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 Quarter Ended September 30, 1995 Commission File Number: 0-3676
VSE CORPORATION
(Exact Name of Registrant as Specified in its Charter)
DELAWARE 54-0649263
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
2550 Huntington Avenue
Alexandria, Virginia 22303-1499
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code (703) 960-4600
Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
Common Stock, par value $.05 per share
(Title of Class)
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 [ ]
Number of shares of Common Stock outstanding as of October 1, 1995: 869,167.
<PAGE>
<TABLE>
VSE Corporation and Subsidiaries
Consolidated Financial Statements (Unaudited)
Consolidated Balance Sheets
(in thousands, except per share amounts)
<CAPTION>
September 30, December 31,
1995 1994
_______ _______
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents . . . . . . . . . . . $ 514 $ 3,124
Accounts receivable, principally
U. S. Government . . . . . . . . . . . . . . . 17,147 10,922
Deferred tax assets . . . . . . . . . . . . . . 1,286 1,491
Other current assets . . . . . . . . . . . . . . 973 858
_______ _______
Total current assets . . . . . . . . . . . . . 19,920 16,395
Property and equipment, net . . . . . . . . . . . 3,612 3,078
Deferred tax assets . . . . . . . . . . . . . . . 0 248
Intangible assets . . . . . . . . . . . . . . . . 3,977 102
Other assets . . . . . . . . . . . . . . . . . . . 1,854 1,449
_______ _______
Total assets . . . . . . . . . . . . . . . . . $29,363 $21,272
======= =======
Liabilities and Stockholders' Investment
Current liabilities:
Accounts payable and other current liabilities . $ 3,596 $ 2,485
Accrued expenses . . . . . . . . . . . . . . . 6,910 5,661
Accrued income taxes . . . . . . . . . . . . . . 494 70
Dividends payable . . . . . . . . . . . . . . . 74 69
_______ _______
Total current liabilities . . . . . . . . . . 11,074 8,285
Long-term debt . . . . . . . . . . . . . . . . . . 3,651 0
Deferred tax liabilities . . . . . . . . . . . . . 270 0
Deferred compensation . . . . . . . . . . . . . . 1,218 886
_______ _______
Total liabilities . . . . . . . . . . . . . . 16,213 9,171
_______ _______
Commitments and contingencies
Stockholders' investment:
Common stock, par value $.05 per share, authorized
5,000,000 shares; issued 1,948,044 shares . . 97 97
Paid-in surplus . . . . . . . . . . . . . . . . 8,247 8,247
Retained earnings . . . . . . . . . . . . . . . 21,000 20,042
Treasury stock, at cost (1,072,877 shares in
1995 and 1,078,877 shares in 1994) . . . . . . (16,194) (16,285)
_______ _______
Total stockholders' investment . . . . . . . . 13,150 12,101
_______ _______
Total liabilities and stockholders' investment $29,363 $21,272
======= =======
</TABLE>
<PAGE>
<TABLE>
VSE Corporation and Subsidiaries
Consolidated Financial Statements (Unaudited)
Consolidated Statements of Income For the three and nine months ended
(in thousands, except per share amounts)
<CAPTION>
September 30,
1995 1994
Three Nine Three Nine
Months Months Months Months
------- ------- ------- -------
<S> <C> <C> <C> <C>
Revenues, principally from contracts. . $21,204 $54,469 $15,778 $49,547
Costs and expenses of contracts . . . . 19,605 51,569 14,342 46,557
_______ _______ _______ _______
Gross profit . . . . . . . . . . . . . 1,599 2,900 1,436 2,990
Selling, general and administrative
expenses . . . . . . . . . . . . . . 813 964 747 1,123
Interest expense . . . . . . . . . . . 15 27 8 19
_______ _______ _______ _______
Pretax income . . . . . . . . . . . . . 771 1,909 681 1,848
Provision for income taxes . . . . . . 312 739 266 726
_______ _______ _______ _______
Net income . . . . . . . . . . . . . . $ 459 $ 1,170 $ 415 $ 1,122
======= ======= ======= =======
Earnings per common share, based on
weighted average shares outstanding: $ .53 $ 1.35 $ .48 $ 1.30
======= ======= ======= =======
Weighted average shares outstanding 869,167 865,567 863,167 863,167
