<PAGE>
U. S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D. C. 20549
FORM 10-QSB
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE PERIOD ENDED SEPTEMBER 30, 1998
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT
FOR THE TRANSITION PERIOD FROM ___________ TO _____________
Commission file number 0-25366
AUSTINS STEAKS & SALOON, INC.
(Exact name of small business issuer as specified in its charter)
Delaware 86-0723400
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification No.)
6940 "O" Street, Suite 334
Lincoln, Nebraska 68510
(Address of principal executive offices)
(402) 466-2333
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Exchange Act during the past 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been
subject to such filing requirements for the past 90 days. Yes X No
--- ---
As of October 30, 1998, there were 2,647,927 shares of the issuer's common stock
outstanding.
<PAGE>
Part I: Financial Information
Item 1 - Financial Statements
AUSTINS STEAKS & SALOON, INC.
Consolidated Balance Sheets
as of September 30, 1998 and December 31, 1997
<TABLE>
<CAPTION>
September 30,
1998 December 31,
(unaudited) 1997
------------ ------------
<S> <C> <C>
ASSETS
Current assets:
Inventories $ 134,111 $ 119,068
Prepaid expenses & other current assets 253,982 168,397
--------- ---------
Total current assets 388,093 287,465
--------- ---------
Equipment 1,702,888 1,479,162
Leasehold improvements 2,632,396 2,308,802
--------- ---------
4,335,284 3,787,964
Accumulated depreciation & amortization (1,756,846) (1,388,183)
--------- ---------
Equipment & leasehold improvements, net 2,578,438 2,399,781
--------- ---------
Intangibles, net 568,780 605,612
Other assets 785,982 786,599
--------- ---------
$ 4,321,293 $ 4,079,457
============ ============
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Cash overdraft $ 39,244 $ 53,224
Accounts payable 872,317 817,157
Interest payable 2,274 8,858
Unredeemed gift certificates 54,905 85,070
Current portion of long-term debt 764,683 119,330
--------- ---------
Total current liabilities 1,733,423 1,083,639
--------- ---------
Long-term debt, net of current portion 331,897 699,361
Note payable to shareholder 269,928 269,928
--------- ---------
601,825 969,289
--------- ---------
STOCKHOLDERS' EQUITY
Common stock ($0.01 par value; 7,500,000 shares
authorized; 2,647,927 and 2,331,052 shares issued and outstanding) 26,479 23,311
Additional paid-in capital 5,704,655 5,487,511
Accumulated deficit (3,745,089) (3,484,293)
----------- -----------
Total stockholders' equity 1,986,045 2,026,529
--------- ----------
$ 4,321,293 $ 4,079,457
============ ============
</TABLE>
The accompanying notes are an integral part of the
consolidated financial statements.
<PAGE>
AUSTINS STEAKS & SALOON, INC.
Consolidated Statements of Operations
(unaudited)
<TABLE>
<CAPTION>
For the three months For the nine months
ended September 30 ended September 30
1998 1997 1998 1997
------------ ------------ ---------- ------------
<S> <C> <C> <C> <C>
Net sales $ 2,395,780 $ 2,367,462 $ 7,041,636 $ 7,258,318
Costs and expenses:
Cost of sales 1,639,931 1,664,700 4,817,927 5,087,679
Restaurant operating expenses 659,228 684,093 1,939,172 2,102,737
--------- --------- --------- ---------
Restaurant costs and expenses 2,299,159 2,348,793 6,757,099 7,190,416
--------- --------- --------- ---------
Restaurant operating income 96,621 18,669 284,537 67,902
General and administrative 134,553 167,926 426,494 457,798
Loss on sale of restaurant - - 35,000 -
--------- --------- --------- ---------
Loss from operations (37,932) (149,257) (176,957) (389,896)
Other expense:
Interest expense 32,739 24,733 83,839 86,597
--------- --------- --------- ---------
Net loss $ (70,671) $ (173,990) $ (260,796) $ (476,493)
=========== ============ ============ ===========
Basic and diluted net loss per share $ (0.03) $ (0.07) $ (0.11) $ (0.20)
=========== ============ ============ ===========
Weighted average number of common
shares outstanding 2,616,052 2,331,052 2,442,755 2,331,052
--------- --------- --------- ---------
</TABLE>
The accompanying notes are an integral part of the
consolidated financial statements.
