<PAGE>
U.S. 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 the quarterly period Ended September 30, 1997
Commission File No. 0-24110
NEWCARE HEALTH CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Nevada 86-0594391
- ------------------------------ ------------------------------------
(State or other jurisdiction of (IRS Employer Identification Number)
Incorporation or Organization)
6000 Lake Forrest Drive, Suite 315, Atlanta, Georgia 30328
------------------------------------------------------------------
(Address of Principal Executive Offices including zip code)
(404) 252-2923
------------------------------
(Registrant's telephone number)
Indicate by check mark whether the Registrant (1) has 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 [ ]
There were 10,682,525 shares of the Registrant's Common Stock outstanding as
of September 30, 1997.
<PAGE>
NEWCARE HEALTH CORPORATION
FORM 10-Q
INDEX
-----
PAGE
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS 3
Unaudited Consolidated Balance Sheets as of September 30,
1997 and Audited December 31, 1996 3
Unaudited Consolidated Statements of Operations for
the Three Months Ended September 30, 1997 and 1996 4
Unaudited Consolidated Statements of Operations for
the Nine Months Ended September 30, 1997 and 1996 5
Unaudited Consolidated Statements of Cash Flows for
the Nine Months Ended September 30, 1997 and 1996 6
Notes to Consolidated Financial Statements 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS 9
PART II. OTHER INFORMATION 12
ITEM 1. LEGAL PROCEEDINGS 12
ITEM 2. CHANGES IN SECURITIES 12
ITEM 3. DEFAULTS UPON SENIOR SECURITIES 12
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 12
ITEM 5. OTHER INFORMATION 12
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 13
SIGNATURES 13
-2-
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
NEWCARE HEALTH CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEETS AS OF
SEPTEMBER 30, 1997 AND AUDITED AT DECEMBER 31, 1996
Unaudited Audited
September 30, December 31,
1997 1996
ASSETS --------- ------------
Current
Cash and cash equivalents $ 49,330 $ 3,198,700
Accounts receivable 3,376,689 1,829,581
Mortgage notes receivable -- 1,852,377
Other accounts receivable -- 588,832
Receivables from affiliates 1,007,713 --
Receivables from shareholders 990,000 --
Inventory 28,000 27,762
Restricted bond funds 362,021 305,044
Prepaid expenses -- 92,141
----------- -----------
Total current assets 5,813,753 7,894,437
Property and equipment, net of accum-
ulated depreciation and amortization 36,361,895 23,821,561
Goodwill, net of accumulated amortization 662,727 183,648
Restricted debt service -- --
Other assets 2,016,434 367,455
----------- -----------
Total assets $44,854,809 $32,267,101
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Line of credit $1,483,158 $ --
Current maturities of long-term debt 1,178,825 16,899,696
Accounts payable 2,368,656 1,143,996
Other accounts payable 950,000
Accrued expenses 1,854,120 2,198,917
----------- -----------
Total current liabilities 7,834,759 20,242,609
Long-term debt 33,626,110 6,880,805
Shareholders' equity
Common stock, $.02 par value; 50,000,000
shares authorized; 10,682,525 and
10,667,524 issued respectively 213,350 213,350
Additional paid-in capital 9,055,724 9,055,724
Accumulated deficit (5,825,134) (4,075,387)
Treasury stock (50,000) (50,000)
----------- -----------
Total shareholders' equity 3,393,940 5,143,687
----------- -----------
Total Liabilities and Shareholders'
Equity $44,854,809 $32,267,101
-3-
<PAGE>
NEWCARE HEALTH CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS FOR
THE THREE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
September 30, September 30,
1997 1996
----------- ----------
Revenues
Patient service revenue $8,480,380 $6,228,480
Other operating income 171,280 57,664
----------- ----------
8,651,660 6,286,144
Expenses
Cost of patient services 7,688,499 4,369,697
Lease expense 419,432 113,451
General and administrative 2,323,180 816,096
Depreciation and amortization 365,202 386,969
Interest 655,322 222,085
----------- ----------
11,451,635 5,908,298
----------- ----------
