<PAGE>
UNITED STATES
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 March 31, 1999
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 21044-3530
Columbia, Maryland (Zip Code)
(Address of principal executive offices)
(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 March 31, 1999, 15,022,469 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
----
PART I - FINANCIAL INFORMATION
<S> <C> <C>
Item 1. Financial Statements
Consolidated Condensed Balance Sheets as of March 31, 1999, 1
(Unaudited) and December 31, 1998
Consolidated Statements of Income for the Three Months ended 2
March 31, 1999, and 1998 (Unaudited)
Consolidated Statements of Cash Flows for the Three Months 3
ended March 31, 1999, and 1998 (Unaudited)
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 11
Item 3. Defaults Upon Senior Securities N/A
Item 4. Submission of Matters to a Vote of Security Holders N/A
Item 5. Other Information N/A
Item 6. Exhibits and Reports on Form 8-K 11
Signatures 12
</TABLE>
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
RWD TECHNOLOGIES, INC., AND SUBSIDIARIES
Consolidated Condensed Balance Sheets
(In thousands)
<TABLE>
<CAPTION>
March 31, 1999 December 31, 1998
-------------- -----------------
(unaudited)
ASSETS
<S> <C> <C>
CURRENT ASSETS:
Cash and investments........................................ $48,342 $51,224
Contract accounts receivable, net........................... 22,250 20,388
Costs and estimated earnings in excess of billings on
uncompleted contracts.................................... 10,536 7,889
Prepaid expenses and other.................................... 1,489 1,199
--------------------- --------------------
Total Current Assets..................................... 82,617 80,700
NET FIXED ASSETS:............................................. 9,918 9,394
OTHER ASSETS.................................................. 359 300
--------------------- --------------------
Total Assets............................................. $92,894 $90,394
===================== ====================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable and accrued expenses....................... $ 9,938 $ 9,245
Billings in excess of costs and estimated earnings on
uncompleted contracts.................................... 4,317 4,554
Deferred tax liability...................................... 471 471
Current portion of capital lease obligation................. 16 31
--------------------- --------------------
Total Current Liabilities................................ 14,742 14,301
NONCURRENT LIABILITIES:
Other liabilities........................................... 592 834
Deferred tax liability...................................... 998 1,298
--------------------- --------------------
Total Liabilities........................................ 16,332 16,433
--------------------- --------------------
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock................................................ 1,502 1,502
Additional paid-in capital.................................. 51,560 52,461
Accumulated comprehensive income............................ 58 81
Retained earnings........................................... 23,442 19,917
--------------------- --------------------
Total Stockholders' Equity............................... 76,562 73,961
--------------------- --------------------
Total Liabilities and Stockholders' Equity............ $92,894 $90,394
===================== ====================
</TABLE>
See accompanying notes to consolidated financial statements.
1
<PAGE>
RWD TECHNOLOGIES, INC., AND SUBSIDIARIES
Consolidated Statements of Income
(Unaudited) (In thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended March 31,
1999 1998
------------------ ------------------
<S> <C> <C>
Revenue.................................... $33,242 $26,204
Cost of services........................... 23,592 18,411
------------------ ------------------
Gross profit.............................. 9,650 7,793
General and administrative expenses........ 4,024 3,446
------------------ ------------------
Operating income........................... 5,626 4,347
Other income, net.......................... 460 439
------------------ ------------------
Income before taxes....................... 6,086 4,786
Income tax provision....................... 2,282 1,819
------------------ ------------------
Net income................................ $ 3,804 $ 2,967
================== ==================
Diluted earnings per share................ $0.24 $0.19
================== ==================
Basic earnings per share.................. $0.25 $0.20
================== ==================
Weighted average shares outstanding -
Diluted calculation................. 15,920 15,947
================== ==================
Basic calculation................... 15,032 14,766
================== ==================
</TABLE>
See accompanying notes to consolidated financial statements.
