<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 June 30, 1999
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: 000-28600
CCC INFORMATION SERVICES GROUP INC.
(Exact name of registrant as specified in its charter)
DELAWARE 54-1242469
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
WORLD TRADE CENTER CHICAGO
444 MERCHANDISE MART
CHICAGO, ILLINOIS 60654
(Address of principal executive offices, including zip code)
(312) 222-4636
(Registrant's telephone number, including area code)
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 __
As of August 10, 1999, CCC Information Services Group Inc. common stock, par
value $0.10 per share, outstanding was 22,320,187 shares.
<PAGE>
CCC INFORMATION SERVICES GROUP INC.
AND SUBSIDIARIES
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION Page(s)
<S> <C> <C>
Item 1. Financial Statements
Consolidated Interim Statement of Operations (Unaudited), 3
Three Months and Six Months Ended June 30, 1999 and 1998
Consolidated Interim Balance Sheet, 4
June 30, 1999 (Unaudited) and December 31, 1998
Consolidated Interim Statement of Cash Flows (Unaudited), 5
Six Months Ended June 30, 1999 and 1998
Notes to Consolidated Interim Financial Statements (Unaudited) 6-9
Item 2. Management's Discussion and Analysis 10-14
of Results of Operations and Financial Condition
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 14
Item 2. Changes in Securities 14
Item 3. Defaults Upon Senior Securities 14
Item 4. Submission of Matters to a Vote of Security Holders 14
Item 5. Other Information 15
Item 6. Exhibits and Reports on Form 8-K 15-16
SIGNATURES 17
EXHIBIT INDEX 18
</TABLE>
2
<PAGE>
CCC INFORMATION SERVICES GROUP INC. AND SUBSIDIARIES
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED INTERIM STATEMENT OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
---------------------- ----------------------
June 30, June 30,
-------- --------
1999 1998 1999 1998
-------- -------- --------- --------
<S> <C> <C> <C> <C>
Revenues $ 50,968 $ 46,147 $ 100,877 $ 90,838
Expenses:
Production and customer support 15,033 10,835 29,149 20,742
Commissions, royalties and licenses 4,390 5,526 8,850 10,845
Selling, general and administrative 22,186 14,169 39,032 28,192
Depreciation and amortization 2,503 2,270 4,926 4,441
Product development and programming 6,225 6,951 11,970 13,066
Relocation of claims settlement function - 1,707 - 1,707
-------- -------- --------- --------
Total operating expenses 50,337 41,458 93,927 78,993
-------- -------- --------- --------
Operating income 631 4,689 6,950 11,845
Interest expense (186) (1) (381) (65)
Other income, net 189 112 228 462
-------- -------- --------- --------
Income before income taxes 634 4,800 6,797 12,242
Income tax provision (58) (2,046) (2,737) (5,208)
-------- -------- --------- --------
Income before equity losses 576 2,754 4,060 7,034
Equity in net losses of affiliates (501) (3,036) (4,996) (4,217)
-------- -------- --------- --------
Net income (loss) 75 (282) (936) 2,817
Dividends and accretion on mandatorily redeemable preferred stock (1) (97) (2) (191)
-------- -------- --------- --------
Net income (loss) applicable to common stock $ 74 $ (379) $ (938) $ 2,626
-------- -------- --------- --------
-------- -------- --------- --------
PER SHARE DATA
Income (loss) per common share - basic $ - $ (0.01) $ (0.04) $ 0.11
-------- -------- --------- --------
-------- -------- --------- --------
Income (loss) per common share - diluted $ - $ (0.01) $ (0.04) $ 0.10
-------- -------- --------- --------
-------- -------- --------- --------
Weighted average shares outstanding:
Basic 23,381 24,859 23,550 24,749
Diluted 23,685 25,493 23,910 25,456
</TABLE>
The accompanying notes are an integral part of these
consolidated interim financial statements.
3
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CCC INFORMATION SERVICES GROUP INC. AND SUBSIDIARIES
CONSOLIDATED INTERIM BALANCE SHEET
(IN THOUSANDS)
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
----------- ------------
(Unaudited)
<S> <C> <C>
ASSETS
Cash $ 460 $ 1,526
Accounts receivable (net of reserves of $3,241 (unaudited) and
$3,258 at June 30, 1999 and December 31, 1998, respectively) 23,815 23,212
Income taxes receivable 2,042 272
Other current assets 6,391 5,726
----------- ------------
Total current assets 32,708 30,736
Property and equipment (net of accumulated depreciation
of $38,338 (unaudited) and $34,494 at June 30, 1999
and December 31, 1998, respectively) 15,205 14,951
Goodwill (net of accumulated amortization of $12,965 (unaudited) and
$11,845 at June 30, 1999 and December 31, 1998, respectively) 12,643 12,799
Deferred income taxes 7,573 7,371
Long-term investment in affiliates 4,679 9,843
Other assets 3,138 3,318
----------- ------------
Total Assets $ 75,946 $ 79,018
----------- ------------
----------- ------------
LIABILITIES, MANDATORILY REDEEMABLE PREFERRED STOCK
AND STOCKHOLDERS' EQUITY
Accounts payable and accrued expenses $ 29,880 $ 23,128
Deferred revenues 5,565 4,327
----------- ------------
Total current liabilities 35,445 27,455
Long-term debt 13,000 11,000
Long-term deferred revenue 577 956
Other liabilities 3,378 3,611
Minority interest in consolidated companies 5 5
----------- ------------
Total liabilities 52,405 43,027
----------- ------------
Mandatorily redeemable preferred stock ($1.00 par value, 100,000 shares
authorized, 0 and 684 designated and outstanding at
June 30, 1999 (unaudited) and December 31, 1998, respectively) - 688
----------- ------------
Common stock ($0.10 par value, 30,000,000 shares authorized for all periods
presented, 22,893,260 (unaudited) and 23,700,165 shares issued and
outstanding at June 30, 1999 and December 31, 1998, respectively) 2,529 2,510
Additional paid-in capital 97,282 95,573
Accumulated deficit (47,407) (46,469)
Accumulated other comprehensive income (84) (26)
Treasury stock, at cost ($0.10 par value, 2,517,615 and 1,521,925 shares in
treasury at June 30, 1999 (unaudited) and December 31, 1998, respectively) (28,779) (16,285)
----------- ------------
Total stockholders' equity 23,541 35,303
----------- ------------
Total Liabilities, Mandatorily Redeemable Preferred Stock and
Stockholders' Equity $ 75,946 $ 79,018
----------- ------------
----------- ------------
</TABLE>
The accompanying notes are an integral part of these
consolidated interim financial statements.
