================================================================================
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 MARCH 31, 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 : 0-27594
TRESCOM INTERNATIONAL, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
FLORIDA 65-0454571
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
200 EAST BROWARD BOULEVARD, 33301
FT. LAUDERDALE, FLORIDA (Zip Code)
(Address of Principal Executive Offices)
(954) 763-4000
(Registrant's Telephone Number, Including Area Code)
---------------------------------------------------
(Former name, former address and former 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 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. [ X ] Yes [ ] 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
----- -----------
Common Stock, par value 11,821,444 shares on
$0.0419 per share May 5, 1997
================================================================================
<PAGE>
<TABLE>
<CAPTION>
TRESCOM INTERNATIONAL, INC.
INDEX
-----
PART I. FINANCIAL INFORMATION
- -----------------------------
<S> <C>
PAGE NO.
--------
ITEM 1. Financial Statements:
Consolidated Balance Sheets as of March 31, 1997 (Unaudited) and December 31, 1996 ........... 1
Unaudited Consolidated Statements of Operations for the three months ended March 31,
1997 and 1996 ............................................................................... 2
Unaudited Consolidated Statement of Shareholders' Equity at March 31, 1997 .................. 3
Unaudited Consolidated Statements of Cash Flows for the three months ended March 31,
1997 and 1996 ............................................................................... 4
Notes to Unaudited Consolidated Financial Statements ......................................... 5
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of
Operations.................................................................................... 7
PART II. OTHER INFORMATION
- --------------------------
ITEM 1. Legal Proceedings ............................................................................ 9
ITEM 2. Changes in Securities ........................................................................ 9
ITEM 3. Default Upon Senior Securities................................................................ 9
ITEM 4. Submission of Matters to a Vote of Security-Holders........................................... 9
ITEM 5. Other Information............................................................................. 9
ITEM 6. Exhibits and Reports on Form 8-K.............................................................. 9
SIGNATURES
<PAGE>
PART I. - FINANCIAL INFORMATION
-------------------------------
ITEM 1. FINANCIAL STATEMENTS.
---------------------
TRESCOM INTERNATIONAL, INC.
CONSOLIDATED BALANCE SHEETS
ASSETS
MARCH 31, DECEMBER 31,
1997 1996
------------------------------------------
(Unaudited)
(In thousands, except share data)
<S> <C> <C>
Current assets:
Cash............................................................................. $ 3,772 $ 6,020
Accounts receivable, net of allowance for doubtful accounts of
$7,453 and $7,588, respectively............................................... 30,833 29,063
Other current assets............................................................. 3,796 3,441
-----------------------------------------
Total current assets.......................................................... 38,401 38,524
Property and equipment, at cost:
Transmission and communications equipment........................................ 25,437 24,691
Furniture, fixtures and other.................................................... 5,934 5,600
-----------------------------------------
31,371 30,291
Less accumulated depreciation and amortization................................... (6,651) (5,755)
-----------------------------------------
24,720 24,536
Other assets:
Customer bases, net of accumulated amortization of $1,604 and
$1,358, respectively............................................................ 3,560 3,806
Excess of cost over net assets of businesses acquired, net of
accumulated amortization of $2,630 and $2,368, respectively.................... 33,998 34,260
Other............................................................................ 469 484
-----------------------------------------
Total assets....................................................................... $ 101,148 $ 101,610
=========================================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable................................................................. $ 1,573 $ 2,758
Accrued network costs............................................................ 21,809 19,546
Other accrued expenses........................................................... 4,253 5,395
Long-term obligations due within one year........................................ 838 817
Deferred revenue and other current liabilities................................... 196 1,807
-----------------------------------------
Total current liabilities..................................................... 28,669 30,323
Long-term obligations (Note 3).................................................... 6,264 3,965
Stockholders' equity:
Preferred stock, $.01 par value; 1,000,000 shares authorized; no shares issued
and outstanding............................................................. - -
Common stock, $.0419 par value; 50,000,000 shares authorized; 11,821,444
shares issued and outstanding; 11,804,675 shares issued
and outstanding ............................................................. 494 493
Deferred compensation............................................................ (646) (808)
Additional paid-in capital....................................................... 106,146 106,140
Accumulated deficit.............................................................. (39,779) (38,503)
-------------------------------------------
Total stockholders' equity......................................................... 66,215 67,322
-------------------------------------------
Total liabilities and stockholders' equity......................................... $ 101,148 $101,610
===========================================
See accompanying notes.
