<PAGE> 1
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 JUNE 30, 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: 000-23889
----------------------
BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN CHARTER)
DELAWARE 76-0553110
(STATE OF OTHER JURISDICTION OF (I.R.S. EMPLOYER
INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.)
4900 HOPYARD ROAD, SUITE 200
PLEASANTON, CALIFORNIA 94566
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (925) 251-0000
-----------------------
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 preceeding 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 .
--- ---
The number of shares of Common Stock of the Registrant, par value $.001
per share, outstanding at August 10, 1999, was 8,642,034.
*The Registrant became subject to the reporting requirements of Section 13 of
the Securities Exchange Act of 1934 on April 16, 1998.
<PAGE> 2
ITEM 1. FINANCIAL STATEMENTS
BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(000'S, EXCEPT PER SHARE DATA)
<TABLE>
<CAPTION>
JUNE 30, DECEMBER 31,
1999 1998
----------- -----------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 4,829 $ 3,672
Trade accounts receivable, net of allowance for doubtful accounts
of $1,608 and $1,316 24,509 20,297
Unbilled revenue 4,377 2,238
Deferred tax asset 562 785
Prepaid expenses and other 1,617 1,298
----------- -----------
Total current assets 35,894 28,290
PROPERTY AND EQUIPMENT 7,105 5,051
Less-accumulated depreciation (2,307) (1,505)
----------- -----------
Property and equipment, net 4,798 3,546
GOODWILL 64,362 62,260
Less-accumulated amortization (1,828) (1,030)
----------- -----------
Goodwill, net 62,534 61,230
OTHER 566 498
----------- -----------
TOTAL $ 103,792 $ 93,564
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 5,117 $ 3,920
Acquisition payable 2,000 4,784
Line of credit 8,640 --
Current maturities of capital lease obligations 129 167
Restructuring reserve 3,404 4,383
Accrued salaries and other expenses 9,924 6,328
Income taxes payable 1,958 1,791
Deferred revenue 822 1,936
----------- -----------
Total current liabilities 31,994 23,309
NOTE PAYABLE 500 --
LONG-TERM CAPITAL LEASES, NET 96 129
OTHER 34 52
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, $0.001; 35,000,000 shares authorized; 8,189,059 and
7,989,059 shares issued and outstanding 8 8
Additional paid-in capital 84,393 82,818
Common stock payable 6,300 6,875
Common stock warrants 100 100
Deferred stock compensation -- (468)
Accumulated other comprehensive income 128 248
Retained earnings (deficit) (19,761) (19,507)
----------- -----------
Total stockholders' equity 71,168 70,074
----------- -----------
TOTAL $ 103,792 $ 93,564
=========== ===========
</TABLE>
See notes to condensed consolidated financial statements
2
<PAGE> 3
BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(000'S, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SIX MONTHS ENDED
-------------------------- --------------------------
JUNE 30, JUNE 30, JUNE 30, JUNE 30,
1999 1998 1999 1998
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
REVENUE $ 36,123 $ 18,557 $ 68,602 $ 23,666
COST OF REVENUE 26,222 11,975 49,800 15,330
----------- ----------- ----------- -----------
GROSS PROFIT 9,901 6,582 18,802 8,336
OPERATING EXPENSES:
Selling, general and administrative expenses 8,049 4,821 16,199 6,138
Stock compensation expense 67 1,264 468 1,264
In-process research & development costs -- 3,000 -- 3,000
Goodwill amortization 404 224 798 224
Depreciation and amortization 465 182 802 212
----------- ----------- ----------- -----------
Total operating expenses 8,985 9,491 18,267 10,838
INCOME (LOSS) FROM OPERATIONS 916 (2,909) 535 (2,502)
OTHER INCOME (EXPENSE) 3 134 (32) 135
INTEREST EXPENSE (99) (29) (78) (62)
----------- ----------- ----------- -----------
INCOME (LOSS) BEFORE INCOME TAXES 820 (2,804) 425 (2,429)
INCOME TAX PROVISION 484 597 679 693
----------- ----------- ----------- -----------
NET INCOME (LOSS) $ 336 $ (3,401) $ (254) $ (3,122)
=========== =========== =========== ===========
Net income (loss) per share -
Basic and Diluted $ 0.04 $ (0.47) $ (0.03) $ (0.76)
=========== =========== =========== ===========
Weighted average shares outstanding -
Basic and Diluted 8,723,584 7,203,560 8,682,809 4,107,933
=========== =========== =========== ===========
</TABLE>
See notes to condensed consolidated financial statements.
