<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 June 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 June 30, 1997.
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NEWCARE HEALTH CORPORATION
FORM 10-Q
INDEX
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PAGE
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS 3
Unaudited Consolidated Balance Sheets as of June 30,
1997 and Audited December 31, 1996 3
Unaudited Consolidated Statements of Operations for
the Three Months Ended June 30, 1997 and 1996 4
Unaudited Consolidated Statements of Operations for
the Six Months Ended June 30, 1997 and 1996 5
Unaudited Consolidated Statements of Cash Flows for
the Six Months Ended June 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
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<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements
NEWCARE HEALTH CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED BALANCE SHEETS AS OF
JUNE 30, 1997 AND AUDITED AT DECEMBER 31, 1996
Unaudited Audited
June 30, December 31,
1997 1996
ASSETS --------- ------------
Current
Cash and cash equivalents $ 385,322 $ 3,198,700
Accounts receivable 2,621,444 1,829,581
Mortgage notes receivable -- 1,852,377
Other accounts receivable 1,174,000 588,832
Receivables from affiliates 644,819 --
Receivables from shareholders 1,430,424 --
Inventory 27,998 27,762
Restricted bond funds 355,418 305,044
Prepaid expenses -- 92,141
----------- -----------
Total current assets 6,639,425 7,894,437
Property and equipment, net of accum-
ulated depreciation and amortization 26,628,134 23,821,561
Goodwill, net of accumulated amortization 171,138 183,648
Restricted debt service 1,159,000 --
Other assets 597,452 367,455
----------- -----------
Total assets $35,195,149 $32,267,101
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Line of credit $1,000,000 $ --
Current maturities of long-term debt 1,165,074 16,899,696
Accounts payable 2,360,132 1,143,996
Accrued expenses 1,981,120 2,198,917
----------- -----------
Total current liabilities 6,506,326 20,242,609
Long-term debt 23,553,909 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 (4,084,160) (4,075,387)
Treasury stock (50,000) (50,000)
----------- -----------
Total shareholders' equity 5,134,914 5,143,687
----------- -----------
Total Liabilities and Shareholders'
Equity $35,195,149 $32,267,101
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<PAGE>
NEWCARE HEALTH CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS FOR
THE THREE MONTHS ENDED JUNE 30, 1997 AND 1996
June 30, June 30,
1997 1996
----------- ----------
Revenues
Patient service revenue $ 7,170,180 $7,206,222
Other operating income 128,604 134,526
----------- ----------
7,298,784 7,340,748
Expenses
Cost of patient services 5,604,995 5,358,222
Lease expense 137,381 163,544
General and administrative 992,625 850,700
Shareholder settlements 668,750 --
Depreciation and amortization 254,031 299,556
Interest 637,410 412,748
----------- ----------
8,295,192 7,084,770
----------- ----------
Operating income (loss) (996,408) 255,978
Income tax (provision) benefit 516,000 (20,000)
----------- ----------
Income (loss) from continuing operations (480,408) 235,978
(Loss) from discontinued business segment -- (199,104)
----------- ----------
Income (loss) before extraordinary item (480,408) 36,874
Extraordinary item, net of tax provision
of 510,000 and 194,000, respectively 508,743 497,668
----------- ----------
Net income $ 28,335 $ 534,542
----------- ----------
Net income (loss) per commmon share:
From continuing operations $ (0.04) $ 0.02
After discontinued business segment
and extraordinary item $ -- $ 0.05
Weighted average shares outstanding 11,604,043 10,667,524
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<PAGE>
NEWCARE HEALTH CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF OPERATIONS FOR
THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
June 30, June 30,
1997 1996
----------- ----------
Revenues
Patient service revenue $13,843,073 $14,700,000
Other operating income 223,490 170,810
----------- ----------
14,066,563 14,870,810
Expenses
Cost of patient services 10,652,388 11,058,106
Lease expense 304,618 353,235
General and administrative 2,188,726 1,692,619
Shareholder settlements 668,750 --
Depreciation and amortization 499,283 555,016
Interest 998,334 884,986
----------- ----------
15,312,099 14,543,962
----------- ----------
Operating income (loss) (1,245,536) 326,848
Income tax (provision) benefit 516,000 (40,000)
----------- ---------
Income (loss) from continuing operations (729,536) 286,848
(Loss) from discontinued business
segment (77,852) (166,527)
----------- ----------
Income (loss) before extraordinary item (807,388) 120,321
Extraordinary item, net of tax provision
of 510,000 and 194,000, respectively 798,615 497,668
----------- ----------
Net income (loss) $ (8,773) $ 617,989
