<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q/A
(Mark One)
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended March 31, 1996
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from to
Commission file number 0-26526
MOOVIES, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
DELAWARE 57-1012733
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
</TABLE>
201 BROOKFIELD PARKWAY, SUITE 200
GREENVILLE, SOUTH CAROLINA 29607
(Address of principal executive offices)
(Zip code)
(864) 213-1700
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name, former address and formal fiscal year, if changed since last
report)
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 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. [ X ] Yes [ ] No
The number of shares of common stock, par value $0.001 per share,
outstanding at May 13, 1996 is 8,664,040.
<PAGE>
PART I -- FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
MOOVIES, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER
MARCH 31, 31,
1996 1995
<S> <C> <C>
(UNAUDITED)
ASSETS
Current assets:
Cash and cash equivalents.................................................................... $ 5,570,084 $ 3,563,788
Receivables.................................................................................. 1,737,596 2,780,214
Merchandise inventory........................................................................ 2,390,047 2,617,496
Deferred income tax benefit.................................................................. 308,224 984,136
Prepaid rent................................................................................. 1,030,112 739,804
Other........................................................................................ 1,595,951 1,243,708
Total current assets...................................................................... 12,632,014 11,929,146
Videocassette rental inventory, net............................................................ 17,931,976 16,728,416
Furnishings and equipment, net................................................................. 11,116,831 9,858,952
Goodwill....................................................................................... 30,535,285 29,080,621
Deposits and other assets...................................................................... 916,183 622,361
$73,132,289 $68,219,496
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Line of credit............................................................................... $12,795,934 $ 2,500,000
Notes payable................................................................................ 500,000 5,935,215
Current portion of long-term debt............................................................ 448,971 481,064
Accounts payable............................................................................. 8,330,138 10,567,375
Accrued liabilities.......................................................................... 3,737,165 3,065,603
Total current liabilities................................................................. 25,812,208 22,549,257
Long-term debt, less current portion........................................................... 3,698,356 2,410,987
Deferred income tax payable.................................................................... 5,535,494 5,796,051
35,046,058 30,756,295
Commitments
Stockholders' equity:
Preferred stock, $.001 par value; 1,000,000 shares authorized; no shares issued and
outstanding............................................................................... -- --
Common stock, $.001 par value; 25,000,000 shares authorized; issued and outstanding 8,658,532
shares at March 31, 1996 and December 31, 1995............................................ 8,659 8,659
Additional paid-in capital................................................................... 35,857,767 35,857,767
Retained earnings............................................................................ 2,219,805 1,596,775
Total stockholders' equity................................................................ 38,086,231 37,463,201
$73,132,289 $68,219,496
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
MOOVIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH
31,
1996 1995
<S> <C> <C>
Revenues:
Rental revenues............................................................................. $16,957,403 $1,114,672
Product sales............................................................................... 2,358,658 108,581
19,316,061 1,223,253
Operating costs and expenses:
Operating expenses.......................................................................... 13,728,706 870,729
Cost of product sales....................................................................... 1,537,095 92,392
Selling, general and administrative......................................................... 2,328,845 186,502
Amortization of goodwill.................................................................... 361,084 --
17,955,730 1,149,623
Operating income.............................................................................. 1,360,331 73,630
Interest expense.............................................................................. (301,047) (27,097)
Other, net.................................................................................... (20,900) --
Income before income taxes.................................................................... 1,038,384 46,533
Income tax expense............................................................................ 415,354 --
Net income.................................................................................... $ 623,030 $ 46,533
Earnings per share:
Net income.................................................................................. $ .07 $ N/A
Weighted average shares outstanding......................................................... 8,976,332 N/A
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
MOOVIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH
31,
1996 1995
<S> <C> <C>
Operating activities:
Net income................................................................................... $ 623,030 $ 46,533
