<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-QSB
(XX) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended March 31, 1998
-------------------------------
( ) TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from to
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Commission file number 1-12130
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GREAT PINES WATER COMPANY, INC.
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(Exact name of small business issuer as specified in its charter)
Texas 76-0203752
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
600 N. Shepherd, Suite #303 Houston, Texas 77007
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(Address of Principal executive offices) (Zip Code)
(Issuer's telephone Number) (713) 864-6688
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(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 12 months (or for
such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days.
YES X NO
--- ---
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required to
be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court. YES NO
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes
of common equity, as of the latest practicable date:
Class Outstanding as of March 31, 1998
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(Common stock, $.01 per value) 2,611,012 Shares
<PAGE>
PART I - FINANCIAL INFORMATION
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ITEM 1. FINANCIAL STATEMENTS
GREAT PINES WATER COMPANY, INC.
CONDENSED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
March 31, December 31,
1998 1997
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(Unaudited)
<S> <C> <C>
Assets
Current assets:
Cash $ 255 $ 342
Marketable securities 177 177
Accounts receivable - Trade (net) 826 942
Inventory 78 75
Prepaid expenses 43 39
Prepaid insurance 201 286
Other current assets 30 14
--------------------
Total current assets 1,610 1,875
Property and equipment, net 5,334 5,557
Other assets 45 47
--------------------
Total Assets $ 6,989 $ 7,479
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--------------------
Liabilities and Shareholders' Equity
Current liabilities:
Accounts payable, trade $ 354 $ 311
Customer deposits 926 1,088
Accrued liabilities and other current 290 286
Note payable 151 251
Current portion of capital lease 50 74
Current maturities of long term debt 977 1,008
--------------------
Total current liabilities 2,748 3,018
Long term debt, net of current portion 2,642 2,872
Capital lease obligations, net of current 0 0
Shareholders' equity:
Preferred stock, $1.00 par value;
1,000,000 shares authorized;
15,150 shares outstanding at March 31,
1998 and 14,050 shares outstanding at
December 31, 1997 (liquidation value of
$100 per share) 15 14
Common Stock, $.01 par value;
10,000,000 shares authorized; 2,611,012
shares and 2,607,654 shares outstanding
at March 31, 1998 and December 31, 1997,
respectively 26 26
Additional paid-in capital 5,076 4,967
Accumulated deficit (3,518) (3,418)
--------------------
Total shareholders' equity 1,599 1,589
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Total Liabilities and Shareholders' Equity $ 6,989 $ 7,479
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</TABLE>
The accompanying notes are an integral part of these financial statements.
1
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GREAT PINES WATER COMPANY, INC.
CONDENSED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
Three Months Ended March 31,
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1998 1997
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(Unaudited) (Unaudited)
<S> <C> <C>
Revenues:
Water $ 1,233 $1,142
Equipment rental 771 677
Other 39 38
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2,043 1,857
Cost and expenses:
Operating costs 385 369
Transportation costs 500 462
Depreciation and amortization 247 269
Commissions and other selling costs 325 320
General and administrative expenses 544 488
-----------------------
2,001 1,908
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Gain/(Loss) from operations 42 (51)
Other expense (income):
Interest expense 102 86
Interest income (1) 0
Other expense (income) 0 0
-----------------------
101 86
-----------------------
Gain/(Loss) before income taxes (59) (137)
Income tax expense (benefit) 0 0
-----------------------
Net Income (Loss) (59) (137)
Dividends on Preferred Stock 41 22
-----------------------
Income (Loss) attributable to Common Stock $ (100) $ (159)
-----------------------
-----------------------
Income (Loss) per common share $(0.04) $(0.06)
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Weighted average number of common shares 2,609 2,451
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</TABLE>
The accompanying notes are an integral part of these financial statements.
