<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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 30, 1997
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: 0-26938
HOME HEALTH CORPORATION OF AMERICA, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Pennsylvania 23-2224800
- ---------------------------------------- --------------------------------------
(State or other jurisdiction of (IRS Employer Identification Number)
incorporation or organization)
2200 Renaissance Boulevard, Suite 300
King of Prussia, PA 19406
- ---------------------------------------- --------------------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code - (610) 272-1717
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 at November 1, 1997
- ------------------------------ ------------------------------------------
Common stock, no par value 9,250,261
Exhibit index is located on page 12
<PAGE>
HOME HEALTH CORPORATION OF AMERICA, INC. AND SUBSIDIARIES
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
Number
------
<S> <C>
PART I: FINANCIAL INFORMATION
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Statements of Income for the three
months ended September 30, 1997 and 1996 3
Condensed Consolidated Balance Sheets as of June 30, 1997
and September 30, 1997 4
Condensed Consolidated Statements of Cash Flows for the three
months ended September 30, 1997 and 1996 5
Notes to Unaudited Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 7
PART II: OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 10
SIGNATURES 11
EXHIBIT INDEX 12
</TABLE>
2
<PAGE>
HOME HEALTH CORPORATION OF AMERICA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(in thousands, except per share data)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
SEPTEMBER 30,
------------------------
1996 1997
--------- ----------
<S> <C> <C>
Net revenues.......................................... $27,118 $47,046
Operating costs and expenses:
Patient care........................................ 13,259 21,928
General and administrative.......................... 9,444 17,409
Provision for doubtful accounts..................... 1,094 1,472
Depreciation........................................ 279 503
Amortization........................................ 355 751
Interest, net....................................... 469 1,839
--------- ----------
Total operating costs and expenses............ 24,900 43,902
--------- ----------
Income before income taxes............................ 2,218 3,144
Provision for income taxes............................ 863 1,116
--------- ----------
Net income.................................... $ 1,355 $ 2,028
========= ==========
Other data, including per share data:
Net income available to common stockholders......... $ 1,349 $ 2,028
========== ==========
Net income per common and common
equivalent share................................... $0.16 $0.22
========== ==========
Weighted average shares used in computing net
income per common and common equivalent
share......................................... 8,182 9,301
========== =========
</TABLE>
See accompanying notes to unaudited condensed consolidated financial statements.
3
<PAGE>
HOME HEALTH CORPORATION OF AMERICA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
JUNE 30, SEPTEMBER 30,
ASSETS 1997 1997
------ ------------ -------------
<S> <C> <C>
Current assets:
Cash and cash equivalents..................................... $ 464 $ 1,234
Accounts receivable, net of allowance for doubtful accounts
of $10,847 and $11,610, respectively......................... 56,410 55,471
Inventories................................................... 3,262 3,327
Prepaid expenses and other.................................... 2,018 2,804
Income taxes receivable....................................... 593 -
Deferred income taxes......................................... 1,973 1,973
-------- --------
Total current assets........................................ 64,720 64,809
Property and equipment, net..................................... 18,261 17,819
Goodwill, net................................................... 68,202 68,556
Other assets, net............................................... 2,080 2,646
-------- --------
Total assets............................................ $153,263 $153,830
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities:
Current maturities of long-term debt.......................... $ 6,263 $ 5,649
Accounts payable.............................................. 5,705 5,400
Accrued salaries and related employee benefits................ 4,788 4,589
Other current liabilities..................................... 4,760 5,517
Income taxes payable.......................................... - 416
-------- --------
Total current liabilities.................................. 21,516 21,571
Long-term debt, net of current portion.......................... 78,793 77,216
Other liabilities............................................... 1,109 1,001
Deferred income taxes........................................... 1,273 1,273
Stockholders' equity:
Preferred stock (undesignated), no par value, 10,000 shares
authorized; no shares issued and outstanding................ - -
Common stock, no par value, 20,000 shares authorized; 9,221
and 9,250 shares issued, 9,129 and 9,158 outstanding at
June 30, 1997 and September 30, 1997, respectively.......... 43,927 44,096
Retained earnings............................................... 6,645 8,673
-------- --------
Total stockholders' equity................................. 50,572 52,769
-------- --------
Total liabilities and stockholders' equity................ $153,263 $153,830
======== ========
</TABLE>
See accompanying notes to unaudited condensed consolidated financial statements.
