<PAGE>
- --------------------------------------------------------------------------------
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 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: 0-27064
FIRST COMMONWEALTH, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 75-2154228
(State or other jurisdiction (IRS employer identification number)
of incorporation or organization)
444 NORTH WELLS STREET, SUITE 600, CHICAGO, IL 60610
(Address of principal executive offices)
(312) 644-1800
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant has (1) 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 applicable date.
Common Stock, par value $.001 per share, outstanding as of April 26, 1996:
3,368,240 shares
- --------------------------------------------------------------------------------
<PAGE>
FIRST COMMONWEALTH, INC.
FORM 10-Q
FOR THE QUARTER ENDED MARCH 31, 1996
INDEX
PART I. FINANCIAL INFORMATION
------------------------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
Item 1. Financial Statements
Consolidated Balance Sheets as of March 31, 1996 and
December 31, 1995................................................ 3
Consolidated Statements of Income for the three months ended
March 31, 1996 and 1995.......................................... 5
Consolidated Statements of Cash Flows for the three months ended
March 31, 1996 and 1995.......................................... 6
Reconciliations of Net Income to Net Cash Provided by Operating
Activities for the three months ended March 31, 1996 and 1995.... 7
Notes to Consolidated Financial Statements......................... 8
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations............................................ 9
PART II. OTHER INFORMATION
---------------------------
Item 6. Exhibits and Reports on Form 8-K................................... 12
SIGNATURES.................................................................. 13
</TABLE>
2
<PAGE>
PART I. FINANCIAL INFORMATION
------------------------------
ITEM 1. FINANCIAL STATEMENTS
First Commonwealth, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS
- --------------------------------------------------
(Dollars in Thousands)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
ASSETS 1996 1995
- ------ --------- ------------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $10,551 $12,680
Investments - Short Term 2,141 0
Accounts receivable, net of allowance
of $224 at March 31, 1996 and $197 at
December 31, 1995 2,616 1,751
Other receivables 113 52
Deposit under reinsurance agreement 582 432
Prepaid expenses 1,317 1,290
Deferred tax asset 761 665
Income taxes receivable 19 19
------- -------
Total current assets 18,100 16,889
------- -------
PROPERTY AND EQUIPMENT, at cost 2,540 2,465
Less - Accumulated depreciation (1,201) (1,086)
------- -------
Property and equipment, net 1,339 1,379
------- -------
OTHER ASSETS:
Restricted cash equivalents and government securities
on deposit, at cost which approximates market 976 799
Deposits and other 43 44
------- -------
Total other assets 1,019 843
------- -------
TOTAL ASSETS $20,458 $19,111
======= =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
3
<PAGE>
First Commonwealth, Inc. and Subsidiaries
CONSOLIDATED BALANCE SHEETS - continued
- --------------------------------------------------
(Dollars in Thousands)
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
LIABILITIES AND STOCKHOLDERS' EQUITY 1996 1995
--------- ------------
(Unaudited)
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable - trade $ 98 $ 364
Accounts payable - dental service providers 439 399
Claims liability 1,548 1,258
Accrued payroll and related costs 556 846
Other accrued expenses 546 720
Current portion of capital lease obligations 11 27
