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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
(Mark one)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended February 20, 1994
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period to
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Commission file number 0-4377
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SHONEY'S, INC.
(Exact name of registrant as specified in its charter)
Tennessee 62-0799798
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1727 Elm Hill Pike, Nashville, TN 37210
(Address of principal executive (Zip Code)
offices)
Registrants telephone number, including area code (615)391-5201
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes X No
------ ----
As of April 1, 1994, there were 41,093,972 shares of
Shoney's, Inc. $1 par value common stock outstanding.
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PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
SHONEY'S, INC. AND SUBSIDIARIES
Consolidated Condensed Balance Sheet
(Unaudited)
<TABLE>
<CAPTION>
February 20, October 31,
1994 1993
--------------- -------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 9,173,794 $ 7,841,426
Notes and accounts receivable, less allowance for doubtful
accounts of $2,913,000 in 1994 and $2,061,000 in 1993 27,705,717 24,857,375
Inventories 47,805,437 52,795,971
Deferred income taxes and other current assets 26,345,969 21,633,965
------------ ------------
Total current assets 111,030,917 107,128,737
Property, plant and equipment, at cost 702,506,531 684,218,089
Less accumulated depreciation and amortization (289,137,974) (280,421,156)
------------ ------------
Net property, plant and equipment 413,368,557 403,796,933
Other assets:
Deferred charges and other intangible assets 7,370,581 7,950,725
Other assets 8,337,931 9,215,940
------------ ------------
Total other assets 15,708,512 17,166,665
------------ ------------
$ 540,107,986 $ 528,092,335
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Accounts payable $ 28,821,322 $ 36,636,478
Federal and state income taxes 3,076,850 2,303,533
Other accrued liabilities 65,200,535 68,979,196
Reserve for litigation settlement 24,777,398 25,713,422
Debt and capital lease obligations due within one year 116,599,675 111,401,224
------------ ------------
Total current liabilities 238,475,780 245,033,853
Senior debt-recapitalization 60,000,000 60,000,000
Other long-term senior debt and capital lease obligations 110,827,023 111,251,814
Subordinated debentures 144,255,701 144,187,529
Zero coupon subordinated convertible debentures 76,551,251 74,614,987
Reserve for litigation settlement 80,386,339 86,413,339
Deferred credits:
Income taxes 7,612,158 9,424,823
Income and other liabilities 8,055,619 7,153,808
Shareholders' equity (deficit):
Common stock, $1 par value: authorized 100,000,000 shares;
issued 41,048,262 in 1994 and 40,724,536 in 1993 41,048,262 40,724,536
Additional paid-in capital 55,707,384 50,771,605
Retained earnings (deficit) (282,811,531) (301,483,959)
------------ ------------
Total shareholders' equity (deficit) (186,055,885) (209,987,818)
------------ ------------
$ 540,107,986 $ 528,092,335
============ ============
</TABLE>
See notes to consolidated condensed financial statements.
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<PAGE>
SHONEY'S, INC. AND SUBSIDIARIES
Consolidated Condensed Statement of Operations
(Unaudited)
<TABLE>
<CAPTION>
Sixteen Weeks Ended
February 20, February 14,
1994 1993
--------------- --------------
<S> <C> <C>
Revenues $ 339,219,955 $ 317,671,587
Costs and expenses
Cost of sales 283,339,621 265,351,654
General and administrative expenses 19,696,752 19,282,825
Interest expense 13,458,540 13,502,925
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Total costs and expenses 316,494,913 298,137,404
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Income before income taxes and
cumulative effect of change
in accounting principle 22,725,042 19,534,183
Provision for income taxes 8,521,000 7,423,000
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Net income before cumulative effect of
change in accounting principle 14,204,042 12,111,183
Cumulative effect of change
in accounting for income taxes 4,468,386
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Net income $ 18,672,428 $ 12,111,183
=========== ===========
Earnings per common share
Primary:
Income before cumulative effect of
change in accounting principle $ 0.34 $ 0.30
Cumulative effect of change in
accounting for income taxes 0.11
---- ----
Net income $ 0.45 $ 0.30
==== ====
Fully diluted:
Income before cumulative effect of
change in accounting principle $ 0.33 $ 0.29
Cumulative effect of change in
accounting for income taxes 0.10
---- ----
Net income $ 0.43 $ 0.29
==== ====
Weighted average shares outstanding
Primary 41,287,317 40,176,719
Fully diluted 46,526,938 45,435,597
Common shares outstanding 41,048,262 39,605,143
Dividends per share NONE NONE
</TABLE>
See notes to consolidated condensed financial statements.
