<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1996
COMMISSION FILE NUMBER 0-28840
INFORMATION MANAGEMENT RESOURCES, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
FLORIDA 59-2911475
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
26750 U.S. HIGHWAY 19 NORTH
SUITE 500
CLEARWATER, FLORIDA 34621
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE AND ZIP CODE)
(813) 797-7080
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS 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 NO X
----- -----
AS OF DECEMBER 20, 1996, THERE WERE 9,649,090 OUTSTANDING SHARES OF THE
REGISTRANT'S COMMON STOCK, PAR VALUE $.10 PER SHARE.
1
<PAGE>
INFORMATION MANAGEMENT RESOURCES, INC.
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
ITEM 1. CONDENSED CONSOLIDATED BALANCE SHEETS
AS OF SEPTEMBER 30, 1996 AND DECEMBER 31, 1995................. 3
CONDENSED CONSOLIDATED STATEMENTS OF
INCOME FOR THE THREE AND NINE MONTH
PERIODS ENDED SEPTEMBER 30, 1996 AND 1995...................... 4
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTH PERIODS ENDED
SEPTEMBER 30, 1996 AND 1995.................................... 5
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS........... 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION............................. 9
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.............................................. 12
ITEM 5. OTHER INFORMATION.............................................. 12
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K............................... 12
</TABLE>
2
<PAGE>
INFORMATION MANAGEMENT RESOURCES, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
(UNAUDITED AND IN THOUSANDS)
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
------------- ------------
(Unaudited)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $ 352 $1,621
Accounts receivable 4,550 2,906
Unbilled work in process 831 708
Other current assets 798 460
------- ------
Total current assets 6,531 5,695
Property and equipment, net of
accumulated depreciation 3,224 1,699
Capitalized software costs, net of
accumulated amortization 664 549
Deposits and other assets 836 264
Goodwill, net of accumulated amortization 1,653 451
------- ------
Total assets $12,908 $8,658
======= ======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable $ 1,356 $ 490
Revolving credit loans 1,659 655
Accrued expenses 1,769 1,485
Deferred revenue 1,146 17
Current portion of long-term debt 899 460
Notes payable - shareholder - 242
------- ------
Total current liabilities 6,829 3,349
Long-term debt 660 1,132
Notes payable - shareholder - 107
Deferred income taxes 72 38
Other liabilities 79 83
------- ------
Total liabilities 7,640 4,709
------- ------
Minority interest 1,728 1,241
------- ------
Shareholders' Equity:
Preferred stock - -
Common stock 640 906
Additional paid-in capital - 1,167
Retained earnings 3,017 706
Cumulative foreign currency
translation adjustments (117) (62)
------- ------
3,540 2,717
Less treasury stock - (9)
------- ------
Total shareholders' equity 3,540 2,708
------- ------
Total liabilities and shareholders' equity $12,908 $8,658
======= ======
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
3
<PAGE>
INFORMATION MANAGEMENT RESOURCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED AND IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ ------------------
1996 1995 1996 1995
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenues $ 7,048 $ 5,853 $19,445 $16,428
Cost of revenues 4,106 3,607 11,328 10,360
------- ------- ------- -------
Gross profit 2,942 2,246 8,117 6,068
Selling, general and administrative expenses 1,817 1,456 4,909 3,924
------- ------- ------- -------
Income from operations 1,125 790 3,208 2,144
Other (expense) income:
Income (loss) in equity investment 16 (19) 16 (78)
Interest expense, net (62) (98) (222) (295)
Other 10 12 42 448
------- ------- ------- -------
Total other (expense) income (36) (105) (164) 75
------- ------- ------- -------
Income before provision for income taxes and
minority interest 1,089 685 3,044 2,219
Provision (benefit) for income taxes 42 (22) 157 176
------- ------- ------- -------
Income before minority interest 1,047 707 2,887 2,043
Minority interest in net (Income) loss (166) 89 (497) (266)
------- ------- ------- -------
Net income $ 881 $ 796 $ 2,390 $ 1,777
======= ======= ======= =======
PRO FORMA INCOME DATA (UNAUDITED):
Income before income taxes and minority interest 1,089 685 3,044 2,219
Pro forma provision for income taxes 332 253 1,012 796
------- ------- ------- -------
Pro forma net income before minority interest 757 432 2,032 1,423
Pro forma minority interest in net (income) loss (166) 89 (497) (266)
------- ------- ------- -------
Pro forma net income $ 591 $ 521 $ 1,535 $ 1,157
======= ======= ======= =======
Pro forma net income per share $ 0.05 $ 0.04 $ 0.14 $ 0.08
======= ======= ======= =======
Pro forma weighted average common and
common stock equivalent shares outstanding 11,255 14,202 11,336 14,175
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
4
<PAGE>