Deferred subscriber revenue 3,763 3,263
Payable under reinsurance agreement 525 389
Accrued preferred dividends and stock
redemption payable 0 14
Income taxes payable 471 0
------- -------
Total current liabilities 7,957 7,280
CAPITAL LEASE OBLIGATIONS, less current portion 0 0
DEFERRED TAX LIABILITY - long-term 125 125
------- -------
Total liabilities 8,082 7,405
------- -------
STOCKHOLDERS' EQUITY:
Preferred stock ($.001 par value; 1,000,000
shares authorized, none issued) 0 0
Common stock ($.001 par value; 15,000,000 shares
authorized, 3,368,240 shares at March 31, 1996
and 3,365,375 shares at December 31, 1995 issued
and outstanding) 3 3
Capital in excess of par value 7,678 7,677
Retained earnings 4,695 4,026
------- -------
Total stockholders' equity 12,376 11,706
------- -------
Total liabilities and stockholder's equity $20,458 $19,111
======= =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
4
<PAGE>
First Commonwealth, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF INCOME
- --------------------------------------------------
(Dollars in Thousands, except per share data)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED:
-------------------------------
MARCH 31, 1996 MARCH 31, 1995
-------------- --------------
SUBSCRIBER REVENUE (Unaudited) (Unaudited)
<S> <C> <C>
Managed Care $ 7,097 $ 6,106
Indemnity/PPO 2,492 1,633
Fee Income 184 195
---------- ----------
Total Subscriber Revenue 9,773 7,934
---------- ----------
BENEFIT COVERAGE EXPENSES
Managed Care 4,086 3,532
Indemnity/PPO 1,940 1,302
Fee Income -- --
---------- ----------
Total Benefit Coverage Expenses 6,026 4,834
---------- ----------
GROSS MARGIN
Managed Care 3,011 2,574
Indemnity/PPO 552 331
Fee Income 184 195
---------- ----------
Total Gross Margin 3,747 3,100
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE 2,794 2,291
---------- ----------
Operating income 953 809
INTEREST INCOME, net 162 27
---------- ----------
Income before income taxes 1,115 836
PROVISION FOR INCOME TAXES 446 335
---------- ----------
NET INCOME $ 669 $ 501
========== ==========
WEIGHTED AVERAGE COMMON AND COMMON
EQUIVALENT SHARES OUTSTANDING 3,496,125 2,862,176
EARNINGS PER SHARE $0.19 $0.18
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
<PAGE>
First Commonwealth, Inc. and Subsidiaries
CONSOLIDATED STATEMENTS OF CASH FLOWS
- --------------------------------------------------
(Dollars in Thousands)
<TABLE>
<CAPTION>
FOR THE THREE MONTHS ENDED:
---------------------------
MARCH 31, MARCH 31,
1996 1995
--------- ---------
CASH FLOWS FROM OPERATING ACTIVITIES: (Unaudited) (Unaudited)
<S> <C> <C>
Cash received from subscribers $ 9,409 $ 8,668
Cash paid to providers of care (3,847) (3,301)
Cash paid to employees, brokers and suppliers (3,618) (2,579)
Claims paid (1,650) (678)
Interest paid 0 (1)
Interest received 85 22
Income taxes paid (71) (107)
Cash transferred to restricted funds (177) (130)
------- -------
Net cash provided by operating activities 131 1,894
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net (75) (75)
Purchase of short-term investment (3,163) 0
Proceeds from short-term investment 1,007 0
------- -------
Net cash used in investing activities (2,231) (75)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Issuance of common stock 0 0
Principal payments on capital leases (16) (15)
Payments of preferred dividends (13) (13)
------- -------
Net cash used in financing activities (29) (28)
------- -------
Net change in cash and cash equivalents (2,129) 1,791
CASH AND CASH EQUIVALENTS,
beginning of period 12,680 2,706
------- -------
CASH AND CASH EQUIVALENTS,
end of period $10,551 $ 4,497
======= =======
</TABLE>
The accompanying notes are an integral part of these financial statements.