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<PAGE>
SHONEY'S, INC. AND SUBSIDIARIES
Consolidated Condensed Statement of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
Sixteen Weeks Ended
February 20, February 14,
1994 1993
-------------- -------------
<S> <C> <C>
Operating activities
Net income $ 18,672,428 $ 12,111,183
Adjustments to reconcile net
income to net cash provided by
operating activities:
Depreciation and amortization 13,423,398 12,256,135
Amortization of deferred charges
and other noncash charges 3,540,044 2,781,342
Gain on marketable securities
and sale of other assets (2,781,051)
Cumulative effect of change in
accounting for income taxes (4,468,386)
Change in deferred income taxes 1,704,200 906,000
Changes in operating assets
and liabilities (1,169,700) (8,453,448)
------------ -----------
Net cash provided by
operating activities 28,920,933 19,601,212
Investing activities
Cash required for property,
plant and equipment (28,784,981) (22,962,435)
Proceeds from disposal of
property, plant and equipment 1,549,667 970,707
Cash (required for) derived from
other assets (6,622) 3,078,645
------------ ------------
Net cash used by investing activities (27,241,936) (18,913,083)
Financing activities
Payments on long-term debt and
capital lease obligations (586,340) (1,087,303)
Net proceeds from (payments on)
short-term borrowings 5,360,000 (89,000)
Payments on litigation settlement (6,963,024) (1,107,942)
Cash required for deferred charges (345,198) (338,606)
Proceeds from exercise of employee
stock options 2,187,933 5,310,508
----------- -----------
Net cash (used by) provided by
financing activities (346,629) 2,687,657
----------- -----------
Increase in cash $ 1,332,368 $ 3,375,786
=========== ===========
</TABLE>
See notes to consolidated condensed financial statements.
-4-
<PAGE>
SHONEY'S, INC. AND SUBSIDIARIES
Notes to Consolidated Condensed Financial Statements
February 20, 1994
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited Consolidated Condensed Financial
Statements have been prepared in accordance with generally accepted
accounting principles for interim financial information and the
instructions to Form 10-Q. As a result, they do not include all of
the information and footnotes required by generally accepted
accounting principles for complete financial statements.
The Company, in management's opinion, has included all adjustments
(consisting of normal recurring accruals) necessary for a fair
presentation of the results of operations. Certain
reclassifications have been made in the Consolidated Condensed
Financial Statements to conform to the 1994 presentation.
Operating results for the sixteen week period ended February 20,
1994 are not necessarily indicative of the results that may be
expected for all or any balance of the fiscal year ending October
30, 1994.
NOTE 2 - CHANGES IN ACCOUNTING POLICIES
Effective November 1, 1993, the Company adopted FASB Statement No.
109 "Accounting for Income Taxes" through a cumulative effect
adjustment resulting in an increase to net income of approximately
$4.5 million or $.10 per share. Statement No. 109 changes the
Company's method of accounting for income taxes from the deferred
method to the liability method. The liability method requires the
recognition of deferred income tax liabilities and assets for the
expected future tax consequences of temporary differences between
the tax bases and financial reporting bases of assets and
liabilities (See Note 4).
Effective November 1, 1993, the Company also adopted FASB Statement
No. 115, "Accounting for Certain Investments in Debt and Equity
Securities". This Statement requires that debt and equity
securities be carried at fair value unless the Company has the
positive intent and ability to hold debt securities to maturity.
Debt and equity securities must be classified into one of three
categories: 1) held-to maturity, 2) available-for-sale or 3) trading
securities. Each category has different accounting treatment for
the change in fair values. There was no cumulative effect from the
adoption of Statement No. 115, since at the time of adoption, the
Company held no investments in debt or equity securities.
