<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
-------- --------
Commission File Number: 0-22145
RWD TECHNOLOGIES, INC.
(Exact name of Registrant as specified in its Charter)
MARYLAND 52-1552720
- ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
10480 LITTLE PATUXENT PARKWAY
COLUMBIA, MARYLAND 21044-3530
- ---------------------------------------- -----------
(Address of principal executive offices) (Zip Code)
(410) 730-4377
----------------------------------------------------
(Registrant's telephone number, including area code)
NONE
---------------------------------------
(Former name, former address and former
fiscal year - if changed since last report)
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. YES X NO
--- ---
As of June 30, 1997, 14,222,205 shares of common stock $0.10 par value
("Common Stock") of the Registrant were outstanding.
<PAGE>
RWD TECHNOLOGIES, INC.
INDEX
FORM 10-Q
<TABLE>
<CAPTION>
Page
----
<S> <C> <C>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of June 30, 1997 1
and December 31, 1996
Consolidated Statements of Income for the three months
and six months ended June 30, 1997 and 1996 2
Consolidated Statements of Cash Flows for the six months
ended June 30, 1997 and 1996 3
Notes to Consolidated Financial Statements 4
Item 2. Management's Discussion and Analysis of Financial Condition 6
and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk N/A
PART II - OTHER INFORMATION
Item 1. Legal Proceedings N/A
Item 2. Changes in Securities 10
Item 3. Defaults Upon Senior Securities N/A
Item 4. Submission of Matters to a Vote of Security Holders 10
Item 5. Other Information N/A
Item 6. Exhibits and Reports on Form 8-K 10
Signatures 11
</TABLE>
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.
RWD TECHNOLOGIES, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
<TABLE>
<CAPTION>
DECEMBER 31, 1996 JUNE 30, 1997
----------------- -------------
(UNAUDITED)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents................................. $ 3,530,600 $18,433,500
Investments............................................... 2,002,900 21,500,100
Contract accounts receivable, net of allowance
for doubtful accounts of $383,700
and $477,300, respectively.............................. 11,981,600 11,611,200
Costs and estimated earnings in excess of billings on
uncompleted contracts................................... 3,331,400 7,633,400
Prepaid expenses and other................................ 849,500 1,014,200
----------- -----------
Total Current Assets................................... 21,696,000 60,192,400
----------- -----------
FIXED ASSETS net of accumulated depreciation
and amortization of $4,718,000
and $6,203,900, respectively............................. 7,876,900 8,506,500
----------- -----------
OTHER ASSETS................................................ 285,500 60,300
----------- -----------
Total Assets........................................... $29,858,400 $68,759,200
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses..................... $ 3,111,700 $ 6,454,500
Billings in excess of costs and estimated earnings on
uncompleted contracts................................... 2,689,300 3,176,000
Deferred tax liability.................................... --- 992,600
S corporation Notes....................................... --- 6,500,000
Current portion of capital lease obligation............... 41,600 46,700
Related party debt........................................ 3,800,000 ---
----------- -----------
Total Current Liabilities.............................. 9,642,600 17,169,800
NONCURRENT LIABILITIES:
Capital lease obligation, net of current portion.......... 83,400 58,700
Deferred tax liability.................................... --- 3,507,600
----------- -----------
Total Liabilities...................................... 9,726,000 20,736,100
----------- -----------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, $.10 par value; authorized - 50,000,000
shares; issued and oustanding - 4,859,640 and
14,222,200 respectively............................... 486,000 1,422,200
Additional paid-in capital................................ 2,753,800 44,739,500
Retained earnings......................................... 16,892,600 1,861,400
----------- -----------
Total Stockholders' Equity................................. 20,132,400 48,023,100
----------- -----------
Total Liabilities and Stockholders' Equity................. $29,858,400 $68,759,200
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
1
<PAGE>
RWD TECHNOLOGIES, INC. AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
----------------------------- -------------------------------
1996 1997 1996 1997
------------- ------------ ------------ -------------
<S> <C> <C> <C> <C>
Revenue.................................... $ 15,998,700 $ 20,706,200 $ 30,630,300 $ 39,805,800
Cost of services........................... 11,716,700 14,272,900 22,579,600 27,685,800
------------- ------------ ------------ -------------
Gross profit............................ 4,282,000 6,433,300 8,050,700 12,120,000
General and administrative expenses........ 1,937,800 2,781,500 3,757,800 5,467,500
------------- ------------ ------------ -------------
Operating income........................... 2,344,200 3,651,800 4,292,900 6,652,500