<PAGE>
AUSTINS STEAKS & SALOON, INC.
Consolidated Statement Of Changes In Stockholders'
Equity for the nine months ended September 30, 1998
(unaudited)
<TABLE>
<CAPTION>
Additional
Common Stock Paid-In (Accumulated
Shares Dollars Capital Deficit) Total
---------- -------- ----------- ------------- -----------
<S> <C> <C> <C> <C> <C>
Balances, December 31, 1997 2,331,052 $ 23,311 $ 5,487,511 $ (3,484,293) $ 2,026,529
Issuance of shares 316,875 3,168 217,144 - 220,312
Net loss - - - (260,796) (260,796)
---------- -------- ----------- ------------- -----------
Balances, September 30, 1998 2,647,927 $ 26,479 $ 5,704,655 $ (3,745,089) $ 1,986,045
========= ======== =========== ============= ===========
</TABLE>
The accompanying notes are an integral part of the
consolidated financial statements.
<PAGE>
AUSTINS STEAKS & SALOON, INC.
Consolidated Statements Of Cash Flows
for the nine months ended September 30, 1998 and 1997
(unaudited)
<TABLE>
<CAPTION>
September 30, 1998 September 30, 1997
------------------ ------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (260,796) $ (476,493)
Adjustments to reconcile net loss to
net cash provided by operating activities:
Depreciation and amortization 409,188 441,210
Loss on sale of equipment 167 8,579
Loss on sale of restaurant 35,000 -
Changes in assets and liabilities:
Inventories (15,043) 3,362
Prepaid expenses and other current assets (34,023) (83,370)
Accounts payable 55,160 325,321
Interest payable (6,584) (6,236)
Unredeemed gift certificates (30,165) (63,930)
---------- ----------
Net cash provided by operating activities 152,904 148,443
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of equipment and restaurant 5,305 120,183
Purchase of equipment and leasehold improvements (149,314) (60,375)
Decrease in other assets 617 26,082
---------- ----------
Net cash provided by (used in) investing activities (143,392) 85,890
CASH FLOWS FROM FINANCING ACTIVITIES:
Decrease in cash overdraft (13,980) (47,824)
Payments on debt (150,532) (629,166)
Proceeds from debt 155,000 442,657
---------- ----------
Net cash used in financing activities (9,512) (234,333)
---------- ----------
Net increase in cash and cash equivalents -- --
Cash and cash equivalents, beginning of period -- --
---------- ----------
Cash and cash equivalents, end of period $ -- $ --
---------- ----------
---------- ----------
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING
AND FINANCING ACTIVITIES:
Equipment and leasehold improvements acquired
through assumption of debt and issuance of stock $ 442,171 $ --
Rent and legal services paid through issuance of stock 68,437 --
</TABLE>
The accompanying notes are an integral part of the
consolidated financial statements.
<PAGE>
AUSTINS STEAKS & SALOON, INC.
Notes To Consolidated Financial Statements
(unaudited)
1. Summary of Significant Accounting Policies
a) Basis of Presentation
In the opinion of management, the accompanying unaudited financial
statements contain all normal recurring adjustments necessary for a
fair presentation of financial position and results of operations and
cash flows for the periods presented.
A summary of the significant accounting policies followed by Austins
Steaks & Saloon, Inc. ("Austins" or the "Company") are set forth in the
Notes To Financial Statements in the Company's 1997 Annual Report on
Form 10-KSB filed with the Securities and Exchange Commission. These
financial statements should be read in conjunction with the financial
statements included in the 1997 Annual Report on Form 10-KSB.