4
<PAGE>
HOME HEALTH CORPORATION OF AMERICA, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30,
---------------------------------------
1996 1997
------------------ -------------------
<S> <C> <C>
Cash flows provided by (used in) operating activities:
Net income.................................................. $ 1,355 $ 2,028
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation, amortization and other...................... 1,108 2,072
Provision for doubtful accounts........................... 1,094 1,472
Deferred income taxes..................................... 28 -
Net changes in certain assets and liabilities, net of
acquisitions:
Accounts receivable....................................... (3,072) (2,609)
Inventories............................................... (105) (65)
Prepaid expenses and other................................ (77) (785)
Accounts payable, accrued expenses and other.............. (2,225) 252
Income taxes payable...................................... 320 1,008
-------- --------
Net cash flows (used in) provided by operating
activities............................................ (1,575) 3,373
-------- --------
Cash flows used in investing activities:
Purchases of property and equipment......................... (807) (844)
Cash paid for acquisitions, net of cash acquired............ (2,985) -
Increase in other, net...................................... (63) (144)
-------- --------
Net cash flows used in investing activities............... (3,855) (988)
-------- --------
Cash flows provided by (used in) financing activities:
Proceeds from long-term debt................................ 6,467 -
Repayments of long-term debt................................ (424) (1,784)
Payment of deferred financing fees.......................... (209) -
Proceeds from issuance of common stock...................... - 169
-------- --------
Net cash flows provided by (used in) financing
activities............................................. 5,834 (1,615)
-------- --------
Net increase in cash and cash equivalents..................... 404 770
Cash and cash equivalents, beginning of year.................. 1,695 464
-------- --------
Cash and cash equivalents, end of year........................ $ 2,100 $ 1,234
======== ========
</TABLE>
See accompanying notes to unaudited condensed consolidated financial statements.
5
<PAGE>
HOME HEALTH CORPORATION OF AMERICA, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements of Home
Health Corporation of America, Inc. and subsidiaries (the "Company") have been
prepared in accordance with generally accepted accounting principles for interim
financial information and pursuant to the rules and regulations of the
Securities and Exchange Commission. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting principles
for complete financial statements. Additionally, although the June 30, 1997
condensed consolidated balance sheet was derived from audited financial
statements, it does not include all disclosures required by generally accepted
accounting principles. In the opinion of management, all adjustments
(consisting only of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the three months ended
September 30, 1997 are not necessarily indicative of the results that may be
expected for the fiscal year ending June 30, 1998. The accompanying unaudited
condensed consolidated financial statements should be read in conjunction with
the consolidated financial statements and notes thereto for the year ended June
30, 1997 included in the Company's Form 10-K/A filed with the Securities and
Exchange Commission.
2. SUPPLEMENTAL CASH FLOW INFORMATION
Supplemental disclosure of cash flow information for the three months ended
September 30:
<TABLE>
<CAPTION>
1996 1997
---- ----
(amounts in thousands)
<S> <C> <C>
Non-cash investing and financing activities:
Acquisitions:
Assets acquired............................... $5,689 $ -
Less:
Liabilities assumed and acquisition costs..... 404 -
Issuance of subordinated seller notes........ 1,625 -
Issuance of common stock...................... 675 -
Cash paid, net of cash acquired............. $2,985 $ -
======== ========
</TABLE>
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
ACQUISITIONS
The Company seeks to establish and increase market share through
acquisitions in existing and new markets. During fiscal 1997, the Company
entered the Texas and New England regions with five acquisitions, expanding its
operations into Texas, Massachusetts, New Hampshire, Rhode Island and Maine.
Additionally, during fiscal 1997, the Company expanded its ongoing operations in
Pennsylvania, New Jersey, Maryland and the Tampa/St. Petersburg, Florida market
with five acquisitions, and also expanded into Illinois as a result of a merger
transaction. The acquisitions in fiscal 1997 included nursing and related
patient services, infusion therapy, durable medical equipment and respiratory
services. The merger was accounted for as a pooling of interests. The
acquisitions were accounted for as purchases. Under the purchase method, the
results of operations from acquisitions are included in the Company's results of
operations from the dates of acquisition and the purchase price is allocated to
net identifiable assets, principally accounts receivable, fixed assets and
inventory, with any excess allocated to goodwill and other intangible assets.
RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, selected
financial information expressed as a percentage of net revenues:
<TABLE>
<CAPTION>
Three months ended September 30,
-------------------------------------
1996 1997
-------------- -------------
<S> <C> <C>
Net revenues............................... 100.0% 100.0%
Operating costs and expenses:
Patient care ........................... 48.9 46.6
General and administrative.............. 34.8 37.0
Provision for doubtful accounts......... 4.0 3.1
Depreciation............................ 1.1 1.1
Amortization............................ 1.3 1.6
Interest, net........................... 1.7 3.9
------ ------
Income from operations..................... 8.2 6.7
Provision for income taxes.............. 3.2 2.4
------ ------
Net income................................. 5.0% 4.3%
====== =======
</TABLE>
THREE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED WITH THE THREE MONTHS ENDED
SEPTEMBER 30, 1996
Net revenues. Net revenues increased to $47.0 million for the three months
ended September 30, 1997. This represented an increase of $19.9 million, or
73.5%, over the same period in fiscal 1997. Of this increase, $14.8 million was
attributable to acquisitions completed during fiscal 1997. The balance of the
increase was due to internal growth of 20.4%, resulting from volume growth at
existing branch locations and an increase in the percentage of corporate and
7
<PAGE>
regional overhead allocated to the Medicare-certified home health agencies. Net
revenues from nursing and related patient services increased from $16.2 million
for the three months ended September 30, 1996 to $30.8 million for the three
months ended September 30, 1997, an 89.6% increase. Total Medicare nursing
visits during this period increased 110.4% to 274,000. Total non-Medicare
nursing hourly and visit volume during this period increased 88.2% and 41.7%,
respectively, to 322,000 hours and 52,000 visits, respectively. Respiratory
therapy, infusion therapy and durable medical equipment net revenues increased
$5.4 million, or 49.4%, to $16.2 million for the three months ended September
30, 1997 from $10.9 million for the same period in fiscal 1997 as a result of
acquisitions, increased referrals and effective cross-selling of these services
and products to the Company's nursing patients.
Patient care. Patient care costs increased to $21.9 million for the three
months ended September 30, 1997. This represented an increase of $8.7 million,
or 65.4%, over the same period in fiscal 1997. This increase was principally
related to the increases in net revenues. Patient care costs decreased as a
percentage of net revenues from 48.9% to 46.6% due to an increase in
productivity primarily relating to non-Medicare nursing services and an increase
in the percentage of corporate and regional overhead allocated to the Medicare-
certified home health agencies.
General and administrative. General and administrative expenses increased
to $17.4 million for the three months ended September 30, 1997. This
represented an increase of $8.0 million, or 84.3%, over the same period in
fiscal 1997. This increase was principally related to increases in net
revenues. Additionally, general and administrative expenses increased as a
percentage of net revenues from 34.8% to 37.0% due to the increase in
administrative costs relating to regional offices acquired in connection with
establishment of new regions in New England and Texas.
Provision for doubtful accounts. The provision for doubtful accounts
increased to $1.5 million for the three months ended September 30, 1997. This
represented an increase of $378,000, or 34.6%, over the same period in fiscal
1997. This increase was principally related to increases in net revenues. The
provision for doubtful accounts decreased from 4.0% to 3.1% as a percentage of
net revenues in the three months ended September 30, 1997 as a result of the
increase in the portion of total net revenues relating to Medicare cost-based
nursing services, which net revenues require a nominal provision for doubtful
accounts due to the cost-based nature of the reimbursement from Medicare.
Depreciation. Depreciation expense increased to $503,000. This represented
an increase of $224,000, or 80.3%, over the same period in fiscal 1997. Of
this increase, $101,000 was attributable to fixed assets acquired in connection
with acquisitions during fiscal 1997 with the remainder resulting from capital
expenditures related to vehicles, management information systems and equipment
in support of the Company's internal growth.
Amortization. Amortization increased to $751,000 for the three months ended
September 30, 1997. This represented an increase of $396,000, or 111.5%, over
the same period in fiscal 1997, which was entirely attributable to amortization
of goodwill arising from the acquisitions during fiscal 1997.
