<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
[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: 0-28074
Sapient Corporation
------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
Delaware 04-3130648
- ------------------------------ -------------------
(State or Other Jurisdiction (I.R.S. Employer
Incorporation or Organization) Identification No.)
One Memorial Drive, Cambridge, MA 02142
- ---------------------------------------- ----------
(Address of Principal Executive Offices) (Zip Code)
617-621-0200
----------------------------------------------------
(Registrant's Telephone Number, Including Area Code)
N/A
---------------------------------------------------------------
(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. Yes X No
----- -----
As of May 6, 1997 there were 11,602,915 shares of Common Stock, $.01
par value, outstanding.
<PAGE> 2
SAPIENT CORPORATION
INDEX
-----
Part I. FINANCIAL INFORMATION PAGE NUMBER
Item 1. Consolidated Balance Sheets as of December 31, 1996 and 3
March 31, 1997
Consolidated Statements of Income for the Three Months 4
Ended March 31, 1996 and 1997
Consolidated Statements of Cash Flows for the Three Months 5
Ended March 31, 1996 and 1997
Notes to Consolidated Financial Statements 6-7
Item 2. Management's Discussion and Analysis of Financial 8-11
Condition and Results of Operations
Part II. OTHER INFORMATION
Item 1. Legal Proceedings 12
Item 6. Exhibits and Reports on Form 8-K 12
Signatures 13
Exhibit 10.1 14-16
Exhibit 11.1 17
Exhibit 27.1 18
2
<PAGE> 3
SAPIENT CORPORATION
<TABLE>
Consolidated Balance Sheets
<CAPTION>
December 31, March 31,
Assets 1996 1997
------ ------------ ------------
(Unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 49,997,905 $ 45,328,840
Short term investments 9,540,498 12,481,058
Accounts receivable, less allowance for
doubtful accounts of $150,000 11,387,576 11,736,621
Unbilled revenues on contracts 4,673,812 4,525,759
Deferred income tax asset 188,534 188,534
Prepaid expenses and other current assets 450,885 657,800
------------ ------------
Total current assets 76,239,210 74,918,612
Property and equipment, net 2,256,635 3,980,324
Other assets 61,088 61,088
------------ ------------
Total assets $ 78,556,933 $ 78,960,024
============ ============
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 72,419 $ 39,854
Accrued expenses 1,554,473 908,974
Accrued compensation 2,162,016 1,329,368
Accrued income taxes payable 1,551,661 959,151
Deferred revenues on contracts 4,915,681 4,119,491
------------ ------------
Total current liabilities 10,256,250 7,356,838
Deferred income taxes 1,296,171 1,296,171
Other long term liabilities 754,484 837,460
------------ ------------
Total liabilities 12,306,905 9,490,469
------------ ------------
Stockholders' equity:
Preferred stock, par value $.01 per share, 5,000,000 authorized and
none outstanding at December 31, 1996 and March 31, 1997 - -
Common stock, par value $.01 per share, voting, 40,000,000 shares
authorized, 11,492,760 issued at December 31, 1996; 40,000,000
shares authorized, 11,541,765 shares issued at March 31, 1997 114,928 115,418
Additional paid-in capital 54,502,520 55,152,107
Retained earnings 11,657,580 14,202,030
Notes receivable from stockholders (25,000) --
------------ ------------
Total stockholders' equity 66,250,028 69,469,555
------------ ------------
Total liabilities and stockholders' equity $ 78,556,933 $ 78,960,024
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE> 4
SAPIENT CORPORATION
<TABLE>
Consolidated Statements of Income
(Unaudited)
<CAPTION>
Three Months Ended
March 31,
1996 1997
----------- -----------
<S> <C> <C>
Revenues $ 9,267,116 $16,504,104
Operating expenses:
Project personnel costs 4,552,035 7,881,231
Selling and marketing 466,799 1,067,544
General and administrative 2,212,824 4,028,586
----------- -----------
Total operating expenses 7,231,658 12,977,361
Income from operations 2,035,458 3,526,743
Interest income, net 5,178 525,496
----------- -----------
Income before income taxes 2,040,636 4,052,239
Income taxes 816,254 1,507,790
----------- -----------
Net Income $ 1,224,382 $ 2,544,449
=========== ===========
Net income per share $ 0.12 $ 0.20
=========== ===========
