UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES ECHANGE 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)
Delaware 57-1012733
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
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
August 12, 1996 is 11,884,040.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
MOOVIES, INC.
Consolidated Balance Sheets
<TABLE>
<CAPTION>
June 30, December 31,
Assets 1996 1995
------ ---- ----
(unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 191,095 $ 3,563,788
Receivables 2,238,690 2,780,214
Subscriptions receivable 20,384,000 -
Merchandise inventory 2,706,695 2,617,496
Deferred income tax benefit 308,224 984,136
Prepaid rent 1,071,138 739,804
Other 1,744,634 1,243,708
------------- -------------
Total current assets 28,644,476 11,929,146
Videocassette rental inventory, net 19,144,366 16,728,416
Furnishings and equipment, net 16,014,766 9,858,952
Goodwill 30,255,843 29,080,621
Deposits and other assets 989,702 622,361
------------- -------------
$ 95,049,153 $ 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 448,771 481,064
Accounts payable 9,788,466 10,567,375
Accrued liabilities 3,663,864 3,065,603
------------- -------------
Total current liabilities 27,197,035 22,549,257
Long-term debt, less current portion 3,604,601 2,410,987
Deferred income tax payable 5,921,634 5,796,051
------------- -------------
36,723,270 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 8,664,040
shares at June 30, 1996 and 8,658,532 shares
at December 31, 1995 8,664 8,659
Common stock subscribed 2,800 -
Additional paid-in capital 55,503,225 35,857,767
Retained earnings 2,811,194 1,596,775
------------- --------------
Total stockholders' equity 58,325,883 37,463,201
------------- -------------
$ 95,049,153 $ 68,219,496
============= =============
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
MOOVIES, INC.
Consolidated Statements of Operations
(unaudited)
<TABLE>
<CAPTION>
Three months ended June 30, Six months ended June 30,
1996 1995 1996 1995
<S> <C> <C> <C>
Revenues:
Rental revenues $ 15,675,975 $ 1,155,231 $ 32,633,378 $ 2,269,903
Product sales 2,608,636 119,526 4,967,294 228,107
----------- ----------- ------------ -----------
18,284,611 1,274,757 37,600,672 2,498,010
Operating costs and expenses:
Operating expenses 12,608,793 902,122 26,337,499 1,772,851
Cost of product sales 1,630,397 99,116 3,167,492 191,508
Selling, general and administrative 2,281,437 191,380 4,610,282 377,882
Amortization of goodwill 393,321 - 754,405 -
----------- ----------- ------------ ----------
16,913,948 1,192,618 34,869,678 2,342,241
----------- ----------- ------------ -----------
Operating income 1,370,663 82,139 2,730,994 155,769
Interest expense (399,471) (51,952) (700,518) (79,049)
Other, net 6,378 - (14,522) -
----------- ----------- ------------ ----------
Income before income taxes 977,570 30,187 2,015,954 76,720
Income tax expense 386,181 - 801,535 -
----------- ----------- ------------ ----------
Net income $ 591,389 $ 30,187 $ 1,214,419 $ 76,720
=========== =========== ============ ===========
Net income per share: $ 0.07 $ N/A $ 0.14 $ N/A
=========== =========== ============ ===========
Weighted average shares outstanding 8,887,000 N/A 8,931,000 N/A
=========== =========== ============ ===========
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
MOOVIES, INC.