3
<PAGE> 4
BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC. AND SUBSIDIARIES
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(OOO'S)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
JUNE 30, JUNE 30,
1999 1998
------------ ------------
<S> <C> <C>
OPERATING ACTIVITIES:
Net loss $ (254) $ (3,122)
Adjustments to reconcile net loss to net cash
used in operating activities:
Cumulative translation adjustment (120) (3)
Depreciation and amortization 1,600 436
Additions to allowance for doubtful accounts 292 201
In-process research & development costs -- 3,000
Compensation expense on issuance of common stock 468 1,264
Deferred taxes 223 --
Cash provided by (used in) operating working capital:
Trade accounts receivable (4,504) (3,136)
Unbilled revenue (2,139) 2,035
Prepaid expenses and other (1,134) 378
Accounts payable 1,197 567
Restructuring reserve (979) --
Accrued salaries and other expenses 3,407 (5,746)
Income taxes payable 167 1,075
Deferred revenue (1,114) (675)
------------ ------------
Net cash used in operating activities (2,890) (3,726)
INVESTING ACTIVITIES:
Cash paid to acquire founding companies -- (41,891)
Payments for acquisitions (3,386) --
Additions of property and equipment, net of disposals (1,136) (242)
------------ ------------
Net cash used by investing activities (4,522) (42,133)
FINANCING ACTIVITIES:
Payments on short-term debt and notes payable -- (1,344)
Net proceeds from issuance of common stock -- 59,090
Borrowings under line of credit 8,640 (175)
Net payments on capital lease obligations (71) (99)
------------ ------------
Net cash provided by financing activities 8,569 57,472
NET INCREASE IN CASH AND CASH EQUIVALENTS 1,157 11,613
CASH AND CASH EQUIVALENTS:
Beginning of period 3,672 3
------------ ------------
End of period $ 4,829 $ 11,616
============ ============
SUPPLEMENTAL DISCLOSURE:
Noncash issuance of common stock of fair value $ 1,575 $ --
============ ============
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE> 5
BRIGHTSTAR INFORMATION TECHNOLOGY GROUP, INC.
AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles
for interim financial information and the instructions to form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. The consolidated financial
statements for the three and six month periods ended June 30, 1999 and the
balance sheet at December 31, 1998 include the accounts of all BrightStar
subsidiaries. The statement of operations and cash flows for the six month
period ended June 30, 1998 include only the accounts of Brian R. Blackmarr
and Associates, Inc, the accounting acquirer, from January 1, 1998 to April
17, 1998, the date of acquisition. 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, 1999, are not necessarily indicative of
the results that may be expected for the year ending December 31, 1999. The
balance sheet at December 31, 1998, has been derived from the audited
financial statements at that date but does not include all of the
information and footnotes required by generally accepted accounting
principles for complete financial statements. For additional information,
refer to financial statements and footnotes thereto included in the
Company's annual report on Form 10-K for the year ended December 31, 1998.
Certain reclassifications have been made to conform the prior year's
financial statement amounts to the current year presentation. Additionally,
certain costs and expenses amounting to $0.9 million and $1.5 million,
respectively, for the three and six month periods ended June 30, 1998 and
$1.4 million for the three month period ended March 31, 1999 that were
previously included in cost of revenue have been reclassified to selling,
general and administrative expenses.
2. CREDIT FACILITY
Effective March 29, 1999, the Company established a $15 million credit
facility (the "Credit Facility") with Comerica Bank. Under terms of the
agreement, the Credit Facility will be used for working capital needs,
including issuance of letters of credit, and for general corporate purposes.
Borrowings under the Credit Facility bear an interest rate of prime plus
.25%, or the Eurodollar rate plus 2.5%. The Company will pay a commitment
fee on unused amounts of the Credit Facility amounting to .375% per annum
based on the average daily amount by which the commitment amount exceeds the
principal amount outstanding during the preceding month. Interest is payable
monthly on prime rate borrowings and quarterly or at the end of the
applicable interest period for the Eurodollar rate borrowings.
The Credit Facility is secured by liens on substantially all the Company's
assets (including accounts receivable) and a pledge of all of the
outstanding capital stock of the Company's domestic operating subsidiaries.
The Credit Facility also requires that the Company comply with various loan
covenants, including (i) maintenance of certain financial ratios, (ii)
restrictions on additional indebtedness and (iii) restrictions on liens,
guarantees and payments of dividends. The Credit Facility expires on March
30, 2001. The Credit Facility contains provisions requiring mandatory
prepayment of outstanding borrowings from the issuance of debt or equity
securities for cash, excluding certain equity issued in connection with
future acquisitions, and cash realized in connection with permitted asset
sales outside of the ordinary course of business. Borrowings outstanding
under the Credit Facility amounted to $8.6 million at June 30, 1999 at an
interest rate of 8.25%.