----------- ----------
Net income (loss) per common share:
From continuing operations $ (0.06) $ 0.03
After discontinued business segment
and extraordinary item $ -- $ 0.06
Weighted average shares outstanding 11,369,662 10,667,524
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<PAGE>
NEWCARE HEALTH CORPORATION AND SUBSIDIARIES
UNAUDITED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
June 30, June 30,
1997 1996
----------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) $ (8,773) $ 617,989
Adjustments to reconcile net income
(loss) to net cash provided by
(used in) operating activities:
Depreciation and amortization 499,283 555,016
Provision for bad debts 275,000 222,086
Extraordinary item, net of tax
(provision) benefit (798,615) (497,668)
Changes in assets and liabilities
(Increase) decrease in accounts
receivable (1,066,863) 59,186
(Increase) decrease in inventories (236) 8,742
(Increase) decrease in prepaid
expenses 92,141 (3,232)
Increase (decrease) in accounts
payable and accrued expenses 1,508,339 (8,234)
Changes in other assets and lia-
bilities, net (282,737) (77,379)
----------- ---------
Net cash provided by operating
activities 217,539 876,506
CASH FLOWS FROM INVESTING ACTIVITIES
Net purchase of property and equipment (3,240,606) (166,019)
Payment of note receivable 1,852,377 --
Net (increase) in restricted funds (1,209,374) --
Increase in other accounts receivable (585,168) --
Increase in receivables from affiliates
and shareholders (2,075,243) --
----------- ---------
Net cash (used in)investing activities (5,258,014) (166,019)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from long-term debt 22,462,500 566,865
Repayment of long-term debt (21,235,403) (1,092,473)
Line of credit 1,000,000
----------- ---------
Net cash provided by (used in)
financing activities 2,227,097 (525,608)
----------- ---------
Net increase (decrease) in cash (2,813,378) 184,879
Cash and cash equivalents at beginning
of period 3,198,700 201,639
----------- ---------
Cash and cash equivalents at end of
period $ 385,322 $ 386,518
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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 $644,819 consist of advances to
Renaissance Senior Living, Inc., the management company, and are due on
demand.
Receivables from shareholders of $1,430,424 consist of amounts advanced
to shareholders to purchase stock of the Company. Subsequent to the end of the
quarter, $457,500 was repaid to the Company. The remaining balance of
$972,924 is due by 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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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:
June 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 $ 2,798,862 --
Notes payable to a real estate
investment trust ("REIT") $19,650,000 --
Notes payable to banks $ 175,121 $ 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 $24,718,983 $23,780,501
Less: Current maturities 1,165,074 16,899,696
----------- -----------
Long-term debt $23,553,909 $ 6,880,805
NOTE 8. FACILITY ACQUISITIONS AND OTHER TRANSACTIONS
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.
NOTE 9. SUBSEQUENT EVENTS
On August 1, 1997, the Company purchased an 84-bed rehabilitation
hospital located in Gardner, Kansas and announced an agreement had been
reached on the purchase of a 120 bed nursing facility located in Wakulla,
Florida. The purchase of the Florida nursing facility should be completed by
the end of the September 1997 quarter.
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<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF THE RESULTS OF OPERATIONS AND
FINANCIAL CONDITION.
THREE MONTHS ENDED JUNE 30, 1997 COMPARED TO THREE MONTHS ENDED JUNE 30, 1996
For the quarter ended June 30, 1997, the Company recorded a net income
of $28,000, or less than $0.01 per share, compared to a net income of
$535,000, or $0.05 per share, for the quarter ended June 30, 1996. The
results for the June 1997 quarter were impacted by an after-tax gain of
$509,000 from the refinancing and retirement of debt, while the results for
the June 1996 quarter were similarly impacted by an after-tax gain of $498,000
from the refinancing of debt.
Operating revenue totaled just under $7.3 million for the June 1997
quarter, a slight decline from the $7.3 million reported in the June 1996
quarter. Operating expenses for the current period were $8.3 million versus
$7.1 million in 1996. As a result, the Company experienced a loss from
operations of $996,000 for the three months ended June 30, 1997. For the
three months ended June 30, 1996, the Company reported an operating income of
$256,000. Included in the results for the current period were expenses
related to the settlement of liabilities due previous shareholders. Excluding
the settlement, the operating loss for the June 1997 quarter was $328,000.