2
<PAGE>
RWD TECHNOLOGIES, INC., AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Unaudited) (In thousands)
<TABLE>
<CAPTION>
Three Months Ended March 31,
1999 1998
------------------- -------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income..................................................... $ 3,804 $ 2,967
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization.............................. 967 865
(Gain)/loss on sale of fixed assets........................ (1) 37
Deferred income taxes...................................... (300) (305)
(Increase)/decrease in trade accounts receivable........... (1,862) 21
Increase in costs and earnings in
excess of billings on uncompleted contracts.............. (2,647) (3,361)
Increase in prepaid expense and other...................... (230) (262)
Increase in accounts payable and accrued expenses.......... 1,611 2,493
(Decrease)/increase in billings in excess of
earnings on uncompleted contracts....................... (237) 48
Decrease in other liabilities.............................. (242) (184)
------------------- -------------------
Net cash provided by operating activities.................. 863 2,319
------------------- -------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of investments, net.............................. (351) (239)
Purchase of fixed assets................................... (1,740) (1,314)
Increase in other assets................................... (59) (32)
Proceeds from sale of fixed assets......................... 8 5
------------------- -------------------
Net cash used in investing activities...................... (2,142) (1,580)
------------------- -------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal portion paid on capital lease.................... (15) (12)
Issuance of common stock................................... 252 624
Repurchase of common stock................................. (2,168) --
------------------- -------------------
Net cash (used in) provided by financing activities........ (1,931) 612
------------------- -------------------
NET (DECREASE)/INCREASE IN CASH AND CASH
EQUIVALENTS...................................................... (3,210) 1,351
------------------- -------------------
CASH AND CASH EQUIVALENTS, beginning of period................... 13,328 3,620
------------------- -------------------
CASH AND CASH EQUIVALENTS, end of period......................... $10,118 $ 4,971
=================== ===================
Supplemental Cash Flow Disclosures:
Income taxes paid.......................................... $ 1,613 $ 246
=================== ===================
Interest expense paid...................................... $ 2 $ 5
=================== ===================
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE>
RWD TECHNOLOGIES, INC., AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
1. Summary of Significant Accounting Policies:
Organization and Business
- -------------------------
RWD Technologies, Inc., and subsidiaries (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.
The Company's operations depend upon, among other things, the Company's
ability to attract, develop, and retain a sufficient number of highly skilled
professional employees. In addition, the Company's revenue is generated from a
limited number of clients in specific industries. Future operations may be
affected by its ability to retain these clients and cyclical and economic
factors that could have an impact on those industries.
Basis of Presentation
- ---------------------
The accompanying consolidated financial statements include the accounts of RWD
Technologies, Inc., and its wholly owned subsidiaries and are presented on the
accrual basis of accounting in accordance with generally accepted accounting
principles. All significant intercompany balances and transactions have been
eliminated in consolidation. The preparation of consolidated financial
statements in conformity with generally accepted accounting principles requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities and disclosure of contingent assets and liabilities as of
the date of the consolidated financial statements and the reported amounts of
total revenue and expenses during the reporting period. Actual results could
differ from those estimates.
Comprehensive Income
- --------------------
Comprehensive income is defined as the change in equity of a business
enterprise during a period from transactions and other events and circumstances
from nonowner sources. The Company's comprehensive income for the periods
presented is listed below:
<TABLE>
<CAPTION>
For the Three Months Ended March 31,
------------------------------------------------------
(in thousands)
1999 1998
------------------------ ----------------------
<S> <C> <C>
Net Income as Reported $3,804 $2,967
Effect of Unrealized Gains on Investments Available-for-Sale (23) 4
------------------------ ----------------------
Comprehensive Net Income $3,781 $2,971
======================== ======================
</TABLE>
4
<PAGE>
2. Business Segments:
The Company believes it has reportable operating segments, as defined by
Statement of Financial Accounting Standards No. 131. The Company has identified
four distinct operating segments: Information Technology Services; Enterprise
Resource Planning Services; Lean Manufacturing Consulting Services; and
Technology Performance Support Services.