Operating income (loss) (2,799,975) 377,846
Income tax (provision) benefit 1,059,000 (157,000)
----------- ----------
Income (loss) from continuing operations (1,740,975) 220,846
(Loss) from discontinued business segment -- (2,044,241)
----------- ----------
Income (loss) (1,740,975) (1,823,395)
Net income (loss) per common share:
From continuing operations $ (.16) $ 0.02
After discontinued business segment
and extraordinary item $ (.16) $ (0.17)
Weighted average shares outstanding 10,682,525 11,047,525
-4-
<PAGE>
NEWCARE HEALTH CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS FOR
THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
September 30, September 30,
1997 1996
----------- ----------
Revenues
Patient service revenue $22,323,453 $20,928,480
Other operating income 394,770 228,474
----------- ----------
22,718,223 21,156,954
Expenses
Cost of patient services 18,340,887 15,427,803
Lease expense 724,050 466,686
General and administrative 4,481,906 2,508,715
Shareholder settlements 668,750 --
Depreciation and amortization 864,485 941,985
Interest 1,653,656 1,107,071
----------- ----------
26,733,734 20,452,260
----------- ----------
Operating income (loss) (4,015,511) 704,694
Income tax (provision) benefit 1,545,000 (197,000)
----------- ---------
Income (loss) from continuing operations (2,470,511) 507,694
(Loss) from discontinued business
segment net of tax provision of $30,000
and $391,000 respectively (77,852) (2,210,768)
----------- ----------
Income (loss) before extraordinary item (2,548,363) (1,703,074)
Extraordinary item, net of tax provision
of 510,000 and 194,000, respectively 798,616 497,668
----------- ----------
Net income (loss) ($1,749,747) ($1,205,406)
----------- ----------
Net income (loss) per common share:
From continuing operations $ (.23) $ 0.05
After discontinued business segment
and extraordinary item $ (.16) $ (0.11)
Weighted average shares outstanding 10,677,252 10,797,525
-5-
<PAGE>
NEWCARE HEALTH CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
September 30, September 30,
1997 1996
----------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) ($ 1,749,747) ($ 1,205,406)
Adjustments to reconcile net
(loss) to net cash (used in)
operating activities:
Depreciation and amortization 864,485 1,202,011
Provision for bad debts 425,000 826,228
Extraordinary item, net of tax
(provision) benefit (798,615) 882,332
Changes in assets and liabilities
(Increase) decrease in accounts
receivable (1,972,108) 294,603
(Increase) decrease in inventories (238) 186,583
(Increase) decrease in prepaid
expenses 92,141 (10,731)
Increase (decrease) in accounts
payable and accrued expenses 2,339,863 (745,989)
Changes in other assets and lia-
bilities, net (1,726,269) (334,548)
----------- ---------
Net cash provided by (used in)
operating activities (2,525,488) 1,095,083
CASH FLOWS FROM INVESTING ACTIVITIES
Net purchase of property and equipment (13,806,608) (319,978)
Payment of note receivable 1,852,377 --
Net (increase) in restricted funds (56,977) --
Increase in other accounts receivable 588,832 --
Increase in receivables from affiliates
and shareholders (1,997,713) --
----------- ---------
Net cash (used in)investing activities (13,420,089) (319,978)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long-term debt 32,569,300 714,837
Repayment of long-term debt (21,256,251) (1,265,490)
Line of credit 1,483,158
----------- ---------
Net cash provided by (used in)
financing activities 12,769,207 (550,653)
----------- ---------
Net increase (decrease) in cash (3,149,370) 224,452
Cash and cash equivalents at beginning
of period 3,198,700 201,639
----------- ---------
Cash and cash equivalents at end of
period $ 49,330 $ 426,091
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<PAGE>
NEWCARE HEALTH CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1. BASIS OF PRESENTATION
The consolidated financial statements included herein have been prepared
by the Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations, although the Company believes that the
disclosures are adequate to make the information presented not misleading.
