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 FISCAL QUARTER ENDED MARCH 31, 1998
Commission file No. 0-13530
OR
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
AMERICAN BINGO & GAMING CORP.
-----------------------------
(Exact name of small business issuer as specified in its charter)
DELAWARE 74-2723809
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
515 CONGRESS AVENUE, SUITE 1200, AUSTIN, TEXAS 78701
------------------------------------------------------
(Address of principal executive offices)
(512) 472-2041
--------------
(Registrant's telephone number)
Securities registered pursuant to Section 12(b) of the Act: NONE
Securities registered pursuant to Section 12(g) of the Act: COMMON STOCK
COMMON STOCK $0.001 PAR VALUE
-----------------------------
(Title of Class)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter 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 [ ] NO [ X ]
On MAY 5, 1998, the Registrant had 9,647,602 shares of its $.001 par value
common stock outstanding.
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
AMERICAN BINGO & GAMING CORP.
CONSOLIDATED BALANCE SHEET (UNAUDITED) March 31, 1998
----------------
<S> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 11,175,610
Accounts receivable 875,109
Notes receivable - current, net 478,158
Prepaid expenses 780,876
Other current assets 71,820
Total Current Assets 13,381,573
Property and Equipment, net 6,390,369
Other Assets:
Notes receivable, net 670,557
Prepaid license expense 1,174,931
Intangible assets, net 3,242,134
Other non-current assets 202,047
Total Other Assets 5,289,669
TOTAL ASSETS $ 25,061,611
================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable and accrued expenses $ 1,294,977
Notes payable - current 885,478
----------------
Capital leases payable - current 408,066
Total Current Liabilities 2,588,521
Long-term liabilities:
Notes payable, net 1,080,545
Capital leases payable, net 468,565
- -------------------------------------------------------------------------
Total Long-term Liabilities 1,549,110
Stockholders' Equity:
Preferred Stock, $.01 par value, 1,773 shares issued and outstanding
Liquidation preference of $1,000 per share 18
Common Stock, $.001 par value, authorized 20,000,000 shares,
Issued and outstanding 9,399,604 shares 9,400
Additional paid-in capital 24,228,688
Accumulated deficit (3,314,126)
Total Stockholders' Equity 20,923,980
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 25,061,611
<FN>
See notes to consolidated financial statements.
</TABLE>
1
<PAGE>
<TABLE>
<CAPTION>
AMERICAN BINGO & GAMING CORP.
CONSOLIDATED STATEMENTS OF NET INCOME (UNAUDITED)
For Three Months Ended March 31, 1998 1997
------------ -----------
<S> <C> <C>
REVENUES:
Video gaming $ 2,599,154 $2,378,089
Bingo 981,766 663,136
Other 136,355 66,885
------------ -----------
TOTAL REVENUES 3,717,275 3,108,110
COSTS AND EXPENSES:
Salaries and other compensation 540,028 374,436
Rent and utilities 498,402 339,574
Direct operating costs 527,513 404,285
Depreciation and amortization 740,615 352,581
General and administrative 1,003,979 936,515
------------ -----------
TOTAL COSTS AND EXPENSES 3,310,537 2,407,391
OPERATING INCOME 406,738 700,719
OTHER INCOME AND EXPENSES:
Interest income 180,541 53,359
Other income 35,104 30,466
Interest and other expense (91,755) (17,002)
------------ -----------
TOTAL OTHER INCOME AND EXPENSES, NET 123,890 66,823
INCOME BEFORE TAXES 530,628 767,541
PROVISION FOR INCOME TAXES 76,403 150,787
NET INCOME $ 454,225 $ 616,754
============ ===========
EARNINGS PER SHARE:
Basic $ .05 $ .09
Diluted $ .04 $ .09
Weighted average shares outstanding 9,353,518 6,792,618
Weighted average shares outstanding - assuming full dilution 10,577,657 7,077,590
<FN>
See notes to consolidated financial statements.
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
AMERICAN BINGO & GAMING CORP.
CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
For Three Months Ended March 31, 1998 1997
------------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 454,225 $ 616,754
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and amortization 740,615 352,581
Changes in operating assets and liabilities, net (277,658) (236,523)
NET CASH PROVIDED BY OPERATING ACTIVITIES $ 917,182 $ 732,812
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital and intangible expenditures (1,081,063) (123,358)
License expenditures (640,930) ---
Collections of notes receivable, other 43,472 ---
Issuance of notes receivable --- (123,467)
NET CASH USED IN INVESTING ACTIVITIES ($1,678,521) ($246,825)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on notes (216,666) (13,584)
Payments on capital leases (87,610) (10,424)
Proceeds from margin line of credit 651,613 ---
Proceeds from issuance of common stock 39,000 ---
Payments of warrant financing costs (354,422) ---
Dividend payments to preferred stockholders (31,828) ---
NET CASH PROVIDED BY/(USED IN) FINANCING ACTIVITIES $ 87 ($24,008)
NET INCREASE/(DECREASE) IN CASH ($761,252) $ 461,979
CASH AT BEGINNING OF YEAR $ 11,936,862 $1,373,057
------------- -----------
CASH AT END OF PERIOD $ 11,175,610 $1,835,036
============= ===========
<FN>
See notes to consolidated financial statements.
</TABLE>
3
<PAGE>
AMERICAN BINGO & GAMING CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
March 31, 1998
NOTE 1 BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements include the
accounts of American Bingo & Gaming Corp. and its wholly-owned subsidiaries,
hereafter collectively referred to as "The Company." The financial statements
have been prepared in accordance with generally accepted accounting principles
for interim financial information and with instructions to Form 10-QSB.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments and inter-company eliminations
considered necessary for a fair presentation of the interim financial statements
have been included. Certain items in the financial statements have been
reclassified to maintain consistency and comparability for all periods
presented. Operating results for the three-month period ended March 31, 1998 are
not necessarily indicative of the results that may be expected for the fiscal
year ending December 31, 1998. Except for historical information contained
herein, certain matters set forth in this report are forward looking statements
that are subject to substantial risks and uncertainties, including the impact of
government regulation and taxation, customer attendance and spending,
competition, and general economic conditions, among others. For further
information, refer to the consolidated financial statements and footnotes
included in the Company's annual report on Form 10-KSB for the fiscal year ended
December 31, 1997.
NOTE 2 PROPERTY AND EQUIPMENT
Property and Equipment at March 31, 1998 consists of the following:
<TABLE>
<CAPTION>
<S> <C> <C>
Land $ 189,671
Buildings and improvements 379,342
Leasehold improvements 2,327,861
Video gaming machines and bingo equipment 6,312,974
Equipment, furniture and fixtures 582,643
Automobiles 453,639
----------
Sub-total 10,246,130
Accumulated depreciation and amortization (3,855,761)
------------
Property and Equipment, net $ 6,390,369
</TABLE>
NOTE 3 INTANGIBLE ASSETS
Intangible Assets at March 31, 1998 consist of the following:
<TABLE>
<CAPTION>
<S> <C> <C>
Goodwill $3,498,019
Covenants not to compete 228,891
----------
Sub-total 3,726,910
Accumulated amortization (484,776)
-----------
Intangible Assets, net $3,242,134
</TABLE>
4
<PAGE>
AMERICAN BINGO & GAMING CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
March 31, 1998
NOTE 4 INCOME TAXES
The Company recorded $76,000 of state income tax liability in the first fiscal
quarter of 1998. The Company does not expect to pay significant federal income
taxes in 1998 due to accumulated tax loss carryforwards, which totaled
approximately $2.2 million at the end of 1997.
