<PAGE> 1
United States
Securities and Exchange Commission
Washington, DC 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 Period Ended June 30, 1997
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 For the Transition Period From __________ to _______
Commission file number 000-21567
---------
Educational Medical, Inc.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 65-0038445
- ---------------------------------------- ----------------------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
1327 Northmeadow Parkway, Suite 132
Roswell, GA 30076
- ---------------------------------------- -----------------------------------
(Address of principal executive offices) (Zip Code)
(770) 475-9930
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
Not applicable
- --------------------------------------------------------------------------------
(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 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
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 Section 12, 13, or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by the 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 practical date.
Common Stock, $.01 Par Value, 7,345,399 shares as of August 14, 1997
<PAGE> 2
INDEX
EDUCATIONAL MEDICAL, INC.
<TABLE>
<S> <C>
Part I. Financial Information
Item 1. Financial Statements (Unaudited)
Condensed consolidated balance sheets-June 30, 1997 and March 31, 1997
Condensed consolidated statements of operations-Three months ended June 30, 1997 and 1996
Condensed consolidated statements of cash flows-Three months ended June 30, 1997 and 1996
Notes to condensed consolidated financial statements - June 30, 1997
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Part II. Other Information
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
</TABLE>
2
<PAGE> 3
EDUCATIONAL MEDICAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, March 31,
1997 1997
----------- -----------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 9,158,426 $14,047,889
Trade accounts receivable, net 6,154,634 5,238,742
Prepaid expenses 1,161,353 1,149,146
Income taxes receivable 88,381 155,542
Deferred income tax assets 1,208,669 1,208,669
----------- -----------
Total current assets 17,771,463 21,799,988
Property and equipment, net 7,617,041 7,617,958
Deferred debt issuance costs, net 308,396 297,492
Covenants not to compete, net 1,054,792 1,082,987
Goodwill and other intangible assets, net 9,943,676 10,152,625
Deferred income tax assets 944,629 944,629
Other assets 176,854 176,855
=========== ===========
Total assets $37,816,851 $42,072,534
=========== ===========
</TABLE>
3
<PAGE> 4
EDUCATIONAL MEDICAL, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(CONTINUED)
<TABLE>
<CAPTION>
JUNE 30, MARCH 31,
1997 1997
------------ ------------
(Unaudited)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 650,695 $ 820,784
Accrued payroll compensation 1,179,798 858,049
Accrued expenses 791,797 2,486,532
Deferred tuition income 3,541,045 3,184,225
Current portion of long-term debt 768,394 3,964,851
------------ ------------
Total current liabilities 6,931,729 11,314,441
Long-term debt, less current portion 1,830,978 2,163,880
Other liabilities 641,153 394,145
------------ ------------
Total liabilities 9,403,860 13,872,466
Stockholders' equity:
Preferred stock, authorized 5,000,000 shares,
none issued and outstanding -- --
Common stock, $.01 par value - authorized
15,000,000 shares and 7,418,100 shares issued
and outstanding 74,181 74,181
Additional paid-in capital on common stock 30,222,776 30,222,776
Accumulated deficit (1,783,966) (1,996,889)
Less treasury stock, at cost - 34,817 common
shares (100,000) (100,000)
------------ ------------
Total stockholders' equity 28,412,991 28,200,068
============ ============
Total liabilities and stockholders' equity $ 37,816,851 $ 42,072,534
============ ============
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE> 5
EDUCATIONAL MEDICAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
Three months Three months
ended June 30, ended June 30,
1997 1996
--------------- --------------
(Unaudited) (Unaudited)
<S> <C> <C>
Net revenues $ 12,909,020 $ 10,400,873
School operating costs:
Cost of education and facilities 6,369,982 5,243,020
Selling and promotional 1,976,546 1,669,958
General and administrative expenses 3,985,226 2,985,350
Amortization of goodwill and intangibles 312,743 175,926
------------ ------------
Income from operations 264,523 326,619
Interest (income) expense, net (94,130) 210,741
------------ ------------
Income before income taxes 358,653 115,878
Provision for income taxes 145,730 43,674
============ ============
Net income $ 212,923 $ 72,204
============ ============
Pro forma income tax data:
Income before income taxes $ 115,878
Provision for income taxes 56,429
============
Pro forma net income $ 59,449
============
Net income per share $. 03 $ .01
============ ============
Pro forma net income per share $ .01
============
Weighted average shares outstanding 7,603,243 5,524,548
============ ============
</TABLE>
See notes to condensed consolidated financial statements.