3. RESTRUCTURING
During the fourth quarter of 1998, the Company announced a plan to
restructure its operations and recorded a charge of $7.6 million. The plan
included a reorganization of operations, relocation of the Company's
corporate office, reduction in workforce, and termination of leases and
other contractual obligations.
The major categories of the restructuring charge are summarized below
(000's omitted):
<TABLE>
<CAPTION>
REMAINING
AMOUNTS CHARGED AMOUNTS ACCRUED
TO EARNINGS IN 1998 AT JUNE 30, 1999
------------------- ----------------
<S> <C> <C>
Workforce severance obligations $ 4,960 $ 2,067
Asset writedowns 1,171 --
Lease and other contract obligations 1,483 1,337
----------- -----------
Total $ 7,614 $ 3,404
=========== ===========
</TABLE>
The balance of the restructuring charge will be utilized through the first
quarter of 2001.
5
<PAGE> 6
4. INCOME TAXES
The provision for income taxes for the six month period ended June 30, 1999
is based on an estimated effective tax rate of 39%, as adjusted for
non-deductible goodwill amortization and stock compensation expense.
Components of net deferred tax assets of $0.6 million at March 31, 1999
principally relate to the Company's accounts receivable and restructuring
reserves.
5. COMPREHENSIVE INCOME
SFAS No. 130, "Reporting Comprehensive Income," requires companies to report
and display comprehensive income and its components in the financial
statements. Comprehensive income includes all changes in equity during a
period except those resulting from investment by owners and distributions to
owners. The comprehensive loss was $0.4 million for the six months ended in
June 30, 1999, due to the effect of the cumulative foreign currency
translation adjustment. Comprehensive income is the same as net income
reported in the 1998 period reported.
6. ACQUISITION
On May 28, 1999, the Company purchased Integrated Systems Consultants, LLC
("ISC") pursuant to an Asset Purchase Agreement (the "Agreement"), dated as
of April 1, 1999. ISC is a provider of SAP consulting services based in
Phoenix, Arizona. The four principals of ISC each have over five years
experience leading and completing SAP implementations for mid-tier and large
global enterprises. The ISC customers include Microsoft, Arch Chemicals and
the Tessenderlo Group as well as other companies in the high tech, chemical
and manufacturing industries.
The aggregate consideration for this transaction was $3.0 million; of which
$500,000 was paid in cash upon closing; $1,000,000 will be paid on June 1,
2000 in up to 244,648 shares of common stock, or a combination of cash and
stock as defined in the Agreement; $500,000 was financed by a Convertible
Subordinated Promissory Note due August 1, 2000; and, the remaining
$1,000,000 contingent consideration will be paid subject to the achievement
of ISC earnings during the twelve months ending March 31, 2000, as defined
in the Agreement. The Company has allocated the entire purchase price and
certain other acquisition costs to goodwill.
7. CONTINGENT LIABILITY
Under the terms of the acquisition of Cogent Technologies, LLC ("Cogent"),
the Company is required, as additional consideration for the acquisition, to
make an additional cash payment and issue additional shares of the Company's
common stock to the prior owners based upon an earn-out calculation. The
additional purchase consideration will be recorded as goodwill upon
transfer.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
INTRODUCTION - BrightStar provides enterprise-wide business and technology
solutions to Global 2000 companies and other large organizations. BrightStar
provides these services to a diverse client base including but not limited
to retail, industrial, petrochemical, manufacturing and distribution
companies and governmental agencies.
The Company's services and products include Enterprise Resource Planning
(ERP) software implementation, consulting, software and Web application
development, systems integration and outsourcing, and training as well as
upgrades and support related to software products. The services are
generally performed at clients' locations and also at the Company's
facilities. In providing ERP implementation and other IT services, the
Company may assume responsibility for project management and bill the client
on a time and material or fixed fee basis.
Revenue is recognized as services are rendered. The timing of revenue is
difficult to forecast because the Company's sales cycle for certain of its
services can be relatively long and is subject to a number of uncertainties,
including clients' budgetary constraints, the timing of clients' budget
cycles, clients' internal approval processes and general economic
conditions. In addition, as is customary in the industry, the Company's
engagements, generally, are terminable without a client penalty. The
Companies' revenue and results of operations may fluctuate significantly
from quarter to quarter or year to year because of a number of factors,
including, but not limited to, the effect of changes in estimates to
complete fixed fee contracts; the rate of hiring and the productivity of
revenue generating personnel; the availability of qualified IT
professionals; the significance of client engagements
6
<PAGE> 7
commenced and completed during a quarter; the number of business days in the
quarter; changes in the relative mix of the Company's services; changes in
the pricing of the Company's services; the timing and the rate of entrance
into new geographic or IT specialty markets; departures or temporary
absences of key revenue-generating personnel; the structure and timing of
acquisitions; changes in the demand for IT services; and general economic
factors.
