<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
--------------------
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1997
Commission file number 0-27042
AlphaNet Solutions, Inc.
------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
New Jersey 22-2554535
- --------------------------------- -------------------------------------
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
7 Ridgedale Ave., Cedar Knolls, New Jersey 07927
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
(201) 267-0088
-------------------------------
(Registrant's Telephone Number,
Including Area Code)
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 Registrant's
classes of common stock, as of March 31, 1997:
Class Number of Shares
- ----- ----------------
Common Stock, $.01 par value 5,102,900
<PAGE>
ALPHANET SOLUTIONS, INC. AND SUBSIDIARY
TABLE OF CONTENTS
-----------------
PART I. FINANCIAL INFORMATION.................................................1
Item 1. Financial Statements..............................................1
Consolidated Balance Sheets
as of December 31, 1996
and March 31, 1997 (unaudited)....................................2
Consolidated Statements of Income
for the Three Months Ended
March 31, 1996 and 1997 (unaudited)...............................3
Consolidated Statements of Cash Flows
for the Three Months Ended
March 31, 1996 and 1997 (unaudited)...............................4
Notes to Consolidated Financial Statements (unaudited)............5
Item 2. Management's Discussion and Analysis of
Results of Operations and Financial Condition.....................7
Results of Operations.............................................9
Liquidity and Capital Resources..................................10
PART II. OTHER INFORMATION...................................................13
Item 6. Exhibits and Reports on Form 8-K.................................13
SIGNATURES....................................................................14
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<PAGE>
PART I. FINANCIAL INFORMATION
------------------------------
ITEM 1. FINANCIAL STATEMENTS
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<PAGE>
ALPHANET SOLUTIONS, INC. AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1996 1997
------------ ----------
ASSETS (unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents............. $ 1,610 $ 117
Accounts receivable, net.............. 29,848 34,137
Inventories........................... 4,809 3,594
Deferred income tax asset............. 445 445
Prepaid expenses and other current
assets............................... 1,705 1,684
------- -------
Total current assets................. 38,417 39,977
Property and equipment, net............. 3,856 4,467
Other assets............................ 1,374 1,698
------- -------
Total assets......................... $43,647 $46,142
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Notes payable to bank................. $ -- $ 4,675
Current portion of capital lease
obligations.......................... 103 115
Accounts payable...................... 17,923 13,243
Accrued expenses...................... 5,984 7,352
------- -------
Total current liabilities............ 24,010 25,385
Advance from principal shareholder...... 675 675
Capital lease obligations............... 41 --
------- -------
Total liabilities.................... 24,726 26,060
------- -------
Shareholders' equity:
Preferred stock -- $0.01 par value;
authorized 3,000,000 shares, none
issued............................... -- --
Common stock -- $0.01 par value;
authorized 15,000,000 shares,
5,102,900 shares issued and
outstanding.......................... 51 51
Additional paid-in capital............ 15,904 15,904
Retained earnings..................... 2,966 4,127
------- -------
Total shareholders' equity........... 18,921 20,082
------- -------
Total liabilities and shareholders'
equity.............................. $43,647 $46,142
======= =======
</TABLE>
See accompanying notes to consolidated financial statements.
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<PAGE>
ALPHANET SOLUTIONS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(in thousands, except per share amounts)
<TABLE>
<CAPTION>
For the Three Months
Ended March 31,
----------------------
1996 1997
---------- ----------
Net sales:
<S> <C> <C>
Product sales......................... $15,191 $38,768
Services and support.................. 4,105 7,733
------- -------
19,296 46,501
------- -------
Cost of sales:
Product sales......................... 13,283 34,493
Services and support.................. 2,609 5,028
------- -------
15,892 39,521
------- -------
Gross profit............................ 3,404 6,980
------- -------
Operating expenses:
Selling expenses...................... 1,249 2,918
General and administrative expenses... 1,176 2,036
------- -------
2,425 4,954
------- -------
Operating income........................ 979 2,026
------- -------
Other income (expense):
Interest income....................... 17 3
Interest expense...................... (35) (61)
------- -------
(18) (58)
------- -------
Income before income taxes.............. 961 1,968
Provision (benefit) for income taxes.... (32) 807
------- -------
Net income.............................. $ 993 $ 1,161
======= =======
Pro forma data:
Income before income taxes............ $ 961
Pro forma provision for income taxes.. 389
-------
Pro forma net income.................. $ 572
=======
Net income per share.................. $ 0.14 $ 0.22
======= =======
Weighted average number of common
shares and common shares
equivalent........................... 4,043 5,293
======= =======
</TABLE>
See accompanying notes to consolidated financial statements.