5
<PAGE> 6
EDUCATIONAL MEDICAL, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
THREE MONTHS ENDED THREE MONTHS ENDED
JUNE 30, JUNE 30,
1997 1996
-------------------- ------------------
(Unaudited) (Unaudited)
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 212,923 $ 72,204
Adjustments to reconcile net income to net cash used in
operating activities:
Depreciation 350,703 310,998
Amortization of other intangible assets 312,743 175,925
Loss on closure of school -- (35,187)
Provision for losses on accounts receivable 321,047 217,157
Amortization of discount on long-term debt -- 30,877
Changes in operating assets and liabilities (2,118,036) (1,019,751)
------------ ------------
Net cash (used in) operating activities (920,620) (247,777)
INVESTING ACTIVITIES:
Net Additions to goodwill and intangibles (50,760) --
Purchases of property and equipment, net (349,786) (686,620)
------------ ------------
Net cash (used in) investing activities (400,546) (686,620)
FINANCING ACTIVITIES:
Proceeds from long-term debt -- 532,295
Principal payments on long-term debt (3,529,358) (414,095)
Increase in deferred debt issue costs (38,939) --
Distributions to former Nebraska Shareholders -- (108,000)
------------ ------------
Net cash (used in) provided by financing activities (3,568,297) 10,200
------------ ------------
(Decrease) in cash and cash equivalents (4,889,463) (924,197)
Cash and cash equivalents at beginning of period 14,047,889 3,819,045
------------ ------------
Cash and cash equivalents at end of period $ 9,158,426 $ 2,894,848
============ ============
</TABLE>
See notes to condensed consolidated financial statements.
6
<PAGE> 7
EDUCATIONAL MEDICAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
JUNE 30, 1997
1. BASIS OF PRESENTATION
The accompanying unaudited condensed 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
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three-month period ended June 30, 1997
are not necessarily indicative of the results that may be expected for the year
ending March 31, 1998. For further information, refer to the consolidated
financial statements and footnotes thereto included in the Company's Annual
Report on Form 10-K for the fiscal year ended March 31, 1997 filed with the
Securities and Exchange Commission.
The balance sheet at March 31, 1997 has been derived from the audited financial
statements at that date but does not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements.
2. INITIAL PUBLIC OFFERING
In October, 1996, the Company completed its Initial Public Offering ("IPO")
of common stock. A total of 2,610,000 shares were sold at $10 per share which
included 2,200,000 shares sold by the Company and 410,000 shares sold by certain
selling stockholders. The net proceeds to the Company were approximately $19.2
million and were partially used to repay $4.8 million in subordinated debt. The
balance of the offering proceeds is being used for general corporate purposes,
including the expansion of its operations through the acquisition of additional
schools.
3. PRO FORMA INCOME TAX DATA
Prior to March 31, 1997, the operations of two Nebraska schools acquired by the
Company in a transaction accounted for as a pooling of interests were conducted
by a Subchapter S Corporation and a partnership and, accordingly, were not
subject to federal or state income taxes. For information purposes, the
Company's prior year statement of operations includes a pro forma presentation
that includes a provision for income taxes as if the merged entities had been
taxable corporations for these periods and had filed a consolidated income tax
return with the Company. Such pro forma calculations were based on the income
tax laws and rates in effect during those periods and Statements of Financial
Accounting Standards No. 109, Accounting for Income Taxes.
7
<PAGE> 8
EDUCATIONAL MEDICAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTSUNAUDITED
(CONTINUED)
4. EARNINGS PER SHARE
Historical and pro forma net income per share presented in accordance with
generally accepted accounting principles is as follows:
<TABLE>
<CAPTION>
Three months Three months ended
ended June 30, June 30, 1996
1997
-------------------- --------------------
<S> <C> <C>
Net income per common share and common
equivalent share:
Net income per share $ .03 $ .01
Pro forma net income per share - $ .01
Weighted average number of shares
used in computing net income
per common share and common
equivalent share 7,603,243 5,524,548
</TABLE>
Historical net income per share was computed by dividing net income by the
weighted average number of shares of common stock and common stock equivalents
outstanding (including 761,263 shares issued on March 31, 1997 to effect the
Nebraska Acquisition less 37,884 shares returned in July 1997 pursuant to the
contingency clause as if outstanding for all periods), plus cheap stock using
the treasury stock method at the estimated market prices at each applicable
date.