4
<PAGE>
CCC INFORMATION SERVICES GROUP INC. AND SUBSIDIARIES
CONSOLIDATED INTERIM STATEMENT OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended
----------------
June 30,
--------
1999 1998
-------- --------
<S> <C> <C>
Operating activities:
Net income (loss) $ (936) $ 2,817
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Equity in net losses of affiliates 4,996 4,217
Depreciation and amortization of property and equipment 3,768 3,751
Amortization of goodwill 1,120 673
Deferred income taxes (202) 42
Other, net 223 190
Changes in:
Accounts receivable, net (603) (4,543)
Other current assets (665) (448)
Other assets 280 (2,048)
Accounts payable and accrued expenses 6,752 1,787
Income taxes receivable (1,281) 1,343
Deferred revenues 859 (1,897)
Other liabilities (233) (203)
-------- --------
Net cash provided by operating activities 14,078 5,681
-------- --------
Investing activities:
Capital expenditures (4,135) (9,686)
Purchase of investment securities (1,484) (8,332)
Proceeds from the sale of investment securities 1,484 38,386
Investments (1,064) (20,000)
-------- --------
Net cash provided by (used for) investing activities (5,199) 368
-------- --------
Financing activities:
Principal repayments on long-term debt (23,000) (62)
Proceeds from the issuance of long-term debt 25,000 -
Proceeds from exercise of stock options 814 1,184
Proceeds from employee stock purchase plan 401 -
Payments to acquire treasury stock (12,622) -
Issuance of treasury stock 152 -
Redemption of preferred stock, including accrued dividends (690) -
-------- --------
Net cash provided by (used for) financing activities (9,945) 1,122
-------- --------
Net increase (decrease) in cash (1,066) 7,171
Cash:
Beginning of period 1,526 2,064
-------- --------
End of period $ 460 $ 9,235
-------- --------
-------- --------
SUPPLEMENTAL DISCLOSURES:
Cash paid:
Interest $ (383) $ (48)
-------- --------
-------- --------
Income taxes, net of refunds $ (4,218) $ (3,795)
-------- --------
-------- --------
</TABLE>
The accompanying notes are an integral part of these
consolidated interim financial statements.
5
<PAGE>
CCC INFORMATION SERVICES GROUP INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1 - DESCRIPTION OF BUSINESS AND ORGANIZATION
CCC Information Services Group Inc. ("Company") (formerly known as
InfoVest Corporation), through its wholly owned subsidiary CCC Information
Services Inc., is a supplier of automobile claims information and processing
services, claims management software and communication services. The
Company's services and products enable automobile insurance company customers
and collision repair facility customers to improve efficiency, manage costs
and increase consumer satisfaction in the management of automobile claims and
restoration.
As of June 30, 1999, White River Ventures Inc. ("White River") held
approximately 31.7% of the total outstanding common stock of the Company.
White River is a wholly owned subsidiary of White River Corporation. On June
30, 1998, White River Corporation, the sole shareholder of White River, was
acquired in a merger with Demeter Holdings Corporation, which is solely
controlled by the President and Fellows of Harvard College, a Massachusetts
educational corporation and title-holding company for the endowment fund of
Harvard University. Charlesbank Capital Partners LLC is acting as investment
manager with respect to the investment of White River in the Company. On June
16, 1999, and in accordance with the terms of the Company's Mandatorily
Redeemable Series D and Series E Preferred Stock, all outstanding shares of
the Company's preferred stock were redeemed. Following the redemption of the
Company's Series E Preferred Stock, White River no longer has certain voting
rights that entitle it to have 51% of the votes cast on any matter to be
voted upon by holders of the Company's common stock.
NOTE 2 - CONSOLIDATED INTERIM FINANCIAL STATEMENTS
BASIS OF PRESENTATION
The accompanying consolidated interim financial statements as of and
for the three and six months ended June 30, 1999 and 1998 are unaudited. The
Company is of the opinion that all material adjustments, consisting only of
normal recurring adjustments, necessary for a fair presentation of the
Company's interim results of operations and financial condition have been
included. The results of operations for any interim period should not be
regarded as necessarily indicative of results of operations for any future
period. These consolidated interim financial statements should be read in
conjunction with the Company's 1998 Annual Report on Form 10-K, as amended,
filed with the Securities and Exchange Commission.
PER SHARE INFORMATION
Earnings per share are based on the weighted average number of
shares of common stock outstanding and common stock equivalents using the
treasury method computed as follows:
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
--------------- ---------------
1999 1998 1999 1998
------ ------ ------ ------
<S> <C> <C> <C> <C>
Weighted average common shares outstanding: 23,381 24,859 23,550 24,749
Shares attibutable to common stock outstanding 304 634 360 707
------ ------ ------ ------
Shares attibutable to common stock equivalents outstanding 23,685 25,493 23,910 25,456
====== ====== ====== ======
</TABLE>
6
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NOTE 3 - OTHER COMPREHENSIVE NET INCOME (LOSS)
The Company's other comprehensive net income (loss) includes foreign
currency translation adjustments. The Company's comprehensive net income
(loss) was as follows:
<TABLE>
<CAPTION>
THREE MONTHS SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
-------------- ---------------
1999 1998 1999 1998
------ ------ ------ ------
<S> <C> <C> <C> <C>
Net income (loss) $ 74 $ (379) $ (938) $2,626
Foreign currency translation adjustments (31) -- (58) --
------ ------ ------ ------
Comprehensive net income (loss) $ 43 $ (379) $ (996) $2,626
====== ====== ====== ======
</TABLE>
NOTE 4 - NEW ACCOUNTING PRONOUNCEMENTS
Effective January 1, 1998, the Company adopted Statement of
Financial Accounting Standards No. 130, "Reporting Comprehensive Income"
("SFAS No. 130") which establishes standards for reporting and display of
comprehensive income and its components in the financial statements.
Comprehensive income represents the change in stockholders' equity during a
period resulting from transactions and other events and circumstances from
non-owner sources. It includes all changes in equity during a period except
those resulting from investments by owners and distributions to owners.
