<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
X Quarterly Report Pursuant to Section 13 of 15(d) of the Securities
- - --- Exchange Act of 1934
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1996
OR
Transition Report Pursuant to Section 13 of 15(d) of the
- - ---- Securities Exchange Act of 1934
For the transition period from ____________ to ______________
Commission File No: 0-26432
AIRWAYS CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 59-3315474
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
6280 HAZELTINE NATIONAL DRIVE
ORLANDO, FLORIDA 32822
(407) 859-1579
(Address, including zip code, and telephone number, including area code, of
Registrant's principal executive offices)
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 X No
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding as of AUGUST 1, 1996
----- --------------------------------
Common stock
Par value $.01 per share 8,996,937
<PAGE> 2
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
AIRWAYS CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
JUNE 30, MARCH 31,
ASSETS 1996 1996
------ --------- ---------
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 15,446 $ 16,437
Restricted cash 8,861 11,309
Accounts receivable, net 2,412 3,135
Tax asset, deferred 173 -
Inventory, expendable parts and supplies 1,764 1,847
Prepaid expenses 1,941 1,947
--------- ---------
Total current assets 30,597 34,675
--------- ---------
Property and equipment, net 29,632 29,458
--------- ---------
Other assets:
Goodwill, net 1,856 1,891
Security deposits 1,648 1,339
Other assets, net 907 997
--------- ---------
Total other assets 4,411 4,227
--------- ---------
Total assets $ 64,640 $ 68,360
========= =========
</TABLE>
See accompanying notes to consolidated financial statements. (Continued)
2
<PAGE> 3
AIRWAYS CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)
(In thousands, except share information)
<TABLE>
<CAPTION>
JUNE 30, MARCH 31,
LIABILITIES AND STOCKHOLDERS' EQUITY 1996 1996
- - ------------------------------------ -------- ---------
<S> <C> <C>
Current liabilities:
Accounts payable $ 10,040 $ 9,362
Air traffic liability 11,398 14,912
Accrued liabilities 1,313 993
Current portion of long-term debt 3,368 3,574
Income taxes payable - 533
-------- ---------
Total current liabilities 26,119 29,374
-------- ---------
Long-term debt:
Long-term debt, less current portion 11,951 12,484
Maintenance reserves for owned aircraft 2,358 2,089
Deferred income taxes 50 50
-------- ---------
Total long-term debt 14,359 14,623
-------- ---------
Total liabilities 40,478 43,997
-------- ---------
Stockholders' equity:
Preferred stock, $.01 par value per share, 1,000,000 shares
authorized, no shares issued or outstanding - -
Common stock, $.01 par value per share, 19,000,000 shares
authorized, 8,996,937 and 8,966,937 shares issued and
outstanding at June 30, 1996 and March 31, 1996,
respectively 90 90
Additional paid-in capital 26,431 26,350
Accumulated deficit (2,359) (2,077)
-------- ---------
Total stockholders' equity 24,162 24,363
-------- ---------
Commitments and contingencies (notes 5 and 6)
Total liabilities and stockholders' equity $ 64,640 $ 68,360
======== =========
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE> 4
AIRWAYS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except per share information)
<TABLE>
<CAPTION>
FOR THE QUARTERS ENDED
JUNE 30,
----------------------------
1996 1995
--------- ---------
<S> <C> <C>
Operating revenues:
Passenger $ 28,557 $ 8,536
Charter 23 821
General aviation and other 432 299
--------- ---------
Total operating revenues 29,012 9,656
--------- ---------
Operating expenses:
Flight operations 9,419 3,269
Maintenance 6,492 1,685
Aircraft and traffic servicing 6,372 2,206
Reservations, sales and marketing 5,189 1,615
Depreciation and amortization 1,102 356
General and administrative 919 857
--------- ---------
Total operating expenses 29,493 9,988
--------- ---------
Operating loss (481) (332)
Interest (income) (359) (158)
Interest expense 390 -
--------- ---------
Net interest (income) 31 (158)
--------- ---------
Loss before income taxes (512) (174)
Income tax (benefit) expense (230) 14
--------- ---------
Net loss $ (282) $ (188)
========= =========