Consolidated Statements of Cash Flows
(unaudited)
<TABLE>
<CAPTION>
Six months ended June 30,
1996 1995
<S> <C> <C>
Operating activities:
Net income $ 1,214,419 $ 76,720
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 9,937,748 454,126
Amortization of discount on long-term debt - 34,325
Changes in operating assets and liabilities:
Receivables 795,899 (39,781)
Merchandise inventory (89,199) (20,615)
Other current assets (1,343,002) -
Deposits and other assets (367,341) (266,342)
Accounts payable (778,909) 716,457
Accrued liabilities (26,739) (63,043)
Deferred income taxes 801,495 -
------------- -------------
Net cash provided by operating activities 10,144,371 891,847
------------- --------------
Investing activities:
Purchases of videocassette rental inventory, net (10,765,488) (949,448)
Purchases of furnishings and equipment, net (7,085,103) (220,473)
Proceeds from the sale of the grocery division 745,625 -
Business acquisitions (2,434,187) -
------------ -------------
Net cash used in investing activities (19,539,153) (1,169,921)
------------- --------------
Financing activities:
Proceeds from line of credit borrowings, net 10,295,934 -
Proceeds from issuance of long-term debt 2,000,000 2,100,000
Principal payments on long-term debt (6,273,895) (622,117)
Capitalized initial public offering costs - (1,071,722)
Proceeds from the exercise of warrants 50 -
Capital/partner withdrawals, net - (106,580)
------------- -------------
Net cash provided by financing activities 6,022,089 299,581
------------- --------------
Increase (decrease) in cash and cash equivalents (3,372,693) 21,507
Cash and cash equivalents at beginning of period 3,563,788 169,591
------------- --------------
Cash and cash equivalents at end of period $ 191,095 $ 191,098
============= ==============
Supplemental disclosure of cash flow information:
Cash paid for interest $ 176,483 $ 76,196
============= ==============
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
MOOVIES, INC.
NOTES TO CONDENSED FINANCIAL INFORMATION
(1) Basis of Presentation
Moovies currently operates 190 video specialty superstores, including
23 stores acquired from Premiere Video, located in Georgia, South
Carolina, North Carolina, Virginia, Pennsylvania, New Jersey, New York,
Connecticut, Ohio, Iowa, Colorado, Minnesota, Wisconsin, South Dakota
and Nebraska. 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 and six month periods ended
June 30, 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 and six month
periods ended June 30, 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 were 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 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.
<PAGE>
The new method of amortization was adopted because the Company believes
that (i) 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, (ii)
$15 represents a reasonable average carrying value for tapes to be
rented or sold after four months, and (iii) $6 represents a reasonable
salvage value for all tapes after 36 months.
The new method of amortization has been applied to videocassette rental
inventory that was held at January 1, 1996. The adoption of the new
method of amortization was accounted for as a change in accounting
estimate effected by a change in accounting principle, and accordingly,
the Company recorded $860,000, or $0.06 per share, as a pre-tax charge
to operating expenses in the first quarter.
(3) Subsequent Events
PUBLIC OFFERING. On June 28, 1996 the Company completed a public
offering of 2,800,000 shares of common stock. On July 3, 1996 the
Company closed this offering of 2,800,000 and on July 30, 1996 the
Company closed on 420,000 additional shares issued in accordance with
the over-allotment option granted to the underwriters. The net proceeds
to the Company from the sale of common stock and the over-allotment,
after deducting offering expenses, were approximately $19.7 million and
$3.1 million, respectively. The Company used a portion of the proceeds
to fund the Premiere Video acquisition described below.
PREMIERE. On July 3, 1996, the Company acquired certain assets and
business of American Multi-Entertainment, Inc. d/b/a Premiere Video
("Premiere Video") in an asset purchase transaction for aggregate
consideration 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 has been secured by a bank letter of credit.
Premiere Video owned and operated 23 stores in Minnesota, Iowa,
Wisconsin, South Dakota and Nebraska.
(4) Pro Forma Financial Data
The following pro forma supplemental information for Moovies, Inc.
presents operations as if Moovies, Inc. had completed (i) its initial
public offering of common stock, (ii) the acquisition of 129 video
specialty stores and related operations, (iii) its secondary public
offering of common stock, (iv) the acquisition of the Premiere Video
chain of 23 stores and (v) the adoption of an accelerated method of
amortizing its videocassette rental inventory as of the beginning of
the periods presented.
<TABLE>
<CAPTION>
Three months ended June 30, Six months ended June 30,
1996 1995 1996 1995
(in thousands, except per share information)
<S> <C> <C> <C> <C>
Proforma revenues $ 20,998 $ 18,699 $ 43,649 $ 38,715
========= ======== ======== =========
Proforma operating costs and expenses $ 19,208 $ 17,737 $ 39,048 $ 35,035
========= ======== ======== =========
Proforma net income $ 857 $ 515 $ 2,333 $ 2,064
========= ======== ======== =========
Proforma net income per share $ 0.07 $ 0.04 $ 0.20 $ 0.17
========= ======== ======== =========
Weighted average shares outstanding 11,687 11,760 11,732 11,760
========= ======== ======== =========
</TABLE>
<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 and six months ended June 30,
1995 reflect only the operations of the Predecessor. The results of operations
for the three and six months ended June 30, 1996 reflect the operations of the
Company.