Effective January 1, 1998, the Company adopted Statement of Position
97-2, "Software Revenue Recognition" ("SOP 97-2"). SOP 97-2 provided guidance on
when revenue should be recognized and in what amounts for licensing, selling,
leasing or otherwise marketing computer software. The Company previously
maintained a policy similar to SOP 97-2 and therefore the adoption of SOP 97-2
did not have a material impact on the Company's consolidated results of
operations or financial position.
In March 1998, the AICPA issued Statement of Position 98-1, "Accounting
For the Costs of Computer Software Developed For or Obtained For Internal-Use"
("SOP 98-1"), which the Company adopted. SOP 98-1 requires the capitalization of
certain costs incurred in connection with developing or obtaining software for
internal-use. The Company previously maintained a policy similar to SOP 98-1
and, therefore, the adoption of SOP 98-1 did not have a material impact on the
Company's consolidated results of operations or financial position.
Effective December 31, 1998, the Company adopted Statement of
Financial Accounting Standards No. 131, "Disclosures about Segments of an
Enterprise and Related Information" ("SFAS No. 131"). SFAS No. 131
establishes new standards for reporting information about operating segments
in interim and annual financial statements.
NOTE 5 - NONCASH FINANCING ACTIVITIES
The Company directly charges its accumulated deficit account for
preferred stock accretion and preferred stock dividends accrued. These
amounts totaled $0.0 million and $0.2 million during the six months ended
June 30, 1999 and 1998, respectively.
In conjunction with the exercise of certain stock options, the
Company has reduced current income taxes payable with an offsetting credit to
paid-in capital for the tax benefit of stock options exercised. During the
six months ended June 30, 1999 and 1998, these amounts totaled $0.5 million
and $3.2 million, respectively.
NOTE 6 - LONG-TERM DEBT
Under terms included in the amended and restated credit facility
between the Company and its commercial bank, the Company's ability to borrow
under the revolving line of credit was increased from $50 million to $100
million on February 10, 1999. The line of credit commitment is reduced by $10
million on
7
<PAGE>
October 31, 2001, $15 million on October 31, 2003 and $75 million on October
31, 2003. The interest rate under the amended bank credit facility is the
London Interbank Offering Rate (LIBOR) plus 1.0% or the prime rate in effect
from time to time, as selected by the Company. The Company pays a commitment
fee of 0.25% on any unused portion of the revolving credit facility. When
borrowings are outstanding, interest payments are due quarterly.
Under the bank facility, the Company has limitations and
restrictions on its ability to make certain sales or transfers of assets,
incur indebtedness or encumbrances, and redeem or repurchase its capital
stock. In addition, the bank credit facility requires the Company to maintain
certain levels of operating cash flow and debt coverage, and limits its
ability to make investments and declare dividends.
NOTE 7 - INVESTMENT IN INSURQUOTE
On February 10, 1998, the Company invested $20.0 million in
InsurQuote Systems, Inc. ("InsurQuote"). InsurQuote, formed in 1989, is a
provider of insurance rating information and the software tools used to
manage that information. The Company's $20.0 million investment included
19.9% of InsurQuote common stock, an $8.9 million subordinated note,
warrants, shares of Series C redeemable convertible preferred stock and
Series D convertible preferred stock. The warrants provide the Company with
the right to acquire additional shares of InsurQuote common stock and are
exercisable by the Company through February 10, 2008, subject to potential
early termination provisions. The Series C preferred stock is redeemable in
full at the end of five years, or earlier under certain conditions, if not
converted prior to that time. Each share of Series C and D preferred stock is
initially convertible into one share of common stock at the option of the
Company. Under the terms of the investment agreement, the Company, subject to
certain conditions, can increase its investment through additional purchases
of common and preferred shares. The Company's ownership percentage, assuming
conversion into common stock all of the securities currently exercisable,
would increase to approximately 31.8% at June 30, 1999.
The Company accounted for its investment in InsurQuote on the equity
method through March 31, 1999. Notwithstanding the Company's initial 19.9%
common stock equity share, the Company has recorded 100% of InsurQuote's net
losses for the period from the Company's initial investment, February 10, 1998
to March 31, 1999. The recording of 100% of InsurQuote's net losses was the
result of the Company's $20.0 million investment being InsurQuote's primary
source of funding for its operating losses. The Company has not recorded any
income tax benefit on the InsurQuote losses. At June 30, 1999, the Company's
remaining recorded investment in InsurQuote was approximately $3.7 million. The
market value of the investment in InsurQuote at June 30, 1999 was not readily
determinable.
On March 31, 1999, InsurQuote received a $20.0 million investment from
a new investor for convertible preferred stock with an 11% voting interest. As a
result of this new investment, the Company's ownership percentage decreased to
12.3% and the Company has ceased recording losses on its investment, unless it
is determined that its remaining investment is impaired.
Summary InsurQuote financial information for the six months ended
June 30, 1999 was as follows:
<TABLE>
<CAPTION>
(IN THOUSANDS)
--------------
<S> <C>
Revenues $ 5,326
Loss from operations $(9,064)
Net loss $(9,290)
</TABLE>
NOTE 8 - BUSINESS SEGMENTS
The Company has three reportable segments; Insurance Services,
Automotive Services and Consumer Processing Services. The Insurance Services
Division sells products and services which assist its customers in managing
total loss and repairable auto claims as well as a product to assist in the
underwriting of insurance. The Automotive Services Division sells products
and services which assist its customers in
8
<PAGE>
managing repairable auto claims. The Consumer Processing Services Division
sells products and services which provide complete outsourcing services on
many aspects of the claim process.
The Company's reportable segments are based upon the nature of the
products and services within the Company and the methods used to distribute
these products and services. The Company is organized into revenue producing
divisions and support organizations (product development and customer
support) tasked with facilitating the performance of the revenue producing
divisions. Division expenses represent principally salaries and related
employee expenses directly related to the Division's activities. Each revenue
division and support organization is led by a vice president that reports to
either the Chief Operating Officer or the Chief Executive Officer. Management
evaluates performance at the total company profit level and at the product
revenue level. The support organization costs are not currently allocated to
the revenue producing divisions and include product engineering, management
information systems, customer support and finance and administration costs.