2
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GREAT PINES WATER COMPANY, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
<TABLE>
Three Months Ended March 31,
----------------------------
1998 1997
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Unaudited Unaudited
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<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ (59) $ (137)
Adjustments to reconcile net income (loss) to
net cash provided by (used in) operating
activities:
Depreciation and amortization 247 269
Loss on disposition of assets 0 0
Provision for lost coolers 4 4
Noncash charges 11 4
Deferred income tax expense (benefit) 0 0
Affect of net changes in operating accounts:
Accounts receivable, net 116 45
Inventory (3) (33)
Prepaid expenses 81 59
Other assets (16) (58)
Accounts payable 43 35
Customer deposits, accrued liabilities,
and other current liabilities (158) 98
------------------
Net cash provided by (used in) operating
activities 266 286
Cash flows from investing activities:
Additions to property and equipment (26) (23)
Proceeds from fixed asset retirements 0 0
------------------
Net cash used in investing
activities (26) (23)
Cash flows from financing activities:
Proceeds from note payable and long term
debt 0 0
Payments on note payable and long term debt (361) (255)
Payments on capital lease obligations (24) (25)
Proceeds from issuance of Common Stock, net 1 4
Proceeds from issuance of Preferred
Stock, net 98 0
Dividends on Preferred Stock (41) (22)
Sale (purchase) of treasury stock, net 0 0
------------------
Net cash used in financing (327) (298)
Increase (decrease) in cash and cash
equivalents (87) (35)
Cash and cash equivalents, beginning of
period 342 316
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Cash and cash equivalents, end of period $ 255 $ 281
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Supplemental cash flow information:
Interest paid $ 103 $ 86
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------------------
Equipment acquired in exchange for long-
term debt $ 0 $ 0
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Stock issued for services and settlements
of lawsuits $ 11 $ 4
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</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
GREAT PINES WATER COMPANY, INC.
NOTES TO THE FINANCIAL STATEMENTS
MARCH 31, 1998
NOTE A - BASIS OF PRESENTATION
Great Pines Water Company, Inc. (the "Company") was incorporated in November
1986 and is engaged in the bottling, distributing and sale of bottled
drinking, purified, and spring water and rental of related dispensing
equipment under the "Texas Premium Waters" proprietary brand name.
The accompanying unaudited condensed 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 rule 10-01
of Regulation S-X. They do not include all information and notes required by
Generally Accepted Accounting Principles for complete financial statements.
The accompanying financial statements include all adjustments which in the
opinion of management are necessary in order to make the financial statements
not be misleading.
The accompanying condensed financial statements should be read in conjunction
with the Audited Financial Statements for the Year Ended December 31, 1997
and the notes thereto contained in the Company's Annual Report on Form 10-KSB
for the fiscal year ended December 31, 1997.
The results of operations for the three month period ended March 31, 1998,
are not necessarily indicative of the results to be expected for the full
year.
NOTE B - STOCK OPTION PLANS
The Company's Option Plan ("Option Plan") was adopted in 1993. An aggregate
of 225,000 shares of common stock were reserved for issuance pursuant to the
Option Plan. The Option Plan is administered by the Board of Directors or a
stock option committee established by the Board of Directors (the "Plan
Administrator"). The Plan Administrator determines, subject to the
provisions of the Option Plan, the employees to whom options are granted and
the number of options to be granted. The Plan Administrator may grant (i)
"incentive stock options" within the meaning of Section 422 of the Internal
Revenue Code of 1986, and (ii) "non-qualified stock options" (options which
do not meet the requirements of Section 422). Incentive stock options
granted under the Option Plan must have an exercise price equal to at least
the fair market value of the common stock at the date the option is granted.
Each option granted under the Option Plan may have a term of up to ten years,
except that incentive stock options granted to a shareholder who, at the time
of grant, owns more than 10% of the voting stock of the Company may have a
term of up to five years. The exercise price of incentive stock options
granted to shareholders possessing more than 10% of the total combined voting
power of all classes of stock of the Company must be not less than 110% of
the fair market value of the Company's common stock on the date of grant. As
of March 31, 1998, stock options to acquire 197,350 shares of the Company's
common stock have been granted under the Option Plan at exercise prices of
$2.00 to $2.20 per share. The options are exercisable beginning March 28,
1995 through December 28, 1999. As of March 31, 1998, 160,000 of these
options are exercisable and 31,150 options had been exercised.
