<PAGE>
UNITED STATES
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 0-21447
ADVANCE PARADIGM, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 75-2493381
(State of Incorporation) (IRS Employer Identification Number)
545 E. John Carpenter Freeway, Suite 1900, Irving, Texas 75062
(Address of principal executive offices) (ZIP Code)
(972) 830-6199
(Registrant's Telephone Number, including area code)
formerly (214) 830-6199
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(1) NO
----- -----
Common stock, $.01 par value: 7,800,817
outstanding as of November 13, 1996
__________________
(1) The Company's registration statements on Form S-1 and 8-A became
effective on October 8, 1996. During the period the Company has been subject
to the Section 13 and 15(d) filing requirements, it has not been required to
file any reports.
<PAGE>
ADVANCE PARADIGM, INC.
INDEX TO QUARTERLY REPORT FORM 10-Q
PART I. FINANCIAL INFORMATION PAGE
Item 1. Financial Statements
A. Condensed Consolidated Balance Sheets as of
September 30,1996 and March 31, 1996 2
B. Condensed Consolidated Statements of
Operations for the Three Months and
Six Months Ended September 30, 1996 and 1995 3
C. Condensed Consolidated Statements of Cash
Flows for the Six Months Ended September 30,
1996 and 1995 4
D. Notes to Condensed Consolidated Financial
Statements 5
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
PART II. OTHER INFORMATION 11
SIGNATURES 12
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
ADVANCE PARADIGM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
March 31, 1996 Sept. 30,1996
-------------- -------------
(unaudited)
CURRENT ASSETS:
Cash and cash equivalents $16,457,000 $26,070,000
Accounts receivable, net of allowance for
doubtful accounts of $130,000 and
$130,000, respectively 23,078,000 33,976,000
Inventories 1,598,000 1,524,000
Prepaid expenses and other 449,000 739,000
----------- -----------
Total current assets 41,582,000 62,309,000
PROPERTY AND EQUIPMENT, net of accumulated
depreciation and amortization of $1,935,000
and $2,564,000, respectively 4,080,000 5,183,000
INTANGIBLE ASSETS, net of accumulated
amortization of $808,000 and $981,000,
respectively 13,045,000 12,872,000
OTHER ASSETS, net of accumulated amortization
of $49,000 and $0, respectively 198,000 190,000
----------- -----------
Total assets $58,905,000 $80,554,000
----------- -----------
----------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
CURRENT LIABILITIES:
Accounts payable $39,000,000 $49,037,000
Accrued salaries and benefits 1,283,000 1,220,000
Other accrued expenses 934,000 1,418,000
Current portion of other noncurrent
liabilities 49,000 21,000
----------- -----------
Total current liabilities 41,266,000 51,696,000
NONCURRENT LIABILITIES:
Long-term debt to related parties 7,000,000 7,000,000
Other noncurrent liabilities, less
current portion 241,000 332,000
----------- -----------
Total liabilities 48,507,000 59,028,000
----------- -----------
COMMITMENTS AND CONTINGENCIES
REDEEMABLE PREFERRED STOCK:
Series A cumulative convertible preferred
stock, $.01 par value; 10,000 shares
authorized, issued, and outstanding
with aggregate liquidation preference
of $11,959,000 and $12,359,000, respectively 11,896,000 12,304,000
----------- -----------
STOCKHOLDERS' EQUITY (DEFICIT):
Series B preferred stock, $.01 par value;
5,000 shares authorized, 0 and 4,444 shares
issued and outstanding, respectively ---- ----
Common stock, $.01 par value; 7,500,000
shares authorized, 3,130,500 and 3,133,500
shares issued and outstanding, respectively ---- ----
Additional paid-in capital 1,518,000 11,526,000
Accumulated deficit (3,016,000) (2,304,000)
----------- -----------
Total stockholders' equity (deficit) (1,498,000) 9,222,000
----------- -----------
Total liabilities and stockholders'
equity (deficit) $58,905,000 $80,554,000
----------- -----------
----------- -----------
See accompanying notes to financial statements.
