================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-----------
FORM 10-QSB
(Mark One)
[x] QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 For the quarterly period ended June 30, 1998
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 For the transition period from _____________ to ______________
Commission file number 1-13271
800 TRAVEL SYSTEMS, INC.
(Exact name of Small Business Issuer as specified in its charter)
Delaware 59-3343338
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
4802 Gunn Highway
Tampa, Florida 33624
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (813) 908-0903
------------------------------------------------------------------
N/A
---------------------------------------------------
(Former name, former address and former fiscal year
if changed since last report
Check whether the issuer (1) 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 |_|
State the number of shares outstanding of each of the issuer's classes of
common equity, as of the latest practicable date: 7,497,096 shares of Common
Stock, $.01 par value, were outstanding, as of June 30, 1998.
Transitional Small Business Disclosure Format (check one):
Yes |_| No |X|
================================================================================
<PAGE>
Form 10-QSB
INDEX
Page
Number
PART 1. FINANCIAL INFORMATION .......................................... 1
Item 1. Financial Statements ...................................... F-1 to 8
Balance Sheets ............................................F-1
Statements of Operations ..................................F-3
Statements of Stockholders' Equity ..................... F-4
Statements of Cash Flows ............................... F-5
Notes to Financial Statements .......................... F-7
Item 2. Management's Discussion and Analysis
of Financial Condition and Results of
Operations ............................................... 2
PART 2. OTHER INFORMATION ............................................... 5
Item 6. Exhibits, Lists and Reports on Form 8-K ........................ 5
(a) Exhibits ............................................ 5
(b) Reports on Form 8-K ................................. 5
SIGNATURES ................................................................. 6
<PAGE>
PART 1
FINANCIAL INFORMATION
Item 1. Financial Statements
800 TRAVEL SYSTEMS, INC.
BALANCE SHEETS
ASSETS
June 30,
1998 December 31,
(unaudited) 1997
----------- ------------
CURRENT ASSETS
Cash $ 2,140,696 $ 18,710
Commissions receivable 985,526 553,358
Prepaids 154,500 16,617
----------- -----------
Total current assets 3,280,722 588,685
----------- -----------
LEASEHOLD IMPROVEMENTS AND EQUIPMENT 868,801 450,667
Less accumulated depreciation (181,077) (110,104)
----------- -----------
Net leasehold improvements and equipment 687,724 340,563
----------- -----------
EXCESS OF COST OVER FAIR VALUE OF NET
ASSETS ACQUIRED
Less accumulated depreciation of $192,833 and
$93,126, respectively 4,862,572 1,024,385
----------- -----------
DEFERRED OFFERING COSTS -- 1,408,573
----------- -----------
OTHER ASSETS
Trademarks, net of accumulated amortization
of $45,699 and $29,616, respectively 369,301 185,384
Related party receivables 4,362 308,425
Bonds, security deposits and other assets 39,724 37,824
Merger deposits and deferred acquisition costs -- 416,671
Prepaid expenses 231,748 68,000
----------- -----------
Total other assets 645,135 1,016,304
----------- -----------
TOTAL ASSETS $ 9,476,153 $ 4,378,510
=========== ===========
(continued)
F-1
<PAGE>
LIABILITIES AND STOCKHOLDERS' EQUITY
June 30,
1998 December 31,
(unaudited) 1997
----------- ------------
CURRENT LIABILITIES
Note Payable $ -- $ 50,000
Current maturities of long-term debt 176,565 260,000
Accounts payable 805,893 1,830,652
Accrued liabilities 344,984 479,670
----------- -----------
Total current liabilities 1,327,442 2,620,322
DEFERRED RENT 69,641 138,228
LONG-TERM DEBT - excluding current maturities 36,000 50,000
----------- -----------
Total liabilities 1,433,083 2,808,550
----------- -----------
COMMITMENTS AND CONTINGENCIES -- --
STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value, 1,000,000
shares authorized; none issued and outstanding -- --
Common stock, $.01 par value, 10,000,000 shares
authorized; 7,497,096 and 5,959,709 shares
issued and outstanding, respectively 74,971 59,597
Additional paid-in capital 11,823,592 5,297,424
Stock subscriptions receivable (21,547) (21,547)
Retained deficit (3,833,946) (3,765,514)
----------- -----------
Total Stockholders' Equity 8,043,070 1,569,960
----------- -----------
TOTAL LIABILITIES AND STOCKHOLDERS' $ 9,476,153 $ 4,378,510
EQUITY =========== ===========
The accompanying notes are an integral part of these financial statements.
