<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(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
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to _______
Commission File No. 0-4643
ROY F. WESTON, INC.
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 23-1501990
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1400 WESTON WAY, WEST CHESTER, PA 19380
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (610)-701-3000
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 July 30, 1999, the registrant had outstanding 7,863,733 shares of
Series A common stock and 2,089,019 shares of common stock.
<PAGE> 2
<TABLE>
<CAPTION>
Index Page
----- ----
<S> <C>
Part I - Financial Information
Item 1. Financial Statements:
Consolidated Balance Sheets -
June 30, 1999 and December 31, 1998 1-2
Consolidated Statements of Operations -
Three Months Ended June 30, 1999 and 1998 3
Consolidated Statements of Operations -
Six Months Ended June 30, 1999 and 1998 4
Consolidated Statements of Cash Flows -
Six Months Ended June 30, 1999 and 1998 5
Notes to Consolidated Financial Statements 6-7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8-11
Part II - Other Information 11
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
</TABLE>
<PAGE> 3
ROY F. WESTON, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
(Unaudited)
(Thousands of Dollars)
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 468 $ 3,993
Marketable securities 558 1,547
Accounts receivable, trade, net of allowance for doubtful
accounts of $2,003 in 1999 and $1,882 in 1998 51,580 60,476
Unbilled costs and estimated earnings on contracts in 27,028 20,540
process
Deferred income taxes 1,784 2,470
Other 5,267 4,376
-------- --------
Total current assets 86,685 93,402
-------- --------
PROPERTY AND EQUIPMENT
Land 215 215
Buildings and improvements 10,939 11,500
Furniture and equipment 31,913 30,544
Leasehold improvements 1,780 1,787
Construction in progress 284 --
-------- --------
Total property and equipment 45,131 44,046
Less accumulated depreciation and amortization 35,320 34,852
-------- --------
Property and equipment, net 9,811 9,194
-------- --------
OTHER ASSETS
Goodwill, net of accumulated amortization of $4,169 in
1999 and $4,138 in 1998 1,785 1,816
Deferred income taxes 5,866 5,528
Other 11,294 11,416
-------- --------
Total other assets 18,945 18,760
-------- --------
TOTAL ASSETS $115,441 $121,356
======== ========
</TABLE>
See notes to consolidated financial statements.
-1-
<PAGE> 4
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
June 30, December 31,
1999 1998
-------- --------
(Unaudited)
(Thousands of Dollars)
<S> <C> <C>
CURRENT LIABILITIES
Borrowings under line of credit $ 3,500 $ 1,900
Current maturities of long-term debt 3,275 1,700
Accounts payable and accrued expenses 14,253 17,579
Billings on contracts in process in excess of
costs and estimated earnings 9,100 10,939
Employee compensation, benefits and payroll taxes 8,407 8,445
Income taxes payable 220 202
Other 6,250 7,783
-------- --------
Total current liabilities 45,005 48,548
-------- --------
LONG TERM DEBT 9,824 12,997
-------- --------
OTHER LIABILITIES 3,657 3,487
-------- --------
CONTINGENCIES
STOCKHOLDERS' EQUITY
Common stock, $.10 par value, 10,500,000 shares authorized;
3,170,294 shares issued in 1999; 3,170,294
shares issued in 1998 317 317
Series A common stock, $.10 par value, 20,500,000
shares authorized; 8,650,778 shares issued
in 1999; 8,650,778 shares issued in 1998 865 865
Unrealized gain on investments 766 597
Additional paid-in capital 55,928 55,928
Retained earnings 4,169 3,707
-------- --------
62,045 61,414
Less treasury stock at cost, 1,081,275 common shares in 1999
and 1998; 792,805 Series A common shares in 1999
And 1998 5,090 5,090
-------- --------
Total stockholders' equity 56,955 56,324
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $115,441 $121,356
======== ========
</TABLE>
See notes to consolidated financial statements.