The Company's Non-Employee Director Stock Option Plan ("Non-Employee Director
Plan") was also adopted in 1993. An aggregate of 25,000 shares of common
stock were reserved for issuance pursuant to the Non-Employee Director Plan.
Options to purchase 5,000 shares of common stock are automatically granted to
each person elected for the first time as director of the Company, who is not
an employee of the Company. An option to acquire an additional 1,000 shares
is automatically granted each year thereafter that such director is
re-elected. Options granted under the Non-Employee Director Plan will not
qualify as "incentive stock options" within the meaning of Section 422 of the
Internal Revenue Code of 1986. Options granted under the Non-Employee
Director Plan expire ten years after date of grant. As of March 31, 1998,
14,000 options have been granted under the Non-Employee Director Plan at
exercise prices of $2.00 to $5.75 per share. As of March 31, 1998, 12,000
of these options are exercisable and no options had been exercised.
The Company's Incentive Stock Plan ("Incentive Plan") was adopted in 1995.
An aggregate of 500,000 shares of common stock were reserved for issuance
pursuant to the Incentive Plan. The Incentive Plan is administered by the
Board of Directors. The Board of Directors determines, subject to the
provisions of the Incentive Plan, the employees to whom incentives are
awarded. The Board of Directors may award (i) "incentive stock options"
within the meaning of Section 422 of the Internal Revenue Code of 1986, (ii)
"non-qualified stock options" (options which do not meet the
4
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requirements of Section 422), (iii) shares of "restricted stock", and (iv)
"stock bonuses". Subject to the terms of the Incentive Plan, the Board of
Directors will also determine the prices, expiration dates and other material
features of the incentive awards. As of March 31, 1998, 66,362 shares of
common stock were issued under the Incentive Plan to consultants and in
settlement of lawsuits, and 5,934 shares of common stock were issued under
the Incentive Plan to employees as a stock bonuses. As of March 31, 1998,
stock options to acquire 65,833 shares of the Company's common stock have
been granted under the Incentive Plan at exercise prices of $5.00 to $7.375
per share. The options are exercisable beginning April 23, 1997 through March
10, 2000. As of March 31, 1998, 31,667 of these options are exercisable and
4,166 options had been exercised.
NOTE C - SHAREHOLDERS' EQUITY
In January 1998, the Company issued 744 shares of common stock to an
employee under the Company's 1995 Incentive Stock Plan for a stock bonus.
Costs of $3,600 were expensed as wages.
In March 1998, the Company issued 2,014 shares of common stock to employees
under the Company's 1995 Incentive Stock Plan for stock bonuses. Costs of
$7,800 were expensed as wages.
In March 1998, the Company issued 600 shares of common stock to an employee
under the Company's 1993 Stock Option Plan for exercised vested options.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The following is management's discussion and analysis of certain significant
factors which have affected the Company's financial position and operating
results during the periods included in the accompanying condensed financial
statements.
GENERAL
The Company's revenues consist of sales of the Company's bottled water
products, rental of water dispensers and sales of cups and other
miscellaneous items. The Company's strategy has been to use all available
capital for expansion and increasing its customer base. The growth in
customer accounts has been accompanied by increased revenues. The Company
attributes the growth in customer accounts to aggressive marketing, increased
bottled water consumption, a change in the type of closed water system and an
effective customer retention program. The Company anticipates that its
customer base and revenues will continue to expand as sales of bottled water
increase and the Company continues to penetrate the Houston and Dallas/Fort
Worth bottled water markets. Some of the factors that the Company believes
may affect the rate of increase in bottled water sales include the public
perception of the quality of municipal supplies and general health concerns.