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<PAGE>
ADVANCE PARADIGM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
Three Months Ended September 30, Six Months Ended September 30,
-------------------------------- ------------------------------
1995 1996 1995 1996
-------------- ------------ ------------- ------------
<S> <C> <C> <C> <C>
Revenues $28,958,000 $ 58,019,000 $ 54,650,000 $107,829,000
-------------- ------------ ------------- ------------
Cost of operations:
Cost of revenues 27,074,000 55,540,000 51,519,000 102,994,000
Selling, general, and
administrative expenses 1,481,000 1,781,000 2,923,000 3,495,000
-------------- ------------ ------------- ------------
Total cost of operations 28,555,000 57,321,000 54,442,000 106,489,000
-------------- ------------ ------------- ------------
Operating income 403,000 698,000 208,000 1,340,000
Intererst income 46,000 300,000 85,000 505,000
Interest expense (180,000) (180,000) (358,000) (358,000)
-------------- ------------ ------------- ------------
Income (loss) before income taxes 269,000 818,000 (65,000) 1,487,000
Provision for income taxes --- 311,000 --- 311,000
-------------- ------------ ------------- ------------
Net income (loss) $ 269,000 $ 507,000 $ (65,000) $ 1,176,000
-------------- ------------ ------------- ------------
-------------- ------------ ------------- ------------
Pro forma net income per share $ 0.08 $ 0.19
------------ ------------
------------ ------------
Pro forma weighted average
shares outstanding 8,147,618 7,592,062
------------ ------------
------------ ------------
</TABLE>
See accompanying notes to financial statements.
- 3 -
<PAGE>
ADVANCE PARADIGM, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
Six Months Ended September 30,
------------------------------
1995 1996
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss) $ (65,000) $ 1,176,000
Adjustments to reconcile net income (loss) to
net cash provided by operating activities -
Depreciation and amortization 622,000 803,000
Provision for doubtful accounts 19,000 -----
Change in certain assets and liabilities, net
of effects from acquisition of subsidiary -
(Increase) decrease in accounts receivable (2,994,000) (10,898,000)
(Increase) decrease in inventories (68,000) 74,000
(Increase) decrease in prepaid expenses
and other assets 15,000 (283,000)
Increase in accounts payable, accrued expenses
and other noncurrent liabilities 10,527,000 10,494,000
----------- -----------
Net cash provided by operating activities 8,056,000 1,366,000
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (441,000) (1,732,000)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from sale of preferred stock ----- 10,000,000
Net proceeds from issuance of Common Stock 18,000 7,000
Net payments on long-term obligations (22,000) (28,000)
----------- -----------
Net cash provided by (used in) financing
activities (4,000) 9,979,000
----------- -----------
NET INCREASE IN CASH 7,611,000 9,613,000
CASH AND CASH EQUIVALENTS, beginning of period 2,625,000 16,457,000
----------- -----------
CASH AND CASH EQUIVALENTS, end of period $10,236,000 $26,070,000
----------- -----------
----------- -----------
SUPPLEMENTARY INFORMATION:
The Company made no income tax payments in 1995 or 1996.
</TABLE>
See accompanying notes to financial statements.
- 4 -
<PAGE>
ADVANCE PARADIGM, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying unaudited condensed consolidated financial statements have
been prepared by the Company in accordance with generally accepted accounting
principles for interim financial information and substantially in the form
prescribed by the Securities and Exchange Commission (the "Commission") in
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 the
Company's management, the September 30, 1996 and 1995 unaudited interim
financial statements include all adjustments, consisting of normal recurring
adjustments, necessary for a fair presentation of results for this interim
period. In the opinion of the Company's management, the disclosures contained in
this Form 10-Q are adequate to make the information presented not misleading
when read in conjunction with the Notes to Consolidated Financial Statements
included in the Company's Form S-1 filed with the Commission on October 8, 1996.