NOTE 3 - EARNINGS PER SHARE
Earnings per share have been computed using the weighted average
number of shares of common stock and common stock equivalents
outstanding during each period presented. Common stock equivalents
include all dilutive outstanding stock options. Fully diluted
earnings per share also includes the assumed conversion of the zero
coupon subordinated convertible debentures. Earnings per share for
1993 considers the 2,694,444 shares held in escrow at October 25,
1992 as retired effective with the provisional court approval of a
consent decree settling certain litigation on November 3, 1992 (See
Note 7).
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<PAGE>
NOTE 4 - INCOME TAXES
Income taxes for the sixteen week period ended February 20, 1994
and February 14, 1993 were provided based on the Company's estimate
of its effective tax rates (37.5% and 38.0%, respectively,) for the
entire respective fiscal years. The Company's estimate of its
effective tax rate for the 1994 fiscal year decreased from 1993 due
primarily to the reinstatement of the Targeted Jobs Tax Credit in
August 1993 and the effects of the new tax credit on FICA tips.
The statutory federal income tax rate was 35% and 34.8% for the
sixteen week periods ended February 20, 1994 and February 14, 1993,
respectively.
Effective November 1, 1993, the Company changed its method of
accounting for income taxes from the deferred method to the
liability method as required by FASB Statement No. 109, "Accounting
for Income Taxes" (See Note 2). As permitted under the new rules,
prior years' financial statements have not been restated. The
cumulative effect of adoption of the Statement increased deferred
tax assets and net income by $4.5 million or $.10 per common share.
This amount is reflected in the first quarter of 1994 as the effect
of a change in accounting for income taxes.
Deferred income taxes reflect the net tax effects of temporary
differences between the carrying amounts of assets and liabilities
for financial reporting purposes and the amounts used for income
tax purposes. Significant components of the Company's deferred tax
assets and liabilities as of November 1, 1993 are as follows:
Deferred tax assets:
Reserve for lawsuit settlement $ 40,338,486
Reserves for self insurance 7,325,098
Other - net 4,949,912
----------
Deferred tax assets - net 52,613,496
----------
Deferred tax liabilities:
Tax over book depreciation 18,341,848
Capital contribution 22,501,840
Other - net 149,268
----------
Deferred tax liability 40,992,956
----------
Net deferred tax asset $ 11,620,540
==========
No valuation allowance is considered necessary, as management
believes that the deferred tax assets will ultimately be realized.
NOTE 5 - SENIOR DEBT
The senior debt-recapitalization of $160 million ($100 million due
in one year) is due in varying installments to April 1995 and is
collateralized by certain land and buildings. As of February 20,
1994, this indebtedness had a fixed rate of interest (9.78%) to
maturity in April 1995. The Company has interest rate swap
agreements, which expire at varying dates to April 1995, which
effectively convert the interest rate on this indebtedness to 6.0%.
-6-
<PAGE>
On July 21, 1993, the Company entered into a $125 million Reducing
Revolving Credit Facility with a syndicate of financial
institutions. All material assets of the Company not otherwise
pledged (including all common shares of a wholly-owned real estate
company which owns 107 of the Company's restaurant properties) have
been pledged as collateral for the facility. The facility has a
four year, three month term expiring October 22, 1997, with
reductions in the aggregate credit facility beginning in 1995. The
Company had borrowed $15 million under this facility as of February
20, 1994. The interest rate for this facility is at floating rates
(the London Interbank Offered Rate plus 2%) and was 5.2% at
February 20, 1994.
The Company's subordinated debentures bear interest at 12%, are due
in July 2000 and are redeemable, at the option of the Company, at
par on July 1, 1994. The Company intends to call these debentures
in the second quarter and plans to refinance this obligation with
additional senior bank debt.
The Company's senior debt requires satisfaction of certain
financial ratios and tests; imposes limitations on capital
expenditures; limits the ability to incur additional debt,
leasehold obligations and contingent liabilities; prohibits
dividends and distributions on common stock; prohibits mergers,
consolidations or similar transactions; and includes other
affirmative and negative covenants.
