<PAGE>
FORM 10-Q
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, 1995
-----------------------
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: 1-8122
-----------------------
GRUBB & ELLIS COMPANY
------------------------------------------------------
(Exact Name of Registrant as Specified in Its Charter)
Delaware 94-1424307
------------------------------- --------------------
(State or Other Jurisdiction of (I.R.S. Employer
Incorporation or Organization) Identification No.)
One Montgomery Street, Telesis Tower,
San Francisco, CA 94104
----------------------------------------
(Address of Principal Executive Offices)
(Zip Code)
(415) 956-1990
----------------------------------------------------
(Registrant's Telephone Number, Including Area Code)
No Change
---------------------------------------------------------------
(Former Name, Former Address and Former Fiscal Year, if Changed
Since Last Report)
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
--- ---
8,810,220
----------------------------------------------------------
(Number of Shares Outstanding of the Registrant's
Common Stock at August 1, 1995)
1
<PAGE>
PART I
FINANCIAL INFORMATION
2
<PAGE>
ITEM 1. FINANCIAL STATEMENTS
GRUBB & ELLIS COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Operations
(in thousands, except per share amounts and shares)
(unaudited)
<TABLE>
<CAPTION>
For the Three Months For the Six Months
Ended June 30, Ended June 30,
------------------------ ------------------------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenue:
Commercial real estate brokerage commissions $ 35,454 $ 37,425 $ 65,334 $ 65,209
Real estate services fees, commissions and other 8,466 8,054 16,659 14,615
-------- -------- -------- --------
Total Revenue 43,920 45,479 81,993 79,824
-------- -------- -------- --------
Costs and Expenses:
Real estate brokerage and other commissions 20,319 21,121 37,414 36,742
Selling, general and administrative 11,537 11,647 23,041 22,224
Salaries and wages 12,178 11,730 24,700 23,310
Depreciation and amortization 533 485 970 936
Special charges and unusual items (558) (308) (677) (308)
-------- -------- -------- --------
Total costs and expenses 44,009 44,675 85,448 82,904
-------- -------- -------- --------
Total operating income (loss) (89) 804 (3,455) (3,080)
Other income and expenses:
Interest income 134 107 422 240
Other income, net 532 1,083 504 790
Interest expense to related parties (723) (711) (1,462) (1,297)
-------- -------- -------- --------
Income (loss) before income taxes (146) 1,283 (3,991) (3,347)
Provision for income taxes 272 80 338 197
-------- -------- -------- --------
Net income (loss) $ (418) $ 1,203 $ (4,329) $ (3,544)
-------- -------- -------- --------
-------- -------- -------- --------
Net income (loss) applicable to common
stockholders, net of dividends in arrears
and accretion of liquidation preference on
preferred stock $ (1,141) $ 546 (5,753) $ (4,839)
Net income (loss) per common share and equivalents $ (.13) $ .11 $ (.65) $ (1.18)
Weighted average common shares outstanding 8,797,377 4,114,549 8,799,014 4,087,386
</TABLE>
See notes to condensed consolidated financial statements.
3
<PAGE>
GRUBB & ELLIS COMPANY AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands)
ASSETS
<TABLE>
<CAPTION>
June 30, December 31, June 30,
1995 1994 1994
----------- ------------ -----------
(unaudited) (unaudited)
<S> <C> <C> <C>
Current Assets:
Cash and cash equivalents $ 11,406 $ 23,371 $ 10,270
Real estate brokerage
commissions receivable 2,390 4,500 2,754
Real estate services fees and
other commissions receivable 2,952 3,317 2,415
Other receivables 3,051 3,116 3,911
Prepaids and other current
assets 1,354 2,222 3,193
--------- --------- ---------
Total current assets 21,153 36,526 22,543
Noncurrent Assets:
Real estate brokerage
commissions receivable 412 454 1,034
Real estate investments held
for sale and real estate owned 828 1,016 958
Equipment and leasehold
improvements, net 5,309 5,203 5,011
Other assets 1,789 2,230 2,596
--------- --------- ---------
Total assets $ 29,491 $ 45,429 $ 32,142
--------- --------- ---------
--------- --------- ---------
</TABLE>
See notes to condensed consolidated financial statements.