-3-
<PAGE>
ALPHANET SOLUTIONS, INC. AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(in thousands)
<TABLE>
<CAPTION>
For the Three Months
Ended March 31,
----------------------
1996 1997
----------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net income............................. $ 993 $ 1,161
Adjustments to reconcile net income to
net cash provided by (used in)
operating activities:
Depreciation and amortization......... 84 311
Increase (decrease) from changes in:
Accounts receivable.................. 18 (4,289)
Inventories.......................... 196 1,215
Prepaid expenses and other current
assets.............................. (723) 21
Other assets......................... 397 (37)
Accounts payable and accrued expenses 2,222 (3,312)
------- -------
Net cash provided by (used in)
operating activities................. 3,187 (4,930)
------- -------
Cash flows from investing activities:
Property and equipment expenditures.... (213) (887)
Receipt of loan repayments -
shareholder........................... 413 --
------- -------
Net cash provided by (used in)
investing activities................. 200 (887)
------- -------
Cash flows from financing activities:
Net borrowings of notes payable to bank -- 4,675
Costs of anticipated common stock
offering.............................. -- (322)
Net proceeds from issuance of common
stock................................. 14,802 --
Repayment of long-term debt............ (736) --
Repayment of capital lease obligations. (22) (29)
Payment of dividends................... (1,147) --
Distribution of S Corporation earnings. (6,155) --
------- -------
Net cash provided by financing
activities........................... 6,742 4,324
------- -------
Net increase (decrease) in cash and
cash equivalents....................... 10,129 (1,493)
Cash and cash equivalents, beginning of
period................................. 1,223 1,610
------- -------
Cash and cash equivalents, end of period $11,352 $ 117
======= =======
</TABLE>
See accompanying notes to consolidated financial statements.
-4-
<PAGE>
ALPHANET SOLUTIONS, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(in thousands, except per share amounts)
Note 1 -- Basis of Presentation:
The information presented for March 31, 1996 and 1997, and for the three-
month periods then ended, is unaudited, but, in the opinion of the management of
AlphaNet Solutions, Inc. (the "Company"), the accompanying unaudited
consolidated financial statements contain all adjustments (consisting only of
normal recurring adjustments) which the Company considers necessary for the fair
presentation of the Company's financial position as of March 31, 1997 and the
results of its operations and its cash flows for the three-month periods ended
March 31, 1996 and 1997. The consolidated financial statements included herein
have been prepared in accordance with generally accepted accounting principles
and the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.
Accordingly, certain information and footnote disclosures normally included in
financial statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. These consolidated financial
statements should be read in conjunction with the Company's audited financial
statements for the year ended December 31, 1996, which were included as part of
the Company's Annual Report on Form 10-K, as filed with the Securities and
Exchange Commission.
Results for the interim period are not necessarily indicative of results
that may be expected for the entire year.
Certain indirect costs, totaling $701, relating to the three months ended
March 31, 1996, which previously were classified as costs of services and
support, have been reclassified to general and administrative expenses to
conform with current industry practices.
Note 2 -- Income Taxes:
Prior to March 19, 1996, the Company, with the consent of its shareholders,
had elected to be taxed under the Subchapter S of the Internal Revenue Code as
an S Corporation for federal income tax purposes. In lieu of corporate income
taxes, the shareholders of an S Corporation are taxed on their proportionate
share of the Company's taxable income. As a result, the Company was not subject
to federal income taxes prior to March 19, 1996. The Company had also elected S
Corporation status in the State of New Jersey. The accompanying financial
statements include provisions for certain state and local income taxes which
were imposed at the corporate level.
On March 19, 1996, the Company terminated its status as an S Corporation
and became subject to federal and state income taxes thereafter at applicable C
Corporation income tax rates.
For informational purposes, the accompanying statement of income for the
three months ended March 31, 1996 includes a pro forma adjustment for income
taxes which would have been recorded if the Company had not been an S
Corporation, based on the tax laws in effect during such period.