The accounting policies for these segments are the same as those described in
the summary of significant accounting policies. Depreciation and amortization
expense is reported in each operating segment. However, the Company's tangible
assets are not managed as distinct asset groups. All tangible assets are
recorded at the corporate level with depreciation expense allocated to operating
segments based on headcount. Interest expense, interest income, and income taxes
are reported at the corporate level only and are not disclosed below.
<TABLE>
<CAPTION>
For the Three Months Ended March 31,
-----------------------------------------------------
(in thousands)
1999 1998
------------------------ ----------------------
<S> <C> <C>
Revenue (all external):
Information Technology $ 8,167 $ 6,229
Enterprise Resource Planning 12,107 7,282
Lean Manufacturing Consulting 4,813 4,588
Technology Performance Support 8,155 8,105
------------------------ -----------------------
Total Revenue $33,242 $26,204
======================== ======================
Gross Profit:
Information Technology $ 2,872 $ 2,298
Enterprise Resource Planning 3,371 2,004
Lean Manufacturing Consulting 1,449 1,486
Technology Performance Support 1,958 2,005
------------------------ -----------------------
Total Gross Profit $ 9,650 $ 7,793
======================== ======================
Depreciation and Amortization Expense Allocated To Segments:
Information Technology $ 180 $ 135
Enterprise Resource Planning 287 161
Lean Manufacturing Consulting 59 51
Technology Performance Support 199 198
------------------------ -----------------------
Total Allocated to Segments 725 545
Amount not Allocated to Segments 242 309
------------------------ -----------------------
Total Depreciation and Amortization Expense $ 967 $ 854
======================== ======================
Revenue (by geography):
United States $30,019 $22,802
Non-United States 3,223 3,402
------------------------ -----------------------
Total Revenue $33,242 $26,204
======================== ======================
</TABLE>
5
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Results of Operations
Quarter Ended March 31, 1999, Compared to Quarter Ended March 31, 1998
Revenue. Revenue for the total Company increased by $7.0 million (or 26.9
percent), from $26.2 million for the quarter ending March 31, 1998, to $33.2
million for the quarter ending March 31, 1999. The Company experienced revenue
growth in all of its operating segments as follows:
. Information Technology Services. Revenue for the Company's Information
Technology Services increased by $1.9 million (or 31.1 percent), from $6.2
million in the quarter ending March 31, 1998, to $8.2 million in the
quarter ending March 31, 1999, representing 23.8 percent of the Company's
revenue in 1998 and 24.6 percent of the Company's revenue in 1999. Key
factors in revenue increases included strong follow-on business with
existing clients as well as business deriving from expansion into strategic
IT consulting and alliance relationships.
. Enterprise Resource Planning Services. Revenue for the Company's
Enterprise Resource Planning Services increased by $4.8 million (or 66.3
percent), from $7.3 million in the quarter ending March 31, 1998, to $12.1
million in the quarter ending March 31, 1999, representing 27.8 percent of
the Company's revenue in 1998 and 36.4 percent of the Company's revenue in
1999. This growth was due in part to strong demand in the market for the
services offered by the Company throughout 1998, as well as the Company's
alliances with SAP and PricewaterhouseCoopers, partially offset by
moderating demand in the ERP market in 1999.
. Lean Manufacturing Consulting Services. Revenue for the Company's Lean
Manufacturing Consulting Services increased by $224,300 (or 4.9 percent),
from $4.6 million in the quarter ending March 31, 1998, to $4.8 million in
the quarter ending March 31, 1999, representing 17.5 percent of the
Company's revenue in 1998 and 14.5 percent of the Company's revenue in
1999. This increase in revenue was attributable to growth in business with
automotive supplier and other non-auto industry clients, and increases in
billing rates charged to clients, partially offset by decreases in business
with a large lean manufacturing client.
