<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
----------------------
FORM 10-Q
[x] Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934 For the Period Ended March 31, 1997
or
[ ] 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 0-23256
----------------------
JAMESON INNS, INC.
(Exact name of registrant as specified in its Articles)
----------------------
Georgia 58-2079583
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification No.)
8 Perimeter Center East, Suite 8050
Atlanta, Georgia 30346-1603
(Address of principal executive offices including zip code)
(770) 901-9020
(Registrant's telephone number, including area code)
-----------------------------------------
(Former name, former address and former
fiscal year, if changed since 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 for such shorter periods that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. X Yes No
------ -------
APPLICABLE ONLY TO CORPORATE ISSUERS
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practical date - Common Stock, $.10 Par Value -
9,703,002 shares outstanding as of May 5, 1997.
<PAGE> 2
INDEX
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION
<S> <C> <C>
ITEM 1. FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets as of March 31, 1997
(unaudited) and December 31, 1996 ..................................................... 3
Condensed Consolidated Statements of Income for the Three Month
Periods Ended March 31, 1997 and 1996 (unaudited)...................................... 4
Condensed Consolidated Statements of Cash Flows for the Three Month
Periods Ended March 31, 1997 and 1996 (unaudited)...................................... 5
Notes to Condensed Consolidated Financial Statements (unaudited)....................... 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS...................................... 8
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.................................................. 14
SIGNATURES................................................................................ 15
EXHIBITS
</TABLE>
<PAGE> 3
ITEM 1. FINANCIAL STATEMENTS
JAMESON INNS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1997 1996
-------------- ---------------
(UNAUDITED)
ASSETS
<S> <C> <C>
Property and equipment, at cost $85,287,783 $80,816,228
Less accumulated depreciation (9,975,262) (9,205,591)
----------- ----------
75,312,521 71,610,637
Cash -- 208,912
Lease revenue receivable 1,396,378 684,625
Prepaid expenses 179,189 98,794
Deferred finance costs, net 668,883 1,197,205
Accounts receivable from and
advances to affiliates 1,318,001 --
Other assets 57,052 184,784
----------- -----------
$78,932,024 $73,984,957
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Mortgage notes payable $ 2,930,291 $22,317,206
Accounts payable 84,271 20,121
Accounts payable to affiliates -- 633,460
Accrued interest 42,728 120,543
Accrued property taxes 139,376 97,515
Other accrued liabilities -- 33,154
----------- ----------
$ 3,196,666 23,221,999
Stockholders' equity:
Preferred stock, $1 par value, 100,000 shares
authorized, no shares issued and outstanding -- --
Common stock, $.10 par value, 20,000,000 shares
authorized, 9,676,442 (7,357,471 in 1996) shares
issued and outstanding 967,644 735,747
Contributed capital 75,794,705 51,054,202
Retained deficit (1,026,991) (1,026,991)
----------- -----------
Total stockholders' equity 75,735,358 50,762,958
----------- -----------
$78,932,024 $73,984,957
=========== ===========
</TABLE>
See notes to condensed consolidated financial statements.