Net loss per share (proforma in 1995) $ (.03) $ (.02)
========= =========
Weighted average shares outstanding (proforma in 1995) 9,303 8,927
========= =========
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE> 5
AIRWAYS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
FOR THE QUARTERS ENDED JUNE 30,
-------------------------------
1996 1995
---------- ----------
<S> <C> <C>
Operating activities:
Net loss $ (282) $ (188)
Adjustments to reconcile net loss to net cash flows provided by (used
for) operating activities:-
Depreciation and amortization 1,105 358
Maintenance reserves, net 585 203
Change in current operating items:
Restricted cash 2,448 203
Accounts receivable, net 723 (818)
Inventories 82 60
Prepaid expenses (323) (265)
Accounts payable and accrued liabilities 682 873
Air traffic liability (3,514) 753
Related party payable - 15,500
Income tax payable (706) -
---------- ----------
Net cash flows provided by operating activities 800 16,679
---------- ----------
Investing activities:
Purchases of property and equipment, net (1,095) (802)
Increases in other assets, excluding deferred loan costs (54) (1,483)
---------- ----------
Net cash flows used for investing activities (1,149) (2,285)
---------- ----------
</TABLE>
See accompanying notes to consolidated financial statements. (Continued)
5
<PAGE> 6
AIRWAYS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
FOR THE QUARTERS ENDED JUNE 30,
-------------------------------
1996 1995
---------- ----------
<S> <C> <C>
Financing activities:
Repayments of long-term debt (739) -
Deferred loan costs 16 -
Proceeds from issuance of common stock 81 -
---------- ----------
Net cash flows used for financing activities (642) -
---------- ----------
Net increase in cash and short-term investments (991) 14,394
Cash and short-term investments at beginning of quarter 16,437 961
---------- ----------
Cash and short-term investments at end of quarter $ 15,446 $ 15,355
========== ==========
Supplemental disclosures of cash flow activities:
Cash paid for interest $ 334 $ -
========== ==========
Cash paid for income taxes $ 475 $ -
========== ==========
</TABLE>
See accompanying notes to consolidated financial statements.
6
<PAGE> 7
AIRWAYS CORPORATION
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996
The financial statements included herein have been prepared by Airways
Corporation (the Company), without audit, pursuant to the rules and regulations
of the Securities and Exchange Commission. The information furnished in the
financial statements includes normal recurring adjustments and reflects all
adjustments which are, in the opinion of management, necessary for a fair
presentation of such financial statements. The Company's business is seasonal
and, accordingly, interim results are not indicative of results for a full
year. 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. It is suggested that these
financial statements be read in conjunction with the financial statements for
the year ended March 31, 1996, and the notes thereto, included in the Company's
Form 10-K Annual Report (File No. 0-26432) filed with the Securities and
Exchange Commission.
(1) SPIN-OFF TRANSACTION
In May 1995, AirTran Corporation, parent of the Company ("AirTran"),
Mesaba Aviation, Inc. and Northwest Airlines, Inc. ("Northwest") entered
into an agreement to spin-off AirTran's Orlando-based jet carrier and
fixed-base operations ("FBO") in Grand Rapids, Minnesota. On April 7,
1995, AirTran established the Company as a wholly owned subsidiary to
consolidate the above operations in order to facilitate the spin-off.
The spin-off, in the form of a one-for-one dividend of all of the
outstanding shares of the Company to the shareholders of AirTran (other
than Northwest), was approved by AirTran's shareholders on August 29,
1995. The distribution was made on September 7, 1995 to shareholders of
record (other than Northwest) on August 31, 1995.
AirTran Airways, Inc., which operates the Orlando-based jet carrier, was
previously a subsidiary of AirTran. The FBO had historically been
operated as a division of an AirTran subsidiary. The following financial
statements present the results of the combined entities whereby
significant intercompany accounts and transactions are eliminated.
