<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549-1004
FORM 10-Q
X
- ---- QUARTERLY REPORT PURSUANT TO SECTION 13 OF THE SECURITIES EXCHANGE ACT OF
1934
For the quarterly period ended September 30, 1996
OR
- ---- TRANSITION REPORT PURSUANT TO SECTION 13 OF THE SECURITIES EXCHANGE ACT
OF 1934
For the transition period from to
Commission file number 0-21485
SUPERIOR CONSULTANT HOLDINGS CORPORATION
(exact name of registrant as specified in its charter)
STATE OF DELAWARE 38-3306717
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4000 Town Center, Suite 1100 Southfield, Michigan 48075
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (810) 386-8300
Indicate by check mark whether the registrant:
(1) has filed all reports required to be filed by Section 13 of the Securities
Exchange Act of 1934 during the preceding 12 months, Yes X . No . and
---- ----
(2) has been subject to such filing requirements for the past 90 days
Yes . No X .
---- ----
As of November 15,1996, there were outstanding 7,559,735 shares of the issuer's
$.01 par value common stock.
<PAGE> 2
SUPERIOR CONSULTANT HOLDINGS CORPORATION
QUARTER ENDED SEPTEMBER 30, 1996
INDEX
PART I - FINANCIAL INFORMATION
PAGE
<TABLE>
<C> <S> <C>
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as of September 30, 1996 and December 3
31, 1995 (unaudited)
Condensed Consolidated Statements of Operations for the three months and nine 4
months ended September 30, 1996 and 1995 (unaudited)
Condensed Consolidated Statements of Cash Flows for the nine months ended 5
September 30, 1996 and 1995 (unaudited)
Notes to Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition and Results of 8
Operations
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 13
SIGNATURES 14
</TABLE>
Page 2
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
SUPERIOR CONSULTANT HOLDINGS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
ASSETS SEPTEMBER 30, DECEMBER 31,
------
1996 1995
---- ----
<S> <C> <C>
Current assets
Cash and cash equivalents $ 95 $ 455
Accounts receivable, net 9,568 5,811
Prepaid expenses and other current assets 236 154
------- ------
Total current assets 9,899 6,420
Property and equipment, net 1,543 985
------- ------
Total Assets $11,442 $7,405
======= ======
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
Current liabilities
Lines of credit $ 845 $ 50
Accounts payable 1,675 1,118
Accrued liabilities
Payroll and withholding taxes 1,097 1,736
Commissions 20 502
Profit sharing 1,071 482
Bonuses 3,923 281
Deferred revenue 1,121 638
Note payable to stockholder 5 156
Income tax payable 95 -
------- ------
Total current liabilities 9,852 4,963
Deferred income taxes 107 133
Deferred bonuses 593 448
Stockholders' equity
Preferred stock; authorized, 1,000,000
shares of $.01 par value; no shares issued
or outstanding -- --
Common stock; authorized, 30,000,000 shares
of $.01 par value; issued and outstanding,
4,777,985 in 1996 and 1995 48 48
Additional paid-in capital 1,214 1,036
Retained earnings 343 1,506
Stockholders' notes receivable (715) (729)
------- ------
Total stockholders' equity 890 1,861
------- ------
Total Liabilities and Stockholders' Equity $11,442 $7,405
======= ======
</TABLE>
See notes to condensed consolidated financial statements.
Page 3
<PAGE> 4
SUPERIOR CONSULTANT HOLDINGS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------ -----------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues $ 8,955 $6,961 $25,502 $ 18,882
Costs and expenses
Cost of services 4,388 3,088 12,585 8,640
Selling, general and administrative expenses 3,302 2,768 9,552 7,440
Executive compensation expense 1,673 976 4,273 2,742
------- ------ ------- --------
Total costs and expenses 9,363 6,832 26,410 18,822
------- ------ ------- --------
Earnings (loss) from operations (408) 129 (908) 60
Interest expense 30 - 52 9
Other income (15) - (43) (30)
-------- ------ ------- --------
Earnings (loss) before income taxes (423) 129 (917) 81
Income taxes 55 33 68 133
------- ------ ------- --------
Net earnings (loss) $ (478) $ 96 $ (985) $ (52)
======= ====== ======= ========
Pro forma earnings data
Earnings (loss) before income taxes, as reported $ (423) $ 129 $ (917) $81
Adjustment for executive compensation expense 1,408 711 3,478 1,948
------- ------ ------- --------
Pro forma earnings before income taxes 985 840 2,561 2,029
Pro forma income tax expense 390 335 1,015 886
------- ------ ------- --------
Pro forma net earnings $595 $ 505 $ 1,546 $ 1,143
======= ====== ======= ========
Pro forma net earnings per share $ 0.12 $ 0.10 $ 0.32 $ 0.25
======= ====== ======= ========
Pro forma weighted average number of common and
common equivalent shares outstanding 4,824 4,824 4,824 4,536
======= ====== ======= ========
</TABLE>
See notes to condensed consolidated financial statements.
