<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 September 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)
(610)-701-3000
(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 October 29, 1999, the registrant had outstanding 7,867,735 shares
of Series A common stock and 2,089,019 shares of common stock.
<PAGE> 2
Index Page
----- ----
Part I - Financial Information
Item 1. Financial Statements:
Consolidated Balance Sheets -
September 30, 1999 and December 31, 1998 1-2
Consolidated Statements of Operations -
Three Months Ended September 30, 1999 and 1998 3
Consolidated Statements of Operations -
Nine Months Ended September 30, 1999 and 1998 4
Consolidated Statements of Cash Flows -
Nine Months Ended September 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 12
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
<PAGE> 3
ROY F. WESTON, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
(Unaudited)
(Thousands of Dollars)
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 689 $ 3,993
Marketable securities 398 1,547
Accounts receivable, trade, net of allowance for doubtful
accounts of $2,063 in 1999 and $1,882 in 1998 56,775 60,476
Unbilled costs and estimated earnings on contracts in process 21,800 20,540
Deferred income taxes 2,067 2,470
Other 6,101 4,376
-------- --------
Total current assets 87,830 93,402
-------- --------
PROPERTY AND EQUIPMENT
Land 215 215
Buildings and improvements 11,093 11,500
Furniture and equipment 32,441 30,544
Leasehold improvements 1,784 1,787
Construction in progress 280 --
-------- --------
Total property and equipment 45,813 44,046
Less accumulated depreciation and amortization 35,886 34,852
-------- --------
Property and equipment, net 9,927 9,194
-------- --------
OTHER ASSETS
Goodwill, net of accumulated amortization of $4,184 in
1999 and $4,138 in 1998 1,770 1,816
Deferred income taxes 5,678 5,528
Other 10,870 11,416
-------- --------
Total other assets 18,318 18,760
-------- --------
TOTAL ASSETS $116,075 $121,356
======== ========
See notes to consolidated financial statements.
</TABLE>
-1-
<PAGE> 4
LIABILITIES AND STOCKHOLDERS' EQUITY
<TABLE>
<CAPTION>
September 30, December 31,
1999 1998
(Unaudited)
(Thousands of Dollars)
<S> <C> <C>
CURRENT LIABILITIES
Borrowings under line of credit $ 5,500 $ 1,900
Current maturities of long-term debt 3,281 1,700
Accounts payable and accrued expenses 12,770 17,579
Billings on contracts in process in excess of costs and
estimated earnings 10,500 10,939
Employee compensation, benefits and payroll taxes 7,120 8,445
Income taxes payable 225 202
Other 6,414 7,783
-------- --------
Total current liabilities 45,810 48,548
-------- --------
LONG TERM DEBT 9,730 12,997
-------- --------
OTHER LIABILITIES 3,720 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 503 597
Additional paid-in capital 55,928 55,928
Retained earnings 4,263 3,707
-------- --------
61,876 61,414
Less treasury stock at cost, 1,081,275 common shares in 1999 and 1998; 783,043
Series A common shares in 1999 and 792,805 Series A common shares in 1998 5,061 5,090
-------- --------
Total stockholders' equity 56,815 56,324
-------- --------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $116,075 $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 September 30,
--------------------------------
1999 1998
(Thousands of Dollars)
<S> <C> <C>
Gross revenues $ 62,869 $ 62,416
Direct project costs 26,931 25,864
----------- ----------
Net revenues 35,938 36,552
----------- ----------
Expenses:
Direct salaries and other operating costs 31,887 32,074
General and administrative expenses 4,131 4,323
----------- ----------
36,018 36,397
----------- ----------
Income (loss) from operations (80) 155
----------- ----------
Other income (expense):
Investment income 659 369
Interest expense (430) (325)
Other 9 (27)
----------- ----------
238 17
----------- ----------
Income before income taxes 158 172
Provision for income taxes 64 68
----------- ----------
Net income $ 94 $ 104
=========== ==========
Basic earnings per share $ .01 $ .01
=========== ==========
Weighted average shares outstanding - basic 9,954,671 9,946,992
=========== ==========
Diluted earnings per share $ .01 $ .01
=========== ==========
Weighted average shares outstanding - diluted 10,019,154 9,970,924
=========== ==========
</TABLE>
See notes to consolidated financial statements.