<TABLE>
<CAPTION>
CONSUMER
INSURANCE AUTOMOTIVE PROCESSING
SERVICES SERVICES SERVICES OTHER* TOTAL
---------- ---------- ---------- -------- --------
<S> <C> <C> <C> <C> <C>
SIX MONTHS ENDED JUNE 30, 1999
Net revenue $ 50,819 $ 33,744 $ 16,212 $ 102 $ 100,877
Expenses (14,964) (18,140) (14,232) (46,591) (93,927)
--------- -------- -------- -------- --------
Operating income 35,855 15,604 1,980 (46,489) 6,950
Equity in losses of affiliates (4,996) -- -- -- (4,996)
--------- -------- -------- -------- --------
Division operating margin $ 30,859 $ 15,604 $ 1,980 $(46,489) $ 1,954
========= ========= ======== ========= =======
Accounts receivable, net $ 14,034 $ 1,657 $ 7,833 $ 291 $ 23,815
========= ======== ======== ======== ========
SIX MONTHS ENDED JUNE 30, 1998
Net revenue $ 50,894 $ 30,315 $ 8,910 $ 719 $ 90,838
Expenses (15,416) (15,518) (7,814) (40,245) (78,993)
--------- -------- -------- -------- --------
Operating income 35,478 14,797 1,096 (39,526) 11,845
Equity in losses of affiliates (1,181) -- -- (3,036) (4,217)
--------- -------- -------- -------- --------
Division operating margin $ 34,297 $ 14,797 $ 1,096 $(42,562) $ 7,628
========= ========= ======== ========= =======
Accounts receivable, net $ 12,399 $ 4,411 $ 5,545 $ 490 $ 22,845
========= ======== ======== ====== ========
</TABLE>
* Other net revenue includes a discontinued product which provided new
and used car pricing to consumers. Other expenses include support costs.
NOTE 9 - LEGAL PROCEEDINGS
In March 1999, the Company completed a settlement of a lawsuit filed
in late 1998 involving a former independent sales representative. The
settlement of $1.7 million, recorded in December 1998, included, among other
things, payment for past earned commissions, resolution of disputed
commissions, and other costs associated with the resolution of the dispute.
The Company is a party to various claims and routine litigation
arising in the normal course of business. Such claims and litigation are not
expected to have a material adverse effect on the financial condition or
results of operations of the Company.
NOTE 10 - SUBSEQUENT EVENT
On August 13, 1999, the Company acquired 100% of the outstanding
stock of D.W. Norris Limited for $5.0 million. D.W. Norris Limited provides
vehicle accident damage assessment, accident investigation, theft
investigation and other third-party insurance services throughout the United
Kingdom. The purchase agreement provides for a contingent purchase price not
to exceed approximately $3 million and is based on certain performance
measures of D.W. Norris through December 2002.
9
<PAGE>
CCC INFORMATION SERVICES GROUP INC.
AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1999 COMPARED WITH THREE MONTHS ENDED JUNE 30,
1998
The Company reported net income applicable to common stock of $0.1
million, or $0.00 per share on a diluted basis, for the three months ended June
30, 1999, versus a net loss of $0.4 million, or $(0.01) per share on a diluted
basis, for the same quarter last year.
REVENUES. Second quarter 1999 revenues of $51.0 million were $4.8
million, or 10.4%, higher than the same quarter last year. The increase in
revenues was primarily due to continued growth in the Consumer Processing
Services Division and the increase revenues from the Automotive Services
Division. The Automotive Services Division increase was a result of growth in
the digital imaging product and an increase in the number of collision
estimating seats.
PRODUCTION AND CUSTOMER SUPPORT. Production and customer support
increased from $10.8 million, or 23.5% of revenues, to $15.0 million, or 29.5%
of revenues. The increase in dollars and percentage of revenue was attributable
primarily to an increase in production and customer support capacity related to
Consumer Processing Services and an increase in Automotive Services
workflow/collision estimating seat implementations.
COMMISSION, ROYALTIES AND LICENSES. Commission, royalties and licenses
decreased from $5.5 million, or 12.0% of revenues, to $4.4 million, or 8.6% of
revenues. The decrease in dollars and as a percentage of revenue was due
primarily to the conversion of Automotive Services outside sales representatives
to salaried employees.
SELLING, GENERAL AND ADMINISTRATIVE. Selling, general and
administrative increased from $14.2 million, or 30.7% of revenues, to $22.2
million, or 43.6% of revenues. The increase in dollars was due primarily to
compensation charge of $1.2 million as a result of a stock repurchase from a
charitable trust funded by the Company's chairman, David M. Phillips;
consulting costs for projects aimed at improving the internal
telecommunications and customer service infrastructure and reorganization
costs of the Automotive Services division. The Automotive Services division
reorganization costs include severance costs and conversion costs of outside
sales representatives to salaried employees.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization increased
from $2.3 million, or 4.9% of revenues, to $2.5 million, or 4.9% of revenues.
The increase in dollars was mainly the result of an increase in goodwill
amortization resulting from the acquisition of two subsidiaries in the third
quarter of 1998.
PRODUCT DEVELOPMENT AND PROGRAMMING. Product development and
programming decreased from $7.0 million, or 15.1% of revenues, to $6.2 million,
or 12.2% of revenues. The dollar amount and percentage of revenue decreases were
due primarily to the Company's development efforts on international products
being reimbursed monthly by the Enterstand Joint Venture in Europe.
RELOCATION OF CLAIMS SETTLEMENT FUNCTION. In the second quarter of
1998, the Company recorded a charge of $1.7 million related to the relocation of
certain customer service and claims processing operations to South Dakota.
OTHER INCOME/INTEREST EXPENSE. Net other income/interest expense
decreased from $0.1 million to $0.0 million. The decrease was principally the
result of higher interest expense due to borrowing under the revolving credit
facility.
INCOME TAXES. Second quarter income taxes decreased from $2.0 million,
or 42.6% of income before taxes, to $0.1 million, or 9.1% of income before
taxes. The dollar decrease was attributable to both lower pretax income and a
decrease in the state income tax effective rate.
EQUITY IN NET LOSSES OF AFFILIATES. Equity in net losses of affiliates
decreased from $3.0 million to $0.5 million. The results include $3.0 million
loss in InsurQuote for second quarter 1998 and $0.3 million
10
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CCC INFORMATION SERVICES GROUP INC.