======= ======= ======= =======
</TABLE>
<PAGE>
<TABLE>
VSE Corporation and Subsidiaries
Consolidated Financial Statements (Unaudited)
Consolidated Statements of Stockholders' Investment
(in thousands)
<CAPTION>
Common Stock Paid-In Retained Treasury
Shares Amount Surplus Earnings Stock
_____ ___ ______ _______ ________
<S> <C> <C> <C> <C> <C>
Balance at December 31, 1993 . 1,948 $97 $8,247 $18,757 $(16,285)
Net income for the year. . . . -- -- -- 1,122 --
Dividends declared ($.23). . . -- -- -- (199) --
_____ ___ ______ _______ ________
Balance at September 30, 1994. 1,948 $97 $8,247 $19,680 $(16,285)
===== === ====== ======= ========
Balance at December 31, 1994 . 1,948 $97 $8,247 $20,042 $(16,285)
Net income for the year. . . . -- -- -- 1,170 --
Dividends declared ($.24). . . -- -- -- (212) --
Issuance of Treasury Stock . . -- -- -- -- 91
_____ ___ ______ _______ ________
Balance at September 30, 1995. 1,948 $97 $8,247 $21,000 $(16,194)
===== === ====== ======= ========
</TABLE>
<PAGE>
<TABLE>
VSE Corporation and Subsidiaries
Consolidated Financial Statements (Unaudited)
Consolidated Statements of Cash Flows For the nine months ended September 30,
(in thousands)
<CAPTION>
1995 1994
<S> <C> <C>
Cash flows from operating activities:
Net income . . . . . . . . . . . . . . . . . . . . . . . . $ 1,170 $ 707
Adjustments to reconcile net income to net cash
provided by operations:
Depreciation and amortization . . . . . . . . . . . . . 1,993 545
(Gain) on sale of property and equipment . . . . . . . (2) (14)
Deferred compensation plan expense . . . . . . . . . . 94 0
Change in assets and liabilities -
(Increase) decrease in:
Accounts receivable . . . . . . . . . . . . . . . . . (6,225) 5,750
Intangible assets . . . . . . . . . . . . . . . . . 755 30
Other current assets and noncurrent assets . . . . . (2,230) (215)
Deferred tax assets . . . . . . . . . . . . . . . . . 453 (425)
Increase (decrease) in:
Accounts payable and other current
liabilities . . . . . . . . . . . . . . . . . . . . 1,204 (1,295)
Accrued expenses. . . . . . . . . . . . . . . . . . . 1,249 305
Accrued and deferred taxes . . . . . . . . . . . . . 424 (37)
Deferred tax liability . . . . . . . . . . . . . . . 270 0
_______ _______
Net cash (used in) provided by operations . . . . . (845) 5,351
_______ _______
Cash flows from investing activities:
Acquisition of CMstat Corporation. . . . . . . . . . . . . (970) 0
Acquisition of Energetics Incorporated . . . . . . . . . . (3,660) 0
Purchase of property and equipment . . . . . . . . . . . . (815) (203)
Issuance of treasury shares . . . . . . . . . . . . . . . 91 0
_______ _______
Net cash used in investing activities . . . . . . . . . (5,354) (203)
_______ _______
Cash flows from financing activities:
Net proceeds from (payments of) revolving term loan . . . 3,592 (2,684)
Proceeds from other long-term debt . . . . . . . . . . . 59 0
Cash dividends paid . . . . . . . . . . . . . . . . . . . (207) (129)
Proceeds from (payments of) deferred
compensation . . . . . . . . . . . . . . . . . . . . . 145 (99)
_______ _______
Net cash provided by (used in) financing activities . . 3,589 (2,912)
_______ _______
Net increase (decrease) in cash and cash equivalents . . . (2,610) 2,236
Cash and cash equivalents at beginning of year. . . . . . 3,124 1,032
_______ _______
Cash and cash equivalents at end of period. . . . . . . . $ 514 $ 3,268
======= =======
</TABLE>
<PAGE>
VSE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Condensed Consolidated Financial Statements
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. Operating results for the three and nine month periods ended
September 30, 1995 are not necessarily indicative of the results that may be
expected for the year ended December 31, 1995. For further information refer to
the consolidated financial statements and footnotes thereto included in the VSE
Corporation annual report on Form 10-K for the year ended December 31, 1994.