INFORMATION MANAGEMENT RESOURCES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED AND IN THOUSANDS)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
-----------------
1996 1995
------- -------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 2,390 $ 1,777
------- -------
Adjustments to reconcile net income to cash
provided by (used in) operating activities:
Depreciation and amortization 414 423
Gain on sale of property and equipment - (521)
Unrealized exchange losses 8 42
(Gain) loss in equity investment (16) 78
Minority interest in net income (loss) 496 266
Deferred income taxes 34 1
(Increase) decrease in accounts receivable (1,644) (1,138)
(Increase) decrease in unbilled work in progress (123) (354)
(Increase) decrease in other current assets (338) (472)
(Increase) decrease in deposits and other assets (164) 55
Increase (decrease) in accounts payable 866 (507)
Increase (decrease) in accrued expenses 284 129
Increase (decrease) in other liabilities (4) 12
Increase (decrease) in deferred revenue 1,129 17
------- -------
Total adjustments 942 (1,969)
------- -------
Net cash provided by (used in) operating activities 3,332 (192)
------- -------
Cash flows from investing activities:
Acquisition of interest in consolidated subsidiary (1,790) -
Additions to capitalized software costs (141) (146)
Additions to property and equipment (1,913) (285)
Increase in equity investment (392) (22)
Proceeds from sale of property and equipment - 1,391
------- -------
Net cash (used in) provided by investing activities (4,236) 938
------- -------
Cash flows from financing activities:
Net borrowings from revolving credit lines 1,003 36
Proceeds from long-term debt 900 40
Payments on long-term debt (2,028) (1,157)
Proceeds from issuance of common stock 10 -
Payment of dividends (22) -
Purchase of treasury stock, at cost (217) -
------- -------
Net cash used in financing activities (354) (1,081)
------- -------
Effect of exchange rate changes (11) (66)
------- -------
Net decrease in cash and cash equivalents (1,269) (401)
Cash and cash equivalents at beginning of period 1,621 1,013
------- -------
Cash and cash equivalents at end of period $ 352 $ 612
======= =======
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
5
<PAGE>
INFORMATION MANAGEMENT RESOURCES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
(UNAUDITED)
1. BASIS OF PRESENTATION
---------------------
In the opinion of management, the accompanying condensed consolidated
financial statements have been prepared in conformity with generally
accepted accounting principles and include all adjustments, consisting only
of all normal recurring adjustments necessary for a fair presentation. The
results of operations for the three and nine month periods ended September
30, 1996 are not necessarily indicative of the results to be expected for
the full year. These interim condensed consolidated financial statements
should be read in conjunction with the audited consolidated financial
statements for the year ended December 31, 1995, which are contained in the
Company's Registration Statement on Form S-1 and amendments thereto, as
filed with the Securities and Exchange Commission.
2. ACCOUNTING POLICIES
-------------------
(a) Principles of Consolidation - the condensed consolidated financial
statements include the accounts of Information Management Resources, Inc.
(IMR or the "Company") and its majority owned or effectively controlled
foreign subsidiary, Information Management Resources (India) Limited, an
Indian limited liability company (IMR-India). The Company's investment in
Information Management Resources (U.K.) Limited (IMR-U.K.) Is accounted for
on the equity method. All significant intercompany balances and
transactions have been eliminated.
During August 1996, IMR purchased 10.5% (60,000 shares) of IMR-India's
outstanding common shares for approximately $1.8 million in cash, which
increased its investment from 34.2% to 44.7%. In September 1996, IMR
entered into an agreement to purchase an additional 35.1% (200,000 shares)
of IMR-India from an unrelated private investment fund. The purchase price
is approximately $5.1 million and closing of this transaction is contingent
upon approval from the Reserve Bank of India. These purchases will be
accounted for as a purchase pursuant to the provisions of APB No. 61,
"Business Combinations" and resulting goodwill will be amortized over a 10-
year period.
In addition, during November 1996, IMR acquired an additional 18.4%
(104,800 shares) of IMR-India from Satish K. Sanan, IMR's President, Chief
Executive Officer and majority shareholder for approximately $3,129,000.
This amount was paid in cash. The acquisition from IMR's majority
shareholder will be accounted for as a reduction of equity.
Upon completion of the acquisition noted above, IMR will own
approximately 98.2% of the outstanding common shares of IMR-India.
(b) Net Income Per Share - Net income (loss) per common and common
equivalent share is computed using the weighted average number of common
and dilutive common equivalent shares outstanding during each period.
