<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 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 SEPTEMBER 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)
One Concourse Parkway, Suite 300, Atlanta, Georgia 30328
- ------------------------------------------------------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(770) 396-1456
- ------------------------------------------------------------------------------
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
NOVA Corporation
Five Concourse Parkway, Suite 700
Atlanta, Georgia 30328
- ------------------------------------------------------------------------------
(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
----- -----
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: 28,721,185 shares of common
stock outstanding as of October 31, 1996.
<PAGE>
NOVA CORPORATION
FORM 10-Q
QUARTER ENDED SEPTEMBER 30, 1996
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
NUMBER
<S> <C>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets-
September 30, 1996 (unaudited) and December 31, 1995................. 3
Condensed Consolidated Statements of Income (unaudited)-
Three and nine months ended September 30, 1996 and 1995.............. 4
Condensed Consolidated Statements of Cash Flows (unaudited)-Nine
months ended September 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 6. EXHIBITS AND REPORTS ON FORM 8-K....................................... 9
SIGNATURES............................................................. 10
</TABLE>
2
<PAGE>
PART 1. FINANCIAL INFORMATION
ITEM 1. Financial Statements.
NOVA CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 1995 AND SEPTEMBER 30, 1996
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1995 1996
------------ --------------
A S S E T S (UNAUDITED)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents................................ $ 630 $34,962
Trade receivables, less allowance for doubtful accounts
of $440 and $1,004, respectively..................... 6,466 5,530
Accounts receivable from affiliate....................... 719 4,562
Inventory................................................ 1,080 970
Deferred tax asset....................................... 3,065 1,769
Other current assets..................................... 694 996
------- -------
Total current assets................................. 12,654 48,789
Merchant and customer contracts.......................... 20,603 20,971
Property and equipment, net.............................. 7,403 8,107
Excess cost of businesses acquired....................... 13,795 13,424
Deferred tax asset....................................... 1,671 227
Other non-current assets................................. 1,992 1,875
------- -------
Total Assets............................................. $58,118 $93,393
======= =======
</TABLE>
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
CURRENT LIABILITIES:
<S> <C> <C>
Accounts payable............................................. $ 4,180 $ 4,209
Accrued compensation and related costs....................... 996 914
Reserve for credit losses.................................... 883 1,109
Other accrued liabilities.................................... 3,120 3,995
Capital lease obligations due within one year................ 1,083 434
Long-term debt obligations due within one year............... 4,101 272
-------- --------
Total current liabilities................................ 14,363 10,933
Capital lease obligations.................................... 725 470
Long-term debt obligations................................... 17,013 684
STOCKHOLDERS' EQUITY:
Preferred Stock.............................................. 33,571 0
Common Stock, $.01 par value, 50,000,000 shares authorized,
11,378,120 and 28,690,773 shares issued, respectively.... 114 287
Additional paid in capital................................... 2,615 98,069
Accumulated deficit.......................................... (10,283) (17,050)
-------- --------
Total Stockholders' Equity................................... 26,017 81,306
-------- --------
Total Liabilities and Stockholders' Equity................... $ 58,118 $ 93,393
======== ========
</TABLE>
See Accompanying Notes to Condensed Consolidated Financial Statements.
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 nine months ended
September 30, September 30,
1995 1996 1995 1996
----------------------------- --------------------------
<S> <C> <C> <C> <C>
REVENUE............................................ $ 37,554 $ 70,459 $ 101,565 $ 198,229
OPERATING COST
Cost of Service................................. 29,162 55,223 79,639 154,484
Conversion Cost................................. 970 1,737 3,248 5,346
Selling, General and Administrative............. 5,067 8,150 14,518 24,917
Depreciation and Amortization................... 1,346 1,774 4,007 5,166
----------- ----------- ----------- -----------
TOTAL OPERATING COST............................... 36,545 66,884 101,412 189,913
OPERATING INCOME (LOSS)............................ 1,009 3,575 153 8,316
Interest expense (income), net.................. 609 (349) 1,792 188
----------- ----------- ----------- -----------
INCOME (LOSS) BEFORE PROVISION FOR INCOME
TAXES......................................... 400 3,924 (1,639) 8,128
Provision for Income Taxes...................... ------- 1,555 -------- 3,205
----------- ----------- ----------- -----------
NET INCOME (LOSS).................................. $ 400 $ 2,369 $ (1,639) $ 4,923
=========== =========== =========== ===========
Proforma weighted average common and common
equivalent shares
outstanding..................................... 14,264,062 30,076,762 14,271,681 28,145,902
=========== =========== =========== ===========
Proforma net income (loss) per share common and
common equivalent
share........................................... $0.02 $0.08 $(0.15) $0.17
=========== =========== =========== ===========
</TABLE>
See Accompanying Notes to Condensed Consolidated Financial Statements.