3
<PAGE> 4
JAMESON INNS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTH PERIOD ENDED
MARCH 31
-----------------------------------
1997 1996
---------- ----------
<S> <C> <C>
Lease revenue $2,735,543 $1,915,590
Expenses:
Property tax expense 127,070 91,523
Insurance expense 93,404 50,183
Depreciation 855,866 610,389
General and administrative 72,032 134,748
Loss on disposal of furniture and equipment 29,886 --
---------- ----------
Total expenses: 1,178,258 886,843
Income from operations 1,557,285 1,028,747
Interest expense, net of capitalized amounts 346,416 690,243
---------- ----------
Income before extraordinary loss 1,210,869 338,504
Extraordinary loss 689,542 --
---------- ----------
Net income $ 521,327 $ 338,504
========== ==========
Per Common equivalent share:
========== ==========
Income before extraordinary loss $.15 $.09
========== ==========
Net income $.06 $.09
========== ==========
Dividends paid $.22 $.21
========== ==========
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE> 5
JAMESON INNS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
FOR THE THREE MONTH PERIOD ENDED
MARCH 31
----------------------------------
1997 1996
-------- --------
<S> <C> <C>
Net income $ 521,327 $ 338,504
Adjustments to reconcile net income to net cash
provided by operating activities:
Extraordinary item 596,526 --
Depreciation and amortization 878,217 647,650
Loss on disposal of furniture and equipment 29,886 --
Stock option and other expenses 22,063 19,096
Changes in assets and liabilities increasing
(decreasing) cash:
Lease revenue receivable (711,753) (191,871)
Prepaid expenses and other assets 47,337 (48,221)
Accounts receivable from and
advances to affiliates (1,318,001) --
Accounts payable 64,150 177,288
Accounts payable to affiliates (633,460) (417,663)
Accrued interest (77,815) (30,693)
Accrued property taxes and other
accrued liabilities 8,707 86,265
---------- ----------
Net cash provided by operating activities (572,816) 580,355
Investing activities
Additions to property and equipment (4,587,637) (4,327,516)
---------- ----------
Net cash used in investing activities (4,587,637) (4,327,516)
</TABLE>
See notes to condensed consolidated financial statements.
5
<PAGE> 6
JAMESON INNS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) CONTINUED
<TABLE>
<CAPTION>
FOR THE THREE MONTH PERIOD ENDED
MARCH 31
-----------------------------------
1997 1996
------------ ---------------
<S> <C> <C>
Financing activities
Common stock dividends paid (1,620,831) (811,399)
Proceeds from issuance of common stock 25,977,954 24,002
Proceeds from exercise of stock options 71,887 72,141
Change in deferred offering costs -- (222,091)
Proceeds from long-term debt 6,256,777 8,994,309
Payment of deferred finance costs (90,554) (347,162)
Payments on long-term debt (25,643,692) (3,935,909)
------------ ------------
Net cash provided by financing activities 4,951,541 3,773,891
------------ ------------
Net increase (decrease) in cash (208,912) 26,730
Cash at beginning of period 208,912 235,254
------------ ------------
Cash at end of period $ -- $ 261,984
============ ============
</TABLE>
See notes to condensed consolidated financial statements.
6
<PAGE> 7
JAMESON INNS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. BUSINESS AND BASIS OF FINANCIAL STATEMENTS
Jameson Inns, Inc. (the "Company") is a self-administered real estate investment
trust ("REIT") headquartered in Atlanta which develops and owns limited service
hotel properties ("Inns") operating in the southeastern United States under the
trademark "The Jameson Inn (R)." At March 31, 1997, the Company had a total of
68 Inns either in operation or under development, including 46 Inns in operation
(2,227 available rooms), 13 Inns under construction and contracts to acquire
nine parcels of land on which additional Inns are expected to be constructed
during 1997 or 1998. In addition, at that date, one of the Inns in operation was
undergoing expansion. Upon completion of these projects, the Company will have
3,147 available rooms.
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-Q and Article 10 of
Regulation S-X. 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 a fair presentation have
been included. The condensed consolidated balance sheet at December 31, 1996 has
been derived from the audited consolidated financial statements at that date.
Operating results for the three month period ended March 31, 1997 are not
necessarily indicative of the results that may be expected for the year ended
December 31, 1997 or any other interim period. For further information, refer to
the consolidated financial statements and footnotes thereto included in the
annual report on Form 10-K for the year ended December 31, 1996.
2. STOCKHOLDERS' EQUITY
On March 10, 1997, the Company completed the sale of 2,300,000 newly issued
shares of common stock at $12 per share before underwriting discounts and
expenses. Net proceeds of approximately $26 million were used to repay certain
existing mortgage indebtedness at that date. The Company recorded an
extraordinary loss of $689,542 due to prepayment penalties and the writeoff of
unamortized deferred finance costs.
