<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q/A
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1996, OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO
--------- -------
Commission file number 1-14342
NOVA Corporation
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Georgia 58-2209575
- --------------------------------------------------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
Five Concourse Parkway, Suite 700, Atlanta, Georgia 30328
- --------------------------------------------------------------------------------
(Address of principal executive offices)
(770) 396-1456
- --------------------------------------------------------------------------------
(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 report(s), and (2) has been subject to such filing
requirements for the past 90 days. Yes x No
--- ---
Applicable only to issuers involved in bankruptcy proceedings during the
preceding five years:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court. Yes No
--- ----
Applicable only to corporate issuers:
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date: 28,688,213 shares of common
stock outstanding as of July 31, 1996.
<PAGE>
NOVA CORPORATION
FORM 10-Q/A
QUARTER ENDED JUNE 30, 1996
TABLE OF CONTENTS
Page
Number
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Balance Sheets -
June 30, 1996 (unaudited) and December 31,
1995...................................................... 3
Condensed Consolidated Statements of Income (unaudited) -
Three and six months ended June 30, 1996 and
1995...................................................... 4
Condensed Consolidated Statements of Cash Flows (unaudited) -
Six months ended June 30, 1996 and
1995...................................................... 5
Notes to Condensed Consolidated Financial
Statements................................................ 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.................................... 7
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders.......... 9
Item 6. Exhibits and Reports on Form 8-K............................. 9
Signatures................................................... 10
2
<PAGE>
PART 1. FINANCIAL INFORMATION
Item 1. Financial Statements.
NOVA CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
As of December 31, 1995 and June 30, 1996
(In Thousands, Except Share and Per Share Data)
<TABLE>
<CAPTION>
December 31, June 30,
1995 1996
---------- ----------
A S S E T S (Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents...................................... $ 630 $ 36,442
Trade receivables, less allowance for doubtful accounts
of $440 and $585, respectively............................... 6,466 5,701
Accounts receivable from affiliate............................. 719 475
Inventory...................................................... 1,080 1,090
Deferred tax asset............................................. 3,065 1,792
Other current assets........................................... 694 690
--------- ---------
Total current assets................................. 12,654 46,190
Merchant and customer contracts................................ 20,603 19,780
Property and equipment, net.................................... 7,403 7,807
Excess cost of businesses acquired............................. 13,795 13,548
Deferred tax asset............................................. 1,671 1,675
Other non-current assets....................................... 1,992 1,731
--------- ---------
Total Assets................................................... $ 58,118 $ 90,731
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITES:
Accounts payable............................................... $ 4,180 $ 2,411
Accrued compensation and related costs......................... 996 1,082
Reserve for credit losses...................................... 883 1,136
Other accrued liabilities...................................... 3,120 5,201
Capital lease obilgations due within one year.................. 1,083 628
Long-term debt obligations due within one year................. 4,101 245
--------- ---------
Total current liabilities.............................. 14,363 10,703
Capital lease obligations...................................... 725 519
Long-term debt obligations..................................... 17,013 575
STOCKHOLDERS' EQUITY:
Preferred Stock................................................ 33,571 0
Common Stock, $.01 par value, 50,000,000 shares
authorized, 11,378,120 and 28,688,213
shares issued, respectively............................... 114 287
Additional paid in capital..................................... 2,615 98,066
Accumulated deficit............................................ (10,283) (19,419)
--------- ---------
Total Stockholders' equity............................. 26,017 78,934
--------- ---------
Total Liabilities and Stockholders' Equity..................... $ 58,118 $ 90,731
========= =========
See Accompanying Notes to Condensed Consolidated Financial Statements.