F-2
<PAGE>
800 TRAVEL SYSTEMS, INC.
STATEMENTS OF OPERATIONS (UNAUDITED)
<TABLE>
<CAPTION>
For the Six Months Ended For the Three Months Ended
June 30, June 30,
-------------------------- --------------------------
1998 1997 1998 1997
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
REVENUES
Commissions $ 3,574,274 $ 3,000,192 $ 2,015,359 $ 1,660,207
Ticket delivery and service fees 1,501,044 721,459 981,576 421,198
----------- ----------- ----------- -----------
Total revenues 5,075,318 3,721,651 2,996,935 2,081,405
OPERATING EXPENSES
Payroll, commissions and employee
benefits 2,327,792 1,775,614 1,261,346 927,371
Telephone 810,649 501,246 484,976 234,132
Ticket delivery 447,549 327,926 280,298 148,959
Advertising 154,359 107,044 105,749 61,499
General and administrative 1,441,311 1,110,164 780,398 476,499
----------- ----------- ----------- -----------
Total operating expenses 5,181,660 3,821,994 2,912,767 1,848,460
EARNINGS (LOSS) BEFORE
OTHER INCOME (106,342) (100,343) 84,168 232,945
OTHER INCOME (EXPENSE)
Interest income 51,038 5,368 23,791 2,888
Interest expense (13,128) (67,453) (7,283) (61,269)
----------- ----------- ----------- -----------
NET EARNINGS (LOSS) $ (68,432) $ (162,428) $ 100,676 $ 174,564
=========== =========== =========== ===========
NET EARNINGS (LOSS) PER
COMMON SHARE - BASIC $ (0.01) $ (0.03) $ 0.01 $ 0.03
=========== =========== =========== ===========
- DILUTED $ (0.01) $ (0.03) $ 0.01 $ 0.03
=========== =========== =========== ===========
WEIGHTED AVERAGE NUMBER
OF COMMON SHARES
OUTSTANDING - BASIC 7,427,622 5,956,352 7,473,694 5,959,709
=========== =========== =========== ===========
- DILUTED 7,427,622 5,956,352 7,837,296 6,199,709
=========== =========== =========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements
F-3
<PAGE>
800 TRAVEL SYSTEMS, INC.
STATEMENT OF STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
Common Stock
------------
Additional Stock
Paid-in Subscriptions Retained
Shares Amount Capital Receivable Deficit Total
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1996 5,951,209 $ 59,512 $ 4,976,259 $ (32,296) $ (3,503,009) $ 1,500,466
Issuance of common stock in
connection with debt issuance
and services 8,500 85 21,165 -- -- 21,250
Issuance of stock options to
Directors -- -- 300,000 -- -- 300,000
Payment of stock subscription -- -- -- 10,749 -- 10,749
Net loss -- -- -- -- (262,505) (262,505)
------------ ------------ ------------ ------------ ------------ ------------
BALANCE, DECEMBER 31, 1997 5,959,709 59,597 5,297,424 (21,547) (3,765,514) 1,569,960
Sales of common stock and
warrants net of issuance
expenses of $2,252,602 1,350,000 13,500 4,872,024 -- -- 4,885,524
Joseph Stevens Group, Inc.