3. EARNINGS PER SHARE
In 1997, the Financial Accounting Standards Board released Statement No. 128,
Earnings Per Share, which generally simplifies the calculation of earnings per
share. The Company will adopt the new standard in 1998, as required; however,
the effect has not yet been determined.
7
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following discussion should be read in conjunction with the Jameson Inns,
Inc. condensed consolidated financial statements and notes thereto appearing
elsewhere in this quarterly report.
Jameson Inns, Inc. (the "Company") is a self-administered real estate investment
trust ("REIT") headquartered in Atlanta which develops and owns limited service
hotel properties ("Inns") operating in the southeastern United States under the
trademark "The Jameson Inn (R)." At March 31, 1997, the Company had a total of
68 Inns either in operation or under development, including 46 Inns in operation
(2,227 available rooms), 13 Inns under construction and contracts to acquire
nine parcels of land on which additional Inns are expected to be constructed
during 1997 or 1998. In addition, at that date, one of the Inns in operation was
undergoing expansion. Upon completion of these projects, the Company expects to
have 3,147 available rooms.
The Company's primary source of revenue is rent payments by Jameson Operating
Company (the "Operator") under a master lease (the "Lease") covering all of the
Inns in operation. The expenses of the Company consist of property taxes,
insurance, corporate overhead, interest on mortgage debt and depreciation of the
Inns. The Lease provides for the payment of Base Rent and Percentage Rent. For
the quarter ended March 31, 1997, Base Rent and Percentage Rent in the aggregate
amount of $2.7 million was earned by the Company. The principal determinant of
Percentage Rent is the Operator's Room Revenues of the Inns. Therefore,
management believes that a review of the historical performance of the
operations of the operating Inns, particularly with respect to occupancy,
average daily rate ("ADR") and revenue per available room ("REVPAR") is
appropriate for understanding the Lease revenue.
The following table shows certain historical financial and other information for
the periods indicated.
<TABLE>
<CAPTION>
THREE MONTH PERIOD ENDED
MARCH 31
------------------------------
1997 1996
------- -------
<S> <C> <C>
Occupancy rate 63.53% 64.34%
ADR $45.55 $43.92
REVPAR $28.94 $28.26
Room Revenues (000s) $5,820 $4,100
Room nights available 195,479 140,554
Room nights occupied 124,190 90,437
Operating Inns (at period end) 46 33
Rooms available (at period end) 2,227 1,617
</TABLE>
8
<PAGE> 9
RESULTS OF OPERATIONS
Comparison of the Three Months Ended March 31, 1997 to the Three Months Ended
March 31, 1996.
Lease revenue for the Company for the three month period ended March 31, 1997
increased 42% to $2.7 million as compared to $1.9 million for the same period in
1996. The increase was due to the increase in the Operator's Room Revenues.
The number of room nights available increased from 140,554 in 1996 to 195,479 in
1997, or 39%, due to the opening from January 1, 1996 through March 31, 1997 of
14 new 40-room Inns and six 20 to 26 room expansions of existing Inns. The
occupancy rate decreased from 64.34% during the first quarter of 1996 to 63.53%
during the first quarter of 1997. However, ADR increased 4% from $43.92 in 1996
to $45.55 in 1997. As a result of these three factors, first quarter Room
Revenues rose 42%, from $4.1 million for 1996 to $5.8 million in 1997. Same Inn
Room Revenues in 1997 versus 1996 grew to $4.3 million from $4.1 million, or 5%.
The growth is due to an increase in ADR from $43.92 to $45.06 for these Inns, an
increase in room nights available (due to expansions of certain of these Inns)
from 140,474 to 146,600, partially offset by a decrease in the occupancy rate
from 64.37% to 63.32% for these Inns for 1997 compared to 1996.