Of the total operating expenses, excluding shareholder settlements, for
the June 1997 quarter, approximately $5.6 million, or 74% of the total, was
incurred on patient services expenses. For the June 1996 quarter, patient
services expenses were $5.4 million and accounted for 76% of total operating
expenses. Lease expenses totaled $137,000 in the current year versus
$164,000 last year, and comprised roughly 2% of total expenses in both
periods. Depreciation and amortization expense was $254,000 in the June 1997
quarter, or 3% of the total, and $300,000 in the June 1996 quarter, or 4% of
total expenses.
Interest expense for the quarter ended June 30, 1997 totaled $637,000
versus $413,000 in the quarter ended June 30, 1996, with the increase
principally the result of a higher average level of debt outstanding. General
and administrative expense was $993,000 in the current period and $851,000 in
1996. The expense in the current period was impacted by increased accruals
totalling $225,000 covering the areas of property taxes, personnel health
insurance, and professional fees, portions of which were related to the prior
quarter.
SIX MONTHS ENDED JUNE 30, 1997 COMPARED TO THE SIX MONTHS ENDED JUNE 30, 1996.
The Company experienced a net loss of $9,000, less than $0.01 per share,
for the six months ended June 30, 1997 compared to a net income of $618,000,
or $0.06 per share, reported for the six months ended June 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 an after-tax loss of
$167,000 from a discontinued business segment and after-tax gain of $498,000
from the refinancing of debt. The operating loss for the current period was
$1.2 million compared to an operating income of $327,000 in 1996.
Total operating revenues for the first six months of 1997 were $14.1
million versus $14.9 million in the same period in 1996. The decline in
operating revenues was the result of a drop in the average occupancy level at
the nursing home facilities from approximately 89% for the first six months of
1996 to approximately 87% for the first six months of 1997, and a slight
decrease in the average per diem rates. The lower occupancy levels and per
diem rates experienced in 1997 were partially offset by an improvement in the
payor mix at the nursing facilities as follows:
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<PAGE>
Six Months Ended
June 30,
1997 1996
---- ----
Medicaid 73% 77%
Medicare 12 12
Private Pay 13 7
Other Payors 2 4
---- ----
100% 100%
Total operating expenses for the first six months of 1997 were $15.3
million compared to $14.5 million 1996. Patient services expenses were $10.7
million in the current year versus $11.1 million last year, with the decline
resulting from lower occupancy levels. Lease expenses totalled $305,000 in
1997 and $353,000 in 1996. Depreciation and amortization expense was $499,000
for the first six months of 1997 and $555,000 in 1996. Interest expense was
$998,000 this year and $884,000 last year, principally the result of a higher
average level of debt outstanding.
General and administrative costs increased to $2.2 million from $1.7
million, and was related mainly to out of period accrual adjustments. The
results for the six months ended June 30, 1997 were also impacted by two
shareholder settlements totalling $669,000.
LIQUIDITY AND CAPITAL RESOURCES
At June 30, 1997, the Company had positive working capital of $130,000
versus a negative working capital position of $12.8 million at March 31, 1997
and December 31, 1996. During the June 1997 quarter, the Company completed a
debt refinancing on four of its facilities. This transaction, which totaled
$21.5 million, added $19.65 million to long-term debt and left $1.85 million
available for facility renovations at the Company's discretion over the next
two years. Approximately $4.5 million net cash was generated, of which a
majority was used to make the final payment in settlement of the Spectrum
note.
In addition, the Company implemented a new $10 million line of credit,
with the available amount based on the balance of specific accounts
receivable. At June 30, 1997, the available amount was approximately $2
million, of which $1 million was drawn. The term of the agreement is for
three years with an annual one year roll over feature.
During the six months ended June 30, 1997, cash provided from operating
activities totaled $218,000 versus $877,000 for the six months ended June 30,
1996. The principal reason for the decline was the reduction in net income.
In addition, there was an increase in accounts receivable, but this was offset
by an increase in accounts payable.
Cash flow used in investing activities totaled $5.3 million for the
first six months of 1997 compared to $166,000 for the first six months of
1996. A majority of the increase resulted from an increase in expenditures
for property and equipment. Increases in various receivables were partially
offset by the receipt of funds related to a note receivable.
Cash provided by financing activities for the six months ended June 30,
1997 totaled $2.2 million versus cash used in financing activities of $526,000
for the six months ended June 30, 1996. Proceeds from additional debt
financing increased $21.9 million from the year earlier, while the repayment
of long term
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<PAGE>
debt increased $20.1 million from 1996. In addition, the Company drew down $1
million under its revolving credit line.
Cash and cash equivalents at June 30, 1997 was $385,000 versus $387,000
at June 30, 1996. The Company believes that its existing cash and cash from
operations will be sufficient to fund its continued operations.