These consolidated financial statements and the notes thereto should be read
in conjunction with the consolidated financial statements included in the
Company's Annual Report on Form 10-KSB for the year ended December 31, 1996,
File No. 0-24110.
In the opinion of management of the Company, the accompanying unaudited
consolidated financial statements contain all necessary adjustments to present
fairly the financial position, the results of operations and cash flows for
the periods reported. All adjustments are of a normal recurring nature.
NOTE 2. ACCOUNTS RECEIVABLE AND COST REIMBURSEMENTS
Accounts receivable and operating revenue include net amounts reimbursed
by Medicaid under the provisions of cost reimbursement formulas in effect.
The Company operates under a prospective payment system with Medicare, under
which annual rates are assigned based on estimated reimbursements.
Differences between estimated provisions and final settlement are reflected as
adjustments to future rates.
NOTE 3. RECEIVABLES FROM AFFILIATES AND SHAREHOLDERS
Receivables from affiliates of $1,007,713 consist of advances to
Renaissance Senior Living, Inc., the management company, and are due on
demand.
Receivables from shareholders of $990,000 consist of amounts advanced to
shareholders to purchase stock of the Company and are due July 1, 1998.
NOTE 4. INVENTORY
Inventory consists primarily of health care supplies and is stated at
the lower of cost (determined using the first-in, first-out method) or market
value.
NOTE 5. MORTGAGE NOTES RECEIVABLE
On November 15, 1996, the Company purchased two purchase money mortgage
notes totaling $1,853,300. The notes are collateralized by all real and
personal property of Central Tampa Nursing Facility which the Company leases
from the issuer of the notes. The notes bear interest at the rate of 10% per
annum and were due on January 15, 1997. At maturity, the note terms were
modified where the notes are due on demand by the Company. The notes were
repaid with the purchase of Central Tampa Nursing Facility by the Company
during the June 1997 quarter.
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<PAGE>
NOTE 6. LINE OF CREDIT
The Company acquired a $10,000,000 line of credit collateralized by
accounts receivable in June 1997 which requires monthly interest payments at
the financial institution's prime base rate plus 2%. Borrowings under the
line of credit are limited to a percentage of qualified accounts receivable.
NOTE 7. LONG-TERM DEBT
Long-term debt payable consisted of the following:
September 30, December 31,
1997 1996
----------- -----------
Amounts outstanding under
revenue bonds secured by a
nursing facility $ 1,000,000 $ 3,335,000
HUD loan outstanding secured
by a nursing home $ 2,788,383 --
Notes payable to real estate
investment trust's ("REIT") $25,252,680 --
Specialty health care lender $ 4,500,000 --
Notes payable to banks $ 168,872 $ 4,350,546
Notes payable to related party $ 1,095,000 $ 6,820,993
Notes payable to others $ -- $ 3,914,367
Notes payable related to
acquisition of Spectrum $ -- $ 5,359,595
----------- ----------
TOTALS $34,804,935 $23,780,501
Less: Current maturities 1,178,825 16,899,696
----------- -----------
Long-term debt $33,626,110 $ 6,880,805
NOTE 8. FACILITY ACQUISITIONS AND OTHER TRANSACTIONS
During the quarter ended June 30, 1997, the Company purchased a nursing
facility, which it had previously leased, and refinanced four existing
facilities with long-term debt of $22.5 million. A portion of the proceeds
was used to retire the Spectrum note of $5.4 million. The Company also
entered into a long term lease agreement related to a 142 bed nursing facility
located in Whigham, Georgia. The term is for 15 years at a monthly rental of
$29,333.
On August 1, 1997 the Company purchased an 84-bed rehabilitation
hospital located in Gardner, Kansas. The purchase price of $5,000,000 was
paid $500,000 in cash and a mortgage of $4,500,000 from a specialty health
care lender.