The results of operations for the three month and six month periods ended
September 30, 1996 are not necessarily indicative of the results to be expected
for the full year or for any future period.
2. INITIAL PUBLIC OFFERING OF COMMON STOCK
On October 8, 1996 the Company completed an initial public offering (the
"Offering") of its $.01 par value common stock ("Common Stock"). On November 7,
1996 the Underwriters exercised the over-allotment option of the Offering. The
Company sold 2,397,067 shares of its Common Stock at a price of $9.00 per share,
prior to underwriting discount and other offering expenses. In connection with
the Offering, the Company's redeemable Series A preferred stock ("Series A
Preferred Stock") automatically converted into 2,500,000 shares of Common Stock.
The pro forma information below gives effect to such conversion, the issuance of
2,397,067 new shares in the Offering and the merger of Advance Health Care
("AHC") into Advance ParadigM, Inc. (see Note 5).
<TABLE>
September 30, 1996 (Unaudited)
----------------------------------------------------
As Stated Pro Forma
----------------------- -------------------------
Number of Number of
Shares Amount Shares Amount
--------- ----------- ---------- ----------
<S> <C> <C> <C> <C>
Redeemable Series A Preferred Stock 10,000 $12,304,000 --- $ ---
Stockholders' equity -
Series B Preferred Stock 4,444 $ --- 4,444 $ ---
Common Stock 3,133,500 --- 7,800,817 $ ---
Additional paid-in capital 11,526,000 43,393,000
Accumulated deficit (2,304,000) (2,304,000)
----------- -----------
Total stockholders' equity $ 9,222,000 $41,089,000
----------- -----------
----------- -----------
</TABLE>
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<PAGE>
3. PRO FORMA NET INCOME PER SHARE
Pro forma net income per share gives effect to (i) the conversion of the
Series A Preferred Stock to Common Stock, (ii) the issuance of 836,320 shares of
Common Stock in the Offering, the net proceeds of which were used to retire the
$7.0 million note payable to Whitney Subordinated Debt Fund, L.P. ("Whitney
Note"), (iii) a reduction of interest expense by the amount of interest on the
$7.0 million note payable and (iv) the impact to shares and options outstanding
of the merger of AHC into the Company (see Note 5). Pro forma net income per
share is computed using the weighted average number of common and common
equivalent shares outstanding during the period which include stock options and
warrants. As required by the Commission rules, all warrants, options, and shares
issued during the year immediately preceding the Offering are assumed to be
outstanding for purposes of calculating pro forma net income per share. The
primary and fully diluted per share amounts were the same since the effect of
potentially dilutive securities was anti-dilutive.
4. INCOME TAXES
In the three months ended September 30, 1996, the Company recorded a
provision for income taxes of $311,000. As of March 31, 1996 the Company had net
operating loss carryforwards for both financial reporting and federal income tax
purposes. The Company has recorded a tax provision based upon management's
estimate of income, after utilization of net operating losses, for the year
ended March 31, 1997.
5. SUBSEQUENT EVENTS
On October 7, 1996, the Company amended and restated its Certificate of
Incorporation to, among other things, increase the number of authorized shares
of its Common Stock to 25,000,000 and the number of shares of its Preferred
Stock to 5,000,000. On October 8, 1996, the Company effected a 250-for-one
stock split of the Company's Common Stock. Accordingly, all share and per share
amounts have been adjusted to reflect the stock split as though it had occurred
at the beginning of the initial period presented.
