<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 JUNE 30, 1999
[ ] 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.)
317 Kimball Avenue N.W.
Roanoke, Virginia 24016
(Address of principal executive offices)
(540) 345-3195
(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 July 30, 1999, there were 6,524,502 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 June 30, 1999 and December 31, 1998
<TABLE>
<CAPTION>
June 30,
1999 December 31,
(unaudited) 1998
----------- ------------
<S> <C> <C>
ASSETS
Current assets
Cash $ 20,940 $ 44,211
Inventories 129,810 116,490
Prepaid expenses & other current assets 389,948 190,926
----------- -----------
Total current assets 540,698 351,627
----------- -----------
Equipment 1,562,721 1,664,985
Leasehold improvements 2,465,126 2,633,919
----------- -----------
4,027,847 4,298,904
Accumulated depreciation & amortization (1,819,832) (1,869,825)
----------- -----------
Equipment & leasehold improvements, net 2,208,015 2,429,079
----------- -----------
Intangibles, net 505,869 530,916
Other assets 673,994 782,300
----------- -----------
$ 3,928,576 $ 4,093,922
----------- -----------
----------- -----------
LIABILITIES & STOCKHOLDERS' EQUITY
Current liabilities:
Cash overdraft $ 287,217 $ 53,038
Accounts payable 433,427 753,328
Interest payable 933 9,150
Unredeemed gift certificates 27,840 100,095
Current portion of long-term debt 963,692 95,817
----------- -----------
Total current liabilities 1,713,109 1,011,428
----------- -----------
Long-term debt, net of current portion 240,572 982,147
Note payable to shareholder 269,928 269,928
----------- -----------
2,223,609 2,263,503
----------- -----------
STOCKHOLDERS' EQUITY
Common stock ($0.01 par value; 7,500,000 shares authorized;
2,700,406 and 2,647,927 shares issued and outstanding, respectively) 27,004 26,479
Additional paid-in capital 5,800,770 5,775,055
Accumulated deficit (4,122,807) (3,971,115)
----------- -----------
Total stockholders' equity 1,704,967 1,830,419
----------- -----------
$ 3,928,576 $ 4,093,922
----------- -----------
----------- -----------
</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 six months
ended June 30 ended June 30
1999 1998 1999 1998
------------ ----------- ------------ ------------
<S> <C> <C> <C> <C>
Net sales $2,268,746 $2,238,459 $4,546,606 $4,645,856
Costs and expenses:
Cost of sales 1,562,687 1,530,809 3,026,992 3,177,996
Restaurant operating expenses 665,498 621,019 1,297,895 1,279,944
---------- ---------- ---------- ----------
Restaurant costs and expenses 2,228,185 2,151,828 4,324,887 4,457,940
---------- ---------- ---------- ----------
Restaurant operating income 40,561 86,631 221,719 187,916
---------- ---------- ---------- ----------
General and administrative 127,356 182,173 273,466 291,941
Restructuring expense 39,334 - 39,334 -
Loss on sale of restaurant - - - 35,000
---------- ---------- ---------- ----------
Loss from operations (126,129) (95,542) (91,081) (139,025)
Other expense:
Interest expense 32,994 30,054 60,611 51,100
Net loss $ (159,123) $ (125,596) $ (151,692) $ (190,125)
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Basic and diluted net loss per share $ (0.06) $ (0.05) $ (0.06) $ (0.08)
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
Weighted average number of common
shares outstanding 2,673,773 2,378,030 2,660,921 2,354,671
---------- ---------- ---------- ----------
---------- ---------- ---------- ----------
</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 six months ended June 30, 1999
(unaudited)
<TABLE>
<CAPTION>
Common Stock Additional
---------------------- Paid-In (Accumulated
Shares Dollars Capital Deficit) Total
------ ------- ----------- ------------ ---------
<S> <C> <C> <C> <C> <C>
Balances, December 31, 1998 2,647,927 $ 26,479 $ 5,775,055 $ (3,971,115) $ 1,830,419
Exercise of stock options 52,479 525 25,715 - 26,240
Net loss - - (151,692) (151,692)
--------- --------- ----------- ------------ -----------
Balances, June 30, 1999 2,700,406 $ 27,004 $ 5,800,770 $ (4,122,807) $ 1,704,967
--------- --------- ----------- ------------ -----------
--------- --------- ----------- ------------ -----------
</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 six months ended June 30, 1999 and 1998
(unaudited)
<TABLE>
<CAPTION>