REVENUES. Revenues for the three and six months ended June 30, 1996 were
$18,285,000 and $37,601,000, respectively, compared to revenues of $1,275,000
and $2,498,000 for the same periods 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 14.3% and 13.2% for the three and
six months ended June 30, 1996, respectively, compared to 9.4% and 9.1% for the
same periods in 1995. This increase is the result of greater emphasis by certain
acquired companies on product sales, including video game sales.
During the quarter same store revenues declined by approximately two percent. In
the quarter, management has concentrated on the profitability of product sales
by making a concerted effort to reduce certain unprofitable products previously
sold in some acquired stores, particularly video games. This emphasis and a
variety of other factors, including softness in video games rentals, contributed
to this decline in same store revenues.
OPERATING COSTS AND EXPENSES. Operating expenses were $12,609,000 and
$26,338,000 for the three and six months ended June 30,1996 compared to $902,000
and $1,773,000 for comparable prior year periods. Operating expenses as a
percentage of total revenues were 69.0% and 70.0% for 1996 compared to 70.7% and
71.0% for 1995. Excluding the $860,000 pre-tax charge to operating expenses in
the first quarter (see Note 2), operating expenses for the six months ended June
30, 1996 would have been $25,478,000 or 67.8% of total revenues. This decrease
was primarily the result of increased revenues from product sales in 1996
without a corresponding increase in operating expenses, partially offset by the
impact of the change in the method of amortization of videocassette rental
inventory as described in note 2 to the consolidated financial statements
included herein. The new method of accounting accelerates the amortization of
videocassette rental inventory.
Cost of product sales increased $1,531,000 to $1,630,000 and $2,975,000 to
$3,167,000 for the three and six months ended June 30, 1996. This increase is
directly related to the increase in product sales. Cost of product sales as a
percentage of product sales were 62.5% and 63.8% for the three and six months
ended June 30, 1996 compared to 82.9% and 84.0 % 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 to $2,281,000 and $4,610,000 for
the three and six months ended June 30, 1996 respectively from $191,000 and $
378,000 for the comparable prior year periods, reflecting the acquisitions and
additional store openings. General and administrative expenses as a percentage
of total revenues were 12.5% and 12.3% for 1996 compared to 15.0% and 15.1% 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 to $399,000 and $701,000 for the
three and six months ended June 30, 1996 from $52,000 and $ 79,000 for the
comparable prior year periods. 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 and six
months ended June 30, 1995 because the Predecessor operated as a partnership for
income tax purposes. Income tax expense for the three and six months ended June
30, 1996 was approximately $368,000 and $802,000, respectively, representing an
effective income tax rate of 40%.
<PAGE>
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 Facility at any time without
penalty. As of June 30, 1996, the Company had outstanding borrowings of $12.8
million.
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 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 36 additional superstores in the last two 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 150 video specialty
stores. 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.
On July 28, 1996 the Company completed a public offering of 2.8 million shares
of common stock and on July 3, 1996 received net proceeds of $19.7 million. On
July 30, 1996 the underwriters exercised their over-allotment option for 420,000
additional shares of common stock and the Company received additional net
proceeds of $3.1 million.
Concurrently with the closing of the public offering, the Company acquired the
Premiere Video chain in an asset purchase agreement. Pursuant to the agreement,
the Company paid $8.9 million in cash and the Company will make a final payment
of $2.6 million in January 1997. The Company's obligation to make this payment
has been secured by a letter of credit. In addition, the Company repaid its $3.5
million subordinated notes payable and repaid $3.0 million of its line of
credit. The remaining proceeds were
<PAGE>
temporarily placed in short-term investment securities and will be used to
finance new store openings and acquisitions of other businesses that are
consistent with the Company's growth strategy. 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.
PART II-OTHER INFORMATION
Item 1. Legal Proceedings.