4
<PAGE>
GRUBB & ELLIS COMPANY AND SUBSIDIARIES
Condensed Consolidated Balance Sheets, continued
(in thousands, except per share amounts and shares)
<TABLE>
<CAPTION>
June 30, December 31, June 30,
1995 1994 1994
-------- ------------ --------
(unaudited) (unaudited)
<S> <C> <C> <C>
LIABILITIES
Current Liabilities:
Notes payable and current portion
of long-term debt $ 383 $ 508 $ 506
Current portion of notes payable
and long-term debt to related
party - - 15,000
Accounts payable 2,162 1,764 1,554
Compensation and employee benefits
payable 4,820 8,556 8,455
Deferred commissions payable 239 5,195 189
Accrued severance obligations 465 876 1,600
Accrued office closure costs 1,086 1,346 2,713
Accrued claims and settlements 2,436 2,502 5,129
Other accrued expenses 6,947 8,430 6,834
--------- --------- ---------
Total current liabilities 18,538 29,177 41,980
Long-Term Liabilities:
Long-term debt, net of current
portion 361 391 766
Long-term debt to related party,
net of current portion 25,717 25,292 15,636
Accrued claims and settlements 12,824 13,404 11,909
Accrued severance obligations 202 277 373
Accrued office closure costs 1,348 2,220 3,566
Other 294 154 142
--------- --------- ---------
Total liabilities 59,284 70,915 74,372
--------- --------- ---------
Commitments and contingencies (Note 4) - - -
--------- --------- ---------
REDEEMABLE PREFERRED STOCK
12% Senior Convertible Preferred
Stock, $100.00 per share redemption
value; 137,160 shares outstanding - - 15,366
5% Junior Convertible Preferred Stock,
$100.00 per share redemption value;
150,000 shares outstanding - - 15,942
--------- --------- ---------
Total redeemable preferred stock - - 31,308
--------- --------- ---------
STOCKHOLDERS' EQUITY (DEFICIT)
Preferred stock, $.01 par value:
1,000,000 shares authorized; 137,160
shares of 12% Senior Convertible
Preferred Stock and 150,000 shares
of 5% Junior Convertible Preferred
Stock outstanding 32,143 32,143 -
Common stock, $.01 par value:
25,000,000 shares authorized;
8,810,220, 8,797,377 and 4,114,549
shares issued and outstanding at
June 30, 1995, December 31, 1994 and
June 30, 1994, respectively 89 89 42
Additional paid-in capital 56,939 56,917 46,940
Retained earnings (deficit) (118,964) (114,635) (120,520)
--------- --------- ---------
Total stockholders' equity (deficit) (29,793) (25,486) (73,538)
--------- --------- ---------
Total liabilities and
stockholders' equity (deficit) $ 29,491 $ 45,429 $ 32,142
--------- --------- ---------
--------- --------- ---------
</TABLE>
See notes to condensed consolidated financial statements.
5
<PAGE>
GRUBB & ELLIS COMPANY AND SUBSIDIARIES
Condensed Consolidated Statements of Cash Flows
(unaudited - in thousands)
<TABLE>
<CAPTION>
For the Six Months
Ended June 30,
------------------------
1995 1994
---- ----
<S> <C> <C>
Cash Flows from Operating Activities:
Net loss $ (4,329) $ (3,544)
Adjustments to reconcile net loss to net
cash used in operating activities (6,409) (7,981)
-------- --------
Net cash used in operating activities (10,738) (11,525)
-------- --------
Cash Flows from Investing Activities:
Proceeds from disposition and distribution from
real estate joint ventures and real estate owned 31 344
Purchases of equipment and leasehold
improvements (1,104) (828)
-------- --------
Net cash used in investing activities (1,073) (484)
-------- --------
Cash Flows from Financing Activities:
Proceeds from borrowing - 6,000
Repayment of notes payable (154) (134)
Proceeds from issuance of common stock - 7
-------- --------
Net cash provided by (used in) financing
activities (154) 5,873
-------- --------
Net decrease in cash and cash equivalents (11,965) (6,136)
Cash and cash equivalents at beginning of period 23,371 16,406
-------- --------
Cash and cash equivalents at end of period $ 11,406 $ 10,270
-------- --------
-------- --------
----------------------------------
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for:
Interest $ 711 $ 683
Income taxes 648 291
</TABLE>
See notes to condensed consolidated financial statements.