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<PAGE>
ALPHANET SOLUTIONS, INC. AND SUBSIDIARY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(in thousands, except per share amounts)
Note 3 -- Net Income Per Share:
Net income per share (pro forma for the 1996 period) is computed using the
weighted average number of common shares and common shares equivalent
outstanding during the period. Common shares equivalent consists of the
Company's common shares issuable upon the exercise of stock options. The
weighted average number of common shares and common shares equivalent
outstanding have been adjusted for the number of shares that were required to
fund the S Corporation Distribution to shareholders ($6,155) less the
outstanding loan to a shareholder ($413), following the Company's initial public
offering in March 1996. Pursuant to the requirements of the Securities and
Exchange Commission, stock options issued by the Company during the twelve
months immediately preceding the Company's initial public offering have been
included in the weighted average number of common shares and common shares
equivalent used in computing pro forma net income per share as if they were
outstanding for periods prior to the Company's initial public offering using the
treasury stock method.
In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standard No. 128 "Earnings per Share." The Statement is
effective for financial statements for periods ending after December 15, 1997,
and changes the method in which earnings per share will be determined. Adoption
of this Statement by the Company is not expected to have a material impact on
earnings per share.
-6-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION.
GENERAL
The Company is a single-source provider of information technology ("IT")
products, services and support to Fortune 1000 and other large and mid-sized
companies located primarily in the New York-to-Philadelphia corridor. The
Company was formed in 1984 as an authorized reseller of computer hardware and
software products, and since 1990, has been developing and offering related IT
services. To date, most of the Company's net sales have been derived from IT
product sales. In the first quarter of 1997, net product sales were 83.4% and
services and support revenue was 16.6% of the Company's net sales.
In general, there are no ongoing written commitments by customers to
purchase products from the Company and all product sales are made on a purchase
order basis. Furthermore, as the market for IT products has matured, price
competition has intensified and is likely to continue to intensify. The
Company's gross profits, margins and results of operations could be adversely
affected by such continued product pricing pressure, a significant reduction in
product purchase orders from the Company's customers, or a disruption in the
Company's sources of product supply.
The Company offers network consulting (including systems integration),
workstation support, education, communications installation and IT staffing
services. Services and support revenue is recognized as such services are
performed. The Company's network consulting, workstation support and
communications installation services are billed on a time and materials basis.
The Company's education and IT staffing services are fee-based on a per-course
and per-placement basis, respectively. Generally, the Company's service
arrangements with its customers may be terminated by such customers with limited
advance notice and without significant penalty. The most significant cost
relating to the services component of the Company's business is personnel
expenses which consist of salaries, benefits and payroll-related expenses. Thus,
the financial performance of the Company's service business is based primarily
upon billing margins (billable hourly rates less the costs to the Company of
such service personnel on an hourly basis) and utilization rates (billable hours
divided by paid hours). The future success of the services component of the
Company's business will depend in large part upon its ability to maintain high
utilization rates at profitable billing margins. The Company's utilization rates
for service personnel likely will be adversely affected during periods of rapid
and concentrated hiring. In addition, the competition for quality technical
personnel has continued to intensify resulting in increased personnel costs for
the Company and many other IT service providers, which has adversely affected
the Company's billing margins.
The Company's cost of sales includes primarily, in the case of product
sales, the cost to the Company of products acquired for resale, and in the case
of services and support revenue, salaries and related expenses for billable
technical personnel. The Company's selling expenses
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<PAGE>
consist primarily of personnel costs, including sales commissions earned by
employees involved in the sales of IT products, services and support. These
personnel include direct sales, sales support and marketing personnel. Sales
commissions are recorded as revenue is recognized. General and administrative
expenses consist of all other operating expenses, including primarily salaries
and occupancy costs for administrative, executive and finance personnel. Certain
indirect costs, totaling $701,000, relating to the three months ended March 31,
1996, which previously were classified as costs of services and support, have
been reclassified to general and administrative expenses to conform with current
industry practices.
The Company believes that its ability to provide a broad range of technical
services, coupled with its traditional strength in satisfying its clients' IT
product requirements and its long-term relationships with large clients,
positions the Company to continue to grow the services component of its
business, while further strengthening its product sales. As such, the Company
anticipates that an increasing percentage of its gross profits in the future
will be derived from the services and support component of its business.