Other income (expense)..................... (48,800) (21,100) (109,200) 900
------------- ------------ ------------ -------------
Income before taxes..................... 2,295,800 3,630,700 4,183,700 6,653,400
Provision for income taxes (including the
$4.5 million deferred tax liability
related to C corp. conversion).......... 70,000 4,889,000 140,000 4,989,000
------------- ------------ ------------ -------------
Net income (loss)....................... $ 2,225,800 $ (1,258,300) $ 4,043,700 $ 1,664,400
============= ============ ============ =============
Earnings per share...................... $ (0.09) $ 0.13
============ =============
Weighted average shares outstanding..... 13,381,300 13,175,000
============ =============
Pro Forma Information:
Income before taxes, as reported........... $ 2,295,800 $ 3,630,700 $ 4,183,700 $ 6,653,400
Pro forma income tax provision............. 918,000 1,452,300 1,673,000 2,661,300
------------- ------------ ------------ -------------
Pro forma net income.................... $ 1,377,800 $ 2,178,400 $ 2,510,700 $ 3,992,100
============= ============ ============ =============
Pro forma earnings per share............ $ 0.11 $ 0.16 $ 0.19 $ 0.30
============= ============ ============ =============
Weighted average shares outstanding..... 13,030,000 13,381,300 13,030,000 13,175,000
</TABLE>
See accompanying notes to consolidated financial statements.
2
<PAGE>
RWD TECHNOLOGIES, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited)
<TABLE>
<CAPTION>
SIX MONTHS ENDED JUNE 30,
1996 1997
------------ -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income.................................................................. $ 4,043,700 $ 1,664,400
Adjustments to reconcile net income to net cash from
operating activities--
Depreciation and amortization............................................. 959,600 1,505,700
Loss/(Gain) on sale of fixed assets....................................... 16,800 (20,700)
Deferred income taxes..................................................... - 4,500,000
(Increase)/Decrease in contract accounts receivable....................... 1,852,900 370,300
(Increase)/Decrease in costs and estimated earnings in
excess of billings on uncompleted contracts............................. (5,640,500) (4,302,100)
(Increase)/Decrease in prepaid expense and other.......................... 501,500 (164,700)
Increase/(Decrease) in accounts payable and accrued expenses.............. 1,211,600 2,596,400
Increase/(Decrease) in billings in excess of estimated
earnings on uncompleted contracts and costs............................. 5,352,600 486,600
------------ -------------
Net cash from operating activities........................................ 8,298,200 6,635,900
------------ -------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of investments................................................... (502,900) (49,300,100)
Proceeds from sales/maturities of investments............................. 500,700 29,802,900
Purchase of fixed assets.................................................. (2,182,800) (2,139,600)
(Increase)/Decrease in other assets....................................... (23,300) 63,000
Proceeds from sale of fixed assets........................................ 3,700 25,100
------------ -------------
Net cash from investing activities........................................ (2,204,600) (21,548,700)
------------ -------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal portion paid on capital lease................................... - (19,600)
Net borrowings/(payments) under line of credit............................ (2,700,000) -
Payments on shareholder loans............................................. - (3,800,000)
Shareholder distributions................................................. (501,200) (9,864,400)
Public offering costs..................................................... - (3,227,800)
Issuance of common stock.................................................. 200 47,547,300
Repurchase of common stock................................................ - (819,800)
------------ -------------
Net cash from financing activities........................................ (3,201,000) 29,815,700
------------ -------------
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS................................ 2,892,600 14,902,900
------------ -------------
CASH AND CASH EQUIVALENTS, beginning of period...................................... 390,900 3,530,600
------------ -------------
CASH AND CASH EQUIVALENTS, end of period............................................ $ 3,283,500 $ 18,433,500
============ =============
SUPPLEMENTAL DISCLOSURE
Income taxes paid......................................................... $ 63,800 $ 41,500
============ =============
Interest expense paid..................................................... $ 181,100 $ 176,400
============ =============
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE>
RWD TECHNOLOGIES, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
(1) Organization and Business
RWD Technologies, Inc. (the "Company") was incorporated on January 22, 1988, in
the state of Maryland. The Company provides a broad range of integrated
solutions designed to improve the productivity and effectiveness of workers in
complex operating environments.
