SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For Quarter Ended Commission File No.
March 31, 1998 33-67422
SABRELINER CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 43-1289921
(State of Incorporation) (I.R.S. Employer Identification No.)
Pierre Laclede Center
Suite 1500
7733 Forsyth Blvd.
St. Louis Missouri 63105-1821
(314) 863-6880
(Name, address, including ZIP Code, and telephone number,
including area code, of registrant's principal executive offices)
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 report(s), and (2) has been subject to such filing
requirements for the past 90 days. YES [ X ] NO [ ]
The number of shares of the Company's common stock outstanding on
April 30, 1998 was 869,934.
PART I - FINANCIAL INFORMATION
Condensed Financial Statements
Sabreliner Corporation
Consolidated Balance Sheets
(Dollars in Thousands)
Unaudited Audited
March 31, 1998 June 30, 1997
Assets
Current assets:
Cash $ 893 $ 22,994
Accounts receivable (net of
allowances of $405 and $550, 27,553 29,952
respectively)
Inventories 39,371 31,542
Contracts in process (net of
customer advances and progress
payments of $28,374 and 54,983 20,192
$15,143, respectively)
Prepaid and other current 6,427 4,697
assets
Total current assets 129,227 109,377
Property and equipment (net of
depreciation of $23,379 and 46,658 37,882
$21,286, respectively)
Deferred financing costs and 8,682 9,641
other assets
Total assets $184,567 $156,900
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 28,501 $ 24,997
Current portion of long-term
debt and capital leases 715 750
Customer advances 1,874 5,588
Accrued compensation 5,661 7,068
Accrued interest expense 4,990 1,946
Other accrued liabilities 5,827 8,994
Total current liabilities 47,568 49,343
Long-term debt and capital 93,866 94,863
leases
Revolving credit facility 25,764 -
Other long-term liabilities 2,201 2,202
Stockholders' equity 15,168 10,492
Total liabilities and $184,567 $156,900
stockholders' equity
Sabreliner Corporation
Consolidated Statements of Operations
(Unaudited)
(Dollars in Thousands, Share and Per Share Data as Stated)
Three Months Ended Nine Months Ended
March 31 March 31 March 31 March 31
1998 1997 1998 1997
Net revenue $77,227 $56,897 $209,539 $159,595
Cost of revenue 63,514 47,709 168,251 135,113
Gross margin 13,713 9,188 41,288 24,482
Selling, general and
administrative
expense 8,022 6,929 23,596 23,035
Operating income 5,691 2,259 17,692 1,447
Interest expense, (3,804) (3,392) (10,116) (9,676)
net
Other income (expense) 57 1,007 - 1,004
Earnings (loss)
before income
taxes 1,944 (126) 7,576 (7,225)
Income tax (746) 415 (2,885) 3,379
(expense) benefit
Net income (loss) $ 1,198 $ 289 $ 4,691 $ (3,846)
Earnings per share
data
Basic earnings $ 1.38 $ 0.33 $ 5.39 $ (4.42)
(loss) per share
Diluted earnings $ 1.37 $ 0.33 $ 5.36 $ (4.39)
(loss) per share
Dividends paid per
common share $ 0.00 $ 0.00 $ 0.00 $ 0.00
Sabreliner Corporation
Consolidated Statements of Cash Flows
(Unaudited)
(Dollars in Thousands)
Nine Months Ended
March 31, March 31,
1998 1997
Cash flows from operating activities:
Net income (loss) $ 4,691 $ (3,846)
Adjustments to reconcile net earnings
to net cash provided by operating
activities:
Depreciation 4,514 4,528
Amortization 971 915
Changes in assets and
liabilities (44,987) (12,438)
Net cash used by operating activities (34,811) (10,841)
Cash flows used in investing
activities:
Capitalized expenditures (12,512) (5,897)
Cash flows from financing activities:
Principal payments on long-term debt (527) (773)
and capital leases
Proceeds from revolving credit
facility and other short-term
borrowings 25,764 4,290
Other long-term borrowings - 1,457
Purchase of treasury stock (15) 1
Net cash provided by financing 25,222 4,975
activities
Net decrease in cash and cash (22,101) (11,763)
equivalents
Cash and cash equivalents, 22,994 12,254
beginning of period
Cash and cash equivalents, end of $ 893 $ 491
period
Notes to Unaudited Condensed Financial Statements
Basis of Presentation
The information set forth in this interim financial
statement as of and for the three and nine months ended
March 31, 1998 and March 31, 1997 is unaudited. In the
opinion of management, the unaudited financial statement
reflects all adjustments necessary to present fairly the
financial results of Sabreliner Corporation reported as
corporate and government airframe business and engine
business and its wholly owned subsidiaries Midcoast
Aviation, Inc., reported as corporate and government
airframe business; Turbotech Repairs, Inc., marketed under
the Premier Turbines tradename and reported as engine
business; and Dimension Aviation, Inc. and SabreTech, Inc.,
reported as commercial airframe business for the periods
indicated. Results of operations for the interim period
ended March 31, 1998 are not necessarily indicative of the
results of operations for the full fiscal year.
