14
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
(Mark One)
[ X ] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the quarterly period ended
September 30, 1997
OR
[ ] Transition Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Commission file no. 0-28830
The Metzler Group, Inc.
(Exact name of Registrant as specified in its charter)
Delaware 36-4094854
(State or other jurisdiction of (I.R.S.Employer
incorporation or organization) Identification No.)
520 Lake Cook Road, Suite 500, Deerfield, Illinois 60015
(Address of principal executive office, including zip code)
(847) 914 - 9100
(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 November 7, 1997, 5 the Registrant had outstanding
13,289,088 shares of its $.001 par value Common Stock.
THE METZLER GROUP, INC.
Quarter Ended September 30, 1997
INDEX
PART 1 - FINANCIAL INFORMATION PAGE
Item 1 Financial Statements
Consolidated Balance Sheets as
of September 30, 1997 (unaudited)
and December 31, 1996 (supplemental
unaudited)...............................3
Consolidated Statements of
Operations for the three
months ended September 30,
1997 and 1996 (unaudited)................4
Consolidated Statements of
Operations for the nine months
ended September 30, 1997 and
1996 (unaudited).........................5
Consolidated Statements of
Cash Flows for the nine months
ended September 30, 1997 and
1996 (unaudited).........................6
Notes to Consolidated
Financial Statements
(unaudited)..............................7
Item 2 Management's Discussion and
Analysis of Financial
Condition and Results of
Operations...............................8
Item 3. Quantitative and Qualitative
Disclosure About Market Risk
Sensitive Instruments....................10
Part II - OTHER
INFORMATION
Item 2 Changes in Securities and Use
of Proceeds..............................10
Item 6 Exhibits and Reports on Form 8-K.........11
Financial Data Schedule..................12
SIGNATURES................................13
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
THE METZLER GROUP, INC.
CONSOLIDATED BALANCE SHEETS
September December
30, 31,
1997 1996
(unaudited) (supplemental
unaudited)
ASSETS
Current assets:
Cash and cash equivalents, $20,611,754 $33,536,265
Accounts receivable, net 19,078,159 14,184,458
Prepaid expenses 1,054,218 525,957
Other current assets 326,112 129,211
----------- -----------
Total current assets 41,070,243 48,375,891
Property and equipment, net 2,487,504 2,713,793
Intangible assets 743,710 749,345
Other assets 250,921 430,076
----------- -----------
Total assets $44,552,378 $52,269,105
=========== ===========
LIABILITIES AND STOCKHOLDERS'
EQUITY
Current liabilities:
Book overdraft $ -- $ 642,124
Line of credit 1,191,924 1,685,133
Notes payable to related parties -- 1,734,580
Current portion of long-term
debt 183,780 606,621
Accounts payable 1,941,442 2,699,675
Accrued liabilities 860,400 749,947
Accrued compensation and related
costs 3,277,944 1,797,676
Income taxes payable 1,993,405 771,157
Deferred income taxes 425,545 711,626
Other current liabilities 594,141 548,493
----------- -----------
Total current liabilities 10,468,581 11,947,032
Long-term debt, less current
maturities 369,724 1,400,553
Notes payable to related parties,
less current portion - 88,725
Deferred income taxes 2,639,268 2,305,639
Other noncurrent liabilities 257,624 577,782
----------- ----------
Total liabilities 13,735,197 16,319,731
----------- ----------
Stockholders' equity:
Preferred stock, $.001 par value;
3,000,000 shares authorized;
no shares issued or outstanding -- --
Common stock, $.001 par value,
15,000,000 shares authorized;
13,287,449 and 13,476,758 shares
issued and outstanding in 1997
and 1996 13,287 13,468
Additional paid-in capital 21,266,146 30,014,290
Retained earnings 9,537,748 5,921,616
---------- ----------
Total stockholders' equity 30,817,181 35,949,374
---------- ----------
Total liabilities and
stockholders' equity $44,552,378 $52,269,105
=========== ===========
See accompanying notes to consolidated financial statements.