1
<PAGE>
TRESCOM INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
THREE MONTHS ENDED MARCH 31,
1997 1996
-------------------------------------------
(In thousands, except per share data)
<S> <C> <C>
Revenues .............................................................. $ 36,143 $ 32,331
Cost of services ...................................................... 27,812 24,128
--------------------------------------------
Gross profit .......................................................... 8,331 8,203
Selling, general and administrative ................................... 8,108 7,409
Depreciation and amortization ......................................... 1,501 1,169
--------------------------------------------
Operating loss ..................................................... (1,278) (375)
Other expenses, net ............................................... (2) 1,076
--------------------------------------------
Loss before extraordinary item ........................................ (1,276) (1,451)
Extraordinary loss on early extinguishment of debt .................... -- 1,956
============================================
Net loss .............................................................. $ (1,276) $ (3,407)
============================================
Per share data (Pro forma prior to February 8, 1996)
Loss before extraordinary item ....................................... $(0.11) $(0.15)
Extraordinary item ................................................... - (0.20)
--------------------------------------------
Net loss per common share .............................................. $(0.11) $(0.35)
============================================
Weighted average number of shares of common stock
outstanding .......................................................... 11,816 9,829
============================================
See accompanying notes.
2
<PAGE>
TRESCOM INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY
(UNAUDITED)
Common Stock
-------------------------------------
Additional Total
Paid-in Deferred Accumulated Shareholders'
Shares Amount Capital Compensation Deficit Equity
---------------------------------------------------------------------------------
(In thousands, except share data)
<S> <C> <C> <C> <C> <C> <C>
Balance at December 31, 1996............. 11,804,675 $ 493 $ 106,140 $(808) $ (38,503) $ 67,322
Non-cash compensation.................... - - - 162 - 162
Exercise of stock options................ 16,769 1 6 - - 7
Net loss................................. - - - - (1,276) (1,276)
---------------------------------------------------------------------------------
Balance at March 31, 1997................ 11,821,444 $494 $106,146 $(646) $ (39,779) $ 66,215
=================================================================================
See accompanying notes.
3
<PAGE>
TRESCOM INTERNATIONAL, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
THREE MONTHS ENDED MARCH 31,
1997 1996
---------------------------------
(IN THOUSANDS)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Loss before extraordinary item...................................... $ (1,276) $ (1,451)
Extraordinary loss on early extinguishment of debt.................. -- (1,956)
Adjustments to reconcile net loss to net cash
used in operating activities:
Depreciation and amortization................................... 1,501 1,169
Non-cash interest expense ...................................... -- 407
Non-cash interest expense on note to shareholder ............... -- 297
Non-cash compensation .......................................... 162 672
Changes in operating assets and liabilities:
Accounts receivable............................................ (1,770) (5,933)
Other current assets........................................... (355) (319)
Accounts payable............................................... (1,195) 533
Accrued network costs.......................................... 2,263 3,081
Other accrued expenses......................................... (1,142) (449)
Deferred revenue and other current liabilities............. (1,611) (47)
------------------------------------
Net cash used in operating activities............................... (3,423) (3,996)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment................................. (1,080) (2,733)
Expenditures for line installations................................. (72) 4
------------------------------------
Net cash used in investing activities............................... (1,152) (2,729)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from the issuance of common stock.......................... -- 50,727
Costs relating to initial public offering .......................... -- (1,123)
Proceeds from debt.................................................. 2,500 --
Repayment of revolving credit facility ............................. -- (24,173)
Repayment of sellers' note ......................................... -- (1,000)
Repayment of notes payable to shareholder........................... -- (8,476)
Repayment of debt................................................... (4) --
Proceeds from stock option exercise ................................ 7 15
Principal payments on capital lease obligations..................... (176) (26)
------------------------------------
Net cash provided by financing activities........................... 2,327 15,944
------------------------------------
Net change in cash ................................................. (2,248) 9,219
Cash at beginning of period ........................................ 6,020 2,052
------------------------------------
Cash at end of period .............................................. $ 3,772 $ 11,271
======================================
Interest paid....................................................... $163 $766
======================================
See accompanying notes.
4
</TABLE>
<PAGE>
TRESCOM INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
1. GENERAL
ORGANIZATION AND BASIS OF PRESENTATION
TresCom International, Inc. (together with its subsidiaries
collectively referred to as the "Company") is a facilities based long distance
telecommunications carrier focused on international long distance traffic. The
Company offers telecommunications services, including long distance, calling
cards, prepaid debit cards, domestic and international toll-free calling, frame
relay and bilingual operator services.