NOTE 6 - RESERVE FOR LITIGATION SETTLEMENT
On January 25, 1993, the Company received final court approval of
a settlement of a three and one-half year old class action race
discrimination lawsuit against the Company and its former senior
chairman. Under the terms of the settlement, the Company has
agreed to pay $105 million in claims. In addition, the Company
agreed to pay $25.5 million in plaintiffs' attorneys fees and an
estimated $4 million in applicable payroll taxes and
administrative costs. Under the terms of the consent decree,
payments are made quarterly and substantially all payments will be
completed by March 1, 1998.
NOTE 7 - SHAREHOLDERS' EQUITY (DEFICIT)
On February 26, 1993, the Company received a capital contribution
of 2,694,444 shares of the Company's common stock. The Company had
recorded the net effect of the shares, which were held in escrow
pending final court approval of the litigation settlement (see Note
6), at October 25, 1992 in shareholders' equity. The Company
recorded the effect (net of estimated income taxes) of the
contribution and subsequent retirement of these shares in
shareholders' equity during the first quarter of 1993.
NOTE 8 - LEGAL PROCEEDINGS
The Company is a party to legal proceedings incidental to its
business. In the opinion of management, the ultimate liability
with respect to these actions will not materially affect the
operating results or the financial position of the Company.
NOTE 9 - SALE OF MOTEL JOINT VENTURES
Effective February 16, 1994, the Company sold its minority
ownership interests in four Shoney's Inns to ShoLodge, Inc.
("ShoLodge") in exchange for 90,909 common shares of ShoLodge. The
shares received were recorded at their fair value on the date of
the transaction of approximately $2.4 million
-7-
<PAGE>
resulting in a gain of $1.7 million in the quarter ended
February 20, 1994. The ShoLodge common shares were classified
as trading securities under FASB Statement No. 115, "Accounting
for Certain Investments in Debt and Equity Securities"
(See Note 2). The change in fair value of the ShoLodge common
shares since the transaction is reflected in the results of
operations.
The Company also owns certain warrants to acquire ShoLodge common
stock which were obtained in the 1992 sale of the Company's lodging
division to ShoLodge. In connection with the sale of the Company's
minority motel interests described in the preceding paragraph, the
Company received future registration rights with respect to the
shares that may be acquired upon exercise of the warrants. Under
the provisions of FASB Statement No. 115, certain of these warrants
were classified as trading securities during the first quarter and
adjusted to their fair value resulting in a gain of approximately
$1 million which was reflected in results of operations in the
quarter ended February 20, 1994.
NOTE 10 - RESTATEMENT - CUMULATIVE EFFECT OF ACCOUNTING CHANGE
The Company's first quarter net income has been restated to reflect
a correction of the cumulative effect of adopting FASB Statement
No. 109, "Accounting for Income Taxes." In the first quarter the
Company had estimated the cumulative effect of adopting Statement
No. 109 to be an increase to income of $5.4 million or $.12 per
share (fully diluted), resulting in originally reported net income
for the quarter of $19.6 million or $.45 per share (fully diluted).
During the fourth quarter, the Company reassessed the cumulative
effect and found that it had been overstated by approximately $.9
million or $.02 per share (fully diluted). Accordingly, the first
quarter results have been restated to reflect the revised
cumulative effect from the change in accounting for income taxes of
$4.5 million or $.10 per share (fully diluted), resulting in net
income for the first quarter, as restated, of $18.7 million or $.43
per share (fully diluted).
-8-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis provides information
which management believes is relevant to an assessment and
understanding of the Company's consolidated results of operations
and financial condition. The discussion should be read in
conjunction with the consolidated condensed financial statements
and notes thereto. The first quarters of fiscal 1994 and 1993
covered periods of sixteen weeks.
Revenues for the first quarter of 1994 increased 7% ($21.5
million) to $339.2 million as compared to the first quarter of
1993. An analysis of the increase in revenues is shown below.
<TABLE>
<CAPTION>
16 Weeks Ended Feb. 20, 1994
$ Millions %
------------ ----
<S> <C> <C>
Restaurant revenue $ 11.7 54
Manufacturing, distribution
and other sales 5.1 24
Franchise fees .6 3
Other income 4.1 19
---- ---
$ 21.5 100
==== ===
</TABLE>
The Company opened nine restaurants during the first quarter
of 1994, including six Shoney's and one each for Captain D's, Lee's
and Pargo's. During the quarter, the Company sold ten Captain D's
units to a franchisee and closed four other units. Franchisees
opened 35 units during the quarter (including the ten purchased
from the Company) and closed 28 units. Comparable store sales of
all company-owned restaurants increased 1.1% , which included a
menu price increase of 1.8%.