However, in the near term, the Company believes that product sales will continue
to generate a significantly larger percentage of the Company's gross profit,
particularly due to the acquisition of certain assets and the business of Lior,
Inc. ("Lior") in July 1996. Due in part to such acquisition, the Company's sales
of IT products increased substantially in the first quarter of 1997. In
addition, the Company has begun to provide services and support to the Lior
customers, which previously had purchased primarily computer products from Lior.
The Company believes that its ability to be a single-source provider of IT
products, services and support enables it to earn margins higher than it would
earn if it sold products only.
This Form 10-Q contains forward-looking statements that involve risks and
uncertainties. The Company's actual results may differ significantly from the
results discussed in the forward-looking statements. Such forward-looking
statements include risks and uncertainties, including, but not limited to: (i)
the substantial variability of the Company's quarterly operating results caused
by a variety of factors, some of which are not within the Company's control,
including (a) the short-term nature of the Company's customers' commitments, (b)
patterns of capital spending by customers, (c) the timing, size and mix of
product and service orders and deliveries, (d) the timing and size of new
projects, (e) pricing changes in response to various competitive factors, (f)
market factors affecting the availability of qualified technical personnel, (g)
the timing and customer acceptance of new product and service offerings, (h)
changes in trends affecting outsourcing of IT services, (i) disruption in
sources of supply, (j) changes in product, personnel and other operating costs,
and (k) industry and general economic conditions; (ii) changes in technical
personnel billing and utilization rates which are likely to be adversely
affected during periods of rapid and concentrated hiring; (iii) the intense
competition in the markets for the Company's products and services; (iv) the
Company's ability to manage its growth effectively which will require the
Company to continue developing and improving its operational, financial and
other internal systems, including a major upgrade of the Company's internal
management information systems ("MIS") infrastructure; (v) the Company's ability
to develop, market, provide, and achieve market acceptance of, new service
offerings to new and
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<PAGE>
existing clients; (vi) the Company's ability to attract, hire, train and retain
qualified technical personnel in an increasingly competitive market; (vii) the
Company's substantial reliance on a concentrated number of key customers; (viii)
uncertainties relating to potential acquisitions, if any, made by the Company,
such as its ability to integrate acquired operations and to retain key customers
and personnel of the acquired business; (ix) the Company's dependence on vendor
authorizations to resell certain computer products and to provide related
services; (x) the Company's dependence on certain aggregators for a substantial
portion of its products acquired for resale; and (xi) the Company's reliance on
the continued services of key executive officers and salespersons. Such risks
and uncertainties may cause the Company's actual results to differ materially
from the results discussed in the forward-looking statements contained herein.
RESULTS OF OPERATIONS
Three Months Ended March 31, 1996 Compared to Three Months Ended March 31,
1997
Net Sales. Net sales increased by 141.0%, or $27.2 million, from $19.3
million in 1996 to $46.5 million in 1997. Product sales increased by 155.2%, or
$23.6 million, from $15.2 million in 1996 to $38.8 million in 1997. This
increase was attributable primarily to increased demand from the Company's
established customer base and to product sales resulting from the Company's July
1996 acquisition of certain assets and the business of Lior. Services and
support revenue increased by 88.4%, or $3.6 million, from $4.1 million in 1996
to $7.7 million in 1997. This increase was attributable primarily to increased
demand for the Company's service and support offerings, particularly its network
consulting services, due to an increase in the number and size of client
projects. In 1997, sales to Nabisco, the Company's largest customer, accounted
for approximately 23% of the Company's net sales. Another customer accounted
for approximately 11% of net sales during the 1997 quarter. There can be no
assurance that such customers will continue to place orders with the Company or
engage the Company to perform services and support at existing levels.
Gross profit. The Company's gross profit increased by 105.1%, or $3.6
million, from $3.4 million in 1996 to $7.0 million in 1997. Gross profit margin
decreased from 17.6% of net sales in 1996 to 15.0% in 1997. Gross profit margin
attributable to product sales decreased from 12.6% in 1996 to 11.0% in 1997.