AND SUBSIDIARIES
loss from the Enterstand Joint Venture, in second quarter of 1999. The
Company ceased recording equity in net losses of InsurQuote in the second
quarter of 1999 as a result of a new investor in InsurQuote.
SIX MONTHS ENDED JUNE 30, 1999 COMPARED WITH SIX MONTHS ENDED JUNE 30, 1998
The Company reported a net loss applicable to common stock of $0.9
million, or $(0.04) per share on a diluted basis, for the six months ended June
30, 1999, versus net income of $2.6 million, or $0.11 per share on a diluted
basis, for the same period last year.
REVENUES. Revenues of $100.9 million were $10.0 million, or 11.1%,
higher than the same period last year. The increase in revenues was primarily
due to continued growth in the Consumer Processing Services Division, increase
revenues from the Automotive Services Division and revenues from CCC
International. The Automotive Services Division increase was a result of growth
in the digital imaging product and an increase in the number of collision
estimating seats.
PRODUCTION AND CUSTOMER SUPPORT. Production and customer support
increased from $20.7 million, or 22.8% of revenues, to $29.1 million, or 28.9%
of revenues. The increase in dollars and percentage of revenue was attributable
primarily to an increase in production and customer support capacity related to
Consumer Processing Services, Automotive Services and CCC International.
COMMISSION, ROYALTIES AND LICENSES. Commission, royalties and licenses
decreased from $10.8 million, or 12.0% of revenues, to $8.9 million, or 8.8% of
revenues. The decrease in dollars and as a percentage of revenue was due
primarily to the conversion of Automotive Services outside sales representatives
to salaried employees.
SELLING, GENERAL AND ADMINISTRATIVE. Selling, general and
administrative increased from $28.2 million, or 31.0% of revenues, to $39.0
million, or 38.7% of revenues. The increase in dollars was due primarily to
compensation charge of $1.2 million as a result of a stock repurchase from a
charitable trust funded by the Company's chairman, David M. Phillips;
consulting costs for projects aimed at improving the internal
telecommunications and customer service infrastructure and reorganization
costs of the Automotive Services division. The Automotive Services division
reorganization costs include severance costs and conversion costs of outside
sales representatives to salaried employees.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization increased
from $4.4 million, or 4.9% of revenues, to $4.9 million, or 4.9% of revenues.
The increase in dollars was mainly the result of an increase in goodwill
amortization resulting from the acquisition of two subsidiaries in the third
quarter of 1998.
PRODUCT DEVELOPMENT AND PROGRAMMING. Product development and
programming decreased from $13.1 million, or 14.4% of revenues, to $12.0
million, or 11.8% of revenues. The dollar and percentage of revenue decreases
were due primarily to the Company's development efforts on international
products being reimbursed monthly by the Enterstand Joint Venture in Europe.
RELOCATION OF CLAIMS SETTLEMENT FUNCTION. In the second quarter of
1998, the Company recorded a charge of $1.7 million related to the relocation of
certain customer service and claims processing operations to South Dakota.
OTHER INCOME/INTEREST EXPENSE. Net other income/interest expense
decreased from $0.4 million to $(0.2) million. The decrease was principally the
result of higher interest expense due to borrowing under the revolving credit
facility in 1999 and lower interest income from the investment of excess cash in
1999.
INCOME TAXES. Income taxes decreased from $5.2 million, or 42.5% of
income before taxes, to $2.7 million, or 40.3% of income before taxes. The
dollar decrease was attributable to both lower pretax income and a decrease in
the state income tax effective rate.
EQUITY IN NET LOSSES OF AFFILIATES. Equity in net losses of affiliates
increased from $4.2 million to $5.0 million. The results include $4.2 million
losses in InsurQuote for both 1999 and 1998 and $0.8 million loss from the
Enterstand Joint Venture, in 1999. The Company ceased recording equity in net
losses of InsurQuote in the second quarter of 1999 as a result of a new investor
in InsurQuote.
11
<PAGE>
CCC INFORMATION SERVICES GROUP INC.
AND SUBSIDIARIES
YEAR 2000 ISSUE
BACKGROUND. Some computers, software and other equipment include
programming code in which calendar year data is abbreviated to only two digits.
As a result of this design decision, some of these systems could fail to operate
or fail to produce correct results if "00" is interpreted to mean 1900, rather
than 2000 ("Year 2000 Problem"). These problems are widely expected to increase
in frequency and severity as the year 2000 approaches. The Company defines an
application to be Year 2000 compliant if it can accurately process date data
(including calculating, comparing and sequencing) from, into and between 1999
and 2000, including leap year calculations.
ASSESSMENT. The Year 2000 Problem could affect computers, software, and
other equipment used, operated, or maintained by the Company. Accordingly, the
Company is reviewing its internal computer programs and systems to ensure that
the programs and systems will be Year 2000 compliant. The Company presently
believes that its computer systems will be Year 2000 compliant in a timely
manner. However, while the estimated cost of these efforts are not expected to
be material to the Company's financial position or any year's results of
operations, there can be no assurance to this effect.
SOFTWARE SOLD TO CUSTOMERS. The Company believes that it has
substantially identified all potential Year 2000 Problems with any of the
software products, which it develops and markets. As a key supplier to insurance
companies and collision repair facilities, the Company has identified a
significant exposure for Year 2000 problems regarding the effect of its legacy
collision estimating software on some customers' ability to complete an
estimate. A major undertaking is currently in process to convert those customers
impacted to the Year 2000 compliant version of the software. While lost revenues
from such an event are a concern for the Company, the greater risks are the
monetary damages for which the Company could be liable if it in fact is found
responsible for the shutdown of one of its customer's facilities. Such a finding
could have a material adverse impact on the Company's results of operations.
INTERNAL INFRASTRUCTURE. The Company believes that it has identified
substantially all of the major computers, software applications, and related
equipment used in connection with its internal operations that must be modified,
upgraded or replaced to minimize the possibility of a material disruption to its
business. The Company has commenced the process of modifying, upgrading, and
replacing major systems that have been identified as adversely affected, and
expects to complete most of this process by the third quarter of 1999.
SYSTEMS OTHER THAN INFORMATION TECHNOLOGY SYSTEMS. In addition to
computers and related systems, the operation of office and facilities equipment,
such as fax machines, photocopiers, telephone switches, security systems,
elevators, and other common devices may be affected by the Year 2000 Problem.
