<PAGE> 1
U.S. 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, 1999
( ) 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 1-13333
---------
DBT ONLINE, INC.
-----------------------------------------------------
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 85-0439411
--------------------------------- -------------------
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
5550 W. FLAMINGO ROAD, SUITE B-5
----------------------------------------
(Address of Principal Executive Offices)
LAS VEGAS, NEVADA 89103
-----------------------
(702) 257-1112
---------------------------
(Issuer's telephone number)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act during the preceding 12
months (or for such shorter periods 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
---- ------
The number of common shares outstanding as of March 31, 1999 was 18,512,451.
<PAGE> 2
DBT ONLINE, INC.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C> <C>
PART I FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS (Unaudited)
Consolidated Balance Sheets as of March 31, 1999
and December 31, 1998..................................................................3
Consolidated Statements of Operations for the Three Months Ended March 31, 1999
and 1998...............................................................................4
Consolidated Statements of Cash Flows for the Three Months Ended March 31, 1999
and 1998...............................................................................5
Notes to Consolidated Financial Statements......................................................6
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS...................................................7
PART II OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS..............................................................................12
Item 2. CHANGES IN SECURITIES..........................................................................12
Item 3. DEFAULTS UPON SENIOR SECURITIES................................................................12
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS............................................12
Item 5. OTHER INFORMATION..............................................................................12
Item 6. EXHIBITS AND REPORTS ON FORM 8-K...............................................................12
Signature........................................................................................................13
EXHIBIT
Exhibit 27.1 Financial Data Schedule..............................................................E-1
</TABLE>
Page 2
<PAGE> 3
Part I - FINANCIAL INFORMATION
ITEM 1. Financial Statements
DBT ONLINE, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
At March 31, At December 31,
1999 1998
----------- ------------
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $22,632,000 $21,314,400
Accounts receivable, less allowance: March 31, 1999 - $404,900
December 31, 1998 - $384,200 10,518,500 8,401,000
Short-terrn investments 26,371,100 25,840,200
Prepaid expenses and other current assets 2,353,400 2,139,900
----------- -----------
Total current assets 61,875,000 57,695,500
Property and equipment, net 19,130,200 18,247,100
Patents, less amortization: March 31, 1999 - $4,436,100
December 31, 1998 - $4,012,400 9,406,600 9,830,400
Goodwill, less amortization: March 31, 1999 - $1,376,700
December 31, 1998 - $1,170,200 4,435,800 4,637,000
Other assets 294,600 103,100
----------- -----------
TOTAL ASSETS $95,142,200 $90,513,100
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued liabilities $ 3,947,900 $ 2,501,200
Due to other patent interest holders 1,723,400 1,394,500
Income Taxes Payable 703,600 405,900
----------- -----------
Total current liabilities 6,374,900 4,301,600
DEFERRED INCOME TAXES 3,323,700 3,447,600
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS'EQUITY:
Preferred stock, $.10 par value. 5,000,000 shares
authorized; no shares issued or outstanding.
Common stock, $. 10 par value. 100,000,000 shares authorized.
18,512,451 shares and 18,473,416 shares issued and outstanding
at March 31,1999 and December 31, 1998, respectively. 1,851,200 1,847,300
Additional paid-in capital 69,776,200 68,971,200
Retained earnings 13,816,200 11,945,400
----------- -----------
Total stockholders' equity 85,443,600 82,763,900
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS'EQUITY $95,142,200 $90,513,100
=========== ===========
</TABLE>
See notes to consolidated financial statements.