6
<PAGE>
GRUBB & ELLIS COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
1. INTERIM PERIOD REPORTING
The accompanying unaudited condensed consolidated financial statements
include the accounts of Grubb & Ellis Company, its wholly and majority
owned and controlled subsidiaries and partnerships (the "Company"), and are
prepared in accordance with generally accepted accounting principles for
interim financial information and with 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 and therefore, should be read
in conjunction with the Company's Annual Report on Form 10-K for the year
ended December 31, 1994 and footnotes thereto.
In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation have been
included. Certain amounts in prior periods have been reclassified to
conform to the current presentation.
Operating results for the three and six month periods ended June 30, 1995
are not necessarily indicative of the results that may be expected for the
year ending December 31, 1995. Any adjustments to reserves provided in
prior periods in connection with offices which management determined in
1993 to close in 1994 are reflected as "Special charges and unusual items".
2. INCOME TAXES
The Company's tax provision is attributable to federal, state and local
income taxes assessed on profitable subsidiaries of the Company.
3. EARNINGS (LOSS) PER COMMON SHARE AND EQUIVALENTS
Earnings (loss) per common share and equivalents computations are based on
the weighted average number of common shares outstanding. Common equivalent
shares from stock options and warrants are excluded from the computation if
their effect is anti-dilutive.
The calculation of earnings (loss) per common share includes net income
(loss), adjusted for amounts applicable to the Senior and Junior Preferred
Stock related to undeclared dividends earned and accretion of liquidation
preference (for periods during which the preferred stock was subject to
mandatory redemption) as follows (in thousands):
7
<PAGE>
GRUBB & ELLIS COMPANY AND SUBSIDIARIES
Notes to Condensed Consolidated Financial Statements
<TABLE>
<CAPTION>
For the For the
Three Months Six Months
Ended June 30, Ended June 30,
---------------- ----------------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Senior Convertible Preferred Stock:
Accretion of liquidation preference $ -- $ 460 $ -- $ 904
Undeclared dividends 516 -- 1,014 --
Junior Convertible Preferred Stock:
Accretion of liquidation preference -- 197 -- 391
Undeclared dividends 207 -- 410 --
------ ------ ------ ------
$ 723 $ 657 $1,424 $1,295
------ ------ ------ ------
------ ------ ------ ------
</TABLE>
4. COMMITMENTS AND CONTINGENCIES
The Company has guaranteed, in the aggregate amount of $4 million, the
contingent liabilities of one of its wholly-owned subsidiaries with respect
to two limited partnerships in which the subsidiary formerly acted as
general partner.
The Company is involved in various claims and lawsuits arising in the
ordinary course of business, as well as in connection with its
participation in various joint ventures, partnerships, and a trust, many of
which may not be covered by the Company's insurance policies. In the
opinion of management, the eventual outcome of such claims and lawsuits is
not expected to have a material adverse effect on the Company's financial
position or results of operations.
The Company previously disclosed in its Annual Report on Form 10-K for the
year ended December 31, 1994 the information concerning a complaint, JOHSZ
ET AL. V. KOLL COMPANY, ET AL., and a related complaint, YOUNKIN, MAIONA,
ET AL. V. KOLL COMPANY, ET AL. and a purported class action lawsuit, JOHN
W. MATTHEWS, ET AL. V. KIDDER, PEABODY & CO., ET AL. AND HSM INC., ET AL.
The YOUNKIN case had been stayed pending appellate review of certain
jurisdictional issues. The stay has been vacated and discovery is
proceeding. Discovery has commenced in the MATTHEWS case. Except as
described herein, there has been no material change with respect to these
matters.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
REVENUE
The Company's revenue is derived principally from commercial brokerage
activities. Property management, mortgage brokerage and appraisal and
consulting fees provide substantially all of the remaining revenue.
The Company has historically experienced its lowest quarterly revenue in the
first quarter of each year with historically higher and more consistent revenue
in the second and third quarters. The fourth quarter has historically provided
the highest quarterly revenue due to increased activity related to clients'
desire to complete transactions by year-end. As a percentage of total annual
revenue, quarterly revenue during 1992 to 1994 ranged from a high of 30.8% to a
low of 19.8%. Additionally, the Company operates in an industry that may be
affected by various economic conditions, such as interest rates, and tax and
environmental laws.