Shares of stock issuable pursuant to stock options have been included where
their effect is dilutive. Fully diluted earnings per common share are not
presented as they are not materially different from primary earnings per
share. Dilutive common equivalent shares consist of stock options (using
the treasury stock method).
(c) Pro Forma Income Adjustment - The pro forma adjustments give pro
forma effect to the elective termination of the Company's S Corporation
status under the Internal Revenue code, which occurred on November 11,
1996.
6
<PAGE>
INFORMATION MANAGEMENT RESOURCES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
(UNAUDITED)
3. TERM LOAN
---------
In August 1996, IMR-India obtained approval of a U.S. dollar
denominated term loan of $1,300,000 from a financial institution to finance
the expansion of their facility in Bangalore, India. Funds are available
for draw until August 26, 1997. At September 30, 1996, no draws have been
made on this note. The loan is repayable in eight equal semi-annual
installments of $162,500 commencing September, 1997. Interest on the loan
is payable semi-annually at the rate of LIBOR plus 3% per annum. The loan
is collateralized by a first lien on IMR-India's property and equipment and
a guarantee by the Company's majority shareholder.
4. TREASURY STOCK
--------------
During January 1996, IMR repurchased 29.2% (1,063,730 voting common
shares and 1,583,210 nonvoting common shares) of its outstanding common
stock from certain minority stockholders for approximately $1,323,000 ($.50
per share). The repurchase agreement required an immediate payment of
$50,000 and the execution of 7% notes payable in the aggregate amount of
$1,273,000 payable in four equal quarterly installments commencing April
1996. This note was paid in full on November 5, 1996.
5. SHAREHOLDERS' EQUITY
--------------------
On September 12, 1996, the Company filed Amended and Restated Articles
of Incorporation which: (I) effected a reclassification of each share of
its voting and nonvoting common stock into 10 shares of common stock, par
value $.10 per share; (ii) increased the Company's authorization of common
stock to 40,000,000 shares; and (iii) created and authorized 10,000,000
shares of preferred stock, par value $.10 per share, under terms that allow
the Board of Directors to designate one or more classes of preferred stock
and to designate the rights, privileges, preferences and limitations of
each such class. All applicable share and per share amounts in the
accompanying financial statements have been retroactively adjusted to
reflect this reclassification.
Changes in shareholders' equity for the nine months ended September
30, 1996 is summarized as follows (in thousands):
<TABLE>
<CAPTION>
Cumulative
Foreign
Common Stock Additional Currency
--------------- Paid-In Translation Retained Treasury
Shares Amount Capital Adjustment Earnings Stock Total
------ ------ ---------- ----------- -------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, December 31, 1995 9,056 $ 906 $ 1,167 $ (62) $ 706 $(9) $ 2,708
Issuance of common stock 104 10 - - - - 10
Repurchase of common stock (2,756) (276) (1,167) - (57) 9 (1,491)
Net income - - - - 2,390 - 2,390
Dividends paid - - - - (22) - (22)
Translation adjustments - - - (55) - - (55)
----- ----- ------- ----- ------ --- -------
Balance, September 30, 1996 6,404 $ 640 $ - $(117) $3,017 $ - $ 3,540
===== ===== ======= ===== ====== === =======
</TABLE>
7
<PAGE>
INFORMATION MANAGEMENT RESOURCES, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
(UNAUDITED)
6. INCOME TAXES
------------
The Company had elected to be taxed as an S Corporation under the
provisions of the Internal Revenue Code whereby taxable income is generally
reported by the shareholders on their individual income tax returns. In
connection with the closing of the initial public offering, the
S Corporation election was terminated on November 11, 1996 and subsequently
the Company became subject to U.S. federal and state income taxes as a
C Corporation.
Upon termination of the S Corporation election, the Company realized
current and deferred income tax liabilities reflecting the tax effects of
temporary differences between the Company's financial statement and tax
bases of certain assets and liabilities. These tax liabilities will be
reflected on the consolidated balance sheet with a corresponding non-
recurring expense in the consolidated statement of operations as of the
date of the S Corporation termination.
Deferred income taxes will relate primarily to accounts receivable,
accounts payable, accrued expenses and deferred income, primarily
attributable to the use of the cash method of accounting for income tax
purposes. The amount of the deferred income tax liability computed using
the asset and liability method of accounting for income tax purposes
approximates $1.1 million at September 30, 1996.
7. SUBSEQUENT EVENT
----------------
During November 1996, the Company completed an initial public offering
of 3,212,500 shares of its authorized but unissued Common Stock, par value
$0.10 per share. Net proceeds from the initial public offering were
approximately $40.8 million.