4
<PAGE>
ITEM 1. FINANCIAL STATEMENTS (CONTINUED)
NOVA CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
<TABLE>
<CAPTION>
For the nine months ended
September 30,
1995 1996
---- ----
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss)................................................... $(1,639) $ 4,923
Adjustments to reconcile net income (loss) to net cash
provided by (used in) operating activities:
Depreciation and amortization..................................... 4,007 5,166
Non-cash compensation............................................. 0 2
Loss on sale of equipment......................................... 0 121
Changes in assets and liabilities, net of the effects of business
acquisitions:
Trade receivables................................................. (936) (2,907)
Inventory......................................................... (104) 110
Other assets...................................................... 372 1,982
Accounts payable.................................................. (682) 29
Accrued liabilities............................................... 1,736 1,087
------- --------
Net cash provided by operating activities......................... 2,754 10,513
------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of businesses............................................. (2,072) (2,347)
Additions to property and equipment................................. (1,138) (3,219)
Proceeds from the sale of equipment................................. 0 80
------- --------
Net cash provided by (used in) investing activities............... (3,210) (5,486)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from line of credit and notes payable...................... 1,900 5,600
Payment of long-term debt and capital leases........................ (2,338) (26,662)
Proceeds from initial public offering, stock issued and
stock options exercised............................................ 0 67,056
Payment of accrued dividends........................................ 0 (11,689)
Redemption of preferred stock....................................... 0 (5,000)
------- --------
Net cash provided by (used in) financing activities............... (438) 29,305
------- --------
INCREASE (DECREASE) IN CASH AND CASH
EQUIVALENTS......................................................... (894) 34,332
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD....................... 2,031 630
------- --------
CASH AND CASH EQUIVALENTS, END OF PERIOD............................. $ 1,137 $ 34,962
======= ========
Supplemental Cash Flow Information
Supplemental cash flow disclosures, including non-cash investing and
financing activities, are: For the Nine Months Ended
September 30
1995 1996
------ ------
Interest Paid........................................................ $ 1,939 $ 1,025
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 (333-1788). The results
for the nine months ended or the quarter ended September 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 $(0.32) and $0.08 for the three months ended September 30,
1995 and 1996, respectively, and $(2.58) and $0.17 for the nine months ended
September 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
adverse 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 %/Increase Nine Month Period %/Increase
Ended September 30, (Decrease) Ended September 30, (Decrease)
-------------------- ----------- ---------------------- -----------
<S> <C> <C> <C> <C> <C> <C>
1995 1996 1995 1996
----- ----- ----- -----
Revenues........................ 100.0% 100.0% 87.6% 100.0% 100.0% 95.2%
Cost of service................. 77.7 78.4 89.4 78.4 77.9 94.0
Conversion cost................. 2.6 2.5 79.1 3.2 2.7 64.6
Selling, general and
administrative expenses......... 13.5 11.6 60.8 14.3 12.6 71.6
Depreciation and amortization... 3.6 2.5 31.8 3.9 2.6 28.9
----- ----- ----- ----- ----- ------
97.4 95.0 83.0 99.8 95.8 87.3
----- ----- ----- ----- ----- ------
Operating income (loss)......... 2.7 5.0 254.3 .2 4.2 5,335.0
Interest expense(income), net... 1.6 (0.5) ----- 1.8 .1 (89.5)
----- ----- ----- ----- ----- ------
Income (loss) before provision
for income taxes............. 1.1 4.5 881.0 (1.6) 4.1 ------
Provision for income taxes...... ----- 2.2 ----- ----- 1.6 ------
----- ----- ----- ----- ----- ------
Net Income (loss)............... 1.1% 2.3% 492.0% (1.7)% 2.5% ------
----- ----- ----- ----- ----- ------
</TABLE>
REVENUES
Revenue increased 87.6% to $70.5 million for the quarter ended September 30,
1996 compared with $37.6 million for the same period in 1995. For the first nine
months of 1996, the Company reported revenues of $198.2 million, 95.2% higher
than revenues of $101.6 million for the same period last year. These increases
resulted from a 78.1% and an 88.7% increase to $3.1 billion and $8.9 billion in
merchant sales volume processed for the three months and nine months of 1996,
respectively, compared to $1.8 billion and $4.7 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 the
Company's sales efforts. Additionally, the Company has obtained commitments for
four new exclusive bank marketing agreements, which are expected to result in
increased annualized bankcard volume of approximately $200 million.
