<PAGE> 1
================================================================================
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES AND EXCHANGE ACT OF 1934
For the transition period from to
Commission file number: 0-22141
COMPLETE BUSINESS SOLUTIONS, INC.
(Exact Name of Registrant as Specified in its Charter)
MICHIGAN
(State or Other Jurisdiction of
Incorporation or Organization)
38-2606945
(IRS Employer
Identification No.)
32605 WEST TWELVE MILE ROAD
SUITE 250
FARMINGTON HILLS, MICHIGAN 48334
(Address of Principal Executive Offices and Zip Code)
Registrant's telephone number, including area code: (248) 488-2088
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 [ ]
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
NO PAR VALUE 10,796,107
(Class of Common Stock) (Outstanding as of September 30,1997)
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<PAGE> 2
COMPLETE BUSINESS SOLUTIONS, INC. AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
PAGE NO.
--------
<S> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements....................................... 3
Condensed Consolidated Statements of Income................ 3
Condensed Consolidated Balance Sheets...................... 4
Condensed Consolidated Statements of Cash Flows............ 5
Notes to Condensed Consolidated Financial Statements....... 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations.................................. 8
PART II. OTHER INFORMATION
Item 5. Other Information.......................................... 10
Item 6. Exhibits and Reports on Form 8-K........................... 10
SIGNATURES............................................................. 11
</TABLE>
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
COMPLETE BUSINESS SOLUTIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
------------------ -----------------
1997 1996 1997 1996
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues......................................... $29,372 $ 21,951 $80,309 $61,499
Cost of revenues:
Salaries, wages and employee benefits.......... 16,738 13,942 47,228 40,045
Contractual services........................... 2,276 1,409 6,181 2,905
Project travel and relocation.................. 1,457 908 3,802 2,396
Depreciation and amortization.................. 271 478 928 1,193
------- -------- ------- -------
Total cost of revenues....................... 20,742 16,737 58,139 46,539
------- -------- ------- -------
Gross profit................................. 8,630 5,214 22,170 14,960
Selling, general and administrative expenses..... 5,156 3,855 14,541 11,086
------- -------- ------- -------
Income from operations....................... 3,474 1,359 7,629 3,874
Interest expense (income)........................ (369) 146 (747) 446
------- -------- ------- -------
Income before provision for income taxes and
minority interest.......................... 3,843 1,213 8,376 3,428
Provision for income taxes....................... 1,218 24 3,209 60
Minority interest................................ - 67 82 180
------- -------- ------- -------
Net income................................ $ 2,625 $ 1,122 $ 5,085 $ 3,188
======= ======== ======= =======
<CAPTION>
PRO FORMA INFORMATION
(UNAUDITED)
---------------------------------
<S> <C> <C> <C> <C>
Net income as reported........................... $ 2,625 $ 1,122 $ 5,085 $ 3,188
Adjustment to provision for income taxes......... - 412 (560) 1,171
------- -------- ------- -------
Net income....................................... $ 2,625 $ 710 $ 5,645 $ 2,017
======= ======== ======= =======
Net income per common share...................... $ .25 $ .09 $ .61 $ .26
======= ======== ======= =======
Weighted average shares outstanding.............. 10,398 7,697 9,265 7,616
======= ======== ======= =======
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
3
<PAGE> 4
COMPLETE BUSINESS SOLUTIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1997 1996
---- ----
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents................................ $54,592 $ 3,382
Accounts receivable, net................................. 23,149 20,741
Prepaid expenses and other............................... 1,473 1,136
------- --------
Total current assets................................... 79,214 25,259
------- --------
Property and equipment, net................................ 5,505 5,167
Goodwill, net.............................................. 2,845 --
Other assets............................................... 553 832
------- --------
Total assets........................................... $88,117 $ 31,258
======= ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable......................................... $ 2,724 $ 2,304
Accrued payroll and related costs........................ 6,425 4,907
Revolving credit facility................................ -- 5,400
Current portion of deferred revenue...................... 1,159 1,124
Current portion of long-term debt........................ -- 486
Other accrued liabilities................................ 2,128 961
------- --------
Total current liabilities.............................. 12,436 15,182
------- --------
Deferred revenue, less current portion..................... 210 317
Long-term debt, less current portion....................... -- 305
Deferred taxes............................................. 300 --
Minority interest.......................................... -- 1,503
Commitments and contingencies
Shareholders' equity:
Preferred stock, no par value, 1,000,000 shares
authorized, none issued................................ -- --
Common stock, no par value, 30,000,000 shares authorized,
10,796,107 and 6,447,368 shares issued and outstanding
as of September 30, 1997 and December 31, 1996,
respectively............................................. -- --
Additional paid-in capital................................. 72,599 3,226
Retained earnings.......................................... 4,742 13,049
Stock subscriptions receivable............................. (1,858) (2,125)
Cumulative translation adjustment.......................... (312) (199)
------- --------
Total shareholders' equity............................... 75,171 13,951
------- --------
Total liabilities and shareholders' equity............... $88,117 $ 31,258
======= ========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
balance sheets.