Page 3
<PAGE> 4
DBT ONLINE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three Months Ended March 31,
-------------------------------------
1999 1998
---------- -----------
(Unaudited) (Unaudited)
<S> <C> <C>
Revenues $ 14,789,000 $ 10,710,500
Patent royalties 1,652,500 1,714,400
------------------ ------------------
Total revenues and royalties 16,441,500 12,424,900
------------------ ------------------
Cost of revenues 6,806,900 5,575,000
Sales and marketing 2,074,800 1,225,900
Research and development 1,178,800 663,000
General and administrative 3,976,800 3,187,200
------------------ ------------------
Total expenses 14,037,300 10,651,100
------------------ ------------------
Income from operations 2,404,200 1,773,800
Interest income, net 430,300 602,100
Income before income taxes 2,834,500 2,375,900
Provision for income taxes 963,700 807,800
------------------ ------------------
Net income $ 1,870,800 $ 1,568,100
================== ==================
Net income per common share (basic) $0.10 $0.08
================== ==================
Weighted average shares outstanding (basic) 18,482,000 18,465,400
Net income per common share (diluted) $0.10 $0.08
================== ==================
Weighted average shares outstanding (diluted) 19,213,500 19,118,400
================== ==================
</TABLE>
See notes to consolidated financial statements.
Page 4
<PAGE> 5
DBT ONLINE, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Three Months Ended March 31,
-----------------------------------
1999 1998
------------ ------------
(Unaudited) (Unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 1,870,800 $ 1,568,100
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 1,905,900 1,627,200
Deferred taxes (123,900) (138,300)
Changes in operating assets and liabilities:
Accounts receivable, net (2,117,500) (1,489,600)
Prepaid expenses and other current assets (213,500) (27,300)
Accounts payable and accrued liabilities 1,588,800 1,348,000
Due to other patent interest holders 328,900 210,800
Income taxes payable 297,700 719,800
------------ ------------
Net cash provided by operating
activities 3,537,200 3,818,700
CASH FLOWS FROM INVESTING ACTIVITIES:
Property and equipment purchased (2,164,000) (2,998,500)
Increase in other assets (191,500) (53,200)
(Purchases of) proceeds from investments (530,900) 2,690,800
------------ ------------
Net cash used in investing activities (2,886,400) (360,900)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from exercise of stock options 666,800 172,200
------------ ------------
Net cash provided by financing activities 666,800 172,200
------------ ------------
NET INCREASE IN CASH AND CASH EQUIVALENTS 1,317,600 3,630,000
CASH AND CASH EQUIVALENTS AT
BEGINNING OF PERIOD 21,314,400 7,689,800
------------ ------------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 22,632,000 $ 11,319,800
============ ============
</TABLE>
See notes to consolidated financial statements.
Page 5
<PAGE> 6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
The following should be read in conjunction with the Consolidated
Financial Statements and the Notes thereto, which are included in the Company's
Annual Report on Form 10-K for the year ended December 31, 1998.
NOTE 1. BASIS OF PRESENTATION
The accompanying consolidated financial statements include the accounts
of DBT Online, Inc. (the "Company") and its wholly-owned subsidiaries, Database
Technologies, Inc., a Florida corporation ("DBT"), The Information Connectivity
Group, Inc., a Nevada corporation ("ICON") and Patlex Corporation, a
Pennsylvania corporation ("Patlex"). The interim consolidated financial
statements as of March 31, 1999 and for the three months periods ended March 31,
1999 and 1998 are unaudited. All significant intercompany accounts and
transactions have been eliminated. The accompanying consolidated financial
statements reflect all adjustments which are, in the opinion of management,
necessary for a fair presentation of the financial position, results of
operations and cash flows for the interim periods presented. Such adjustments
consist solely of normal recurring accruals. Results for the interim periods are
not necessarily indicative of results for a full year.
NOTE 2. SUBSEQUENT EVENT
On May 6, 1999, the Company acquired I.R.S.C., Inc. in a stock for
stock exchange. For accounting purposes, the transaction will be treated as a
pooling of interests.
Page 6
<PAGE> 7
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following should be read in conjunction with the Consolidated
Financial Statements and the Notes thereto contained in the Company's 1998 Form
10K. This information contains certain statements regarding future trends, the
accuracy of which is subject to many risks and uncertainties. Such trends, and
their anticipated impact upon the Company, could differ materially from those
presented in this Form 10-Q.