7
<PAGE>
COST OF SERVICE
Cost of service increased 89.4% to $55.2 million for the quarter ended September
30, 1996 compared with $29.2 million for the same period in 1995. For the nine
month period ended September 30, 1996, cost of service increased 94.0% to $154.4
million from $79.6 million for the same nine 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 processed
by the Company. Cost of service as a percent of revenues increased from 77.7% to
78.4% for the quarter resulting primarily from an increase in the reserve for
credit and fraud loss. The Company increased its reserve for credit and fraud
losses due to recent losses related to certain acquired furniture industry
merchants and incurred during the transition period of the First Union
Corporation portfolio. Cost of service decreased from 78.4% to 77.9% for the
nine months ended September 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 79.1% to $1.7 million for the quarter ended September
30, 1996, compared with $970,000 for the same period in 1995. For the nine
month period ended September 30, 1996, conversion cost increased 64.6% to $5.3
million as compared with $3.2 million for the same nine month period in 1995.
The increase resulted primarily from the ongoing conversion of the First Union
Corporation portfolio, acquired in December 1995. The conversion of the First
Union Corporation portfolio is anticipated to be substantially completed by the
end of the first quarter of 1997.
SELLING, GENERAL, AND ADMINISTRATIVE
Selling, general and administrative expenses increased 60.8% to $8.2 million for
the quarter ended September 30, 1996 compared with $5.1 million for the same
period in 1995. For the first nine months of 1996, selling, general and
administrative expenses increased 71.6% to $24.9 million from $14.5 million for
the same period in 1995. Higher expenses in 1996 resulted primarily 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
11.6% and 12.6% of revenues, respectively, for the quarter and nine months ended
September 30, 1996, as compared with 13.5% and 14.3% for the same periods in
1995, reflecting operational efficiencies.
DEPRECIATION AND AMORTIZATION
Depreciation and amortization increased 31.8% to $1.8 million for the quarter
ended September 30, 1996 compared with $1.3 million for the same period in 1995.
For the first nine months of 1996, depreciation and amortization increased 28.9%
to $5.2 million from $4.0 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 third 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 September 30,
1996 increased $2.6 million to $3.6 million compared with $1.0 million for the
same period in 1995. For the nine months ended September 30, 1996, operating
income increased $8.1 million to $8.3 million compared to $153,000 for the same
period in 1995.
INTEREST EXPENSE (INCOME) - NET
Net interest expense decreased $1.0 million for the quarter ended September 30,
1996 resulting in a net interest income of $349,000 compared to a net interest
expense of $609,000 for the same period in 1995. For the nine month period ended
September 30, 1996, interest expense decreased 89.5% to $188,000 compared with
$1.8 million for the same period in 1995. This decrease was due to reduced
levels of bank debt and purchase note obligations associated with the net
proceeds received form the company's initial public offering. The increase in
interest income resulted from the investment of the net proceeds received from
the Company's initial public offering.
8
<PAGE>
INCOME TAXES
As a result of the Company's profitability for the third quarter and the first
nine months of fiscal year 1996, income tax expense was recorded at an effective
tax rate of approximately 39.0%.
NET INCOME
Net income increased $2.0 million to $2.4 million for the quarter ended
September 30, 1996 compared with $400,000 for the same period in 1995 due to
the factors discussed above. For the nine months ended September 30, 1996, net
income increased $6.5 million to $4.9 million, as compared to a net loss of $1.6
million for the same period in 1995.
LIQUIDITY AND CAPITAL RESOURCES
Net cash provided by operating activities was $10.5 million for the first nine
months of 1996 as compared to $2.8 million for the same period in 1995.
Net cash used in investing activities was $5.5 million for the nine month period
ended September 30, 1996 as compared to $3.2 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 Company's operations center.
Net cash provided by financing activities was $29.3 million for the nine months
ended September 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.
9
<PAGE>
PART II. OTHER INFORMATION
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.
