<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 DECEMBER 31, 1999
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM __________________
TO ___________________.
COMMISSION FILE NUMBER: 0-22737
ADVANCED COMMUNICATION SYSTEMS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 54-1421222
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
10089 LEE HIGHWAY, FAIRFAX, VIRGINIA 22030
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICE AND ZIP CODE)
(703) 934-8130
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE:
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 THE CLOSE OF BUSINESS ON FEBRUARY 8, 2000, THE REGISTRANT HAD OUTSTANDING
8,905,666 SHARES OF COMMON STOCK, PAR VALUE $.01 PER SHARE.
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ADVANCED COMMUNICATION SYSTEMS, INC.
QUARTERLY REPORT ON FORM 10-Q
INDEX
<TABLE>
<CAPTION>
PAGE
<S> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets as of December 31, 1999
and September 30, 1999 3
Condensed Consolidated Statements of Operations for the Three
Months Ended December 31, 1999 and 1998 4
Condensed Consolidated Statements of Cash Flows for the Three
Months Ended December 31, 1999 and 1998 5
Notes to Condensed Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 9
Item 3. Quantitative and Qualitative Disclosures About Market Risk 12
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K 13
</TABLE>
2
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ADVANCED COMMUNICATION SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1999 1999
---- ----
(UNAUDITED)
ASSETS
<S> <C> <C>
Current assets:
Cash and cash equivalents $979 $1,615
Contract receivables 68,962 67,834
Other receivables 855 1,617
Deferred costs 969 -
Prepaid expenses 693 1,279
Income taxes receivable 226 -
Inventories 720 932
--------- ---------
Total current assets 73,404 73,277
--------- ---------
Property and equipment, net 8,690 7,908
Other assets:
Intangibles, net 71,174 61,603
Other non-current assets 422 414
--------- ---------
Total other assets 71,596 62,017
--------- ---------
Total assets $153,690 $143,202
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current portion of long-term debt $43 $87
Obligations under capital lease 714 877
Accounts payable 4,924 5,773
Accrued expenses and other current liabilities 32,775 27,789
Billings in excess of revenue 532 1,182
Deferred profit 4,930 5,319
Income taxes payable - 738
Deferred income tax liability 2,977 2,317
--------- ---------
Total current liabilities 46,895 44,082
Obligations under capital lease - long-term 358 420
Deferred income tax liability - long-term 1,711 1,226
Long-term debt 52,565 47,580
--------- ---------
Total liabilities 101,529 93,308
Stockholders' equity:
Preferred stock, $.01 par value, 1,000,000 shares authorized,
no shares issued and outstanding - -
Common stock, $.01 par value, 40,000,000 shares authorized, 11,450,000 shares
issued at December 31, 1999 and September 30, 1999 115 115
Paid-in-capital 43,416 42,511
Retained earnings 8,930 7,578
Less - Treasury stock, 2,613,748 shares at December 31, 1999 and 2,701,513
shares at September 30, 1999 (300) (310)
--------- ---------
Total stockholders' equity 52,161 49,894
--------- ---------
Total liabilities and stockholders' equity $153,690 $143,202
========= =========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
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ADVANCED COMMUNICATION SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
DECEMBER 31,
------------
1999 1998
---- ----
<S> <C> <C>
Revenues.................................................. $46,255 $47,222
Direct costs.............................................. 30,031 31,893
Indirect, general and administrative expenses............. 12,549 12,373
------- -------
Income from operations.................................... 3,675 2,956
Other expense, net........................................ (1,380) (847)
------- -------
Income before taxes....................................... 2,295 2,109
Income tax expense........................................ 943 836
------- -------
Net income................................................ $1,352 $1,273
======= =======
Net income per share - basic.............................. $0.15 $0.15
======= =======
Net income per share - diluted............................ $0.15 $0.15
======= =======
Weighted average shares outstanding - basic............... 8,778 8,620
======= =======
Weighted average shares outstanding - diluted............. 8,926 8,708
======= =======
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
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ADVANCED COMMUNICATION SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
DECEMBER 31,
------------
1999 1998
----- ----
<S> <C> <C>
Cash flow from operating activities:
Net income $ 1,352 $ 1,273
Adjustments to reconcile net income to net cash
used in operating activities-
Depreciation and amortization 934 876
Reserve for doubtful accounts 400 -
Deferred tax provision 1,145 833
Reduction of deferred revenue (389) -
Loss on sale of subsidiary 167 -
Changes in assets and liabilities:
Contract receivables (1,588) (7,838)
Other receivables 756 (318)
Prepaid expenses 586 (154)
Inventories 212 83
Other assets (31) 23
Accounts payable (812) (3,247)
Accrued expenses and other current liabilities (5,983) (2,140)
Billings in excess of revenue (650) (312)
Income taxes payable (700) (342)
------- --------
Net cash used in operating activities (4,601) (11,263)
------- --------
Cash flows from investing activities:
Purchases of property and equipment (1,308) (601)
Capitalized software development costs - (463)
------- --------
Net cash used in investing activities (1,308) (1,064)
------- --------
Cash flows from financing activities:
Net borrowings repaid (59) (8)
Net borrowings under line of credit 5,000 12,000
Repayments of obligations under capital leases (225) (543)
Sales of treasury stock 557 227
------- --------
Net cash provided by financing activities 5,273 11,676
------- --------
Net decrease in cash (636) (651)
Cash and cash equivalents, beginning of period 1,615 2,457
------- --------
Cash and cash equivalents, end of period $ 979 $ 1,806
======= ========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements.