4
<PAGE> 5
COMPLETE BUSINESS SOLUTIONS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
-----------------
1997 1996
---- ----
<S> <C> <C>
Net income................................................. $5,085 $ 3,188
Adjustments to reconcile net income to net cash provided by
operating activities:
Depreciation and amortization........................... 1,799 1,772
Provision for doubtful accounts......................... 234 90
Minority interest....................................... 82 180
Change in assets and liabilities
Accounts receivable................................... (2,651) (4,666)
Prepaid expenses and other............................ (343) (127)
Accounts payable...................................... 413 842
Accrued payroll and related costs and other
liabilities........................................ 2,684 949
Deferred revenue...................................... (72) 207
Other................................................. 276 (17)
------- -------
Net cash provided by operating activities.......... 7,507 2,418
------- -------
Cash flows from investing activities:
Investment in computer software.......................... - (566)
Purchases of property and equipment...................... (1,761) (2,411)
------- -------
Net cash used in investing activities.............. (1,761) (2,977)
------- -------
Cash flows from financing activities:
Net borrowings (payments) on revolving credit facility... (5,400) 750
Payments on long-term debt............................... (791) (406)
Proceeds from issuance of long-term debt................. - 356
Net proceeds from issuance of common stock............... 61,862 -
S corporation distribution and other..................... (10,200) -
Proceeds from issuance of note
payable-shareholder.................................... - 608
Proceeds from sale of stock in
subsidary, net......................................... - 3,500
Repurchase of stock in
subsidary.............................................. - (2,708)
Capital Contribution..................................... - 1,100
------- -------
Net cash provided by financing activities.......... 45,471 3,200
------- -------
Effect of exchange rate changes on cash.................... (7) (10)
------- -------
Increase in cash and cash equivalents...................... 51,210 2,631
------- -------
Cash and cash equivalents at beginning of period........... 3,382 830
------- -------
Cash and cash equivalents at end of period................. $54,592 $ 3,461
======= =======
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest............................................... $ 69 $ 410
Income taxes........................................... $ 2,960 $ -
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
5
<PAGE> 6
COMPLETE BUSINESS SOLUTIONS, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
(UNAUDITED)
NOTE (1) BASIS OF PRESENTATION
The accompanying condensed consolidated financial statements have been
prepared by management, without audit, pursuant to the rules and regulations of
the Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in accordance
with generally accepted accounting principles have been condensed or omitted
pursuant to such rules and regulations. In the opinion of management, the
accompanying unaudited condensed consolidated financial statements contain all
adjustments, consisting of normal recurring adjustments, necessary to present
fairly the financial position of Complete Business Solutions, Inc. (the
Company) as of September 30, 1997, the results of its operations for the three
and nine-month periods ended September 30, 1997 and 1996, and cash flows for
the nine-month periods ended September 30, 1997 and 1996. These financial
statements should be read in conjunction with the consolidated financial
statements and footnotes thereto included in the Company's Registration
Statement on Form S-4, dated September 30, 1997.
The results of operations for the three-month period ended September 30,
1997 are not necessarily indicative of the results to be expected in future
quarters or for the full fiscal year ending December 31, 1997.
NOTE (2) PRINCIPLES OF CONSOLIDATION AND ORGANIZATION
The condensed consolidated financial statements include the accounts of
the Company and its subsidiaries. All significant intercompany accounts and
transactions have been eliminated in the accompanying condensed consolidated
financial statements.
As of December 31, 1996, the Company owned 72% of CBS Complete Business
Solutions (Mauritius) Limited (CBS Mauritius) and an unrelated entity owned the
remaining 28%. CBS Mauritius owns 100% of Complete Business Solutions (India)
Private Limited (CBS India). As authorized in the CBS Mauritius Shareholders
Agreement and in connection with the initial public offering of the Company's
Common Stock, the 28% shareholder of CBS Mauritius converted its ownership
interest in CBS Mauritius into 552,632 shares of the Company's Common Stock.