On September 15, 1997, the Company acquired all of the outstanding stock
of a 120-bed nursing facility in Wakulla, Florida for approximately $1,200,000
in cash and the assumption of approximately $3,200,000 in debt. The Company
purchased the stock, retired the assumed debt and retired additional
liabilities with a $4,800,000 loan from a real estate investment trust.
-8-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE RESULTS OF OPERATIONS AND
FINANCIAL CONDITION.
THREE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 1996
For the quarter ended September 30, 1997, the Company recorded a net
loss of $1,741,000, or $0.16 per share, compared to a net loss of $1,823,000,
or $0.17 per share, for the quarter ended September 30, 1996. The results for
the September 1996 quarter included a loss from discontinued operations of
$2,044,000.
Operating revenue for the September 1997 quarter totaled $8.7 million
compared to $6.3 million reported in the September 1996 quarter. Operating
expenses were $11.5 million in the current period versus $5.9 million in 1996.
As a result, the Company incurred a loss from operations of $2,800,000 for the
September 1997 quarter compared to an operating income of $378,000 reported in
the September 1996 quarter.
Included in the total operating expense for the three months ended
September 30, 1997 was $7.7 million incurred on patient services which
represented approximately 91% of patient services revenue. For the three
months ended September 30, 1996, patient services expense totaled $4.4 million
which represented approximately 70% of patient services revenue. The
principal reasons for the increase in expenses as a percent of revenue
included a decline in the average facility occupancy rate and additional
accruals for health insurance and other employee benefits. Lease expense
totaled $419,000 in the current year and $113,000 in 1996, with the increase
attributable to growth in operations. Depreciation and amortization expense
was $365,000 in the September 1997 quarter and $387,000 in the September 1996
quarter. Interest expense in the current quarter was $655,000 versus $222,000
last year, and the increase was mainly the result of a higher average level of
debt outstanding.
General and administrative expense for the September 1997 quarter
totaled $2,323,000 versus $816,000 in the same period last year. Included in
the current period expense was a retroactive rate increase to April of this
year related to personnel health insurance, additional bad debt reserves
related to aging receivables, and higher personnel costs resulting from the
addition of several key members of the management team to better position the
Company for expansion and strategic growth in the coming months.
NINE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO THE NINE MONTHS ENDED
SEPTEMBER 30, 1996.
The Company reported a net loss of $1,750,000, or $0.16 per share, for
the nine months ended September 30, 1997 compared to a net loss of $1,205,000,
or $0.11 per share, for the nine months ended September 30, 1996. Included in
the current year's results was a $78,000 after-tax loss from a discontinued
business segment and an after-tax gain of $799,000 from the refinancing and
retirement of debt. The results for 1996 included a $2.2 million after-tax
loss from a discontinued business segment and a $498,000 after-tax gain from
the restructuring of debt. The operating loss for the current period was $4.0
million compared to an operating income of $705,000 in 1996.
Total operating revenues for the first nine months of 1997 were $22.8
million versus $21.2 million in first nine months of 1996. The increase in
revenue was principally the result of a full quarter of operations for Whigham
Nursing Home acquired on June 1, of this year, the acquisition of Meadowbrook
Hospital on August 1, and the addition of Wakulla Nursing Home on September
16.
-9-
<PAGE>
These increases were partially offset by changes in the average occupancy
levels and payor mix at the nursing home facilities as follows:
Nine Months Ended
September 30,
1997 1996
---- ----
Medicaid 78% 75%
Medicare 4 9
Private Pay 17 10
Other Payors 1 6
TOTAL 100% 100%
Occupancy Level 77% 89%
Total operating expenses for the first nine months of 1997 were $26.7
million compared to $20.5 million 1996. Patient services expense was $18.3
million in the current year versus $15.4 million last year. Lease expense
totaled $724,000 in 1997 and $467,000 in 1996. The increase in patient
services and lease expense are attributable to the growth in the number of
facilities since 1996. Depreciation and amortization expense for the first
nine months of 1997 totaled $864,000 and $942,000 for the first nine months of
1996. Interest expense was $1.7 million in 1997 and $1.1 million in 1996,
with the increase principally the result of a higher average level of debt
outstanding.