8
<PAGE>
Interest, net. Interest, net, increased to $1.8 million for the three
months ended September 30, 1997. This represented an increase of $1.4 million,
or 292.1%, over the same period in fiscal 1997. This increase principally
resulted from increases in indebtedness due to acquisitions completed since the
beginning of fiscal 1997 and increased indebtedness incurred as a result of
working capital used to fund internal growth.
Provision for income taxes. The Company's effective tax rate decreased to
35.5% of pretax income for the three months ended September 30, 1997 from 38.9%
for the same period in fiscal 1997 principally due to a decrease in the
aggregate average state income tax rate.
LIQUIDITY AND CAPITAL RESOURCES
Consistent with its growth strategy, the Company has significantly expanded
its operations over the past year through a combination of acquisitions and
internal growth. Historically, this growth has been financed principally through
borrowings under the Company's senior credit facility (the "Credit Facility"),
installment notes and stock issued to sellers in connection with acquisitions.
Working capital remained consistent at $43.2 million at September 30, 1997
as compared to June 30, 1997. Cash provided by operating activities was $3.4
million for the three months ended September 30, 1997 compared with a use of
cash of $1.6 million for the same period in fiscal 1997.
Expenditures for purchases of capital equipment were $844,000 for the three
months ended September 30, 1997 compared with capital expenditures of $807,000
for the same period in fiscal 1997. The Company expects to spend an additional
$7.1 million for capital expenditures for the remainder of fiscal 1998.
Management anticipates the Company's available lines of credit and cash
flow generated from operations will be adequate to enable the Company to fund
its operations, capital expenditures and anticipated internal growth for at
least the next twelve months. Despite the amount of unused commitment under the
Credit Facility, there is no assurance the Company can continue to acquire
businesses consistent with the size and number of acquisitions completed in
fiscal 1997, due to, among other factors, limitations on access to additional
funds which may be imposed by the Credit Facility financial covenants.
RECENT PRONOUNCEMENTS
In February 1997, the Financial Accounting Standards Board (the "FASB")
issued Statement of Financial Accounting Standard ("SFAS") 128, "Earnings Per
Share" which is effective for periods ending after December 15, 1997. The
overall objective of SFAS 128 is to simplify the calculation of earnings per
share and achieve comparability with International Accounting Standards. The
Company will be required to adopt SFAS 128 in the second quarter of fiscal 1998,
and the adoption is not expected to have a material effect on the Company's
condensed consolidated financial statements.
9
<PAGE>
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
The exhibits filed with this report are listed in the exhibit
index on page 12.
(b) Reports on Form 8-K
The registrant did not file a report on Form 8-K during the quarter ended
September 30, 1997.
10
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
HOME HEALTH CORPORATION OF AMERICA, INC.
Date: November 13, 1997 /s/ Bruce Colburn
---------------------------------------
Chief Financial and Accounting Officer
11
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT INDEX
<C> <S>
EXHIBIT NO. DESCRIPTION
- ------------- -----------
* 3.1 Amended and Restated Articles of Incorporation of the Company.
* 3.2 Amended and Restated Bylaws of the Company.
** 10.1 Stock Purchase Agreement among HHCA, Home Health Corporation of New
Hampshire, Randy DiSalvo, R.S.D. Management Services, Inc.,
Nursing Services Home Care, Inc. and Nursing Services Home Care,
Ltd.
*** 10.2 Asset Acquisition Agreement Among Home Health Corporation of
America, Inc. and its Nominees, LHS Holdings, Inc., Liberty Health
Services, Inc., Nurses Today M/C, Inc. and Mark H. O'Brien.
*** 10.3 Asset Acquisition Agreement Among Home Health Corporation of
America, Inc. and its Nominees, PDN, Inc., Medical I.V., Inc. and
Mark H. O'Brien.
*** 10.4 Indemnification Agreement Among Home Health Corporation of America,
Inc. and its Nominees, LHS Holdings, Inc., Liberty Health
Services, Inc., Nurses Today M/C, Inc., PDN, Inc., Medical I.V.,
Inc. and Mark H. O'Brien.
* 10.5 Asset Acquisition Agreement among Home Care Medical
Supply and Equipment, Inc., Alpha Home Care Services, Inc.,
Joel Schreiber, and Joseph J. D'Alessandro, including
schedules and exhibits thereto.