(1) Summary of Significant Accounting Policies
Principles of Consolidation
The consolidated financial statements include VSE Corporation ("VSE" or the
"company"), CMstat Corporation ("CMstat"), Energetics Incorporated
("Energetics"), Human Resource Systems, Inc. ("HRSI"), Schmoldt Engineering
Services ("Schmoldt Engineering"), VSE Corona, Inc. ("VCI"), VSE Services
Corporation ("VSES"), and Value Systems Services ("VSS") and BAV, unincorporated
divisions of VSE. All significant intercompany transactions have been
eliminated in consolidation. Certain prior year balances have been reclassified
for comparative purposes.
(2) CMstat Corporation Acquisition
On May 31, 1995 the company acquired all of the outstanding stock of CMstat
Corporation, a leading developer and supplier of commercial off-the-shelf
configuration and product data management solutions, for approximately $970
thousand in cash. CMstat designs, manufactures, and supports the software
developed for commercial and government customers. The acquisition was
accounted for by the purchase method of accounting. The results of operations
since May 31, 1995 are included in these financial statements. The company has
recorded intangible assets of $2.4 million allocating approximately $400
thousand of Goodwill, $1.2 million of intangible assets and $800 thousand of
deferred taxes thereon. These allocations are based on preliminary estimates
made by management. The allocations to intangible assets may be revised at a
later date, however, the impact of the differences, if any, in the final alloca-
tions are not expected to have a material impact on the financial statements.
Goodwill and intangible assets are being amortized by the straight-line method
over periods from seven to ten years.
<PAGE>
VSE CORPORATION
Notes to Consolidated Financial Statements
(3) Energetics Incorporated Acquisition
On August 29, 1995 the company acquired all of the outstanding stock of
Energetics Incorporated ("Energetics") for approximately $3.7 million.
Energetics assists government and industry in conducting effective technology
programs, primarily in the fields of energy use and the environment. Principal
clients include the U. S. Department of Energy, other U. S. Government prime
contractors, public utilities, universities, and not-for-profit corporations and
associations. The acquisition was accounted for by the purchase method of
accounting. The results of operations for the period August 29, 1995 through
September 24, 1995 and the balance sheet as of September 24, 1995 are included
in these financial statements. The company has recorded intangible assets of
$1.6 million consisting of approximately $1.5 million of goodwill and $100
thousand of intangible assets. These allocations are based on preliminary
estimates made by management. The allocations to intangible assets may be
revised at a later date, however, the impact of the differences, if any, in the
final allocations are not expected to have a material impact on the financial
statements. Goodwill and intangible assets are being amortized by the straight-
line method over periods from one to 15 years.
(4) BAV Division
On August 17, 1995 the company was notified that BAV was awarded a contract with
the U. S. Navy to provide engineering, technical and logistical support services
associated with the sale, lease, or transfer of Navy ships to foreign
governments. The contract is a cost plus award fee contract with a base year
and nine option years. The total potential value of the contract is
approximately $1 billion. In September 1995 the contract award was protested
and the protest is currently under review by the General Accounting Office
("GAO"). BAV continues to perform under the contract during the protest period.
(5) Debt
<TABLE>
Long-term Debt
Long-term Debt as of September 30, 1995 and December 31, 1994 was as follows (in
thousands):
<CAPTION>
September 30, December 31,
1995 1994
<S> <C> <C>
Revolving term loan . . . . . . . . . . $3,592 $ 0
Other debt . . . . . . . . . . . . . . 208 3
_____ _____
3,800 3
Less portion due within one year . . . (149) (3)
______ _____
$3,651 $ 0
====== =====
</TABLE>
At September 30, 1995, VSE had a revolving term loan agreement (the "Loan") with
a bank whereby VSE could borrow up to $8 million, subject to a borrowing base
formula and certain other conditions and covenants. Interest was charged on
amounts borrowed under the Loan at the prime rate of interest established by the
<PAGE>
VSE CORPORATION
Notes to Consolidated Financial Statements
bank or at an optional federal funds based rate. A commitment fee of was
charged on the average unused portion of the loan commitment. Borrowings were
secured by VSE assets. The termination date of the Loan was May 31, 1997.