Inventories
Components of inventories as of March 31, 1998 and June 30,
1997 were:
March June
(Dollars in Thousands)
Aircraft parts $36,376 $28,839
Raw materials 2,566 1,403
Pre-owned aircraft 429 1,300
Total $39,371 $31,542
Contracts in Process
Contracts in process represent accumulated contract cost and
estimated earnings thereon based upon the percentage of
completion of unbilled customer orders, net of applicable
customer advance or progress payments. In determining
balances of contracts in process, the Company follows the
requirements of SOP81-1. Title to or a security interest in
certain items included in contracts in process can be vested
in the U.S. government and other customers by reasons of
progress payment provisions of related contracts. Included
in the contracts in process as of March 31, 1998 are the
proportionate revenues earned on amounts subject to claim
settlement, representing approximately $1.0 million in after-
tax earnings. In accordance with industry practices,
contracts in process relating to long-term contracts are
classified as current assets even though a portion may not
be realized within one year.
Earnings Per Share
In 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128,
Earnings Per Share. Adoption of Statement 128 requires the
replacement of the previously reported primary earnings per
share with a dual presentation of basic and diluted earnings
per share. Basic earnings per share is computed using
outstanding common stock only. Diluted earnings per share
includes any dilutive effects of options, warrants and
convertible securities. All earnings per share amounts for
all periods have been presented, and where necessary,
restated to conform to the Statement 128 requirements. The
following table sets forth the computation of basic and
diluted earnings per share:
Three Months Ended Nine Months Ended
3/31/98 3/31/97 3/31/98 3/31/97
Numerator:
Net Income $ 1,198 $ 289 $ 4,691 $ (3,846)
Preferred stock
dividends - - - -
Numerator for fully
diluted EPS $ 1,198 $ 289 $ 4,691 $ (3,846)
Effect of dilutive
securities: - - - -
Numerator for fully
diluted EPS $ 1,198 $ 289 $ 4,691 $ (3,846)
Denominator:
Denominator for basic
EPS - weighted-
average shares 869,934 870,934 870,267 870,901
Effect of dilutive
securities:
Employee stock
options 4,106 4,937 4,106 4,944
Denominator for
diluted EPS -
adjusted weighted-
average shares and 874,040 875,871 874,373 875,845
assumed conversions
EPS:
Basic earnings per share $ 1.38 $ 0.33 $ 5.39 $ (4.42)
Diluted earnings per $ 1.37 $ 0.33 $ 5.36 $ (4.39)
share
Options to purchase 1,400 shares of common stock at $17.22
per share were outstanding through August 19, 1996 and 4,000
shares of common stock at $15.00 per share are currently
outstanding but were not included in the computation of
diluted earnings per share because the options' exercise
price was greater than or equal to the average market price
of the common shares, and, therefore, the effect would be
antidilutive.
Contingencies
Refer to PART II - OTHER INFORMATION, Item 1. Legal
Proceedings.
Management's Discussion and Analysis of Financial Condition
and Results of Operation
Overview
Operating income was $5.7 million for the quarter ended and
$17.7 million for the nine months ended March 31, 1998,
representing increases over the same periods of the previous
year of $3.4 million and $16.3 million, respectively. The
performance on recently awarded government airframe and
engine contracts provided $2.5 million and $10.0 million for
the quarter and nine months ended, respectively, of these
increases. The removal of four unprofitable commercial
aviation facilities during fiscal 1997 increased comparable
fiscal 1998 profits by $1.1 million for the quarter and $7.8
million for the nine months ended March 31, 1998. The
addition of a new commercial aviation subsidiary, Dimension
Aviation, to perform DC-10 and MD-11 PtoF conversions under
Boeing subcontracts also improved commercial aviation
operating profit for the quarter and nine months by $1.0
million and $2.1 million, respectively. Offsetting gains in
other areas, the Company has recognized declines in the
continuing operations at the SabreTech subsidiary, of $1.2
million and $4.4 million for the quarter and nine months
ended, respectively, due to lower business volume. See PART
II - OTHER INFORMATION. Item 1. Legal Proceedings.