10
<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
and Secretary
Date: November 12, 1996
By: /s/ Edward Grzedzinski
-----------------------------------------
Edward Grzedzinski
Date: November 12, 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)
11
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description
<S> <C>
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
</TABLE>
12
<PAGE>
EXHIBIT 11.1
NOVA CORPORATION
COMPUTATION OF PRO FORMA EARNINGS PER SHARE
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------- -------------------------
1995 1996 1995 1996
------------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Weighted average Common Stock outstanding during
the period 2,335,775 28,688,583 2,343,394 26,389,308
Cheap Stock (1) 52,069 0 52,069 0
Conversion of Preferred Stock into Common Stock 11,876,218 0 11,876,218 0
Dilutive effect of common stock equivalents --- 1,388,179 --- 1,756,594
----------- ----------- ----------- -----------
Total 14,264,062 30,076,762 14,271,681 28,145,902
=========== =========== =========== ===========
Net income (loss) $ 400,000 $ 2,369,000 $(1,639,000) $ 4,923,000
Less: Preferred Stock dividends 147,145 0 430,758 0
----------- ----------- ----------- -----------
Net income (loss) available for Common Stock and
common stock equivalents $ 252,855 $ 2,369,000 $(2,069,758) $ 4,923,000
========= =========== =========== ===========
Per share amount $0.02 $0.08 $(0.15) $0.17
========= =========== =========== ===========
</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.
13
<PAGE>
EXHIBIT 11.2
NOVA CORPORATION
COMPUTATION OF HISTORICAL EARNINGS PER SHARE
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------ -------------------------
1995 1996 1995 1996
----------- ----------- ------------ -----------
<S> <C> <C> <C> <C>
PRIMARY
Weighted average Common Stock outstanding during
the period 1,671,296 28,688,583 1,671,296 26,389,308
Cheap Stock (1) 52,069 0 52,069 0
Dilutive effect of common stock equivalents --- 1,388,179 --- 1,756,594
---------- ----------- ----------- -----------
Total 1,723,365 30,076,762 1,723,365 28,145,902
========== =========== =========== ===========
Net income (loss) $ 400,000 $ 2,369,000 ($1,639,000) $ 4,923,000
Less: Preferred Stock dividends 956,126 0 2,804,688 0
---------- ----------- ----------- -----------
Net income (loss) available for Common Stock
and common stock equivalents ($556,126) $ 2,369,000 ($4,443,688) $ 4,923,000
========== =========== =========== ===========
Per share amount ($0.32) $0.08 ($2.58) $0.17
========== =========== =========== ===========
FULLY DILUTED
Weighted average Common Stock outstanding during
the period 1,671,296 28,688,583 1,671,296 26,389,308
Cheap Stock (1) 52,069 0 52,069 0
Dilutive effect of common stock equivalents --- 1,388,179 --- 1,756,594
---------- ----------- ----------- -----------
Total 1,723,365 30,076,762 1,723,365 28,145,902
========== =========== =========== ===========
Net income (loss) $ 400,000 $ 2,369,000 ($1,639,000) $ 4,923,000
Less: Preferred Stock dividends 956,126 0 2,804,688 0
---------- ----------- ----------- -----------
Net income (loss) available for Common Stock
and common stock equivalents ($556,126) $ 2,369,000 ($4,443,688) $ 4,923,000
========== =========== =========== ===========
Per share amount ($0.32) $0.08 ($2.58) $0.17
========== =========== =========== ===========
</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.
14
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE
TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 9-MOS
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1996
<PERIOD-START> JUL-01-1996 JAN-01-1996
<PERIOD-END> SEP-30-1996 SEP-30-1996
<CASH> 34,962,000 34,962,000
<SECURITIES> 0 0
<RECEIVABLES> 11,096,000 11,096,000
<ALLOWANCES> 1,004,000 1,004,000
<INVENTORY> 970,000 970,000
<CURRENT-ASSETS> 48,789,000 48,789,000
<PP&E> 13,494,000 13,494,000
<DEPRECIATION> 5,387,000 5,387,000
<TOTAL-ASSETS> 93,393,000 93,393,000
<CURRENT-LIABILITIES> 10,933,000 10,933,000
<BONDS> 0 0
0 0
0 0
<COMMON> 287,000 287,000
<OTHER-SE> 81,019,000 81,019,000
<TOTAL-LIABILITY-AND-EQUITY> 93,393,000 93,393,000
<SALES> 70,459,000 198,229,000
<TOTAL-REVENUES> 70,459,000 198,229,000
<CGS> 55,223,000 154,484,000
<TOTAL-COSTS> 55,223,000 154,484,000
<OTHER-EXPENSES> 11,661,000 35,429,000
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> (349,000) 188,000
<INCOME-PRETAX> 3,924,000 8,128,000
<INCOME-TAX> 1,555,000 3,205,000
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 2,369,000 4,923,000
<EPS-PRIMARY> .08 .017
<EPS-DILUTED> .08 .017
</TABLE>