For the first six months of 1995, total revenues of $82.0 million increased by
$2.0 million or 2.7% compared to the same period in 1994. Overall, commercial
real estate brokerage commissions were level during the comparable periods. On
a regional basis, the Pacific Southwest and Eastern regions' commercial
brokerage commissions exceeded the comparable 1994 periods by $2.5 million and
$1.4 million, respectively. However, the Pacific Northwest region experienced a
decrease of $3.8 million which had a significant impact on the net loss for the
periods as described below.
Other real estate service fees of $16.7 million for the year-to-date period
increased by $2.0 million or 14.0% over the comparable 1994 period primarily as
a result of heightened business services activities in the Company's property
management operations.
Total revenue of $43.9 million for the second quarter of 1995 declined by $1.6
million or 3.4% from total revenue of $45.5 million for the second quarter of
1994. Second quarter commercial brokerage commissions declined by $2.0 million
or 5.3% from the comparable 1994 period as a result of the revenue shortfall of
$2.9 million in the Pacific Northwest. The timing of major transactions can
significantly impact revenue reporting on a partial year basis, and has
contributed in part, to the weaker revenue reported in the Pacific Northwest
region. Increased property management fees accounted for nearly all of the
$411,000 increase in other real estate service fees over the second quarter of
1994.
9
<PAGE>
COSTS AND EXPENSES
Real estate brokerage and other commission expense (salespersons' participation)
is the Company's major expense and is a direct function of gross brokerage
commission revenue levels. Commission expense related to the commercial
brokerage operations represents the major component of salespersons'
participation. As a percentage of total commercial real estate brokerage
commission revenue, commercial brokerage salespersons' participation expense for
the first six months and the second quarter of 1995 increased by 200 and 300
basis points, respectively, over the comparable periods in 1994. The increased
participation expense percentages were primarily related to performance of top
producers and the Company's commitment to strengthen the salesforce by adding
seasoned sales personnel.
Total costs and expenses, other than real estate brokerage commissions expense,
increased by $1.9 million, or 4.1%, to $48.0 million for the first six months of
1995 compared to the same period in 1994. The increase was primarily
attributable to increased business activity levels in the commercial brokerage
branch offices and property management operations, as well as increased
commitments to upgrading marketing support and information systems which
management believes will contribute to future earnings.
Total costs and expenses, other than real estate brokerage commission expense,
for the second quarter of 1995 were $23.7 million compared to $23.6 million for
the second quarter of 1994. The leveling of expenses was primarily attributable
to the controlling of expenses not related to supporting the growth in the
salesforce.
Special charges and unusual items were favorably adjusted by $677,000 for the
first six months of 1995 compared to $308,000 for the comparable 1994 period.
The 1995 adjustment included $180,000 related to the reversal of a portion of
the remaining lease liability of the Southern California residential brokerage
operations sold in November 1994. The remainder of the 1995 adjustment and the
1994 adjustment related to changes in estimates and reduction of reserves
established for the closure of certain offices at the end of 1993.
As of June 30, 1995, the Company had current accrued severance and office
closure costs of approximately $1.6 million of which $465,000 of accrued
severance costs and $812,000 of accrued office closure costs, net of expected
sublease income, are expected to be paid in cash. As of June 30, 1995, the
Company had long-term accrued severance costs of $202,000 which are expected to
be paid in cash in 1996. Approximately $1.0 million of the $1.3 million of
long-term accrued office closure costs, net of expected sublease income, is
expected to be paid in cash over the next seven years. For the six month period
ended June 30, 1995, the Company paid $944,000 in cash for the accrued severance
and office closure costs described above.
10
<PAGE>
NET LOSS
The net loss of $4.3 million or $.65 per common share for the first six months
of 1995 compared unfavorably to the net loss of $3.5 million or $1.18 per common
share for the same period in 1994. The decrease from prior year's performance
was primarily related to lower earnings from commercial brokerage activities in
the Pacific Northwest Region which was partially offset by higher earnings from
property management operations and by leveling of operating expenses in the
second quarter.