-2-
<PAGE> 5
ROY F. WESTON, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended June 30,
1999 1998
(Thousands of Dollars)
<S> <C> <C>
Gross revenues $ 60,065 $ 58,780
Direct project costs 24,012 23,844
------------ -----------
Net revenues 36,053 34,936
------------ -----------
Expenses:
Direct salaries and other operating costs 31,107 29,994
General and administrative expenses 4,556 4,774
------------ -----------
35,663 34,768
------------ -----------
Income from operations 390 168
------------ -----------
Other income (expense):
Investment income 137 400
Interest expense (381) (333)
Other 6 19
------------ -----------
(238) 86
------------ -----------
Income before income taxes 152 254
Provision for income taxes 61 102
------------ -----------
Net income $ 91 $ 152
============ ===========
Basic earnings per share $ .01 $ .02
============ ===========
Weighted average shares outstanding - basic 9,946,992 9,881,588
============ ===========
Diluted earnings per share $ .01 $ .02
============ ===========
Weighted average shares outstanding - diluted 10,006,483 9,922,385
============ ===========
</TABLE>
See notes to consolidated financial statements.
-3-
<PAGE> 6
ROY F. WESTON, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended June 30,
1999 1998
----------- -----------
(Thousands of Dollars)
<S> <C> <C>
Gross revenues $ 132,869 $ 113,457
Direct project costs 59,001 45,770
----------- -----------
Net revenues 73,868 67,687
----------- -----------
Expenses:
Direct salaries and other operating costs 63,830 57,947
General and administrative expenses 8,931 9,224
----------- -----------
72,761 67,171
----------- -----------
Income from operations 1,107 516
----------- -----------
Other income (expense):
Investment income 342 787
Interest expense (722) (706)
Other 43 2
----------- -----------
(337) 83
----------- -----------
Income before income taxes 770 599
Provision for income taxes 308 240
----------- -----------
Net income $ 462 $ 359
=========== ===========
Basic earnings per share $ .05 $ .04
=========== ===========
Weighted average shares outstanding - basic 9,946,992 9,881,226
=========== ===========
Diluted earnings per share $ .05 $ .04
=========== ===========
Weighted average shares outstanding - diluted 9,959,943 9,911,434
=========== ===========
</TABLE>
See notes to consolidated financial statements.
-4-
<PAGE> 7
ROY F. WESTON, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended June 30,
1999 1998
------- --------
(Thousands of Dollars)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 462 $ 359
Adjustments to reconcile net income to net cash
used for operating activities:
Depreciation and amortization 1,865 1,948
Provision for losses on accounts receivable 274 298
Other (318) 212
Change in assets and liabilities:
Accounts receivable, trade 8,622 4,592
Unbilled costs and estimated earnings on contracts in process (6,488) (261)
Other current assets (891) (2,237)
Accounts payable and accrued expenses (3,326) (541)
Billings on contracts in excess of costs and estimated earnings (1,839) (5,356)
Employee compensation, benefits and payroll taxes (38) (1,471)
Income taxes 18 244
Deferred income taxes 261 49
Other current liabilities (1,210) (1,565)
Other assets and liabilities 432 969
------- --------
Net cash used for operating activities (2,176) (2,760)
------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of investments 1,727 3,739
Payments for purchase of investments -- (5,412)
Purchase of property and equipment, net (1,863) (849)
Investments in other assets (947) (693)
------- --------
Net cash used for investing activities (1,083) (3,215)
------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings under line of credit 1,600 --
Principal payments under long-term debt (1,866) (4,024)
Proceeds from issuance of Series A common stock -- 235
------- --------
Net cash used for financing activities (266) (3,789)
------- --------
Net decrease in cash and cash equivalents (3,525) (9,764)
Cash and cash equivalents:
Beginning of period 3,993 10,767
------- --------
End of period $ 468 $ 1,003
======= ========
</TABLE>
See notes to consolidated financial statements.