Commissions and other selling costs comprise the largest controllable
component of expenses. Selling expenses consist primarily of commissions
paid to the sales force and telemarketing expenses. Commissions paid are
expensed as they are incurred. Commissions represent a higher percentage of
total expenses during periods when the Company is adding accounts at an
accelerated rate when compared to other expenses, which are not as variable.
Transportation expenses include lease expense, fuel, insurance, and repair
and maintenance expenses associated with the delivery trucks and vans.
Depreciation and amortization and operating expenses consist of depreciation
of the Company's delivery trucks and vans, water dispensers and bottles and
the bottling plants. Depreciation and amortization are expected to increase
as the Company continues to commit resources to its growing customer base.
General and administrative expenses include centralized administration and
support costs.
The Company currently provides an estimate of the cost of dispensers which
are lost or stolen as a reduction of fixed assets.
5
<PAGE>
RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1998 AND 1997
Revenues for the three month period ended March 31, 1998 (the "First Quarter
of 1998") increased 10% to $2,043,000 from $1,857,000 for the three month
period ended March 31, 1997 (the "First Quarter of 1997"). The principal
reason for the increase in revenues was the increase in the number of
customer accounts from the First Quarter of 1997 to the First Quarter of 1998.
Operating costs increased 1%, as a percentage of sales, to 19% or $385,000 in
the First Quarter of 1998 from 20% or $369,000 in the First Quarter of 1997.
This is primarily due to an increase in plant employee wages.
Transportation costs decreased less than 1%, as a percentage of sales, to 24%
or $500,000 in the First Quarter of 1998 from 25% or $462,000 in the First
Quarter of 1997. The decrease in transportation expenses is primarily due to
a decrease in repair and maintenance expenses.
Depreciation and amortization costs decreased, as a percentage of sales, to
12% or $247,000 in the First Quarter of 1998 from 14% or $269,000 in the
First Quarter of 1997. The decrease is primarily due to an increase in
sales, by certain fixed assets of the Company becoming fully depreciated for
book purposes during 1997, and by the estimated useful life of coolers being
extended from ten to twelve years during 1997.
Commissions and other selling costs decreased, as a percentage of sales, to
16% or $325,000 in the First Quarter of 1998 from 17% or $320,000 in the
First Quarter of 1997. Management's policy is to use all available cash from
operations and financing activities after debt service for its marketing
activities. The decrease is primarily due to a reduction of telemarketing
expenses, partially offset by an increase in outside sales expenses.
General and administrative expenses increased, as a percentage of sales, to
27% or $544,000 in the First Quarter of 1998 from 26% or $488,000 in the
First Quarter of 1997. This is primarily due to an increase in executive
compensation.
Interest expense remained the same, as a percentage of sales, at 5% or
$102,000 in the First Quarter of 1998 from 5% or $86,000 in the First Quarter
of 1997. This is primarily due to additions of long term debt during 1997,
partially offset by an increase in sales.
The Company reported a loss after income taxes of $59,000 in the First
Quarter of 1998 compared to a loss after taxes of $137,000 in the First
Quarter of 1997. The decrease in the loss was caused by increased revenues
and improved operating efficiencies.
LIQUIDITY AND CAPITAL RESOURCES
The Company has typically financed operations from a combination of vendor
financing, bank loans and leases, placement of securities and cash generated
from operations. The Company acquires water coolers and cooler equipment
through vendor financing. The Company leases water processing and bottling
plants and various trucks from financial institutions under capital lease
arrangements. Additional trucks and equipment are obtained under operating
leases.
Net cash provided by operating activities for the three month period ended
March 31, 1998 and the three month period ended March 31, 1997 was $266,000
and $286,000 respectively. The decrease is primarily due to reduction of
customer deposits, partially offset by a reduction in accounts receivable.
During the three month period ended March 31, 1998, the Company made capital
expenditures of $26,000 for plant equipment, water bottles and truck
improvements.
As of March 31, 1998, the Company's long-term debt amounted to $144,000 in
bank debt, $3,142,000 in vendor financing and $333,000 in convertible
subordinated debt. The Company has capital lease commitments of $50,000.