Immediately prior to the consummation of the Offering, AHC was merged with
and into the Company (the "Merger"). Such Merger was consummated as a means of
simplifying the corporate structure of the Company and was intended to qualify
as a tax free reorganization. Prior to the Merger, AHC held 3,125,000 shares of
the Company's Common Stock. In connection with the Merger, the AHC incentive
stock option plan was merged with the Company's Incentive Stock Option Plan, and
holders of options under the AHC incentive stock option plan received options to
purchase Common Stock under the Company's Incentive Stock Option Plan. In the
Merger, the Company canceled the shares held by AHC and issued shares of Common
Stock directly to the AHC stockholders (the "AHC Stockholders") based upon
their fully-diluted proportionate ownership interests in AHC after giving
consideration to the new shares of AHC to be issued in repayment of debt as
indicated below. After the Merger, there were 2,903,750 shares of Common Stock
outstanding and 229,750 additional options outstanding at exercise prices
ranging from $0.67 to $2.71 per share. Immediately prior to the Merger, AHC
distributed the stock of certain subsidiaries of AHC, operating in businesses
unrelated to the Company, to the AHC Stockholders. Prior to such spin-off,
certain indebtedness owed by AHC to several of its stockholders (including
certain indebtedness of AHC payable to an affiliate of a preferred stockholder
of the Company which was assumed by an AHC stockholder) was
exchanged for additional shares of AHC common stock. The spin-off and exchange
of indebtedness did not impact the number of shares of the Company's Common
Stock outstanding.
- 6 -
<PAGE>
The Common Stock outstanding as of November 13, 1996 resulted from the
following transactions:
Shares outstanding after the Merger 2,903,750
Shares sold in the offering 2,397,067
Shares issued from the conversion of Series A
Preferred Stock 2,500,000
---------
7,800,817
---------
---------
- 7 -
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following table sets forth certain consolidated financial data
of the Company, for the periods indicated, as a percentage of revenues.
Three Months Six Months
Ended Sept. 30, Ended Sept. 30,
--------------- ----------------
1995 1996 1995 1996
------ ------ ------ ------
Revenues 100.0% 100.0% 100.0% 100.0%
Cost of operations:
Cost of revenues 93.5 95.7 94.3 95.5
Selling, general and administrative
expenses 5.1 3.1 5.3 3.2
------ ------ ------ ------
Total cost of operations 98.6 98.8 99.6 98.7
------ ------ ------ ------
Operating income 1.4 1.2 .4 1.3
Interest income (expense) (.5) .2 (.5) .1
------ ------ ------ ------
Net income (loss) before taxes .9% 1.4% (.1)% 1.4%
------ ------ ------ ------
------ ------ ------ ------
THREE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO THREE MONTHS ENDED
SEPTEMBER 30, 1995
REVENUES. Revenues for the three months ended September 30, 1996
increased $29.1 million, or 100%, compared to revenues for the three months
ended September 30, 1995. Approximately 76% of the increase in revenues was
attributable to a four-fold increase in the number of pharmacy claims
processed during the period. Approximately 17% of the increase was
attributable to additional sales of the Company's mail pharmacy services,
resulting from a 38% increase in the number of mail prescriptions dispensed.
Approximately 7% of the increase in revenues resulted from an increase in
clinical services revenues derived from formulary and disease management
services.
COST OF REVENUES. Cost of revenues for the three months ended September
30, 1996 increased by $28.5 million, or 105%, compared to the same period in
1995. This increase was attributable primarily to the expanded volume in the
Company's mail pharmacy and the additional costs associated with the
Company's claims processing growth. As a percentage of revenues, cost of
revenues increased from 94% in the three months ended September 30, 1995 to
96% in the three months ended September 30, 1996. This increase resulted
primarily from the increase in the Company's claims processing revenues
generated by new customers utilizing the Company's pharmacy network. In
cases in which the Company has an independent obligation to pay its network
pharmacy providers, the Company includes payments from its plan sponsors for
these benefits as revenues and payments to its pharmacy providers as cost of
revenues, thereby increasing revenues and cost of revenues by the same amount.