The acquisition of the minority shares was accounted for under the purchase
method of accounting. The excess of the aggregate purchase price over the fair
value of the net assets acquired has been recognized as goodwill of
approximately $2,931 in the condensed consolidated balance sheets. The impact
of this transaction on prior years was not significant, therefore pro forma
information has not been provided.
NOTE (3) COMMON STOCK OFFERINGS
In March 1997, the Company completed an initial public offering of
2,500,000 shares of its Common Stock at a price of $12 per share. This
offering consisted of 2,300,000 shares of newly issued Common Stock and 200,000
shares sold by a selling shareholder. After underwriting discounts, commissions
and other issuance costs, net proceeds to the Company from that offering were
approximately $23,713. The net proceeds from that offering have been invested
in cash equivalents with an initial maturity of three months or less.
In August 1997, the Company completed a secondary offering of
2,600,000 shares of its Common Stock at a price of $28 1/4 per share. This
offering consisted of 1,450,000 shares of newly issued Common Stock and
1,150,000 shares sold by selling shareholders. After underwriting discounts,
commissions and other issuance costs, net proceeds to the Company from that
offering were approximately $37,634. The net proceeds from that offering have
been ivested in cash equivalents with an initial maturity of three months or
less.
On September 30, 1997 the Company filed with the Securities and Exchange
Commission a registration statement on Form S-4 covering 5,000,000 shares of
Common Stock to be issued in conjunction with the future acquisition of assets,
businesses or securities.
6
<PAGE> 7
NOTE (4) INCOME TAXES
Prior to March 4, 1997, the shareholders of the Company had elected, under
the provisions of Subchapter S of the United States Internal Revenue Code, to
have income and related tax benefits of the Company included in the taxable
income of the shareholders. As a result, no provision for U.S. federal or state
income taxes has been included in the condensed consolidated statements of
income prior to March 4, 1997.
On March 4, 1997, in connection with the initial public offering discussed
in Note 3, the shareholders and the Company revoked the Subchapter S election,
thereby subjecting future income of the Company to federal and state income
taxes at the corporate level. Accordingly, the application of the provisions of
Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes," resulted in the recognition of deferred tax assets and liabilities, and
a corresponding charge to the provision for income taxes of approximately $920
during the nine-month period ended September 30, 1997.
Subsequent to March 4, 1997, the Company has provided federal and state
income taxes in the condensed consolidated statements of income based on the
anticipated effective tax rate for fiscal year 1997. The unaudited pro forma
net income in the condensed consolidated statements of income reflects
applicable pro forma adjustments to the provision for income taxes to reflect
net income as if the Subchapter S election had been revoked prior to January 1,
1996.
CBS Mauritius is incorporated in Mauritius and is not subject to income
taxes. CBS India is an Indian corporation subject to income taxes and receives
certain exemptions from Indian income taxes under free trade zone and software
exporters provisions of Indian tax law. CBS-India's tax provision has been
included in the condensed consolidated statements of income as part of the
provision for income taxes. The Company considers all undistributed earnings
of its foreign subsidiaries to be permanently invested. Therefore, no United
States income taxes have been provided on these earnings.
NOTE (5) EARNINGS PER SHARE
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 the 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 effect of options and warrants; (ii) use of
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 effect of this accounting change on pro forma net income per share is as
follows:
<TABLE>
<CAPTION>
NINE MONTHS
ENDED SEPTEMBER 30,
-------------------
1997 1996
---- ----
<S> <C> <C>
Per share amounts
Pro forma net income per common share as reported $0.61 $0.26
Effect of SFAS No. 128........................... 0.02 0.05
----- -----
Pro forma basic net income per common share...... $0.63 $0.31
===== =====
Pro forma diluted net income per common share.... $0.61 $0.26
===== =====
</TABLE>
7
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
The following Management's Discussion and Analysis of Financial Condition
and Results of Operations contains certain forward-looking statements that
involve substantial risks and uncertainties. When used in this section, the
words "anticipate," "believe," "estimate," "expect" and similar expressions as
they relate to the Company or its management are intended to identify such
forward-looking statements. The Company's actual results, performance or
achievements could differ materially from the results expressed in, or implied
by, these forward-looking statements. Factors that could cause or contribute
to such differences include those discussed in "Risk Factors."
The following Management's Discussion and Analysis of Financial Condition
and Results of Operations should be read in conjunction with the condensed
consolidated financial statements and the notes thereto included in this
Quarterly Report, and with Management's Discussion and Analysis of Financial
Condition and Results of Operations contained in the Company's Registration
Statement on Form S-4, dated September 30, 1997.