Weighted average common shares and
equivalents outstanding 10,287,254 12,614,092
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE> 5
SAPIENT CORPORATION
<TABLE>
Consolidated Statements of Cash Flows
(Unaudited)
<CAPTION>
Three Months Ended
March 31,
1996 1997
------------ ------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 1,224,382 $ 2,544,449
Adjustments to reconcile net income to net cash from
operating activities:
Depreciation and amortization 150,112 330,244
Deferred income taxes 303,362 -
Changes in assets and liabilities:
(Increase) decrease in accounts receivable 202,929 (349,046)
Decrease (increase) in unbilled revenues on contracts (1,533,906) 148,053
Increase in prepaid expenses and other
current assets (361,208) (206,914)
Decrease in income tax receivable 479,892 -
Decrease in other assets 48,923 -
Decrease in accounts payable (349,164) (32,565)
(Decrease) increase in accrued expenses 1,269,818 (645,498)
Decrease in accrued compensation (54,217) (832,649)
Decrease in income taxes payable - (592,510)
(Decrease) increase in deferred revenues on contracts 46,429 (796,190)
Increase in other long term liabilities - 82,976
------------ ------------
Net cash (used in) provided by operating activities 1,427,352 (349,650)
------------ ------------
Cash flows from investing activities:
Purchase of property and equipment (293,811) (2,053,933)
Purchase of short term investments - (2,940,560)
------------ ------------
Net cash used for investing activities (293,811) (4,994,493)
------------ ------------
Cash flows from financing activities:
Decrease in notes receivable stockholder - 25,000
Exercise of stock options 10,727 60,567
Proceeds from employee stock purchase plan - 589,511
Principal payments on notes payable to bank (91,399) -
------------ ------------
Net cash provided by (used in) financing activities (80,672) 675,078
------------ ------------
(Decrease) increase in cash and cash equivalents 1,052,869 (4,669,065)
Cash and cash equivalents, at beginning of period 378,019 49,997,905
------------ ------------
Cash and cash equivalents, at end of period $ 1,430,888 $ 45,328,840
============ ============
Supplemental disclosures for cash flow information:
Cash paid during the year for income taxes $ 175,000 $ 2,101,635
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE> 6
SAPIENT CORPORATION
Notes to Consolidated Financial Statements
(1) BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared by
Sapient Corporation (the "Company") pursuant to the rules and
regulations of the Securities and Exchange Commission regarding interim
financial reporting. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements and should be read in
conjunction with the financial statements and notes thereto for the
year ended December 31, 1996 included in the Company's Annual Report on
Form 10K. The accompanying financial statements reflect all adjustments
(consisting solely of normal, recurring adjustments) which are, in the
opinion of management, necessary for a fair presentation of results for
the interim periods presented. The results of operations for the three
month period ended March 31, 1997 are not necessarily indicative of the
results to be expected for the full fiscal year.
(2) SHORT TERM INVESTMENTS
Short term investments are available-for-sale securities, which are
recorded at fair market value. The difference between fair market value
and cost is not material. Realized gains and losses from sales of
available-for-sale securities were not material for any period
presented.
(3) NET INCOME PER SHARE
Net income per share is computed using the weighted average number of
shares of common stock outstanding and dilutive common equivalent
shares from stock options using the treasury stock method. Pursuant to
the Securities and Exchange Commission Staff Accounting Bulletins, for
all periods prior to the Company's initial public offering, such
computations include all common and common equivalent shares issued
within twelve months of the offering date as if they were outstanding
for all periods presented using the treasury stock method and the
initial public offering price ($21.00). Fully diluted and primary
earnings per share are the same for all periods presented.