- 8 -
<PAGE>
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expense for the three months ended September 30, 1996
increased by $300,000, or 20%, compared to the same period in 1995. This
increase was the result of the Company's expansion of its administrative and
support staff levels and salaries and benefits in response to volume growth
in all services. In spite of the increase, selling, general and
administrative expenses as a percentage of revenues decreased from 5% for the
three months ended September 30, 1995 to 3% in the same period in 1996 as the
result of greater economies of scale and due to the increase in revenues
associated with the Company's claims processing services. Additional revenues
generated by clients utilizing the Company's network pharmacy providers do
not result in an increase in selling, general and administrative expenses.
INTEREST INCOME AND INTEREST EXPENSE. Interest income, net of interest
expense, for the three months ended September 30, 1996 increased $254,000
compared to the same period in 1995. The increase resulted from cash
management programs which utilized the Company's short-term excess cash to
generate interest income through investment in money market funds. In
addition, the Company's cash balance throughout the three months ended
September 30, 1996 included the $10.0 million proceeds from the June 1996
issuance of its Series B Preferred Stock.
INCOME TAXES. The Company had income tax loss carryforwards available to
offset income generated for the three months ended September 30, 1995, and as
a result, incurred no federal income tax expense. For the three months ended
September 30, 1996 the Company recorded income tax expense of $311,000 in
anticipation of fully utilizing its net operating loss carryforwards during
its fiscal year ended March 31, 1997.
SIX MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO SIX MONTHS ENDED SEPTEMBER
30, 1995
REVENUES. Revenues for the six months ended September 30, 1996 increased
$53.2 million, or 97%, compared to revenues for the six months ended
September 30, 1995. Approximately 72% of the increase in revenues was
attributable to a five-fold increase in the number of pharmacy claims
processed during the period. Approximately 18% of the increase was
attributable to additional sales of the Company's mail pharmacy services,
resulting from a 41% increase in the number of mail prescriptions dispensed.
Approximately 10% of the increase in revenues resulted from an increase in
clinical services revenues derived from formulary and disease management
services.
COST OF REVENUES. Cost of revenues for the six months ended September
30, 1996 increased by $51.5 million, or 100%, compared to the same period in
1995. This increase was attributable primarily to the expanded volume in the
Company's mail pharmacy and the additional costs associated with the
Company's claims processing growth. As a percentage of revenues, cost of
revenues increased from 94% in the six months ended September 30, 1995 to 96%
in the six months ended September 30, 1996. This increase resulted primarily
from the increase in the Company's claims processing revenues generated by
new customers utilizing the Company's pharmacy network. In cases in which
the Company has an independent obligation to pay its network pharmacy
providers, the Company includes payments from its plan sponsors for these
benefits as revenues and payments to its pharmacy providers as cost of
revenues, thereby increasing revenues and cost of revenues by the same amount.
- 9 -
<PAGE>
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES. Selling, general and
administrative expense for the six months ended September 30, 1996 increased
by $572,000, or 20%, compared to the same period in 1995. This increase was
the result of the Company's expansion of its administrative and support staff
levels and salaries and benefits in response to volume growth in all
services. In spite of the increase, selling, general and administrative
expenses as a percentage of revenues decreased from 5% for the six months
ended September 30, 1995 to 3% in the same period in 1996 as the result of
greater economies of scale and due to the increase in revenues associated
with the Company's claims processing services. Additional revenues generated
by clients utilizing the Company's network pharmacy providers do not result
in an increase in selling, general and administrative expenses.
INTEREST INCOME AND INTEREST EXPENSE. Interest income, net of interest
expense, for the six months ended September 30, 1996 increased $420,000
compared to the same period in 1995. The increase resulted from cash
management programs which utilized the Company's short-term excess cash to
generate interest income through investment in money market funds. In
addition, the Company's cash balance in the months of July, August and
September 1996 included the $10.0 million proceeds from the June 1996
issuance of its Series B Preferred Stock.
INCOME TAXES. The Company incurred a loss for the six months ended
September 30, 1995, and as a result, incurred no federal income tax expense.
For the six months ended September 30, 1996 the Company recorded income tax
expense of $311,000 in anticipation of fully utilizing its net operating loss
carryforwards during its fiscal year ended March 31, 1997.