Additionally, all results presented for periods prior to the spin-off are
presented on a pro-forma basis.
Net loss per share information for the quarter ended June 30, 1996 is
based on 9,303,140 shares outstanding calculated on the treasury method,
fully-diluted basis as of June 30, 1996.
(2) AIRCRAFT TRANSACTIONS
The Company's fleet currently consists of six leased and four owned
Boeing 737 with average capacities of 126 passengers. The Company also
owns three Cessna 172 aircraft
7
<PAGE> 8
AIRWAYS CORPORATION
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996
used in flight training and rental operation of the FBO. In addition,
the FBO had one F-27 aircraft held for resale at June 30, 1996 which has
subsequently been sold.
(3) ROUTE MATTERS
During the three months ended June 30, 1996, the Company added service
from Orlando to Greensboro. On July 25, 1996 the Company decided that it
would discontinue service to Birmingham and Dallas in order to provide
service to other markets with more long term potential.
(4) LETTERS OF CREDIT
The Company maintains a $1,000,000 credit facility with a bank for
purposes of issuing letters of credit. Nine letters, totaling $888,000
and $ 673,000 at June 30, 1996 and March 31, 1996, respectively, have
been issued and were outstanding at the end of both periods. In the
event advances under the facility are drawn, the borrowings would bear
interest at the bank's prime rate plus 1-1/4%. No amounts were drawn
under this facility as of or during either of the quarters ended June 30,
1996 and March 31, 1996.
(6) LITIGATION
The Company is a party to ongoing legal proceedings arising in the
ordinary course of business. In the opinion of management, the
resolution of these matters will not have a material adverse effect on
the Company's financial position, results of operations, or its cash
flows.
(7) RECLASSIFICATIONS
Certain amounts in the March 31, 1996 financial statements have been
reclassified to conform with presentation in the June 30, 1996 quarterly
consolidated financial statements.
8
<PAGE> 9
AIRWAYS CORPORATION
JUNE 30, 1996
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The Company provides non-stop scheduled passenger air service between Orlando
and 22 cities, principally in the eastern half of the United States. The
following table shows the expansion of the Company's route system and fleet
through June 30, 1996. All flights are to and from Orlando, unless otherwise
noted.
<TABLE>
<CAPTION>
As of Total number Departures
month end of aircraft per month Scheduled cities added
--------- ----------- --------- ----------------------
<S> <C> <C> <C>
FISCAL YEAR 1996:
April 4 354 -
May 4 428 Nashville*
June 4 412 -
July 4 426 -
August 6 714 San Antonio, Dayton, Birmingham, and
Buffalo
September 6 642 -
October 7 880 Dallas, Greenville/Spartanburg, Kansas
City, and Norfolk
November 7 874 -
December 8 883 -
January 9 929 -
February 10 1,126 Allentown, Canton/Akron, and Rochester
March 10 1,223 Richmond
FISCAL YEAR 1997
April 10 1,209 -
May 10 1,135 -
June 10 1,106 Greensboro
</TABLE>
* Includes services between Tampa and Nashville which were discontinued as
of October 1, 1995.
9
<PAGE> 10
AIRWAYS CORPORATION
JUNE 30, 1996
The table below sets forth selected operating statistics and the major
components of operating revenues and expenses per ASM.