LIQUIDITY AND CAPITAL RESOURCES
Cash and cash equivalents decreased by $12.0 million from December 31, 1994 to
June 30, 1995. The decrease was mainly attributable to cash used by operations
of $10.7 million, which included $4.0 million for 1994 salespersons' and
managers' incentive compensation, $5.1 million for deferred salespersons'
commission payments, and aggregate interest payments of $704,000 on the 9.9%
Senior Notes and the Revolving Credit Note. Approximately $10.3 million of the
$10.7 million of cash used by operations related to first quarter operations,
consistent with the fact that the Company has historically experienced the
highest use of operating cash in the first quarter of the year. Working capital
decreased by $4.4 million to $3.0 million during the first six months of 1995.
During 1994, debt agreements with The Prudential Insurance Company of America
were renegotiated and modified to provide, among other things, deferral of
principal payments until November 1, 1997 and thereafter on the $15 million
principal amount of the 9.9% Senior Notes, 10.65% Payment-in-Kind Notes and the
Revolving Credit Note which would have been due from 1994 through 1996.
The Company believes that its short-term and long-term cash requirements will be
met by operating cash flow. With the completion of the previously mentioned
long-term debt restructuring in 1994, and deployment of its 1995 business plan,
management believes it will be able to focus on expanding its core commercial
real estate business and should be prepared to take advantage of the improving
real estate markets. However, if the Company's goals are not substantially
achieved because of adverse economic conditions or other unfavorable events, the
Company may find it necessary to reduce expense levels, or undertake other
actions as may be appropriate.
11
<PAGE>
PART II
OTHER INFORMATION
(Items 2, 3 and 5 are not applicable
for the quarter ended June 30, 1995)
12
<PAGE>
ITEM 1. LEGAL PROCEEDINGS
The Company previously disclosed in its Annual Report on Form 10-K for the
year ended December 31, 1994 information concerning a complaint, JOHSZ ET AL. V.
KOLL COMPANY, ET AL., and a related complaint, YOUNKIN, MAIONA, ET AL. V. KOLL
COMPANY, ET AL. and a purported class action lawsuit, JOHN W. MATTHEWS, ET AL.
V. KIDDER, PEABODY & CO., ET AL. AND HSM INC., ET AL. The YOUNKIN case had been
stayed pending appellate review of certain jurisdictional issues. The stay has
been vacated and discovery is proceeding. Discovery has commenced in the
MATTHEWS case. Except as described herein, there has been no material change
with respect to these matters.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
The 1995 annual meeting of stockholders of the Company was held on May
16, 1995. The Company submitted to a vote of stockholders, through the
solicitation of a proxy, the following proposal regarding the election of six
directors -- representing the entire Board of Directors. The votes cast for or
withheld with respect to nominees for election as director were as follows:
<TABLE>
<CAPTION>
WITHHOLD
FOR AUTHORITY
---------- ---------
<S> <C> <C>
Joe F. Hanauer 15,914,850 51,725
R. David Anacker 15,917,719 48,856
Lawrence S. Bacow 15,917,506 49,069
Reuben S. Leibowitz 15,916,178 50,397
Robert J. McLaughlin 15,917,679 48,896
John D. Santoleri 15,916,220 50,355
</TABLE>
ITEM 6(a). EXHIBITS
(3) ARTICLES OF INCORPORATION AND BYLAWS
3.1 Certificate of Incorporation of the Registrant, as restated effective
November 1, 1994 incorporated herein by reference to Exhibit 3.2 to
the Registrant's Annual Report on Form 10-K filed on March 31, 1995
(Commission File No. 1-8122).
3.2 Grubb & Ellis Company Bylaws, as amended effective June 1, 1994,
incorporated herein by reference to Exhibit 4.21 to the Registrant's
Quarterly Report on Form 10-Q filed on November 14, 1994 (Commission
File No. 1-8122).
13
<PAGE>
(3) ARTICLES OF INCORPORATION AND BYLAWS, (CONTINUED)
3.3 Amendment to the Grubb & Ellis Company Bylaws, effective as of June 1,
1994, incorporated herein by reference to Exhibit 4.20 to the
Registrant's Quarterly Report on Form 10-Q filed on November 14, 1994
(Commission File No. 1-8122).