These financial statements have been prepared in accordance with
generally accepted accounting principles for interim financial reporting and
Securities and Exchange Commission regulations. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such regulations. In the opinion of management, the information
contained herein reflects all adjustments necessary to make the financial
position, results of operations and cash flows for the interim periods a fair
presentation. All such adjustments are of a normal recurring nature. The
preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amount of revenues and expenses during the reporting period. Actual
results could differ from those estimates. These financial statements should be
read in conjunction with the Company's Annual Report on Form 10-K for the fiscal
year ended December 31, 1996. The results of operations for the interim periods
shown are not necessarily indicative of results of operations to be expected for
the entire fiscal year.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
References should be made to the Notes to Consolidated Financial
Statements in the Company's Form 10-K for the fiscal year ended December 31,
1996, specifically Note 2, for a summary of the Company's significant accounting
policies.
PROPERTY AND EQUIPMENT
Property and equipment is recorded at cost. Depreciation and
amortization is provided for financial reporting purposes using the
straight-line method over the following estimated useful lives:
Transmission and communications equipment 3 to 20 years
Furniture, fixtures and other 3 to 7 years
During the first quarter of 1997, the Company changed the estimated
useful life of fiber optic undersea cables from 10 years to 20 years to conform
to the predominant industry standard. The change in depreciation expense
associated with the revised estimated useful life of fiber optic undersea cables
is currently immaterial.
RECLASSIFICATION
Certain prior year amounts have been reclassified to conform with
current year presentation.
NEW ACCOUNTING PRONOUNCEMENT
In February 1997, the Financial Accounting Standards Board issued
Statement No. 128, "Earnings per Share," ("SFAS 128") which is required to be
adopted on December 31, 1997. At that time, the Company will be required to
change the method currently used to compute earnings per share and to restate
all prior periods. Under the new requirements for calculating primary earnings
per share, the dilutive effect
5
<PAGE>
TRESCOM INTERNATIONAL, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
of stock options will be excluded. The Company has not yet determined what the
impact of SFAS 128 will be on the calculation of fully diluted earnings per
share.
3. LONG-TERM OBLIGATIONS
A summary of long-term obligations is as follows:
<TABLE>
<CAPTION>
MARCH 31, DECEMBER 31,
1997 1996
-----------------------------
<S> <C> <C>
Credit facility ....................................................... $ 2,500 $ --
Loans payable to the Small Business Administration,
bearing interest at 4%, due in monthly principal and
interest payments of $3 through February 2015,
collateralized by a security agreement covering certain assets ...... 412 416
Capital leases bearing interest at rates ranging from 9% to
11% and payable in monthly installments totaling $104 ............... 4,190 4,366
------------------------------
7,102 4,782
Less amounts due within one year ...................................... 838 817
------------------------------
$ 6,264 $ 3,965
==============================
</TABLE>
The Company has a $5,000 line of credit with a commercial bank (the "Credit
Facility"), secured by certain accounts receivable. The Credit Facility, which
expires in April 1998, contains standard debt covenants relating to financial
position and performance, as well as restrictions on the declaration and payment
of dividends. The Company is currently in compliance with all covenants
contained in the Credit Facility. As of March 31, 1997, the Company had utilized
$2,000 under the Credit Facility to provide letters of credit and had borrowed
$2,500 for working capital. In April 1997, $1,850 of the letters of credit were
converted to borrowings.
4. STOCK OPTION PLAN
The following table summarizes all option activity for the three months
ended March 31, 1997:
<TABLE>
<CAPTION>
Weighted
Average
Number of Exercisable Exercise
Options Options Price
---------------------------------------------
<S> <C> <C> <C>
Outstanding as of December 31, 1996....... 496,263 23,713 $10.37
Granted................................... 414,000 7.50
Forfeited................................. 21,000 7.50
Exercised................................. 16,769 0.42
---------------------------------------------
Outstanding as of March 31, 1997.......... 872,494 72,345 $9.18
=============================================
</TABLE>
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS.
----------------------------------------------
SUMMARY
TresCom is a facilities based long distance telecommunications carrier
focused on international long distance traffic originating in the United States.
The Company offers a broad array of competitively priced services, including
long distance, calling cards, prepaid debit cards, domestic and international
toll-free calling, frame relay and bilingual operator services. The Company
derives its revenues by providing international and domestic long distance
services on a wholesale basis to other telecommunications carriers and resellers
and on a retail basis to residential and commercial customers, ranging in size
from small businesses to Fortune 500 companies. Service revenues are based on
minutes of use and charged at a rate per minute which varies according to the
termination point of the traffic and time of day. All revenues are billed in
United States dollars.