<TABLE>
<CAPTION>
Quarters ended June 30,
------------------------------------ Percent
1996 1995 Change
--------------- --------------- --------
<S> <C> <C> <C>
Operating revenue:
Passenger fare revenue $ .077 $ .063 22.2%
Charter .000 .006 (100.0%)
General aviation and other .001 .002 (50.0%)
--------------- --------------- --------
Total .078 .071 9.9%
Operating expenses
Flight operations .025 .024 4.2%
Maintenance .017 .012 41.7%
Aircraft and traffic servicing .017 .016 6.3%
Reservations, sales and marketing .014 .012 16.7%
Depreciation and amortization .003 .003 0.0%
General and administrative .003 .006 (50.0%)
--------------- --------------- --------
Total .079 .073 8.2%
--------------- --------------- --------
Operating Income $ (.001) $ (.002) (50.0%)
=============== =============== ========
Available seat miles (1) 371,881,000 135,254,000 175.0%
Revenue passenger miles (2) 264,966,000 83,200,000 218.5%
Passengers 303,108 89,514 238.6%
Departures 3,450 1,194 188.9%
Load Factor (3) 71.3% 61.5% 9.8%
Yield per revenue passenger mile (4) $ 0.108 $ 0.103 4.9%
</TABLE>
(1) The number of seats available for passengers multiplied by the number of
scheduled miles those seats are flown.
(2) The number of scheduled miles flown by revenue passengers.
(3) Revenue passenger miles divided by available seat miles. Year over year
percent change is measured only as percentage points difference.
(4) Passenger revenue divided by revenue passenger miles.
10
<PAGE> 11
AIRWAYS CORPORATION
JUNE 30, 1996
OPERATING REVENUES
Total operating revenues were $28,557,000 and $8,536,000 for the quarters ended
June 30, 1996 and 1995, respectively. The increase of $20,021,000 or 234.5%
in 1996 reflects expansion of the aircraft fleet, growth in departures and
improved load factors and yield. The company purchased four and leased two
additional aircraft since June 30, 1995.
ASMs were 371,881,000 and 135,254,000 in 1996 and 1995, respectively, an
increase of 236,627,000 or 175.0%. Revenue Passenger Miles ("RPM"s) were
264,966,000 and 83,200,000 in 1996 and 1995, respectively, an increase of
181,766,000 or 218.5%. This was principally the result of higher load factors
on existing routes and the addition of 13 new markets in 1996. Load factors
were 71.3% and 61.5% in 1996 and 1995, respectively, an increase of 9.8
percentage points.
Charter revenues were $23,000 and $821,000 in the quarters ended June 30, 1996
and 1995, respectively, a decrease of $798,000 or 97.2%. The decrease
reflects the deliberate shift of using more aircraft in scheduled service in
1996 than in 1995.
OPERATING EXPENSES
Flight operations expense includes expenses related directly to the operation
of aircraft except for depreciation and amortization of aircraft and aircraft
improvements. Expenses for hull insurance, pilots' salaries, aircraft fuel and
flight operations administration are all included in flight operations. Flight
operations expenses were $9,419,000 and $3,269,000 in 1996 and 1995,
respectively, an increase of $6,150,000 or 188.1%. Departures were 3,450 and
1,194 in 1996 and 1995, respectively, an increase of 2,256 or 188.9% which
paralleled, directly, the increase in flight operations expense. The Company
purchased four aircraft since June 30, 1995 which shifts fleet ownership costs
from flight operations expense to depreciation. This decrease, however, was
offset by expenses incurred for substitute aircraft rentals required to
accommodate passengers whose flights otherwise would have been canceled during
June 1996. Additionally, the Company became subject to the $0.043 per gallon
fuel tax when the aviation exemption expired on October 1, 1995.
Maintenance expense includes all expenses related to the upkeep of aircraft.
Such expenses include labor, parts, supplies and contract maintenance. The
direct cost of airframe and engine overhauls are expensed and, for leased
aircraft, paid monthly to the lessor in the form of reserves. For owned
aircraft, the Company reserves on a per flight hour basis for future
maintenance. These reserves are recorded on the Company's balance sheet each
month as the aircraft are flown. The reserves are then available for major
overhauls when they occur. Maintenance expenses were $6,492,000 and $1,685,000
for the quarters ended June 30, 1996 and 1995, respectively, an increase of
$4,807,000 or 285.3%. Maintenance expense is a semi-variable cost, driven by
facilities and salaries and wages
11
<PAGE> 12
AIRWAYS CORPORATION
JUNE 30, 1996
(which are relatively fixed), reserve expense (which is variable according to
the number of block hours flown) and other repairs and maintenance expenses
which are driven by expansion of the airline and other events as explained
below.