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards ("SFAS") No. 128, "Earnings
per Share." SFAS 128 establishes a different method of computing net
income per share than is currently required under the provisions of
Accounting Principles Board Opinion No. 15. Under SFAS No.128, the
Company will be required to present both basic net income per share and
diluted net income per share. Basic net income per share is expected to
be higher than the currently presented net income per share as the
effect of dilutive stock options will not be considered in computing
basic net income per share. The impact on diluted net income per share
is not expected to be material.
6
<PAGE> 7
The Company plans to adopt SFAS No. 128 in its quarter ending December 31,
1997 and at that time all historical net income per share data
presented will be restated to conform to the provisions of SFAS No.
128.
(4) CONTINGENT LIABILITIES
The Company has certain contingent liabilities that arise in the ordinary
course of its business activities. The Company accrues liabilities when
it is probable that future costs will be incurred and such costs can be
reasonably estimated.
The Company is in litigation with a former employee who alleges breach of
certain contractual and other violations resulting from his termination
as an employee. Management denies that it breached any obligations or
duties to this former employee, and asserts that the Company has
meritorious defenses. In August 1996, the Company's motion to compel
arbitration on these claims was allowed. The Company plans to
vigorously contest these claims. Although the Company does not expect
the claim to have a material adverse effect on the Company's business,
results of operations or financial condition, an adverse judgment or
settlement could have a material adverse effect on the operating
results reported by the Company for the period in which any such
adverse judgment or settlement occurs.
7
<PAGE> 8
SAPIENT CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
OVERVIEW
Sapient designs, develops, integrates and implements client/server and
Web-based information systems that enable clients to rapidly achieve their
business objectives. Sapient delivers its solutions for both enterprise-wide and
departmental initiatives on a fixed-price, fixed-timeframe basis using its
proprietary QUADD(R) (Quality Design and Delivery) process. QUADD is a
workshop-based, rapid development methodology which emphasizes active client
participation to help visualize, prioritize and create time-critical business
and technology solutions.
To determine its proposed fixed price for a project, the Company uses
an internally developed estimation process which takes into account standard
billing rates and the risks associated with the particular project, such as the
number and type of key functions to be developed, the technology environment and
application type to be applied, the project's timetable and the overall
technical complexity of the project. Each fixed-price proposal must be approved
by a member of the Company's senior management team.
The Company's revenues and earnings may fluctuate from quarter to
quarter based on such factors as the number, size and scope of projects in which
the Company is engaged, the contractual terms and degree of completion of such
projects, any delays incurred in connection with a project, employee utilization
rates, the adequacy of provisions for losses, the accuracy of estimates of
resources required to complete ongoing projects, and general economic
conditions. In addition, revenues from a large client may constitute a
significant portion of the Company's total revenues in a particular quarter.
8
<PAGE> 9
RESULTS OF OPERATIONS
The following table sets forth the percentage of revenues of certain items
included in the Company's statements of income:
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1996 1997
---- ----
<S> <C> <C>
Revenues 100% 100%
Operating expenses:
Project personnel costs 49 48
Selling and marketing 5 7
General and administrative 24 24
--- ---
Total operating expenses 78 79
Income from operations 22 21
Interest income - 3
Income taxes 9 9
--- ---
Net income 13% 15%
=== ===
</TABLE>
REVENUES
Revenues for the first quarter of 1997 increased 78% over revenues for
the first quarter of 1996. The increase in revenues reflects increases in both
the size and number of client projects. Unbilled revenues on contracts decreased
slightly from $4.7 million at December 31, 1996 to $4.5 million at March 31,
1997 as a result of an improvement in the process for invoicing client design
and development projects. In the first three months of 1997, the Company's five
largest clients accounted for approximately 47% of its revenues. During this
period, two clients each accounted for more than 10% of such revenues.
PROJECT PERSONNEL COSTS
Project personnel costs consist primarily of salaries and employee
benefits for personnel dedicated to client assignments and direct expenses
incurred to complete projects that were not reimbursed by the client. These
costs represent the most significant expense the Company incurs in providing its
services. The increase in project personnel costs for the three month period
ended March 31, 1997 was primarily due to an increase in project personnel from
232 at March 31, 1996 to 443 at March 31, 1997. Project personnel costs
decreased as a percentage of revenues from 49% to 48% for the first three months
of 1996 and 1997.