June 30, 1999 June 30, 1998
------------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (151,692) $ (190,125)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization 282,205 232,788
Loss (gain) on sale of equipment and liquor licenses (11,683) 167
Loss on sale of restaurant - 35,000
Changes in assets and liabilities:
Inventories (13,320) 4,115
Prepaid expenses and other current assets (187,616) (64,921)
Accounts payable (319,901) 22,954
Interest payable (8,217) (6,584)
Unredeemed gift certificates (72,255) (36,585)
---------- ----------
Net cash used in operating activities (482,479) (3,191)
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of equipment and restaurant 10,390 5,305
Purchase of equipment and leasehold improvements (46,207) (59,084)
Change in other assets 108,306 (1,735)
---------- ----------
Net cash provided by (used in) investing activities 72,489 (55,514)
CASH FLOWS FROM FINANCING ACTIVITIES:
Increase in cash overdraft 234,179 42,387
Payments on debt (48,700) (127,182)
Proceeds from debt 175,000 143,500
Net proceeds from options exercised 26,240 -
---------- ----------
Net cash provided by financing activities 386,719 58,705
---------- ----------
Net decrease in cash and cash equivalents (23,271) -
Cash and cash equivalents, beginning of period 44,211 -
---------- ----------
Cash and cash equivalents, end of period $ 20,940 $ -
---------- ----------
---------- ----------
SUPPLEMENTAL DISCLOSURE OF NONCASH INVESTING
AND FINANCING ACTIVITIES:
Equipment and leasehold improvements acquired
through assumption of debt and issuance of stock $ - $ 442,171
</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 1998 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 1998 Annual Report on Form 10-KSB.
2. Business Combination
Effective July 1, 1999, the shareholders of The WesterN SizzliN
Corporation ("Western") approved the business combination with the
Company. Western is a family-style steak, buffet, and bakery restaurant
chain. The results of operations for Western for the three months and
six months ended June 30, 1999 are not included in these financial
statements.
3. Closing of Restaurant
On June 7, 1999, the Company closed its Albuquerque, New Mexico
restaurant. This restaurant was closed due to its operating performance
not meeting the Company's expectations.
4. Restructuring Plan
In the second quarter of 1999, the Company recorded provisions of
$39,334 for restructuring expenses. The Company's restructuring plan
relates to the approval of the business combination effective July 1,
1999 between the Company and Western. The restructuring plan committed
to terminate and pay severance to certain personnel. As part of the
restructuring initiative, four employees have been eliminated from the
Company. A majority of the terminated personnel were employed at the
Company's corporate offices. As of June 30, 1999, the $39,334 has not
been paid and is included in accounts payable.
5. Equity Transaction
During May 1999, certain officers of the Company exercised stock
options. The Company issued a total of 52,479 shares of common stock in
response to the officers' decision to exercise a portion of their
stock options. The proceeds in excess of the $.01 par value of common
stock have been recorded as an increase to paid-in-capital.
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
OVERVIEW
The Company currently operates six steakhouse restaurants: Four are located
in Omaha, Nebraska; and one each is located in Scottsdale, Arizona and Santa
Fe, New Mexico. The Omaha restaurants were opened in January 1992, December
1992, January 1996 and June 1998; the Santa Fe restaurant was opened in April
1994; and the Scottsdale restaurant was opened in December 1995. The
Albuquerque restaurant was closed in June 1999.
Effective July 1, 1999, the shareholders of Western approved a business
combination with the Company. Western is a family-style steak, buffet, and
bakery restaurant chain headquartered in Roanoke, Virginia. Western is
operating as a wholly owned subsidiary of the Company. The corporate offices
of the combined Company are now located in Roanoke, Virginia. As a result of
the business combination, the combined Company currently owns and operates 26
restaurants and approximately 230 franchised units in 25 states.