General and administrative expense includes overhead charges for management,
accounting and legal services for the corporate home office. General and
administrative expense for the three months ended March 31, 1997 was $72,032, as
compared to $134,748 for the three months ended March 31, 1996. The 1997 expense
is lower than 1996 due to a lower overhead allocation.
Property taxes and insurance expenses totaled $220,474 for the three month
period ended March 31, 1997 compared to $141,706 for the same period in 1996.
The increase is attributable to the increase in number of Inns.
Interest expense decreased from $690,243 for the three-month period ended March
31, 1996 to $346,416 for the same period ended March 31, 1997, due to the
greater amount of principal indebtedness outstanding in the first quarter of
1996. Debt balances were lower in 1997 due to the $25.6 million payoff in March
1997 and the $30.9 million payoff in April 1996 with proceeds of two equity
offerings. Interest expense amounts exclude interest capitalized in the cost of
new Inn development.
Depreciation expense increased from $610,389 to $855,866 for the three month
periods ended March 31, 1996 and 1997, respectively, due to an increase in the
number of operating Inns.
FUNDS FROM OPERATIONS
Industry analysts generally consider funds from operations (FFO) an appropriate
measure of an equity REIT's performance. Effective the second quarter of 1995,
the Company adopted the March 1995 interpretation of the NAREIT definition of
funds from operations which is calculated
9
<PAGE> 10
(in the Company's case) as net income plus depreciation, loss on disposal of
furniture and equipment and extraordinary items, if applicable. The following
FFO calculations for both periods follow the new interpretation. Other non-cash
expenses such as amortization and stock option expense have not been added back
in FFO. Funds from operations should not be considered an alternative to net
income as an indicator of the Company's operating performance or to cash flow as
a measure of liquidity.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
MARCH 31
----------------------
1997 1996
---------- --------
<S> <C> <C>
Net income $ 521,327 $338,504
Depreciation 855,866 610,389
Extraordinary loss 689,542 --
Loss on disposal of furniture and equipment 29,886 --
---------- --------
Funds from operations, per March 1995
NAREIT interpretation $2,096,621 $948,893
========== ========
</TABLE>
LIQUIDITY AND CAPITAL RESOURCES
In January 1997, the Company filed a shelf registration statement with the
Securities and Exchange Commission that provides for the issuance of an
aggregate of up to $100 million in Common Stock, Preferred Stock and Common
Stock warrants to be offered and sold from time to time. On March 10, 1997, the
Company completed the sale of 2,300,000 newly issued shares of common stock at
$12 per share before underwriting discounts and expenses. Net proceeds of
approximately $26 million were used to repay certain existing mortgage
indebtedness at that date. The Company intends to use future net proceeds, if
any, from any sale of securities under such registration statement for the
repayment of existing indebtedness, working capital and general corporate
purposes.
Since its election to be taxed as a REIT, the Company has financed and currently
intends to continue financing the construction of new Inns entirely with bank
borrowings. At March 31, 1997, the Company had approximately $2.9 million in
outstanding debt. It is management's intention to continue to borrow from some
or all of its previous lenders to finance future projects.
At March 31, 1997, the Company had a $29 million line of credit (the "Line")
convertible in June 1998 to a term note and the entire $29 million was available
for borrowing. Loans made under the Line are secured by mortgages on 28 of the
Inns. Subsequent to March 31, 1997, the Company increased its Line to
approximately $36 million, secured by mortgages on 31 of the Inns, and extended
the interest-only period to June 1999, at which time the Line is convertible to
a term note. Construction and long-term mortgages are expected to be available
to fund the balance of construction costs not funded under the Line. For each
new Inn developed by the
10
<PAGE> 11
Company, generally a construction loan for approximately $1.1 million has been
obtained. Each construction loan converts to a long-term mortgage upon
completion of the Inn without any further action by the Company. As of March 31,
1997, the Company had thirteen Inns unencumbered and available to use as
collateral for any additional financing.