Cost of revenue consists primarily of salaries (including non-billable and
training time) and benefits for consultants. The company generally strives
to maintain its gross profit margins by offsetting increases in salaries and
benefits with increases in billing rates.
Selling, general and administrative expenses primarily consist of costs
associated with (i) corporate overhead, (ii) sales and account management,
(iii) telecommunications, (iv) human resources, (v) recruiting and training.
RESULTS OF OPERATIONS
Financial results for the three and six month periods ended June 30, 1999
include the operations of all BrightStar companies acquired in conjunction
with, or subsequent to the date of the IPO. Financial results for the six
months ended June 30, 1998 contain only the operations of Blackmarr, the
accounting acquirer from January 1, 1998 to April 17, 1998, the date of
acquisition. Consequently, variances between six month periods reflect the
combined operations of the BrightStar companies from April 17, 1998, which
was the date BrightStar commenced operations, or later dates for companies
subsequently acquired. The information herein should be read in conjunction
with financial and pro forma information contained in the Company's 1998
annual report on Form 10-K.
Revenue increased primarily due to new ERP contracts and additional custom
and web application development projects.
Costs of revenues increased in proportion to the additional ERP and custom
application development revenue. Cost of revenues as a percentage of
revenues for the three and six months ended June 30, 1999 was higher than
normal as a result of consultant salaries and related costs attributable to
certain fixed fee contracts that are not billable at normal rates and
competitive pricing pressures. The Company expects to continue to incur
costs that are not fully billable on certain fixed fee projects through the
third quarter of 1999.
The increase in selling, general and administrative expenses reflect the
Company's investment in building its internal infrastructure and field sales
force during the first half of 1999.
Stock compensation is a non-cash expense item related to the issuance of
stock to certain Founders as a part of the IPO. This amount was amortized
over a period of 12 months.
Goodwill amortization relates to goodwill acquired in conjunction with the
IPO and subsequent acquisitions.
Income taxes are based on the Company's estimated annual tax rate of 39%,
adjusted for non-deductible goodwill amortization and stock compensation
expense.
LIQUIDITY AND CAPITAL RESOURCES
Effective March 29, 1999, the Company established a $15 million credit
facility (the "Credit Facility") with Comerica Bank. Under terms of the
agreement, the Credit Facility will be used for working capital needs,
including issuance of letters of credit, and for general corporate purposes.
Borrowings under the Credit Facility bear an interest rate of prime plus
.25%, or the Eurodollar rate plus 2.5%. The Company will pay a commitment
fee on unused amounts of the Credit Facility amounting to a .375% per annum
based on the average daily amount by which the commitment amount exceeds the
principal amount outstanding during the preceding month. Interest is payable
monthly on prime rate borrowings and quarterly or at the end of the
applicable interest period for the Eurodollar rate borrowings.
The Credit Facility is secured by liens on substantially all the Company's
assets (including accounts receivable) and a pledge of all of the
outstanding capital stock of the Company's domestic operating subsidiaries.
The Credit Facility also requires that the Company comply with various loan
covenants, including (i) maintenance of certain financial ratios, (ii)
restrictions on additional indebtedness and (iii) restrictions on liens,
guarantees and payments of dividends. The Credit Facility expires on March
30, 2001. The Credit Facility contains provisions requiring mandatory
prepayment of outstanding borrowings from the issuance of debt or equity
securities for cash, excluding certain equity issued in connection with
future acquisitions, and cash realized in connection with permitted asset
sales outside of the ordinary course of business.
During the first half of 1999, the Company borrowed $8.6 million under its
Credit Facility to finance $2.9 million of additional working capital
requirements, $1.1 million of equipment additions and $3.4 million of
payments related to acquisitions.
7
<PAGE> 8
The Company expects to install or upgrade its accounting and management
information systems and to install an internal network and communications
system to facilitate exchange of information among the BrightStar companies.
Management presently anticipates that expenditures for these items will
total approximately $500,000.
The Company intends to continue to pursue acquisition opportunities. The
timing, size or success of any acquisition effort and the associated
potential capital commitments are unpredictable. The Company expects to fund
future acquisitions through the issuance of additional equity, as well as
through a combination of working capital, cash flow from operations, and
borrowings under the Credit Facility.