6
<PAGE>
First Commonwealth, Inc. and Subsidiaries
RECONCILIATIONS OF NET INCOME TO NET CASH PROVIDED BY OPERATING
ACTIVITIES
- -------------------------------------------------------------------------------
(Dollars in Thousands)
<TABLE>
<CAPTION>
For The Three Months Ended:
-------------------------------
March 31, 1996 March 31, 1995
-------------- --------------
(Unaudited) (Unaudited)
<S> <C> <C>
Net income $ 669 $ 501
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization................ 131 85
(Increase) decrease in assets:
Accounts receivable, net................... (865) (123)
Other receivables.......................... (61) 1
Deposit under reinsurance agreement........ (151) (88)
Prepaid expenses........................... (27) 66
Deferred tax asset......................... (96) 0
Income taxes receivable.................... 0 69
Restricted cash equivalents and government
securities............................... (177) (130)
Deposits and other......................... 1 5
Increase (decrease) in current liabilities:
Accounts payable -- trade.................. (266) (45)
Accounts payable -- dental service
providers................................ 40 11
Claims liability........................... 291 622
Accrued payroll and related costs.......... (290) (98)
Other accrued expenses..................... (175) (3)
Deferred subscriber revenue................ 500 783
Payable under reinsurance agreement........ 136 79
Income taxes payable....................... 471 159
Increase in long-term liabilities:
Long-term deferred tax liability........... 0 0
----- ------
Net cash provided by operating activities...... $ 131 $1,894
===== ======
</TABLE>
The accompanying notes are an integral part of these financial statements.
7
<PAGE>
FIRST COMMONWEALTH, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MARCH 31, 1996
1. Interim Financial Statements
The accompanying consolidated financial statements include the accounts of
First Commonwealth, Inc., together with its subsidiaries, First Commonwealth of
Illinois, Inc., First Commonwealth Limited Health Services Corporation and First
Commonwealth Reinsurance Company, and its affiliate, First Commonwealth Health
Services Corporation (collectively, the "Company"). All material intercompany
transactions and balances have been eliminated in consolidation. The financial
position and results of operations of First Commonwealth Health Services
Corporation, an affiliated not-for-profit company, are not material to the
Company's financial statements.
The consolidated financial statements included herein have been prepared by
the Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain notes and other information normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted from the interim financial
statements presented in this quarterly report on Form 10-Q in accordance with
such rules and regulations. In the opinion of the Company's management, the
accompanying consolidated financial statements include all adjustments,
consisting only of normal recurring adjustments, necessary to state fairly the
financial position of the Company as of March 31, 1996, and the results of its
operations and cash flows for the periods indicated. The results of operations
for the three months ended March 31, 1996 are not necessarily indicative of the
results to be expected for the full year. The accompanying consolidated
financial statements should be read in conjunction with the Company's financial
statements and notes thereto included in the Company's annual report on Form
10-K for the year ended December 31, 1995.
2. Earnings Per Share
Earnings per share is calculated by dividing net income by the weighted
average number of shares of common stock outstanding during the period plus (i)
the number of shares of common stock into which the Series B Preferred Stock was
converted upon the occurrence of the initial public offering for periods solely
prior to the initial public offering; (ii) the dilutive effect of stock options;
and (iii) the dilutive effect of all shares issued and shares subject to options
granted at prices below the public offering price of $15.00 per share within one
year prior to the initial filing date of the registration statement for the
initial public offering.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the attached
consolidated financial statements and notes thereto.
THREE MONTHS ENDED MARCH 31, 1996 COMPARED TO THREE MONTHS ENDED MARCH 31, 1995
Total subscriber revenue increased by $1.8 million, or 23.2%, to $9.8
million in the three months ended March 31, 1996 from $7.9 million in the three
months ended March 31, 1995. This increase is primarily attributable to
increased enrollment in the Company's managed care and indemnity/PPO dental
plans. Managed care revenue increased by $990,000, or 16.2%, to $7.1 million in
the three months ended March 31, 1996 from $6.1 million in the same period in
1995, primarily due to a 11.3% increase in new members and, to a lesser extent,
a shift toward managed care products with higher benefit and premium levels.
Indemnity/PPO revenue increased $860,000 to $2.5 million in 1996 from $1.6
million in 1995, primarily as a result of adding new indemnity/PPO plan members.
In January 1996, the Company introduced its new PPO product (Managed
Choice/SM/ Triple Option), which integrates a managed component, the PPO
option, into the Company's indemnity plans. The Indemnity/PPO revenue line now
includes revenue from both indemnity business that includes the PPO component as
well as indemnity business that does not include the PPO component. The PPO
component was available to less than 10% of the Company's Indemnity/PPO members
as of March 31, 1996.