SELLING AND MARKETING
Selling and marketing costs consist primarily of salaries, employee
benefits, travel expenses and promotional costs. In the first quarter of 1997,
selling and marketing costs as a
9
<PAGE> 10
percentage of revenues was 7% compared to 5% in the first quarter of 1996. The
increase over the first three months between 1996 and 1997 was primarily the
result of the Company's decision to expand its selling and marketing group,
which grew from 18 employees at March 31, 1996 to 29 employees at March 31,
1997.
GENERAL AND ADMINISTRATIVE
General and administrative costs consist primarily of expenses
associated with the Company's management, finance and administrative groups,
including personnel devoted to recruiting and training project personnel, and
occupancy costs. The increase in general and administrative costs for the three
month period ended March 31, 1997 was primarily due to an increase in costs
associated with the employees hired during 1997, along with an increase in
occupancy costs related to having three additional offices during the first
quarter of 1997. The Company's total headcount increased from 289 at March 31,
1996 to 556 at March 31, 1997. As a percentage of revenues, general and
administrative costs remained constant at 24% in both the first quarter of 1996
and 1997. An increase in college hiring costs during the first quarter of 1997
was offset by improved office space utilization.
INTEREST INCOME
Interest income for the three month period ended March 31, 1997 was
derived from the Company's investments, which were primarily tax-exempt,
short-term municipal bonds.
PROVISION FOR INCOME TAXES
Income tax expense represents combined federal and state taxes at an
effective rate of 37% for 1997 and 40% for 1996. The decrease in the effective
tax rate primarily represents a reduction in the effective federal tax rate due
to excess cash being invested in tax-exempt municipal bonds.
LIQUIDITY AND CAPITAL RESOURCES
In April 1996, the Company completed an initial public offering of
common stock resulting in net proceeds to the Company of approximately $32.4
million. In October 1996, the Company completed a follow-on offering of common
stock resulting in net proceeds of $21.7 million. The Company has a bank
revolving line of credit providing for borrowings of up to $5.0 million.
Borrowings under this line of credit, which expires on June 30, 1997, are
collateralized by the Company's accounts receivable and bear interest at the
bank's prime rate. The line of credit includes covenants relating to the
maintenance of certain financial ratios, such as minimum net worth and
profitability, and prohibits the payment of any dividends. At March 31, 1997,
the Company had no bank borrowings outstanding and no material capital
commitments.
Cash and cash equivalents decreased to $45.3 million at March 31, 1997,
from $50.0 million at December 31, 1996. The decrease was primarily due to cash
invested in additional
10
<PAGE> 11
property and equipment related to office expansions, along with additional cash
invested in short-term investments. At March 31, 1997, $12.5 million was
invested in tax-exempt, short-term municipal bonds which mature in less than 12
months, compared to $9.5 million which was invested as of December 31, 1996.
The Company believes that the cash provided from operations, borrowings
available under its revolving line of credit and the net proceeds of its public
offerings of common stock will be sufficient to meet the Company's working
capital and capital expenditure requirements for at least the next 18 months.
11
<PAGE> 12
PART II
OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS.
The Company is in litigation with a former employee who alleges breach
of certain contractual obligations resulting from his termination as an
employee. Management denies that it breached any obligations or duties to this
former employee, and believes that the Company has meritorious defenses. In
August 1996, the Company's motion to compel arbitration of these claims was
allowed. The Company intends to vigorously contest these claims. Although the
Company does not expect the outcome of this claim to have a material adverse
effect on the Company's business, results of operations or financial condition,
an adverse judgment or settlement could have a material adverse effect on the
operating results reported by the Company for the period in which any such
adverse judgment or settlement occurs.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) EXHIBITS
10.1 1997 Executive Compensation Plan
11.1 Computation of weighted average number of shares
outstanding used in determining primary and fully
diluted earnings per share.
27.1 Financial data schedule.
(b) REPORTS ON FORM 8-K.