RESULTS OF OPERATIONS
The Company's revenues increased approximately 34% to $29.4 million for
the three month period ended September 30, 1997 from $22.0 million for the same
period in 1996. Revenue increased approximately 31% to $80.3 million for the
nine month period ended September 30, 1997 from $61.5 million for the same
period in 1996. This growth in revenues is primarily attributable to increases
in the Company's IT professional workforce, further expansion of the Company's
international operations, increasing demand for service offerings and
additional services provided to existing clients. The Company's IT professional
workforce increased approximately 38% from September 30, 1996 to September 30,
1997. Revenues from international operations, principally offshore development
centers, increased approximately 119% to $9.2 million for the nine month period
ending September 30, 1997 from $4.2 million for the same nine month period in
1996. Revenues from existing clients increased $4.3 million and $7.5 million
for the three month and nine month periods ended September 30, 1997,
respectively, over the same periods in 1996.
GROSS PROFIT
Gross profit increased approximately 66% to $8.6 million for the three
month period ended September 30, 1997 from $5.2 million for the same period in
1996, and approximately 48% to $22.2 million for the nine month period ended
September 30, 1997 from $15.0 million for the same nine month period in 1996.
These increases are primarily attributable to increases in the Company's IT
professional workforce and average U.S. billing rates, as well as the continued
expansion of the Company's offshore development centers. Gross profit as a
percentage of revenues increased to approximately 29% for the three month period
ended September 30, 1997 from approximately 24% for the same period in 1996. For
the nine month period ended September 30, 1997, gross profit margin increased to
approximately 28% from 24% for the same period in 1996. These increases in gross
profit margin as a percentage of revenues are primarily attributable to the
Company's increased utilization and expansion of the offshore development
centers which operated at higher gross profit and operating margins, and the
continued strategic shift of its business toward higher margin service
offerings, including Year 2000 services. For the three month period ended
September 30, 1997, approximately 19% of revenues were generated from contract
programming services, as compared with approximately 32% for the three month
period ended September 30, 1996. Gross profit margin for contract programming
services and other service offerings was approximately 21% and 29%,
respectively, for the nine month period ended September 30, 1997.
SELLING, GENERAL AND ADMINISTRATIVE
Selling, general and administrative expenses increased approximately 34%
to $5.2 million for the three month period ended September 30, 1997 from $3.9
million for the same period in 1996, and approximately 31% to $14.5 million for
the nine month period ended September 30, 1997 from $11.1 million for the same
nine month period in 1996. These increases resulted from the continued
expansion of the Company's direct selling and marketing effort, further
enhancement of the infrastructure, and other general overhead cost increases
necessary to support the Company's continued revenue growth. As a percentage of
revenues, selling, general and administrative expenses represented
approximately 18% for all periods presented.
INTEREST EXPENSE (INCOME)
Interest expense (income) represents interest earned on cash
equivalents, net of interest expense on borrowings. The decrease in interest
expense (income) to $(747) thousand for the nine month period ended September
30, 1997 from $446 thousand for the same period in 1996 is primarily due to the
repayment of outstanding debt during the first quarter of 1997, and interest
earned resulting from the investment of net proceeds from the Company's initial
and secondary public offerings of Common Stock in 1997.
8
<PAGE> 9
LIQUIDITY AND CAPITAL RESOURCES
From the Company's inception in 1985 through March 5, 1997, the Company
generally funded its operations and working capital needs through internally
generated funds, periodically supplemented by borrowings under the Company's
revolving credit facility with a commercial bank. The Company's cash provided
by operations was $7.5 million and $2.4 million for the nine month periods ended
September 30, 1997 and 1996, respectively. The increase in cash provided by
operations is primarily attributable to a reduction in the accounts receivable
days sales outstanding during the nine months ended September 30, 1997, as
compared to the same period in 1996.
The principal use of cash for investing activities during the nine month
periods ended September 30, 1997 and 1996 was for the purchase of property and
equipment and computer software primarily related to the continued development
and expansion of the Company's software development and training centers.
Historically, borrowings and repayments under the Company's revolving
credit facility represented the most significant components of cash provided or
used by financing activities. However, net cash provided by financing
activities increased to $45.5 million during the nine month period ended
September 30, 1997 primarily due to the Company realizing net proceeds of
approximately $23.7 million from the initial public offering of its Common
Stock in March 1997 and $37.6 million from the secondary offering of its Common
Stock in August 1997. Outstanding borrowings under the revolving credit
facility were repaid from the proceeds of the initial public offering. In
connection with the termination of the Company's S corporation status, the
Company has made partial distributions of its previously undistributed S
corporation earnings totalling approximately $10.5 million during the nine
month period ended September 30, 1997.