</TABLE>
3
<PAGE>
Item 1. Financial Statements (continued)
NOVA CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
(In Thousands, Except Share and Per Share Data)
<TABLE>
<CAPTION>
For the three months ended For the six months ended
June 30, June 30,
1995 1996 1995 1996
---------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
REVENUE.............................................................. $ 34,170 $ 67,568 $ 64,011 $ 127,768
OPERATING COST
Cost of Service.................................................. 26,724 52,624 50,477 99,256
Conversion Cost.................................................. 997 2,034 2,278 3,608
Selling, General and Administrative.............................. 4,950 8,736 9,451 16,769
Depreciation and Amortization.................................... 1,346 1,715 2,661 3,391
---------- ---------- ----------- ----------
TOTAL OPERATING COST................................................. 34,017 65,109 64,867 123,024
OPERATING INCOME(LOSS)............................................... 153 2,459 (856) 4,744
Interest expense, net............................................. 593 48 1,183 539
INCOME(LOSS) BEFORE PROVISION FOR INCOME ---------- ---------- ----------- ----------
TAXES............................................................. (440) 2,411 (2,039) 4,205
Provision for Income Taxes........................................ ---- 972 ---- 1,651
---------- ---------- ----------- ----------
NET INCOME(LOSS)..................................................... $ (440) $ 1,439 $ (2,039) $ 2,554
========== ========== =========== ==========
Proforma weighted average common and common equivalent shares
outstanding........................................................ 14,216,674 28,556,538 14,216,674 27,273,930
========== ========== =========== ==========
Proforma net income(loss) per share common and common equivalent
share.............................................................. $ (0.04) $ 0.05 $ (0.16) $ 0.09
========== ========== =========== ==========
See Accompanying Notes to Condensed Consolidated Financial Statements.
</TABLE>
4
<PAGE>
Item 1. Financial Statements (continued)
NOVA CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
<TABLE>
<CAPTION>
For the six months ended
June 30,
1995 1996
------------- ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss).......................................................... $ (3,750) $ 2,554
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization.......................................... 2,661 3,391
Non-cash compensation.................................................. 0 2
Changes in assets and liabilities, net of the effects of
business acquisitions:
Trade receivables................................................ (1,672) 1,009
Inventory........................................................ 84 (10)
Other assets..................................................... 530 1,180
Accounts payable................................................. 113 (1,770)
Accrued liabilities.............................................. 1,352 2,420
------- --------
Net cash provided by (used in) operating activities................... (682) 8,776
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of businesses.................................................... (762) (476)
Additions to property and equipment........................................ (570) (1,897)
------- --------
Net cash provided by (used in) investing activities.................... (1,332) (2,373)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from line of credit and notes payable............................. 550 5,600
Payment of long-term debt and capital leases............................... (716) (26,555)
Proceeds from initial public offering, stock issued and
stock options exercised................................................. 0 67,053
Payment of accrued dividends............................................... 0 (11,689)
Redemption of preferred stock.............................................. 0 (5,000)
------- --------
Net cash provided by (used in) financing activities.................... (166) 29,409
------- --------
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS.............................................................. (2,180) 35,812
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD .............................. 2,031 630
------- --------
CASH AND CASH EQUIVALENTS, END OF PERIOD..................................... $ (149) $ 36,442
======= ========
Supplemental Cash Flow Information
Supplemental cash flow disclosures, including non-cash investing and
financing activities, are:
For the Six Months Ended
June 30,
1995 1996
------- --------
Interest Paid.............................................................. $1,279 $842
Acquisition of equipment in exchange for debt or capital leases............ 382 ----
</TABLE>
See Accompanying Notes to Condensed Consolidated Financial Statements.
5
<PAGE>
NOVA CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
only of normal recurring accruals) considered necessary for a fair presentation
have been included. These financial statements should be read in conjunction
with the Company's audited financial statements included in the Company's Form
S-1 filed with the Securities and Exchange Commission (333-3287). The results
for the six months ended or the quarter ended June 30, 1996 are not necessarily
indicative of the results that may be expected for the year ending December 31,
1996.
NOTE 2 - PER SHARE DATA
Net income (loss) per share is computed using the weighted average number of
common and dilutive common equivalent shares outstanding during the period.
Dilutive common equivalent shares consist of the incremental common shares
issuable upon the exercise of stock options (using the treasury stock method).
In addition, pursuant to the Securities and Exchange Commission Staff
Accounting Bulletins and Staff policy, such computations include all dilutive
and antidilutive common and common equivalent shares issued within 12 months of
the public offering date as if they were outstanding for all periods presented
using the treasury stock method. Historical net income (loss) per share (primary
and fully diluted) was $(0.80) and $0.04 for the three months ended June 30,
1995 and 1996, respectively, and $(2.26) and $0.06 for the six months ended
June 30, 1995 and 1996, respectively.
NOTE 3 - CONTINGENCIES
The Company is from time to time subject to claims and suits arising in the
ordinary course of its business. In the opinion of management, the ultimate
resolution of any such currently pending matters will not have a material effect
on the Company's financial position and results of operations.