General and administrative expense increased to $4.5 million in 1997
from $2.5 million in 1996. The main reasons for the increase included
additional bad debt reserves associated with aging receivables, higher costs
for personnel insurance programs, increases in property taxes, and the
addition of key management personnel during the year. Operating expenses for
the current year were also impacted by two shareholder settlements in the June
quarter totaling $669,000.
LIQUIDITY AND CAPITAL RESOURCES
At September 30, 1997, the Company had a negative working capital
position of $2.0 million versus a negative working capital position of $12.3
million at December 31, 1996. The principal reason for the improvement in
working capital during the year resulted from the refinancing of a significant
portion of the Company's debt during the June quarter and the implementation
of a new $10 million line of credit. At September 30, 1997, long-term debt,
including current maturities, totaled $34.8 million versus $23.8 million at
December 31, 1996.
During the first nine months of 1997, cash used in operations totaled
$2.5 million versus cash provided by operations of $1.1 million for the first
nine months of 1996. The main reason for the reduction stemmed from a higher
net loss and an increase in accounts receivable.
Cash flow used in investing activities totaled $13.4 million for the
nine months ended September 30, 1997 versus cash used in investing activities
of $320,000 for the nine months ended September 30, 1996. A majority of the
increase resulted from additional expenditures for property and equipment
associated with the addition of facilities.
Cash provided by financing activities for the first nine months of 1997
totaled $12.8 million versus cash used in financing activities of $551,000 for
the first nine months of 1996. Proceeds from additional debt financing
increased to $32.6 million in the current period from $715,000 last year, and
the repayment of long-term debt increased to $21.3 million in 1996 from $1.3
million in 1996. In addition, the Company drew down $1.5 million under its
revolving credit line.
-10-
<PAGE>
Cash and cash equivalents at September 30, 1997 was $49,000 versus
$426,000 at September 30, 1996. The Company believes that its existing cash,
cash from operations and available external capital sources will be sufficient
to fund its continued operations.
Subsequent to the end of the quarter, the Company completed its initial
minimum private placement of common stock, which generated approximately $2.8
million. The Company plans to keep open the private placement for an
undetermined period of time as continued interest in this placement is
received from investors. The maximum private placement the Company will allow
is $10 million. The Company plans to utilize these funds to acquire
additional facilities and enhance its working capital position.
RECENT DEVELOPMENTS
Subsequent to the close of the quarter, the Company announced it had
reached an agreement to manage two hospitals for an initial term of five years
and obtain five year purchase options equal to the debt at each hospital at
the time the option is exercised.
Tri-City Hospital, located in Dallas, Texas, is a private, non-profit
137 licensed-bed osteopathic acute care facility. Princeton Hospital, located
in Orlando, Florida, is a private, non-profit 150 licensed-bed general acute
care facility.
The Company believes these management agreements are in line with its
strategy of opportunistic growth in the hospital environment and will
complement its Meadowbrook facility purchased on August 1 of this year.