On September 30, 1997, the Company filed with the Securities and Exchange
Commission a registration statement on Form S-4 covering 5,000,000 shares of
Common Stock to be issued in conjunction with the future acquisition of assets,
businesses or securities.
Under an arrangement with a commercial bank, the Company may borrow an
amount not to exceed $21 million with interest at the bank's prime interest
rate or the Libor rate. The borrowings under this facility are short-term,
payable on demand and are secured by trade accounts receivable and equipment of
the Company. As of September 30, 1997, there were no borrowings outstanding
under this facility. In recent years, the Company executed several short-term
notes with the bank to finance the purchase of equipment and software. During
the nine month period ended September 30, 1997, the balances outstanding on
these notes were repaid.
9
<PAGE> 10
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
<TABLE>
<CAPTION>
NUMBER EXHIBIT
------ -------
<S> <C>
(11) Computation of Earnings per share
(27) Financial Data Schedule
</TABLE>
(b) Reports on Form 8-K
No reports on Form 8-K were filed by the Company during the three months
ended September 30, 1997.
10
<PAGE> 11
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.
COMPLETE BUSINESS SOLUTIONS, INC.
By: /s/ RAJENDRA B. VATTIKUTI
---------------------------------------
Rajendra B. Vattikuti
President and Chief Executive Officer
*
---------------------------------------
Timothy Manney
Executive Vice President of Finance and
Administration, Treasurer and Director
Dated: November 7, 1997
11
<PAGE> 12
EXHIBIT INDEX
<TABLE>
<CAPTION>
EXHIBIT
NO. DESCRIPTION
- ------- -----------
<S> <C>
11 Computation of Earnings per share
27 Financial Data Schedule
</TABLE>
12
<PAGE> 1
EXHIBIT 11
COMPUTATION OF PER SHARE EARNINGS
COMPLETE BUSINESS SOLUTIONS, INC. AND SUBSIDIARIES
PRO FORMA OR ACTUAL NET INCOME PER COMMON SHARE
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
SEPTEMBER 30,
-------------------------
1997 1996
--------- ----------
<S> <C> <C>
Weighted average number of shares of Common Stock
outstanding................................................. 9,974,289 5,942,275
Common Stock equivalents calculated using the weighted 424,000 307,154
average stock price per share for the periods presented.....
Stock options and convertible stock issued during the twelve
months immediately preceding the offering date.............. -- 641,501
Stock issued to satisfy S corporation distribution based
upon the estimated initial public offering price per
share....................................................... -- 806,452
----------- ----------
Weighted average shares outstanding......................... 10,398,289 7,697,382
----------- ----------
Actual or pro forma net income.............................. $ 2,625,000 $ 710,000
----------- ----------
Actual or pro forma net income per common share............. $ 0.25 $0.09
----------- ----------
<CAPTION>
NINE MONTHS ENDED
SEPTEMBER 30,
----------------------
1997 1996
---- ----
<S> <C> <C>
Weighted average number of shares of Common Stock
outstanding................................................. $8,838,939 5,942,275
Common Stock equivalents calculated using the weighted
average stock price per share for the periods presented..... 292,898 226,026
Stock options and convertible stock issued during the twelve
months immediately preceding the offering date.............. 133,074 641,501
Stock issued to satisfy S corporation distribution based
upon the estimated initial public offering price per
share....................................................... -- 806,452
---------- ----------
Weighted average shares outstanding......................... 9,264,911 7,616,254
========== ==========
Pro forma net income........................................ $5,645,000 $2,017,000
========== ==========
Pro forma net income per common share....................... $ 0.61 $ 0.26
========== ==========
</TABLE>
13
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 54,592
<SECURITIES> 0
<RECEIVABLES> 23,513
<ALLOWANCES> (364)
<INVENTORY> 0
<CURRENT-ASSETS> 79,214
<PP&E> 11,888
<DEPRECIATION> (6,383)
<TOTAL-ASSETS> 88,117
<CURRENT-LIABILITIES> 12,436
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 75,171
<TOTAL-LIABILITY-AND-EQUITY> 88,117
<SALES> 0
<TOTAL-REVENUES> 80,309
<CGS> 0
<TOTAL-COSTS> 58,139
<OTHER-EXPENSES> 14,391
<LOSS-PROVISION> 150
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 8,376
<INCOME-TAX> 3,209
<INCOME-CONTINUING> 5,085
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,085
<EPS-PRIMARY> .61
<EPS-DILUTED> 0
</TABLE>