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization............................................................. 5,270,654 252,902
Amortization of discount on long-term debt................................................ -- 17,021
Changes in operating assets and liabilities:
Receivables............................................................................. 1,296,993 (42,032)
Merchandise inventory................................................................... 227,449 (5,615)
Other current assets.................................................................... (642,551) --
Deposits and other assets............................................................... (293,822) (188,137)
Accounts payable........................................................................ (2,237,237) 811,513
Accrued liabilities..................................................................... 271,562 (25,088)
Deferred income taxes................................................................... 415,354 --
Net cash provided by operating activities............................................... 4,931,432 867,097
Investing activities:
Purchases of videocassette rental inventory, net............................................. (5,868,674) (539,192)
Purchases of furnishings and equipment....................................................... (1,483,893) (163,612)
Proceeds from the sale of the grocery division............................................... 745,625 --
Business acquisitions........................................................................ (2,434,187) --
Net cash used in investing activities................................................... (9,041,129) (702,804)
Financing activities:
Proceeds from line of credit borrowings, net................................................. 10,295,934 --
Proceeds from issuance of long-term debt..................................................... 2,000,000 600,000
Principal payments on long-term debt......................................................... (6,179,941) (102,927)
Capitalized initial public offering costs.................................................... -- (582,806)
Capital/partner withdrawals, net............................................................. -- (73,027)
Net cash (used in) provided by financing activities..................................... 6,115,993 (158,760)
Increase in cash and cash equivalents.......................................................... 2,006,296 5,533
Cash and cash equivalents at beginning of period............................................... 3,563,788 169,591
Cash and cash equivalents at end of period..................................................... $ 5,570,084 $ 175,124
Supplemental disclosure of cash flow information:
Cash paid for interest.................................................................... $ 58,007 $ 26,114
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
MOOVIES, INC.
NOTES TO CONDENSED FINANCIAL INFORMATION
(1) BASIS OF PRESENTATION
The Company is filing this revised Form 10-Q/A to revise the accounting
treatment accorded the change in amortization method to a "change in accounting
estimate effected by a change in accounting principle," as defined by APB No.
20, rather than as a "change in accounting principle," following discussions
with the staff of the SEC. The Company will continue to utilize its recently
adopted accelerated method of amortizing videocassette rental inventory.
As a result, the Company has restated its first quarter results by (i)
eliminating the $891,000 cumulative effect of a change in accounting principle,
net of taxes that was previously reported ($1,485,000 before taxes), (ii)
recording $860,000 as a pre-charge to operating expenses in the first quarter
for the amortization expense that would have been recorded for tapes had the
Company adopted the new method prior to January 1, 1996, and (iii) restoring the
remaining $625,000 pre-tax amount to videocassette rental inventory, that was
eliminated as part of the cumulative effect of a change in accounting principle
originally recorded. This amount related to the videocassettes remaining in
inventory at December 31, 1995 which were purchased concurrently with the
Company's initial public offering of common stock. This amount will be amortized
over the remaining lives of the related tapes (approximately 31 months) in
accordance with the new method. Approximately $50,000 ($30,000 after taxes) of
additional amortization was recorded during the first quarter of 1996 related to
the restored videocassette rental inventory. Accordingly, the Company's
previously reported operating income of $2,270,000 and net income of $278,000 or
$.03 per share for the first quarter ended March 31, 1996 have been revised to
$1,360,000, $623,000 and $.07, respectively.
Moovies currently operates 158 video specialty superstores located in
Georgia, South Carolina, North Carolina, Virginia, Pennsylvania, New Jersey, New
York, Connecticut, Ohio, Iowa and Colorado. Moovies' superstores rent and sell a
wide range of videos and video games, rent video players and video game
equipment, and sell video accessories such as blank cassettes, cleaning
equipment and a variety of confectionery items.
The interim financial information included herein is unaudited. The
financial information for the three month period ended March 31, 1995 reflects
the operations of Tonight's Feature Limited Partnership II ("Tonight's Feature"
or the "Predecessor") which was operated as a partnership for income tax
purposes. Accordingly, income taxes were paid by the Predecessor's general
partners and the Predecessor had no income tax liability. Moovies, Inc. (the
"Company") was incorporated in November 1994 for the purpose of entering into
agreements to acquire video specialty stores, consummating an initial public
offering of stock and operating video specialty stores. In August 1995,
concurrently with the completion of an initial public offering of Company stock,
the Predecessor was merged into Moovies, Inc. The financial information for the
three month period ended March 31, 1996 reflects the operations of the Company.