Page 4
<PAGE> 5
SUPERIOR CONSULTANT HOLDINGS CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
-------------------------------
1996 1995
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (985) $ (52)
Adjustments to reconcile net loss to net cash
provided by (used in) operating activities
Depreciation 332 237
Non-cash compensation - 225
Bad debt expense 110 97
Deferred income taxes (27) 106
Changes in operating assets and liabilities:
Accounts receivable (3,867) (1,645)
Prepaid expenses and other current
assets (82) (19)
Accounts payable 557 (155)
Accrued liabilities 3,256 1,931
Deferred revenue 483 47
Income taxes payable 95 27
------- --------
Net cash provided by (used in)
operating activities (128) 799
Cash flows from investing activities:
Purchases of property and equipment (890) (608)
------- --------
Net cash used in investing activities (890) (608)
Cash flows from financing activities:
Proceeds from lines of credit, net 795 -
Proceeds from notes payable to stockholder - 200
Repayment of note payable to stockholder (151) -
Principal payments on stockholders' notes
receivable 14 -
------- --------
Net cash provided by financing activities 658 200
------- --------
Net increase (decrease) in cash (360) 391
Cash and cash equivalents, beginning of period 455 215
------- --------
Cash and cash equivalents, end of period $ 95 $ 606
======= ========
Supplemental disclosure of cash flow
information:
Interest payments $ 42 $ 9
Income tax payments 12 30
</TABLE>
See notes to condensed consolidated financial statements.
Page 5
<PAGE> 6
SUPERIOR CONSULTANT HOLDINGS CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
SEPTEMBER 30, 1996
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have
been prepared pursuant to the rules of the Securities and Exchange Commission
for quarterly reports on Form 10-Q. 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 and estimated
provisions for bonus and profit-sharing arrangements) considered necessary for
a fair presentation have been included. Operating results for the three-month
and nine-month periods ended September 30, 1996 are not necessarily indicative
of the results that may be expected for the year ended December 31, 1996.
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, 1995, included in the registration statement (No. 333-10213) on
Form S-1 filed by the Company with the Securities and Exchange Commission on
August 15, 1996, as amended.
NOTE 2 - PRO FORMA ADJUSTMENTS TO FINANCIAL STATEMENTS
The following pro forma adjustments have been made to the historical
results of operations to make the presentation more comparable in relation to
future periods:
(a) Elimination of executive compensation expense (including bonuses) in
excess of the amount that would have been paid had the compensation limiting
agreements, for the majority stockholder and two other executive officers, which
became effective concurrent with the closing of the Company's initial public
offering of common stock on October 16, 1996, been effective throughout such
periods.
(b) Computation of federal income taxes assuming effective tax rate of
40% for the three months ended September 30, 1996 and 1995 and for the nine
months ended September 30, 1996, and 43% for the nine months ended September 30,
1995, which would have been recorded had one of the Company's subsidiaries,
Superior Consultant Company, Inc., been a C Corporation and after eliminating
the executive compensation expense in (a).
NOTE 3 - PRO FORMA NET EARNINGS PER SHARE
Pro forma net earnings per share is computed based on the weighted average
number of shares of Common Stock outstanding during the respective periods, and
includes the dilutive effect of unexercised stock options using the treasury
stock method.
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NOTE 4 - SUBSEQUENT EVENT
On October 16, 1996, the Company completed the public offering of 2,723,623
shares of its Common Stock at $16 per share, resulting in net proceeds of
approximately $40,000,000. Of the proceeds, $4,475,000 was used to repay all
amounts then outstanding on the lines of credit of the Company's subsidiaries.
Just prior to the public offering, the Company paid three senior executive
officers accrued compensation totaling $3.7 million, financed via the Company's
lines of credit.
In connection with the public offering, the Company entered into two merger
transactions pursuant to which (i) Superior Consultant Company, Inc.
("Superior") and Unitive Corporation ("Unitive") became wholly-owned
subsidiaries of the Company and (ii) all issued and outstanding shares of
common stock and options for common stock of Superior and Unitive were
exchanged for 4,836,112 shares of common stock of the Company.