The Company has nearly completed its assessment and expects that most facility
and office equipment will be compliant by the end of the third quarter of 1999.
The Company estimates the total cost to the Company of completing any
required modifications, upgrades, or replacements of these internal systems will
not have a material adverse effect on the Company's business or results of
operations. Currently, the Company is expensing approximately $600 thousand per
quarter associated with this effort. It is expected that this cost will continue
through the fourth quarter of 1999. This estimate is being monitored and will be
revised as additional information becomes available.
SUPPLIERS. The Company has substantially completed communications with
third party suppliers of the major computers, software, and other equipment
used, operated, or maintained by the Company to identify and, to the extent
possible, to resolve issues involving the Year 2000 Problem. However, the
Company has limited or no control over the actions of these third party
suppliers. Thus, while the Company expects that it will be able to resolve any
significant Year 2000 Problems with these systems, there can be no assurance
that these suppliers will resolve any or all Year 2000 Problems with these
systems before the occurrence of a material disruption to the business of the
Company or any of its customers. Any failure of these third parties to resolve
Year 2000 Problems with their systems in a timely manner could have a material
adverse effect on the Company's business, financial condition, and results of
operation.
MOST LIKELY CONSEQUENCES OF YEAR 2000 PROBLEMS. The Company expects to
identify and resolve all Year 2000 Problems that could materially adversely
affect its business operations. However, management believes that it is not
possible to determine with complete certainty that all Year 2000 Problems
affecting the
12
<PAGE>
CCC INFORMATION SERVICES GROUP INC.
AND SUBSIDIARIES
Company have been identified or corrected. The number of devices that could be
affected and the interactions among these devices are simply too numerous. In
addition, one cannot accurately predict how many Year 2000 Problem-related
failures will occur or the severity, duration, or financial consequences of
these perhaps inevitable failures. As a result, management expects that the
Company could likely suffer the following consequences:
1. a significant number of operational inconveniences and inefficiencies
for the Company and its customers that may divert management's time
and attention and financial and human resources from its ordinary
business activities; and
2. a lesser number of serious failures that may require significant
efforts by the Company or its customers to prevent or alleviate
material business disruptions.
Although the Company believes its critical customer systems are
compliant and expects the remaining critical internal system to be compliant by
the end of the third quarter of 1999, there is no guarantee of these results.
Specific factors that give rise to this uncertainty include a possible loss of
technical resources to perform the work, failure to identify all susceptible
systems, non-compliance by third parties whose systems and operations impact the
Company, and other similar uncertainties. A possible worst case scenario might
include one or more of the Company's software products sold to customers being
non-compliant. Such an event could result in a material disruption to the
Company's or customers operations. For example, the software could experience an
interruption in its ability to properly calculate or access the data required to
complete a collision estimate. Should the worst case scenario occur it could,
depending on its duration, have a material impact on the Company's results of
operations and financial position.
CONTINGENCY PLANS. The Company is currently completing contingency
plans to address Year 2000 Problems should they occur. The Company expects to
complete its contingency plans by the end of the third quarter of 1999.
Depending on the systems affected, these plans could include accelerated
replacement of affected equipment or software, short to medium use of backup
equipment and software, increased work hours for Company personnel or use of
contract personnel to correct on an accelerated schedule any Year 2000 Problems
that arise or to provide manual workarounds for information systems, and similar
approaches. If the Company is required to implement any of these contingency
plans, it could have a material adverse effect on the Company's financial
condition and results of operations.
Based on the activities described above, management believes the
Company is devoting the necessary resources to identify and resolve Year 2000
Problems. The success of this effort and a favorable outcome to the various
potential situations described herein will determine the impact the Year 2000
Problem has on the Company's business or results of operations.
LIQUIDITY AND CAPITAL RESOURCES
During the six months ended June 30, 1999, net cash provided by
operating activities was $14.1 million. The Company applied $4.1 million to the
purchase of equipment and software. In addition, the Company borrowed $2.0
million of long-term debt. The Company also acquired 1.0 million of the
Company's outstanding shares for $12.6 million during the six months ended June
30, 1999. On August 13, 1999, the Company acquired 100% of the outstanding stock
of D.W. Norris Limited for $5.0 million.
Management believes that cash flows from operations and the Company's
credit facility will be sufficient to meet the Company's liquidity needs over
the next 12 months. There can be no assurance, however, that the Company will be
able to satisfy its liquidity needs in the future without engaging in financing
activities beyond that described above.
FORWARD-LOOKING STATEMENTS
The Private Securities Litigation Reform Act of 1995 contains certain
safe harbors regarding forward-looking statements. In that context, the
discussion in Item 2 contains forward-looking statements which involves
certain degrees of risks and uncertainties, including statements relating to
liquidity and capital resources. Except for the historical information, the
risks and uncertainties, include, without limitation, the effect of competitive
pricing within the industry, the presence of competitors with greater financial
resources than the Company, the intense competition for top software engineering
talent and the
13
<PAGE>
CCC INFORMATION SERVICES GROUP INC.
AND SUBSIDIARIES
volatile nature of technological change within the automobile claims
industry. Additional factors that could affect the Company's financial
condition and results of operations are included in the Company's Initial
Public Offering Prospectus and Registration on Form S-1 filed with the
Securities and Exchange Commission ("Commission") on August 16, 1996 and the
Company's 1998 Annual Report on Form 10-K, as amended, filed with the
Commission on April 1, 1999.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In March 1999, the Company completed a settlement of a lawsuit filed in
late 1998 involving a former independent sales representative. The settlement of
$1.7 million, recorded in December 1998, included, among other things, payment
for past earned commissions, resolution of disputed commissions, and other costs
associated with the resolution of the dispute.
The Company is a party to various claims and routine litigation arising
in the normal course of business. Such claims and litigation are not expected to
have a material adverse effect on the financial condition or results of
operations of the Company.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
(a) The annual meeting of the stockholders of the Registrant was held
on April 29, 1999.