Other debt is related to debt assumed in the acquisitions of CMstat and
Energetics and will be extinguished by the end of 1996.
On October 26, 1995, the original revolving term loan agreement was replaced
with a new revolving term loan agreement (the "Current Loan") with a syndicate
of three banks. Under the Current Loan, VSE can borrow up to $45 million,
subject to a borrowing formula based on billed receivables. Interest is charged
at a prime-based rate or at an optional LIBOR-based rate. A commitment fee is
charged on the unused portion of the loan commitment. The prime-based rate and
the LIBOR-based rate and the amount of the commitment fee increase or decrease
as VSE's leverage ratio increases or decreases. The Current Loan contains
collateral requirements similar to those in the original Loan and restrictive
covenants that include minimum tangible net worth and profitability requirements
and a limit on annual dividendse. The termination date of the Current Loan is
May 31, 1997.
<PAGE>
VSE CORPORATION AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
<TABLE>
The following table sets forth certain items, including consolidated revenues,
pretax income, and net income and the amount of changes of such items for the
three and nine month periods ended September 30, 1995 and 1994 (in thousands).
<CAPTION>
Three Months Nine Months 1995 Compared to 1994
Ended September 30, Ended September 30, Three Nine
1995 1994 1995 1994 Months Months
_______ _______ _______ _______ _______ ______ ______
<S> <C> <C> <C> <C> <C> <C>
Revenues,
principally from
contracts . . . $21,204 $15,778 $54,469 $49,547 $5,426 $4,922
======= ======= ======= ======= ====== ======
Pretax income . . $ 771 $ 681 $ 1,909 $ 1,848 $ 90 $ 61
Provision for
income taxes . . 312 266 739 726 46 13
_______ _______ _______ _______ ______ ______
Net income . . . . $ 459 $ 415 $ 1,170 $ 1,122 $ 44 $ 48
======= ======= ======= ======= ====== ======
</TABLE>
RESULTS OF OPERATIONS
The results of operations includes the operations of VSE Corporation ("VSE" or
the "company"), CMstat Corporation ("CMstat"), acquired in May of 1995,
Energetics Incorporated ("Energetics"), acquired in August of 1995, Human
Resource Systems, Inc. ("HRSI"), Schmoldt Engineering Services Company
("Schmoldt Engineering"), VSE Corona, Inc. ("VCI"), VSE Services Corporation
("VSES"), and Value Systems Services ("VSS") and BAV, unincorporated divisions
of VSE, all of which operate principally in the engineering, software
development, testing, and management services industry. Intercompany sales are
principally at cost.
Revenues for the three and nine month periods ended September 30, 1995 increased
by about 34% and 10%, respectively, compared to the same periods of 1994. The
increase in revenues is primarily due to: the increase in services performed by
VSS associated with the VSS Navy contract (see discussion about the "VSS
Contract" below), revenues associated with the acquisition of CMstat and
Energetics, and an increase in sales of materials and subcontract services by
VSE.
Pretax income for the three and nine month periods ended September 30, 1995
increased by about 13% and 3%, respectively, compared to the same periods of
1994. The increase in pretax income is primarily due to an increase in profits
associated with the additional revenues provided by the VSS Navy contract and
the income of CMstat and Energetics.
The largest customer for the engineering services rendered by the company is the
U. S. Department of Defense ("Defense"), including agencies of the U. S. Army,
Navy, and Air Force. The Defense budget has been restrained by the federal
budget deficit in recent years, and as a result of this and increased
competition,VSE's engineering services revenues have decreased from the levels
attained in prior years. There can be no assurance that future reductions in
<PAGE>
VSE CORPORATION AND SUBSIDIARIES
Management Discussion and Analysis
the Defense budget will not have a material adverse impact on the company's
revenues, results of operations, and financial position.