-5-
<PAGE> 8
ROY F. WESTON, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
The unaudited consolidated financial statements reflect all adjustments which
are, in the opinion of management, necessary for a fair presentation of the
financial position, results of operations and cash flows for the interim
periods. The unaudited consolidated financial statements do not include all of
the information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting principles
and should be read in conjunction with the consolidated financial statements and
notes thereto included in the Company's 1998 Annual Report to Shareholders which
is incorporated by reference in its Form 10-K filed with the Securities and
Exchange Commission. Results for the three months and six months ended June 30,
1999 are not necessarily indicative of results for the full year 1999.
NOTE 2 - LINE OF CREDIT AGREEMENT
The Company's line of credit was amended effective March 31, 1999 to reduce the
required minimum cash balances and revise required financial ratios. The
amendment also established a new sub-limit of $8,000,000 for working capital
borrowings.
NOTE 3 - SEGMENTS
Net revenues and segment profit (loss) for the three months and six months ended
June 30, 1999 and 1998 were as follows:
<TABLE>
<CAPTION>
Three Months Six Months
Ended Ended
June 30 June 30
------- -------
1999 1998 1999 1998
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net revenues:
Infrastructure Redevelopment $ 29,486 $ 26,459 $ 59,780 $ 51,740
Federal Programs 5,447 6,836 11,588 12,981
Knowledge Systems and Solutions 674 1,031 1,452 2,142
Corporate 446 610 1,048 824
-------- -------- -------- --------
Consolidated $ 36,053 $ 34,936 $ 73,868 $ 67,687
======== ======== ======== ========
Segment profit (loss):
Infrastructure Redevelopment $ 3,125 $ 2,146 $ 5,973 $ 4,358
Federal Programs 681 1,810 2,047 3,061
Knowledge Systems and Solutions (288) (108) (505) (117)
Corporate (3,366) (3,594) (6,745) (6,703)
-------- -------- -------- --------
Consolidated $ 152 $ 254 $ 770 $ 599
======== ======== ======== ========
</TABLE>
-6-
<PAGE> 9
NOTE 4 - COMPREHENSIVE INCOME
Comprehensive income consists of net income, adjusted for other increases and
decreases affecting stockholders' equity that, under generally accepted
accounting principles, are excluded from the determination of net income.
The calculation of comprehensive income for the three months and six months
ended June 30, 1999 and 1998 follows:
<TABLE>
<CAPTION>
Three Months Six Months
Ended Ended
June 30 June 30
------- -------
1999 1998 1999 1998
---- ----- ---- ----
<S> <C> <C> <C> <C>
Net income $ 91 $ 152 $462 $359
Unrealized gain (loss) on
investments, net of tax 182 (96) 169 153
---- ----- ---- ----
Comprehensive income $273 $ 56 $631 $512
==== ===== ==== ====
</TABLE>
NOTE 5 - CONSOLIDATED STATEMENTS OF CASH FLOW
Net cash payments for income taxes were $24,000 in the first six months of 1999
while there were net cash refunds for income taxes of $226,000 in the first six
months of 1998. Cash payments for interest were $663,000 in each of the six
months ended June 30, 1999 and 1998.
Capital lease obligations of $268,000 and $661,000 were incurred in the six
months ended June 30, 1999 and 1998, respectively.
-7-
<PAGE> 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS.
The following information should be read in conjunction with the unaudited
interim consolidated financial statements and the notes thereto included in this
Quarterly Report and the audited financial statements and Management's
Discussion and Analysis of Financial Condition and Results of Operations
contained in the Company's Form 10-K filed with the Securities and Exchange
Commission for the fiscal year ended December 31, 1998.