(2) Basis of Presentation
The condensed financial statements included herein have been prepared by the
Company, 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. However, the Company believes that the disclosures are adequate to
make the information presented not misleading. These condensed financial
statements should be read in conjunction with the financial statements and the
notes thereto for the year ended December 31, 1996, included in the Company's
Form S-1 Registration Statement No. 333-21779.
The unaudited condensed financial statements included herein reflect all
adjustments (which include only normal, recurring adjustments) which are, in the
opinion of management, necessary to state fairly the results for the three and
six month periods ended June 30, 1997 and 1996. The results for the interim
periods are not necessarily indicative of the results expected for the full
fiscal year.
(3) Initial Public Offering
In the initial public offering effected by the Form S-1 Registration Statement
dated June 19, 1997, the Company sold 3.3 million shares of its Common Stock,
par value $0.10 per share. The Company realized $38.5 million from the offering
(after deducting the expenses of the offering).
(4) Termination of S corporation Election
Just prior to the initial public offering, the Company terminated its S
corporation election for federal income tax purposes and converted to C
corporation status. The provision for income taxes for periods prior to the
conversion related to certain states that do not recognize S corporation status.
The provision for income taxes for the period following the conversion reflects
the estimated current provision for federal and state income taxes and the $4.5
million deferred income tax liability resulting from the conversion. In
addition, the Company recorded $16.1 million in distributions to S corporation
shareholders during the three months ended June 30, 1997, including $6.5 million
in shareholder notes which remained outstanding as of June 30, 1997.
Pro forma net income is based on the assumption that the Company's S corporation
status was terminated at the beginning of each period and reflects a pro forma
income tax provision based on applicable tax rates as if the Company was a C
corporation taxpayer for all periods presented.
4
<PAGE>
(5) Pro Forma Net Income Per Share
Pro forma net income per share was computed based on the weighted average number
of common and common equivalent shares outstanding during the period. Common
equivalent shares are calculated using the treasury stock method and represent
incremental shares issuable upon the exercise of outstanding stock options. In
accordance with SEC Staff Accounting Bulletin No. 1.B.3, weighted average shares
for all periods prior to the initial public offering also include those shares
which would have had to have been issued (at the public offering price of $13
per share, less the underwriting discount) to generate sufficient cash to fund
the portion of the S corporation distribution that was in excess of the net
income for the year ended December 31, 1996.
(6) New Accounting Standards
Statement of Financial Accounting Standards No. 128, "Earnings Per Share"
changes the reporting requirements for earnings per share (EPS) for publicly
traded companies by replacing primary EPS with basic EPS and changing the
disclosures associated with this change. The Company intends to adopt this
standard for use in its financial statements for the year ending December 31,
1997, as required.
5
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1997 COMPARED WITH THREE MONTHS ENDED JUNE 30, 1996.
Revenue. Revenue increased by $4.7 million, or 29.4%, from $16.0 million in
the second quarter of 1996 to $20.7 million in the same period in 1997. The
Company experienced growth in all of its service areas in the second quarter of
1997 compared to the same period in 1996, with performance support services
revenue increasing by 15.4%, from $6.8 million to $7.9 million; enterprise-wide
systems implementation support services revenue increasing by 28.8%, from $3.3
million to $4.2 million; information technology services revenue increasing by
40.1%, from $4.0 million to $5.6 million; and lean manufacturing consulting
services revenue increasing by 57.9% from $1.9 million to $3.1 million.