Other income increased $4.1 million in the first quarter of
1994 as compared with the first quarter of 1993 as the result of
several factors. The Company sold its minority ownership interests
in four Shoney's Inns to ShoLodge, Inc. ("ShoLodge"), the majority
owner. The sale resulted in a $1.7 million gain, which is included
in other income in the first quarter of 1994. In conjunction with
the sale, the Company also received future registration rights for
shares of ShoLodge stock that may be acquired by the Company upon
the exercise of certain warrants that it owns. Under the provisions
of FASB Statement No. 115, certain of these warrants were
classified as trading securities and adjusted to fair value
resulting in a gain of approximately $1 million which is included
in other income in the first quarter of 1994 (See Note 9--Sale of
Motel Joint Ventures). In addition, during the first quarter of
1994, the Company received $.9 million from the settlement of
certain class action litigation against RJR Nabisco, Inc. and
others. The litigation alleged failure to disclose certain material
information in connection with certain proposals concerning RJR
Nabisco, Inc. stock during 1988.
Manufacturing and commissary sales increased 7% or $4.7
million during the first quarter as compared to the first quarter
of 1993. When compared to restaurant sales, these sales have a
higher percentage of food costs and a lower percentage of operating
expenses. There is no restaurant labor associated with these sales.
-9-
<PAGE>
Cost of sales for the first quarter of 1994 increased $18.0
million over the same quarter in 1993 and was 83.5% of total revenues
in both periods. Food and supplies increased as a percentage of
revenue due principally to higher food costs at the restaurant level
which resulted from the introduction of a new menu in the Shoney's
Division early in the quarter and the increased cost of whitefish and
other food products in the Captain D's Division. Restaurant labor
declined as a percentage of restaurant revenues. Operating expenses
increased as a percentage of restaurant revenues primarily due to
higher workers' compensation insurance costs.
General and administrative expenses decreased as a percentage
of revenues from 6.1% in the first quarter of 1993 to 5.8% in the
first quarter of 1994. This decline was primarily due to non-
recurring expense items included in 1993. These items included the
receipt of $3 million from certain insurance carriers relating to
the litigation (See Note 6--Reserve for Litigation Settlement),
which reduced net legal costs, and $3.2 million of employee
severance expenses resulting from the resignation or termination of
several individuals during the first quarter of 1993.
Interest expense for the first quarter of 1994 was marginally
lower as compared to the first quarter of 1993 since there were no
material changes in the Company's debt structure or interest rates.
The effective income tax rates for the first quarter of 1994
and 1993 were 37.5% and 38.0%, respectively. The decrease in the
effective tax rate for fiscal 1994 is primarily due to the
reinstatement of the Targeted Jobs Tax Credit in August 1993 and
the effects of the new tax credit on FICA tips. Effective November 1,
1993, the Company changed its method of accounting for income taxes
from the deferred method to the liability method required by FASB
Statement No. 109, "Accounting for Income Taxes" (See Note 2--Changes
in Accounting Policies). As permitted under the new rules, prior
years' financial statements have not been restated. The cumulative
effect of adoption of the new Statement was to increase deferred
tax assets and net income by $4.5 million or $.10 per common share.
Cash provided from operations increased $9.3 million to
$28.9 million for the first quarter of 1994 compared to $19.6
million for the first quarter of 1993. This increase was due
primarily to a reduction in cash required for operating assets and
liabilities, principally inventory. Cash used by investing
activities during the first quarter of 1994 increased by
approximately $5.8 million as compared to the first quarter of 1993
as the Company continued its new unit expansion, and expanded its
extensive remodeling program in 1994. In addition, the Company used
$3.4 million of restricted cash in 1993 to purchase certain
restaurants which reduced cash used by investing activities in the
first quarter of 1993 when compared to the first quarter of 1994.