MATERIAL CHANGES IN RESULTS OF OPERATIONS
Net income for the three months ended June 30, 1999 was $91,000, or $.01 per
share, compared to $152,000, or $.02 per share, for the three months ended June
30, 1998. Net income for the six months ended June 30, 1999 was $462,000, or
$.05 per share, compared to $359,000, or $.04 per share, for the six months
ended June 30, 1998.
Net revenues increased 3% to $36,053,000 for the three months ended June 30,
1999 and 9% to $73,868,000 for the six months ended June 30, 1999 compared to
the 1998 periods. Net revenues for the three months and six months ended June
30, 1998 include approximately $800,000 from a U.S. government agency in payment
for work performed in an earlier period. Gross revenues increased 2% to
$60,065,000 for the three months ended June 30, 1999 and 17% to $132,869,000 for
the six months ended June 30, 1999 compared to the 1998 periods. Direct labor
costs increased 8% in the six months ended June 30, 1999, concentrated in the
Company's Infrastructure Redevelopment segment, due to additional projects
obtained through enhanced selling efforts. The larger increase in gross revenues
in the six months ended June 30, 1999 is primarily due to increased
subcontracting activity, the expense of which is passed through to the Company's
clients.
The Company had income from operations of $390,000 and $1,107,000 in the three
months and six months ended June 30, 1999, respectively, compared to $168,000
and $516,000 in the three months and six months ended June 30, 1998,
respectively. The three months and six months ended June 30, 1999 include a
$500,000 reduction in the Company's estimated insurance claim liabilities.
Investment income decreased $263,000, or 66% and $445,000, or 57% in the three
months and six months ended June 30, 1999, respectively, due primarily to lower
amounts invested. Interest expense increased $48,000, or 14%, in the three
months ended June 30, 1999 due to increased borrowings under the Company's line
of credit, partially offset by the reductions of 7% convertible subordinated
debt outstanding.
MATERIAL CHANGES IN FINANCIAL CONDITION
Cash and cash equivalents decreased $3,525,000 in the first six months of 1999
to $468,000 from $3,993,000 at December 31, 1998. Marketable securities
decreased $989,000 in the first six months of 1999 to $558,000 from $1,547,000
at December 31, 1998.
Operating activities used cash of $2,176,000 for the first six months of 1999,
compared to $2,760,000 in the comparable 1998 period. Net cash investments in
property and equipment and other assets were $2,810,000 in the first six months
of 1999, compared to $1,542,000 in the comparable 1998 period. The Company used
cash of $266,000 in financing activities in the first six months of 1999,
compared to $3,789,000 in the comparable 1998 period. The six months ended
-8-
<PAGE> 11
June 30, 1999 included $1,600,000 in borrowings under the Company's line of
credit and the repurchase of $1,620,000 principal amount of the Company's 7%
Convertible Subordinated Debentures in order to satisfy the April 15, 1999
sinking fund requirement and a portion of the April 15, 2000 sinking fund
requirement. Further debenture repurchases of $2,918,000 are required before
April 15, 2000.
YEAR 2000 ISSUES
The Company continues to implement its Y2K readiness program with the objective
of having all significant exposures under its direct control functioning
properly with respect to Y2K Issues before January 1, 2000. The Company's Y2K
readiness program is described more fully on pages 12-13 of the Company's 1998
Annual Report to Shareholders.
The Company has substantially completed its inventory of Y2K issues and has
assigned priorities to the identified issues. Assessment of the Company's Y2K
compliance is also substantially completed and the process of repair and
replacement of critical non-compliant systems is underway and is expected to be
completed in August 1999. Testing of repaired or replaced items is expected to
be completed in November 1999. In addition, the Company is in the process of
identifying and contacting service providers, suppliers and clients whose
activities are believed to be critical to business operations to determine their
compliance with Y2K Issues.
The Company is developing contingency plans intended to mitigate possible
disruptions in business that may result from Y2K Issues. These plans will
address special payment considerations from clients, alternate suppliers and
alternate methods of processing business transactions. The contingency plans
will be continually modified as additional information becomes available.