NOTE 5 EARNINGS PER SHARE
A reconciliation of basic to diluted earnings per share for the three months
ended March 31, 1998 and 1997, is as follows:
<TABLE>
<CAPTION>
1998 1997
------------------------ ----------------------
Basic Diluted Basic Diluted
Numerator:
<S> <C> <C> <C> <C>
Net Income $ 454,225 $ 454,225 $ 616,754 $ 616,754
less Preferred Dividends (31,228) --- --- ---
Income Available to Common Shareholders $ 422,997 $ 454,225 $ 616,754 $ 616,754
Denominator:
Weighted Average Shares Outstanding 9,353,518 9,353,518 6,792,618 6,792,618
Effect of Dilutive Securities:
Preferred Stock --- 543,153 --- ---
Stock Options and Warrants --- 680,986 --- 284,972
Weighted Average Shares Outstanding 9,353,518 10,577,657 6,792,618 7,077,590
Earnings Per Share $ .05 $ .04 $ .09 $ .09
</TABLE>
NOTE 6 ACQUISITION
On March 25, 1998, the Company acquired Ambler Bingo, a bingo center in
Abilene, Texas under a stock purchase agreement. Consideration for this
acquisition totaled $990,000 and included $500,000 of cash, $400,000 of notes,
and 29,630 shares of Company stock valued at $90,000. The Company accounts for
the results of operations from purchases such as Ambler from the date of
purchase; pooled acquisitions are accounted for all periods presented.
Pro-forma financial information for the periods
ended March 31, 1998 and 1997 as though the Ambler purchase had occurred on
January 1, 1997 is as follows:
5
<PAGE>
AMERICAN BINGO & GAMING CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
March 31, 1998
NOTE 6 ACQUISITION (CONTINUED)
<TABLE>
<CAPTION>
--- March 31, 1998 --- --- March 31, 1997 ---
As Reported As Restated As Reported As Restated
------------ ------------ ------------ ------------
<S> <C> <C> <C> <C>
Revenues $ 3,717,275 $ 3,866,995 $ 3,108,110 $ 3,248,948
Net income 454,225 507,297 616,754 659,704
Earnings per share-basic $ .05 $ .05 $ .09 $ .10
Weighted average
shares outstanding 9,353,518 9,383,148 6,792,618 6,822,248
</TABLE>
NOTE 7 CONTINGENCIES
In July of 1995 the Company bought three Florida bingo centers from Phillip
Furtney. In June of 1997, Mr. Furtney filed a lawsuit against the Company,
alleging breach of contract on these purchases and default on purchase note and
stock obligations per sales agreements. In July of 1997 the Company answered
this lawsuit and filed a counterclaim against Mr. Furtney alleging, among other
things, fraud, negligent representation, breach of express warranties,
contractual indemnity and tortious interference with contractual rights. The
Company believes that it was materially defrauded in its purchases of these
three Florida bingo centers from Mr. Furtney in that he made no disclosure to
the Company of a known, ongoing criminal investigation of his operation of these
centers by the Florida State Attorney General's Office. The Company believes
that Mr. Furtney's lawsuit against the Company is completely without merit and
that the Company will prevail in its counterclaim against him. There can be no
assurance of this result, however, and a decision against the Company could have
a potentially adverse effect on the financial position and operations of the
Company.
In 1998 one of the Company's subsidiaries was named a defendant (among many
other video gaming operators) in a legal action in the U.S. District Court in
Columbia, South Carolina. This action alleges that certain of the defendants'
video gaming operations in South Carolina: i) comprise a lottery, which violates
the state constitution; ii) violate the state's daily net video gaming machine
payout limit of $125 per player; and iii) violate the state's single premise
rule which only allows up to five video gaming machines per premise. The
plaintiffs in this action are attempting to have this action certified as a
class action lawsuit. The District Judge certified questions for an advisory
opinion of the South Carolina Supreme Court and oral arguments were heard by the
state Supreme Court in April of 1998. The Supreme Court has not yet rendered its
decision. The Company believes that this action is completely without merit and
will defend itself vigorously. If this case were to be decided against the
Company, it would have a materially adverse effect on the financial position and
operations of the Company.