Certain information and footnote disclosures normally included in the financial
statements have been condensed or omitted pursuant to the rules and regulations
of the Securities and Exchange Commission ("SEC"), although the Company believes
that the disclosures made are adequate to make the information presented not
misleading. This financial information should be read in conjunction with the
consolidated financial statements and related notes contained in the Company's
Annual Report on Form 10-K which was previously filed with the SEC. Other than
as indicated herein, there have been no significant changes from the financial
data published in that report. In the opinion of management, such unaudited
information reflects all adjustments, consisting only of normal recurring
accruals and other adjustments as disclosed herein, necessary for a fair
presentation of the unaudited information. The results of operations for interim
periods are not necessarily indicative of the results expected for the full
year.
(2) CHANGE IN AMORTIZATION METHOD FOR VIDEOCASSETTE RENTAL INVENTORY
Effective January 1, 1996, the Company adopted an accelerated method of
amortizing its videocassette rental inventory. Under this new method,
videocassette rental inventory, which includes video games, is stated at cost,
including the related costs to prepare such videocassettes for rent, and is
amortized over its estimated economic life of 36 months, to its salvage value
($6 per videocassette during 1996). All copies of new release videocassettes are
amortized on an accelerated basis during their first four months to an average
net book value of $15 and then on a straight-line basis to their salvage value
of $6 over the next 32 months.
The method for calculating amortization of videocassette rental inventory
in 1995 was as follows: videocassettes that are considered base stock ("catalog
titles"), together with related costs to prepare them for rent, are amortized
over 36 months on a straight-line basis. New release videocassettes are
amortized as follows: the tenth and any succeeding copies of each title per
store are amortized over nine months on a straight-line basis; the fourth
through ninth copies of each title per store are
<PAGE>
MOOVIES, INC.
NOTES TO CONDENSED FINANCIAL INFORMATION -- CONTINUED
(2) CHANGE IN AMORTIZATION METHOD FOR VIDEOCASSETTE RENTAL
INVENTORY -- Continued
amortized 40% in the first year and 30% in each of the second and third years;
and copies one through three of the titles per store are amortized as base
stock.
The new method of amortization has been applied to videocassette rental
inventory that was held in inventory at January 1, 1996. The adoption of the new
method of amortization has been accounted for as a change in accounting estimate
effected by a change in accounting principle and, accordingly, the Company
recorded $860,000 as a pre-tax charge to operating expenses in the first
quarter. The charge in the current period related to amortization expense that
would have been recorded for tapes had the Company adopted the new amortization
method prior to January 1, 1996. The application of the new method of amortizing
videocassette rental inventory, including the $860,000, or $0.06 per share,
charge described above, increased amortization expense for the quarter ended
March 31, 1996 by approximately $1.5 million and reduced net income by
approximately $891,000 and earnings per share by $0.10.
(3) ACQUISITION AND PENDING ACQUISITIONS
SHOWTIME. In March 1996, the Company acquired the "Showtime Video" chain of
five stores in an asset purchase transaction for aggregate consideration of
approximately $400,000 in cash and a $1.9 million note payable. The Company paid
the cash portion of the consideration and repaid the note in April 1996 with
borrowings under its line of credit. Showtime operates three stores in Fort
Collins, Colorado, one in Boulder, Colorado, and one in Greeley, Colorado.
PREMIERE. In April 1996, the Company signed an asset purchase agreement to
purchase certain assets and business of American Multi-Entertainment, Inc. d/b/a
Premiere Video ("Premiere Video") for a purchase price of approximately $11.5
million, consisting of $8.9 million in cash at closing and a final payment of
$2.6 million payable in January 1997 which will be secured by a bank letter of
credit. Premiere Video owns and operates 23 stores in Minnesota, Iowa,
Wisconsin, South Dakota and Nebraska. The Company's obligation to complete the
acquisition is contingent upon the availability, prior to July 31, 1996, of
financing on terms acceptable to the Company. The Company anticipates closing
the acquisition concurrently with the completion of a public offering of stock
(see note 4). However, there can be no assurance that the acquisition will be
consummated.