As part of the Company's ongoing plan to reduce overhead costs, the Company is
in the process of installing new business systems, which are designed to more
efficiently manage the Company's operations. The vendor of these systems has
warranted that they are Y2K compliant. The new systems are expected to be fully
operational during 1999 and the Company believes that they will be Y2K
compliant. The Company currently estimates that the total cost of the new
business systems will be $4,500,000 to $5,000,000, of which the Company had
expended approximately $3,800,000 as of June 30, 1999. The Company currently
estimates that the cost of addressing other Y2K issues will be $350,000 to
$600,000, of which the Company had expended approximately $225,000 as of June
30, 1999.
The Company expects that its Y2K readiness program will achieve its objectives
and that the costs of Y2K readiness will not have a material adverse effect on
the Company's results of operations or financial condition. The Company's Y2K
readiness program is, however, an ongoing process and the estimates of costs and
completion dates, as well as the Company's expectations, described above are
subject to uncertainties. For example, the total costs which the Company will
incur in connection with Year 2000 Issues will be influenced by the Company's
ability to successfully complete its Y2K readiness program, including
identification of issues, the nature and amount of programming required to fix
affected programs, the related labor and/or consulting costs for such
remediation and the ability of third parties with whom the Company has business
relationships to successfully address their own Y2K Issues. The failure of the
Company to successfully identify and fix all Y2K Issues in critical operations,
or the failure of critical
-9-
<PAGE> 12
customers or critical systems vendors to continue operations due to their Y2K
Issues, could have a material adverse effect on the Company's results of
operations and financial condition.
FORWARD LOOKING STATEMENTS
From time to time, the Company, its management, or other Company representatives
may make or publish statements that contain projections, beliefs, expectations,
predictions or intentions relating to anticipated financial performance,
business prospects, potential contract value, business strategy and plans,
technological developments and other matters. The Private Securities Litigation
Reform Act of 1995 provides a safe harbor for these forward looking statements.
In order to comply with the terms of the safe harbor, the Company notes that a
number of factors could cause the Company's actual results, experience or
outcome to differ materially from projections, beliefs, expectations,
predictions or intentions expressed in forward looking statements. These risks
and uncertainties which may affect the operations, performance, development and
results of the Company's business, include, but are not limited to, the
following:
- - The highly competitive marketplace in which the Company operates.
- - Changes in and levels of enforcement of federal, state and local
environmental legislation and regulations.
- - The Company's ability to obtain new contracts from existing as well as new
clients, and the uncertain timing of awards and contracts.
- - The Company's ability to execute new projects and those currently in
backlog within reasonable cost estimates, as well as other contract
performance risks.
- - Funding appropriation, funding delay, and the issuance of work orders on
government projects.
- - The Company's ability to achieve any planned overhead or other cost
reductions while maintaining adequate work flow.
- - The Company's ability to obtain adequate financing for its current
operations and future expansion, including adequate financing to fund
working capital needs and the Company's acquisition strategy.
- - The Company's ability to execute its strategic plan through successful
marketing activities and continued cost containment.
- - The nature of the Company's work with hazardous materials, toxic wastes,
and other pollutants, and the potential for uninsured claims or claims in
excess of insurance limits, including professional liability and pollution
claims.
10-
<PAGE> 13
- - The Company's ability to conclude and implement acquisitions of other
businesses consistent with the Company's acquisition strategy.
- - The Company's ability to retain key personnel.
The Company disclaims any intent or obligation to update forward looking
statements.
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Not Applicable.
Item 2. Changes in Securities
Not Applicable.
Item 3. Defaults Upon Senior Securities
Not Applicable.
Item 4. Submission of Matters to a Vote of Security Holders
Not Applicable.
Item 5. Other Information
Not Applicable.
Item 6. Exhibits and Reports on Form 8-K
(a) The exhibits are numbered in accordance with the Exhibit
Table of Item 601 of Regulation S-K.