Quarter and Nine Months Ended March 31, 1998 as Compared to
Quarter and Nine Months Ended March 31, 1997
Revenue. Revenue for the third quarter ended March 31, 1998
was $20.3 million higher than the same period of the
previous year. Increases were reported in each of the
Company's business areas. Corporate and government
airframes provided $6.0 million in added revenue, primarily
from the Lockheed Martin Eagle subcontract and the addition
of an aircraft inspection program for the U.S. Navy. Engine
revenue increased by $6.2 million, substantially all of
which was due to performance on government contracts.
Commercial airframe revenue increased by $8.1 million,
representing the addition of a new subsidiary to perform
PtoF conversions which provided $10.7 million. This was
offset by $2.6 million reduction in revenues at the
remaining commercial facilities.
Revenue increased $49.9 million, or 31.2%, to $209.5 million
for the nine months ended March 31, 1998 from $159.6 million
for the nine months ended March 31, 1997. Increased revenue
was reported in each of the Company's business areas.
Corporate and government airframe revenue increased $22.5
million, or 25%, to $111.2 million for the nine months ended
March 31, 1998 from $88.7 million for the nine months ended
March 31, 1997. Modifications and maintenance generated
$5.9 million of this revenue increase. The sale of pre-
owned aircraft also provided $5.5 million in added revenue.
Another $6.3 million of the increase was provided by U.S.
Government logistics service contracts, representing
aircraft condition inspections recently awarded by the U.S.
Navy and added volume on the U.S. Air Force C-20 program.
Corporate and government engine revenue increased $25.4
million, or 132%, to $44.7 million for the nine months ended
March 31, 1998 from $19.3 for the nine months ended March
31, 1997. Government contracts generated $17.3 million of
this increase and the addition of engine overhaul
capabilities on the AlliedSignal TFE731 provided another
$5.8 million in engine revenue. Growth in engine component
repairs increased revenue $2.1 million.
Commercial airframe revenue increased $2.0 million, or 4%,
to $53.6 million for the nine months ended March 31, 1998
from $51.6 million for the nine months ended March 31, 1997,
despite the removal of four commercial aviation facilities
from operation which had provided $12.6 million in revenue
during that period. Excluding the effect of closing these
facilities, commercial airframe revenue would have increased
by $14.6 million in the nine months ended March 31, 1998,
versus the corresponding period of the previous year. The
addition of a new subsidiary to perform PtoF conversions
provided $29.1 million in added revenue for the nine months
ended March 31, 1998. Partially offsetting this increase
was a decline in revenue of $14.5 million at the remaining
commercial operation caused by the adverse effects of the
ValuJet crash on customer demand.
Gross Margins. Gross margin for the three months ended
March 31, 1998 increased by $4.5 million from the
corresponding period of the prior year. The largest
increase was in corporate and government airframes, totaling
$3.0 million, generated largely through the performance of
government contracts, which provided $2.0 million. Engine
gross margin was $1.9 million higher in the third quarter of
fiscal 1998, versus the same period of last year due to the
additional business provided by recent government awards.
Commercial aviation gross margin declined by $0.4 million
during the quarter, as compared to the previous year,
despite the closure of four unprofitable facilities during
fiscal 1997 which reported losses of $0.5 million during the
three months ended March 31, 1997. The addition of a new
subsidiary to perform PtoF modifications, which added $1.8
million during the three months ended March 31, 1998 was
offset by declines attributed to the remaining commercial
facility which reported gross margin $2.7 million lower than
the prior year due to reduced business volume.