- - - Facilities and salaries and wages increased $ 240,000 or 64% due to the
expansion of the airline and the acquisition of the Company's new
maintenance hangar in February of 1996.
- - - Reserve expense increased by $ 1,431,000 or 189% which is driven by
increased block hours (146%), year over year rate increases on reserves
and higher reserve rates on the aircraft acquired since June 1995.
- - - The remainder, or other maintenance and repair expenses totaled $ 3,700,000
which was an increase of $ 3,136,000 over 1995, or 567%. This large
variance is caused by a number of contributing factors which are explained
following with $ 2,900,000 of that difference summarized in the table that
follows: to facilitate the continued managed growth of the airline, the
Company initiated an inspection program during the 1996 quarter to ensure
that all aircraft maintenance and records of maintenance had been properly
executed. This program involved engaging outside consultants to provide an
independent report on the Company's maintenance procedures and records.
That report recommended, among other things, that certain repairs and parts
replacement be made. In addition to those costs, the Company had one
unscheduled engine repair during the 1996 quarter which required the rental
of a replacement engine during the time the Company's engine was out for
repair. Lastly, as previously reported in the Company's Form 10-K, the
prior year's expenses were, in some cases, not tabulated and reported until
the fourth quarter of that fiscal year resulting in an unusually low base
against which this year's quarter is being compared - the remainder of the
difference in this expense category is largely the result of those
expenses.
<TABLE>
<S> <C>
Increased expense from:
Company initiated inspection program
- outside consultants $ 300,000
- replacement of parts and repairs 800,000
Unscheduled engine repair 300,000
Rental of replacement engine 100,000
Increase in expense anticipated as a result of tripled ASM volume 1,400,000
--------------
Total $ 2,900,000
==============
</TABLE>
12
<PAGE> 13
AIRWAYS CORPORATION
JUNE 30, 1996
Aircraft and traffic servicing expense includes all expenses incurred at
airports, including landing fees, facilities rental, station labor, passenger
liability insurance, ground handling services, flight attendant wages, catering
expenses and flight attendant overnight expenses. Aircraft and traffic
servicing expenses were $6,372,000 and $2,206,000 in the 1996 and 1995 first
quarters, respectively, an increase of $4,166,000 or 188.8%. While the
increase is directly in line with the increased ASMs and block hours flown in
1996 versus 1995, the Company would ordinarily have experienced the benefit of
leverage of costs over higher ASMs. The inspection program referred to above
necessitated the diversion/cancellation of an unusually high number of flights
to have the planes examined and the Company incurred $ 1,100,000 of diverted
passenger costs as a consequence.
Reservations and sales expense includes all sales, marketing and advertising
expenses as well as the cost of reservations. Reservation expense includes
salaries of reservations personnel, computer reservation system expenses and
travel agent commissions. Reservations and sales expenses were $5,189,000 and
$1,615,000 in the 1996 and 1995 first quarters, respectively, an increase of
$3,574,000 or 221.3%. The Company carried 303,108 and 89,514 passengers in 1996
and 1995 first quarters, respectively, an increase of 213,594 or 238.6%. The
increased passenger volume is directly correlated with the higher marketing
costs associated with travel agent commissions, advertising and reservation
activity. The increased activity was caused by the expansion of the Company's
service into new markets and higher load factors on existing routes in 1996.
The reservations and sales cost per ASM was $0.014 and $0.012 for the quarters
ended June 30, 1996 and 1995, respectively, an increase of $0.002 or 16.7%.
The total cost increased by 221.3% but inasmuch as the volume of ASMs flown
increased 175%, the increase in the cost per ASM was largely mitigated.