2. Other Assets
Other assets consisted of the following:
<TABLE>
<CAPTION>
September 30,
1998 December 31,
(unaudited) 1997
-------------- -------------
<S> <C> <C>
Land held for sale $ 535,039 $ 535,039
Liquor licenses 193,183 193,183
Deposits 43,980 36,115
Organization costs, net 13,780 22,262
----------- -------------
$ 785,982 $ 786,599
========== ==========
</TABLE>
<PAGE>
3. Long-Term Debt and Note Payable to Shareholder:
Long-term debt and note payable to shareholder consisted of the following:
<TABLE>
<CAPTION>
September 30,
1998 December 31,
(unaudited) 1997
------------- --------------
<S> <C> <C>
Note payable to bank, due in monthly installments of $5,000, including interest
at 1% above the bank's prime rate, with the unpaid principal balance due on
January 31, 1999, collateralized by substantially all assets of the Company,
except for the assets of the Maple Street location in Omaha, Nebraska, and
guaranteed by a shareholder. $ 151,006 $ 236,006
Note payable to bank, due January 27, 1999, interest only payable monthly at the
bank's prime rate, with principal due upon maturity, collateralized by real
estate and guaranteed by a shareholder. 395,000 395,000
Bank line of credit in the amount of $210,000, due January 3, 1999, interest
only payable monthly at the bank's prime rate, with principal due upon maturity
and guaranteed by a shareholder. 210,000 55,000
Note payable to bank, due March 17, 2000, payable in monthly installments of
$945, including interest at 8.25% per annum, with balance of principal due
upon maturity. 15,925 23,177
Note payable to bank, due March 25, 2000, payable in monthly installments of
$1,000, including interest at 2% above the WALL STREET JOURNAL prime rate, with
balance of principal due upon maturity, collateralized by a liquor license. 58,443 65,367
Real estate mortgage note payable, due in quarterly installments of $100,000
beginning February 1, 1997, plus interest at 11% per annum, with the unpaid
principal balance due on January 31, 1998, collateralized by real estate. - 44,141
Note payable to bank, due October 2, 2003, payable in monthly installments of
$1,977, including interest at 9.75% per annum, with balance of principal due
upon maturity, collateralized by substantially all assets of the Maple Street
restaurant, in Omaha, Nebraska. 93,577 -
Note payable, due August 15, 2001, payable in monthly installments of $1,620,
including interest at 9% per annum, with the unpaid principal balance due upon
maturity and guaranteed by a shareholder. 172,629 -
--------- ---------
1,096,580 818,691
Less current portion (764,683) (119,330)
--------- ---------
Total long-term debt $ 331,897 $ 699,361
--------- ---------
--------- ---------
Note payable to shareholder, principal and simple interest
at 10.25% due on December 31, 1999. $ 269,928 $ 269,928
--------- ---------
--------- ---------
</TABLE>
<PAGE>
4. Sale of Restaurant
On March 13, 1998, the Company finalized an agreement which resulted in
assignment of the lease on the Lincoln store and transfer of certain
personal property to a family-run restaurant business at a sales
price of $40,000. The conditions of assignment included a guarantee
to the lessor by the Company of performance of the lease for the
duration of the lease term, which runs through February 2014.
Additionally, the lessor has secured a personal guarantee by a majority
shareholder of the Company in the amount of $40,000. The Lincoln store
operations ceased on March 17, 1998.
5. Acquisition of Restaurant
On June 12, 1998, the Company purchased the equipment and leasehold
improvements of another restaurant in Omaha, Nebraska. The assets
acquired were recorded on the Company's balance sheet at fair market
value. As consideration for the purchase, the Company issued 225,000
shares of its own common stock to the seller. The shares issued were
valued at the closing market price of $0.75 per share on June 12, 1998.
In addition, the Company assumed two additional notes payable totaling
$273,421. The Company opened the new location on June 20, 1998.
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
OVERVIEW
The Company currently operates eight steakhouse restaurants: Five are located in
Omaha, Nebraska; and one each is located in Scottsdale, Arizona; Santa Fe, New
Mexico; and Albuquerque, New Mexico. The Omaha restaurants were opened in
September 1989, January 1992, December 1992 January 1996 and June 1998; the
Santa Fe restaurant was opened in April 1994; the Albuquerque restaurant was
opened in February 1995; and the Scottsdale restaurant was opened in December
1995. The Lincoln restaurant was sold in March 1998.
RESULTS OF OPERATIONS
The following table sets forth for the periods presented the percentage
relationship to net sales of certain items included in the Consolidated
Statement of Operations.