(4) SUBSEQUENT EVENT
On May 1, 1996 the Company filed a Registration Statement with the SEC
covering the issuance and sale by Moovies of up to 3,200,000 shares of Common
Stock. If the offering is completed, the Company intends to use $8.9 million of
the proceeds therefrom to fund the acquisition of Premiere Video. The balance of
the net proceeds will be added to the Company's working capital and will be
available for general corporate purposes, including new store openings, possible
future acquisitions and conversion of newly acquired stores to the Moovies logo
and format.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
The Company's results of operations for the three months ended March 31,
1995 reflect only the operations of the Predecessor. The results of operations
for the three months ended March 31, 1996 reflect the operations of the Company
and include the results of the "Showtime Video" acquisition from and after its
acquisition date.
REVENUES. Revenues increased $18,093,000, or 1,479.4%, for the three months
ended March 31, 1996 to $19,316,000 compared to revenues of $1,223,000 for the
same period in 1995. The increased revenues were a result of the additional
stores acquired and opened by the Company concurrently with and subsequent to
the initial public offering in August 1995. Product sales as a percentage of
total revenues increased to 12.2% for 1996 compared to 8.9% for 1995. This
increase is the result of greater emphasis by certain acquired companies on
product sales, including video game sales. In March 1996, the Company sold its
supermarket operation for an amount approximating its net book value. The
supermarket operation had revenues of approximately $355,000 in the quarter
ended March 31, 1996.
OPERATING COSTS AND EXPENSES. Operating expenses increased $12,858,000 to
$13,729,000 for the three months ended March 31, 1996 compared to $871,000 for
1995. Operating expenses for the three months ended March 31, 1996 include a
$860,000 charge for the adoption of the new method of amortization of
videocassette rental inventory as described in note 2 to the consolidated
financial statements included herein. Operating expenses as a percentage of
total revenues were 71.1% for 1996 compared to 71.2% for 1995. Operating
expenses excluding the charge as a percentage of total revenues were 66.6%. The
decrease in operating expenses as a percentage of total revenues was primarily
the result of increased revenues from product sales in 1996 without a
corresponding increase in operating expenses, partially offset by the current
quarter impact of the change in the method of amortization of videocassette
rental inventory. The new method of accounting accelerates the amortization of
videocassette rental inventory. The Company anticipates that the amortization
for the last three quarters of 1996 will be greater under the new method of
amortization than it would have been under the previous method.
Cost of product sales increased $1,445,000 to $1,537,000 for 1996 compared
to $92,000 for 1995. This increase is directly related to the increase in
product sales. Cost of product sales as a percentage of product sales were 65.2%
for the three months ended March 31, 1996 compared to 85.1% for 1995. This
decrease is the result of closer management of product sales by certain acquired
companies and increasing the mix of higher margin items.
General and administrative expenses increased $2,142,000 to $2,329,000 for
1996 compared to $187,000 for 1995, reflecting the acquisitions and additional
store openings. General and administrative expenses as a percentage of total
revenues were 12.1% for 1996 compared to 15.3% for 1995. The percentage
decrease, despite the increase in the amount of general and administrative
expenses, reflects the effect of spreading these expenses over significantly
greater revenues.
INTEREST EXPENSE. Interest expense increased $274,000 to $301,000 for 1996
from $27,000 for 1995. The increase is related primarily to (i) the issuance in
April 1995 of a $1.5 million note payable, which was incurred to provide
financing for the completion of the Company's initial public offering and (ii)
additional borrowings under the Company's line of credit agreements and
subordinated credit facility.
INCOME TAX EXPENSE. The Company had no income tax expense for the three
months ended March 31, 1995 because the Predecessor operated as a partnership
for income tax purposes. Income tax expense for the three months ended March 31,
1996 was approximately $415,000, representing an effective income tax rate of
40%.