THE METZLER GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Three months ended
September 30,
1997 1996
Revenues........................ $21,139,574 $16,189,157
Cost of services................ 12,066,962 10,824,079
----------- -----------
Gross profit.................... 9,072,612 5,365,078
Merger related costs............ 1,311,959 --
Selling, general and
administrative expenses......... 4,295,668 3,885,602
----------- -----------
Operating income................ 3,464,985 1,479,476
Other (income) expense,net...... (190,633) 141,704
----------- -----------
Income before income tax expense
(benefit)....................... 3,655,618 1,337,772
Income tax expense
(benefit)....................... 1,327,424 (86,080)
----------- -----------
Net income...................... $ 2,328,194 $ 1,423,852
=========== ===========
Pro forma income data :
Net income as reported....... $2,328,194 $1,423,852
Pro forma adjustments to
income tax expense.......... -- (602,759)
----------- -----------
Pro forma net income.......... $2,328,194 $ 821,093
=========== ===========
Pro forma net income per share $0.18 $0.07
=========== ===========
Shares used in computing pro
pro forma net income per share 13,287,449 12,458,781
See accompanying notes to consolidated financial statements.
THE METZLER GROUP, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
Nine months ended
September 30,
1997 1996
Revenues........................ $59,417,571 $47,160,440
Cost of services................ 35,169,117 30,776,522
----------- -----------
Gross profit.................... 24,248,454 16,383,918
Merger related costs............ 1,311,959 --
Selling, general and
administrative expenses......... 13,233,069 10,651,889
----------- -----------
Operating income................ 9,703,426 5,732,029
Other (income) expense,net...... (619,811) 290,812
----------- -----------
Income before income tax expense
(benefit)....................... 10,323,237 5.441.217
Income tax expense(benefit)..... 3,851,879 (71,342)
----------- -----------
Net income...................... $6,471,358 $5,512,559
=========== ===========
Pro forma income data :
Net income as reported......... $6,471,358 $5,512,559
Pro forma adjustments to
income tax expense............ -- (1,799,403)
Pro forma adjustments to
executive compensation expense -- (1,019,460)
----------- -----------
Pro forma net income........... $6,471,358 $2,693,696
=========== ===========
Pro forma net income per share. $0.49 $0.22
=========== ===========
Shares used in computing pro
forma net income per share...... 13,285,115 12,458,781
See accompanying notes to consolidated financial statements.
THE METZLER GROUP, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
Nine months ended
September 30,
1997 1996
Cash flows from operating
activities:
Net income......................... $ 6,471,358 $5,512,559
Adjustments to reconcile net
income to net cashprovided by
operating activities,
net of acquisition:
Depreciation and amortiztion........ 769,893 737,501
Loss on sale of property
and equipment...................... -- 665
Deferred income taxes............... (18,452) (1,218,690)
Changes in assets and liabilities
net of acquisitions:
Accounts receivable.............. (4,718,923 (2,809,909)
Prepaid expenses and
other current assets............ (725,162) (867,800)
Accounts payable and
accrued liabilities............. (647,780) 159,575
Accrued compensation and
related costs................... 1,480,268 1,988,107
Other current liabilities........ 45,648 861,129
Taxes payable.................... 1,222,248 (77,916)
----------- ----------
Net cash provided by operating
activities.............................. 3,879,098 4,285,221
Cash flows from investing activities:
Purchase of property and equipment..... (537,969) (803,617)
Other, net............................. (83,201) (147,773)
Cash paid for acquisitions............. - (313,000)
----------- ----------
Net cash used in investing activities... (621,170) (1,264,390)
Cash flows from financing activities:
Issuance of common stock.............. 155,562 --
Repurchase of common stock............ -- (618,476)
Reduction in book overdraft........... (642,124) --
Issuance of notes payable............. -- 1,128,592
Principal payments on notes payable... (1,453,670) (324,082)
Payments for obligations
under capital lease.................. (57,802) (35,902)
Net repayments of lines of credit..... (493,209) (106,323)
Issuance of notes payable to officers. -- 1,000,000
Repayment of notes payable to
officers............................. (1,823,305) (536,340)
Issuance of notes receivable
to officers.......................... -- (744,848)
Purchase of dissenting shares issued in
business combinations................ (8,867,891) --
Distribution to former
S-corporation stockholders........... (3,000,000) (2,200,000)
------------ -----------
Net cash used in financing activities.. (16,182,439 (2,437,379)
Net increase (decrease)in cash......... (12,924,511 583,452
Cash and cash equivalents at
beginning of period................... 33,536,265 701,206
------------ ----------
Cash and cash equivalents at
end of period......................... $20,611,754 $1,284,658
============ ==========
Supplemental information:
Interest payments.................... $ 262,561 $ 369,649
Income tax payments.................. $ 2,595,077 $ 165,763
============= ==========
See accompanying notes to consolidated financial statements.