-3-
<PAGE> 6
ROY F. WESTON, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
------------------------------
1999 1998
(Thousands of Dollars)
<S> <C> <C>
Gross revenues $ 195,738 $ 175,873
Direct project costs 85,932 71,634
---------- ----------
Net revenues 109,806 104,239
---------- ----------
Expenses:
Direct salaries and other operating costs 95,717 90,021
General and administrative expenses 13,062 13,547
---------- ----------
108,779 103,568
---------- ----------
Income from operations 1,027 671
---------- ----------
Other income (expense):
Investment income 1,001 1,156
Interest expense (1,152) (1,031)
Other 52 (25)
---------- ----------
(99) 100
---------- ----------
Income before income taxes 928 771
Provision for income taxes 372 308
---------- ----------
Net income $ 556 $ 463
========== ==========
Basic earnings per share $ .06 $ .05
========== ==========
Weighted average shares outstanding - basic 9,949,601 9,903,457
========== ==========
Diluted earnings per share $ .06 $ .05
========== ==========
Weighted average shares outstanding - diluted 9,974,855 9,931,479
========== ==========
</TABLE>
See notes to consolidated financial statements.
-4-
<PAGE> 7
ROY F. WESTON, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
-------------------------------
1999 1998
(Thousands of Dollars)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 556 $ 463
Adjustments to reconcile net income to net cash used for operating activities:
Depreciation and amortization 2,863 2,877
Provision for losses on accounts receivable 342 339
Other (162) 278
Change in assets and liabilities:
Accounts receivable, trade 3,359 3,335
Unbilled costs and estimated earnings on contracts in process (1,260) (3,509)
Other current assets (1,725) (2,132)
Accounts payable and accrued expenses (4,809) (291)
Billings on contracts in excess of costs and estimated earnings (439) (3,195)
Employee compensation, benefits and payroll taxes (1,325) 976
Income taxes 23 1,078
Deferred income taxes 301 113
Other current liabilities (1,201) (1,775)
Other assets and liabilities 375 890
---------- ----------
Net cash used for operating activities (3,102) (553)
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Proceeds from sale of investments 2,411 7,436
Payments for purchase of investments (501) (6,663)
Purchase of property and equipment, net (2,745) (1,490)
Investments in other assets (1,042) (964)
---------- ----------
Net cash used for investing activities (1,877) (1,681)
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Net borrowings under line of credit 3,600 --
Principal payments under long-term debt (1,954) (4,112)
Proceeds from issuance of Series A common stock 29 235
---------- ----------
Net cash provided by (used for) financing activities 1,675 (3,877)
---------- ----------
Net decrease in cash and cash equivalents (3,304) (6,111)
Cash and cash equivalents:
Beginning of period 3,993 10,767
---------- ----------
End of period $ 689 $ 4,656
========== ==========
See notes to consolidated financial statements.
</TABLE>
-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 nine months ended
September 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 nine months
ended September 30, 1999 and 1998 were as follows:
<TABLE>
<CAPTION>
Three Months Nine Months
------------ -----------
Ended Ended
----- -----
September 30 September 30
------------ ------------
1999 1998 1999 1998
------- ------- -------- --------
<S> <C> <C> <C> <C>
Net revenues:
Infrastructure Redevelopment $30,621 $28,733 $ 90,401 $ 80,473
Federal Programs 4,238 5,978 15,826 18,959
Knowledge Systems and Solutions 760 750 2,212 2,892
Corporate 319 1,091 1,367 1,915
------- ------- -------- --------
Consolidated $35,938 $36,552 $109,806 $104,239
======= ======= ======== ========
Segment profit (loss):
Infrastructure Redevelopment $ 2,492 $ 2,236 $ 8,465 $ 6,594
Federal Programs 867 979 2,914 4,040
Knowledge Systems and Solutions (159) (277) (664) (394)
Corporate (3,042) (2,766) (9,787) (9,469)
------- ------- -------- --------
Consolidated $ 158 $ 172 $ 928 $ 771
======= ======= ======== ========
</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 nine months
ended September 30, 1999 and 1998 follows:
<TABLE>
<CAPTION>
Three Months Nine Months
Ended Ended
September 30 September 30
------------ ------------
1999 1998 1999 1998
----- ----- ----- -----
<S> <C> <C> <C> <C>
Net income $ 94 $ 104 $ 556 $ 463
Unrealized gain (loss) on
investments, net of tax (276) (436) (94) (283)
----- ----- ----- -----
Comprehensive income (loss) $(182) $(332) $ 462 $ 180
===== ===== ===== =====
</TABLE>
NOTE 5 - CONSOLIDATED STATEMENTS OF CASH FLOW
Net cash payments for income taxes were $61,000 in the first nine months of 1999
while there were net cash refunds for income taxes of $1,085,000 in the first
nine months of 1998. Cash payments for interest were $830,000 and $680,000 in
the nine months ended September 30, 1999 and 1998, respectively.