* 10.6 Subordination Agreement among CoreStates Bank, N.A., Summit
Ventures II, L.P., Summit Investors II, L.P., CoreStates
Enterprise Fund, and Alpha Home Care Services, Inc.
* 10.7 Stock Purchase Agreement by and between Home Health
Corporation of Delaware, Inc.,William Moses, Milton
Altshuler, Steven R. Altshuler, and Jane Altshuler, relating
to Delaware Acquisition.
* 10.8 Asset Acquisition Agreement between HHCDME, Inc.,
and Master Medical Supply Co., Inc., relating to Delaware
Acquisition.
* 10.9 Asset Acquisition Agreement between HHCD, Inc., and
Professional Home Health Care Agency, Inc., relating to
Delaware Acquisition.
* 10.10 Indemnification Agreement relating to Delaware
Acquisition.
* 10.11 Agreement among Home Health Care Corporation of
Delaware, Inc., HHCD, Inc., HHCDME, Inc., Master Medical
Supply Co., Inc., Professional Home Health Services, Inc.,
Professional Home Health Care Agency, Inc., William Moses,
Andra H. Moses, Steven R. Altshuler, and Jane Altshuler,
relating to Delaware Acquisition.
* 10.12 Full Payment Guaranty of the Company relating to
Delaware Acquisition.
* 10.13 Subordination Agreement among CoreStates Bank,
N.A., Summit Ventures II, L.P., Summit Investors II, L.P.,
CoreStates Enterprise Fund, and parties to Delaware
Acquisition transaction documents.
* 10.14 Separation Agreement among Home Health Corporation
of America, Inc., Home Health Corporation of Delaware, Inc.,
HHCD, Inc., HHCDME, Inc., Steven R. Altshuler, Jane E.
Altshuler, William W. Moses and Andra H. Moses
* 10.15 Asset Purchase Agreement between Pennsylvania Home
Care, Inc. and Healthcare Professionals, Inc.
**** 10.16 Third Amended and Restated Credit Agreement.
</TABLE>
12
<PAGE>
<TABLE>
<C> <S>
***** 10.17 Amendment No. 1 to the Third Amended and Restated Credit Agreement.
* 10.18 Lease between the Company and Swedeland Road
Corporation, relating to the Company's principal
executive offices.
* 10.19 Employment Agreement between the Company and
Bruce J. Feldman. (a)
* 10.20 Employment Agreement between the Company and
Fred J. Nicholas. (a)
***** 10.21 Employment Agreement between the Company and Bruce Colburn. (a)
* 10.22 Employment Agreement between the Company and Joseph Grilli. (a)
* 10.23 1995 Employee and Consultant Equity Plan. (a)
* 10.24 1984 Employee Stock Option Plan (Qualified and
Non-Qualified), as amended and restated. (a)
* 10.25 Consent and Amendment to Note and Stock Purchase
Agreement, dated September 29, 1995, among the company,
certain subsidiaries of the Company, Summit Ventures II,
L.P., Summit Investors II, L.P.
* 10.26 Subordination Agreement, dated September
29, 1995, among CoreStates Bank, N.A., Summit
Ventures II, L.P., Summit Investors II, L.P., Summit
Subordinated Debt Fund, L.P., CoreStates Enterprise
Fund and Preferred Diagnostic Services, Inc.
* 10.27 Asset Acquisition Agreement among the
Company, Home Health Corporation of America, Inc. -
Tampa, Preferred Diagnostic & Medical Services,
Inc., Preferred Diagnostic Services, Inc., G&S
Industries, Inc., and Joel M. Grossman, Jeffrey
Grossman, Joseph Sterensis, Barbara Sterensis and
Richard Levitt.
* 10.28 Registration Rights Agreement, dated September 28, 1995, among
the Company, a subsidiary of the Company, Preferred Diagnostic &
Medical Services, Inc. and Preferred Diagnostic Services, Inc.
11.1 Computation of primary and fully diluted earnings per share for the
three months ended September 30, 1997 and 1996.
27.1 Financial data schedule for the three month period ended September
30, 1997.
27.2 Financial data schedule for the three month period ended September
30, 1996.
</TABLE>
* Incorporated by reference to the Company's Registration Statement on Form
S-1 (Registration No. 33-96888) dated November 8, 1995, as amended.