. Technology Performance Support Services. Revenue for the Company's
Technology Performance Support Services increased by $49,600 (or 0.6
percent), from $8.1 million in the quarter ending March 31, 1998, to $8.2
million in the quarter ending March 31, 1999, representing 30.9 percent of
the Company's revenue in 1998 and 24.5 percent of the Company's revenue in
1999. This increase in revenue resulted primarily from increases in billing
rates charged to clients, partially offset by decreases in staff
utilization. Revenues in the first quarter of 1999 were also 9.8 percent
ahead of the fourth quarter of 1998. This reversed the downward revenue
trend experienced during 1998 that was attributed to the transfer of
personnel from the performance support area to the ERP area during 1998.
6
<PAGE>
The Company's total number of employees grew 5.1 percent, from 988 at the end
of 1998 to 1,038 employees at March 31, 1999.
Gross Profit. Gross profit for the total Company increased by $1.9 million
(or 23.8 percent), from $7.8 million in the quarter ending March 31, 1998, to
$9.6 million in the quarter ending March 31, 1999, and decreased from 29.7
percent of revenue in 1998 to 29.0 percent of revenue in 1999. This decrease in
gross profit as a percentage of revenue resulted primarily from decreases in
staff utilization, increases in facility rent and depreciation on capital
equipment, partially offset by decreases in indirect travel. Gross profit for
individual operating segments were as follows:
. Information Technology Services. Gross profit for Information Technology
Services increased by 25.0 percent from $2.3 million in the quarter ending
March 31, 1998, to $2.9 million in the quarter ending March 31, 1999. Gross
profit margin for Information Technology Services decreased from 36.9
percent of this segment's revenue in the first quarter of 1998 to 35.2
percent in 1999. This decrease in gross profit margin resulted primarily
from decreases in staff utilization, partially offset by decreases as a
percent of revenue in employee related expenses.
. Enterprise Resource Planning Services. Gross profit for Enterprise Resource
Planning Services increased by 68.3 percent from $2.0 million in the
quarter ending March 31, 1998, to $3.4 million in the quarter ending March
31, 1999. Gross profit margin for Enterprise Resource Planning Services
increased from 27.5 percent of this segment's revenue in the first quarter
of 1998 to 27.8 percent in 1999. This increase in gross profit margin
resulted primarily from increases in the proportion of labor revenue to
other revenue and decreases as a percent of revenue in employee related
expenses, partially offset by decreases in staff utilization.
. Lean Manufacturing Consulting Services. Gross profit for Lean Manufacturing
Consulting Services decreased by 2.5 percent from $1.49 million in the
quarter ending March 31, 1998, to $1.45 million in the quarter ending March
31, 1999. Gross profit margin for Lean Manufacturing Consulting Services
decreased from 32.4 percent of this segment's revenue in the first quarter
of 1998 to 30.1 percent in 1999. This decrease in gross profit margin
resulted primarily from decreases in staff utilization, and, as a percent
of revenue, employee related expenses, partially offset by increases in
billing rates.
. Technology Performance Support Services. Gross profit for Technology
Performance Support Services decreased by 2.4 percent from $2.0 million in
the quarter ending March 31, 1998, to $1.96 million in the quarter ending
March 31, 1999. Gross profit margin for Technology Performance Support
Services decreased from 24.7 percent of this segment's revenue in the first
quarter of 1998 to 24.0 percent in 1999. This decrease in gross profit
margin resulted primarily from decreases in the proportion of labor revenue
to other revenue and decreases in staff utilization, partially offset by
increases in billing rates.
General and Administrative Expenses. General and administrative expenses
increased by $577,900 (or 16.8 percent), from $3.4 million in the first quarter
of 1998 to $4.0 million in the first quarter of 1999, decreasing from 13.2
percent of revenue in 1998 to 12.1 percent of revenue in 1999. This decrease in
general and administrative expenses as a percentage of revenue resulted
primarily
7
<PAGE>
from decreases as a percent of revenue in employee related expenses and
depreciation, partially offset by increases in consultant fees.