Additionally in October 1996, the Company terminated its 1987 Stock Option Plan
and adopted its Long-Term Incentive Plan. Pursuant to the Long-Term Incentive
Plan, a maximum of 900,000 shares of common stock will be initially reserved
for the granting of incentive, nonstatutory or formula options, restricted
stock grants and other equity-based compensation.
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ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
OVERVIEW
The Company conducts business through its two operating subsidiaries,
Superior and Unitive. Superior is a leading healthcare consulting firm that
provides a wide range of information technology consulting and strategic and
operations management consulting services to a broad cross-section of healthcare
industry participants and healthcare information system vendors. Unitive assists
numerous clients in various industries in developing, designing, implementing
and maintaining groupware and intranet and internet information systems and
solutions, principally using Lotus Notes.
The Company derives substantially all of its revenues from fees for
professional services, the substantial majority of which are billed at
contracted hourly rates. The Company establishes standard billing guidelines
based on the type and level of service offered. Actual billing rates are
established on a project by project basis and may vary from the standard
guidelines. Billings are typically made on a biweekly basis to monitor client
satisfaction and manage outstanding accounts receivable balances. Revenue on
time and materials contracts is recognized as the services are provided. A
small percentage of the Company's projects are billed on a fixed fee basis,
which is distinguishable from the Company's general method of billing on a time
and materials basis. The Company recognizes revenue on fixed fee projects using
the percentage of completion basis. The Company could in the future increase
the number and size of projects billed on a fixed fee basis. Increased use of
fixed fee contracts could subject the Company to increased risks, including cost
overruns. Additionally, if the Company is successful in its strategy to provide
healthcare IT outsourcing services, there can be no assurance that the Company
will be able to achieve profit margins on outsourcing contracts it may be
awarded which are consistent with its historical levels of profitability or
which justify the Company's investments in such contracts.
The Company's historical revenue growth is attributable to various factors,
including an increase in the number of projects for existing and new clients,
and expanded geographic presence. In addition, the Company seeks to increase
revenues by expanding its range of specialty services. The Company manages its
client development efforts through several strategic services groups, each
having specific geographic responsibility and focus.
The Company's most significant expense is cost of services, which consists
primarily of consultant salaries and benefits. In recent years, consultant
compensation expense has grown faster than consultant billing rates, resulting
in an increase in the Company's cost of services as a percentage of revenues.
The Company addressed this issue by adding an additional variable portion of
compensation payable upon the achievement of measureable performance goals.
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The Company's cost of services as a percentage of revenues is also impacted
by its consultant utilization. The Company manages utilization by monitoring
project requirements and timetables. The number of consultants assigned to a
project will vary according to the size, complexity, duration and demands of the
project. Project terminations, completions and scheduling delays may result in
periods when consultants are not fully utilized. An unanticipated termination
of a significant project could cause the Company to experience lower consultant
utilization, resulting in a higher than expected number of unassigned
consultants. In addition, the establishment of new practice areas and the
hiring of consultants in peak hiring periods have resulted in periods of lower
consultant utilization (and resulting downward pressure on margins) until
project volume increases in these new areas. In the future, the establishment
of new practice areas, as well as further geographic expansion, could from time
to time adversely affect utilization. Variations in consultant utilization
would result in quarterly variability of the Company's cost of services as a
percentage of revenues. The Company's consultants are generally employed on a
full-time basis, and therefore the Company will in the short run incur
substantially all of its employee-related costs even during periods of low
utilization.
Selling, general and administrative expenses include the costs of
recruiting, continuing education, marketing, facilities, equipment
depreciation, and administration, including compensation and benefits. Selling,
general and administrative expenses as a percentage of total revenues has
decreased as the Company leverages its infrastructure expense across its
growing revenue base. The Company will incur increased rent and certain
one-time costs in the fourth quarter of 1996 associated with its move to larger
headquarters to accomodate its growth.
Historically, executive compensation expense consisted of salaries, formula
bonuses and discretionary bonuses paid to the majority stockholder and two other
key executives. The Company's historical levels of executive compensation were
related primarily to the Company's status as a Subchapter S Corporation and
period to period increases in executive compensation expense were related
primarily to the Company's period to period earnings growth. The Company has
entered into agreements with these individuals, effective upon the consummation
of its initial public offering through December 31, 1997, which provide maximum
annual compensation in an aggregate amount of $1,060,000, comprised of base
salary and bonus amounts to be awarded based on the attainment of certain
financial performance criteria. The foregoing compensation arrangements for
these three officers do not apply to amounts paid on or prior to the closing of
the Company's initial public offering.