Total gross margin increased $16.8 million, or 69%, to $41.3
million for the nine months ended March 31, 1998 from $24.5
million for the nine months ended March 31, 1997. Corporate
and government airframe business provided $5.8 million of
this increase, due to the award of aircraft condition
inspections for the U.S. Navy, which provided $2.3 million
in additional gross margin, and due to increased corporate
major modifications. Corporate and government engine gross
margin increased $8.0 million, or 163%, to $13.0 million for
the nine months ended March 31, 1998 from $4.9 million for
the nine months ended March 31, 1997. Performance on
government contracts provided $6.6 million of this increase.
The addition of engine overhaul capabilities on the
AlliedSignal TFE731 engine also provided $0.7 million in
added gross margin. The remaining increase in business and
government engine service gross margin was due to increased
volume, particularly in engine component repairs.
Commercial airframe gross margin increased $3.0 million, or
176%, to $4.7 million for the nine months ended March 31,
1998 from $1.7 million for the nine months ended March 31,
1997, partially due to the removal of the four unprofitable
commercial airframe facilities from operations during fiscal
1997. Excluding the $2.4 million effect of closing these
facilities, the gross margin associated with the remaining
commercial airframe facilities would have increased by $0.6
million. This resulted from forming a subsidiary to perform
PtoF conversions, which provided $4.6 million in added gross
margin, and the reduction in gross margin of $4.0 million
due to a decline in business at the other commercial
airframe subsidiary.
Selling, General and Administrative. Selling, general and
administrative expense increased by $1.1 million and $0.6
million during the three months and nine months ended March
31, 1998, respectively, as compared to the same periods of
the previous year. After excluding the facilities removed
from operation and the effect of ValuJet-related expense on
fiscal 1997 results, which totaled $0.5 million for the
quarter and $5.4 million for the nine months ended March 31,
1997, selling, general and administrative expense would have
increased from fiscal 1997 by $1.6 million for the quarter
and $6.0 million for the nine months ended March 31, 1998.
The subsidiary established to perform PtoF conversions
required additional administrative expenses of $0.9 million
and $2.6 million for the quarter and nine months,
respectively. The remaining increases in selling, general
and administrative expenses for the periods can be
attributed to incremental marketing expenses and
inflationary effects.
Outlook
A comparison of backlog by business area follows:
Outstanding Backlog
March 31, 1998 June 30, 1997
(Dollars in Thousands)
Corporate and government airframe $ 57,710 $ 98,659
Engine 55,309 31,231
Commercial airframe 90,052 122,655
$203,071 $252,545
Backlog estimates represent the expected values due on
completion of firm, undelivered orders. On contracts
subject to ordering periods with Best Estimated Quantity
("BEQ") provisions, the BEQ estimate is considered backlog
upon order authorization. For contracts with option
periods, no backlog is reflected for the periods of
unexercised options. If included, these options would
increase total backlog as of March 31, 1998 to $594 million.
The reduction in corporate and government airframe business
backlog is primarily due to work completed on government
logistics contracts. The increase in engine business
backlog from June 30, 1997 to March 31, 1998 is due to the
award of a new contract with the U.S. Army and increases in
corporate demand. The reduction in commercial airframe
backlog reflects the continued performance of the DC-10 and
MD-11 PtoF subcontracts with Boeing. The total expected
revenue of firm orders under the Boeing subcontracts is
approximately $120 million, and as of March 31, 1998, nearly
$79.0 million remained undelivered.
Liquidity and Capital Resources
During the nine months ended March 31, 1998 the Company
deployed capital resources provided by outstanding cash
balances and the revolving credit facility totaling $47.9
million. The largest investment for the period was made in
working capital and facility enhancements necessary to
perform the PtoF subcontracts for Boeing performed at the
Company's new commercial aviation subsidiary, where total
investments for the first nine months of fiscal 1998 were
$38.2 million. The Company expects additional working
capital resources of approximately $6.0 million to be
required at this subsidiary as the Boeing subcontracts reach
peak investment. Other major investments during the nine
months ended March 31, 1998 include the construction of a
new corporate airframe hangar at Midcoast valued at $2.9
million and working capital growth, totaling $6.8 million.
See PART II - OTHER INFORMATION. Item 1. Legal Proceedings.