THREE MONTHS ENDED MARCH 31, 1997 COMPARED TO THREE MONTHS ENDED MARCH 31, 1996
REVENUES. Revenues increased 11.8%, or $3.8 million, from $32.3 million
for the first three months of 1996 to $36.1 million for the first three months
of 1997 primarily as a result of additional revenue generated by retail
customers. Approximately 26% of first quarter 1996 revenue was derived from
retail compared with approximately 38% for the first quarter of 1997. The
percentage of revenue derived from international terminations was approximately
80% for both periods.
Minutes of use increased 16.6%, or 16.6 million, from 100.1 million
minutes for the first three months of 1996 to 116.8 million minutes for the
first three months of 1997. The blended rate per minute decreased to $.3097 per
minute during the first quarter of 1997 from $.3229 during the first quarter of
1996. The lower blended rate per minute is primarily a result of a change in the
mix of international terminations. Historically, international traffic has
commanded a higher per minute rate than domestic traffic, however, this gap has
been narrowing due to increased international competition and declining
international termination costs.
COSTS OF SERVICES. Costs of services increased 15.3%, or $3.7 million,
from $24.1 million for the first three months of 1996 to $27.8 million for the
first three months of 1997. This increase correlates, in part, to an increase in
minutes of use, the costs of which are variable in nature, partially offset by a
slight decrease in the overall cost per minute. The cost per minute reduction is
a result of increased terminations to lower cost countries within the
international mix and lower termination costs associated with certain direct
operating agreements.
GROSS PROFIT. Gross profit increased 1.6%, or $0.1 million, from $8.2
million for the first three months of 1996 to $8.3 million for the first three
months of 1997. As a percentage of revenues, however, gross profit decreased
from approximately 25% for the first three months of 1996 to approximately 23%
for the first three months of 1997. This decline was primarily the result of
wholesale price pressures.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSE. Selling, general and
administrative expense increased 9.4%, or $0.7 million, from $7.4 million for
the first three months of 1996 to $8.1 million for the first three months of
1997. Excluding a first quarter 1996 promotional credit of $1.5 million,
selling, general and administrative expense would have decreased from the first
quarter of 1996 to the first quarter of 1997 primarily due to a decrease of
approximately $0.5 million in noncash compensation expense. As a percentage of
revenues, selling, general and administrative expense decreased from 25.4% for
the first three months of 1996 to 23.1% for the first three months of 1997.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization expense
increased 28.4%, or $0.3 million, from $1.2 million for the first three months
of 1996 to $1.5 million for the first three months of 1997. The increased
expense is due to depreciation of assets acquired to support continued expansion
of the Company's network and amortization related to customer bases and
businesses acquired.
7
<PAGE>
OTHER EXPENSES, NET. Other expenses, net decreased 100.2%, or $1.1
million, for the first three months of 1997 compared to the first three months
of 1996. Other expense during the first quarter of 1996 was composed primarily
of interest expense associated with borrowings under the Company's then existing
credit facility and a note payable to a former shareholder, each of which were
paid off with proceeds from the Company's initial public offering in February of
1996. Other expenses, net, including interest during the first quarter of 1997,
were immaterial.
EXTRAORDINARY ITEM. Extraordinary expense decreased 100.0%, or $2.0
million, for the first three months of 1997 compared to the first three months
of 1996. The extraordinary expense in 1996 of $2.0 million was a result of the
early extinguishment of $35.8 million of indebtedness in February. Approximately
$1.5 million was attributable to debt and warrants payable to a major
shareholder of the Company and $0.4 million was related to the write-off of
deferred financing costs associated with borrowings under a bank facility
between one of the Company's subsidiaries and a commercial bank.
NET LOSS. Net loss decreased 62.5%, or $2.1 million, from $3.4 million
for the first three months of 1996 to $1.3 million for the first three months of
1997 due to the above factors.
LIQUIDITY AND CAPITAL RESOURCES
The Company's liquidity requirements arise from working capital needs,
primarily the cost of services, selling, general and administrative expenses,
and capital costs associated with expansion of switching capacity. The Company
is a holding company, the principal assets of which are the capital stock of
TresCom U.S.A., Inc., Global Telephone Holdings, Inc., TresCom Network Services,
Inc. and The St. Thomas and San Juan Telephone Company, Inc. and has no
independent means of generating revenues. As a holding company, the Company's
internal sources of funds to meet its cash needs, including payment of expenses,
are dividends and other permitted payments from its direct and indirect
subsidiaries. Historically, the Company's working capital requirements have been
funded primarily from the sale of equity securities, bank borrowings and loans
from shareholders.