The Company believes that cash flow from operations and borrowings under the
Credit Facility will be sufficient to fund its requirements over the next
twelve months.
YEAR 2000 COMPLIANCE - The inability of computers, software and other
equipment utilizing microprocessors to recognize and properly process data
fields containing a two-digit year is commonly referred to as the Year 2000
problem. The Year 2000 problem arises from the way dates are recorded and
computed in most applications, operating systems, hardware and embedded
chips. If the problem is not corrected a system that uses a date in its
prescribed function may fail or produce erroneous results before, on and
after the Year 2000.
The Company has completed a review of its businesses to determine whether or
not purchased and internally developed computer programs are Year 2000
compliant, as well as determine the extent of any remedial action and
associated costs for such programs which are not compliant. Based upon its
review, the Company plans to complete all remediation efforts for its
critical systems prior to Year 2000. The Company is also contacting its key
suppliers and customers to determine their Year 2000 readiness in order to
ensure a steady flow of goods and services to the Company and continuity
with respect to customer service.
The costs of Year 2000 preparation for the Company's products are primarily
costs of existing internal resources largely absorbed within existing
spending levels. The costs of the readiness program for internal systems are
a combination of incremental external spending and use of existing internal
resources and expertise. The financial impact of the Year 2000 reviews,
modifications, testing, replacements or related purchases are not expected
to be material to the Company's business or its consolidated financial
position, results of operations or cash flows.
FORWARD-LOOKING INFORMATION - Management's Discussion and Analysis of
Financial Condition and Results of Operations ("MD&A") includes
"forward-looking statements" within the meaning of Section 27A of the
Securities Act of 1933 and Section 21E of the Securities Exchange Act of
1934. All statements, other than statements of historical facts, included in
this MD&A regarding the Company's financial position, business strategy and
plans and objectives of management of the Company for future operations are
forward-looking statements. These forward-looking statements rely on a
number of assumptions concerning future events and are subject to a number
of uncertainties and other factors, many of which are outside of the
Company's control, that could cause actual results to materially differ from
such statements. While the Company believes that the assumptions concerning
future events are reasonable, it cautions that there are inherent
difficulties in predicting certain important factors, especially the timing
and magnitude of technological advances; the performance of recently
acquired businesses; the prospects for future acquisitions; the possibility
that a current customer could be acquired or otherwise be affected by a
future event that would diminish their information technology requirements;
the competition in the information technology industry and the impact of
such competition on pricing, revenues and margins; the degree to which
business entities continue to outsource information technology and business
processes; uncertainties surrounding budget reductions or changes in funding
priorities or existing government programs and the cost of attracting and
retaining highly skilled personnel.
8
<PAGE> 9
PART II - OTHER INFORMATION
ITEM 1. Legal proceedings
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF STOCKHOLDERS
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
None
(b) Reports on Form 8-K
On June 14, 1999, the Company filed a report on Form 8-K
describing its acquisition of Integrated Systems Consultants pursuant to an
Asset Purchase Agreement dated as of April 1, 1999
9
<PAGE> 10
SIGNATURES
Pursuant to the requirements of the Securities Act of 1934, the Registrant has
duly caused this report to be signed on its behalf by the undersigned thereunto
duly authorized.
BRIGHTSTAR INFORMATION
TECHNOLOGY GROUP, INC.
BY: /s/ Michael A. Ober
-------------------------
Michael A. Ober
Chief Executive Officer
By: /s/ Donald W. Rowley
------------------------
Donald W. Rowley
August 13, 1999 Chief Financial Officer
10
<PAGE> 11
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit
Number Description
- ------- -----------
<S> <C>
27 Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 4,829
<SECURITIES> 0
<RECEIVABLES> 24,509
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 35,894
<PP&E> 7,105
<DEPRECIATION> 2,307
<TOTAL-ASSETS> 103,792
<CURRENT-LIABILITIES> 31,994
<BONDS> 0
0
0
<COMMON> 8
<OTHER-SE> 71,160
<TOTAL-LIABILITY-AND-EQUITY> 103,792
<SALES> 68,602
<TOTAL-REVENUES> 68,602
<CGS> 49,800
<TOTAL-COSTS> 49,800
<OTHER-EXPENSES> 18,267
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 78
<INCOME-PRETAX> 425
<INCOME-TAX> 679
<INCOME-CONTINUING> (254)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (254)
<EPS-BASIC> (0.03)
<EPS-DILUTED> (0.03)
</TABLE>