None
Item 2. Changes in Securities.
(a) None
(b) None
Item 3. Defaults Upon Senior Securities.
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders.
(a) The Company held its annual meeting of shareholders on May 15, 1996.
(b) On May 15, 1996, the shareholders of the Company elected the following
individuals as Directors:
Shares Voted For Authority Withheld
Class A John L. Taylor 6,116,443 653,476
F. Andrew Mitchell 6,116,443 653,476
Robert J. Klein 6,116,443 653,476
The following individuals will continue as Directors of the Company:
Class B Arthur F. Greeder, III
Rokki Rogan
Charles D. Way
Class C Theodore J. Coburn
Douglas M. Raines
Michael A. Yeargin
(c) On May 15, 1996, the shareholders of the Company approved the
following matter:
<TABLE>
<CAPTION>
Voting for Voting Against Abstain Broker Non-Votes
<S> <C> <C> <C> <C>
Increase the number of shares reserved
for the 1995 Stock Option Plan 5,776,325 76,071 26,358 0
</TABLE>
(d) None
Item 5. Other Information.
None
Item 6. Exhibits and Reports on Form 8-K
(a) See the Index to Exhibits
(b) None
<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 August 14, 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.
<S> <C> <C>
11.1 -- Statement Re Computation of Per Share Earnings
27.1 -- Financial Data Schedule
</TABLE>
<PAGE>
EXHIBIT 11.1
STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS
<TABLE>
<CAPTION>
THREE SIX
MONTHS ENDED MONTHS ENDED
YEARS ENDED DECEMBER 31, JUNE 30, JUNE 30,
-------------------------------------------------
1993 1994 1995 1996 1996
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Income per share calculations:
Income before cumulative effect
of a change in accounting principle $ 235,188 $ 281,102 $ 1,765,118 $ 591,389 $ 1,214,419
Cumulative effect of a change in
accounting principle, net of taxes - - - - -
-------------- -------------- -------------- --------------- --------------
Net income $ 235,188 $ 281,102 $ 1,765,118 $ 591,389 $ 1,214,419
============== ============== ============== =============== ===============
Weighted average number of common
and common equivalent shares are as follows:
Weighted average common
shares outstanding 3,183,839 8,662,304 8,660,418
Shares issued from assumed
exercise of options and
warrants (1) 211,161 224,696 270,582
-------------- -------------- -------------- --------------- ---------------
Weighted average number
of shares outstanding N/A N/A 3,395,000 8,887,000 8,931,000
============== ============== ============== =============== ===============
Income per common and common equivalent shares:
Income before cumulative effect
of a change in accounting principle $ 0.52 $ 0.07 $ 0.14
Cumulative effect of a change in
accounting principle, net of taxes - - -
-------------- -------------- -------------- --------------- ---------------
Net income N/A N/A $ 0.52 $ 0.07 $ 0.14
============== ============== ============== =============== ===============
</TABLE>
- --------------------------------------------
(1) Shares issued from assumed exercise of options and warrants include the
number of incremental shares which would result from applying the "treasury
stock method" for options and warrants, APB 15, paragraph 38 and Staff
Accouting Bulletin No. 83.
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 191,095
<SECURITIES> 0
<RECEIVABLES> 22,622,690
<ALLOWANCES> 0
<INVENTORY> 2,706,695
<CURRENT-ASSETS> 28,644,476
<PP&E> 22,570,910
<DEPRECIATION> (6,556,204)
<TOTAL-ASSETS> 95,049,153
<CURRENT-LIABILITIES> 27,197,035
<BONDS> 3,604,601
0
0
<COMMON> 8,664
<OTHER-SE> 58,317,219
<TOTAL-LIABILITY-AND-EQUITY> 95,049,153
<SALES> 2,608,636
<TOTAL-REVENUES> 18,284,611
<CGS> 1,630,397
<TOTAL-COSTS> 14,239,190
<OTHER-EXPENSES> 2,674,758
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 399,471
<INCOME-PRETAX> 977,570
<INCOME-TAX> 386,181
<INCOME-CONTINUING> 591,389
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 591,389
<EPS-PRIMARY> 0.07
<EPS-DILUTED> 0.07
</TABLE>