The Company has initiated a process whereby new Senior Notes
would be issued to redeem outstanding indebtedness
associated with its 12 1/2% Senior Notes due 2003 and repay
current indebtedness accumulated under its revolving credit
facility. After issuance of the new Notes and application
of proceeds therefrom, the Company intends to retain
outstanding mortgages, capital leases and other indebtedness
totaling approximately $5.5 million at March 31, 1998. The
Company also plans to continue its revolving credit facility
and maintain letters of credit valued in excess of $3.5
million to comply with contractual requirements. The
Company believes the revolving credit facility, which can
provide up to $40 million subject to collateral limits,
combined with operating cash flows, will provide sufficient
resources to fund continued investments in equipment and
capabilities, facilitate internal growth and execute
selected acquisitions within its growing markets.
Year 2000 Compliance
Many older computer programs identify the applicable year
with only the last two digits, presuming the first two
digits are "19." As of January 1, 2000 or sooner, these
programs could malfunction and cause a system failure or
miscalculation, such as erroneously identifying post-2000
activity as occurring in a prior century. This error could
cause a system failure or miscalculation which could result
in a disruption of operations including, among other things,
a temporary inability to process transactions, age
inventories, or engage in similar normal business
activities. The Company has performed a preliminary
assessment of the impact of the year 2000 on its existing
computer systems and initiated action which it believes will
make them compliant with the year 2000 requirements by
December 31, 1998.
The Company has capitalized the establishment and transition
of new mainframe system software, which is a year 2000-
compliant version, totaling $5.3 million as of March 31,
1998. Other information processing systems, such as
calibration equipment and test cell data gathering systems,
will require modification to meet the requirements of the
new millennium. The costs to convert such other information
processing systems are not material and will be expensed as
incurred. The Company believes conversion efforts will not
unduly disrupt operations or pose significant operational
problems for information systems after modification to
existing software and conversion to new software. However,
if such modifications and conversion are not made or not
completed in timely fashion, the year 2000 effect could have
a material adverse effect on operations of the Company.
Although the Company has completed "beta" and test
installations of its year 2000 compliant replacement
software, there can be no guarantee that these schedules
will be achieved and actual results could differ materially
from those anticipated.
Forward Looking Statements
The Company may have provided "Forward-Looking Statements"
(as defined in Section 27A of the Securities Act and Section
21E of the Exchange Act) which may involve risk or
uncertainty, including, but not limited to: future sales,
earnings, margins, production levels and costs, aircraft
deliveries, research and development, environmental and
other expenditures, and various business trends. All
statements included herein other than statements of
historical fact are forward-looking statements. Although
the Company believes that the expectations reflected in such
forward-looking statements are reasonable, it can give no
assurance that such expections will prove to be correct.
Actual results and trends in the future may differ
materially from expectation, depending on a variety of
factors.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
ValuJet Related
On May 11, 1996, ValuJet Flight 592 from Miami, carrying 110
passengers and crew crashed into the Florida Everglades,
leaving no survivors. On August 19, 1997, the National
Transportation Safety Board (NTSB) conducted its public
hearing and issued an Abstract of Final Report on ValuJet
Flight 592 which listed the probable causes of the accident
to be (1) the failure of SabreTech to properly prepare,
package, identify and track unexpended oxygen generators
before presenting them to ValuJet, (2) the failure of
ValuJet to properly oversee its contract maintenance program
to ensure compliance with maintenance, maintenance training
and hazardous materials requirements and practices and (3)
failure of the Federal Aviation Administration (FAA) to
require smoke detection and fire suspression systems in
Class D cargo compartments. The NTSB also found that other
acts and omissions by SabreTech, ValuJet and FAA contributed
to the accident.
SabreTech, ValuJet and others have been named as defendants
in numerous wrongful death actions that have been filed by
families of victims. The Company's legal costs of defending
against these civil actions and any claim settlements
or judgments are funded by the Company's insurance
policies. In the case of claim settlements or judgements,
such costs are funded only up to the coverage limits of such
policies, except possibly for certain punitive damage claims,
if awarded. Management believes its insurance coverage is
adequate to provide for such legal actions, although
no assurance can be given that these actions will not have
a material adverse affect upon the financial condition or results
of operations of the Company.
SabreTech has filed a Complaint for Declaratory Judgment and
Other Relief against ValuJet in the U.S. District Court for
the Southern District of Florida. Among other things, that
suit seeks indemnification for damages incurred by SabreTech
in connection with the accident. ValuJet has filed an
Answer and Conditional Counterclaim in the case seeking
various damages. Airtran Airlines, Inc., formally known as
ValuJet, also has filed a petition against SabreTech and
Sabreliner in the Circuit Court of St. Louis County,
Missouri. The Petition essentially seeks damages based on
the same allegations that are in ValuJet's Conditional
Counterclaim. The Company's legal costs associated with the
Declaratory Judgment, the Counterclaim and the Petition are
funded by the Company's insurance policies. Management
believes that the Company will be able to successfully
defend against ValuJet's Counterclaim and Airtran's
Petition.