Operating Income. As a result of the foregoing, the Company's operating income
increased by $1.3 million (or 29.4 percent), from $4.3 million in the first
quarter of 1998 to $5.6 million in the first quarter of 1999 and increased from
16.6 percent of revenue in the first quarter of 1998 to 16.9 percent of revenue
in the first quarter of 1999.
Other Income. Other income was $439,500 in the first quarter of 1998 and
$460,600 in the first quarter of 1999. In both periods, this income consisted
primarily of interest income from cash and investment balances partially offset
by interest expense from the Company's capital leases.
Net Income. Net income increased by $836,600 (or 28.2 percent), from $3.0
million in the first quarter of 1998 to $3.8 million in the first quarter of
1999, increasing from 11.3 percent of revenue in 1998 to 11.4 percent of revenue
in 1999.
Liquidity and Capital Resources
The Company's cash and investments were $48.3 million at March 31, 1999,
compared to $51.2 million at December 31, 1998. Decreases in cash and
investments at March 31, 1999, were attributable primarily to decreases in cash
provided by investing and financing activities as they relate to the repurchase
of common stock and increases in the purchase of capital equipment. The
Company's working capital was $67.9 million at March 31, 1999, and $66.4 million
at December 31, 1998.
The Company's operating activities provided cash of approximately $863,000 for
the three months ended March 31, 1999, compared to $2.3 million for the same
period in 1998. The cash provided from operations in the first quarter of 1999
resulted primarily from increases in net income, trade accounts payable, and
depreciation expense, partially offset by increases in unbilled revenue, and
accounts receivable.
Investing activities used cash of $2.1 million in the three months ended March
31, 1999, compared to $1.6 million for the same period in 1998. Cash used for
investing activities in the three months ended March 31, 1999, consisted
primarily of the net purchase of capital equipment.
Financing activities utilized cash of $1.9 million in the three months ended
March 31, 1999, compared to generation of $612,500 for the same period in 1998.
Cash used for financing activities in the three months ended March 31, 1999,
consisted primarily of the repurchase of 145,000 shares of the Company's common
stock, partially offset by proceeds from the issuance of common stock due to the
exercise of employee stock options.
The Company has a $10.0 million unsecured revolving line of credit with a
commercial bank, which bears interest at the 30-day, LIBOR rate, plus 1.0
percent (5.3 percent on March 31, 1999). The Company utilizes this line of
credit to finance a portion of its working capital needs. There was no balance
outstanding on the line of credit as of March 31, 1999, or on December 31, 1998.
8
<PAGE>
During the quarter ending March 31, 1999, the Company made $1.5 million in
capital expenditures, primarily for office furniture, computer and office
equipment, and leasehold improvements to support the growth in its professional
and administrative staff. Capital expenditures currently are funded from
available cash, although the Company may consider alternative financing methods,
such as equipment leases or asset-based borrowings in future periods.
Year 2000 Compliance
The Company has commenced a process to assure Year 2000 compliance of all
hardware, software, and ancillary equipment which are date dependent. The
process involves four phases:
Phase I - Inventory and Data Collection. This phase involves an
identification of all items that are date dependent. The Company commenced
this phase in the fourth quarter of 1997. This phase is now complete.
Phase II - Compliance Requests. This phase involves requests to systems
vendors for verification that the systems identified in Phase I are Year
2000 compliant. The Company has identified critical systems that cannot be
updated or certified as compliant. The Company commenced this phase in the
first quarter of 1998. This phase is now complete. The Company has verified
that its accounting, payroll, human resources, banking and local wide area
network hardware and software systems are compliant. In addition, the
Company has determined that substantially all of its personal computers and
PC applications are compliant.