6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
The following table presents, for the periods indicated, the percentage of
revenues represented by certain line items in the Company's consolidated
statement of income:
<TABLE>
<CAPTION>
Three Month Period Percentage/Increase Six Month Period Percentage/Increase
Ended June 30, (Decrease) Ended June 30, (Decrease)
-------------- ---------- -------------- ----------
1995 1996 1995 1996
---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C>
Revenues 100.0% 100.0% 97.7% 100.0% 100.0% 99.6%
Cost of service 78.2 77.9 96.9 78.9 77.7 96.6
Conversion cost 2.9 3.0 104.0 3.6 2.8 58.4
Selling, general and
administrative expenses 14.5 12.9 76.5 14.8 13.1 77.4
Depreciation and amortization 3.9 2.5 27.4 4.2 2.7 27.4
----- ----- ------- ----- ----- -----
99.5 96.3 91.4 101.5 96.3 89.7
Operating income (loss) .5 3.6 1,507.2 (1.3) 3.7 ---
Interest expense, net 1.7 0.1 (91.9) 1.9 .4 (54.4)
----- ----- ------- ----- ----- -----
Income (loss) before provision
for income taxes (1.2) 3.5 --- (3.2) 3.3 ---
Provision for income taxes --- 1.4 --- --- 1.3 ---
----- ----- ------- ----- ----- -----
Net Income (loss) (1.2)% 2.1% --- (3.2)% 2.0% ---
----- ----- ------- ----- ----- -----
</TABLE>
REVENUES
Revenue increased 97.7% to $67.6 million for the quarter ended June 30,
1996 compared with $34.2 million for the same period in 1995. For the first six
months of 1996, the Company reported revenues of $128 million, 99.6% higher than
revenues of $64.0 for the same period last year. These increases resulted from a
90% and a 95% increase to $3.0 billion and $5.8 billion in merchant sales volume
processed for the three months and six months of 1996, respectively, compared to
$1.6 billion and $3.0 billion for the same periods in 1995. This increased sales
volume was primarily attributable to the alliance with First Union Corporation
and new merchants added as a result of Company's sales efforts.
COST OF SERVICE
Cost of service increased 96.9% to $52.6 million for the quarter ended June
30, 1996 compared with $26.7 million for the same period in 1995. For the six
month period ended June 30, 1996, cost of service increased 96.6% to $99.3
million from $50.5 million for the same six month period in 1995. These
increases resulted from additional interchange and assessment fees and other
processing costs associated with the higher volume of merchant sales. Cost of
service as a percent of revenues declined from 78.2% to 77.9% for the quarter
and from 78.9% to 77.7% for the six months ended June 30, 1996, reflecting
continuing cost efficiencies realized from the consolidation of the operations
relating to the acquisition of the merchant portfolio of the Bank of Boulder,
consummated in December 1994 and the additional processing volume.
CONVERSION COST
Conversion cost increased 104% to $2.0 million for the quarter ended June
30, 1996, compared with $1.0 million for the same period in 1995. For the six
month period ended June 30, 1996, conversion cost increased 58.4% to $3.6
million as compared with $2.3 million for the same six month period in 1995. The
increase resulted primarily from the ongoing conversion of the First Union
portfolio, acquired in December 1995.
7
<PAGE>
SELLING, GENERAL, AND ADMINISTRATIVE
Selling, general and administrative expenses increased 76.5% to $8.7
million for the quarter ended June 30, 1996 compared with $5.0 million for the
same period in 1995. For the first six months of 1996, selling, general and
administrative expenses increased 77.4% to $16.8 million from $9.5 million for
the same period in 1995. Higher expenses in 1996 resulted from the addition of
personnel in the Company's operations center to support the increased merchant
sales volume processed. Additionally, sales and marketing expenses increased to
support the Company's growing number of merchants and bank alliance
relationships. Selling, general and administrative expenses declined to 12.9%
and 13.1% of revenues for the quarter and six months ended June 30, 1996
compared with 14.5% and 14.8% for the same periods in 1995, reflecting
operational efficiencies.
DEPRECIATION AND AMORTIZATION
Depreciation and amortization increased 27.4% to $1.7 million for the
quarter ended June 30, 1996 compared with $1.3 million for the same period in
1995. For the first six months of 1996, depreciation and amortization increased
27.4% to $3.4 million from $2.7 million for the same period in 1995. The
increase was principally due to greater depreciation for point-of-sale and
systems equipment purchased subsequent to the first quarter of 1995. To a lesser
extent this expense increased due to additional amortization of certain
intangible assets related to the acquisition of merchant portfolios.