** Incorporated by reference to the Company's Form 10-Q dated September 30,
1996 and filed November 14, 1996.
*** Incorporated by reference to the Company's Form 8-K dated January 10, 1997
and filed January 24, 1997.
**** Incorporated by reference to the Company's Form 10-Q dated March 31, 1997
and filed May 14, 1997.
***** Incorporated by reference to the Company's Form 10-K/A dated June 30,
1997 and filed October 28, 1997.
(a) Represents management contract or compensatory plan.
13
<PAGE>
EXHIBIT 11.1
HOME HEALTH CORPORATION OF AMERICA, INC. AND SUBSIDIARIES
COMPUTATION OF PRIMARY AND FULLY DILUTED EARNINGS PER SHARE
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
The following calculation is submitted in accordance with the Securities Act of
1934:
<TABLE>
<CAPTION>
Three months ended Three months ended
September 30, 1997 September 30, 1996
----------------------------------- -----------------------------------
Primary Fully diluted Primary Fully diluted
------------- ------------------ ------------- -----------------
<S> <C> <C> <C> <C>
(amounts in thousands, except per share data)
Net income........................... $2,028 $2,028 $1,355 $1,355
Dividends on preferred stock......... - - (6) (6)
Interest and dividends on
convertible securities, net of - - - 28
tax.................................
------------- ------------------ ------------- -----------------
Net income available to common
stockholders........................ $2,028 $2,028 $1,349 $1,377
============= ================== ============= =================
Weighted average number of maximum
shares outstanding during
period.............................. 9,149 9,149 8,024 8,024
Shares assumed issued in connection
with a merger and upon conversion
of convertible securities, as of
the beginning of the period......... - - - 452
Weighted average number of maximum
shares subject to exercise under
outstanding stock options and
warrants, net of treasury shares
assumed repurchased................. 152 182 158 163
------------ ----------------- ------------- -----------------
Weighted average number of common
and common equivalent shares
outstanding......................... 9,301 9,331 8,182 8,639
============= ================== ============= =================
Net income per share................. $ 0.22 $ 0.22 $0.16 $0.16
============= ================== ============= =================
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET AS OF SEPTEMBER 30, 1997 AND THE RELATED STATEMENT OF INCOME FOR THE THREE
MONTHS ENDED SEPTEMBER 30, 1997, 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> JUN-30-1998
<PERIOD-START> JUL-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 1,234
<SECURITIES> 0
<RECEIVABLES> 67,081
<ALLOWANCES> (11,610)
<INVENTORY> 3,327
<CURRENT-ASSETS> 64,809
<PP&E> 29,660
<DEPRECIATION> (11,841)
<TOTAL-ASSETS> 153,830
<CURRENT-LIABILITIES> 21,571
<BONDS> 0
0
0
<COMMON> 44,096
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 153,830
<SALES> 47,046
<TOTAL-REVENUES> 47,046
<CGS> 21,928
<TOTAL-COSTS> 42,063
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,839
<INCOME-PRETAX> 3,144
<INCOME-TAX> 1,116
<INCOME-CONTINUING> 2,028
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,028
<EPS-PRIMARY> 0.22
<EPS-DILUTED> 0.22
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET AS OF SEPTEMBER 30, 1996 AND THE RELATED STATEMENT OF INCOME FOR THE THREE
MONTHS ENDED SEPTEMBER 30, 1996, AS RESTATED FROM THE PRIOR YEAR FOR A MERGER
ACCOUNTED FOR AS A POOLING OF INTERESTS, 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> JUN-30-1997
<PERIOD-START> JUL-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 2,100
<SECURITIES> 0
<RECEIVABLES> 37,023
<ALLOWANCES> (6,552)
<INVENTORY> 1,809
<CURRENT-ASSETS> 36,566
<PP&E> 14,255
<DEPRECIATION> (4,586)
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<CURRENT-LIABILITIES> 13,316
<BONDS> 0
1,750
0
<COMMON> 34,505
<OTHER-SE> 0
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<SALES> 27,118
<TOTAL-REVENUES> 27,118
<CGS> 13,259
<TOTAL-COSTS> 24,431
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<INCOME-PRETAX> 2,218
<INCOME-TAX> 863
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<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,355
<EPS-PRIMARY> 0.16
<EPS-DILUTED> 0.16
</TABLE>