Pursuant to SEC Staff Accounting Bulletin No. 83, common stock and common stock
equivalents issued at prices equal to or below the IPO price per share ("cheap
stock") during the twelve month period immediately preceding the initial filing
date of the Company's registration statement for the IPO (August 8, 1996) have
been included in both pro forma and historical earnings per share as if
outstanding for all periods presented (using the treasury stock method at the
offering price).
Pro forma net income per share was computed by dividing net income adjusted for
the pro forma income tax provision after taking into account the schools
acquired in the Nebraska Acquisition (which were previously owned by a
partnership and a Subchapter S corporation prior to the acquisition) by the
weighted average number of shares of common stock and common stock equivalents
outstanding (including the 761,263 shares issued on March 31, 1997 to effect the
Nebraska Acquisition less 37,884 shares returned pursuant to the contingency
clause as if outstanding for all periods), plus cheap stock using the treasury
stock method at the IPO price for all periods.
8
<PAGE> 9
EDUCATIONAL MEDICAL, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
5. ACQUISITIONS
The Company has made the following acquisitions since April 1, 1996:
<TABLE>
<CAPTION>
SCHOOL DATE ACQUIRED CURRICULUM ACCOUNTING
- ----------------------------- ---------------------------- ---------------------------- ----------------------------
<S> <C> <C> <C>
San Antonio College
of Medical and Dental
Assistants - San Antonio, TX
9/96 Healthcare Purchase
San Antonio College of
Medical and Dental
Assistants - McAllen, TX 9/96 Healthcare Purchase
Career Centers of Texas -
El Paso, TX
9/96 Healthcare Purchase
Hagerstown Business College -
Hagerstown, MD
12/96 Healthcare/
Business Purchase
Lincoln School of Commerce -
Lincoln, NE
3/97 Healthcare/ Pooling
Business of Interests (1)
Nebraska College of
Business - Omaha, NE 3/97 Healthcare/ Pooling
Business of Interests (1)
</TABLE>
(1) The Nebraska Acquisition was accounted for as a pooling of interests;
therefore, all financial statements presented have been restated to reflect this
acquisition.
See Note 4 to the March 31, 1997 consolidated financial statements included in
the Company's Form 10-K for additional information on these acquisitions.
9
<PAGE> 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS (DOLLARS IN THOUSANDS)
RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
Three months ended Three months ended
June 30, 1997 June 30, 1996
(Unaudited) (Unaudited)
------------------ ---------------
<S> <C> <C>
Net revenue 100.0% 100.0%
Cost of education and facilities 49.3 50.4
Selling and promotional expenses 15.3 16.1
General and administrative expenses 30.9 28.7
Amortization of goodwill and
intangibles 2.4 1.7
------------ ------------
Income from operations 2.1 3.1
Interest income (expense), net 0.7 (2.0)
------------ ------------
Income before income taxes 2.8 1.1
Provision for income taxes 1.1 0.4
------------ ------------
Net income 1.7% 0.7%
============ ============
OTHER OPERATING DATA:
Number of schools at end of period 19 16
Number of students at end of period 5,604 4,347
Number of new students starts during the
period 1,693 1,242
</TABLE>
Three Months Ended June 30, 1997 Compared With Three Months Ended June 30, 1996
Net Revenue. Net revenue increased by $2,508 or 24.1%, to $12,909 for the three
months ended June 30, 1997 from $10,401 for the three months ended June 30,
1996. Revenue growth was primarily a result of the operations of the Texas,
Maryland and Nebraska schools which were acquired in September 1996, December
1996, and March 1997 respectively. Revenue from the operations of schools
included in the Company's results for the entire first quarter ending June 30,
1997 and 1996 (which includes the two Nebraska schools due to the restatement
for the pooling of interests) increased 3.7%. The number of students attending
the Company's schools at the end of the quarter increased 28.9% to 5,604 from
4,347 for the end of the corresponding quarter in 1996 principally as a result
of the addition of the Texas and Maryland schools and increased enrollments in
the Nebraska schools. The number of new student starts at the Company's schools
during the three months ended June 30, 1997 increased to 1,693 from 1,242 for
the corresponding three months of the prior year, a 36.3% increase. The
Company's San Diego area schools experienced a decline in new student starts of
141 for the current quarter as compared to the corresponding period of the prior
year, principally in its medical assistant and medical administration programs.
The Company believes the decline in new student starts is attributable to
several factors in the San Diego area, including a shift in employer
requirements for medical assistants, a continued decline in military personnel,
and an increase in employment opportunities. The Company believes that these
factors may continue to adversely impact the Company's operations in the San
Diego area. All other schools recorded a combined increase in new student
starts, largely offsetting the declines discussed above. Student withdrawal
rates did
10
<PAGE> 11
not change materially compared to withdrawal rates experienced by the Company
during the corresponding three months of the prior year.