The Company expects to continue to develop additional Inns as suitable
opportunities arise, and the Company will not undertake investments unless
adequate sources of financing are available. The Company currently is
constructing new 40-room Inns in Auburn, Jasper, Oxford, Sylacauga and
Tuscaloosa, Alabama; Asheboro, Laurinburg, Sanford and Wilson, North Carolina;
Clinton, Decherd and Tullahoma, Tennessee, and a 60-room Inn in Warner Robins,
Georgia. The total turnkey construction price for the Inns currently under
construction is $18.2 million, of which approximately $3 million had been
expended at March 31, 1997. The Company is also currently expanding the Inn in
Gaffney, South Carolina. The Company may in the future expand additional Inns if
management determines that sufficient market demand exists and financing is
available for any such expansion.
As with most real estate investments, the Company's investments in the Inns are
relatively illiquid and such illiquidity is further increased by the Inns'
location in small communities. As a result, the ability of the Company to sell
or otherwise dispose of any Inn to provide liquidity may be very limited.
FORWARD-LOOKING STATEMENTS
There are a number of statements in this report which address activities, events
or developments which the Company expects or anticipates will or may occur in
the future, including such things as the Company's expansion plans, including
construction of new Inns and expansion of existing Inns, availability of debt
financing and capital, payment of quarterly dividends and other matters. These
statements are based on certain assumptions and analyses made by the Company in
the light of its experience and its perception of historical trends, current
conditions and expected future developments, as well as other factors it
believes are appropriate under the circumstances. However, whether actual
results and developments will conform to the Company's expectations and
predictions is subject to a number of risks and uncertainties, including (1) the
Company's ability to (a) secure construction and permanent financing to finance
such development on terms and conditions favorable to the Company, (b) assess
accurately the market demand for new Inns and expansions of existing Inns, (c )
identify and purchase new sites which meet its various criteria, including
reasonable land prices, (d) contract for the construction of new Inns and
expansions of existing Inns in a manner which produces Inns consistent with its
present quality and standards at a reasonable cost and without significant
delays, (e) provide ongoing renovation and refurbishment of the Inns sufficient
to maintain consistent quality among the Inns, and (f) manage its business in a
cost-effective manner given the increase in the number of Inns; (2) the
Operator's willingness and ability to manage the Inns profitably; (3) general
economic, market and business conditions, particularly those in the lodging
industry generally and in the geographic markets where the Inns are located; (4)
the business opportunities (or lack thereof) that may be presented to and
pursued by the Company; (5) the availability of qualified managers and
11
<PAGE> 12
employees necessary for the Company's planned growth; (6) changes in laws or
regulations and (7) other factors, most of which are beyond the control of the
Company. Consequently, all of the forward-looking statements made in this report
are qualified by these cautionary statements and there can be no assurance that
the actual results or developments anticipated by the Company will be realized,
or even if substantially realized, that they will have the expected consequences
to or effects on the Company or its business or operations.
THE OPERATOR
The Company seeks to enhance Lease revenue by working in a collaborative manner
with the Operator. Presently, the Operator also has an exclusive relationship
with the Company in that the Operator does not manage any hotel properties other
than the Inns. The Company believes this exclusive relationship ensures that the
Company's and the Operator's interests are well-aligned. The Operator is owned
9.9% by Thomas W. Kitchin, Chairman, President and Chief Executive Officer of
the Company, and 90.1% by a grantor trust of which Steven A. Curlee, General
Counsel and Secretary of the Company, is the trustee. While the Company does not
control the operations of the Operator or the day-to-day operation of the Inns,
the two companies work together to enhance both occupancy and ADR. The Lease
formula allows the Company to benefit from increases in Room Revenues,
regardless of the mix between occupancy and ADR.
The following table summarizes the unaudited financial results of the Operator.
The comparison of revenues of the Operator between the two periods is the same
as that described above for the Company.