Total gross margin increased by $647,000, or 20.9%, to $3.7 million in the
three months ended March 31, 1996 from $3.1 million in the three months ended
March 31, 1995. Total gross margin as a percentage of revenue was 38.3% in 1996
as compared to 39.1% in 1995. This percentage decline was primarily the result
of an increasing percentage of revenue being generated by the Company's
indemnity/PPO products, which have a significantly lower gross margin percentage
than the Company's managed care products. Managed care gross margin as a
percentage of revenue was 42.4% in 1996 as compared to 42.2% in 1995. The
indemnity/PPO gross margin as a percentage of indemnity/PPO revenue increased to
22.2% in 1996 from 20.3% in 1995. This improved indemnity/PPO gross margin is
the result of favorable claims experience and increased premium rates charged
for the Company's indemnity/PPO plans.
SG&A expenses increased by $503,000, or 22.0%, to $2.8 million for the
three months ended March 31, 1996 from $2.3 million for the three months ended
March 31, 1995. As a percentage of revenue, SG&A expenses dropped to 28.6% for
1996 from 28.9% for 1995. The change is primarily the result of economies of
scale in meeting the administrative needs of increased enrollment due to the
relatively fixed nature of certain SG&A expenses as well as higher revenues
relative to the SG&A expenses associated with indemnity/PPO plans. Commissions
to independent brokers increased 21.0% during the three months ended March 31,
1996 as compared to the three months ended March 31, 1995, as a result of the
increased revenue from small to medium size employer markets. As a percentage of
total revenue, commissions for the three months ended March 31, 1996 declined to
4.8% from 5.6% for the same period in 1995 as a result of a lower commissions
associated with the Company's growing indemnity/PPO business.
9
<PAGE>
Operating income increased by $144,000, or 17.8%, to $953,000 for the three
months ended March 31, 1996 from $809,000 for the three months ended March 31,
1995. As a percentage of revenue, operating income was 9.8% in 1996 as compared
to 10.2% in 1995. The decline was due primarily to the lower gross margin,
partially offset by the lower SG&A as a percentage of revenue.
Interest income increased by $135,000 to $162,000 for the three months
ended March 31, 1996 from $27,000 for the three months ended March 31, 1995 as a
result of an improved cash position during the period as well as the investment
of proceeds from the initial public offering.
The effective tax rate for for the three months ended March 31, 1996 and
1995 was 40.0%.
Net income increased by $168,000, or 33.5%, to $669,000 for the three
months ended March 31, 1996 from $501,000 for the three months ended March 31,
1995.
LIQUIDITY AND CAPITAL RESOURCES
The Company's operating cash requirements for the three months ended March
31, 1996 have been met principally through operating cash flows. The primary
uses of cash have been for operating activities and capital investments in the
business. The Company believes that cash generated from operations, together
with its increased capital of $6.6 million from the proceeds of the initial
public offering in November 1995, will be adequate to finance its anticipated
operating needs for the foreseeable future.
Cash flows from operating activities were $131,000 and $1.9 million for the
three months ended March 31, 1996, and 1995, respectively. The decrease in cash
flows from operating activities includes a $1.0 million increase in the amount
of cash paid to employees, brokers and suppliers due primarily to payments
relating to costs of the initial public offering that were not paid until the
first three months of 1996. In addition, claims paid increased $972,000 in the
first three months of 1996 as a result of a significant increase in the
Company's indemnity/PPO business. The Company primarily receives premium
payments in advance of disbursing managed care dentist capitation payments and
indemnity claims payments. Cash balances in excess of current needs are invested
in interest-bearing accounts or cash equivalents. Cash flows from operations
consist primarily of subscriber premiums and investment income net of capitation
payments to network dentists, claims paid, brokers' commissions, general and
administrative expenses and income taxes.
