<PAGE>
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 September 29, 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)
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
November 8, 1996 is 11,926,620.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Consolidated Financial Statements
MOOVIES, INC.
Consolidated Balance Sheets
<TABLE>
<CAPTION>
September 29, December 31,
Assets 1996 1995
(unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 5,205,448 $ 3,563,788
Receivables 1,174,300 2,780,214
Merchandise inventory 5,347,197 2,617,496
Deferred income tax benefit 1,486,115 984,136
Prepaid rent 1,237,678 739,804
Other 2,240,840 1,243,708
Total current assets 16,691,578 11,929,146
Videocassette rental inventory, net 21,558,855 16,728,416
Furnishings and equipment, net 24,364,091 9,858,952
Goodwill 39,731,619 29,080,621
Deposits and other assets 836,794 622,361
$ 103,182,937 $ 68,219,496
Liabilities and Stockholders' Equity
Current liabilities:
Line of credit $ 13,795,934 $ 2,500,000
Notes payable 2,600,000 5,935,215
Current portion of long-term debt 355,041 481,064
Accounts payable 12,603,608 10,567,375
Accrued liabilities 4,692,683 3,065,603
Total current liabilities 34,047,266 22,549,257
Long-term debt, less current portion 102,654 2,410,987
Deferred income tax payable 7,397,993 5,796,051
41,547,913 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 11,926,620
shares at September 29, 1996 and 8,658,532 shares
at December 31, 1995 11,927 8,659
Additional paid-in capital 58,335,362 35,857,767
Retained earnings 3,287,735 1,596,775
Total stockholders' equity 61,635,024 37,463,201
$ 103,182,937 $ 68,219,496
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
MOOVIES, INC.
Consolidated Statements of Operations
(unaudited)
<TABLE>
<CAPTION>
Three months ended Nine months ended
Sept. 29, Sept. 30, Sept. 29, Sept. 30,
1996 1995 1996 1995
<S> <C> <C> <C> <C>
Revenues:
Rental revenues $ 19,126,293 $ 6,022,931 $ 51,759,671 $ 8,292,834
Product sales 2,967,489 1,004,951 7,934,783 1,233,058
22,093,782 7,027,882 59,694,454 9,525,892
Operating costs and expenses:
Operating expenses 16,242,077 4,243,178 42,579,576 6,016,028
Cost of product sales 1,790,515 899,380 4,958,007 1,090,888
Selling, general and administrative 2,408,842 1,022,873 7,019,124 1,400,755
Amortization of goodwill 465,143 - 1,219,548 -
20,906,577 6,165,431 55,776,255 8,507,671
Operating income 1,187,205 862,451 3,918,199 1,018,221
Interest expense, net (296,461) (106,271) (996,979) (185,320)
Other, net 3,192 - (11,330) -
Income before income taxes and
extraordinary item 893,936 756,180 2,909,890 832,901
Income tax expense 353,105 265,822 1,154,640 265,822
Net income before extraordinary item 540,831 490,358 1,755,250 567,079
Extraordinary item - loss on early
extinguishment of debt 64,290 - 64,290 -
Net income $ 476,541 $ 490,358 $ 1,690,960 $ 567,079
Net income per share:
Net income before extraordinary item $ 0.05 $ 0.10 $ 0.18 $ 0.33
Extraordinary item - loss on early
extinguishment of debt 0.01 - 0.01 -
Net income $ 0.04 $ 0.10 $ 0.17 $ 0.33
Weighted average shares outstanding 11,850,000 5,015,382 9,904,000 1,710,993
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
MOOVIES, INC.