The Company did not file any Reports on Form 8-K during the
quarter ended March 31, 1997
12
<PAGE> 13
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.
SAPIENT CORPORATION
Date: May 9, 1997 By: /s/ JERRY A. GREENBERG
------------------------------
Jerry A. Greenberg
Co-Chief Executive Officer
Co-Chairman of the Board
Date: May 9, 1997 By: /s/ SUSAN D. JOHNSON
------------------------------
Susan D. Johnson
Chief Financial Officer
13
<PAGE> 1
Exhibit 10.1
SAPIENT CORPORATION
1997 EXECUTIVE BONUS PLAN
-------------------------
The 1997 Executive Bonus Plan (the "Plan") for the executive officers and
key employees of Sapient Corporation (the "Company") is as follows:
A. Definitions.
-----------
For purposes of the Plan, the following terms shall have the meanings
ascribed to them in this Section 1:
a. "CHIEF FINANCIAL OFFICER" shall mean the chief financial officer of
the Company.
b. "EXECUTIVE OFFICERS" shall mean the executive officers of the
Company designated by the Board of Directors of the Company who are involved in
the delivery of client projects.
c. "KEY EMPLOYEES" shall mean the individuals involved in the delivery
of client projects who are designated by the Co-Chief Executive Officers of the
Company as eligible to participate under the Plan.
d. "PARTICIPANT" shall mean any Executive Officer or Key Employee.
B. Bonus Plan for Executive Officers and Key Employees.
---------------------------------------------------
1. Participants.
------------
All Executive Officers and Key Employees of the Company are eligible to
receive cash bonus compensation under the Plan.
2. Elements.
--------
The Compensation Committee of the Board of Directors, in the case of the
Executive Officers, and the Co-Chief Executive Officers of the Company, in the
case of the Key Employees, will determine the target base amount of bonus
compensation payable to each Participant for services provided to the Company
during the fiscal year ending December 31, 1997.
Each Participant's actual bonus compensation will be calculated as follows:
<PAGE> 2
a. CLIENT SATISFACTION. Sixty percent of each Participant's bonus
compensation will be based on the weighted average of the Company's measurements
of client satisfaction. To calculate the weighted average, numerical client
ratings, which are on a scale of 1 to 10, shall be assigned the following
weights (E.G., the average of the numerical client ratings received for each RIP
Workshop will be counted once, the average of the numerical client ratings
received for each Design and Implementation project with a fixed price of less
than $500,000 will be counted three times, and so on):
RIP Workshop - 1
Design and Implementation projects
with a fixed-price of less than $500,000 - 3
Design and Implementation projects
with a fixed-price of more than
$500,000 but less than $1,000,000 - 6
Design and Implementation projects
with a fixed-price of more than
$1,000,000 but less than $2,500,000 - 8
Design and Implementation projects
with a fixed-price of more than
$2,500,000 but less than $5,000,000 - 10
Design and Implementation projects
with a fixed price of more than $5,000,000 - 15
Each Participant shall be entitled to receive bonus compensation allocable
to this measurement in an amount equal to the weighted average of the Company's
measurements of client satisfaction multiplied by 60% of such Participant's
target base bonus. For example, if the weighted average is 9.5, 95% of 60% of
such Participant's target base bonus compensation will be payable under the
Plan. However, if a client project is delayed by Sapient more than one month in
1997, the client satisfaction rating will be reduced by 5%. For example, a 95%
rating would be reduced to a 90% rating.
b. OFFICE MORALE. Twenty percent of each Participant's bonus
compensation will be based on overall office morale ratings. The ratings, which
are on a scale of 1-10, will be measured quarterly by employee surveys. Each
Participant shall be entitled to receive bonus compensation allocable to this
measurement in an amount equal to the weighted average of the ratings multiplied
by 20% of such Participant's target base bonus. For example, if the average
rating is 9.5, 95% of 20% of a Participant's target base bonus compensation will
be payable under
2
<PAGE> 3
the Plan. If the average rating is 6 or less, no portion of the bonus
compensation allocable to this measurement will be payable under the Plan.