10
<PAGE>
Cash used in investing activities was $2.2 million and $75,000 for the
three months ended March 31, 1996 and 1995, respectively. The increase in cash
used in the first three months of 1996 relates primarily to $2.1 million used to
purchase short term investment grade securities (securities which mature between
3 months and 12 months). Capital expenditures were $75,000 for the three months
ended March 31, 1996 and 1995, respectively mainly for furniture, leasehold
improvements, and equipment as the Company has expanded their leased office
space.
Cash used in financing activities was $29,000 and $28,000 for the three
months ended March 31, 1996 and 1995, respectively, for payments on capital
leases and dividends on preferred stock.
As of March 31, 1996, the Company had cash and cash equivalents of $10.6
million as well as short term investments of $2.1 million and no long term debt
outstanding. In addition, the Company has a $500,000 unsecured revolving line of
credit facility which expires June 30, 1996, which has not been drawn upon
during the past three years. Any outstanding indebtedness under the line of
credit will bear interest at a rate equal to the prime rate. To the extent the
Company makes acquisitions, a portion of the purchase price may be financed
through borrowings.
Under applicable insurance laws of the states in which the Company conducts
business, the Company's subsidiaries operating in the particular state are
required to maintain a minimum level of net worth and reserves. The Company may
be required from time to time to invest funds in one or more of its subsidiaries
to meet regulatory requirements, or to expand its operations into new geographic
areas. In addition, applicable laws generally limit the ability of the Company's
subsidiaries to pay dividends to the extent that required regulatory capital or
surplus would be impaired.
IMPACT OF INFLATION
The Company does not believe the impact of inflation has significantly
affected the Company's operations.
11
<PAGE>
PART II. OTHER INFORMATION
---------------------------
ITEM 6. EXHIBITS AND REPORTS ON FORMS 8-K
(a) Exhibits:
3.1 Second Restated Certificate of Incorporation of the
Company, as amended, is hereby incorporated by reference
to Exhibit 3.1 as filed with the Company's Registration
Statement on Form S-1, as amended (Registration No.
33-97426)
3.2 Restated Bylaws of the Company are hereby incorporated by
reference to the Company's Registration Statement on Form
S-1, as amended (Registration No. 33-97426)
10 First Commonwealth, Inc. 1995 Long-Term Incentive Plan, as
amended as of April 26, 1996, is hereby incorporated by
reference to Annex A to the registrant's definitive proxy
statement as filed with the Securities and Exchange
Commission on April 29, 1996
11 Statement Regarding Computation of Net Earnings Per Share
27 Financial Data Schedule
(b) Reports on Form 8-K filed during the quarter ended March 31,
1996:
None
12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed by the undersigned,
thereunto duly authorized.
FIRST COMMONWEALTH, INC.
(Registrant)
Date: May 14, 1996 By: /s/ Christopher C. Multhauf
-------------------------------------
Christopher C. Multhauf
Chairman and Chief Executive Officer
Date: May 14, 1996 By: /s/ David W. Mulligan
-------------------------------------
David W. Mulligan
President, Secretary and Chief
Operating Officer
Date: May 14, 1996 By: /s/ Scott B. Sanders
-------------------------------------
Scott B. Sanders
Chief Financial Officer and
Treasurer (Principal Financial and
Accounting Officer)
13
<PAGE>
EXHIBIT INDEX
-------------
Exhibit No. Description
- ----------- -----------
3.1 -- Second Restated Certificate of Incorporation of the Company,
as amended, is hereby incorporated by reference to Exhibit
3.1 as filed with the Company's Registration Statement on
Form S-1, as amended (Registration No. 33-97426)
3.2 -- Restated Bylaws of the Company are hereby incorporated by
reference to the Company's Registration Statement on Form
S-1, as amended (Registration No. 33-97426)
10 -- First Commonwealth, Inc. 1995 Long-Term Incentive Plan, as
amended as of April 26, 1996, is hereby incorporated by
reference to Annex A to the registrant's definitive proxy
statement as filed with the Securities and Exchange
Commission on April 29, 1996
11 -- Statement Regarding Computation of Net Earnings Per Share
27 -- Financial Data Schedule
<PAGE>
Exhibit 11
FIRST COMMONWEALTH, INC.