<PAGE> 6
ADVANCED COMMUNICATION SYSTEMS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1999
(UNAUDITED)
1. BASIS OF PRESENTATION
The accompanying condensed consolidated balance sheet as of December 31, 1999
and the statements of operations and cash flows for all periods presented have
been prepared by Advanced Communication Systems, Inc. ("the Company"), and have
not been audited. These financial statements, in the opinion of management,
include all adjustments, consisting of normal recurring adjustments, necessary
for a fair presentation of the financial position, results of operations and
cash flows for all periods presented. These condensed consolidated financial
statements should be read in conjunction with the financial statements and notes
thereto for the fiscal year ended September 30, 1999 included in the Company's
Annual Report on Form 10-K. Interim operating results are not necessarily
indicative of operating results for the full year.
2. MANAGEMENT'S USE OF ESTIMATES
The preparation of 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 at the date of the financial statements and
reported amounts of revenues and expenses during the reporting period. Actual
results could differ from those estimates.
3. RECLASSIFICATION
Certain prior year amounts have been reclassified to conform to the current
period's presentation.
4. SUPPLEMENTAL STATEMENTS OF CASH FLOWS DATA
The Company paid income taxes of approximately $489,000 and $339,000 and
interest of approximately $1,264,000 and $884,000 in the three-month periods
ended December 31, 1999 and 1998, respectively.
The following are non-cash transactions for the three-month periods ended
December 31, 1999 and 1998.
<TABLE>
<CAPTION>
DECEMBER 31,
1999 1998
---- ----
(IN THOUSANDS)
<S> <C> <C>
Deferred merger costs $ 969 $ -
Contingent payment - SEMCOR selling shareholders $10,000 $5,000
Tax effect of stock option exercises $ 358 $ -
</TABLE>
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5. ACQUISITION AND DIVESTITURE
In June 1998, the Company acquired all the outstanding shares of SEMCOR, Inc.
("SEMCOR") for a preliminary purchase price of $38,100,000 in cash and
additional contingent payments based on the achievement of certain financial
goals for the six-month period ended December 31, 1998, up to a maximum of
$5,000,000, and the twelve-month period ending December 31, 1999, up to a
maximum of $10,000,000. SEMCOR successfully achieved the financial goals for the
six-month ended December 31, 1998 as outlined in the stock purchase agreement
and accordingly the selling shareholders were paid the maximum of $5,000,000 in
February 1999. Additionally, SEMCOR achieved the financial goals for the
twelve-month period ended December 31, 1999, and accordingly the selling
shareholders earned the maximum $10,000,000. The excess of the preliminary
purchase price and the contingent payments over the net assets acquired is being
carried as goodwill in the amount of $51,784,000, and is being amortized over
its estimated useful life of 40 years.
In connection with the final determination of the fair value of assets acquired
and pursuant to the provisions of Accounting Principles Board Opinion No. 16,
the Company has valued acquired contracts in process at the contract price,
minus the estimated costs to complete and an allowance for the normal industry
profit on its effort to complete such contracts, which amounted to $6,343,000.
Effective April 1, 1999, this adjustment has been reflected in the accompanying
balance sheet as an increase to goodwill and a corresponding increase to
deferred profit. The Company recognized approximately $388,000 as a reduction of
costs in the three months ended December 31, 1999, with the remaining $4,930,000
to be recorded as a reduction of costs in future periods as work on certain
contracts is performed.
In October 1999, the Company sold its 100% interest in its U.K. subsidiary,
Fairfax Communications, Ltd. for $30,000 in cash, resulting in a loss of
approximately $167,000. This loss is reflected in the statement of operations
for the three month period ended December 31, 1999.