6
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Management's strategy is based on increasing the Company's value by
increasing the customer base. Because the Company records Commissions and
other selling costs associated with the implementation of its growth strategy
in the period in which such expenses are incurred, the Company's net income
will initially decrease for a period in which the Company experiences rapid
growth. Despite the short-term effect of growth on net income, the Company
believes that its strategy of increasing the size of its customer base will
enhance shareholder value and improve the financial performance of the
Company. The Company will not be able to expand significantly or enter into
new markets until additional funding is acquired. There can be no assurance
that such arrangements will become available on terms acceptable to the
Company.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is subject to legal proceedings and claims which arise in the
ordinary course of its business. Management believes, based on discussions
with its legal counsel that the outcome of these legal actions will not have
a material adverse effect upon the financial position and results of
operations of the Company.
The Company filed suit against Liqui-Box Corporation ("Liqui-Box") on July
18, 1994 in the United States District Court for the Southern District of
Texas. In the lawsuit, the Company alleged that Liqui-Box sold a defective
water system, which, in turn, the Company leased to its bottled water
customers. The Company sought monetary damages, including lost customers, the
cost of replacing defective equipment, treble damages under the Texas
Deceptive Trade Practices Act, and attorney's fees. During February 1997, the
case went to trial and a jury verdict was reached. Damages of approximately
$2.3 million were awarded to the Company. The amount is subject to appeal
and there can be no assurance that the Company will recover damages in this,
or any amount. Through March 31, 1998, the Company has not recorded any
amounts in the financial statements related to these damages. Liqui-Box
Corporation had net sales of $152.4 million for the year ended December 28,
1996. It is publicly traded under the ticker symbol LIQB.
7
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ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
Exhibit No. Description of Exhibit
- ----------- ----------------------
3.1 Amended and Restated Articles of Incorporation. Exhibit 3.1 to
the Company's Registration Statement on Form SB-2 (No. 33-63022-FW)
that was initially filed on May 19, 1993 (the "Registration
Statement") is incorporated herein by reference.
3.2 Restated Bylaws. Exhibit 3.2 to the Registration Statement is
incorporated herein by reference.
3.3 Certificate of Designation, Preferences, Rights and Limitations of
Series A Preferred Stock, $1.00 Par Value of Great Pines Water
Company, Inc. Exhibit 3.3 to the Company's quarterly report on Form
10-QSB for the quarterly period ended September 30, 1996 is
incorporated herein by reference.
3.4 Certificate of Designation, Preferences, Rights and Limitations of
Series B Preferred Stock, $1.00 Par Value of Great Pines Water
Company, Inc. Exhibit 3.4 to the Company's quarterly report on Form
10-QSB for the quarterly period ended September 30, 1997 is
incorporated herein by reference.
3.5 Certificate of Designation, Preferences, Rights and Limitations of
Series C Preferred Stock, $1.00 Par Value of Great Pines Water
Company, Inc. Exhibit 3.5 to the Company's annual report on
Form 10-KSB for the fiscal year ended December 31, 1997 is
incorporated herein by reference.
4.1 Specimen stock certificate evidencing shares of Common Stock.
Exhibit 4.1 to the Registration Statement is incorporated herein by
reference.
9.1 Joshua Slocum Hammond Trust Agreement, dated May 11, 1993. Exhibit
9.1 to the Registration Statement is incorporated herein by reference.
10.1 Loan Agreement, dated November 1, 1988, by and between Great Pines
Water Company, Inc. and Bank One Texas, National Association,
as amended. Exhibit 10.1 to the Registration Statement is
incorporated herein by reference.
10.2 Authorization and Loan Agreement with the United States Small
Business Administration. Exhibit 10.2 to the Registration
Statement is incorporated herein by reference.
10.3 Lease Agreement, dated April 1, 1990, with DBH Investment Partners
No. 3, as amended. Exhibit 10.3 to the Registration Statement
is incorporated herein by reference.