COMPUTATION OF PRIMARY AND FULL DILUTED EARNINGS PER SHARE
<TABLE>
<CAPTION>
EARNINGS PER SHARE
------------------------------------
MARCH 31, 1996 MARCH 31, 1995
-------------- --------------
<S> <C> <C>
Weighted average common shares outstanding (1) (2) 3,365,858 1,049,000
Common shares issued to Series B Preferred
Stockholders upon initial public offering (1) 0 1,784,000
Additional common share equivalents related to option
exercises within one year of initial public offering in accordance
with SEC Staff Accounting Bulletin Number 83 (1) (3) 0 0
Additional common share equivalents related to option grants
within one year of initial public offering in accordance
with SEC Staff Accounting Bulletin Number 83 (1) (3) (4) 0 0
Additional common share equivalents related to stock
options assumed to be exercised in accordance with
the treasury stock method (5) (6) (7) 130,267 29,176
--------- ---------
Total weighted average common and equivalent
shares outstanding 3,496,125 2,862,176
========= =========
Net income $669,000 $501,000
========= =========
Earnings per share - Primary $0.19 $0.18
========= =========
Earnings per share - Fully diluted $0.19 $0.18
========= =========
</TABLE>
NOTES
(1) Amount computed for purposes of presenting fully diluted earnings per share
is the same as this amount.
(2) For March 31, 1996, includes new shares issued in initial public offering
of 530,000 shares on November 16, 1995, as well as converted Series B
preferred shares.
(3) Computed based on initial public offering price of $15 per share.
(4) No stock options were granted less than or equal to one year prior to the
initial public offering date.
(5) Options with an exercise price less than the fair value of common stock
during the year presented are assumed to have been exercised with the
proceeds from the exercise, including tax benefits assumed to have been
realized, being used to purchase treasury shares. The repurchase of
treasury shares is assumed to be at the average market price for purposes
of computing primary earnings per share and the ending market price for
purposes of computing fully diluted earnings per share .
(6) Average and ending fair market values are determined by reference to the
price and date upon which stock options are granted. All such options are
granted at the fair value on the date of the grant. These prices at the end
of each quarter are as follows:
<TABLE>
<CAPTION>
Quarter Ended 1996 1995
------------- ------ -----
<S> <C> <C>
31-Mar $25.75 $1.70
</TABLE>
(7) The additional share equivalents related to stock options for purposes of
fully diluted earnings per share are 130,267 and 29,176, at March 31, 1996,
and 1995, respectively.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Financial Statements of First Commonwealth, Inc. as of March 31,
1996, and for the three months then ended, 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> DEC-31-1996
<PERIOD-START> JAN-1-1996
<PERIOD-END> MAR-31-1996
<CASH> 10,551
<SECURITIES> 2,141
<RECEIVABLES> 2,840
<ALLOWANCES> 224
<INVENTORY> 0
<CURRENT-ASSETS> 18,100
<PP&E> 2,540
<DEPRECIATION> 1,201
<TOTAL-ASSETS> 20,458
<CURRENT-LIABILITIES> 7,957
<BONDS> 0
<COMMON> 3
0
0
<OTHER-SE> 12,373
<TOTAL-LIABILITY-AND-EQUITY> 20,458
<SALES> 0
<TOTAL-REVENUES> 9,773
<CGS> 0
<TOTAL-COSTS> 8,820
<OTHER-EXPENSES> (162)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,115
<INCOME-TAX> 446
<INCOME-CONTINUING> 669
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 669
<EPS-PRIMARY> 0.19
<EPS-DILUTED> 0.19
</TABLE>