OPERATING INCOME (LOSS)
For the foregoing reasons, operating income for the quarter ended June 30,
1996 increased $2.3 million to $2.5 million compared with $150,000 for the same
period in 1995. For the six months ended June 30, 1996, operating income
increased $5.6 million to $4.7 million compared to a $860,000 loss for the same
period in 1995.
INTEREST EXPENSE - NET
Interest expense decreased 91.9% to $48,000 for the quarter ended June 30,
1996 compared with $590,000 for the same period in 1995. For the six month
period ended June 30, 1996, interest expense decreased 54.4% to $540,000
compared with $1.2 million for the same period in 1995. This decrease was due to
reduced levels of bank debt and purchase note obligations and increased interest
income resulting from the investment of the net proceeds received from the
Company's initial public offering.
INCOME TAXES
As a result of the Company's profitability for the second quarter and the
first six months of fiscal year 1996, income tax expense was recorded at an
effective tax rate of approximately 39.0%.
NET INCOME
Net income increased $1.9 million to $1.4 million for the quarter ended
June 30, 1996 compared with a net loss of $440,000 for the same period in 1995.
For the six months ended June 30, 1996, net income increased $4.6 million to
$2.6 million compared with a net loss of $2.0 million due to the factors
discussed above.
8
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities was $8.8 million for the first
six months of 1996 as compared to net cash used by operating activities of
$682,000 for the same period in 1995.
Cash used in investing activities was $2.4 million for the six month period
ended June 30, 1996 as compared to $1.3 million for the same period in 1995. In
addition to normal capital expenditures, the Company invested in upgrades to its
computer systems for transaction processing as well as enhancing systems within
the Knoxville operations center.
Net cash provided by financing activities was $29.4 million for the six
months ended June 30, 1996, due primarily to the Company's initial public
offering.
The Company typically has relatively low working capital requirements
because discount fees charged to merchants are collected in an average of 15
days, while normal payables are paid in 30 days (or longer in the case of point
of sale terminal purchases). In addition, increasing acquisition activity may
cause variations in working capital due to conversion-period operating costs.
Because of the seasonality of the Company's business, capital requirements may
be greater in certain months.
The Company expects that cash generated from operations will be the
principle source of funds for its cash requirements. The Company intends to use
its $25.0 million credit facility, net proceeds generated from the initial
public offering and cash generated from operations to fund future merchant
portfolio acquisitions and working capital requirements.
PART II. OTHER INFORMATION
ITEM 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Pursuant to a unanimous written consent of the shareholders of NOVA
Corporation dated May 2, 1996, the shareholders unanimously approved (i) the
assumption and amendment of the NOVA Corporation 1991 Employees Stock Option and
Stock Appreciation Rights Plan, and (ii) the adoption and amendment of the NOVA
Corporation 1996 Employees Stock Incentive Plan.
ITEM 6 - EXHIBITS AND REPORTS FILED ON FORM 8-K
(a) Exhibits
11.1 Statement regarding Computation of Pro Forma Earnings Per Share
11.2 Statement regarding Computation of Historical Earnings Per Share
27. Financial Data Schedule
(aa) Reports on Form 8-K
None.
9
<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.
NOVA Corporation
(Registrant)
By: /s/ James M. Bahin
----------------------------------
James M. Bahin
Vice Chairman, Chief Financial Officer
Date:August 6, 1996 and Secretary
---------------
By: /s/ Edward Grzedzinski
------------------------
Edward Grzedzinski
Date:August 6, 1996 Chairman, President and Chief
--------------- Executive Officer
(Principal Executive Officer)
By: /s/ James M. Bahin
------------------
James M. Bahin
Vice Chairman, Chief Financial Officer
and Secretary
(Principal Accounting Officer)
10
<PAGE>
Exhibit Description Page
Number ----------- ----
- ------
11.1 Statement regarding Computation of Pro Forma Earnings Per Share
11.2 Statement regarding Computation of Historical Earnings Per Share
27. Financial Data Schedule
<PAGE>
EXHIBIT 11.1
NOVA CORPORATION
COMPUTATION OF PRO FORMA EARNINGS PER SHARE
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
---------------------- ----------------------
1995 1996 1995 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Weighted average Common Stock outstanding during
the period 2,288,387 22,104,131 2,288,387 16,821,959
Cheap Stock (1) 52,069 11,717 52,069 19,843
Conversion of Preferred Stock into Common Stock 11,876,218 4,959,303 11,876,218 8,398,657
Dilutive effect of common stock equivalents --- 1,481,387 --- 2,033,471
---------- ---------- ----------- ----------
Total 14,216,674 28,556,538 14,216,674 27,273,930
========== ========== =========== ==========
Net income (loss) $ (440,000) $1,439,000 $(2,039,000) $2,554,000
Less: Preferred Stock dividends 143,557 75,082 283,613 229,677
---------- ---------- ----------- ----------
Net income (loss) available for Common Stock and
common stock equivalents $ (583,557) $1,363,918 $(2,322,613) $2,324,323
========== ========== =========== ==========
Per share amount $(0.04) $0.05 $(0.16) $0.09
========== ========== =========== ==========
</TABLE>
__________
(1) Pursuant to Securities and Exchange Commission Accounting Bulletin No. 83,
common stock and common stock equivalents issued at prices below the assumed
initial public offering price per share ("Cheap Stock") during the twelve months
immediately preceding the initial filing date of the Company's Registration
Statement for its public offering have been included as outstanding for all
periods presented.