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
11 Statements of Computation of Basic
and Diluted Earnings Per Share.
27 Financial Data Schedule.
</TABLE>
(b) Reports on Form 8-K
There were no reports on Form 8-K in the three months
ended June 30, 1999.
-11-
<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.
ROY F. WESTON, INC.
(Registrant)
Date: August 5, 1999 By: s/William Robertson
---------------------------
William Robertson
Chief Executive Officer
(Duly Authorized Officer)
Date: August 5, 1999 By: s/William G. Mecaughey
---------------------------
William G. Mecaughey
Vice President and
Chief Financial Officer
(Chief Accounting Officer)
<PAGE> 1
Exhibit 11
ROY F. WESTON, INC. AND SUBSIDIARIES
STATEMENTS OF COMPUTATION OF EARNINGS PER SHARE
<TABLE>
<CAPTION>
Three Months Ended June 30,
1999 1998
----------- ----------
(Thousands of Dollars)
<S> <C> <C>
BASIC
Net income $ 91 $ 152
=========== ==========
Weighted average shares outstanding 9,946,992 9,881,588
=========== ==========
Basic earnings per share $ .01 $ .02
=========== ==========
DILUTED
Net income $ 91 $ 152
=========== ==========
Weighted average number of shares used in
calculating
basic earnings per share 9,946,992 9,881,588
ADD:
Dilutive impact of stock options 59,491 40,797
----------- ----------
Weighted average number of shares used in
calculating
diluted earnings per share 10,006,483 9,922,385
=========== ==========
Diluted earnings per share $ .01 $ .02
=========== ==========
</TABLE>
<PAGE> 2
Exhibit 11
ROY F. WESTON, INC. AND SUBSIDIARIES
STATEMENTS OF COMPUTATION OF EARNINGS PER SHARE
<TABLE>
<CAPTION>
Six Months Ended June 30,
1999 1998
---------- ----------
(Thousands of Dollars)
<S> <C> <C>
BASIC
Net income $ 462 $ 359
========== ==========
Weighted average shares outstanding 9,946,992 9,881,226
========== ==========
Basic earnings per share $ .05 $ .04
========== ==========
DILUTED
Net income $ 462 $ 359
========== ==========
Weighted average number of shares used in
calculating
basic earnings per share 9,946,992 9,881,226
ADD:
Dilutive impact of stock options 12,951 30,208
---------- ----------
Weighted average number of shares used in
calculating
diluted earnings per share 9,959,943 9,911,434
========== ==========
Diluted earnings per share $ .05 $ .04
========== ==========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AS OF JUNE 30, 1999 AND THE CONSOLIDATED STATEMENT
OF OPERATIONS FOR THE SIX MONTHS ENDED JUNE 30, 1999 AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 468
<SECURITIES> 558
<RECEIVABLES> 78,608<F1>
<ALLOWANCES> 2,003
<INVENTORY> 0
<CURRENT-ASSETS> 86,685
<PP&E> 45,131
<DEPRECIATION> 35,320
<TOTAL-ASSETS> 115,441
<CURRENT-LIABILITIES> 45,005
<BONDS> 9,824
1,182
0
<COMMON> 0
<OTHER-SE> 55,773
<TOTAL-LIABILITY-AND-EQUITY> 115,441
<SALES> 0
<TOTAL-REVENUES> 132,869
<CGS> 0
<TOTAL-COSTS> 131,762
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 274
<INTEREST-EXPENSE> 722
<INCOME-PRETAX> 770
<INCOME-TAX> 308
<INCOME-CONTINUING> 462
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 462
<EPS-BASIC> .05
<EPS-DILUTED> .05
<FN>
<F1>INCLUDES 27,028 OF UNBILLED COSTS AND ESTIMATED EARNINGS THEREON.
</FN>
</TABLE>