OVERVIEW OF THE COMPANY
The Company is a holding company with businesses that serve the
electronic information and patent enforcement industries. Its electronic
information businesses are on-line providers of integrated database services and
related reports primarily to law enforcement and other government agencies, law
firms, insurance companies and licensed investigation companies. Its patent
enforcement business is engaged in the exploitation and enforcement of two laser
patents and generates its revenues through patent royalties.
ELECTRONIC INFORMATION GROUP
The Electronic Information Group's ("EIG") revenues increased 38% to
$14,789,000 for the three months ended March 31, 1999 from $10,710,500 for the
same period in 1998. The increase in EIG's revenues was attributable to an
increase in the number of active customers and new products released by EIG.
DBT's active customers (defined as customers accessing the system in a given
month) increased 30% to 15,500 at March 31, 1999 from 11,900 at March 31, 1998.
EIG's cost of revenues increased 24% to $6,380,200 for the three months
ended March 31, 1999 from $5,147,900 for the same period in 1998. As a
percentage of EIG revenues, cost of revenues decreased to 43.1% for the three
months ended March 31, 1999 from 48.1% for the same period in 1998. The dollar
increase in the EIG's cost of revenues was due primarily to increases in both
purchased data costs and depreciation expense as EIG continued to invest both in
its computer facilities and in the expansion of its databases. The Company
expects this trend to continue. As a percentage of revenue, the decrease was due
to the accelerated pace of the revenue growth.
EIG's sales and marketing expenses increased 69% to $2,074,800 for the
three months ended March 31, 1999 from $1,225,900 for the same period in 1998.
The increase was primarily due to increases in advertising expenses and the
expansion of the sales and marketing payroll. As a percentage of EIG's revenues,
sales and marketing expense increased to 14.0% for the three months ended March
31, 1999 from 11.4%, for the same period in 1998 as the EIG focused on building
revenues.
EIG's research and development expenses increased 78% to $1,178,800 for
the three months ended March 31, 1999 from $663,000 for the same period in 1998.
This increase was caused by an increase in payroll and related expenses. As a
percentage of total revenues, research and development expenses increased to
8.0% for the three months ended March 31, 1999, from 6.2% for the same period in
1998. The increase was due to the Company's focus on building and delivering new
products to its subscribers.
EIG's general and administrative expenses increased 29% to $3,703,500
for the three months ended March 31, 1999 from $2,879,800 for the same period in
1998. This increase was due to increases in occupancy expenses, payroll and
other expenses, related to the company's building of its infrastructure in 1998.
As a percentage of EIG revenues, general and administrative expenses decreased
to 25.0% for the three months ended March 31, 1999 from 26.9% for the same
period in 1998.
PATENT ENFORCEMENT GROUP
Revenues of the Patent Enforcement Group ("PEG") decreased 4% to
$1,652,500 for the three months ended March 31, 1999 from $1,714,400 for the
same period in 1998. PEG's cost of revenues decreased to $426,600 for the three
months ended March 31, 1999 from $427,100 for the same period in 1998 and
consists solely of the amortization of its patents. PEG's general and
administrative expenses decreased to $273,300 for the three months ended March
31, 1999 from $307,400 for the same period in 1998.
Page 7
<PAGE> 8
OPERATING PROFIT
The EIG contributed $1,451,500 in operating profit for the three months
ended March 31, 1999 compared to an operating profit of $793,900 for the same
period in 1998, an increase of 83%. PEG contributed $952,600 in operating profit
for the three months ended March 31, 1999 compared to $979,900 for the same
period in 1998.
On a consolidated basis, the Company's operating profit was $2,404,200
for the three months ended March 31, 1999 compared to $1,773,800 for the same
period in 1998.
INTEREST INCOME
Net interest income was $430,300 for the three months ended March 31,
1999 compared to $602,100 for the same period in 1998. The decrease is due to
lower invested balances as the Company's capital expenditures increased
significantly in 1998.