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30 September 30
------------------ ------------------
1998 1997 1998 1997
------ ------ ------ -----
<S> <C> <C> <C> <C>
Net sales 100% 100% 100% 100%
Costs and expenses:
Cost of sales 68.5 70.3 68.5 70.1
Restaurant operating expenses 27.5 28.9 27.5 29.0
------ ------ ------ -----
Restaurant costs and expenses 96.0 99.2 96.0 99.1
------ ------ ------ -----
Restaurant operating income 4.0 0.8 4.0 0.9
------ ------ ------ -----
General and administrative 5.6 7.1 6.0 6.3
Loss on sale of restaurant - - 0.5 -
------ ------ ------ -----
Loss from operations (1.6) (6.3) (2.5) (5.4)
Other expense:
Interest expense 1.4 1.0 1.2 1.2
------ ------ ------ -----
Net loss (3.0)% (7.3)% (3.7)% (6.6)%
====== ====== ====== ======
Store data:
Number of restaurants open, beginning of period 8 8 8 8
Number of restaurants open, end of period 8 8 8 8
</TABLE>
<PAGE>
QUARTER AND YEAR-TO-DATE ENDED SEPTEMBER 30, 1998 COMPARED TO QUARTER
ENDED SEPTEMBER 30, 1997
Net sales for the third quarter ended September 30, 1998 were $2.40 million,
a 1.2% increase from the third quarter 1997 revenues of $2.37 million. For
the nine months ended September 30, 1998, net sales decreased 3% to $7.0
million from net sales of $7.3 million in the comparable 1997 period. For the
quarters ended September 30, 1998 and September 30, 1997, net sales include
the operations of eight restaurants for the entire period. For the nine
months ended September 30, 1998, net sales include the operations of seven
restaurants for the entire period, an eighth restaurant (Lincoln) for two and
a half months and a ninth restaurant (Maple Street) for three and a half
months. During the first nine months of 1997, net sales include the
operations of eight restaurants for the entire period. The decrease in
year-to-date net sales is due to one less restaurant three months out of the
nine month period in 1998. During the first nine months of 1998, same store
sales for restaurants open for more than one year decreased by 0.3% primarily
because of decreased revenues from the Company's southwest stores. The same
store sales for the Company's four mature Omaha stores for the third quarter
ended 1998 and nine months ended September 30, 1998 increased by 3.4% and
1.1%, respectively. The increase in same store sales for the four Omaha
stores is due to the Company's aggressive advertising approach during the
year. The Company will be taking the same marketing campaign to the southwest
stores in the fourth quarter to help enhance same store sales.
Cost of sales (consisting primarily of food, beverage, and restaurant labor
costs) decreased 1.5% to $1.64 million (or 68.5% of net sales) during the
third quarter of 1998, compared to $1.66 million (or 70.3% of net sales) in
the 1997 third quarter. For the nine month period ended September 30, 1998,
cost of sales were $4.8 million (or 68.5% of net sales), a 5.3% decrease from
$5.1 million (or 70.1% of net sales) in the comparable 1997 period. The
overall decrease in cost of sales is attributed to one less restaurant three
months out of the nine month period, as discussed above. The decrease in the
cost of sales as a percentage of net sales relates to a decrease in in-store
food promotions.
Restaurant operating expenses were $659,000 (or 27.5% of net sales) during
the third quarter of 1998, compared to $684,000 (or 28.9% of net sales) in
the comparable 1997 period. During the first nine months of 1998, the costs
decreased 7.8% to $1.9 million (or 27.5% of net sales) from $2.1 million (or
29.0% of net sales) in the first nine months of 1997. Restaurant operating
expenses represent primarily the costs of occupancy (including rent,
depreciation, maintenance, and utilities), and various related costs. The
decrease, as a percentage of net sales, is due to the conscious effort of
restaurant management in controlling variable expenses such as operating
supplies and equipment maintenance.
General and administrative costs decreased 19.9% during the third quarter of
1998 to $135,000 (or 5.6% of net sales) from $168,000 (or 7.1% of net sales)
in the comparable 1997 period. For the nine months ended September 30, 1998,
these costs decreased 6.8% to $426,000 (or 6.0% of net sales) from $458,000
(or 6.3% of net sales) in the comparable 1997 period. For the nine month
period, the decrease in general and administrative costs is due to a decrease
in corporate personnel and attorneys fees.