The Company also faces risk in that the South Carolina legislature has
considered a bill that would abolish the video gaming industry in South
Carolina. The Governor and House support this bill, but the Company believes
that the bill will not pass the Senate. If the bill does not pass in the Senate,
a number of potential outcomes are possible, including: i) the passage of an
alternative bill that imposes higher taxes and regulation on the industry; ii) a
public referendum on video gaming; or iii) no bill or referendum in 1998. The
South Carolina legislature meets annually, and it is possible that the continued
legalization of video gaming could be an issue in future legislative sessions.
The Company would be adversely affected if the legislature or court system were
to abolish the industry, adversely modify regulations and/or substantially
increase video gaming taxes.
6
<PAGE>
AMERICAN BINGO & GAMING CORP.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
American Bingo & Gaming Corp. was formed in 1994 as a Delaware corporation to
consummate the acquisition of charitable bingo centers and video gaming
operations. The Company operates primarily through wholly-owned subsidiaries in
Texas, Alabama and South Carolina. The Company completed its initial public
offering in December of 1994.
The following discussion should be read in conjunction with the Company's Form
10-KSB and the consolidated financial statements for the years ended December
31, 1997 and December 31, 1996; the Company's Form 10-QSB for the quarters ended
March 31, 1997, June 30, 1997 and September 30, 1997; and the consolidated
financial statements and related notes, for the quarter ended March 31, 1998,
found elsewhere in this report.
RESULTS OF OPERATIONS
(Note: 1997 first quarter results have been restated to incorporate 1997 pooled
transactions). The Company generated consolidated revenues of over $3.7 million
during its first fiscal quarter of 1998, ended March 31, 1998, as compared to
$3.1 million in the comparable period of the prior fiscal year, representing an
increase of $609,000 or 20%. Sales were led by video gaming operations, which
produced $2.6 million or 70% of total sales for the first quarter of 1998. Bingo
rental and other revenues totaled $1.1 million or 30% of sales for the first
quarter. Approximately 81% of first quarter 1998 revenues were generated in
South Carolina, with 11% in Alabama and 8% in Texas. The year-over-year sales
increase was due to increases in bingo/other revenues of $388,000 and gaming
revenues of $221,000. Bingo/other revenues increased primarily due to four
additional South Carolina bingo centers open in the first quarter of 1998 that
were not open in the first quarter of 1997.
Total costs and expenses were $3.3 million in the first quarter of 1998 versus
$2.4 million in the first quarter of 1997, an increase of $903,000 or 38%.
Salaries and other compensation totaled $540,000 in the first quarter of 1998,
which included the costs of approximately 100 video gameroom workers and six
bingo center property managers. Rent and utilities for the Company's
freestanding video gamerooms and bingo centers totaled $498,000 in the first
quarter of 1998. The Company is currently absorbing nearly $140,000 of rent
expense per quarter for idle facilities. The Company is attempting to minimize
this cost by sub-letting or converting these properties to other
income-producing uses. Direct operating costs for the Company's video and bingo
centers totaled $528,000 during the first quarter of 1998. Direct operating
costs include video gaming parts, bingo supplies, repairs and maintenance,
janitorial services, insurance, travel, and local taxes, among other expenses.
Depreciation and amortization totaled $741,000 in the first quarter of 1998,
more than double the first quarter of 1997 balance. This expense includes
amortization of the Company's South Carolina video gaming licenses, depreciation
of the Company's 750 video gaming machines and other assets, and amortization of
the Company's intangible assets. General and administrative (G&A) expenses
totaled $1.0 million in the first quarter of 1998 and includes the costs of the
Company's corporate offices in Texas and two gaming offices in South Carolina.
Approximately 55% of G&A expenses are comprised of personnel costs, with the
balance comprised of costs for insurance, legal, lobbying, professional fees,
telephone and travel, among others. The Company is aggressively focused on
reducing costs and, through the first quarter, has taken action to reduce its
annual costs by over $800,000 through workforce and salary reductions and
sub-letting of idle properties.