8
<PAGE>
INFORMATION MANAGEMENT RESOURCES, INC.
MANAGEMENT DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Except for historical information contained herein, some matters discussed
in this report constitute forward-looking statements within the meaning of
Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended. The Company notes that a variety
of risk factors could cause the Company's actual results and experience to
differ materially from the anticipated results or other expectations expressed
in the Company's forward-looking statements. Reference is made in particular to
the discussion set forth below in this report and set forth in the Company's
Registration Statement on Form S-1 and amendments thereto, as filed with the
Securities and Exchange Commission, under "Risk Factors."
RESULTS OF OPERATIONS
FOR THE THREE MONTH AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 1996 AND 1995
The following information should be read in conjunction with the
consolidated financial statements and the notes thereto and in conjunction with
Management Discussion and Analysis of Financial Condition and Results of
Operations in the Company's Registration Statement on Form S-1 and amendments
thereto, as filed with the Securities and Exchange Commission.
For the three months and nine months ended September 30, 1996, revenues
increased to $7.0 million and $19.4 million, respectively, a 20.4% and 18.4%
increase over the prior year's comparable periods. Revenue growth during those
periods reflects the Company's current emphasis on its Year 2000 services. The
information technology ("IT") industry is currently focused on resolving the
Year 2000 problem, as many existing computer systems run software programs
permitting only two-digit entries for years and therefore cannot properly
process dates in the next century. The Gartner Group, a recognized industry
source, has estimated the world-wide costs (including in-house costs) to resolve
the Year 2000 problem could range from $300 billion to $600 billion. Third
quarter revenues from the Company's Year 2000 services increased to $2.2
million, compared to less than $50,000 for the third quarter of 1995.
The Company's transitional outsourcing services (software development,
application maintenance and migration, and re-engineering services), revenues
were $3.5 million for the third quarter of 1996 compared to $3.6 million for the
third quarter of 1995.
Professional services revenues for the third quarter of 1996 were $815,000
or 53.9% less than professional services revenues of $1.8 million for the third
quarter of 1995, as the Company's resources were reallocated from short-term,
time-and-materials contract programming projects to multi-year, turnkey Year
2000 and application maintenance engagements.
As a percentage of revenues, gross profit for the three months and
nine months ended September 30, 1996 increased to 41.7% and 41.7%, respectively
from 38.4% and 36.9%, respectively over the comparable periods in 1995. This
increase in gross profit reflects more favorable pricing and improved
utilization of technical personnel and proprietary tools.
9
<PAGE>
INFORMATION MANAGEMENT RESOURCES, INC.
MANAGEMENT DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(CONTINUED)
FOR THE THREE MONTH AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 1996 AND 1995
For the three months and nine months ended September 30, 1996, selling,
general and administrative expenses increase to $1.8 million and $4.9 million,
respectively, a 24.8% and 25.1% increase over the prior year's comparable
periods. As a percentage of revenues, selling, general and administrative
expenses for the three months and nine months ended September 30, 1996 increased
to 25.7% and 25.2%, respectively from 24.9% and 23.9%, respectively over the
comparable periods in 1995. The increase of approximately 1.0% as a percentage
of revenue over the prior comparable periods is the results of the
implementation of new incentive programs during 1996 and an expansion of branch
offices.
As a percentage of revenues, income from operations for the three months
and nine months ended September 30, 1996 increased to 16.0% and 16.5%,
respectively from 13.5% and 13.0%, respectively over the comparable periods in
1995. Operating income for the third quarter of 1996 was $1.1 million, a 42.4%
increase over the same quarter in 1995 of $790,000. Operating income for the
nine months ended September 30, 1996 was $3.2 million, a 49.6% increase over the
comparable period in 1995 of $2.1 million.
The Company incurred other expense of $36,000 for the three months ended
September 30, 1996 as compared to other expense of $105,000 for the three months
ended September 30, 1995. During this period, the Company realized lower
interest expense on lower levels of debt and improved operations in the
Company's equity investment in IMR-U.K. The Company incurred other expense of
$164,000 for the first nine months of 1996 as compared to $75,000 of other
income for the first nine months of 1995. Lower interest expense and the
improved operations in IMR-U.K. were offset by a non-recurring $400,000 net gain
realized by IMR-India on the sale of certain assets and real property during the
second quarter of 1995.