6. CONTRACT RECEIVABLES
Contract receivables consist of the following:
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1999 1999
------------- -------------
(IN THOUSANDS)
<S> <C> <C>
U.S. government:
Amounts billed ....................................... $ 26,204 $ 25,625
Recoverable costs and accrued profit on progress
completed; not billed .............................. 38,278 38,422
------------- -------------
Subtotal ......................................... 64,482 64,047
------------- -------------
Commercial customers:
Amounts billed ....................................... 3,847 3,513
Recoverable costs and accrued profit on progress
completed; not billed .............................. 2,006 1,235
------------- -------------
Subtotal ......................................... 5,853 4,748
------------- -------------
Less allowance for doubtful accounts ...................... 1,373 961
------------- -------------
Total ............................................ $ 68,962 $ 67,834
============= =============
</TABLE>
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7. LONG-TERM DEBT
Long-term debt consisted of the following:
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1999 1999
------------- -------------
<S> <C> <C>
Lines of credit:
$60,000,000 line of credit, with a commercial bank
expiring February 28, 2002 ......................................... $ 51,000 $ 46,000
$400,000 line of credit with a commercial bank, interest at prime
plus 1%, due on demand ............................................ -- 50
Long-term debt:
Note payable to bank, interest at 9.9%, due February
2005, secured by a First Deed of Trust on an office building ....... 947 951
Note payable to Urban Business Development
Corporation, interest at 8.575%, due January 2015, guaranteed
by the Small Business Administration and secured by a
Second Deed of Trust on an office building ........................... 661 666
------------- -------------
52,608 47,667
Less current maturities .............................................. (43) (87)
------------- -------------
$ 52,565 $ 47,580
============= =============
</TABLE>
8. SEGMENT REPORTING
The Company adopted the provisions of Statement of Financial Accounting
Standards ("SFAS") No. 131, Disclosure About Segments of an Enterprise and
Related Information. SFAS No. 131 required publicly-held companies to report
financial and other information about key revenue-producing segments of the
entity for which such information is available and is utilized by the chief
operating decision maker in deciding how to allocate resources and in assessing
performance. SFAS No. 131 permits operating segments to be aggregated if they
have similar products and services, customers, methods of distribution, and
belong to the same regulatory environment.
The Company's revenues are derived predominately from the U.S. Government
through long-term cost reimbursement, fixed-price or time and materials
contracts that are administered and executed under the Federal Acquisition
Regulations. The Company's operating margin is primarily affected by the mix of
contract types. The Company makes vertical market disclosures such as,
communication services, information systems and aerospace services. The chief
operating decision-maker does not allocate resources and does not assess the
Company's performance by the above classifications. The Company manages on a
contract by contract basis and, accordingly, the Company's government contracts
are considered to be one reportable operating segment.
9. SUBSEQUENT EVENT
On December 9, 1999, the Company entered into a definitive agreement to merge
a subsidiary of The Titan
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Corporation ("Titan", NYSE: TTN) into the Company in a tax-free exchange of
Titan common stock for the Company's common stock at an approximate value
ranging from $18 to $22 per share of the Company's common stock. The transaction
has been approved by the board of directors of both companies and is subject to
the approval of the Company's stockholders.
A special meeting of the Company's stockholders will be held on February 23,
2000, to vote for the adoption of the merger agreement and approval of the
merger and related transactions.
Included in deferred costs and accrued expenses is $969,000 that represents the
merger costs incurred by the Company as of December 31, 1999. Deferred costs
will be charged to expense upon consummation of the merger.
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 forward-looking statements based on management's
current expectations, estimates and projections about the Company's industry,
management's beliefs and certain assumptions made by management. These
forward-looking statements involve risks and uncertainties, and actual results
may differ materially from those anticipated or expressed in such statements.
Potential risks and uncertainties include, among others, those set forth in the
Company's annual report on Form 10-K, as filed with the Securities and Exchange
Commission. Except as required by law, the Company undertakes no obligation to
update any forward-looking statement, whether as a result of new information,
future events or otherwise.
OVERVIEW
The Company provides communications, information systems and aerospace services
and solutions, predominately to U.S. government agencies and to commercial
customers.
Many of the Company's contracts are funded from year to year, based primarily on
the procuring agency's fiscal requirements. There can be no assurance that
Congress will appropriate funds or that procuring agencies will commit funds to
the Company's contracts for their anticipated terms. The Company's business,
financial condition and results of operations could be materially affected by
changes in procurement policies, a reduction in funds available for the services
provided by it and other risks generally associated with federal government
contracts.