Net other income totaled $124,000 for the first quarter of 1998 as compared to
$67,000 for the first quarter of 1997. Other income for the first quarter of
1998 was primarily comprised of interest income of $181,000 on the Company's
short-term investments. The Company recorded $76,000 of income tax liability in
the first quarter of 1998 versus $151,000 in the first quarter of 1997. The 1998
provision primarily reflected state income tax obligations. The Company had
approximately $2.2 million of tax loss carryforwards at the beginning of 1998,
and does not expect to incur any significant federal income tax liability until
this carryforward is depleted.
7
<PAGE>
AMERICAN BINGO & GAMING CORP.
RESULTS OF OPERATIONS (CONTINUED)
Net income for the first quarter of 1998 was $454,000, which equated to basic
earnings per share of $.05 and diluted earnings per share of $.04. Net income
for the first quarter of 1997 was $616,000, which equated to basic and diluted
earnings per share of $.09. The number of basic Company shares outstanding
totaled 9.4 million in the first quarter of 1998 as compared to 6.8 million in
the first quarter of 1997. This share increase was primarily due to the
Company's warrant call at the end of 1997, which increased shares outstanding by
2.3 million.
LIQUIDITY AND CAPITAL RESOURCES
At March 31, 1998, the Company had cash and cash equivalents of approximately
$11.2 million, down from $11.9 million at the end of 1997. Cash declined by
$761,000 during the first quarter of 1998 primarily as a result of a bingo
center acquisition ($500,000), purchase of video gaming machines, licenses and
other assets ($447,000), warrant financing costs ($354,000), leasehold
improvements ($335,000), and payments on note and lease obligations ($305,000).
These expenditures were partially offset by cash provided by operating
activities of $917,000 and draws against a margin line of credit of $652,000.
The Company intends to re-finance certain of its video gaming machines and other
asset purchases under an equipment lease credit line.
Cash flows from operating activities totaled $917,000 in the first quarter of
1998 and were led by the Company's net income of $454,000, adjusted for non-cash
costs for depreciation, gaming license amortization and intangible asset
amortization of $741,000, reduced by net changes in operating assets and
liabilities of ($278,000). Cash flows from operating activities in the first
quarter of 1997 totaled $733,000, which was less than comparable 1998 cash flows
from operating activities due to the increase in the Company's business from the
addition of new bingo centers and video gaming machines since the first quarter
of 1997.
Cash flows from investing activities in the first quarter of 1998 totaled ($1.7
million) and were comprised of the aforementioned expenditures for the
acquisition of a bingo center, video gaming machines and licenses, and leasehold
improvements to the Company's gaming and bingo properties. Cash flows from
investing activities in the first quarter of 1997 totaled ($247,000), which were
much lower than comparable 1998 cash flows from investing activities due to
lower capital and intangible asset expenditures and investments in video gaming
licenses in the first quarter of 1997.
Cash flows from financing activities in the first quarter of 1998 netted to zero
and were primarily comprised of $652,000 of borrowings under a margin line of
credit, offset primarily by expenditures totaling $652,000 for warrant financing
costs and payments on the Company's outstanding capital lease and note
obligations issued for the purchase of equipment. Cash flows from financing
activities in the first quarter of 1997 totaled ($24,000), which was slightly
lower than comparable 1998 cash flows from financing activities that only
included payments on notes and capital leases.
Current assets totaled $13.4 million at the end of the first quarter, providing
the Company with working capital of $10.8 million and a current ratio (current
assets divided by current liabilities) of over 5.2. Cash and cash equivalents
totaled $11.2 million at the end of the first quarter of 1998 and represented
nearly half of the Company's total assets. Accounts receivable totaled $875,000
and were primarily comprised of short-term advances to video gaming route
location owners. Total notes receivable, less provision for doubtful
collectibility, totaled $1.1 million at March 31, 1998. Notes receivable are
primarily comprised of note balances due on the Company's sale of four Florida
bingo centers at the end of 1995. Total prepaid licenses of $1.2 million
represent the Company's portfolio of video gaming licenses for machines in South
Carolina. Video gaming parts and bingo supplies are expensed at the time of
purchase; thus no inventory is recorded for operations.
8
<PAGE>
AMERICAN BINGO & GAMING CORP.