Merger 383,333 3,833 1,944,082 -- -- 1,947,915
Purchase of 204,615 shares (204,615) (2,046) (405,954) -- -- (408,000)
Exercise of warrants 58,200 582 363,168 -- -- 363,750
Shares exchanged in payment of
receivables (49,531) (495) (247,152) -- -- (247,647)
Net loss -- -- -- -- (68,432) (68,432)
------------ ------------ ------------ ------------ ------------ ------------
BALANCE, JUNE 30, 1998 (unaudited) 7,497,096 $ 74,971 $ 11,823,592 $ (21,547) $ (3,833,946) $ 8,043,070
============ ============ ============ ============ ============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements
F-4
<PAGE>
800 TRAVEL SYSTEMS, INC.
STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
Six Months Ended June 30,
-------------------------
1998 1997
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (68,432) $ (162,428)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation and amortization 186,763 61,313
Stock, options and warrants issued for expenses -- 21,250
Prepaid rent amortization 6,000 6,000
Changes in operating assets and liabilities, net of effects of acquisition:
Increase in receivables (432,168) (236,608)
(Increase) decrease in prepaids (137,883) 3,385
Increase in other assets (37,876) --
Increase (decrease) in deferred rent liability (74,587) 72,246
Increase (decrease) in accounts payable and accrued expenses (1,159,445) 181,929
----------- -----------
Net cash used in operating activities (1,717,628) (52,913)
----------- -----------
CASH FLOW FROM INVESTING ACTIVITIES
Purchase of leasehold improvements and equipment (78,133) (46,703)
Merger deposits and deferred acquisition costs -- (50,000)
Cash paid for acquisition (2,114,665) --
----------- -----------
Net cash used in investing activities (2,192,798) (96,703)
----------- -----------
CASH FLOW FROM FINANCING ACTIVITIES
Deferred offering cost -- (293,700)
Principal payments on debt (217,435) --
Issuance of common stock 6,657,847 --
Purchase of common stock (408,000) --
----------- -----------
Net cash provided by (used in) financing activities 6,032,412 (293,700)
----------- -----------
NET INCREASE (DECREASE) IN CASH 2,121,986 (443,316)
CASH AT THE BEGINNING OF PERIOD 18,710 588,960
----------- -----------
CASH AT THE END OF PERIOD $ 2,140,696 $ 145,644
=========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest expense $ 13,128 $ 61,453
=========== ===========
NON-CASH FINANCING ACTIVITIES
Common stock received for payment of related party receivables $ 247,647 $ --
=========== ===========
</TABLE>
The accompanying notes are an integral part of these financial statements
F-5
<PAGE>
800 TRAVEL SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998 AND 1997
NOTE 1 - BASIS OF PRESENTATION
The accompanying unaudited consolidated financial statements have been prepared
in accordance with generally accepted accounting principals for interim
financial information and with the instructions to Form 10-QSB and Rule 10-01 of
Regulations S-X. They do not include all information and notes required by
generally accepted accounting principals for complete financial statements.
However, except as disclosed, there has been no material change in the
information disclosed in the notes to consolidated financial statements included
in the Annual Report on Form 10-KSB of 800 Travel Systems, Inc. for the year
ended December 31, 1997. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary for a fair
presentation have been included. Operating results for the three and six month
periods ended June 30, 1998, are not necessarily indicative of the results that
may be expected for the year ending December 31, 1998.
NOTE 2 - SALE OF COMMON STOCK
In January 1998, the Company sold 1,350,00 shares of common stock ($5.00) and
3,105,000 warrants ($.125). The following summarizes the transactions:
Proceeds:
Common stock $6,750,000
Warrants 388,125
----------
7,138,125
Expenses:
Underwriter commissions and expenses 927,956
Printing 226,000
Other 1,098,645
----------
Net proceeds $4,885,524
==========
F-6
<PAGE>
800 TRAVEL SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998 AND 1997
NOTE 3 - ACQUISITION
In January 1998, the Company acquired selected assets and selected liabilities
of Joseph Stevens Group, Inc. in exchange of the issuance of 383,733 shares of
its common stock, issuance of 250,000 warrants to purchase common stock and the
payment of $1,578,000 purchase acquisition note. The following summarizes the
transaction:
Purchase Price:
Cash payment on note $1,578,000
Common stock 1,916,665
Warrants 31,250
Cash payments 536,665
Acquisition expenses 345,315
Capital lease assumed 70,000
----------
$4,477,895
==========
Assets Acquired:
Equipment $ 340,000
Trademarks 200,000
Goodwill 3,937,895
----------
$4,477,895
==========
In March 1998, the Company entered into an agreement with the previous
stockholders of Joseph Stevens Group, Inc. to purchase a telephone switch and
certain other fixed assets and to release the Company from its guaranty of the
future value of the Company's common stock issued to the principal stockholder
of Joseph Stevens Group, Inc. for payments totalling $490,000. These have been
included in the calculation of the purchase shown above.