THE METZLER GROUP, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
September 30, 1997
Note 1. Basis of Presentation
The accompanying unaudited interim consolidated financial
statements of The Metzler Group, Inc. (the Company) have been
prepared pursuant to the rules of the Securities and Exchange
Commission for quarterly reports on Form 10-Q and do not include
all of the information and note disclosures required by
generally accepted accounting principles. The information
furnished herein includes all adjustments, consisting of normal
recurring adjustments, which are, in the opinion of management,
necessary for a fair presentation of results for these interim
periods.
The results of operations for the nine months ended
September 30, 1997 are not necessarily indicative of the results
to be expected for the entire fiscal year ending December 31,
1997.
The consolidated financial statements include the accounts
of The Metzler Group, Inc. and its subsidiaries. As discussed
in Note 3, during the three months ended September 30, 1997, the
Company entered into business combinations with Resource
Management International, Inc. (RMI) and Reed Consulting Group,
Inc. (Reed). Each of these transactions was accounted for as a
pooling of interests and, accordingly, the consolidated
financial statements have been restated as if the combining
companies had been combined for all periods presented. The
supplemental consolidated balance sheet at December 31, 1996
will become the historical consolidated balance sheet of The
Metzler Group, Inc. and subsidiaries when financial statements
covering the dates of consummation of the business combinations
are issued.
In addition, these financial statements should be read in
conjunction with the Company's audited consolidated financial
statements and notes thereto for the year ended December 31,
1996, included in the Annual Report on Form 10-K filed by the
Company with the Securities and Exchange Commission on March 31,
1997, which reflect the historical financial statements of the
Company prior to the business combinations discussed in Note 3,
as well as with the interim reports on Form 8-K filed by the
Company with the Securities and Exchange Commission on August
14th.
Note 2. Summary of Significant Accounting Policies
Pro Forma Net Income Per Share
Net income per common and common equivalent share is
computed based on the weighted average of common and common
equivalent shares (stock options) outstanding during the period.
Pursuant to Securities and Exchange Commission Staff
Accounting Bulletin No. 83, common and common equivalent shares
issued during the twelve months immediately preceding the initial
public offering date (using the treasury stock method and the
initial public offering price per share) have been included in
the calculation of common and common equivalent shares as if they
were outstanding for all periods presented.
The pro forma adjustments during the nine month period ended
September 30, 1996 reflect the impact of a compensation plan
effective July 1, 1996. The pro forma effect of this
compensation plan was an increase in officer compensation of
$1,019,460 for the nine month period ended September 30, 1996.
The pro forma adjustments for the three and nine month
periods ended September 30, 1996 include additional federal and
state income tax expense of $602,759 and $1,799,403,
respectively. This represents the additional tax that would have
been required had one of the Company's subsidiaries not made an
S-corporation election effective January 1, 1996, partially offset
by a reduction in taxes that would have occurred had the Company
adopted the officers compensation plan referred to above.
Note 3. Business Combinations
On July 31, 1997, the Company issued 2,137,178 shares of
common stock for substantially all the outstanding common stock
of Resource Management International, Inc. (RMI). Additionally,
on August 15, 1997, the Company issued 518,400 shares of common
stock for substantially all of the outstanding common stock of
Reed Consulting Group, Inc. (Reed). Each of these transactions
was accounted for as a pooling of interests and, accordingly, the
consolidated financial statements have been restated as if the
combining companies had been combined for all periods presented.
The Company's consolidated statements of operations for the
three month and nine month periods ended September 30, 1996 have
been restated to reflect revenues of $10,586,472 and $30,701,108,
respectively, for the combined operations of RMI and Reed.
The Company's consolidated statements of operations for the nine
months ended September 30, 1997 include revenues from RMI and Reed
totaling $24,195,771 through the six months ended June 30, 1997 and
$4,710,311 for the period from July 1, 1997 through the dates of
acquisition.