LIQUIDITY AND CAPITAL RESOURCES (CONTINUED)
Net property and equipment totaled $6.4 million at the end of the first quarter
of 1998. The majority of property and equipment is comprised of video game
machines (the Company had over 750 video gaming machines in operation at the end
of the first quarter of 1998). Intangible assets totaled $3.2 million at the end
of the first quarter of 1998 and were primarily comprised of goodwill associated
with the Company's acquisition of bingo centers.
Current liabilities totaled $2.6 million and long-term liabilities totaled $1.5
million at the end of the first quarter of 1998. The majority of liabilities
were comprised of $2.8 million of notes payable and capital lease obligations,
primarily for the Company's acquisition of video gaming machines over the past
year.
The Company had total assets of over $25.1 million and total liabilities of $4.1
million at the end of the first quarter of 1998, with shareholder equity of
$20.9 million. Management believes that its current cash balances of $11.2
million, current operational cash flows, margin credit line and two equipment
lease financing credit lines will support operational and expansion requirements
for the next year. The Company intends to finance future expansion primarily
through the use of cash, stock and notes. The Company may seek incremental
financing for certain particularly lucrative acquisition opportunities. The
Company intends to use a portion of its cash to repurchase its shares on a
periodic basis.
PART II - OTHER INFORMATION
ITEM 5. OTHER EVENTS
On May 4, 1998 the Company announced that it had hired Mr. Andre Hilliou as
Chief Executive Officer pursuant to a three-year employment agreement. Mr.
Hilliou will also serve on the Company's Board of Directors. Mr. Hilliou, age
50, has over 28 years of experience in the gaming industry, including Chief
Executive Officer and other senior management positions with Aristocrat Inc.,
the world's second largest gaming machine manufacturer, and Showboat Inc., a
renowned international casino hotel operator.
The Company also announced on this date that it had terminated a Stock Purchase
Agreement to acquire three Mississippi bingo centers from Bingo & Gaming
International. The Company was uncertain whether it would have been able to
continue rents on these properties that would have allowed the Company to earn a
fair return on its proposed investment. The Company also announced that Mr.
Jeffrey Gilbert had resigned from the Board to allow the Company's new Chief
Executive Officer to make a future appointment.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
The Company filed the following reports during the first quarter of 1998:
<TABLE>
<CAPTION>
Date Items Reported Financial Statements
- ---- --------------- -------------------
<S> <C> <C>
February 18, 1998 Darlington Music Company acquisition Yes - attached to 8-K filing
March 11, 1998 Updates to South Carolina legislation N/A affecting the video gaming industry
</TABLE>
9
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant has caused this report to be signed on its behalf by the undersigned,
thereunto authorized.
American Bingo & Gaming Corp.
May 15, 1998
By:
/s/ George M. Harrison, Jr.
---------------------------------
George M. Harrison, Jr.
Chairman of the Board
/s/ John T. Orton
----------------------
John T. Orton
Chief Financial Officer
<PAGE>
SIGNATURES
In accordance with the requirements of the Securities Exchange Act of 1934, the
registrant has caused this report to be signed on its behalf by the undersigned,
thereunto authorized.
American Bingo & Gaming Corp.
May 15, 1998
By:
---------------------------------
George M. Harrison, Jr.
Chairman of the Board
----------------------
John T. Orton
Chief Financial Officer
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<CASH> 11176
<SECURITIES> 0
<RECEIVABLES> 2024
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 13381
<PP&E> 10246
<DEPRECIATION> 3856
<TOTAL-ASSETS> 25062
<CURRENT-LIABILITIES> 2589
<BONDS> 0
<COMMON> 9
0
0
<OTHER-SE> 20915
<TOTAL-LIABILITY-AND-EQUITY> 25062
<SALES> 0
<TOTAL-REVENUES> 3717
<CGS> 0
<TOTAL-COSTS> 3311
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 531
<INCOME-TAX> 76
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 454
<EPS-PRIMARY> .05
<EPS-DILUTED> .04
</TABLE>