The statements of operations for the three and six months ended June 30, 1997
and cash flows for the six month period ended June 30,1997, include the
operations of the Joseph Stevens Group, Inc. for the period January 1, 1997 to
June 30, 1997. In the opinion of management, these statements have been prepared
on the same basis as the audited financial statements and include all
adjustments, consisting of only normal recurring adjustments, necessary to state
fairly the information set forth therein. Operating results for the three and
six months ended June 30,1997 are not necessarily indicative of the results that
would have occurred had they been a single entity during the period.
F-7
<PAGE>
800 TRAVEL SYSTEMS, INC.
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1998 AND 1997
NOTE 4 - NET INCOME (LOSS) PER COMMON SHARE
The following table reconciles the numerators and denominators of the basic and
diluted income per share computations, as computed in accordance with FAS 128:
<TABLE>
<CAPTION>
For the Six Months Ended For the Three Months Ended
June 30, June 30,
-------------------------- --------------------------
1998 1997 1998 1997
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
Net earnings (loss) -
(numerator) $ (68,432) $ (162,428) $ 100,676 $ 174,564
=========== =========== =========== ===========
Basic:
Weighted average shares
outstanding
(denominator) $ 7,427,622) $ 5,956,352 $ 7,473,694 $ 5,959,709
=========== =========== =========== ===========
Net earnings (loss) per
common share - basic $ (.01) $ (.03) $ .01 $ .03
=========== =========== =========== ===========
Diluted:
Weighted average shares
outstanding 7,427,622 5,956,352 7,473,694 5,959,709
Effect of dilutive options -- -- 363,602 240,000
----------- ----------- ----------- -----------
Adjusted weighted average
shares (denominator) 7,427,622 5,956,352 7,837,296 6,199,709
=========== =========== =========== ===========
Net earnings (loss) per
common share - basic $ (.01) $ (.03) $ (.01) $ (.03)
=========== =========== =========== ===========
</TABLE>
All warrants outstanding are excluded from the calculation of adjusted weighted
average shares, as they are anti-dilutive. Options for 237,500 shares of common
stock are excluded from the adjusted weighted average shares for the three
months ended June 30, 1998, as they are anti-dilutive.
F-8
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Overview
The Company operates as a telemarketing travel agency, providing air
transportation reservation services for domestic and international travel to
customers through its easy to remember, toll-free numbers. The Company was
formed in November 1995 to acquire certain assets of and assume certain
liabilities of 1-800- Low Airfare, Inc. (the "Predecessor Business"). The
acquisition was consummated on December 1, 1995. To expand its operations, in
November 1996 the Company entered into a Merger Agreement with the Joseph
Stevens Group, Inc. ("Stevens") and its sole shareholder, Joseph Stevens Group,
LLC ("JSG"). Prior to the consummation of the merger with Stevens (the "Stevens
Merger"), Stevens operated as an independent travel agency specializing in the
telemarketing of airline tickets. Pursuant to the Merger Agreement,
simultaneously with the closing of the Company's initial public offering on
January 21, 1998, Stevens was merged with and into the Company, with the Company
as the surviving corporation.
The Company's operating revenues presently consist, and for the immediate
future will continue to consist, principally of (i) commissions on air travel
tickets; (ii) override commissions on air travel tickets booked on airlines with
which the Company has override agreements; (iii) segment incentives under the
Company's agreement with SABRE; (iv) co-op promotions with suppliers of travel
related products and services; and (v) service fees charged to customers.
The Company's revenues are a function of the number and price of the
tickets its sells and the percentage of the price of such tickets it retains as
commissions and override commissions, as well as on the service charge imposed
on customers. Although the Company entered into its first override agreement in
December 1995, it only began to achieve the volume necessary to benefit from
these agreements in the third quarter of 1996. The Company entered into an
agreement with a consolidator that sells tickets on TWA at a discount (the "TWA
Discounter") on March 1, 1996. As a result of its override agreements and its
agreement with the TWA Discounter, the Company is able to charge its customers a
$10 or $20 service charge, depending on the price of the ticket, while still
offering low priced tickets. The Company only began to impose this service
charge in January 1997.