<PAGE>
EXHIBIT 11.2
NOVA CORPORATION
COMPUTATION OF HISTORICAL EARNINGS PER SHARE
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
--------------------- --------------------
1995 1996 1995 1996
--------- --------- -------- --------
<S> <C> <C> <C> <C>
PRIMARY
Weighted average Common Stock outstanding during
the period 1,671,296 22,104,131 1,671,296 16,821,959
Cheap Stock (1) 52,069 11,717 52,069 19,843
Dilutive effect of common stock equivalents --- 1,481,387 --- 2,033,471
----------- ---------- ----------- ----------
Total 1,723,365 23,597,235 1,723,365 18,875,273
=========== ========== =========== ==========
Net income (loss) ($440,000) $1,439,000 ($2,039,000) $2,554,000
Less: Preferred Stock dividends 934,736 485,201 1,848,562 1,485,591
----------- ---------- ----------- ----------
Net income (loss) available for Common Stock
and common stock equivalents ($1,374,736) $953,799 ($3,887,562) $1,068,409
=========== ========== =========== ==========
Per share amount ($0.80) $0.04 ($2.26) $0.06
=========== ========== =========== ==========
FULLY DILUTED
Weighted average Common Stock outstanding during
the period 1,671,296 22,104,131 1,671,296 16,821,959
Cheap Stock (1) 52,069 11,717 52,069 19,843
Dilutive effect of common stock equivalents --- 1,481,387 --- 2,033,471
----------- ---------- ----------- ----------
Total 1,723,365 23,597,235 1,723,365 18,875,273
=========== ========== =========== ==========
Net income (loss) ($440,000) $1,439,000 ($2,039,000) $2,554,000
Less: Preferred Stock dividends 934,736 485,201 1,848,562 1,485,591
----------- ---------- ----------- ----------
Net income (loss) available for Common Stock
and common stock equivalents ($1,374,736) $953,799 ($3,887,562) $1,068,409
=========== ========== =========== ==========
Per share amount ($0.80) $0.04 ($2.26) $0.06
=========== ========== =========== ==========
</TABLE>
__________
(1) Pursuant to Securities and Exchange Commission Accounting Bulletin No. 83,
common stock and common stock equivalents issued at prices below the assumed
initial public offering price per share ("Cheap Stock") during the twelve months
immediately preceding the initial filing date of the Company's Registration
Statement for its public offering have been included as outstanding for all
periods presented.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 1996 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> APR-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 36,442,000
<SECURITIES> 0
<RECEIVABLES> 6,286,000
<ALLOWANCES> 585,000
<INVENTORY> 1,090,000
<CURRENT-ASSETS> 46,183,000
<PP&E> 7,807,000
<DEPRECIATION> 748,000
<TOTAL-ASSETS> 90,731,000
<CURRENT-LIABILITIES> 10,703,000
<BONDS> 0
0
0
<COMMON> 287,000
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 90,731,000
<SALES> 67,568,000
<TOTAL-REVENUES> 67,568,000
<CGS> 52,624,000
<TOTAL-COSTS> 52,624,000
<OTHER-EXPENSES> 12,485,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 48,000
<INCOME-PRETAX> 2,411,000
<INCOME-TAX> 972,000
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,439,000
<EPS-PRIMARY> .04
<EPS-DILUTED> .04
</TABLE>