Performance support services, enterprise-wide systems implementation support
services, information technology services and lean manufacturing consulting
generated 37.9%, 20.3%, 27.0% and 14.8% of total revenue, respectively, in the
second quarter of 1997.
Revenue from the Company's largest client, Chrysler, increased by 36.9% in the
second quarter of 1997, from $4.6 million in the second quarter of 1996 to $6.3
million in the same period in 1997, as a result of increases in information
technology services and performance support provided by the Company.
Gross Profit. Gross profit increased by $2.2 million, or 50.2%, from $4.3
million in the second quarter of 1996 to $6.4 million in the same period in 1997
and increased from 26.8% of revenue in 1996 to 31.1% in 1997. This increase in
gross profit resulted primarily from increases in billing rates charged to
clients and improvements in individual project profitability.
General and Administrative Expenses. General and administrative expenses
increased by $844,000, or 43.5%, from $1.9 million in the second quarter of 1996
to $2.8 million in the same period in 1997, increasing from 12.1% of revenue in
1996 to 13.4% of revenue in 1997. This increase in general and administrative
expenses as a percentage of revenue resulted primarily from increases in
depreciation, facility rent, marketing costs, and payroll taxes, partially
offset by savings in training and health insurance costs.
Operating Income. As a result of the foregoing, the Company's operating
income increased by $1.3 million, or 55.8%, from $2.3 million in the second
quarter of 1996 to $3.7 million in the same period in 1997 and increased from
14.7% of revenue in 1996 to 17.6% of revenue in 1997.
Other Income (Expense). Other income (expense) was ($48,400) in the second
quarter of 1996 and ($21,100) in the second quarter of 1997. In both periods,
this expense consisted primarily of interest expense paid on the Stockholder
Notes, partially offset by interest income from cash and investment balances.
Net Income. Pro forma net income increased by $800,600, or 58.1% from $1.4
million in the second quarter of 1996 to $2.2 million in the second quarter of
1997. Pro forma results assume the Company was a C corporation throughout each
of the periods. During the second quarter of 1997,
6
<PAGE>
the Company converted from S corporation to C corporation tax status and as a
result recognized a $4.5 million charge to establish a deferred tax liability.
Including this charge, net income decreased by $3.5 million, from $2.2 million
in the second quarter of 1996 to ($1.3) million in the same period in 1997.
SIX MONTHS ENDED JUNE 30, 1996 COMPARED TO SIX MONTHS ENDED JUNE 30, 1997.
Revenue. Revenue increased by $9.2 million, or 30.0%, from $30.6 million in
the first half of 1996 to $39.8 million in the first half of 1997. The Company
experienced growth in all of its service areas the first half of 1997 compared
to the same period in 1996, with performance support services revenue increasing
by 9.1%, from $14.2 million to $15.5 million; enterprise-wide systems
implementation support services revenue increasing by 30.8%, from $6.0 million
to $7.9 million; information technology services revenue increasing by 46.6%,
from $7.3 million to $10.6 million; and lean manufacturing consulting services
revenue increasing by 83.8% from $3.2 million to $5.8 million. Performance
support services, enterprise-wide systems implementation support services,
information technology services and lean manufacturing consulting generated
38.9%, 19.7%, 26.7% and 14.6% of total revenue, respectively, in the first half
of 1997.
Revenue from the Company's largest client, Chrysler, increased by 25.5%, from
$9.2 million in the first half of 1996 to $11.5 million in the same period in
1997, primarily as a result of increases in information technology and
performance support services provided by the Company.
Gross Profit. Gross profit increased by $4.1 million, or 50.5%, from $8.1
million in the first half of 1996 to $12.1 million in the first half of 1997 and
increased from 26.3% of revenue in this period in 1996 to 30.4% in this period
in 1997. This increase in gross profit resulted primarily from increases in
billing rates charged to clients and improvements in individual project
profitability.