The Company's restated consolidated statements of operations
for the three month and nine month periods ended September 30, 1996
reflect net losses of $122,737 and $174,099, respectively, for the
combined operations of RMI and Reed. The Company's restated consolidated
statements of operations for the nine months ended September 30, 1997
include net income from RMI and Reed totaling $1,112,130 through the six
months ended June 30, 1997 and $416,558 for the period from July
1, 1997 through the dates of acquisition.
The Company incurred significant costs and expenses in
connection with these acquisitions, including legal and
accounting, and other various expenses. These costs and expenses
were recorded in the statement of operations during the third
quarter of 1997.
Item 2.
THE METZLER GROUP, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Statements included in Management's Discussion and
Analysis of Financial Condition and Results of
Operations which are not historical in nature, are
intended to be, and are hereby identified as, "forward
looking statements" for purposes of the safe harbor
provided by Section 21E of the Securities Exchange Act
of 1934, as amended by Public Law 104-67. Forward-
looking statements may be identified by words
including "anticipate," "believe," `intends,"
"estimates," "expect" and similar expressions. The
Company cautions readers that forward-looking
statements, including without limitation, those
relating to the Company's future business prospects,
revenues, working capital, liquidity, and income, are
subject to certain risks and uncertainties that could
cause actual results to differ materially from those
indicated in the forward looking statements, due to
several important factors herein identified, among
others, and other risks and factors identified from
time to time in the Company's reports filed with the
SEC. Such risk factors include, but are not limited
to, risks related to: acquisitions and acquisitions
under consideration, significant client assignments,
recruiting and new business solicitation efforts,
regulatory changes and general economic conditions.
Results of Operations
Revenues. Revenues increased by 31% to $21 million in the
three months ended September 30, 1997 from $16 million in the
third quarter of 1996. Revenues for the first nine months of
1997 increased 26% to $59 million from $47 million for the first
nine months of 1996. These increases were the result of
continued strong demand for the Company's management consulting,
engineering and technical, and economic and financial services
for the electric and energy-related industries. The growth in
revenues was due to increases in both the number and average size
of client projects.
Gross Profit. Gross profit consists of revenues less cost
of services, which includes consultant salaries, benefits and
travel-related direct project expenses. Gross profit increased
69% to $9 million for the three months ended September 30, 1997
from $5 million in the same period of 1996. For the first nine
months of 1997, gross profit grew 48% to $24 million from $16
million in the comparable 1996 period. Gross profit as a
percentage of revenues was 43% for the three month period and 41%
for the nine month period ended September 30, 1997 as compared to
33% for the three month period and 35% for the nine month period
ended September 30, 1996. The improvement in gross profit
margins was driven primarily by increased utilization of the
Company's professional consulting staff.
Merger Related Costs. In the third quarter of 1997, the
Company incurred merger related costs of $1.3 million related to
acquisitions accounted for as poolings of interests. The merger
costs include legal, accounting and other transaction related
fees and expenses. There were no acquisitions or corresponding
related costs in the prior year period.
Selling, General and Administrative Expenses. Selling,
general and administrative expenses include salaries and benefits
of management and support personnel, facilities costs, training,
direct selling, outside professional fees and all other corporate
costs. Selling, general and administrative expenses for the three
months ended September 30, 1997 increased approximately 10% to
$4.3 million from $3.9 million in the year earlier period. The
increase was driven by the expanded volume of business, offset in
part by economies and increased efficiency in certain support
functions. Selling, general and administrative expenses for the
nine months ended September 30, 1997 increased approximately 24%
to $13.2 million from $10.7 million for the comparable period in
1996. The pro forma adjustments for 1996 include an increase in
officer compensation of $1.0 million for the first six months of
the year to reflect the impact of a compensation plan adopted
July 1, 1996. After giving effect to this pro forma adjustment,
selling, general and administrative expenses for the nine months
ended September 30, 1997 increased approximately 13% to $13.2
million from the pro forma $11.7 million for the first nine
months of 1996. This increase is largely attributable to the
overall higher business volume in 1997, again partially offset by
economies and increased efficiency in certain support functions.
Income Taxes. For the first nine months of 1996, one of the
Company's subsidiaries was taxed under Subchapter S of the
Internal Revenue Code. Under the provisions of Subchapter S,
federal income taxes were the responsibility of the Company's
stockholders as were certain state income taxes. Accordingly,
the Company's consolidated statements of operations for the three
month and nine month periods ended September 30, 1996 did not
include a provision for federal or certain state income taxes.