Substantially all of the company's revenues from continuing operations depend on
the exercise of option periods and the satisfaction of incremental funding
requirements on current contracts, on current contracts not being terminated for
the convenience of the Government, and on the incremental funding requirements
on current contracts. In 1995 and 1994 the company did not experience any
termination of contracts for the convenience of the Government or any non-
exercise of option periods on current contracts which were material to the
company's business.
BAV Contract. In August 1995, the BAV Division of VSE was awarded a contract
with the U. S. Navy to provide engineering, technical and logistical support
services associated with the sale, lease or transfer of Navy ships to foreign
governments. BAV began work on the contract, however, the contract award was
protested and the protest is currently under review by the General Accounting
Office ("GAO"). BAV continues to perform under the contract during the protest
period. This contract has the potential, if all options are exercised, to
generate revenues in excess of one billion dollars over a ten year period from
1995 to 2005.
VSE Contracts. VSE has a contract with the U. S. Navy which accounted for
approximately 18% of consolidated revenues for the nine month period ended
September 30, 1995. This contract was scheduled to expire in September 1992,
but was extended through September 1995. The Navy had announced that it
intended to combine the work performed under this contract with other related
work, and VSE had been informed that it was not the successful bidder for the
new contract. Substantially all work on the contract ended by September 30,
1995. The company has been able to replace the contract with new contracts and
continues to look for opportunities to support the affected workforce.
VSE has another contract with the U. S. Navy which accounted for approximately
13% of revenues for the nine month period ended September 30, 1995. Revenues
for this contract have increased substantially compared to prior years due to
increased requirements for materials and subcontract work. Although work on
the contract is expected to continue through its completion date of September
1996, future levels of materials sales and subcontract work are not expected to
continue at the increased levels experienced during the nine months ended
September 30, 1995.
VSS Subcontract. Beginning in January 1992, VSS provided services to the U. S.
Marine Corps under a subcontract. The subcontract generated revenues to VSS
equal to about 8% of VSE's consolidated revenues for the nine month period
<PAGE>
VSE CORPORATION AND SUBSIDIARIES
Management's Discussion and Analysis
ended September 30, 1994. A protest against the award of the prime contract was
sustained by the General Accounting Office, and in October 1993, a new prime
contract was awarded to a different contractor. Substantially all work on the
VSS subcontract terminated effective April 23, 1994. There is no revenue
associated with this subcontract during 1995.
VSS Contract. In February 1994 VSS was awarded a new contract with a U. S. Navy
customer. In September 1994 VSS began work on the contract. The contract
generated revenues to VSS equal to approximately 12% of consolidated revenues
during the nine month period ended September 30, 1995.
Liquidity and Capital Resources
A net decrease in cash and cash equivalents of approximately $2.6 million during
the nine month period ended September 30, 1995, resulted from approximately $5.4
million in cash used in investing activities, approximately $3.6 million in cash
provided by financing activities and approximately $800 thousand used in
operations.
Investing activities consisted primarily of cash payments of approximately $3.7
million associated with the investment in Energetics, $970 thousand associated
with the investment in CMstat Corporation and $815 thousand associated with the
purchase of property and equipment. Financing activities consisted primarily of
the company's revolving term loan of $3.6 million. Cash used in operations
consisted primarily of an increase in accounts receivable due primarily to the
acquisitions and several significant material purchases under a contract at the
end of the quarter offset by an increase in net income, reduced accounts payable
and accrued expenses.
The company's principal requirements for cash are to finance the costs of
operations pending the collection of accounts receivable, to acquire capital
assets for office and computer support, and to pay cash dividends. As of
September 30, 1995, VSE had borrowings of approximately $3.6 million outstanding
under its $8 million bank loan. Execution on the BAV contract described above
is expected to substantially increase the company's requirements for cash,
however, management believes that the cash flows from operations and a new $45
million bank loan commitment that was executed on October 26, 1995 are adequate
to meet current operating cash requirements.