General and Administrative Expenses. General and administrative expenses
increased by $1.7 million, or 45.5%, from $3.8 million in the first half of 1996
to $5.5 million in the first half of 1997, increasing from 12.3% of revenue in
this period in 1996 to 13.7% of revenue in this period in 1997. This increase
in general and administrative expenses as a percentage of revenue resulted
primarily from increased depreciation, facility rent, marketing costs, and
payroll taxes, partially offset by savings in training and health insurance
costs.
Operating Income. As a result of the foregoing, the Company's operating
income increased by $2.4 million, or 55.0%, from $4.3 million in the first half
of 1996 to $6.7 million in the first half of 1997 and increased from 14.0% of
revenue in this period in 1996 to 16.7% of revenue in this period in 1997.
Other Income (Expense). Other income (expense) was ($109,200) in the first
half of 1996 and $900 in the first half of 1997. In the first half of 1996,
this expense consisted primarily of interest expense paid on the Stockholder
Notes, partially offset by interest income from cash and investment balances.
In the first half of 1997, this income consisted primarily of interest income
from cash and investment balances, partially offset by interest expense paid on
the Stockholder Notes. The Stockholder Notes were repaid during the second
quarter of 1997.
7
<PAGE>
Net Income. Pro forma net income increased by $1.5, or 59.0% from $2.5 million
in the first half of 1996 to $4.0 million in the first half of 1997. Pro forma
results assume the Company was a C corporation throughout the periods presented.
During the second quarter of 1997, the Company converted from S corporation to C
corporation tax status and as a result recognized a $4.5 million charge to
establish a deferred tax liability. Including this charge, net income decreased
by $2.4 million, from $4.0 million in the first half of 1996 to $1.7 million in
the same period of 1997.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash and investments were $39.9 million at June 30, 1997,
compared to $5.5 million at December 31, 1996. Increases in cash and investments
at June 30, 1997 were attributable primarily to proceeds from the Company's June
1997 initial public offering. The Company's working capital was $43.0 million at
June 30, 1997, and $12.1 million at December 31, 1996.
The Company's operating activities provided cash of $6.6 million for the six
months ended June 30, 1997, compared to $8.3 million for the same period in
1996. The decreases in cash from operations resulted primarily from differences
in the timing of billings and collections in the six months ended June 30, 1997,
compared to the same period in 1996.
Investing activities used cash of $21.5 million in the six months ended June
30, 1997, compared to the use of $2.2 million for the same period in 1996. Cash
used for investing in the six months ended June 30, 1997, consisted primarily of
the net purchase of investments from the proceeds of the Company's initial
public offering.
Financing activities provided cash of $29.8 million in the six months ended
June 30, 1997, compared to the use of $3.2 million for the same period in 1996.
Increases in cash provided from financing activities consisted primarily of the
issuance of common stock from the Company's initial public offering and proceed
from the exercise of options, partially offset by repayments of shareholders
loans and distributions to S corporation shareholders of prior period earnings
of the Company.
The Company has a $7.5 million unsecured revolving line of credit with a
commercial bank, which bears interest at the 30-day LIBOR rate, plus 1.75%
(7.44% on June 30, 1997). The Company utilizes this line of credit to finance a
portion of its working capital needs. There was no balance outstanding as of
June 30, 1997, or on December 31, 1996.
During the second quarter, the Company converted from S corporation to C
corporation tax status and as a result recognized a $4.5 million charge to
establish a deferred tax liability. This tax liability will become due ratably
over the four years beginning with 1997.
During 1997, the Company expects to make between $4.0 million and $5.0 million
in capital expenditures, primarily for office furniture, computer and office
equipment and leasehold improvements to support the anticipated growth in its
professional and administrative staff. Capital expenditures in the first and
second quarters of 1997 were $1.0 million and $1.1 million, respectively.
Capital expenditures currently are expected to be funded from available cash,
although the Company may consider alternative financing methods, such as
equipment leases or asset based borrowings.