The results of operations for Western for the three months and six months ended
June 30, 1999, are not included in this Form 10-QSB. Combined results of the
Company and Western will be reported in the Company's Form 10-QSB for the three
months and nine months ending September 30, 1999.
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
Statements of Operations.
<TABLE>
<CAPTION>
Three months ended Six months ended
June 30 June 30
------------------ -----------------
1999 1998 1999 1998
------ ------ ------ ------
<S> <C> <C> <C> <C>
Net sales 100% 100% 100% 100%
Costs and expenses:
Cost of sales 68.9 68.4 66.6 68.4
Restaurant operating expenses 29.3 27.7 28.5 27.6
------ ------ ------ ------
Restaurant costs and expenses 98.2 96.1 95.1 96.0
------ ------ ------ ------
Restaurant operating income 1.8 3.9 4.9 4.0
------ ------ ------ ------
General and administrative 5.6 8.2 6.0 6.3
Restructuring expense 1.7 - 0.9 -
Loss on sale of restaurant - - - 0.7
------ ------ ------ ------
Loss from operations (5.5) (4.3) (2.0) (3.0)
Other expense:
Interest expense 1.5 1.3 1.3 1.1
------ ------ ------ ------
Net loss (7.0)% (5.6)% (3.3)% (4.1)%
------ ------ ------ ------
------ ------ ------ ------
Store data:
Number of restaurants open, beginning of period 7 7 7 8
Number of restaurants open, end of period 6 8 6 8
</TABLE>
<PAGE>
QUARTER AND YEAR-TO-DATE ENDED JUNE 30, 1999 COMPARED TO QUARTER AND
YEAR-TO-DATE ENDED JUNE 30, 1998
Net sales for the quarter ended June 30, 1999 were $2.3 million, a 1.4%
increase from the second quarter 1998 revenues of $2.2 million. For the six
months ended June 30, 1999, net sales decreased 2.1% to $4.5 million from net
sales of $4.6 million in the comparable 1998 period. For the quarter ended
June 30, 1999, net sales include the operations of six restaurants for the
entire period and a seventh restaurant (Albuquerque) for two months. For the
year-to-date ended June 30, 1999, net sales include the operations of six
restaurants for the entire period and a seventh restaurant (Albuquerque) for
five months. For the quarter ended June 30, 1998, net sales include the
operations of seven restaurants for the entire period and an eighth
restaurant (Maple Street restaurant in Omaha) for eleven days. For the
year-to-date ended June 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 eleven days. Even
though the Company had one less restaurant in operation during the second
quarter of 1999 compared to the second quarter of 1998, the net sales during
the same period increased. The increase in net sales for the quarter is
primarily due to the increase in same-store sales. For the quarter,
same-store sales for restaurants open for more than one year increased 1.5%.
The decrease in net sales for the six months year-to-date is due to two less
restaurants in operation. The 3.0% increase in same-store sales for six
months was not substantial enough to offset the loss of two restaurants in
operation during that same period. The increase in same-store sales for the
quarter and six months year-to-date can be attributed to the Company's
long-term investment in advertising.
Cost of sales (consisting primarily of food, beverage, and restaurant labor
costs) increased 2.1% to $1.6 million (or 68.9% of net sales) during the
second quarter of 1999, compared to $1.5 million (or 68.4% of net sales) in
the 1998 second quarter. For the six month period ended June 30, 1999, cost
of sales were $3.0 million (or 66.6% of net sales), a 4.8% decrease from $3.2
million in the comparable 1998 period. The increase as a percentage of net
sales for the second quarter is due to two weeks severance paid to the five
managers at the Albuquerque restaurant. The Albuquerque restaurant was closed
on June 7, 1999 due to its operating performance not meeting the Company's
expectations. The decrease in cost of sales for the six month period is due
to two less restaurants in operation, as discussed above. The decrease in the
percentage of net sales for year-to-date is attributed to improved food and
beverage margins as a result of better pricing and a decrease in in-store
"two for one" promotions.