Significant financing activities in the first quarter of 1994
included an increase in short-term borrowings under the Company's
unsecured lines of credit of $5.4 million, increased payments required
under the terms of the litigation settlement (See Note 6-- Reserve for
Litigation Settlement) of $5.8 million, and a reduction in proceeds
from the exercise of employee stock options. Cash provided from the
exercise of employee stock options decreased $3.1 million in the first
quarter of 1994 as compared to the first quarter of 1993. One factor
in this decrease was the exercise during the first quarter of 1993 of
a significant number of options granted during the Company's 1988
recapitalization. These options would have expired in July 1993.
At February 20, 1994, the Company had cash and cash
equivalents of approximately $9.2 million. The Company has unsecured
lines of credit totalling $30 million under which the Company had
borrowings of $13.4 million outstanding at February 20, 1994.
Additionally, the Company has a $125 million Reducing Revolving Credit
Facility under which it had borrowed $15 million at February 20, 1994.
-10-<PAGE>
The Company's 12% subordinated debentures, due July 2000, are
redeemable at par at the option of the Company, on July 1, 1994.
The Company intends to redeem these debentures at that time and to
refinance this obligation with additional senior bank debt.
Management expects this refinancing to reduce the annual effective
interest rate on this debt by approximately 5%. Unamortized
original issue discount and debt issue costs of approximately
$1,710,000 related to the debentures will be charged to expense if
the refinancing is completed as planned.
Capital expenditures for fiscal 1994 are expected to be
approximately $114 million. The Company expects to meet its needs
for debt service, capital expenditures (excluding those for land
and buildings which are expected to be met through mortgage
financing arrangements), the payments required by the settlement of
the class action litigation and general corporate purposes through
cash generated by the Company's operations and from the Company's
Reducing Revolving Credit Facility (See Note 5--Senior
Debt).
PART II- OTHER INFORMATION.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) In accordance with the provisions of Item 601 of
Regulation S-K, the following have been furnished as an Exhibit to
this Quarterly Report on Form 10-Q:
(11) Statement regarding computation of per share
earnings.
(b) No reports on Form 8-K have been filed during the
quarterly period covered by this Quarterly Report on Form 10-Q.
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 both on
behalf of the registrant and in his capacity as principal financial
officer of the registrant.
SHONEY'S, INC.
Date: January 30, 1995 By:/s/ W. Craig Barber
---------------------------
W. Craig Barber
Senior Executive Vice President
and Chief Financial Officer
(Principal Financial and
Chief Accounting Officer)
-11-
<PAGE>
STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE - EXHIBIT 11
<TABLE>
<CAPTION>
Sixteen Weeks Ended
February 20, February 14,
1994 1993
------------ ------------
<S> <C> <C>
Primary:
Average shares outstanding 40,856,711 39,184,004
Net effect of dilutive stock options
--based on the treasury stock method
using average market price 430,606 992,715
---------- ----------
Totals 41,287,317 40,176,719
========== ==========
Net income before cumulative effect of
change in accounting principle $ 14,204,042 $ 12,111,183
Cumulative effect of change in
accounting for income taxes 4,468,386
---------- ----------
Net income $ 18,672,428 $ 12,111,183
========== ==========
Earnings per share:
Income before cumulative effect
of change in accounting principle $ .34 $ .30
Cumulative effect of change
in accounting for income taxes .11
--- ---
Net income $ .45 $ .30
=== ===
Fully diluted:
Average shares outstanding 40,856,711 39,184,004
Net effect of dilutive stock options
--based on the treasury stock method
using the quarter-end market price,
if higher than average market price 446,464 1,026,699
Assumed conversion of 8.5% zero coupon
convertible debentures 5,223,763 5,224,894
---------- ----------
Totals 46,526,938 45,435,597
========== ==========
Net income before cumulative effect of
change in accounting principle $ 14,204,042 $ 12,111,183
Add 8.5% zero coupon convertible
debentures interest, net of income
taxes 1,213,687 1,108,591
---------- ----------
Total before cumulative effect of
change in accounting principle 15,417,729 13,219,774
Cumulative effect of change in
accounting for income taxes 4,468,386
---------- ----------
Net income $ 19,886,115 $ 13,219,774
========== ==========
Earnings per share:
Income before cumulative effect
of change in accounting principle $ .33 $ .29
Cumulative effect of change
in accounting for income taxes .10
--- ---
Net income $ .43 $ .29
=== ===
</TABLE>