<TABLE>
<CAPTION>
THREE MONTH PERIOD ENDED
MARCH 31
-------------------------
1997 1996
---------- -----------
<S> <C> <C>
Room revenues as defined by Lease $5,820,328 $4,099,604
Operating expenses (3,078,100) (2,181,958)
Lease expense to Jameson Inns, Inc. (2,735,543) (1,915,590)
---------- ----------
Income before income taxes $ 6,685 $ 2,056
========== ==========
</TABLE>
12
<PAGE> 13
DISTRIBUTIONS TO STOCKHOLDERS
The table below sets forth, for the periods indicated, the cash distributions
declared per share for the common stock since January 1, 1995.
<TABLE>
<S> <C>
First Quarter, 1995 $ .19*
Second Quarter, 1995 .21
Third Quarter, 1995 .21
Fourth Quarter, 1995 .21
First Quarter, 1996 .21
Second Quarter, 1996 .22
Third Quarter, 1996 .22
Fourth Quarter, 1996 .22
First Quarter, 1997 .22**
</TABLE>
* Includes $.07 declared for the period January 1 to February 2, 1995 and
$.12 declared for the period February 3 to March 31, 1995.
** On April 25, 1997, the Company declared this dividend, which is payable on
May 22, 1997 to shareholders of record on May 5, 1997.
13
<PAGE> 14
PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
On March 7, 1997, the Company filed a current report on Form 8-K
reporting the execution by the Company of an underwriting agreement with
Oppenheimer & Company relating to the March 10, 1997 sale by the Company of
2,300,000 shares of Common Stock.
<TABLE>
<CAPTION>
EXHIBITS
<S> <C>
11.1 Earnings per Share
27.1 Financial Data Schedule
</TABLE>
14
<PAGE> 15
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
Jameson Inns, Inc.
(Registrant)
Dated: May 14, 1997 By: /s/ Thomas W. Kitchin
--------------------------------------
Thomas W. Kitchin
President and Chief Executive Officer
Dated: May 14, 1997 By: /s/ Craig R. Kitchin
--------------------------------------
Craig R. Kitchin
Chief Financial Officer
(Principal Financial Officer)
15
<PAGE> 16
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Page
- ------- ----
<S> <C> <C>
11.1 - Statement Re: Per Share Earnings ...........................
27.1 - Financial Data Schedule .....................................
</TABLE>
<PAGE> 1
EXHIBIT 11.1 STATEMENT RE: PER-SHARE EARNINGS
<TABLE>
<CAPTION>
THREE MONTH PERIOD ENDED
MARCH 31
--------------------------------
1997 1996
----------- ------------
<S> <C> <C>
Average shares and common stock
equivalents outstanding 7,906,499 3,864,797
Net effect of dilutive stock options
based on the treasury stock method 174,380 29,696
----------- -----------
8,080,879 3,894,493
=========== ===========
Net income $ 521,327 $ 338,504
=========== ===========
Extraordinary loss $ 689,542 $ --
=========== ===========
Per common and common equivalent share:
Income before extraordinary loss $ .15 $ .09
Extraordinary loss (.09) --
----------- -----------
Net income $ .06 $ .09
=========== ===========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 1,396,378
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,950,620
<PP&E> 85,287,783
<DEPRECIATION> (9,975,262)
<TOTAL-ASSETS> 78,932,024
<CURRENT-LIABILITIES> 266,375
<BONDS> 2,930,291
0
0
<COMMON> 967,644
<OTHER-SE> 74,767,714
<TOTAL-LIABILITY-AND-EQUITY> 78,932,024
<SALES> 2,735,543
<TOTAL-REVENUES> 2,735,543
<CGS> 220,474
<TOTAL-COSTS> 220,474
<OTHER-EXPENSES> 101,918
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 346,416
<INCOME-PRETAX> 1,210,869
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,210,869
<DISCONTINUED> 0
<EXTRAORDINARY> 689,542
<CHANGES> 0
<NET-INCOME> 521,327
<EPS-PRIMARY> .06
<EPS-DILUTED> .06
</TABLE>