Cost of Education and Facilities. Cost of education and facilities increased
by $1,127, or 21.5%, to $6,370 for the three months ended June 30, 1997 from
$5,243 for the three months ended June 30, 1996, principally as a result of
facility expansions and the addition of the Texas and Maryland schools in fiscal
1997, and costs related to the increased enrollments in the Nebraska schools.
The cost of education and facilities as a percentage of net revenue was 49.3% in
1997 compared with 50.4% in 1996.
Selling and Promotional. Selling and promotional expenses increased by $307,
or 18.4%, to $1,977 for the three months ended June 30, 1997 from $1,670 for the
three months ended June 30, 1996 principally as a result of the addition of the
Texas and Maryland schools. Selling and promotional expenses as a percentage of
net revenue was 15.3% in 1997 compared with 16.1 % in 1996.
General and Administrative. Administrative expenses increased by $1,000, or
33.5%, to $3,985 for the three months ended June 30, 1997 from $2,985 for the
three months ended June 30, 1996. Administrative expense as a percentage of net
revenue increased to 30.9% in 1997 compared with 28.7% in 1997 as a result of
the Company's addition of a director of operations for the central region,
regional sales positions and increased cost at the company's home office.
Amortization of Goodwill and Intangibles. Amortization of goodwill and
intangibles increased $137 or 77.8%, to $313 for the three months ended June 30,
1997 from $176 for the three months ended June 30, 1996. The increase was
primarily a result of the amortization of goodwill arising from the acquisition
of the Texas and Maryland schools.
Interest Income, Net. Net interest income increased $305 to $94 of interest
income for the three months ended June 30, 1997 from net expense of $211 for the
three months ended June 30, 1997. The change was principally a result of lower
debt levels and increased interest income during the three months ended June 30,
1997 due to the investment of a portion of the proceeds of the Company's Initial
Public Offering on October 28, 1996.
Income Taxes. Income taxes increased by $102 to $146 for the three months
ended June 30, 1997 from $44 for the three months ended June 30, 1996 due to the
increase in income before income taxes.
Net Income. Net income increased to $213 for the three months ended June 30,
1997 from net income of $72 (pro forma net income of $59) for the three months
ended June 30, 1996 principally as a result of increased net revenue, and
reduced net interest expense.
LIQUIDITY AND CAPITAL RESOURCES
Cash used in operating activities for the three months ended June 30, 1997
and 1996 was $921 and $248, respectively. The use of cash is primarily as a
result of seasonality. The Company's principal sources of funds at June 30, 1997
were cash and cash equivalents of $9,158 and accounts receivable of $7,079. The
cash balance decrease from March 31, 1997 to June 30, 1997
11
<PAGE> 12
is a result of payments of debt related to the Texas and Maryland acquisitions
and payments of accrued merger expenses.
Historically, the Company's investment activity consisted of capital asset
purchases and the purchase of schools. Capital expenditures, excluding capital
leases, totaled $350 and $236 for the three months ended June 30, 1997 and 1996,
respectively, as a result of purchasing additional equipment upgrading and
replacing existing equipment such as computers and medical equipment, for school
programs, and expanding facilities at some of the Company's schools.
The Company's capital assets consist primarily of classroom and laboratory
equipment (such as computers and medical devices), classroom and office
furniture, and leasehold improvements. All building facilities are leased, with
the exception of the land and building owned by the Company in Dayton, Ohio,
Lincoln and Omaha, Nebraska. The Company plans to continue to expand current
facilities, upgrade and replace equipment, and acquire new schools. The Company
expects that its fiscal 1998 operations and planned capital expenditures funded
through cash to be generated from existing operations.
Cash flow from operations on a long-term basis is highly dependent on the
receipt of funds from Title IV Programs, and presently a majority of the
Company's net revenues is derived from Title IV programs. Disbursement of Title
IV Program funds is governed by federal regulations. For students enrolled in
"non-term" programs, (i.e., not divided into quarters or semesters), payments
are generally made in two equal installments, one in the first 30 days following
the student's first day of class and the second when the student reaches the
midpoint of the program. For students enrolled in term programs (i.e., quarters
or semesters) payments are made at the beginning of each term, with the
exception of the initial disbursement which is made 30 days following the
student's first day of class.
In the routine course of acquiring other schools, the Company must obtain
certain regulatory approvals, typically from state agencies and the U.S.