Consolidated Statements of Cash Flows
(unaudited)
<TABLE>
<CAPTION>
Nine months ended
September 29 September 30,
1996 1995
<S> <C> <C>
Operating activities:
Net income $ 1,690,960 $ 567,079
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 14,827,260 2,347,255
Amortization of discount on long-term debt - 40,046
Changes in operating assets and liabilities:
Receivables 1,860,289 (285,134)
Merchandise inventory (2,584,701) (20,615)
Other current assets (1,495,006) -
Deposits and other assets (184,455) 273,092
Accounts payable 2,036,233 645,216
Accrued liabilities 512,080 (1,297,038)
Deferred income taxes 1,099,963 112,691
Net cash provided by operating activities 17,762,623 2,382,592
Investing activities:
Purchases of videocassette rental inventory, net (15,350,754) (2,091,200)
Purchases of furnishings and equipment, net (15,600,372) (1,771,588)
Proceeds from the sale of the grocery division 745,625 -
Business acquisitions (11,322,687) (1,825,541)
Net cash used in investing activities (41,528,188) (5,688,329)
Financing activities:
Proceeds from line of credit borrowings, net 11,295,934 -
Proceeds from issuance of long-term debt 2,000,000 2,100,000
Principal payments on long-term debt (10,369,572) (5,947,151)
Proceeds from issuance of common stock, net 22,480,813 36,963,330
Cash paid, in the form of a deemed dividend,
for the purchase of videochains - (22,559,870)
Proceeds from the exercise of warrants 50 -
Capital/partner withdrawals, net - (227,707)
Net cash provided by financing activities 25,407,225 10,328,602
Increase (decrease) in cash and cash equivalents 1,641,660 7,022,865
Cash and cash equivalents at beginning of period 3,563,788 169,591
Cash and cash equivalents at end of period $ 5,205,448 $ 7,192,456
Supplemental disclosure of cash flow information:
Cash paid for interest $ 725,680 $ 95,106
</TABLE>
See accompanying notes to consolidated financial statements.
<PAGE>
MOOVIES, INC.
NOTES TO CONDENSED FINANCIAL INFORMATION
(1) Basis of Presentation
Moovies currently operates 210 video specialty superstores, including
23 stores acquired from Premiere Video, located in Georgia, South
Carolina, North Carolina, Tennessee, 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 nine month periods ended
September 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 reflects the results of Tonight's
Feature for all periods presented and includes the results of Moovies,
Inc. from August 9, 1995. The financial information for the three month
and nine month periods ended September 29, 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.
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.
<PAGE>
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) 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 $22.5 million.
The Company used $8.9 million of the proceeds to fund the Premiere
acquisition described below. Another $3.5 million of the proceeds was
used to repay the subordinated note payable to Sirrom Capital. In
conjunction with that repayment, the Company recorded an extraordinary
item, net of income taxes, of $64,290. The remaining proceeds were used
to reduce the outstanding amount on the Company's line of credit and
for general operating activities.
(4) Premiere Acquisition.
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.
(5) 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 Nine months ended
Sept. 29, Sept. 30, Sept. 29, Sept. 30,
1996 1995 1996 1995
(in thousands, except per share information)
<S> <C> <C> <C> <C>
Proforma revenues $ 22,094 $ 19,432 $ 65,743 $ 58,147
Proforma operating costs and expenses $ 20,907 $ 17,255 $ 59,955 $ 52,290
Proforma net income $ 541 $ 1,235 $ 2,874 $ 3,299
Proforma net income per share $ 0.04 $ 0.10 $ 0.24 $ 0.27
Weighted average shares outstanding 12,078 12,160 12,078 12,160
</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 nine months ended
September 30, 1995 reflect only the operations of the Predecessor for the period
from January 1, 1995 to August 8, 1995 and include the results of the various
acquisitions from and after their respective acquisition date.
Revenues. Revenues for the three and nine months ended September 29, 1996 were
$22,094,000 and $59,694,000, respectively, compared to revenues of $7,028,000
and $9,526,000 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 were 13.4% and 13.3% for the three and nine
months ended September 29, 1996, respectively, compared to 14.3% and 12.9% for
the same periods in 1995.