8
<PAGE>
EFFECTS OF INFLATION
Inflation has not had a significant effect on the Company's business during the
past three years. The Company cannot predict what effect, if any, inflation may
have on its future results of operations.
9
<PAGE>
PART II - OTHER INFORMATION
ITEM 2. CHANGES IN SECURITIES.
(c) Sales of Unregistered Securities
On June 19, 1997 the Company issued 12,000 options having a per share
exercise price of $13.00 and 770 shares of stock to each of its outside
directors in accordance with the Company's policies relating to outside director
compensation. The options vest ratably over a three year period. On this date,
the Company also issued 30,000 immediately exercisable options having a per
share exercise price of $13.00 to Robert T. O'Connell in connection with his
employment with the Company. Each of these transactions was exempt from the
registration requirements of the Securities Act of 1933 pursuant to Section 4(2)
thereunder.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
On June 2, 1997, the stockholders of the Company, by unanimous written
consent in lieu of a special meeting approved an amendment to the Company's
Amended and Restated Equity Plan which maintained the effectiveness of the
Prohibited Activities Clause of the prior plan for all options granted under the
prior plan.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
27. Financial Data Schedule
(b) Current Reports on Form 8-K
None
10
<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.
RWD TECHNOLOGIES, INC.
By: /s/ Ronald E. Holtz
---------------------------------------
Ronald E. Holtz
Vice President, Chief Financial Officer
and Director
Dated: August 13, 1997
Pursuant to the requirements of the Securities Exchange Act of 1934, this
Report has been signed below by the following persons on behalf of the
Registrant and in the capacities and on the dates indicated.
<TABLE>
<CAPTION>
NAME CAPACITY DATE
- ---------------------- --------------------------------------- ---------------
<S> <C> <C>
/s/ Robert W. Deutsch Chairman of the Board, August 13, 1997
- ---------------------- Chief Executive Officer and Director
Robert W. Deutsch
/s/ Ronald E. Holtz Vice President, Chief Financial Officer August 13, 1997
- ---------------------- and Director
Ronald E. Holtz
</TABLE>
11
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 6-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1997
<PERIOD-START> JAN-01-1996 JAN-01-1997
<PERIOD-END> JUN-30-1996 JUN-30-1997
<CASH> 0 18,433,500
<SECURITIES> 0 21,500,100
<RECEIVABLES> 0 12,088,500
<ALLOWANCES> 0 477,300
<INVENTORY> 0 0
<CURRENT-ASSETS> 0 60,192,400
<PP&E> 0 14,710,400
<DEPRECIATION> 0 6,203,900
<TOTAL-ASSETS> 0 68,759,200
<CURRENT-LIABILITIES> 0 17,169,800
<BONDS> 0 0
0 0
0 0
<COMMON> 0 1,422,200
<OTHER-SE> 0 46,600,900
<TOTAL-LIABILITY-AND-EQUITY> 0 68,759,200
<SALES> 0 0
<TOTAL-REVENUES> 30,630,300 39,805,800
<CGS> 0 0
<TOTAL-COSTS> 22,579,600 27,685,800
<OTHER-EXPENSES> 3,757,900 5,467,500
<LOSS-PROVISION> 10,000 95,000
<INTEREST-EXPENSE> 201,900 178,700
<INCOME-PRETAX> 4,183,700 6,653,400
<INCOME-TAX> 1,673,000<F1> 2,661,300<F1>
<INCOME-CONTINUING> 2,510,700<F1> 3,992,100<F1>
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 2,510,700<F1> 3,992,100<F1>
<EPS-PRIMARY> .19<F1> .30<F1>
<EPS-DILUTED> .19<F1> .30<F1>
<FN>
<F1>INCOME TAXES, INCOME FROM CONTINUING OPERATIONS, NET INCOME AND EARNINGS PER
SHARE DATA INCLUDE PRO FORMA ADJUSTMENTS TO REFLECT A TOTAL PROVISION FOR INCOME
TAXES HAD THE CORPORATION BEEN TAXED AS A C CORPORATION FOR THE ENTIRE REPORTING
PERIOD.
</FN>
</TABLE>