The Company's contracts with the government and its subcontracts with government
prime contractors are subject to termination for the convenience of the
government; termination, reduction or modification in the event of change in the
government's requirements or budgetary constraints; and, when it participates as
a subcontractor, termination for the failure or inability of the prime
contractor to perform its prime contract. In addition, most of the Company's
government contracts have a base term of one year and a number of option years,
and there can be no assurance that the government will extend a contract through
its option years. Termination of any of the Company's large government
contracts, or failure of the government to extend such
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contracts, could have a material adverse effect on the Company's business,
financial condition and results of operations.
Many of the Company's large contracts require the Company to supply services
upon request, and the Company receives no payments under these contracts until
such services are funded. There can be no assurance that cancellations or scope
adjustments of these contracts might not occur or that the Company's services
under these contracts will be requested at the anticipated levels in the future.
RESULTS OF OPERATIONS
The following table sets forth certain statement of operations data as a
percentage of revenues for the periods indicated:
<TABLE>
<CAPTION>
THREE MONTHS
ENDED DECEMBER 31,
------------------
1999 1998
----- -----
<S> <C> <C>
Revenues .......................................... 100.0% 100.0%
Direct costs ...................................... 64.9 67.5
Indirect, general and administrative .............. 27.1 26.2
----- -----
Income from operations ............................ 8.0 6.3
Other expense, net ................................ (3.0) (1.8)
----- -----
Income before taxes ............................... 5.0 4.5
Provision for income taxes ........................ 2.0 1.8
----- -----
Net income ........................................ 3.0% 2.7%
===== =====
</TABLE>
THREE MONTHS ENDED DECEMBER 31, 1999 COMPARED TO THREE MONTHS ENDED
DECEMBER 31, 1998
Revenues decreased 2.0%, or $967,000, to $46.3 million for the three months
ended December 31, 1999, from $47.2 million for the same period in 1998. The
decrease was due to lower communication services revenues, primarily from the
company's two large U.S. Navy contracts, a decrease in systems integration
revenues, partially offset by an increase in aerospace services revenues.
Direct costs include labor costs, related fringe benefits, subcontract costs,
material costs and other non-overhead costs directly related to a contract.
Direct costs decreased to $30.0 million for the three months ended December 31,
1999 from $31.9 million for the same period in 1998 due primarily to the lower
revenues referred to above. Direct costs, expressed as a percentage of revenues,
decreased to 64.9% for the three months ended December 31, 1999 from 67.5% for
the same period in 1998, due primarily to lower direct subcontract costs
incurred in conjunction with the Company's two large U.S. Navy contracts.
Additionally, there was a decrease in the proportion of revenues derived from
systems integration services. These services generally have higher direct costs
than the other services the Company provides because the contracts generally
require the Company to purchase hardware components as part of the services.
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Indirect, general and administrative expenses include fringe benefits, overhead,
selling and administrative costs, depreciation and amortization, bid and
proposal costs and research and development expenses. Indirect expenses
increased to $12.5 million for the three months ended December 31, 1999 from
$12.4 million for the same period in 1998. Indirect expenses, expressed as a
percentage of revenues, increased to 27.1% from 26.2% for the three months ended
December 31, 1999, due primarily to an increase in the amortization of goodwill
as a result of the initial contingent payment to SEMCOR's selling shareholders
and an increase in the provision for contract receivables.
Income from operations increased 24.3%, to $3.7 million for the three months
ended December 31, 1999, from $3.0 million for the same period in 1998,
primarily due to higher operating margins generated by systems integration
contracts and aerospace services contracts. As a percentage of revenues, income
from operations increased to 8.0% for the three months ended December 31, 1999,
from 6.3% for the comparable period in the prior year principally attributable
to the higher operating margins discussed above.
Other expense, net, consists of interest expense and the loss recognized on the
sale of Fairfax Communications, Ltd., the Company's U.K. subsidiary, offset in
part by interest income from short-term deposits of cash and other sources of
non-operating income. Interest expense was $1.3 million and $884,000 for the
three-month periods ended December 31, 1999 and 1998, respectively. The increase
in interest expense resulted primarily from the amounts borrowed to fund the
SEMCOR initial contingent payment, the acquisition of Program Support
Associates, Inc. and working capital needs.
The Company's effective tax rate was 41.1% and 39.6%, respectively, for the
three months ended December 31, 1999 and 1998. The increase is primarily due to
higher effective state income tax rates.
LIQUIDITY AND CAPITAL RESOURCES
The Company used cash from operating activities of $4.6 million for the three
months ended December 31, 1999, resulting primarily from increases in contract
receivables and decreases in accrued expenses and other current liabilities,
offset in part, by net income. For the three months ended December 31, 1998, the
Company used cash from operating activities which amounted to $11.2 million,
resulting primarily from increases in contract receivables, decreases in
accounts payable and accrued expenses and other current liabilities, offset in
part, by net income.