Pro forma provision for income taxes as a percentage of income before
income taxes and minority interest was 30.5% and 33.2% for the three and nine
months ended September 30, 1996. This represented a decrease over the three and
nine months ended September 30, 1995 of 36.9% and 35.9%, respectively. This
decrease is the result of the IMR-India having a lower effective tax rate and
contributing a greater portion of profitability in 1996.
The minority interest in net income increased by $255,000 and $231,000,
respectively for the three months and nine months ended September 30, 1996 over
the comparable period in 1995 as a result of greater profitability for IMR-
India.
Net income is presented on a pro forma basis to give pro forma effect to
the November 1996 elective termination of the Company's S Corporation status
under the Internal Revenue Code.
Pro forma net income for the third quarter of 1996 was $591,000, a 13.4%
increase over the same quarter in 1995 of $521,000. Pro forma net income for
the nine months ended September 30, 1996 was $1.5 million, a 32.7% increase over
the comparable period in 1995 of $1.2 million.
10
<PAGE>
INFORMATION MANAGEMENT RESOURCES, INC.
MANAGEMENT DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(CONTINUED)
FOR THE THREE MONTH AND NINE MONTH PERIODS ENDED SEPTEMBER 30, 1996 AND 1995
During November 1996 the Company received proceeds of $40.8 million, net of
offering expenses, upon completion of its initial public offering. The
Company's intended use of these funds is fully described in its Registration
Statement on Form S-1 and amendments thereto, as filed with the Securities and
Exchange Commission. Pending any such use, the Company will invest the balance
of these funds in short-term, investment grade securities or money market
instruments.
As of September 30, 1996, the Company had a current ratio of .9 to 1, cash
and cash equivalents of $352,000 and available bank lines of credit of $2.8
million. The Company continuously reviews its future cash requirements,
together with its available bank lines of credit and internally generated funds.
The Company believes it will meet all working capital obligations and fund
further development of its business for at least the next 12 months.
11
<PAGE>
INFORMATION MANAGEMENT RESOURCES, INC.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is not a party to any pending material litigation.
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
There were no reports on Form 8-K filed during the quarter ended
September 30, 1996.
12
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
INFORMATION MANAGEMENT RESOURCES, INC.
Date December 20, 1996 /s/ Satish K. Sanan
------------------- -------------------------------------
Satish K. Sanan
Chief Executive Officer
Date December 20, 1996 /s/ Michael J. Dean
------------------- -------------------------------------
Michael J. Dean
Chief Financial Officer
13
<PAGE>
INFORMATION MANAGEMENT RESOURCES, INC.
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION PAGE
- ------ ----------- ----
<C> <S> <C>
11 Computation of earnings per share for the three
and nine month periods ended September 30, 1996
and 1995.................................................. 15
27 Financial Data Schedule................................... 16
</TABLE>
14
<PAGE>
EXHIBIT NUMBER 11
INFORMATION MANAGEMENT RESOURCES, INC.
COMPUTATION OF EARNINGS PER COMMON SHARE
(UNAUDITED AND IN THOUSANDS, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------ ------------------
1996 1995 1996 1995
------- ------- ------- -------
<S> <C> <C> <C> <C>
Pro forma net income $ 591 $ 521 $ 1,535 $ 1,157
======= ======= ======= =======
Shares:
Weighted average number of common shares
outstanding 6,404 9,056 6,404 9,056
Assuming conversion of options issued and
outstanding 4,851 5,146 4,932 5,119
------- ------- ------- -------
Weighted average number of common shares
outstanding as adjusted $11,255 $14,202 $11,336 $14,175
======= ======= ======= =======
Pro forma earnings per common share $ 0.05 $ 0.04 $ 0.14 $ 0.08
======= ======= ======= =======
</TABLE>
15
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
STATEMENTS FOR THE PERIOD ENDED SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 352
<SECURITIES> 0
<RECEIVABLES> 4,550
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 6,531
<PP&E> 4,781
<DEPRECIATION> 1,557
<TOTAL-ASSETS> 12,908
<CURRENT-LIABILITIES> 6,829
<BONDS> 0
0
0
<COMMON> 640
<OTHER-SE> 2,900
<TOTAL-LIABILITY-AND-EQUITY> 12,908
<SALES> 19,445
<TOTAL-REVENUES> 19,445
<CGS> 0
<TOTAL-COSTS> 11,328
<OTHER-EXPENSES> 4,909
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 222
<INCOME-PRETAX> 3,044
<INCOME-TAX> 1,012
<INCOME-CONTINUING> 2,032
<DISCONTINUED> 0
<EXTRAORDINARY> 497
<CHANGES> 0
<NET-INCOME> 1,535
<EPS-PRIMARY> $.14
<EPS-DILUTED> $.14
</TABLE>