<PAGE>
On March 13, 1998, the Company finalized an agreement which resulted in an
assignment of the lease on the Lincoln store and transfer of certain personal
property to a family-run restaurant business. The $35,000 relates to real
estate agent fees paid by the Company to sell the Lincoln restaurant. The
Lincoln store operations ceased on March 17, 1998. The non-realizable value
of the equipment and leasehold improvements were considered in management's
estimate of the store's impairment loss taken during the fourth quarter of
1997.
Interest expense approximated $32,000 during the third quarter of 1998
compared to $25,000 in the comparable period. Year-To-Date 1998 interest
expense was $84,000 compared $87,000 in the same nine month period of 1997.
The increase in interest expense in the third quarter is due to the two
additional notes payable totaling $273,421 assumed by the Company on June 12,
1998 for consideration of the Maple Street restaurant. The decrease in
Year-To-Date interest is due to the lower average borrowings for the period.
As a result of the factors described above, the Company had a net loss during
the 1998 third quarter of $71,000, and a net loss for the first nine months
of 1998 of $276,000. This compares to net loss of $261,000 in the third
quarter of 1997, and $476,000 for the first nine month period of 1997. The
decrease in net loss is primarily due to the decrease in store expenses.
YEAR 2000 ISSUE
The Company utilizes management information systems and software technology
that may be affected by Year 2000 issues throughout its operations. During
fiscal 1998, the Company began to implement plans to ensure those systems
continue to meet its requirements. The Company's Year 2000 Project is
proceeding on schedule. During fiscal 1998, the Company began by updating the
computer systems at the Corporate level. The Company purchased new computers
which included new processors, additional memory, etc. for each Corporate
employee. The Corporate office network was updated to operate on a Novell
4.11 platform. In addition to the new computers and server, the Company
updated their software to Windows 95. All accounting and processing software
bought during 1998 is "packaged software" which the vendor has certified that
it is compliant with the Year 2000. The cost of the hardware and software for
the Corporate office was approximately $15,000. The plan for 1999 is to
complete the Year 2000 Project and update the computers at the store level.
At this time five stores out of the eight stores need to be addressed for
Year 2000 compliance. Similar to the items purchased for the Corporate
office, the Company is planning on buying one new computer along with Windows
98 for each restaurant. All of the "point-of-sale" software at the restaurant
level is also "packaged software" which the vendor has certified that it is
compliant with the Year 2000. The cost to complete the project will be
approximately $5,000.
The Company has also initiated communications with vendors and other third
parties whose computer systems' functionality could impact the Company.
Currently, the Company's largest vendor, Pegler Sysco, is addressing their
own Year 2000 issues. As the Company is not electronically interfaced with
any vendors at this time any Year 2000 issues not resolved by the Company's
vendors will not have a material impact on the Company's computer systems.
Other third parties, such as American Express, Visanet and MAPP are also
resolving the Year 2000 problem. These credit card processors understand the
Year 2000 issue and with these communications the Company will facilitate
coordination of the Year 2000 solutions and will
<PAGE>
determine the extent to which the Company may be vulnerable to failures of
third parties to address their own Year 2000 issues.
Based on the progress the Company has made in addressing its Year 2000 issues
and the Company's plan and timeline to complete its compliance program, the
Company does not foresee significant risks associated with its Year 2000
compliance at this time. As the Company's plan is to address its significant
Year 2000 issues prior to being affected by them, it has not developed a
comprehensive contingency plan. However, if the Company identifies
significant risks related to its Year 2000 compliance or its progress
deviates form the anticipated timeline, the Company will develop contingency
plans as deemed necessary at that time.
LIQUIDITY AND CAPITAL RESOURCES
The Company currently has $151,006 borrowed under an agreement with First
National Bank of Omaha, at a variable interest rate which was 10.50% at
September 30, 1998. The Company is paying $5,000 a month in principal plus
interest. This bank agreement is guaranteed by a shareholder and matures on
January 31, 1999, at which time it is expected that the agreement will be
renewed, or a new agreement will be negotiated.