The Company anticipates that as the volume of tickets sold increases and
the proportion of tickets sold which are subject to an override agreement
increases, the percentage of the price of the tickets sold retained by the
Company will increase. The Company's operating expenses include primarily those
items necessary to advertise its services, maintain and staff its travel
reservation centers, including payroll, commissions and benefits; telephone;
general and administrative expenses, including rent and computer maintenance
fees; and, to date, interest, fees and expenses associated with the Company's
financing activities. Set forth below for the periods indicated are the gross
dollar amounts of reservations booked, revenues and revenues as a percentage of
reservations, the gross dollar amount of expenses, expenses as a percentage of
revenues, net loss as a percentage of revenues and changes therein for the six
and three month periods ended June 30, 1998 and 1997.
-2-
<PAGE>
<TABLE>
<CAPTION>
Six Six
Months Ended Months Ended
June 30, 1998 % June 30, 1997 % Change %
------------- --- ------------- --- ------ ---
<S> <C> <C> <C> <C> <C> <C>
Gross Reservations $35,969,382 $25,293,857 10,675,525 42
=========== ===========
Revenues
(including override
and service charges) ...... $ 5,075,315 14* $ 3,721,651 14* 1,353,667 36*
----------- -----------
OPERATING
EXPENSES:
Employee
Costs ..................... 2,327,792 46** 1,775,614 47** 552,178 31**
Telephone .................. 810,649 16 501,246 14 309,403 62
Ticket
Delivery .................. 447,549 9 327,926 9 119,623 36
Advertising ................ 154,359 3 107,044 3 47,315 44
General and
Administrative ........... 1,441,311 28 1,110,164 30 331,147 30
----------- -----------
Total Operating
Expenses ................ 5,181,660 102 3,821,994 103 1,359,666 36
Interest Income (Net of
Interest Expense) ..... 38,110 1 (62,085) 2 100,195 161
----------- -----------
Net Loss ..................... $ (68,432) 1 $ (162,428) 4 93,996 57
=========== ==== =========== ==== ========== ====
</TABLE>
- ----------
*Revenues as a percentage of gross reservations.
** Expenses as a percentage of revenues.
<TABLE>
<CAPTION>
Three Three
Months Ended Months Ended
June 30, 1998 % June 30, 1997 % Change %
------------- --- ------------- --- ------ ---
<S> <C> <C> <C> <C> <C> <C>
Gross Reservations............ $20,818,983 $13,134,858 7,684,125
=========== ===========
Revenues
(including override
and service charges)....... $ 2,996,935 14* $ 2,081,405 16* 915,530 44*
----------- -----------
OPERATING
EXPENSES:
Employee
Costs...................... 1,261,346 42** 927,371 45** 335,975 36**
Telephone................... 484,976 16 234,132 11 250,844 107
Ticket
Delivery................... 280,298 9 148,959 7 131,339 88
Advertising................. 105,749 4 61,499 3 44,250 72
General and
Administrative............ 780,398 26 476,499 23 303,899 64
----------- -----------
Total Operating
Expenses................. 2,912,767 97 1,848,460 89 1,064,307 58
Interest Income (Net of
Interest Expense) ..... 16,508 1 (58,381) 3 74,889 128
----------- -----------
Net (Loss).................... $ 100,676 3 $ 174,564 8 (73,888) 42
=========== == =========== == ========= ===
</TABLE>
- ----------
*Revenues as a percentage of gross reservations.
-3-
<PAGE>
** Expenses as a percentage of revenues.
Results of Operations
In connection with the Stevens Merger, the Company and Stevens entered
into an Interim Operating Agreement pursuant to which the Company operated
Stevens' business for the account of the Company effective January 1, 1997
through the closing of the Stevens Merger. The amounts in the tables above and
in the discussion below include the operations of Stevens.