INCOME TAXES
The Company's effective income tax rate was 34% for the three months
ended March 31, 1999 compared to 34% for the same period in 1998. The effective
rates were favorably impacted by non-taxable interest income and reduced state
income taxes.
NET INCOME
The Company's net income increased 19% to $1,870,800 for the three
months ended March 31, 1999 compared to $1,568,100 for the same period in 1998.
The increase is primarily due to the increase in operating profit of EIG.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash flow from operations was $3,537,200 and $3,818,700
for the three months ended March 31, 1999 and 1998, respectively. The Company's
capital expenditures of $2,164,000 and $2,998,500 for the three months ended
1999 and 1998, respectively, were primarily attributable to the acquisition of
computer equipment for DBT and in 1998, leasehold improvements of its new
facility in Boca Raton, Florida. The Company had working capital at March 31,
1999 of $55,500,100 (including cash and cash equivalents of $22,632,000 compared
to $53,393,900 (including cash and cash equivalents of $21,314,400) at December
31, 1998. The Company expects to fund future working capital requirements from
its existing cash and short-term investment balances together with cash
generated from operations.
INFLATION
The rate of inflation has not had a material impact on the operations
of the Company. Moreover, if inflation remains at its recent levels, it is not
expected to have a material impact on the operations of the Company for the
foreseeable future.
RISKS ASSOCIATED WITH THE YEAR 2000
The Year 2000 Issue is the issue of whether information and
non-information technology systems will be able to recognize and process
date-sensitive information in the year 2000. The Company relies, directly and
indirectly, on information technology systems, such as microprocessors,
proprietary operating systems, desktop computers, network hardware equipment and
applications software, to operate its products, manage its business data and
perform a variety of administrative services including, accounting, financial
reporting, payroll and invoicing. The Company also relies on non-information
technology systems including office equipment, security systems, and telephone
systems to carry out its day-to-day operations. In addition, third parties
material to the Company's operations, such as suppliers, vendors and customers,
rely on information and non-information technology systems to manage their
businesses. All of these technology systems could potentially be affected by the
Year 2000 Issue.
Page 8
<PAGE> 9
In order to obtain Year 2000 compliance certification from the
Information Technology Association of America, an independent industry
consortium, and minimize the risk of Year 2000 related losses, the Company began
conducting a comprehensive assessment of its Year 2000 Issues in August 1998.
The assessment has focused on five areas that, if affected by the Year 2000
Issue, could have a material adverse effect on the Company's operations. These
areas are: data storage; product software used by the Company's customers;
product software used internally by the Company; hardware; and non-information
technology systems. The following is a Year 2000 status report for each of these
areas, based upon the phase of the assessment completed to date.
DATA STORAGE
Of the Company's 15 data fields initially identified as non-Year 2000 compliant,
eight fields have been made Year 2000 compliant and the remaining seven fields
will be brought into Year 2000 compliance prior to the original target date of
June 1999.
o The Company has 115 historical data storage files containing date codes. At
least two of these files are not Year 2000 compliant. The Company estimates
that all of these files, along with the Company's other historical data
storage files, will be made Year 2000 compliant by June 1999.
o The Company has determined that some of its data files have been
incorrectly modified for Year 2000 compliance, which could potentially
cause date related errors. The Company is currently in the process of
producing DataLinks, a database that will allow it to identify those files,
which were incorrectly modified. The Company expects to make all of the
improperly modified files Year 2000 compliant by June 1999. Once
operational, DataLinks will serve as the central Year 2000 information
gathering system for the Company, and will be used to identify Year 2000
problems and to monitor adherence to the Company's Year 2000 policies and
procedures.
o The Company is evaluating the necessity of re-configuring all of the date
fields contained within its data storage files to make them Year 2000
compliant. If undertaken, this project would be completed by June 1999.
o The Company is currently in the process of determining the time frame and
format in which vendors will begin supplying Year 2000 compliant data to
the Company. The Company estimates that data obtained from its vendors will
be Year 2000 compliant by September 1999.