Restaurant operating expenses were $665,000 (or 29.3% of net sales) during
the second quarter of 1999, compared to $621,000 (or 27.7% of net sales) in
the comparable 1998 period. During the first six months of 1999, the costs
increased 1.4% to $1.30 million (or 28.5% of net sales) from $1.28 million
(or 27.6% of net sales) in the first six months of 1998. Restaurant operating
expenses represent primarily the costs of occupancy (including rent,
depreciation, maintenance, and utilities), and various related costs. The
increase as a percentage of net sales is due to the increase in advertising,
as discussed above.
General and administrative costs decreased 30.1% during the second quarter of
1999 to $127,000 (or 5.6% of net sales) from $182,000 (or 8.2% of net sales)
in the comparable 1998 period. For the
<PAGE>
six months ended June 30, 1999, these costs decreased 6.3% to $273,000 (or
6.0% of net sales) from $292,000 (or 6.3% of net sales) in the comparable
1998 period. The decrease in general and administrative costs during the
second quarter is primarily due to the settlement of two lawsuits within the
ordinary course of business during the second quarter of 1998. The Company
also recorded a $11,000 net gain during the second quarter 1999 for two
liquor licenses that are currently under contract to sell. The sale for both
liquor licenses should be completed during the third quarter of 1999.
In the second quarter of 1999, the Company recorded provisions of $39,000 for
restructuring expenses. The Company's restructuring plan relates to the
approval of the business combination on June 28, 1999 between the Company and
Western. The restructuring expense pertains primarily to the benefits that
affected employees will receive upon termination.
The $35,000 recorded in 1998 relates to real estate agent fees paid by the
Company to sell the Lincoln restaurant. The Lincoln store operations ceased
on March 17, 1998.
Interest expense approximated $33,000 during the second quarter of 1999
compared to $30,000 in the comparable 1998 period. Year-to-date 1999 interest
expense was $61,000 compared to $51,000 in the same six month period of 1998.
The increase in interest expense was due to the additional debt assumed by
the Company in June 1998 for consideration of the Maple Street restaurant's
assets and leasehold improvements.
The Company incurred a net loss during the 1999 second quarter of $159,000,
and a net loss for the first six months of 1999 of $152,000. This compares to
a net loss of $126,000 in the second quarter of 1998, and $190,000 for the
first six month period of 1998. The increase in net loss for the second
quarter is primarily due to the non-reoccurring restructuring provision. The
decrease in net loss for the six month period is due to better food and
beverage margins, as describe above.
BUSINESS COMBINATION WITH THE WesterN SizzliN CORPORATION
Effective July 1, 1999, the shareholders of Western approved a business
combination with the Company. Immediately prior to that date, the 2,700,406
shares of the Company's common stock were reverse split, 1 for 3.135 with the
result that the Company's outstanding stock was reduced to 861,374 shares. As
a result of the business combination, the former Western shareholders were
entitled to a total of 11,219,250 or 93% of the Company shares. Western is
operating as a wholly owned subsidiary of the Company. The corporate offices
of the combined Company are now located in Roanoke, Virginia.
SETTLEMENT OF WACHTEL LITIGATION
On August 12, 1999, the Board of Directors of the combined Company approved a
settlement agreement with David K. Wachtel, Jr. with respect to long standing
litigation initiated in February, 1995, following Mr. Wachtel's termination
as president of Western. Under the terms of the settlement agreement, the
combined Company will pay Mr. Wachtel $1 million in settlement of all claims
that he had in the litigation and Mr. Wachtel will give a complete release of
all of those claims. Additionally, Mr. Wachtel will withdraw his notice to
dissent from the business combination between the Company and Western with
respect to the 684,000 Western shares owned by him. Those shares will then be
converted to 1,368,000 shares of the Company's common stock which will be
acquired from Mr. Wachtel by the combined Company and certain former Western
shareholders at a price of $2.50 per share. The combined Company is currently
evaluating financing alternatives available to fund the settlement and any
shares not purchased by former shareholders. The settlement is expected to be
closed no later than September 10, 1999.