The Company obtained a line of credit from U.S. Bank, N.A. in the amount of
$395,000 at a variable interest rate which was 8.5% at September 30, 1998. The
line of credit is guaranteed by a stockholder and is collateralized by the Rio
Rancho land held for sale. The Company currently has $395,000 borrowed against
the line to pay off existing debt. This line of credit matures on January 27,
1999 and it is also expected that the line of credit will be renewed.
On November 3, 1997, the Company entered into another line of credit with U.S.
Bank, N.A. in the amount of $210,000 at a variable rate which was 8.5% at
September 30, 1998. Currently, the Company has $210,000 outstanding under this
agreement. This line of credit is also guaranteed by a shareholder and matures
on January 3, 1999 and along with the other U.S. Bank, N.A. line of credit, it
is expected to be renewed.
The Company currently has borrowed $269,928 from The Schorr Family Company, Inc.
due December 31, 1999 with an interest rate equal to the First National Bank of
Omaha "Base Rate".
On June 12, 1998, the Company purchased the assets and leasehold improvements
of another restaurant in Omaha, Nebraska. As consideration for the purchase,
the Company issued 225,000 shares of its own common stock to the restaurant
corporation. In addition, the Company also assumed two additional notes
payable totaling $266,206 as of September 30, 1998. The Company's Maple
Street location in Omaha, Nebraska was opened on June 20, 1998.
The Company's capital requirements relate to the opening of the Maple Street
restaurant and the operation of existing restaurants. Capital expenditures
for the first nine months of 1998 were $149,000 compared to $60,000 for the
comparable period in 1997.
At this time the Company is in the process of selling a liquor license in New
Mexico and is seeking a buyer for the real estate in Rio Rancho which were
purchased in anticipation of opening new stores. These sales will increase
working capital and repay the related debt collateralized by these two assets
and other various debt listed on the balance sheet.
<PAGE>
The Company is currently requesting a temporary suspension of operation from
the New Mexico Alcohol and Gaming Division for the liquor license. Since the
liquor license has not been continuously operated in the ordinary course of
business, the New Mexico Alcohol and Gaming Division has the right to take
the license away from the Licensee. The application is pending with the New
Mexico Alcohol and Gaming Division. It is management's opinion that the
application will be approved by the New Mexico Alcohol and Gaming Division
and that the Company will be able to find a buyer for the liquor license.
Management believes the Company has the financial resources in light of
projected cash flow to maintain its current level of operations throughout
1998. There can be no assurance that the Company will be successful in its
attempt to sell the assets offered for sale at a profit and maintain
profitable operations to the extent necessary to meet existing debt service
requirements.
<PAGE>
Part II: Other Information
Item 3. - Exhibits and Reports on Form 8-K
a) Exhibits:
Exhibit 27 - Financial Data Schedule
b) Reports on Form 8-K:
No reports on Form 8-K were filed during the third quarter of 1998.
<PAGE>
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 hereunto duly authorized.
Austins Steaks & Saloon, Inc.
Date: November 13, 1998 By: /s/ Tish Gade-Jones
----------------- ------------------------------------
Tish Gade-Jones
Chief Financial Officer
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED STATEMENTS OF OPERATIONS FOUND ON
PAGES 2 AND 3 OF THE COMPANY'S FORM 10-Q FOR THE YEAR-TO-DATE AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> DEC-31-1998
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 134,111
<CURRENT-ASSETS> 388,093
<PP&E> 4,335,284
<DEPRECIATION> 1,756,846
<TOTAL-ASSETS> 4,321,293
<CURRENT-LIABILITIES> 1,733,423
<BONDS> 0
0
0
<COMMON> 26,479
<OTHER-SE> 1,959,566
<TOTAL-LIABILITY-AND-EQUITY> 4,321,293
<SALES> 7,041,636
<TOTAL-REVENUES> 7,041,636
<CGS> 6,757,099
<TOTAL-COSTS> 6,757,099
<OTHER-EXPENSES> 461,494
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 83,839
<INCOME-PRETAX> (260,796)
<INCOME-TAX> 0
<INCOME-CONTINUING> (260,796)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (260,796)
<EPS-PRIMARY> (0.11)
<EPS-DILUTED> (0.11)
</TABLE>