General and administrative expenses include the wages and benefits for the
Company's executive officers and various other administrative personnel. Also
included are costs for office supplies, legal expenses, accounting and
miscellaneous expenses. General and administrative expenses were $919,000 and
$857,000 for the quarters ended June 30, 1996 and 1995, respectively, an
increase of $62,000 or 7.2%. Costs related to the spin-off and certain Mesaba
Aviation employee costs and expenses which were allocated to the Company caused
last year's expense to be higher than it otherwise would have been. The
reduction in spin-off related expenses was offset by increased staffing in
General and Administrative departments to support the Company's expanding
operations.
Depreciation and amortization expense includes depreciation on equipment,
aircraft and aircraft improvements and amortization of leasehold improvements,
goodwill and aircraft and loan acquisition costs. Depreciation and
amortization expense were $1,102,000 and $356,000 in the 1996 and 1995 first
quarters, respectively, an increase of $746,000 or 209.6% driven largely by
purchases of aircraft completed in the latter part of 1995.
13
<PAGE> 14
AIRWAYS CORPORATION
JUNE 30, 1996
EFFECTS OF DISTRIBUTION ON LIQUIDITY
Prior to the spin-off distribution (see note 1), AirTran contributed cash and
property to the Company having a book value of approximately $29,000,000.
Pursuant to a distribution agreement, the Company and AirTran agreed to
certain tax-sharing provisions (including AirTran's assumption of all tax
liability related to the Company's operations prior to spin-off) and to
indemnify each other against certain other liabilities occurring both before
and after the distribution. Expenses associated with the distribution were
expensed for financial reporting purposes and charged pursuant to the
distribution agreement to the party for whose benefit the expenses were
incurred. The Company had consolidated current assets of $30,597,000 and
$34,675,000 as of June 30 and March 31, 1996, respectively. Management
believes that such assets, along with internally generated funds as well as
financing which management believes is or will be made available, will satisfy
projected operating and capital needs. If the Company increases its rate of
growth over current projections, acquires another company, purchases more
aircraft (rather than leasing additional aircraft) than is presently planned,
sustains losses, or otherwise requires significant additional capital, other
sources of funds will need to be secured and there is no assurance that such
funds will be secured.
PART II - OTHER INFORMATION
ITEM 5. OTHER INFORMATION
The Company's common stock is listed on the NASDAQ National Market under the
symbol "AAIR." Trading in the stock began on September 8, 1995.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
27.0 Financial Data Schedule (submitted in electronic format)
14
<PAGE> 15
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.
AIRWAYS CORPORATION
Date: August 14, 1996
/s/ Mark B. Rinder
--------------------------------------
Mark B. Rinder
VICE PRESIDENT - FINANCE,
SECRETARY AND CHIEF FINANCIAL OFFICER
15
<PAGE> 16
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT NO. EXHIBIT
- - ----------- -------
<S> <C>
27.0 Financial Data Schedule (submitted in electronic format)
</TABLE>
16
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF AIRWAYS CORPORATION FOR THE THREE MONTHS ENDED JUNE 30,
1996, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-START> APR-1-1996
<PERIOD-END> JUN-30-1996
<CASH> 24,307
<SECURITIES> 0
<RECEIVABLES> 2,412
<ALLOWANCES> 0
<INVENTORY> 1,764
<CURRENT-ASSETS> 30,597
<PP&E> 32,603
<DEPRECIATION> 2,971
<TOTAL-ASSETS> 64,640
<CURRENT-LIABILITIES> 26,119
<BONDS> 0
0
0
<COMMON> 90
<OTHER-SE> 24,072
<TOTAL-LIABILITY-AND-EQUITY> 64,640
<SALES> 0
<TOTAL-REVENUES> 29,012
<CGS> 0
<TOTAL-COSTS> 29,493
<OTHER-EXPENSES> (359)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 390
<INCOME-PRETAX> (512)
<INCOME-TAX> (230)
<INCOME-CONTINUING> (282)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (282)
<EPS-PRIMARY> (.03)
<EPS-DILUTED> (.03)
</TABLE>