SOFTWARE USED BY CUSTOMERS
The Company's product software is divided into two parts: software
written by the Company and commercial software written by third parties. The
following is an update on the Year 2000 status of each of these areas:
o SOFTWARE WRITTEN BY THE COMPANY - Preliminary assessment has revealed that
the date related codes contained in the software written by the Company are
generally Year 2000 compliant. Two software programs, important to the
Company's business and operations AutoTrack Plus(SM) and AutoTrackXP(SM)
will be fully tested for Year 2000 compliance by June 1999. Any Year 2000
remediation efforts necessary in connection with these programs will be
completed by September 1999.
o SOFTWARE WRITTEN BY THIRD PARTIES:
o Version 8.0 of pcAnywhere the software used to access AutoTrack PLUS,
has been certified as Year 2000 compliant by Symantec Corporation its
manufacturer. Through testing, the Company has determined that earlier
versions of pcAnywhere (4.5 and 5.0 for DOS(R), 2.0 for Windows(R) and
7.5 for Windows) are also Year 2000 compliant, except for one
two-digit year display which does not affect the operation of these
versions. However, the Company expects that in the coming months, many
of its customers will as part of their Year 2000 remediation efforts,
be switching from the earlier versions of pcAnywhere to more updated
Year 2000 certified software programs, including AutoTrackXP.
Page 9
<PAGE> 10
o Versions 4.0 and earlier of Microsoft Internet Explorer(R), also
used by the Company's customers, will not be tested for Year 2000
compliance by Microsoft, the manufacturer. The Company expects
that customers using these earlier versions will bring their
systems into Year 2000 compliance through Microsoft's web site,
which provides on-line upgrades of Microsoft Internet Explorer at
no cost.
o Versions 3.x and 4.x of Netscape Navigator(R) are both Year 2000
compliant when used with the Windows 95 or later Operating System,
according to Netscape. The Company expects that customers using
earlier versions of Netscape will bring their systems into Year
2000 compliance through Netscape's web site, which provides
on-line upgrades at no cost.
o Third Party dialer applications used on the AutoTrack XP install
disks have been certified as Year 2000 compliant by the vendor.
PRODUCT SOFTWARE USED BY THE COMPANY
A real time inventory system has been installed by the Company. The
Company will postpone upgrading commercial software used internally until late
1999 in order to ensure that it obtains the most advanced versions possible.
HARDWARE
o DESKTOP MACHINES - Most of the Company's 350 desktop machines are
being replaced with certified Year 2000 Hewlett Packard desktops
as part of a a Company wide computer upgrade program. Clocking for
the Company's computer network will be centralized through a new,
Year 2000 compliant system. The system will control timekeeping
for all desktop machines and servers and ensure that all date and
time related codes and functions used in hardware throughout the
Company's network remain Year 2000 compliant.
o SUPPORT MACHINES - Support machines used by the Company, are being
manually tested for Year 2000 compliance. The Company completed
its Year 2000 assessment of these machines in March 1999 and
expects to make necessary changes and perform testing by June
1999.
o SERVERS - Many of the Company's approximately 400 computer servers
have failed real time clock testing. However, results of the
Company's investigation indicate that this failure will not
materially affect the operation of the servers. Further Year 2000
related testing of the servers will be conducted as a safeguard.
o NETWORK HARDWARE - The Company's network hardware includes
routers, hubs, switches, CD-ROM towers, print servers and
communication servers. Approximately 80% of this network hardware
have been certified as Year 2000 compliant by Hewlett Packard, its
vendor. The remaining 20% have been certified as Year 2000
compliant by Cisco Systems.
o COMMUNICATIONS HARDWARE - The Company's communications hardware
includes modems and DSU/CSUs. Modems do not perform date
processing and therefore, do not have Year 2000 related problems.