(11) STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS
(27) FINANCIAL DATA SCHEDULE
ITEM 6(b) REPORTS ON FORM 8-K
NONE
14
<PAGE>
SIGNATURE
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.
GRUBB & ELLIS COMPANY
---------------------
(Registrant)
Date: August 14, 1995 /s/ James E. Klescewski
----------------------------
James E. Klescewski
Vice President and Corporate Controller
(Chief Accounting Officer)
15
<PAGE>
Grubb & Ellis Company and Subsidiaries
EXHIBIT INDEX (A)
for the quarter ended June 30, 1995
-----------------------------------
Exhibit
-------
(11) STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS
(27) FINANCIAL DATA SCHEDULE
(A) Exhibits incorporated by reference are listed in Item 6(a) of this report.
16
<PAGE>
GRUBB & ELLIS COMPANY AND SUBSIDIARIES
EXHIBIT (11) STATEMENT RE COMPUTATION OF
PER SHARE EARNINGS - FORM 10-Q
for the three-month and six-month periods ended
June 30, 1995 and 1994
(Unaudited)
(in thousands, except for shares and per share amounts)
<TABLE>
<CAPTION>
Three Months Six Months
Ended June 30, Ended June 30,
---------------------------- ----------------------------
1995 1994 1995 1994
---- ---- ---- ----
<S> <C> <C> <C> <C>
Primary income (loss) per share
applicable to Common Stock:
Weighted average common
shares outstanding 8,797,377 4,114,549 8,799,014 4,087,386
Net effect of the assumed conversion
of Preferred Stock (A) - 2,674,511 - -
------------- ------------- ------------- -------------
Total 8,797,377 6,789,060 8,799,014 4,087,386
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Net income (loss) $ (418) $ 1,203 $ (4,329) $ (3,544)
Earnings applicable to
Preferred Stock (723) (461) (1,424) (1,295)
------------- ------------- ------------- -------------
Net income (loss) applicable to
Common Stockholders $ (1,141) $ 742 $ (5,753) $ (4,839)
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Net income (loss) per common
share and equivalents applicable
to Common Stock $ (.13) $ .11 $ (.65) $ (1.18)
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Fully-diluted income (loss) per share
applicable to Common Stock:
Weighted average common
shares outstanding 8,797,377 4,114,549 8,799,014 4,087,386
Net effect of the assumed conversion
of Preferred Stock (A) - 7,225,712 - -
------------- ------------- ------------- -------------
Total 8,797,377 11,340,261 8,799,014 4,087,386
------------- ------------- ------------- -------------
Net income (loss) $ (1,141) $ 742 $ (5,753) $ (4,839)
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
Net income (loss) per common
share and equivalents applicable
to Common Stock $ (.13) $ .11 $ (.65) $ (1.18)
------------- ------------- ------------- -------------
------------- ------------- ------------- -------------
<FN>
(A) Assuming conversion of the 5% Junior Convertible Preferred Stock
in the second quarter of 1994.
</TABLE>
17
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONDENSED
CONSOLIDATED BALANCE SHEETS AND THE CONDENSED CONSOLIDATED STATEMENTS OF
OPERATIONS 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-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> JUN-30-1995
<CASH> 11,406
<SECURITIES> 0
<RECEIVABLES> 10,600
<ALLOWANCES> 4,846
<INVENTORY> 0
<CURRENT-ASSETS> 21,153
<PP&E> 19,556
<DEPRECIATION> 14,247
<TOTAL-ASSETS> 29,491
<CURRENT-LIABILITIES> 18,538
<BONDS> 0
<COMMON> 89
0
32,143
<OTHER-SE> 56,939
<TOTAL-LIABILITY-AND-EQUITY> 29,491
<SALES> 0
<TOTAL-REVENUES> 82,919<F1>
<CGS> 0
<TOTAL-COSTS> 37,414
<OTHER-EXPENSES> 48,034
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,462
<INCOME-PRETAX> (3,991)
<INCOME-TAX> 338
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4,329)
<EPS-PRIMARY> (.65)
<EPS-DILUTED> (.65)
<FN>
<F1>Interest income and Other income, net are included in Total Revenue.
</FN>
</TABLE>