In addition, SabreTech, has been informed by the United
States Attorney's Office in Miami, Florida, that it, and
several unnamed employees, are targets of a Federal grand
jury investigation related to the ValuJet Flight 592 crash.
This means that SabreTech is likely to be indicted on
criminal charges relating to the ValuJet crash. If convicted,
SabreTech, Inc. would face possible criminal penalties including
fines and restitution. The Company believes that there are
meritorious defenses to any criminal charges that may be
brought. The Company is unable to predict the final outcome
of these proceedings. The Company cannot provide any
assurances that Sabreliner Corporation will not become a target
of this investigation or that the resolution thereof will not have a
material adverse effect on the financial condition or
results of operations of the Company.
Uninsured costs of approximately $6.4 million associated
with this accident (such as media relations, incremental
professional services, legal fees and other costs related to
the various investigations and other lawsuits) have been
incurred since May, 1996. Although the Company believes its
insurance coverage is adequate to resolve continuing
wrongful death litigation, there can be no assurance that
the continuing effects of these investigations and other
ValuJet related lawsuits will not have a material adverse
effect upon the financial condition or results of operations
of the Company.
Federal Aviation Administration
On April 30, 1998, the FAA issued a Notice of Proposed Civil
Penalty alleging numerous violations of the federal
hazardous materials regulations by SabreTech in connection
with the FAA's investigation into the ValuJet Flight 592
crash. The amount of the proposed civil penalty is
$2,250,000. The Company believes that it has meritorious
defenses to these alleged violations and intends to dispute
both the alleged non-compliance with the federal hazardous
material regulations and the amount of the proposed penalty.
The Company is not able to determine whether its defenses
will be successful, and no assurances can be given that this
matter will not have a material adverse effect on the
financial condition or results of operations of the Company.
Environmental
SabreTech's handling of oxygen generators prior to the ValuJet
Flight 592 crash has resulted in an investigation by federal
and state environmental regulatory authorities (in addition
to the FAA investigation discussed above) into hazardous
material handling requirements and procedures at SabreTech's
former facility in Miami, Florida. The Company is continuing
to cooperate fully with these investigations. Based on its
investigation of these matters, the Company believes that
SabreTech has meritorious defenses to allegations that SabreTech's
handling of the oxygen generators violated Environmental Laws.
There can be no assurance, however, that the Company's liability,
if any, for such matters will not have a material adverse effect
upon the financial condition or results of operations of the
Company.
On May 6, 1998, the Company and a Company employee were
indicted on two counts each for alleged violations of the
Federal Water Pollution Control Act (also known as the
"Clean Water Act") and the Resource Conservation and
Recovery Act ("RCRA") related to alleged discharges of
wastewater that occurred in 1993 prior to the flooding of
the Company's Perryville, Missouri facility. Based on its
analysis of its environmental practices at the Perryville
facility and the incident described in the indictment, the
Company believes that it has meritorious defenses to the
allegations. However, the Company cannot give any assurance
that these matters will not have a material adverse effect
on the financial condition or results of operations of the
Company.
Other
In addition to the litigation discussed above, the Company
is subject to other legal proceedings and claims arising in
the ordinary course of its business. Although there can be
no assurance as to the outcome of litigation, it is the
opinion of management (based upon the advice of legal
counsel) that all such actions or proceedings are covered by
insurance or will be resolved without material effect on the
Company's financial position or results of operations.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits Filed
Exhibit 27 - Financial Data Schedule.
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Company 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.
SABRELINER CORPORATION
Date: May 15, 1998 /s/ F. Holmes Lamoreux
F. Holmes Lamoreux
Chairman of the Board and
Chief Executive Officer
Date: May 15, 1998 /s/ Rodney E. Olson
Rodney E. Olson
Senior Vice President, Finance and
Corporate Development and Chief
Financial Officer
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<INCOME-CONTINUING> 4,691
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,691
<EPS-PRIMARY> 5.39
<EPS-DILUTED> 5.36
</TABLE>