During the fourth quarter of 1996, the Company established the Credit
Facility. The Credit Facility, as amended on March 27, 1997, contains standard
debt covenants relating to financial position and performance, as well as
restrictions on the declaration and payment of dividends. The Company is
currently in compliance with all covenants under the Credit Facility. As of May
5, 1997, $0.2 million was utilized to provide letters of credit to certain
vendors and $4.3 million has been recognized as a liability. $0.5 million
remains available under the Credit Facility.
The Company currently has capital commitments of approximately $2.5
million during 1997. Pending available financing, the Company has identified
$5.5 million to $7.5 million of additional annual capital expenditures designed
to expand the Company's operations. The Company is currently reviewing various
alternative financing arrangements. There can be no assurance, however, that
such alternative financing arrangements will be available, or if available, on
terms acceptable to the Company.
From time to time, the Company evaluates acquisitions of businesses and
customer bases which complement the business of the Company. Depending on the
cash requirements of potential transactions, the Company may finance
transactions with cash flow from operations, or the Company may raise additional
funds by pursuing various financing vehicles such as new bank financing or one
or more public offerings, or private placements of the Company's securities. The
Company, however, has no present understanding, commitment or agreement with
respect to any acquisition, and there can be no assurance that any such
acquisition will occur, or that the funds to finance any such acquisition will
be available on reasonable terms or at all.
Based on management's projections, the Company believes that cash from
operations, funds available under the Credit Facility and potential alternative
financing arrangements will be sufficient to fund its needs over the next twelve
months. There can be no assurance, however, that such alternative financing
arrangements will be available, or if available, on terms acceptable to the
Company. If additional funds are needed and sources are not available, the
Company's business and results of operations could be materially adversely
affected. The Company has retained the services of an investment banking firm to
8
<PAGE>
assist in actively seeking alternative means for financing or identifying
strategic partners. However, there can be no assurance that any such transaction
will be consummated.
Reference is made to "Management's Discussion and Analysis of Financial
Condition and Results of Operations" contained in the Company's 1996 Annual
Report on Form 10-K for a description of certain factors that may affect the
Company's future results.
PART II - OTHER INFORMATION
---------------------------
Item 1. LEGAL PROCEEDINGS.
-----------------
None.
Item 2. CHANGES IN SECURITIES.
---------------------
None
Item 3. DEFAULT UPON SENIOR SECURITIES.
------------------------------
None.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS.
----------------------------------------------------
None.
Item 5. OTHER INFORMATION.
-----------------
None.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K.
--------------------------------
(a) EXHIBITS
--------
27. Financial Data Schedule.
(b) REPORTS ON FORM 8-K
-------------------
No reports on Form 8-K were filed by the Company during the
quarter ended March 31, 1997.
9
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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, in the City of Ft.
Lauderdale, State of Florida, on the 12th day of May, 1997.
TRESCOM INTERNATIONAL, INC.
--------------------------
(Registrant)
/s/ Wesley T. O'Brien
----------------------------------------
Wesley T. O'Brien
President and Chief Executive Officer
/s/ William A. Paquin
----------------------------------------
William A. Paquin
Chief Financial Officer
10
<PAGE>
EXHIBIT INDEX
-------------
EXHIBIT NO. DESCRIPTION
---------- -----------
27 Financial Data Schedule
11
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONDENSED CONSOLIDATED BALANCE SHEET OF TRESCOM INTERNATIONAL, INC. AT MARCH 31,
1997, AND THE CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS FOR THE THREE
MONTHS ENDED MARCH 31, 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> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 3,772
<SECURITIES> 0
<RECEIVABLES> 38,286
<ALLOWANCES> 7,453
<INVENTORY> 0
<CURRENT-ASSETS> 38,401
<PP&E> 31,371
<DEPRECIATION> 6,651
<TOTAL-ASSETS> 101,148
<CURRENT-LIABILITIES> 28,669
<BONDS> 0
0
0
<COMMON> 494
<OTHER-SE> 65,721
<TOTAL-LIABILITY-AND-EQUITY> 101,148
<SALES> 36,143
<TOTAL-REVENUES> 36,143
<CGS> 27,812
<TOTAL-COSTS> 8,108
<OTHER-EXPENSES> 1,501
<LOSS-PROVISION> (1,278)
<INTEREST-EXPENSE> (2)
<INCOME-PRETAX> (1,276)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,276)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,276)
<EPS-PRIMARY> (0.11)
<EPS-DILUTED> (0.11)
</TABLE>