(b) The directors listed in the Registrant's Proxy Statement dated
March 30, 1999, were elected to serve until the earlier of the next
Annual Meeting of Stockholders or until their respective successors
have been elected and qualified, as follows:
<TABLE>
<CAPTION>
DIRECTOR FOR WITHHELD ABSTENTIONS
- -------- --- -------- -----------
<S> <C> <C> <C>
Morgan W. Davis 21,707,144 200,021 0
Michael R. Eisenson 21,707,144 200,021 0
Thomas L. Kempner 21,707,144 200,021 0
Dudley C. Mecum 21,707,144 200,021 0
David M. Phillips 21,707,144 200,021 0
Githesh Ramamurthy 21,667,144 240,021 0
Mark A. Rosen 21,707,144 200,021 0
Michael R. Stanfield 21,707,144 200,021 0
Herbert S. Winokur 21,707,144 200,021 0
</TABLE>
(c) An increase to the number of shares authorized to be purchased
pursuant to the Company's 1997 Employee Stock Option Plan was
approved. Voting by stockholders on the proposal was 19,893,232
for, 1,999,128 against, 14,805 withheld and 0 abstentions.
(d) Appointment of PricewaterhouseCoopers LLP as the Company's
independent auditors was approved. Voting by stockholders on the
proposal was 21,870,440 for, 4,655 against, 32,070 withheld and 0
abstentions.
14
<PAGE>
CCC INFORMATION SERVICES GROUP INC.
AND SUBSIDIARIES
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
3.1 Amended and Restated Certificate of Incorporation of the
Company filed as Exhibit 3.1 of the Company's Annual
Report on Form 10-K (the "Annual Report") (filed with the
Commission File No. 000-28600 on March 14, 1997, and
hereby incorporated by reference)
3.2 Amended and Restated Bylaws (incorporated herein by
reference to Exhibit 3.2 of the Company's Annual Report on
Form 10-K, Commission File No. 000-28600)
10.1 Amended and restated Credit Facility Agreement between CCC
Information Services Inc., LaSalle National Bank and the
other financial institutions party thereto (incorporated
herein by reference to Exhibit 10.1 of the Company's
Annual Report on Form 10-K, Commission File No. 000-28600)
10.2 Amended and restated Motors Crash Estimating Guide Data
License (incorporated herein by reference to Exhibit 10.2
of the Company's Annual Report on Form 10-K, Commission
File No. 000-28600)
10.3 European Version of Motors Crash Estimating Guide Data
License (incorporated herein by reference to Exhibit 10.3
of the Company's Annual Report on Form 10-K, Commission
File No. 000-28600)
10.4 Stock Option Plan (incorporated herein by reference to
Exhibit 4.03 of the Company's Registration Statement on
Form S-8, Commission File No. 333-15207 filed October 31,
1996)
10.5 1997 Stock Option Plan, as amended (incorporated herein by
reference to Exhibit 4.05 of the Company's Registration
Statement on Form S-8, Commission File No. 333-67645 filed
November 20, 1998)
10.6 401(k) Company Retirement Saving & Investment Plan
(incorporated herein by reference to Exhibit 4.4 of the
Company's Registration Statement on Form S-8, Commission
File No. 333-32139 filed on July 25, 1997)
10.7 Employee Stock Purchase Plan (incorporated herein by
reference to Exhibit 5.01 of the Company's Registration
Statement on Form S-8, Commission File No. 333-47205 filed
on March 2, 1998)
10.8 Securities Purchase Agreement between Company and
InsurQuote Systems Inc. dated February 10, 1998
(incorporated herein by reference to Exhibit 10.7 of the
Company's Quarterly Report on Form 10-Q, Commission File
No. 000-28600 filed on May 15, 1999)
10.9 Investment Agreement between Company and InsurQuote
Systems Inc. dated February 10, 1998 (incorporated herein
by reference to Exhibit 10.8 of the Company's Quarterly
Report on Form 10-Q, Commission File No. 000-28600 filed
on May 15, 1999)
10.10 Common Stock Warrant to purchase 440,350 shares of
InsurQuote Systems Inc. dated February 10, 1998
(incorporated herein by reference to Exhibit 10.9 of
the Company's Quarterly Report on Form 10-Q,
Commission File No. 000-28600 filed on May 15, 1999)
15
<PAGE>
CCC INFORMATION SERVICES GROUP INC.
AND SUBSIDIARIES
10.11 Sale and Purchase Agreement between the Company and
Phillip Carter dated July 1, 1998 (incorporated
herein by reference to Exhibit 10.11 of the
Company's Annual Report on Form 10-K, Commission
File No. 000-28600)
11 Statement Re: Computation of Per Share Earnings
13 InsurQuote Systems, Inc. Audited Consolidated
Financial Statements for the Year Ended June 30,
1998 (incorporated herein by reference to Exhibit 13
of the Company's Annual Report on Form 10-K,
Commission File No. 000-28600)
27 Financial Data Schedule
(b) Reports on Form 8-K
Change in Control of Registrant filed on June 29, 1999,
Commission File No. 000-28600
16
<PAGE>
CCC INFORMATION SERVICES GROUP INC.
AND SUBSIDIARIES
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.
Date: August 13, 1999 CCC Information Services Group Inc.
By: /s/ Githesh Ramamurthy
----------------------
Name: Githesh Ramamurthy
Title: President and Chief Executive Officer
By: /s/ Leonard L. Ciarrocchi
-------------------------
Name: Leonard L. Ciarrocchi
Title: Executive Vice President
and Chief Financial Officer
By: /s/ Michael P. Devereux
-----------------------
Name: Michael P. Devereux
Title: Senior Vice President of Finance
and Chief Accounting Officer
17
<PAGE>
CCC INFORMATION SERVICES GROUP INC.
AND SUBSIDIARIES
EXHIBIT INDEX
3.1 Amended and Restated Certificate of Incorporation of the Company filed
as Exhibit 3.1 of the Company's Annual Report on Form 10-K (the
"Annual Report") (filed with the Commission File No. 000-28600 on
March 14 1997, and hereby incorporated by reference)
3.2 Amended and Restated Bylaws (incorporated herein by reference to
Exhibit 3.2 of the Company's Annual Report on Form 10-K, Commission
File No. 000-28600)
10.1 Amended and restated Credit Facility Agreement between CCC Information
Services Inc., LaSalle National Bank and the other financial
institutions party thereto (incorporated herein by reference to
Exhibit 10.1 of the Company's Annual Report on Form 10-K, Commission
File No. 000-28600)
10.2 Amended and restated Motors Crash Estimating Guide Data License
(incorporated herein by reference to Exhibit 10.2 of the Company's
Annual Report on Form 10-K, Commission File No. 000-28600)
10.3 European Version of Motors Crash Estimating Guide Data License
(incorporated herein by reference to Exhibit 10.3 of the Company's
Annual Report on Form 10-K, Commission File No. 000-28600)
10.4 Stock Option Plan (incorporated herein by reference to Exhibit 4.03 of
the Company's Registration Statement on Form S-8, Commission File No.