The pro forma statement of operations data reflects an adjustment for
executive officer compensation to eliminate the amount by which key executive
compensation paid in such periods was in excess of the estimated compensation
that would have been paid under the newly adopted executive compensation
limiting agreements discussed above, as if such agreements were in place
throughout such periods. The estimated amount payable under the new agreements
was calculated by assuming the payment to the executive officers of their base
salaries plus 100% of their potential bonus for the applicable period.
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<PAGE> 10
Since January 1, 1987, Superior has been treated as a Subchapter S
corporation for federal income tax purposes under Subchapter S of the Internal
Revenue Code and for certain state income tax purposes. As a result,
substantially all of the income of Superior has been taxed directly to its
stockholders rather than Superior. In addition, prior to January 1 ,1995,
Unitive was taxed as a Subchapter S corporation and thereafter as a Subchapter C
corporation. Effective October 9, 1996, Superior and Unitive will be subject to
corporate income taxation on a consolidated basis as Subchapter C corporations.
The pro forma statement of operations data also reflects an adjustment to
federal income taxes for each period shown, assuming Superior has been operating
as a C Corporation, after giving effect to the executive officer compensation
expense adjustments.
In connection with the termination of Superior's S Corporation status in
the fourth quarter of 1996, the Company will record one-time deferred income
taxes in accordance with Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes." This income tax expense will be in addition to
income tax expense otherwise incurred in such quarter.
THREE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 1995
Revenues. Revenues increased by $2.0 million, or 28.6%, to $9.0 million
for the three months ended September 30, 1996, as compared to $7.0 million for
the three months ended September 30, 1995. The revenue growth was due primarily
to an increased number of new client assignments.
Cost of Services. Cost of services increased by $1.3 million, or 42.0%,
to $4.4 million for the three months ended September 30, 1996, as compared to
$3.1 million for the three months ended September 30, 1995. The increase was
due to the additional number of consultants required to support the Company's
growth, as well as increases in their compensation levels. Cost of services as
a percentage of revenue increased to 49.0% for the three months ended September
30, 1996, as compared to 44.4% for the three months ended September 30, 1995.
This increase was due to an increase in compensation levels, with average
billing rates remaining relatively constant. In addition, in 1996 the Company
initiated two new national practice areas, which required both more
highly-compensated individuals and produced lower consultant utilization during
start up.
Selling, general and administrative expenses. Selling, general and
administrative expenses increased by $534,000, or 19.3%, to $3.3 million for the
three months ended September 30. 1996, as compared to $2.8 million for the three
months ended September 30, 1995. This increase was due to the increase in
incentive and other compensation as well as higher recruiting and training
expenses consistent with the Company's growth and enhanced marketing efforts to
achieve higher revenues. Selling, general and administrative expenses as a
percentage of revenues decreased to 36.9% for the three months ended September
30, 1996, as compared to 39.8% for the three months ended September 30, 1995.
This decrease was due to increased operating efficiencies resulting from higher
revenue levels.
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Executive compensation expense. Executive compensation expense increased
by $697,000 to $1,673,000 for the three months ended September 30, 1996, as
compared to $976,000 for the three months ended September 30, 1995. The
Company's historical levels of executive compensation were related primarily to
the Company's status as a Subchapter S Corporation and period to period
increases in executive compensation expense were related primarily to the
Company's period to period earnings growth.
NINE MONTHS ENDED SEPTEMBER 30, 1996 COMPARED TO NINE MONTHS ENDED SEPTEMBER
30, 1995
Revenues. Revenues increased by $6.6 million, or 35.1%, to $25.5 million
for the nine months ended September 30, 1996, as compared to $18.9 million for
the nine months ended September 30, 1995. The revenue growth was attributable
primarily to an increase in the number of new client assignments.
Cost of Services. Cost of services increased by $4.0 million, or
45.7%, to $12.6 million for the nine months ended September 30, 1996, as
compared to $8.6 million for the nine months ended September 30, 1995. The
increase was due to the additional number of consultants required to support
the Company's growth, as well as increases in their compensation levels. Cost
of services as a percentage of revenue increased to 49.3% for the nine months
ended September 30, 1996, as compared to 45.8% for the nine months ended
September 30, 1995. This increase was due to an increase in compensation
levels, with average billing rates remaining relatively constant. In addition,
the Company initiated two new national practice areas, which required both more
highly-compensated individuals and produced lower consultant utilization during
start up.