FACILITY LISTING
At September 30, 1997, the Company operated the following facilities:
Occupancy
Name State # of Beds As of 6/30/97
- ---------------------------- ----- --------- -------------
Central Tampa Nursing Home FL 100 70.0%
Dania Nursing Home FL 88 84.1%
Oak Manor Nursing Home FL 180 92.8%
Oak Manor Villas FL 224 36.2%
Suncoast Nursing Home FL 59 84.7%
Victoria Martin Nursing Home FL 38 76.3%
Wakulla Manor FL 120 93.3%
Emory Nursing Home GA 40 100.0%
Fitzgerald Nursing Home GA 167 84.4%
Fort Valley Nursing Home GA 75 100.0%
Pleasant View Nursing Home GA 120 90.0%
Whigham Nursing Home GA 142 96.5%
Winward Nursing Home GA 100 95.3%
----- -----
TOTALS 1,453 81.1% average
Meadowbrook Hospital KS 84 19.0%
Tri-City Hospital TX 137 (managed)
Princeton Hospital FL 150 (managed)
-11-
<PAGE>
IMPACT OF PENDING FEDERAL HEALTH CARE LEGISLATION
Management is uncertain what the financial impact will be of the pending
federal health care reform package since the legislation has not been
finalized. However, based on information which has been released to the
public thus far, management does not believe that there will be cuts in
reimbursements paid to nursing homes.
Legislative and regulatory action at the state and federal level, has
resulted in continuing changes in Medicare and Medicaid reimbursement
programs. The changes have limited payment increases under these programs.
Also, the timing of payments made under Medicare and Medicaid programs are
subject to regulatory action and governmental budgetary constraints. Within
the statutory framework of the Medicare and Medicaid programs, there are
substantial areas subject to administrative rulings and interpretations which
may further affect payments made under these programs. Further, the federal
and state governments may reduce the funds available under these programs in
the future or require more stringent utilization and quality review of health
care facilities.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS. None.
ITEM 2. CHANGES IN SECURITIES. None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES. None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. None.
ITEM 5. OTHER INFORMATION. None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(b) Reports on Form 8-K. The Company filed the following reports on
Form 8-K during the three months ended September 30, 1997:
1. Two reports dated September 30, 1997 were filed, each of which
reported under Items 5 and 7 the terms of agreements for NewCare Hospital
Corporation ("NHC"), a majority-owned subsidiary of the Company, to manage (1)
Princeton Hospital, a 150 licensed-bed hospital located in Orlando, Florida
and (2) Tri-City Hospital, a 137 licensed-bed osteopathic acute care hospital
located in Dallas, Texas. These agreements also included five-year options
for NHC to purchase these facilities for a price equal to the amount of debt
outstanding at such time as the options are exercised.
SIGNATURES
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
NEWCARE HEALTH CORPORATION
Date: November 14, 1997 By: /s/ James H. Sanregret
James H. Sanregret
Chief Financial Officer
-12-
<PAGE>
EXHIBIT INDEX
EXHIBIT METHOD OF FILING
- ------- ------------------------------
27. Financial Data Schedule Filed herewith electronically
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
balance sheets and statements of operations found on pages 3-4 of the
Company's Form 10-QSB for the year to date, and is qualified in its entirety
by reference to such financial statements.
</LEGEND>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1997
<CASH> 49,330
<SECURITIES> 0
<RECEIVABLES> 4,384,402
<ALLOWANCES> 0
<INVENTORY> 28,000
<CURRENT-ASSETS> 5,813,753
<PP&E> 36,361,895
<DEPRECIATION> 0
<TOTAL-ASSETS> 44,854,809
<CURRENT-LIABILITIES> 7,834,759
<BONDS> 0
<COMMON> 213,350
0
0
<OTHER-SE> 3,180,590
<TOTAL-LIABILITY-AND-EQUITY> 44,854,809
<SALES> 22,718,223
<TOTAL-REVENUES> 22,718,223
<CGS> 18,340,887
<TOTAL-COSTS> 18,340,887
<OTHER-EXPENSES> 8,392,847
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,653,656
<INCOME-PRETAX> (4,015,511)
<INCOME-TAX> 1,545,000
<INCOME-CONTINUING> (2,470,511)
<DISCONTINUED> (77,852)
<EXTRAORDINARY> 798,616
<CHANGES> 0
<NET-INCOME> (1,749,747)
<EPS-PRIMARY> (.16)
<EPS-DILUTED> (.16)
</TABLE>