Capital lease obligations of $268,000 and $661,000 were incurred in the nine
months ended September 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 September 30, 1999 was $94,000, or $.01
per share, compared to $104,000, or $.01 per share, for the three months ended
September 30, 1998. Net income for the nine months ended September 30, 1999 was
$556,000, or $.06 per share, compared to $463,000, or $.05 per share, for the
nine months ended September 30, 1998.
Net revenues decreased 2% to $35,938,000 for the three months ended September
30, 1999 and increased 5% to $109,806,000 for the nine months ended September
30, 1999 compared to the 1998 periods. The decline in net revenues in the three
months ended September 30, 1999 is due to lower personnel utilization, partially
offset by higher margins. Net revenues for the nine months ended September 30,
1998 include approximately $800,000 from a U.S. government agency in payment for
work performed in an earlier period. Gross revenues increased 1% to $62,869,000
for the three months ended September 30, 1999 and 11% to $195,738,000 for the
nine months ended September 30, 1999 compared to the 1998 periods. Direct labor
costs increased 10% in the nine months ended September 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 nine months ended September 30, 1999 is primarily due to increased
subcontracting activity, the expense of which is passed through to the Company's
clients.
The Company had a loss from operations of $80,000 and income from operations of
$1,027,000 in the three months and nine months ended September 30, 1999,
respectively, compared to income from operations of $155,000 and $671,000 in the
three months and nine months ended September 30, 1998, respectively. The decline
in operating income in the three months ended September 30, 1999 is primarily
due to lower net revenues. The nine months ended September 30, 1999 include a
$500,000 reduction in the Company's estimated insurance claim liabilities.
Investment income increased $290,000, or 79% and decreased $155,000, or 13%, in
the three months and nine months ended September 30, 1999, respectively. The
1999 periods include a gain of $480,000 resulting from the demutualization of a
life insurance company in which the Company is a policyholder. Not including the
gain, investment income declined primarily due to lower amounts invested.
Interest expense increased $105,000, or 32%, and $121,000, or 12% in the three
months and nine months ended September 30, 1999, respectively, due to increased
borrowings under the Company's line of credit, partially offset by the
reductions of 7% convertible subordinated debt outstanding.
-8-
<PAGE> 11
MATERIAL CHANGES IN FINANCIAL CONDITION
- ---------------------------------------
Cash and cash equivalents decreased $3,304,000 in the first nine months of 1999
to $689,000 from $3,993,000 at December 31, 1998. Marketable securities
decreased $1,149,000 in the first nine months of 1999 to $398,000 from
$1,547,000 at December 31, 1998.
Operating activities used cash of $3,102,000 for the first nine months of 1999,
compared to $553,000 in the comparable 1998 period. The Company has encountered
significant billing and collection delays due to a dispute over contract
modification issues on one large federal construction project. The Company does
not currently expect to be able to resolve these issues during 1999 and
anticipates that it may have to commence litigation to resolve the dispute.
Although the outcome of any litigation is uncertain, the Company believes that
its position is sound and that it will achieve a favorable resolution of the
dispute. The dispute has reduced the Company's cash flow and, in the event of an
unfavorable resolution, the Company would sustain a significant loss.
Net cash investments in property and equipment and other assets were $3,787,000
in the first nine months of 1999, compared to $2,454,000 in the comparable 1998
period. Financing activities provided $1,675,000 in the first nine months of
1999, and used $3,789,000 in the comparable 1998 period. The nine months ended
September 30, 1999 included $3,600,000 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 completed its inventory of Y2K Issues and has assigned
priorities to the identified issues. Assessment of the Company's Y2K compliance
and the process of repair and replacement of critical non-compliant systems is
substantially complete. Final testing of repaired or replaced items is expected
to be completed by early December 1999. In addition, the Company has identified
and contacted service providers, suppliers and clients whose activities are
believed to be critical to business operations to determine their compliance
with Y2K Issues.
The Company has developed contingency plans intended to mitigate possible
disruptions in business that may result from Y2K Issues. These plans 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 has
installed 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 now fully operational. The Company
currently estimates that the total cost of the new business systems will be
approximately $4,300,000 of which the Company had expended approximately
$4,100,000 as of September 30, 1999. The Company currently estimates that the
cost of addressing other Y2K issues will be approximately $500,000, of which the
Company had expended approximately $425,000 as of September 30, 1999.