Phase III - Test, Fix, and Verify. This phase involves testing all items
that are date dependent and upgrading all non-compliant systems. The
Company has made substantial progress in implementing this phase of its
Year 2000 compliance program and expects to complete this phase during the
second quarter of 1999.
Phase IV - Final Testing, New Item Compliance. This phase involves review
of all systems for compliance and re-testing as necessary. During this
phase, all new systems and equipment will be tested for compliance. The
Company expects to complete this phase by the end of the third quarter of
1999.
To date, the Company has no knowledge that any of its major systems are not
Year 2000 compliant or will not be compliant by the end of the second quarter of
1999. The Company has not incurred significant expenditures and should achieve
substantial Year 2000 compliance without the need to acquire significant new
hardware, software, or systems other than in the ordinary course of business.
The Company is not aware of any non-compliance that would have a material effect
on its operations if not replaced or that would be costly to replace. The
Company is not aware of any non-compliance by its suppliers that is likely to
have material impact on the Company's business. Nevertheless, there can be no
assurance that unanticipated non-compliance will not occur, that such non-
compliance would not require material costs to repair or that it would not cause
material disruptions if not repaired.
9
<PAGE>
The Company delivers software solutions to clients and believes that all such
software delivered over the past several years is Year 2000 compliant. Because
such software is usually the property of the client, the Company has no control
over modifications to the software by the client or over its integration with
other software, either of which could potentially cause Year 2000 compliance
difficulties.
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.
Forward Looking Statements
Certain statements contained herein, including statements regarding
development of the Company's services, markets, and future demands for the
Company's services, and other statements regarding matters that are not
historical facts, are forward-looking statements (as defined in the Private
Securities Litigation Reform Act of 1995). Such forward-looking statements
include risks and uncertainties; consequently, actual results may differ from
those expressed or implied thereby. Factors that could cause actual results to
differ materially are described in the Company's filings with the Securities and
Exchange Commission including its most recent Form 10-K, and include reliance on
strategic alliances, geographic expansion, slower growth in the Enterprise
Resource Planning industry, rapid change in the Information Technology sector,
customer and industry revenue concentration, attracting and retaining personnel,
increasing competition, and other factors such as the Company's ability to
effectively manage its growth, the inherent variability of its operating
results, various risks associated with the success and profitability of
individual projects, and its dependence on key personnel.
10
<PAGE>
PART II - OTHER INFORMATION
Item 2. Changes in Securities.
(c) Issuance of Securities
N/A
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
27. Financial Data Schedule
(b) Current Reports on Form 8-K
N/A
11
<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: May 12, 1999
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, May 12, 1999
- ----------------------------
Robert W. Deutsch Chief Executive Officer, and Director
/s/ Ronald E. Holtz Vice President, Chief Financial Officer, May 12, 1999
- ----------------------------
Ronald E. Holtz and Director
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> MAR-31-1999
<CASH> 10,118,000
<SECURITIES> 38,224,000
<RECEIVABLES> 22,490,000
<ALLOWANCES> 240
<INVENTORY> 0
<CURRENT-ASSETS> 82,617,000
<PP&E> 21,464,000
<DEPRECIATION> 11,546,000
<TOTAL-ASSETS> 92,894,000
<CURRENT-LIABILITIES> 14,742,000
<BONDS> 0
0
0
<COMMON> 1,502,000
<OTHER-SE> 75,060,000
<TOTAL-LIABILITY-AND-EQUITY> 92,894,000
<SALES> 0
<TOTAL-REVENUES> 33,242,000
<CGS> 0
<TOTAL-COSTS> 23,592,000
<OTHER-EXPENSES> 4,024,000
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 7,000
<INCOME-PRETAX> 6,086,000
<INCOME-TAX> 2,282,000
<INCOME-CONTINUING> 3,804,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,804,000
<EPS-PRIMARY> .25
<EPS-DILUTED> .24
</TABLE>