The decrease in such gross profit margin during 1997 was attributable primarily
to continued industry-wide downward pricing pressure on sales of computer
products, which typically results in margin deterioration on such sales, and
increases in certain volume discounts. The Company expects that downward
pricing pressure on products will continue and there can be no assurance that
the Company will be able to sustain its margins on product sales in the future.
Gross profit margin attributable to services and support revenue decreased from
36.4% of services and support revenue in 1996 to 35.0% in 1997. The decrease in
such gross profit margin was attributable primarily to the fact that services
and support revenue increased at a slower rate than related personnel and
recruiting costs, as the Company accelerated the hiring and training of
technical personnel in anticipation of the increased demand
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<PAGE>
for its services. The Company increased its staff of billable technical
personnel from 242 at December 31, 1996 to 344 at March 31, 1997.
Selling expenses. Selling expenses increased by 133.6%, or $1.7 million,
from $1.2 million in 1996 to $2.9 million in 1997, but decreased from 6.5% to
6.3% of net sales, respectively. The increase in selling expenses in absolute
dollars was primarily attributable to increased salesperson commissions and
other support costs due to the increase in net sales, the increase in sales and
marketing efforts associated with the Company's service and support offerings,
the costs associated with the Company's new service offerings and the costs
incurred and associated with the Company's expansion into the Philadelphia
market.
General and administrative expenses. General and administrative expenses
increased by 73.1%, or $860,000, from $1.2 million in 1996 to $2.0 million in
1997, but decreased from 6.1% to 4.4% of net sales, respectively. The increase
in general and administrative expenses in absolute dollars was due primarily to
increases in personnel expenses, training costs, professional fees, depreciation
charges and corporate insurance premiums. The decrease as a percentage of net
sales was due primarily to the substantial increase in net sales.
LIQUIDITY AND CAPITAL RESOURCES
In March and April 1996, the Company consummated an initial public offering
of 2,200,000 shares of its Common Stock at a price of $10.50 per share. Of the
2,200,000 shares sold, 1,700,000 shares (including 100,000 shares issued and
sold by the Company upon the exercise of the underwriters' over-allotment
option) were issued and sold by the Company and 500,000 shares were sold by a
shareholder of the Company. The Company did not receive any of the proceeds
from the sale of shares by such selling shareholder. The net proceeds to the
Company were $15.7 million.
Since its inception, the Company has funded its operations primarily from
cash generated by operations and, to a lesser extent, such cash has been
augmented with funds from borrowings under the Company's credit facilities and
the net proceeds from the Company's initial public offering. The Company's cash
used in operations was $4.9 million for the first quarter of 1997 and consisted
primarily of an increase in accounts receivable of $4.3 million and a decrease
in accounts payable and accrued expenses of $3.3 million, partially offset by
net income of $1.2 million and a decrease in inventories of $1.2 million. The
increase in accounts receivables is primarily attributable to temporary delays
in cash receipts from a few large customers and the increase in net sales. As
measured in days sales outstanding, the Company's accounts receivable increased
from 58 days at December 31, 1996 to 63 days at March 31, 1997. The Company's
cash flow from operations has been and continues to be affected primarily by the
timing of collection of accounts receivable, which accounts receivable have
increased as net sales have increased. The decrease in accounts payable and
accrued expenses is primarily due to the timing of certain large payments
related to inventory purchases.
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<PAGE>
The Company's working capital was $14.6 million at March 31, 1997 compared
to $14.4 million at December 31, 1996.
The Company invested $887,000 in property and equipment in the first
quarter of 1997, primarily related to purchases and upgrades of computer
equipment and software utilized in-house, and development of the services
component of the Company's business. Although there are no other material
commitments for capital expenditures currently outstanding, the Company intends
additional capital expenditures to continue the expansion of the services
component of its business and for the enhancement of its MIS infrastructure.
The Company purchases certain inventory and equipment through financing
arrangements with Deutsche Financial Services (a subsidiary of Deutsche Bank),
IBM Credit Corporation and Finova Capital Corporation. At March 31, 1997, there
were outstanding balances of $835,000, $2.2 million and $6.3 million,
respectively, under such arrangements. Obligations under such financing
arrangements are collateralized by substantially all of the assets of the
Company. Finova Capital Corporation and First Union National Bank have entered
into an intercreditor agreement with respect to their relative interests.