333-15207 filed October 31, 1996)
10.5 1997 Stock Option Plan, as amended (incorporated herein by reference to
Exhibit 4.05 of the Company's Registration Statement on Form S-8,
Commission File No. 333-67645 filed November 20, 1998)
10.6 401(k) Company Retirement Saving & Investment Plan (incorporated herein
by reference to Exhibit 4.4 of the Company's Registration Statement on
Form S-8, Commission File No. 333-32139 filed on July 25, 1997)
10.7 Employee Stock Purchase Plan (incorporated herein by reference to
Exhibit 5.01 of the Company's Registration Statement on Form S-8,
Commission File No. 333-47205 filed on March 2, 1998)
10.8 Securities Purchase Agreement between Company and InsurQuote Systems
Inc. dated February 10, 1998 (incorporated herein by reference to
Exhibit 10.7 of the Company's Quarterly Report on Form 10-Q, Commission
File No. 000-28600 filed on May 15, 1999)
10.9 Investment Agreement between Company and InsurQuote Systems Inc. dated
February 10, 1998 (incorporated herein by reference to Exhibit 10.8 of
the Company's Quarterly Report on Form 10-Q, Commission File No.
000-28600 filed on May 15, 1999)
10.10 Common Stock Warrant to purchase 440,350 shares of InsurQuote Systems
Inc. dated February 10, 1998 (incorporated herein by reference to
Exhibit 10.9 of the Company's Quarterly Report on Form 10-Q,
Commission File No. 000-28600 filed on May 15, 1999)
10.11 Sale and Purchase Agreement between the Company and Phillip Carter
dated July 1, 1998 (incorporated herein by reference to Exhibit 10.11
of the Company's Annual Report on Form 10-K, Commission File No.
000-28600)
11 Statement Re: Computation of Per Share Earnings
13 InsurQuote Systems, Inc. Audited Consolidated Financial Statements for
the Year Ended June 30, 1998 (incorporated herein by reference to
Exhibit 13 of the Company's Annual Report on Form 10-K, Commission File
No. 000-28600)
27 Financial Data Schedule
18
<PAGE>
CCC INFORMATION SERVICES GROUP INC. AND SUBSIDIARIES
STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1999 1998 1999 1998
---- ---- ---- ----
<S> <C> <C> <C> <C>
Per share income (loss) before dividends and accretion on preferred stock
Income (loss) before dividends and accretion on preferred stock $ 75 $ (282) $ (936) $ 2,817
------- -------- ------- -------
------- -------- ------- -------
Weighted average common shares outstanding:
Shares attributable to common stock outstanding 23,381 24,859 23,550 24,749
Shares attributable to common stock equivalents outstanding 304 634 360 707
------- -------- ------- -------
23,685 25,493 23,910 25,456
------- -------- ------- -------
------- -------- ------- -------
Per share income (loss) before dividends and accretion on preferred stock $ - $ (0.01) $ (0.04) $ 0.11
------- ------- ------- -------
------- -------- ------- -------
Per share dividends and accretion on mandatorily redeemable preferred:
Dividends and accretion on mandatorily redeemable preferred: $ (1) $ (97) $ (2) $ (191)
------- ------- ------ -------
------- -------- ------- -------
Weighted average common shares outstanding:
Shares attributable to common stock outstanding 23,381 24,859 23,550 24,749
Shares attributable to common stock equivalents outstanding 304 634 360 707
------- -------- ------- -------
23,685 25,493 23,910 25,456
------- -------- ------- -------
------- -------- ------- -------
Per share dividends and accretion on mandatorily redeemable preferred $ - $ - $ - $ (0.01)
------- -------- ------- -------
------- -------- ------- -------
Net income (loss) per share applicable to common stock:
Net income (loss) applicable to common stock $ 74 $ (379) $ (938) $ 2,626
------- -------- ------- -------
------- -------- ------- -------
Weighted average common shares outstanding:
Shares attributable to common stock outstanding 23,381 24,859 23,550 24,749
Shares attributable to common stock equivalents outstanding 304 634 360 707
------- -------- ------- -------
23,685 25,493 23,910 25,456
------- -------- ------- -------
------- -------- ------- -------
Net income (loss) per share applicable to common stock $ - $ (0.01) $ (0.04) $ 0.10
------- -------- -------- -------
------- -------- -------- -------
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED CONSOLIDATED INTERIM FINANCIAL STATEMENTS AS OF AND FOR THE SIX MONTHS
ENDED JUNE 30, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
CONSOLIDATED INTERIM FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 460
<SECURITIES> 0
<RECEIVABLES> 27,056
<ALLOWANCES> (3,241)
<INVENTORY> 0
<CURRENT-ASSETS> 32,708
<PP&E> 53,543
<DEPRECIATION> (38,338)
<TOTAL-ASSETS> 75,946
<CURRENT-LIABILITIES> 35,445
<BONDS> 0
0
0
<COMMON> 71,032
<OTHER-SE> (47,491)<F1>
<TOTAL-LIABILITY-AND-EQUITY> 75,946
<SALES> 0
<TOTAL-REVENUES> 100,877
<CGS> 0
<TOTAL-COSTS> 93,927
<OTHER-EXPENSES> 228<F2>
<LOSS-PROVISION> 1,769
<INTEREST-EXPENSE> (381)
<INCOME-PRETAX> 6,797
<INCOME-TAX> 2,737
<INCOME-CONTINUING> (936)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (936)<F3>
<EPS-BASIC> (0.04)
<EPS-DILUTED> (0.04)<F4>
<FN>
<F1>Accumulated deficit & cumulative translation adjustment.
<F2>Other income, net of expenses.
<F3>Net loss.
<F4>Includes dividends and accretion on mandatorily redeemable preferred stock.
</FN>
</TABLE>