<PAGE>
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 three out of the six restaurants are year 2000 compliant, the
other three restaurants are waiting to have their year 2000 compliant
software and hardware installed. All of the hardware has been purchased. The
software has been ordered and the Company is anticipating shipment of the
software within one month. Similar to the items purchased for the Corporate
office, the Company bought 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 purchase the remaining software will be
approximately $11,000. This project is projected to be completed during the
third quarter of 1999.
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 or
the delivery of product at it's restaurants. Other third parties, such as
American Express, Visanet and MAPP do not foresee any Year 2000 problems.
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 $111,000 borrowed under an agreement with First
National Bank of Omaha, at a variable interest rate which was 9.75% at June
30, 1999. The Company is paying $5,000 a month in principal plus interest.
This bank agreement is guaranteed by a shareholder and substantially all
assets of the Company. The note matures on January 31, 2000.
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 of 7.7% at June 30, 1999. The
line of credit is guaranteed by a stockholder and is collateralized by the
Rio Rancho land held for sale and substantially all assets of
<PAGE>
the Company. The Company currently has $395,000 borrowed against the line to
pay off existing debt. This line of credit matures on January 23, 2000.
The Company currently has borrowed $269,928 from The Schorr Family Company,
Inc. due December 31, 2000 with an interest rate equal to the First National
Bank of Omaha "Base Rate".
The Company entered into another line of credit with U.S. Bank, N.A. in the
amount of $210,000 at a variable interest rate which was 7.75% at June 30,
1999. Currently, the Company has $210,000 outstanding under this agreement.
This line of credit is also guaranteed by a shareholder and substantially all
assets of the Company. The line of credit matures on January 30, 2000.
During the second quarter of 1999, the Company entered into an agreement with
U.S. Bank, N.A. in the amount of $175,000 at the bank's prime rate. The
Company has $175,000 borrowed against this loan. The principal is due
November 3, 1999 and is guaranteed by a shareholder.
Subsequent to the merger, the combined Company intends to continue its
existing banking relationships and renegotiate new loan agreements where
appropriate.
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 $252,000 as of June 30, 1999. The Company's Maple location
in Omaha, Nebraska was opened on June 20, 1998.
The Company's capital requirements relate principally to the operation of
existing restaurants. Capital expenditures for the first six months of 1999
were $46,000 compared to $59,000 for the comparable period in 1998.
Currently, the Company has signed purchase agreements for two liquor licenses
in New Mexico. These sales, when consummated, will increase working capital
and repay the various debt listed on the balance sheet. The sale for both
liquor licenses is expected to be completed during the third quarter of 1999.
The Company is negotiating the sale of the Rio Rancho real estate. The
proceeds will also be used to repay debt. Management believes the Company has
the financial resources in light of projected cash flow to maintain its
current level of operations throughout 1999. 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 6. - 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 second quarter of 1999.
<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: August 11, 1999 By: /s/ Robert N. Collis, II
------------------------------ -----------------------------
Robert N. Collis, II
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-QSB FOR THE YEAR-TO-DATE.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> JUN-30-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 20,940
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 129,810
<CURRENT-ASSETS> 389,948
<PP&E> 4,027,847
<DEPRECIATION> 1,819,832
<TOTAL-ASSETS> 3,928,576
<CURRENT-LIABILITIES> 1,713,109
<BONDS> 0
0
0
<COMMON> 27,004
<OTHER-SE> 1,677,963
<TOTAL-LIABILITY-AND-EQUITY> 3,928,576
<SALES> 4,546,606
<TOTAL-REVENUES> 4,546,606
<CGS> 4,324,887
<TOTAL-COSTS> 4,324,887
<OTHER-EXPENSES> 312,800
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 60,611
<INCOME-PRETAX> (151,692)
<INCOME-TAX> 0
<INCOME-CONTINUING> (151,692)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (151,692)
<EPS-BASIC> (0.06)
<EPS-DILUTED> (0.06)
</TABLE>