Deutsche Financial Services and IBM Credit Corporation also have entered into an
intercreditor agreement with respect to their relative interests.
The Company has a revolving credit facility with First Union National Bank
pursuant to which it may borrow up to a maximum of $7.0 million (at the bank's
prime rate less 0.25% or at LIBOR plus 1.50%). Obligations under such credit
facility are payable within 90 days following notice of termination by the bank,
or expiration of such facility on May 30, 1997, whichever is earlier, and are
collateralized by substantially all the assets of the Company. From time to
time, the Company borrows under the credit facility to meet its working capital
needs. Outstanding borrowings under the revolving credit facility as of March
31, 1997 was $4.7 million.
On March 7, 1997, the Company received a commitment from First Union
National Bank to expand the Company's credit facility to enable the Company to
borrow, based upon eligible accounts receivable, up to $15.0 million for short-
term working capital purposes. Such facility, intended to expire in May 1998,
includes a $2.5 million sublimit for letters of credit and a $5.0 million
sublimit for acquisitions. Under the new facility the Company will be able to
borrow (i) for working capital purposes at the bank's prime rate less 0.50% or
LIBOR plus 1.25% and (ii) for acquisitions at the bank's prime rate less 0.25%
or LIBOR plus 1.50%. The commitment contemplates that the Company's obligations
under such facility will be collateralized by a first priority lien on the
Company's accounts receivable and inventory, except for inventory for which the
bank will have subordinated its position to certain other lenders pursuant to
intercreditor agreements. Despite the executed commitment with the bank, there
can be no assurance that the Company will consummate such credit facility.
The Company has entered into a master lease agreement with First Union
Leasing Group, Inc. under which the Company may lease up to $500,000 of
equipment. Such agreement
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<PAGE>
provides for equipment to be leased for three-year terms with transfer of
ownership of the equipment to the Company at the end of the applicable equipment
lease term. At March 31, 1997, capital lease obligations outstanding under these
equipment leases, which expire in 1998, aggregated $115,000.
The Company believes that its available funds, together with existing and
anticipated credit facilities and the cash flow expected to be generated from
operations, will be adequate to satisfy its current and planned operations for
at least the next 24 months.
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<PAGE>
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits.
11 Statement re: Computation of Per Share Earnings.
27 Financial Data Schedule
(b) Reports on Form 8-K.
No reports on Form 8-K were filed during the quarter for which
this report on Form 10-Q is filed.
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<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.
AlphaNet Solutions, Inc.
DATE: May 13, 1997 By:/s/ Stan Gang
-----------------------------------------
Stan Gang,
President and Chief
Executive Officer
(Principal Executive
Officer)
DATE: May 13, 1997 By:/s/ Gary S. Finkel
----------------------------------------
Gary S. Finkel,
Vice President and
Chief Financial Officer
(Principal Financial and
Accounting Officer)
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<PAGE>
Exhibit 11
<PAGE>
EXHIBIT 11
ALPHANET SOLUTIONS, INC.
COMPUTATION OF EARNINGS PER SHARE
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31,
------------------------------
1996 1997
------------- -------------
<S> <C> <C>
Net income (pro forma for 1996 period).. $ 572 $1,161
====== ======
Weighted average number of common
shares and common shares equivalent:
Common shares......................... 3,488 5,103
Shares necessary to fund S Corporation
Distribution......................... 520 --
Cheap stock (treasury stock method)... 35 190
------ ------
4,043 5,293
====== ======
Net income per share (pro forma for
1996 period)........................... $ 0.14 $ 0.22
</TABLE> ====== ======
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 117
<SECURITIES> 0
<RECEIVABLES> 34,440
<ALLOWANCES> 303
<INVENTORY> 3,594
<CURRENT-ASSETS> 39,977
<PP&E> 5,756
<DEPRECIATION> 1,289
<TOTAL-ASSETS> 46,142
<CURRENT-LIABILITIES> 25,385
<BONDS> 0
0
0
<COMMON> 51
<OTHER-SE> 20,031
<TOTAL-LIABILITY-AND-EQUITY> 46,142
<SALES> 38,768
<TOTAL-REVENUES> 46,501
<CGS> 34,493
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</TABLE>