Subsequent to the end of the quarter, the Company commenced a private
placement of common stock with a $5 million minimum and a $10 million maximum.
If the offering is successfully completed, of which there is no assurance, 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 the
purchase of a rehabilitation hospital in Gardner, Kansas on August 1. In
addition, the Company reached an agreement to purchase a nursing facility in
Florida. These transactions are in line with the Company's strategy of
opportunistic growth.
To further enhance the already experienced management team, the Company
has recently announced the addition of four highly qualified individuals.
Frank Camma, formerly of NatWest Markets, joined the Company in late March as
Vice President-Strategic Planning and has more than five years experience in
the healthcare industry. Jim Sanregret, a 24 year veteran with Delta Air
Lines and its Treasurer, joined the Company in June as Chief Financial
Officer. In July, the Company added Tim Beaulieu, formerly the Chief
Operating Officer of Life Care Corporation for the past four years, as
Executive Vice President of Nursing Home Operations. Mr. Beaulieu was at Life
Care a total of 14 years. Late in July, the Company announced that Art
Doloresco will be joining the firm as President of NewCare Hospital
Corporation, a wholly-owned subsidiary. He is a twenty year veteran of the
healthcare industry, most recently serving as President of the Kentucky
Division of Columbia/HCA. In this capacity, Mr. Doloresco was responsible for
the operations at 13 hospitals.
FACILITY LISTING
At June 30, 1997, the Company operated the following facilities:
Occupancy
Name State # of Beds As of 6/30/97
- ---------------------------- ----- --------- -------------
Central Tampa Nursing Home FL 100 78.0%
Dania Nursing Home FL 88 83.0
Oak Manor Nursing Home FL 180 90.6
Oak Manor Villas FL 224 61.2
Suncoast Nursing Home FL 59 83.1
Victoria Martin Nursing Home FL 38 65.8
Emory Nursing Home GA 40 100.0
Fitzgerald Nursing Home GA 167 85.6
Fort Valley Nursing Home GA 75 100.0
Pleasant View Nursing Home GA 120 92.5
Whigham Nursing Home GA 142 93.7
Winward Nursing Home GA 100 96.0
-----
TOTALS 1,333 84.2% average
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<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.
During June 1997, the Company's former chief financial officer exercised
a stock option and purchased 10,000 shares of common stock. The shares of the
Company's common stock which were issued pursuant to this transaction were
issued in reliance upon the exemption provided by Section 4(2) of the
Securities Act of 1933, as amended. The person to whom such securities were
issued in exchange for cash made an informed investment decision and had
access to material information regarding the Company. The Company believes
that such person had knowledge and experience in financial and business
matters such that he was capable of evaluating the merits and risks of the
acquisition of the Company's common stock in connection with this transaction.
The certificate representing such common shares bears an appropriate legend
restricting the transfer of such securities, except in accordance with the
Securities Act of 1933, as amended, and stop transfer instructions have been
provided to the Company's transfer agent in accordance therewith.
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 June 30, 1997:
1. A report dated April 15, 1997 was filed which reported under Item
5 the terms of a Settlement Agreement with Robert and Karen Hagan relating to
the termination of Mr. Hagan's employment agreement and other matters.
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<PAGE>
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: August 14, 1997 By /s/ Ashok Dalal
Ashok Dalal, President
Date: August 14, 1997 By /s/ James H. Sanregret
James H. Sanregret
Chief Financial Officer
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<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> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1997
<CASH> 385,322
<SECURITIES> 355,418
<RECEIVABLES> 5,870,687
<ALLOWANCES> 0
<INVENTORY> 27,998
<CURRENT-ASSETS> 6,639,425
<PP&E> 26,628,134
<DEPRECIATION> 0
<TOTAL-ASSETS> 35,195,149
<CURRENT-LIABILITIES> 6,506,326
<BONDS> 0
<COMMON> 213,350
0
0
<OTHER-SE> 4,921,564
<TOTAL-LIABILITY-AND-EQUITY> 35,195,149
<SALES> 7,298,784
<TOTAL-REVENUES> 7,298,784
<CGS> 5,604,995
<TOTAL-COSTS> 5,604,995
<OTHER-EXPENSES> 2,690,197
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 637,410
<INCOME-PRETAX> (996,408)
<INCOME-TAX> 516,000
<INCOME-CONTINUING> (480,408)
<DISCONTINUED> 0
<EXTRAORDINARY> 508,743
<CHANGES> 0
<NET-INCOME> 28,335
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>