During the quarter same store revenues declined by approximately three percent
as the video industry experienced the effects of the Olympics. The Company had
anticipated post-Olympic recovery which did not materialize. Additionally, seven
stores in Georgia continued to experience significant declines in same store
revenues. Management believes that this trend of decreases in same store sales
will be reversed in the next quarter, based in part on anticipated new releases
and certain steps taken with a view to improve operations of the Georgia stores.
Operating Costs and Expenses. Operating expenses were $16,242,000 and
$42,580,000 for the three and nine months ended September 29,1996 compared to
$4,243,000 and $6,016,000 for comparable prior year periods. Operating expenses
as a percentage of total revenues were 73.5% and 71.3% for 1996 compared to
60.4% and 63.2% for 1995. Excluding the $860,000 pre-tax charge to operating
expenses in the first quarter (see Note 2), operating expenses for the nine
months ended September 29, 1996 would have been $41,720,000 or 69.9% of total
revenues. This increase resulted from a combination of higher product costs
associated with purchasing tapes for higher expected revenue levels and higher
costs associated with the opening of new stores as the new store revenues are
not yet at mature levels. In addition, the new method of accounting for the
amortization of videocassette rental inventory, as described in Note 2 to the
consolidated financial statements, accelerates the amortization of videocassette
rental inventory.
Cost of product sales increased $892,000 to $1,791,000 and $3,867,000 to
$4,958,000 for the three and nine months ended September 29, 1996. This increase
is directly related to the increase in product sales. Cost of product sales as a
percentage of product sales were 60.3% and 62.5% for the three and nine months
ended September 29, 1996 compared to 89.5% and 88.5% 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 $2,409,000 and $7,019,000 for
the three and nine months ended September 29, 1996, respectively, from
$1,023,000 and $1,401,000 for the comparable prior year periods, reflecting the
acquisitions and additional store openings. General and administrative expenses
as a percentage of total revenues were 10.9% and 11.8% for 1996 compared to
14.6% and 14.7% 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, Net. Interest expense increased to $296,000 and $997,000 for
the three and nine months ended September 29, 1996 from $106,000 and $185,000
for the comparable prior year periods. The increase is related primarily to
additional borrowings under the Company's line of credit agreements and
subordinated credit facility.
Income Tax Expense. The Company had income tax expense for the three and nine
months ended September 30, 1995 of $266,000. Income tax expense for the three
and nine months ended September 29, 1996 was approximately $353,000 and
$1,155,000, respectively, representing an effective income tax rate of
approximately 39.5%.
<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.
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.
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
was subordinated to the Company's revolving credit facility. The Company repaid
its subordinated Credit Facility with the proceeds of its second offering.
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 September 29, 1996, the Company had outstanding borrowings of
$13.8 million. In November 1996, the Company signed a commitment letter to
increase the Facility to $30.0 million.
On June 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 $19.4 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 Credit Facility and repaid $3.0 million of its line of
credit. The remaining proceeds were temporarily placed in short-term investment
securities and were 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 June 30, 1997.
The Company has had preliminary discussions with numerous video rental store
owners at various times regarding the potential acquisition of their stores.
Management expects that some of these discussions will result in new
acquisitions, although the Company has no agreements or commitments to acquire
stores at this time. The Company is engaged in negotiations with the owners of a
total of 23 video retail stores and franchiser's rights in regard to a total of
45 video retail stores. In the event that the Company purchases this chain of
stores for cash, then the Company may require additional capital prior to June
30, 1997. The Company is considering additional financings which may be through
the issuance of debt or equity securities.
The Company's capital expenditures during the remainder of 1996 will focus on
opening new stores and completing the implementation of a new MIS. The Company
currently intends to open approximately 18 additional superstores in the last
quarter 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. The Company's MIS is currently being used in
approximately 185 video specialty stores.