10.4 1993 Stock Option Plan of Great Pines Water Company, Inc. Exhibit
10.4 to the Registration Statement is incorporated herein by
reference.
10.5 1993 Non-Employee Director Stock Option Plan of Great Pines Water
Company, Inc. Exhibit 10.5 to the Registration Statement is
incorporated herein by reference.
10.6 Form of Loan Agreement by and between Great Pines Water Company,
Inc. and Dependable Acceptance Company for the purchase of
equipment. Exhibit 10.6 to the Company's annual report on Form
10-KSB for the fiscal year ended December 31, 1994 is incorporated
herein by reference.
10.7 Amendment dated December 31, 1994 to Loan Agreement, dated
November 1, 1988 by and between Great Pines Water Company, Inc.
and Bank One Texas, N.A. Exhibit 10.7 to the Company's annual report
on Form 10-KSB for the fiscal year ended December 31, 1994 is
incorporated herein by reference.
10.8 1995 Incentive Stock Plan of Great Pines Water Company, Inc.
Exhibit 10.8 to the Company's quarterly report on Form 10-QSB
for the quarterly period ended September 30,1995 is incorporated
herein by reference.
8
<PAGE>
10.9 Convertible Debenture, dated April 21, 1995, together with Form of
Convertible Note, by and between Great Pines Water Company, Inc. and
EBAC Systems Inc. Exhibit 10.9 to the Company's quarterly report on
Form 10-QSB for the quarterly period ended September 30, 1995 is
incorporated herein by reference.
10.10 Promissory Note dated October 13, 1995 between Great Pines Water
Company, Inc. and Metrobank, N.A. for the assumption of equipment
loans previously with Bank One Texas, N.A. Exhibit 10.10 to the
Company's annual report on Form 10-KSB for the fiscal year ended
December 31, 1995 is incorporated herein by reference.
10.11 Assignment dated March 21, 1996 of the SBA loan dated October 19,
1991 to Sunbelt National Bank, N.A. from Bank One Texas, N.A.
Exhibit 10.11 to the Company's annual report on Form 10-KSB for the
fiscal year ended December 31, 1995 is incorporated herein by
reference.
10.12 Amendment dated March 22, 1996 to the loan agreement, dated
November 1, 1988 by and between Great Pines Water Company, Inc.
and Bank One Texas, N.A. Exhibit 10.12 to the Company's annual report
on Form 10-KSB for the fiscal year ended December 31, 1995 is
incorporated herein by reference.
10.13 Amendment to the Lease Agreement dated April, 1 1990, with DBH
Investment Partners No. 3. Exhibit 10.13 to the Company's annual
report on Form 10-KSB for the fiscal year ended December 31, 1995 is
incorporated herein by reference.
10.14 Promissory Note dated June 12, 1996 between the Great Pines Water
Company, Inc. and Sunbelt National Bank for the purchase of plant
equipment. Exhibit 10.14 to the Company's quarterly report on Form
10-QSB for the quarterly period ended June 30, 1996 is incorporated
herein by reference.
27.1 Financial Data Schedule. Exhibit 27.1 is filed herein.
(b) Reports on Form 8-K:
The Company filed no current reports on Form 8-K during the quarter ended March
31, 1998.
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.
Great Pines Water Company, Inc.
Date: May 14, 1998 By: Kevin F. Vigneaux
--------------- --------------------------------
Kevin F. Vigneaux
Chief Financial Officer and Treasurer
(Principal Financial and Accounting Officer)
9
<TABLE> <S> <C>
<PAGE>
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<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 225
<SECURITIES> 177
<RECEIVABLES> 1,028
<ALLOWANCES> (202)
<INVENTORY> 78
<CURRENT-ASSETS> 1,610
<PP&E> 10,589
<DEPRECIATION> (5,255)
<TOTAL-ASSETS> 6,989
<CURRENT-LIABILITIES> 2,748
<BONDS> 2,642
0
15
<COMMON> 26
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<TOTAL-LIABILITY-AND-EQUITY> 6,989
<SALES> 2,043
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