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary long-term capital needs are for opening and acquiring
new stores. The Company expects to fund such needs through cash flows from
operations, borrowing under credit facilities, operating equipment leases and
the net proceeds from the sale of debt and equity securities.
In December 1995 and January 1996 the Company borrowed a total of $6.5
million under an existing revolving credit facility from a bank. The proceeds
were used to fund the cash portion of certain acquisitions. In addition, in
January 1996 the Company borrowed $2.0 million (the "Subordinated Credit
Facility"), which is subordinated to the Company's revolving credit facility.
Borrowings outstanding under this Subordinated Credit Facility bear interest at
an annual rate equal to 13% and mature in January 2001. In conjunction with this
financing, the Company issued the lender a warrant to purchase 20,000 shares of
Common Stock at an exercise price of $10.80 per share.
In March 1996, the Company signed a revolving credit facility (the
"Facility") for up to $22.5 million to replace its existing credit facilities.
The available amount of the Facility will reduce quarterly beginning on March
31, 1997 with final maturity of June 30, 1998. The interest rate of the Facility
is variable based on LIBOR and the Company may repay the
<PAGE>
Facility at any time without penalty. As of March 31, 1996, the Company had
outstanding borrowings of $12.8 million and had $4.2 million available under the
Facility.
The Company funds its short-term working capital needs, including the
acquisition of videos and other inventory, primarily through cash from
operations. The Company expects that cash from operations will be sufficient to
fund future video and other inventory purchases and other working capital needs.
Under generally accepted accounting principles, rental inventories are treated
as non-current assets because they are not assets that are reasonably expected
to be completely realized in cash or sold in the normal business cycle. Although
the rental of this inventory generates a substantial portion of the Company's
revenue, the classification of these assets as noncurrent excludes them from the
computation of working capital. The cost of video inventory purchases, however,
is reported as a current liability until paid, and accordingly, is included in
the computation of working capital. Consequently, the Company believes working
capital is not an appropriate measure of its liquidity and it anticipates that
it will operate with a working capital deficit during 1996.
The Company's capital expenditures during the remainder of 1996 will focus
on opening new stores, converting newly acquired stores to the Moovies name and
logo and implementing a new MIS. The Company currently intends to open
approximately 42 additional superstores in the last three quarters of 1996. The
Company estimates that the total cash required to open a new Moovies superstore,
including store fixtures and equipment, leasehold improvements and rental and
sale inventory, typically ranges from $250,000 to $300,000 per superstore. In
addition, the Company estimates that the aggregate cost of converting recently
acquired stores to the Moovies name and logo will be approximately $2.5 million.
The Company's MIS is currently being used in approximately 125 video specialty
stores that were acquired. In 1996, the Company intends to replace the various
systems used by its other stores with this system and to improve the
computerized information systems at the corporate offices at an estimated
aggregate cost of approximately $1.0 million.
In April 1996, the Company signed an asset purchase agreement to acquire
the Premiere Video chain. Pursuant to the asset purchase agreement, the Company
will pay $8.9 million in cash concurrently with the closing of a proposed second
offering. The Company intends to fund the cash portion of the purchase price
with proceeds from the proposed offering. In addition, the Company will make a
final payment of $2.6 million in January 1997. The Company's obligation to make
this payment will be secured by a letter of credit.
The Company believes that cash from operations and borrowing availability
under its existing credit facilities will be sufficient to fund its existing
operations, including its planned capital expenditures and new store openings,
through December 31, 1996.
On May 1, 1996 the Company filed with the Securities and Exchange
Commission a Registration Statement on Form S-1 to register a proposed
underwritten offering of 3.2 million shares of the Company's common stock (and
an additional 480,000 shares to cover over-allotments). The proceeds from the
proposed offering will enable the Company to fund the acquisition of Premiere
Video and give the company flexibility to pursue additional acquisitions and
store openings.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has caused this quarterly report on Form 10-Q to be signed on its
behalf by the undersigned thereunto duly authorized on June 26, 1996.
MOOVIES, INC.