The pro forma adjustments for these periods include additional federal
and state taxes that would have been required had the S-corporation
election not been in effect.
Liquidity and Capital Resources
In July 1997, the Company completed the acquisition of
privately owned Resource Management International, Inc. (RMI), in
a transaction accounted for as a pooling of interests. RMI is a
leading strategic management, resource management, and
engineering consulting company serving the electric, gas and
water utilities, as well as the telecommunications industry and
governmental agencies. In August 1997, the Company completed
another acquisition of privately owned Reed Consulting Group Inc.
(Reed), in a transaction also accounted for as a pooling of
interests. Reed is a leading strategic management and financial
services consulting firm serving a wide range of energy industry
clients in the domestic and international markets. In connection
with these acquisitions the Company made cash payments totaling
approximately $8.9 million to acquire shares of the combining
enterprises held by dissenting stockholders. The Company also
made payments of approximately $3.6 million to repay principal
and accrued interest on outstanding debt obligations of RMI.
In January 1997, the Company repaid notes payable to two
shareholders in the aggregate amount of $1.0 million. The notes,
each with a principal amount of $0.5 million, bore interest at a
rate of 10%. The Company repaid notes payable to other officers
aggregating $0.8 million under various other pre-existing
arrangements at RMI and Reed.
During the period from January 1, 1996 to October 4, 1996 the
Company was taxed as an S-corporation. As an S-corporation, all
the Company's net income from that period was distributed to
its key executives and included in their personal taxable income.
During the first quarter of 1997, the Company distributed $3.0
million of S-corporation earnings. Undistributed S-corporation
earnings amount to $0.5 million as of September 30, 1997.
Recently Issued Accounting Pronouncements
Statement of Financial Accounting Standards No. 128,
"Earnings per Share", was issued in February 1997. The Company
will be required to adopt the new standard for the year and
quarter ended December 31, 1997. Early adoption of this standard
is not permitted. The primary requirements of this standard are:
(i) replacement of primary earnings per share with basic
earnings per share, which eliminates the dilutive effective of
options and warrants; (ii) use of an average share price in
applying the treasury method to compute dilution for options and
warrants for diluted earnings per share; and (iii) disclosure
reconciling the numerator and denominator of earnings per share
calculations. The Company plans to adopt this statement in
fiscal year 1997. The effect of applying this standard is not
expected to be significant
Statement of Financial Accounting Standards No. 131,
"Disclosures about Segments of an Enterprise and Related
Information," was issued in June 1997. The Company will be
required to adopt the new standard for the year ended December
31, 1998, although early adoption is permitted. This statement
requires use of the "management approach" model for segment
reporting. The management approach model is based on the way the
Company's management organizes segments within the Company for
making operating decisions and assessing performance. Reportable
segments are based on products and services, geography, legal
structure, management structure, or any other manner in which
management disaggregates a company. The Company will adopt this
statement in fiscal year 1998.
Item 3. Quantitative and Qualitative Disclosure About Market
Risk Sensitive Instruments
The Company currently does not invest excess funds in
derivative financial instruments or other market rate sensitive
instruments for the purpose of managing its foreign currency
exchange rate risk or for any other purpose.
PART II-OTHER INFORMATION
Item 2. Changes in Securities
On July 31, 1997, the Company issued 2,137,178 shares of
common stock for substantially all the outstanding common stock
of Resource Management International Inc. (RMI). Additionally,
on August 15, 1997, the Company issued 518,400 shares of common
stock for substantially all of the outstanding common stock of
Reed Consulting Group, Inc.(Reed). Each of these transactions
was accounted for as a pooling of interests and, accordingly, the
consolidated financial statements have been restated as if the
combining companies had been combined for all periods presented.
(c) The shares were issued to the shareholders of RMI and Reed,
respectively, as "restricted shares" pursuant to Section 4(2) of
the Securities Act of 1933, as amended, in privately negotiated
transactions not constituting public offerings.