-9-
<PAGE> 12
The Company currently 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 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,
including statements contained in this report. 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:
o The highly competitive marketplace in which the Company operates.
o Changes in and levels of enforcement of federal, state and local
environmental legislation and regulations.
o The Company's ability to obtain new contracts from existing as well as new
clients, and the uncertain timing of awards and contracts.
o The Company's ability to execute new projects and those currently in
backlog within reasonable cost estimates, as well as other contract
performance risks, including successful resolution of any contract
disputes.
o Funding appropriation, funding delay, and the issuance of work orders on
government projects.
o The Company's ability to achieve any planned overhead or other cost
reductions while maintaining adequate work flow.
o The Company's ability to successfully implement its readiness program for
Y2K Issues.
o 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.
o The Company's ability to execute its strategic plan through successful
marketing activities and continued cost containment.
o 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.
o The Company's ability to conclude and implement acquisitions of other
businesses consistent with the Company's acquisition strategy.
o The Company's ability to retain key personnel.
The Company disclaims any intent or obligation to update forward looking
statements.
-10-
<PAGE> 13
PART II - OTHER INFORMATION
<TABLE>
<CAPTION>
<S> <C>
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>
<TABLE>
<CAPTION>
Exhibit No. Description
----------- -----------
<S> <C>
11 Statements of Computation of Basic and
Diluted Earnings Per Share.
27 Financial Data Schedule.
(b) Reports on Form 8-K
</TABLE>
There were no reports on Form 8-K in the three months ended September 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: November 11, 1999 By: /s/William Robertson
-----------------------------
William Robertson
Chief Executive Officer
(Duly Authorized Officer)
Date: November 11, 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 September 30,
--------------------------------
1999 1998
(Thousands of Dollars)
BASIC
- -----
<S> <C> <C>
Net income $ 94 $ 104
=========== ==========
Weighted average shares outstanding 9,954,671 9,946,992
=========== ==========
Basic earnings per share $ .01 $ .01
=========== ==========
DILUTED
- -------
Net income $ 94 $ 104
=========== ==========
Weighted average number of shares used in calculating
basic earnings per share 9,954,671 9,946,992
ADD:
Dilutive impact of stock options 64,483 23,032
----------- ----------
Weighted average number of shares used in calculating
diluted earnings per share 10,019,154 9,970,024
=========== ==========
Diluted earnings per share $ .01 $ .01
=========== ==========
</TABLE>
ROY F. WESTON, INC. AND SUBSIDIARIES
STATEMENTS OF COMPUTATION OF EARNINGS PER SHARE
<TABLE>
<CAPTION>
Nine Months Ended September 30,
-------------------------------
1999 1998
(Thousands of Dollars)
BASIC
- -----
<S> <C> <C>
Net income $ 556 $ 463
========== ==========
Weighted average shares outstanding 9,949,601 9,903,457
========== ==========
Basic earnings per share $ .06 $ .05
========== ==========
DILUTED
- -------
Net income $ 556 $ 463
========== ==========
Weighted average number of shares used in calculating
basic earnings per share 9,949,601 9,903,457
ADD:
Dilutive impact of stock options 25,254 28,022
---------- ----------
Weighted average number of shares used in calculating
diluted earnings per share 9,974,855 9,931,479
========== ==========
Diluted earnings per share $ .06 $ .05
========== ==========
</TABLE>
-12-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated balance sheet as of September 30, 1999 and the consolidated
statement of operations for the nine months ended September 30, 1999 and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-START> JAN-01-1999
<PERIOD-END> SEP-30-1999
<CASH> 689
<SECURITIES> 398
<RECEIVABLES> 78,575<F1>
<ALLOWANCES> 2,063
<INVENTORY> 0
<CURRENT-ASSETS> 87,830
<PP&E> 45,813
<DEPRECIATION> 35,886
<TOTAL-ASSETS> 116,075
<CURRENT-LIABILITIES> 45,810
<BONDS> 9,730
0
0
<COMMON> 1,182
<OTHER-SE> 55,633
<TOTAL-LIABILITY-AND-EQUITY> 116,075
<SALES> 0
<TOTAL-REVENUES> 195,738
<CGS> 0
<TOTAL-COSTS> 194,711
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 342
<INTEREST-EXPENSE> 1,152
<INCOME-PRETAX> 928
<INCOME-TAX> 372
<INCOME-CONTINUING> 556
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 556
<EPS-BASIC> .06
<EPS-DILUTED> .06
<FN>
<F1>Includes 21,800 of unbilled costs and estimated earnings there on.
</FN>
</TABLE>