The increased revenues reflect the increase in gross reservations booked.
The gross reservation increase and the resulting revenue increase is largely
attributable to the increase in the volume of calls handled at the Company's
reservation centers as a result of increases in the number of reservation agents
and certain operating efficiencies. In addition, revenues increased as a
percentage of gross reservations, in part as a result of the Company's ability
to increase the service charges imposed on customers.
Operating expenses did not increase proportionate to the increase in
revenues due to the fact that many expenses (office rent, utilities, management
wages, etc.) remain relatively constant over a broad range of revenues. The
increase in operating expenses resulted primarily from an increase in the
Company's payroll, commissions and employee benefits expenses. The increase in
payroll expenses reflects the increase in the number of reservation agents which
occurred at both reservation centers. Consistent with the increase in the volume
of tickets sold by the Company, the Company also recorded increases in its
telephone and ticket delivery expenses. Also contributing to the increase in
operating expenses was an increase in the Company's advertising expense as the
Company increased the number of yellow page directories in which it advertises
and absorbed the cost of advertising its and Stevens' toll free numbers. The
Company's general and administrative costs also increased. Despite the increase
in general and administrative expenses over the two periods, general and
administrative expenses decreased as a percentage of revenues. The increase in
the foregoing operating expenses was offset, in part, by an increase in interest
and other income, on a net basis.
Liquidity and Capital Resources
Prior to completion of its initial public offering in January 1998, the
Company financed its operations from capital contributions, net of related
expenses, in the amount of $2,455,902; loans in the amount of $460,750; and
through services provided by certain vendors to be paid out of future revenues.
In January 1998 the Company completed its initial public offering of its
securities from which it derived net proceeds of $4,885,524. A portion of such
proceeds was used to satisfy liabilities accrued prior to completion of the
offering.
The Company, used $1,717,628 for operating activities in the first half of
1998 as compared to $52,913 used in operating activities in the first half of
1997. The use of cash in 1998 reflects the substantial reduction in the
Company's accounts payable and accrued expenses and an increase in prepaid
assets. 1998 capital expenditures were primarily for leasehold improvements,
computers and other operating equipment purchased out of the initial public
offering.
The Company projects that if its revenues continue to grow as they did
during the first half of 1998 it will generate positive cash flow from
operations, enabling it to preserve its working capital or apply it as it deems
appropriate, as, for example, in completing the Company's electronic commerce
initiative. For example, in March 1998 the Company used $558,000 to redeem
184,615 shares issued to JSG in connection with the Stevens Merger and to obtain
the release of the Make-Whole Rights granted to JSG in the Merger Agreement.
-4-
<PAGE>
PART 2
OTHER INFORMATION
Item 6. Exhibits, Lists and Reports on Form 8-K.
(a) Exhibits.
Exhibit Description
27.1 -- Financial Data Schedule (1)
- -----------------------
(1) Filed herewith.
(b) Reports on Form 8-K.
Not Applicable.
-5-
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 and 15(d) 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.
Dated: August 14, 1998
800 TRAVEL SYSTEMS, INC.
(Registrant)
By: /s/ Mark D. Mastrini
----------------------------------
Mark D. Mastrini, President and
Chief Operating Officer
-6-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Balance Sheet and Statement of Income found in the Company's Form
10-QSB for the three months ended June 30, 1998 and is qualified in its entirety
by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-END> JUN-30-1998
<CASH> 2,141
<SECURITIES> 0
<RECEIVABLES> 985
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 3,281
<PP&E> 869
<DEPRECIATION> 181
<TOTAL-ASSETS> 9,476
<CURRENT-LIABILITIES> 1,327
<BONDS> 0
0
0
<COMMON> 75
<OTHER-SE> 7,968
<TOTAL-LIABILITY-AND-EQUITY> 8,043
<SALES> 5,075
<TOTAL-REVENUES> 5,075
<CGS> 5,182
<TOTAL-COSTS> 5,182
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 13
<INCOME-PRETAX> (68)
<INCOME-TAX> (68)
<INCOME-CONTINUING> (68)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (68)
<EPS-PRIMARY> 0.01
<EPS-DILUTED> 0.01
</TABLE>
