the three and
nine month periods ended September 30, 1997 due to the incurrence of additional
debt to finance acquisitions and fund working capital.
Liquidity and Capital Resources
At September 30, 1997, the Company's working capital was approximately
$3.4 million, without any material increase from the levels at December 31,
1996. The increase in the Company's accounts receivable was offset by increases
in accounts payable and accruals. The increase in the Company's accounts
receivable was due to 1996 and 1997 Acquisitions and increased revenue levels.
The increase in accounts payable and accruals was due to the 1996 and 1997
Acquisitions and certain expenses accrued in connection with an officer's
termination agreement (see Note F).
In December 1996, the Company entered into a three-year revolving loan
agreement (" Loan Agreement") with a financial institution which, as amended in
June and September 1997, provides for borrowings up to $45.0 million based on
operating cash flows as defined therein. Borrowings under the Loan Agreement
bear interest at either prime rate or London Interbank Offered Rate (LIBOR), at
the Company's election, plus the applicable margin rate. The applicable margin
varies on the basis of operating cash flows and the overall leverage ratio as
defined in the Loan Agreement. The effective rate at September 30, 1997 was
9.2%. The Loan Agreement, which is secured by substantially all the assets of
the Company, restricts future indebtedness, investments, distributions,
acquisitions or sale of assets and capital expenditures and also requires
maintenance of certain financial ratios and covenants. The aggregate borrowings
at September 30, 1997 were $28.1 million.
The capital expenditures for 1997, excluding any business acquisition,
are expected to range between $575,000 and $625,000. The Company believes that
the cash flows from its operations supplemented, if needed, by additional
borrowing capacity from the Loan Agreement or other financing resources will be
sufficient to support the working capital and capital expenditure requirements
through at least the end of 1998.
<PAGE>
PART II.
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits-- None
(b) Reports on Form 8-K -- None
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
November 14, 1997
By:/s/ David A. White
David A. White
Chief Executive Officer
By:/s/ David A. Higson
David A. Higson
Senior Vice President,
Chief Financial Officer
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
ART. 5 FDS FOR 3RD QUARTER 10-QSB
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 251
<SECURITIES> 0
<RECEIVABLES> 10,339
<ALLOWANCES> 735
<INVENTORY> 0
<CURRENT-ASSETS> 11,352
<PP&E> 4,399
<DEPRECIATION> 1,947
<TOTAL-ASSETS> 63,848
<CURRENT-LIABILITIES> 7,924
<BONDS> 33,888
0
0
<COMMON> 55
<OTHER-SE> 21,625
<TOTAL-LIABILITY-AND-EQUITY> 63,848
<SALES> 0
<TOTAL-REVENUES> 31,385
<CGS> 0
<TOTAL-COSTS> 17,708
<OTHER-EXPENSES> 11,759
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,667
<INCOME-PRETAX> (1,507)
<INCOME-TAX> (434)
<INCOME-CONTINUING> (1,471)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,471)
<EPS-PRIMARY> (0.33)
<EPS-DILUTED> (0.33)
</TABLE>