(d) On October 3, 1996, the Company's Registration Statement on
Form S-1 (File No. 333-9019) was declared effective by the
Securities and Exchange Commission (the "Commission") and the
Company's Registration Statement on Form S-1 (File No. 333-13417)
filed pursuant to Rule 462(b) of the Securities Act of 1933, as
amended, was automatically effective upon filing (collectively,
the "IPO Registration Statements"). The IPO Registration
Statements registered a total of 2,585,000 shares of Common Stock
sold by the Company and a total of 1,440,000 shares of Common
Stock sold by certain stockholders of the Company (collectively,
the "Offering"). All of the shares covered by the Registration
Statement were sold upon termination of the Offering on October
9, 1996 to an underwriting syndicate managed by Donaldson, Lufkin
& Jenrette Securities Corporation. The shares sold by the
Company were sold at an aggregate price to the public of $41.4
million, netting $38.5 million to the Company after underwriters'
discount of $2.9 million. The shares sold by the selling
stockholders were sold at an aggregate price to the public of
$23.0 million, netting $21.4 million to the selling stockholders
after underwriters' discount of $1.6 million. The Company
incurred approximately $1.1 million in expenses in addition to
the underwriters' discount described above in connection with the
registration, offering, issuance and sale of the shares in the
Offering, netting estimated proceeds from the Offering to the
Company of approximately $37.4 million (the "Net Proceeds").
None of such expenses were paid to any officer, director or 10%
or greater stockholder of the Company or an affiliate of any such
persons. Since the effective date of the IPO Registration
Statements, $8.0 million of the Net Proceeds was used to redeem
1.7 million shares of the Company's stock held by its founding
shareholder, $8.9 million of has been applied to acquisitions of
other businesses, and $3.6 million has been used for repayment of
indebtedness of acquired companies. The remainder of the Net
Proceeds are invested in fully collateralized short-term
municipal and preferred securities.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
(27) Financial Data Schedule
(b) Reports on Form 8-K.
On August 14, 1997, the Company filed with the Securities
and Exchange Commission, an interim report on Form 8-K describing
the acquisition of Resource Management International, Inc.
On August 14, 1997, the Company filed with the Securities
and Exchange Commission, an interim report on Form 8-K describing
the acquisition of Reed Consulting Group.
Item 6.
Exhibit 27
Financial Data Schedule
September 30, 1997
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM THE METZLER GROUP, INC'S., BALANCE
SHEET AT SEPTEMBER 30, 1997 AND STATEMENTS OF
OPERATIONS FOR NINE MONTHS ENDED SEPTEMBER 30, 1997
Nine months
(unaudited)
Article............................... 5
Period-Type........................... 3 mos
Fiscal-Year-End....................... Dec 31, 1997
Period-End............................ Sep 30, 1997
Cash.................................. 20,611,754
Securities............................ --
Receivables........................... 20,288,159
Allowances............................ 1,210,000
Inventory............................. --
Current-Assets........................ 41,070,243
PP&E.................................. 9,594,536
Depreciation.......................... 7,107,032
Total-Assets.......................... 44,552,378
Current Liabilities................... 10,461,581
Bonds................................. --
Preferred- Mandatory.................. --
Preferred............................. --
Common................................ 13,287
Other - Securities.................... --
Total Liabilities and Equity.......... 44,552,378
Sales................................. 59,417,571
Total Revenue......................... 59,417,571
CGS................................... 35,169,117
Total Costs........................... 49,714,145
Other - Expenses......................(619,811)
Loss Provision........................ --
Interest-Expense...................... --
Income-Pretax......................... 10,323,237
Income-Tax............................ 3,851,879
Income-Continuing..................... --
Discontinued.......................... --
Extraordinary......................... --
Changes............................... --
Net Income............................ 6,471,358
EPS-Primary........................... 0.49
EPS-Diluted........................... 0.49
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.
THE METZLER GROUP, INC.
Date: November 19, 1997 By:/s/ Robert P. Maher
Robert P. Maher
Chairman of the Board, President and
Chief Executive Officer
Date: November 19, 1997 By:/s/ James F.Hillman
James F. Hillman
Chief Financial Officer
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<ARTICLE> 5
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<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 20,611,754
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 1,210,000
<INVENTORY> 0
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<PP&E> 9,594,536
<DEPRECIATION> 7,107,032
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0
<COMMON> 13,287
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<TOTAL-REVENUES> 59,417,571
<CGS> 35,169,117
<TOTAL-COSTS> 49,714,145
<OTHER-EXPENSES> (619,811)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 10,323,237
<INCOME-TAX> 3,851,879
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,471,358
<EPS-PRIMARY> 0.49
<EPS-DILUTED> 0.49
</TABLE>