By: /s/ JOHN L. TAYLOR
JOHN L. TAYLOR
PRESIDENT AND CHIEF EXECUTIVE OFFICER
(PRINCIPAL EXECUTIVE OFFICER)
By: /s/ F. ANDREW MITCHELL
F. ANDREW MITCHELL
CHIEF FINANCIAL OFFICER AND DIRECTOR
(PRINCIPAL FINANCIAL OFFICER)
<PAGE>
EXHIBIT INDEX
(a) The following exhibits, which are furnished with this Form 10-Q, are
filed as part of this Form 10-Q:
<TABLE>
<CAPTION>
SEQUENTIAL
EXHIBIT NO. EXHIBIT DESCRIPTION PAGE NO.
<C> <S> <C>
3.2* -- Restated Bylaws of Moovies, Inc.
10.2.1* -- Letter Agreement dated January 16, 1996 between Moovies, Inc. and
Baker & Taylor Entertainment, a division of Baker & Taylor
(Incorporated by reference to Exhibit 10.3.1 in the Company's Annual
Report on Form 10-K for the year ended December 31, 1995)
11.1* -- Statement Re Computation of Per Share Earnings
18.1** -- Letter Re Change in Accounting Principle
27.1* -- Financial Data Schedule
</TABLE>
* Previously filed.
** Filed herewith.
<PAGE>
EXHIBIT 18.1
May 13, 1996
Moovies, Inc.
Greenville, South Carolina
Gentlemen:
We have been furnished with a copy of Form 10-Q of Moovies, Inc. for the
three months ended March 31, 1996, and have read the Company's statements
contained in Note 2 to the condensed consolidated financial statements included
therein. As stated in Note 2, the Company changed its method of accounting for
amortization of videocassette rental inventory and states that the newly adopted
accounting principle is preferable in the circumstances because the Company
believes accelerating expense recognition for new release videocassettes during
the first four months more closely matches the typically higher revenue
generated following a title's release, and believes $15 represents a reasonable
average carrying value for tapes to be rented or sold after four months and $6
represents a reasonable salvage value for all tapes after 36 months. In
accordance with your request, we have reviewed and discussed with Company
officials the circumstances and business judgment and planning upon which the
decision to make this change in the method of accounting was based.
We have not audited any consolidated financial statements of Moovies, Inc.
as of any date or for any period subsequent to December 31, 1995, nor have we
audited the information set forth in the aforementioned Note 2 to the condensed
consolidated financial statements; accordingly, we do not express an opinion
concerning the factual information contained therein.
With regard to the aforementioned accounting change, authoritative criteria
have not been established for evaluating the preferability of one acceptable
method of accounting over another acceptable method. However, for purposes of
Moovies, Inc.'s compliance with the requirements of the Securities and Exchange
Commission, we are furnishing this letter.
Based on our review and discussion, with reliance on management's business
judgment and planning, we concur that the newly adopted method of accounting is
preferable in the Company's circumstances.
Very truly yours,
KPMG PEAT MARWICK LLP
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 5,570,084
<SECURITIES> 0
<RECEIVABLES> 1,737,596
<ALLOWANCES> 0
<INVENTORY> 2,390,047
<CURRENT-ASSETS> 12,632,014
<PP&E> 17,148,364
<DEPRECIATION> (6,031,633)
<TOTAL-ASSETS> 73,132,289
<CURRENT-LIABILITIES> 25,812,208
<BONDS> 3,698,356
0
0
<COMMON> 8,659
<OTHER-SE> 38,077,572
<TOTAL-LIABILITY-AND-EQUITY> 73,132,289
<SALES> 2,358,658
<TOTAL-REVENUES> 19,316,061
<CGS> 1,537,095
<TOTAL-COSTS> 15,265,801
<OTHER-EXPENSES> 2,689,091
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 296,880
<INCOME-PRETAX> 1,038,384
<INCOME-TAX> 415,354
<INCOME-CONTINUING> 623,030
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 623,030
<EPS-PRIMARY> 0.07
<EPS-DILUTED> 0.07
</TABLE>