c. REVENUES. Twenty percent of each Participant's bonus compensation
will be based on the Company's satisfaction of revenue targets established by
the Board of Directors. If the Company does not meet the specified targets, no
portion of the bonus compensation allocable to this measurement will be payable
under the Plan. If the Company meets the revenue targets, 100% of the bonus
compensation allocable to this measurement will be payable under the Plan. If
the Company exceeds the revenue targets the bonus compensation allocable to this
measurement will be increased on a proportional basis (E.G., if the revenue
target is $x million and actual revenue for 1997 is $1.5x million, 150% of the
bonus compensation allocable to this measurement will be payable under the
Plan). Each Participant shall be entitled to receive bonus compensation
allocable to this measurement in an amount equal to the percentage calculated
above multiplied by 20% of such Participant's target base bonus.
3. Payment.
-------
Recoverable draws under the Plan will be made each pay period to each
Participant in an amount equal to 75% of such Participant's target base bonus
divided by 24 (number of pay periods in year). These draws, except draws made to
new employees in the first six months of employment, are recoverable against
1998 compensation in the event such draws exceed the actual bonus earned for
1997. The balance of any payments to be made will be made in January 1998.
C. Bonus Plan for Chief Financial Officer.
--------------------------------------
The Chief Financial Officer of the Company is eligible to receive cash
bonus compensation under the Plan. The Co-Chief Executive Officers of the
Company will determine the target base amount of bonus compensation payable to
the Chief Financial Officer for services provided to the Company during the
fiscal year ending December 31, 1997, as well as the financial metrics and other
factors to be used in calculating such bonus compensation. The factors selected
by the Co-Chief Executive Officers are intended to provide a direct link between
the Chief Financial Officer's compensation and such officer's role in helping
the Company attain its 1997 performance measures. Recoverable draws will be made
to the Chief Financial Officer in accordance with the provisions set forth in
Section B.3 above.
Adopted by the
Board of Directors on
February 4, 1997
3
<PAGE> 1
Exhibit 11.1
Sapient Corporation
Article 6.01 of Regulation S-K
<TABLE>
Computation of Shares Used in Computing Net Income Per Share
<CAPTION>
Three Months Ended
March 31,
1996 1997
---------- ----------
<S> <C> <C>
Common Stock, beginning of period 8,831,730 11,492,760
Weighted average options exercised
during the period 97,990 61,288
Weighted average options outstanding
other than exercised during the period
using the treasury stock method 838,009 1,060,044
Cheap stock relating to SAB No. 83(1) 519,525 -
---------- ----------
10,287,254 12,614,092
</TABLE>
- -----------
(1) In accordance with SEC Staff Accounting Bulletin No. 83 ("SAB No. 83"),
issuances of Common Stock equivalents (common stock and stock options)
one year prior to the initial filing date of the Company's registration
statement (February 22, 1996) at share prices below the public offering
price of $21.00 per share ("Cheap Stock"), are considered to have been
made in anticipation of the public offering and have been included as
if the shares were outstanding for all periods presented using the
treasury stock method at the public offering price of $21.00 per share.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 45,328,840
<SECURITIES> 12,481,058
<RECEIVABLES> 16,412,380
<ALLOWANCES> 150,000
<INVENTORY> 0
<CURRENT-ASSETS> 74,918,612
<PP&E> 6,152,813
<DEPRECIATION> 2,172,489
<TOTAL-ASSETS> 78,960,024
<CURRENT-LIABILITIES> 7,356,838
<BONDS> 0
0
0
<COMMON> 115,418
<OTHER-SE> 69,354,137
<TOTAL-LIABILITY-AND-EQUITY> 78,960,024
<SALES> 0
<TOTAL-REVENUES> 16,504,104
<CGS> 0
<TOTAL-COSTS> 12,977,361
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 525,496
<INCOME-PRETAX> 4,052,239
<INCOME-TAX> 1,507,790
<INCOME-CONTINUING> 2,544,449
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,544,449
<EPS-PRIMARY> .20
<EPS-DILUTED> .20
</TABLE>