LIQUIDITY AND CAPITAL RESOURCES
As of September 30, 1996, the Company had working capital of $10.6
million. The Company's net cash provided by operating activities was $1.4
million for the six months ended September 30, 1996 resulting primarily from
the Company's net income of $1.2 million for the period. During the six
months ended September 30, 1996 the Company used cash of $1.7 million for
purchases of property, plant and equipment associated with the growth and
expansion of the Company's systems and facilities. In addition, in June 1996,
the Company received $10.0 million from the sale of its Series B Preferred
Stock.
On October 8, 1996, the Company completed the Offering of its Common
Stock. The Company received net proceeds of approximately $19.5 million,
after deducting underwriting discount and expenses. The Company used $7.0
million to repay the Whitney Note, and the balance of the funds were invested
in money market funds and high-grade commercial paper.
IMPACT OF INFLATION
Changes in prices charged by manufacturers and wholesalers for
pharmaceuticals dispensed by the Company affects its cost of revenues.
Historically, the Company has been able to pass on the effect of such price
changes to its customers under the terms of its agreements. As a result,
changes in pharmaceutical prices due to inflation have not adversely affected
the Company.
- 10 -
<PAGE>
FORWARD-LOOKING STATEMENTS
This report contains or may contain forward-looking statements within the
meaning of Section 21E of the Securities Exchange Act of 1934 including
statements of the Company's and management's expectations, intentions, plans
and beliefs, including those contained in or implied by "Management's
Discussion and Analysis of Financial Condition and Results of Operations" and
the Notes to Condensed Consolidated Financial Statements. These
forward-looking statements, as defined in Section 21E of the Securities
Exchange Act of 1934, are dependent on certain events, risks and
uncertainties that may be outside the Company's control. These
forward-looking statements may include statements of management's plans and
objectives for the Company's future operations and statements of future
economic performance; the Company's capital budget and future capital
requirements, and the Company's meeting its future capital needs; and the
assumptions described in this report underlying such forward-looking
statements. Actual results and developments could differ materially from
those expressed in or implied by such statements due to a number of factors,
including, without limitation, those described in the context of such
forward-looking statements, and the factors set forth in the Company's
registration statement on Form S-1 under the caption "Risk Factors."
PART II. OTHER INFORMATION
Items 1-6 are not applicable.
- 11 -
<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.
ADVANCE PARADIGM, INC.
(Registrant)
Date: November 13, 1996 By: /s/ DAVID D. HALBERT
---------------------------------------
David D. Halbert, Chief Executive Officer,
Chairman of the Board and President
Date: November 13, 1996 By: /s/ DANNY PHILLIPS
---------------------------------------
Danny Phillips, Chief Financial Officer,
Senior Vice President, Secretary and
Treasurer (Principal Financial and
Accounting Officer)
- 12 -
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the Advance
Paradigm, Inc. Form 10-Q for the quarterly period ended September 30, 1996 and
is qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-START> APR-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 26,070
<SECURITIES> 0
<RECEIVABLES> 34,106
<ALLOWANCES> 130
<INVENTORY> 1,524
<CURRENT-ASSETS> 62,309
<PP&E> 7,747
<DEPRECIATION> 2,564
<TOTAL-ASSETS> 80,554
<CURRENT-LIABILITIES> 51,696
<BONDS> 7,000
12,304
0
<COMMON> 0
<OTHER-SE> 9,222
<TOTAL-LIABILITY-AND-EQUITY> 80,554
<SALES> 0
<TOTAL-REVENUES> 107,829
<CGS> 0
<TOTAL-COSTS> 102,994
<OTHER-EXPENSES> 3,495
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (147)
<INCOME-PRETAX> 1,487
<INCOME-TAX> 311
<INCOME-CONTINUING> 1,176
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,176
<EPS-PRIMARY> .19
<EPS-DILUTED> .19
</TABLE>