Department of Education. After change of control, the Department of Education
suspends payments of the school's Title IV funding until the Department
completes a recertification. This recertification process typically takes from
three to six months after the Department's approval. Presently, the Company's
Title IV funding for its two Nebraska schools has been suspended pending such
recertification.
12
<PAGE> 13
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
ROUTINE PROCEEDINGS
The Company is a party to routine litigation incidental to its business,
including ordinary course employment litigation. Management does not believe
that the resolution of any or all of such routine litigation is likely to have a
material adverse effect on the Company's financial condition or results of
operations.
Item 2. Changes in Securities.
None
Item 3. Defaults upon Senior Securities.
None
Item 4. Submission of Matters to a Vote of Security Holders.
None
Item 5. Other Information.
None
Item 6. Exhibits and Reports on Form 8-K.
Exhibits:
11.1 Statement re: computation of pro forma earnings per share
11.2 Statement re: computation of historical earnings per share
27 Financial Data Schedule (for SEC use only)
Reports on Form 8-K:
(i) Form 8-K filed April 15, 1997 reporting the acquisition of two schools in
Nebraska on March 31, 1997.
(ii) Form 8-K/A filed June 16, 1997 submitting audited financial statements and
pro forma financial statements as to the acquisition of the two Nebraska
schools.
13
<PAGE> 14
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.
Educational Medical, Inc.
------------------------------
Date: August 14, 1997 /s/ Vince Pisano
------------------------------
(Signature)
Vince Pisano
Chief Financial Officer
Principal Financial Officer
and
Principal Accounting Officer
14
<PAGE> 1
EXHIBIT 11.1
EDUCATIONAL MEDICAL, INC.
COMPUTATION OF PRO FORMA NET INCOME PER SHARE
Three months
ended June 30,
1996
---------------
Primary and fully diluted:
Weighted average common stock
outstanding during the period 5,412,548
Effect of common stock
equivalents issued subsequent
to August 7, 1995 computed in
accordance with the treasury
stock method as required by
the SEC (1) 112,000
----------
Total 5,524,548
==========
Pro forma net income $ 59,449
Pro forma net income per
share of common stock $ .01
(1)Pursuant to Securities and Exchange Commission Staff Accounting
Bulletin NO. 83, Common Stock equivalents issued at prices below the
initial public offering price per share of $10 ("cheap stock") during the
twelve month period immediately preceeding the initial filing date of the
Company's Registration Statement for its initial public offering have been
included as outstanding for all periods presented prior to the initial
public offering.
<PAGE> 1
EXHIBIT 11.2
EDUCATIONAL MEDICAL, INC.
COMPUTATION OF HISTORICAL NET INCOME PER SHARE
<TABLE>
<CAPTION>
Three months Three months
ended June 30, ended June 30,
Primary and fully diluted: 1997 1996
--------------- -------------
<S> <C> <C>
Weighted average common stock
outstanding during the period 7,496,243 5,412,548
Effect of common stock
equivalents issued subsequent
to August 7, 1995 computed in
accordance with the treasury
stock method as required by
the SEC 107,000 112,000
---------- ----------
Total 7,603,243 5,524,548
========== ==========
Net income $ 212,923 $ 72,204
Net income per
share of common stock $ .03 $ .01
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATMENTS OF EDUCATIONAL MEDICAL, INC. FOR THE QUARTER ENDED JUNE 30,
1997 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1998
<PERIOD-START> APR-01-1997
<PERIOD-END> JUN-30-1997
<CASH> 9,158,426
<SECURITIES> 0
<RECEIVABLES> 7,079,347
<ALLOWANCES> 924,713
<INVENTORY> 0
<CURRENT-ASSETS> 17,771,463
<PP&E> 13,355,113
<DEPRECIATION> 5,738,072
<TOTAL-ASSETS> 37,816,851
<CURRENT-LIABILITIES> 6,931,729
<BONDS> 2,599,372
0
0
<COMMON> 74,181
<OTHER-SE> 28,338,810
<TOTAL-LIABILITY-AND-EQUITY> 37,816,851
<SALES> 12,909,020
<TOTAL-REVENUES> 12,909,020
<CGS> 12,077,952
<TOTAL-COSTS> 12,077,952
<OTHER-EXPENSES> 314,880
<LOSS-PROVISION> 251,665
<INTEREST-EXPENSE> (94,130)
<INCOME-PRETAX> 358,653
<INCOME-TAX> 145,730
<INCOME-CONTINUING> 212,923
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 212,923
<EPS-PRIMARY> 0.03
<EPS-DILUTED> 0
</TABLE>