The principal uses of cash for investing activities was for the purchases of
property and equipment used primarily in upgrading both the Company's Human
Resources Information Systems and its Financial Reporting and Accounting
Systems.
In June 1998, the Company's line of credit arrangement with a commercial bank,
consisting of two credit facilities, was increased from $35 million to $45
million to finance the acquisition of SEMCOR. The first facility, in an amount
up to $20 million, may be used to finance acquisitions, working capital, and
other corporate purposes, and bears interest at either the bank's prime rate or
at a London interbank offered rate ("LIBOR") for one, two or three month
periods, plus a percentage, not more than 2.2%, which depends on the Company's
historical performance. The second facility, in an amount up to $25 million, may
be used to finance acquisitions, and
11
<PAGE> 12
bears interest at either the bank's prime rate or at a LIBOR rate plus a
percentage, not more than 2.45%, which depends on the Company's historical
financial performance. The credit agreement contains various covenants requiring
the Company and its subsidiaries, on a consolidated basis, to maintain certain
financial ratios, including funded debt to earnings before interest,
depreciation, income taxes and amortization ("EBITDA"), EBITDA coverage ratio,
and minimum net worth. The credit agreement also prohibits the payment of
dividends.
In February 1999, the line of credit arrangement was increased to $60.0 million
to finance the initial contingent payment to the selling shareholders of SEMCOR
and to provide for the working capital needs of the Company. The credit
arrangement is subject to similar terms and conditions as the original agreement
that was entered into in February 1998.
In December 1999, the Company and the commercial bank executed an amendment to
the credit arrangement that restated the definition of EBITDA to exclude $4.8
million in calculating the funded debt to EBITDA financial covenant with respect
to any fiscal period from September 30, 1999, through and including June 30,
2000.
As of December 31, 1999, the Company was in violation of one of the credit
arrangement's financial covenants, the funded debt to EBITDA ratio. The
commercial bank has issued a waiver of this technical violation.
The Company is currently in negotiations with the commercial bank to increase
the existing credit facilities to satisfy its working capital needs and to
provide for the second contingent payment to the selling shareholders of SEMCOR
in the amount of $10.0 million.
The Company anticipates that its current cash balances, amounts available under
its credit facilities and net cash provided by operations will be sufficient to
meet its working capital and capital expenditure requirements for at least the
next twelve months. As of December 31, 1999, $59.2 million was available on this
credit arrangement, $51.0 million was outstanding with an additional $1.2
million in a standby letter of credit. The letter of credit expired effective
January 31, 2000.
YEAR 2000 DISCLOSURE
To date, the Company has experienced no failures or disruptions in its internal
operating systems, its products or in its third party vendors or suppliers
either on or after January 1, 2000. The Company believes that there will be no
compliance issues that could have a material effect on its financial condition
or results of operations. The Company has incurred approximately $501,000 for
Year 2000 compliance costs.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
12
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PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibit 27.1 Financial Data Schedule
(b) Reports on Form 8-K - None
13
<PAGE> 14
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.
Date: February 14, 2000 ADVANCED COMMUNICATION SYSTEMS, INC.
/S/ George A. Robinson
--------------------------------
George A. Robinson
Chairman, President
and Chief Executive Officer
/S/ Terrence E. Hileman
-------------------------------
Terrence E. Hileman
Vice President, Chief
Financial Officer and Treasurer
14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ADVANCED
COMMUNICATION SYSTEMS, INC.'S FINANCIAL STATEMENTS AND IS QUALIIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-2000
<PERIOD-START> OCT-01-1999
<PERIOD-END> DEC-31-1999
<CASH> 979
<SECURITIES> 0
<RECEIVABLES> 70,335
<ALLOWANCES> 1,373
<INVENTORY> 720
<CURRENT-ASSETS> 73,404
<PP&E> 18,455
<DEPRECIATION> 9,765
<TOTAL-ASSETS> 153,690
<CURRENT-LIABILITIES> 46,895
<BONDS> 0
0
0
<COMMON> 115
<OTHER-SE> 52,046
<TOTAL-LIABILITY-AND-EQUITY> 153,690
<SALES> 0
<TOTAL-REVENUES> 46,255
<CGS> 0
<TOTAL-COSTS> 42,180
<OTHER-EXPENSES> 1,380
<LOSS-PROVISION> 400
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 2,295
<INCOME-TAX> 943
<INCOME-CONTINUING> 1,352
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,352
<EPS-BASIC> .15
<EPS-DILUTED> .15
</TABLE>