The DSU/CSUs are digital modems that perform data processing for
administrative purposes only. The Year 2000 status of these
digital modems will be evaluated after other Year 2000 priority
areas have been addressed.
Page 10
<PAGE> 11
NON-INFORMATION TECHNOLOGY SYSTEMS
o PHONE SYSTEM - The Company's phone system has been certified as Year 2000
compliant by Siemens.
o SECURITY SYSTEM - Security software has been certified as Year 2000
compliant. The vendor is in the process of testing the security hardware
for Year 2000 compliance.
o OFFICE ENVIRONMENTAL SYSTEM - The Company's office environmental system is
currently manually controlled and Year 2000 compliant. However, new
automated controls for the environmental system are being installed.
The Company plans to test these controls for Year 2000 compliance.
o TELEPHONE AND UTILITY SYSTEMS - The Year 2000 status of the Company's
telephone and utility systems has not been assessed. The Company expects
that these systems will be made Year 2000 compliant by their providers.
SUMMARY
The Company expects to be fully Year 2000 compliant and obtain
certification of Year 2000 compliance from the Information Technology
Association of America by September 1999. Given the Company's plans to identify
and address its Year 2000 Issue, the Company does not believe that the Year 2000
Issue will have a material adverse effect on its business, results of operations
or financial condition. The Company estimates that the total cost of addressing
its Year 2000 Issue will be approximately $300,000. All costs associated with
the remediation of the Year 2000 Issue will be expensed as incurred. The Company
will develop a contingency plan for dealing with Year 2000 Issues by September
1999.
RISKS ASSOCIATED WITH THE YEAR 2000 ISSUE
The Company's failure to correct a material Year 2000-related problem
in its information or non-information technology systems could result in an
interruption in, or a failure of, certain normal business activities or
operations of the Company. Specially, the Company's inability to bring
historical data files, date fields or information purchased from vendors into
Year 2000 compliance could have a material adverse effect on the business,
financial condition and results of operations of the Company. In addition, the
Company is currently unable to predict the effect that the Year 2000 Issue will
have on its suppliers, or the extent to which the Company would be vulnerable to
its suppliers' failure to remediate their Year 2000 Issues on a timely basis.
The failure of a major supplier to convert its systems on a timely basis or a
conversion that is incompatible with the Company's systems could have a material
effect on the Company.
Page 11
<PAGE> 12
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
None to report.
ITEM 2. CHANGES IN SECURITIES
None to report.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None to report.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS
None to report.
ITEM 5. OTHER INFORMATION
None to report.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
27.1* Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K
None
- ------------
* Filed herewith.
Page 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.
DBT ONLINE, INC.
/s/ TIMOTHY M. LEONARD
------------------------------------
TIMOTHY M. LEONARD
Vice President, Finance, Treasurer
and Chief Financial Officer
(Duly authorized officer and chief
financial officer)
Date: May 13, 1999
Page 13
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 22,632,000
<SECURITIES> 26,371,000
<RECEIVABLES> 10,923,400
<ALLOWANCES> (404,900)
<INVENTORY> 0
<CURRENT-ASSETS> 61,875,000
<PP&E> 32,428,800
<DEPRECIATION> (13,298,600)
<TOTAL-ASSETS> 95,142,200
<CURRENT-LIABILITIES> 6,374,900
<BONDS> 0
0
0
<COMMON> 1,851,200
<OTHER-SE> 69,776,200
<TOTAL-LIABILITY-AND-EQUITY> 95,142,200
<SALES> 14,789,000
<TOTAL-REVENUES> 16,441,500
<CGS> 6,806,900
<TOTAL-COSTS> 6,806,900
<OTHER-EXPENSES> 7,230,400
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 430,300
<INCOME-PRETAX> 2,834,500
<INCOME-TAX> 963,700
<INCOME-CONTINUING> 1,870,800
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,870,800
<EPS-PRIMARY> .10
<EPS-DILUTED> .10
</TABLE>