<PAGE>
Note regarding Private Securities Litigation Reform Act: Statements made by the
Company which are not historical facts, including projections, statements of
plans, objectives, expectations, or future economic performance, are forward
looking statements that involve risks and uncertainties and are subject to the
safe harbor created by the Private Securities Litigation Reform Act of 1995. The
Company's future financial performance could differ significantly from that set
forth herein, and from the expectations of management. Important factors that
could cause the Company's financial performance to differ materially from past
results and from those expressed in any forward looking statements include,
without limitation, the factors discussed in the "Management's Discussion and
Analysis of Financial Condition and Results of Operations." For further
information on these and other risk factors, please refer to the Company's Form
10-K for the year ended December 31, 1995, and the prospectus of June 28, 1996,
including the "Risk Factors" section thereof.
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) None
(b) 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 November 13, 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:
Sequential
Exhibit No. Exhibit Description Page No.
3.1* --Restated Certificate of Incorporation of Moovies, Inc.
3.2 --Restated Bylaws of Moovies, Inc. (Incorporated by
reference to Exhibit 3.2 in the Company's Quarterly Report
on Form 10-Q for the quarter ended March 31, 1996).
11.1 -- Statement Re Computation of Per Share Earnings
27.1 -- Financial Data Schedule
* Incorporated by reference to the same exhibit number in the Company's
Registration Statement on Form S-4 (File No. 333-13899).
EXHIBIT 11.1
STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS
<TABLE>
<CAPTION>
THREE NINE
MONTHS ENDED MONTHS ENDED
YEARS ENDED DECEMBER 31, SEPTEMBER 29, SEPTEMBER 29,
-------------------------------------------------
1993 1994 1995 1996 1996
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Income per share calculations:
Income before extraordinary item $ 235,188 $ 281,102 $ 1,765,118 $ 540,831 $ 1,755,250
Extraordinary item - - - 64,290 64,290
-------------- -------------- -------------- -------------- ----------
Net income $ 235,188 $ 281,102 $ 1,765,118 $ 476,541 $1,690,960
============== ============== ============== ============== ==========
Weighted average number of common
and common equivalent shares are as follows:
Weighted average common
shares outstanding 3,183,839 11,655,779 9,658,872
Shares issued from assumed
exercise of options and
warrants (1) 211,161 194,221 245,128
-------------- -------------- -------------- -------------- ----------
Weighted average number
of shares outstanding N/A N/A 3,395,000 11,850,000 9,904,000
============== ============== ============== ============== ==========
Income per common and common equivalent shares:
Income before extraordinary item $ 0.52 $ 0.05 $ 0.18
Extraordinary item - 0.01 0.01
-------------- -------------- -------------- -------------- ----------
Net income N/A N/A $ 0.52 $ 0.04 $ 0.17
============== ============== ============== ============== ==========
</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.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-29-1996
<CASH> 5,205,448
<SECURITIES> 0
<RECEIVABLES> 1,174,300
<ALLOWANCES> 0
<INVENTORY> 5,347,197
<CURRENT-ASSETS> 16,691,578
<PP&E> 31,519,632
<DEPRECIATION> (7,155,541)
<TOTAL-ASSETS> 103,182,937
<CURRENT-LIABILITIES> 34,047,266
<BONDS> 102,654
0
0
<COMMON> 11,927
<OTHER-SE> 61,623,097
<TOTAL-LIABILITY-AND-EQUITY> 103,182,937
<SALES> 2,967,489
<TOTAL-REVENUES> 22,093,782
<CGS> 1,790,515
<TOTAL-COSTS> 18,032,592
<OTHER-EXPENSES> 2,873,985
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 296,461
<INCOME-PRETAX> 893,936
<INCOME-TAX> 353,105
<INCOME-CONTINUING> 540,831
<DISCONTINUED> 0
<EXTRAORDINARY> 64,290
<CHANGES> 0
<NET-INCOME> 476,541
<EPS-PRIMARY> 0.04
<EPS-DILUTED> 0.04
</TABLE>