VSE's requirements for working capital are affected significantly by its
revenues and accounts receivable, which arise primarily from billings made by
the company to the U. S. Government or other prime contractors for services
rendered. Such accounts receivable generally do not present liquidity or
collection problems. Working capital is also affected by (a) contract
retainages, (b) start-up and termination costs associated with new or complete
contracts, (c) capital equipment requirements, and (d) differences between the
provisional billing rates authorized by the government compared to the costs
actually incurred by the company.
<PAGE>
VSE CORPORATION AND SUBSIDIARIES
Management's Discussion and Analysis
Government contracts generally require VSE to pay for material and subcontract
costs included in VSE's contract billings prior to receiving payment for such
costs from the Government. However, such contracts generally provide for
progress payments on a monthly or semimonthly basis, thereby reducing
requirements for working capital.
Cash dividends were declared at $.24 per share during the nine month period
ended September 30, 1995. Pursuant to its bank loan agreement, the payment of
cash dividends is subject to annual rate restrictions. VSE has paid cash
dividends each year since 1973.
Inflation and Pricing Policy
Most of the contracts performed by VSE provide for estimates of future labor
coststo be escalated for any future option periods provided by the contracts,
while the non-labor costs included in such contracts are normally considered
reimbursable at the then current cost. VSE property and equipment consists
principally of computer systems equipment and furniture and fixtures. The
overall impact of inflation on replacement costs of such property and equipment
is expected to be insignificant.
<PAGE>
VSE CORPORATION AND SUBSIDIARIES
PART II. Other Information
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits.
None
(b) Reports on Form 8-K.
On August 18, 1995, the Registrant filed a Current Report on Form
8-K reporting on an award of a cost-plus-award-fee contract to BAV by the U. S.
Navy to provide engineering, technical, and logistics support services for
various classes of U. S. ships bought, leased, or otherwise transferred to
foreign governments. The initial value of the contract is approximately $202
million. If all options are exercised by the Government, the total contract
value is estimated to be in excess of one billion dollars over a ten year
period.
On September 13, 1995, the Registrant filed a Current Report on Form
8-K reporting the acquisition of Energetics Incorporated ("Energetics") of
Columbia, Maryland on August 29, 1995. The Registrant acquired all of the
outstanding capital stock for $3.7 million pursuant to a Stock Purchase
Agreement.
On November 9, 1995, the Registrant filed a Current Report on Form
8-K/A, Amendment No. 1, to the Current Report on Form 8-K filed on September 13,
1995. The amendment reported Energetics' unaudited Financial Statements as of
June 30, 1995 and for the seven months ended June 30, 1994 and 1995, and audited
Financial Statements for the year ended November 27, 1994 together with
auditors' report. The Current Report also reported the Registrant's unaudited
pro forma combined condensed financial statements and notes to unaudited pro
forma combined condensed financial statements.
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has omitted all other items contained in "Part II. Other Information"
because such other items are not applicable or are not required if the answer is
negative or because the information required to be reported therein has been
previously reported.
<PAGE>
VSE CORPORATION 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.
VSE CORPORATION
Date: November 14, 1995 C. S. Weber
C. S. Weber, Senior Vice President,
Secretary and Treasurer
(Principal Financial Officer)
Date: November 14, 1995 T. J. Corridon
T. J. Corridon, Vice President
and Director of Accounting
(Principal Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
<CASH> 514
<SECURITIES> 0
<RECEIVABLES> 17,147
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 2,259
<PP&E> 3,612
<DEPRECIATION> 0
<TOTAL-ASSETS> 29,363
<CURRENT-LIABILITIES> 11,074
<BONDS> 0
<COMMON> 97
0
0
<OTHER-SE> 13,053
<TOTAL-LIABILITY-AND-EQUITY> 29,363
<SALES> 54,469
<TOTAL-REVENUES> 54,469
<CGS> 51,569
<TOTAL-COSTS> 51,569
<OTHER-EXPENSES> 964
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 27
<INCOME-PRETAX> 1,909
<INCOME-TAX> 739
<INCOME-CONTINUING> 1,170
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,170
<EPS-PRIMARY> 1.35
<EPS-DILUTED> 1.35
</TABLE>