Selling, general and administrative expenses. Selling, general and
administrative expenses increased by $2.1 million, or 28.4%, to $9.6 million for
the nine months ended September 30, 1996, as compared to $7.4 million for the
nine months ended September 30, 1995. This increase was due to the increase in
incentive and other compensation as well as higher recruiting and training
expenses consistent with the Company's growth and enhanced marketing efforts to
achieve higher revenues. Selling, general and administrative expenses as a
percentage of revenues decreased to 37.5% for the nine months ended September
30, 1996, as compared to 39.4% for the nine months ended September 30, 1995.
This decrease was due to increased operating efficiencies resulting from higher
revenue levels.
Executive compensation expense. Executive compensation expense increased
by $1.5 million to $4,273,000 for the nine months ended September 30, 1996, as
compared to $2,742,000 for the nine months ended September 30, 1995. The
Company's historical levels of executive compensation were related primarily to
the Company's status as a Subchapter S Corporation and period to period
increases in executive compensation expense were related primarily to the
Company's period to period earnings growth.
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LIQUIDITY AND CAPITAL RESOURCES
The Company's primary capital needs have been to fund the growth in working
capital required to support its growth in revenues. The Company's primary
source of liquidity has been cash flow from operations. The Company believes
that funds generated from operations, together with the net proceeds from its
initial public offering completed in October 1996, will be sufficient to finance
its working capital and capital expenditure requirements for at least the next
twelve months.
On October 16, 1996, the Company closed its sale of 2,723,623 shares of its
Common Stock at a price of $16 per share. The net proceeds to the Company,
totaling approximately $40 million, will be used for general corporate purposes,
including working capital and possible acquisitions of related business. Also
in October 1996, a portion of the proceeds of the offering were used to repay
all amounts outstanding on the lines of credit, totaling $4,475,000.
At September 30, 1996, the Company had cash and cash equivalents of $95,000
and working capital of $47,000. Working capital at September 30, 1996
represents a decrease of $1,410,000 from December 31, 1995 resulting primarily
from purchases of property and equipment and an increase in accrued executive
compensation expense. In October 1996, accrued compensation to certain key
executives of approximately $3.7 million was paid from a temporary borrowing
from the Company's credit lines, which were repaid out of the proceeds of the
initial public offering.
The Company has two collateralized lines of credit facilities at Comerica
Bank N.A. The credit facilities bear interest at 0.5% over prime. As of
September 30, 1996, the Company had $845,000 outstanding on these lines, with an
interest rate of 8.75% at September 30, 1996. The lines of credit were repaid
with the proceeds from the Company's sale of Common Stock in October 1996.
Net cash used in operating activities for the nine months ended September
30, 1996 was $128,000, compared with cash provided by operations of $799,000 for
the nine months ended September 30, 1995. The increase in cash used is
primarily due to the increase in accounts receivable, attributable to higher
business volumes.
Net cash used in investing activities of $890,000 during the nine months
ended September 30, 1996 consists primarily of computer equipment acquisitions.
Net cash provided by financing activities of $658,000 for the nine months
ended September 30, 1996 was principally the result of borrowings on the lines
of credit to fund equipment purchases.
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PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
None
(b) Form 8-K
No reports on Form 8-K have been filed for the quarter for
which this report is filed.
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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
Superior Consultant Holdings Corporation
Date November 20 , 1996 By: /s/ Richard D. Helppie, Jr
--------------------- ----------------------------
Richard D. Helppie, Jr,
Chief Executive Officer
Date November 20 , 1996 By: /s/ James T. House
--------------------- ----------------------------
* James T. House,
Vice President - Finance
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SUPERIOR CONSULTANT
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit No. Description
- ----------- -----------
<S> <C>
27 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 95
<SECURITIES> 0
<RECEIVABLES> 9,834
<ALLOWANCES> (266)
<INVENTORY> 0
<CURRENT-ASSETS> 9,899
<PP&E> 3,006
<DEPRECIATION> (1,463)
<TOTAL-ASSETS> 11,442
<CURRENT-LIABILITIES> 9,852
<BONDS> 0
0
0
<COMMON> 48
<OTHER-SE> 842
<TOTAL-LIABILITY-AND-EQUITY> 11,442
<SALES> 25,502
<TOTAL-REVENUES> 25,502
<CGS> 12,585
<TOTAL-COSTS> 12,585
<OTHER-EXPENSES> 13,825
<LOSS-PROVISION> 110
<INTEREST-EXPENSE> 52
<INCOME-PRETAX> (917)
<INCOME-TAX> 68
<INCOME-CONTINUING> (985)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (985)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
