<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 September 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 ___
8,873,156
---------------------------------------------------------------------
(Number of Shares Outstanding of the Registrant's
Common Stock at November 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 Nine Months
Ended September 30, Ended September 30,
-------------------- --------------------
1995 1994 1995 1994
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenue:
Commercial real estate brokerage commissions $ 38,686 $ 38,682 $104,020 $103,891
Real estate services fees, commissions and other 8,676 8,322 25,335 22,937
-------- -------- -------- --------
Total Revenue 47,362 47,004 129,355 126,828
-------- -------- -------- --------
Costs and Expenses:
Real estate brokerage and other commissions 22,705 22,511 60,119 59,252
Selling, general and administrative 11,259 11,540 34,300 33,729
Salaries and wages 12,584 11,672 37,284 35,019
Depreciation and amortization 565 575 1,535 1,511
Special charges and unusual items (158) (519) (835) (827)
-------- -------- -------- --------
Total costs and expenses 46,955 45,779 132,403 128,684
-------- -------- -------- --------
Total operating income (loss) 407 1,225 (3,048) (1,856)
Other income and expenses:
Interest income 139 151 561 1,113
Other income, net 992 18 1,496 89
Interest expense to related parties (730) (709) (2,192) (2,006)
-------- -------- -------- --------
Income (loss) before income taxes 808 685 (3,183) (2,660)
Provision for income taxes 212 101 550 297
-------- -------- -------- --------
Net income (loss) $ 596 $ 584 $ (3,733) $ (2,957)
-------- -------- -------- --------
-------- -------- -------- --------
Net income (loss) applicable to common
stockholders, net of dividends in arrears
and accretion of liquidation preference on
preferred stock $ (127) $ (74) $ (5,880) $ (4,910)
Net income (loss) per common share and equivalents $ (.01) $ (.02) $ (.67) $ (1.18)
Weighted average common shares outstanding 8,814,832 4,261,351 8,808,673 4,146,011
</TABLE>
See notes to condensed consolidated financial statements.
3
<PAGE>
GRUBB & ELLIS COMPANY AND SUBSIDIARIES
Condensed Consolidated Balance Sheets
(in thousands)
ASSETS
<TABLE>
<CAPTION>
September 30, December 31, September 30,
1995 1994 1994
------------ ----------- -----------
(unaudited) (unaudited)
<S> <C> <C> <C>
Current Assets:
Cash and cash equivalents $ 14,498 $ 23,371 $ 10,381
Real estate brokerage
commissions receivable 2,896 4,500 2,765
Real estate services fees and
other commissions receivable 3,158 3,317 3,375
Other receivables 4,047 3,116 2,824
Prepaids and other current
assets 1,811 2,222 2,764
---------- --------- ---------
Total current assets 26,410 36,526 22,109
Noncurrent Assets:
Real estate brokerage
commissions receivable 554 454 457
Real estate investments held
for sale and real estate owned 604 1,016 915
Equipment and leasehold
improvements, net 5,354 5,203 5,160
Other assets 714 2,230 2,631
---------- --------- ---------
Total assets $ 33,636 $ 45,429 $ 31,272
---------- --------- ---------
---------- --------- ---------
</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>
September 30, December 31, September 30,
1995 1994 1994
------------- ------------ -------------
(unaudited) (unaudited)
<S> <C> <C> <C>
LIABILITIES
Current Liabilities:
Notes payable and current portion
of long-term debt $ 269 $ 508 $ 506
Current portion of notes payable
and long-term debt to related
party -- -- 6,000
Accounts payable 1,534 1,764 1,079
Compensation and employee benefits
payable 8,719 8,556 8,321
Deferred commissions payable 1,073 5,195 540
Accrued severance obligations 468 876 1,237
Accrued office closure costs 1,031 1,346 2,553
Accrued claims and settlements 2,372 2,502 3,715
Other accrued expenses 5,556 8,430 6,665
--------- -------- --------
Total current liabilities 21,022 29,177 30,616
Long-Term Liabilities:
Long-term debt, net of current
portion 362 391 702
Long-term debt to related party,
net of current portion 26,403 25,292 24,678
Accrued claims and settlements 13,432 13,404 13,068
Accrued severance obligations -- 277 287
Accrued office closure costs 1,349 2,220 2,496
Other 138 154 265
--------- -------- --------
Total liabilities 62,706 70,915 72,112
--------- -------- --------
Commitments and contingencies (Note 4) -- -- --
--------- -------- --------
--------- -------- --------
REDEEMABLE PREFERRED STOCK
12% Senior Convertible Preferred
Stock, $100.00 per share redemption
value; 137,160 shares outstanding -- -- 15,875
5% Junior Convertible Preferred Stock,
$100.00 per share redemption value;
150,000 shares outstanding -- -- 16,147
--------- -------- --------
Total redeemable preferred stock -- -- 32,022
--------- -------- --------
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;
8,873,156, 8,797,377 and 4,434,232
shares issued and outstanding at
September 30, 1995, December 31, 1994
and September 30, 1994, respectively 90 89 45
Additional paid-in capital 57,065 56,917 47,028
Retained earnings (deficit) (118,368) (114,635) (119,935)
--------- -------- --------
Total stockholders' equity (deficit) (29,070) (25,486) (72,862)
--------- -------- --------
Total liabilities and
stockholders' equity (deficit) $ 33,636 $ 45,429 $ 31,272
--------- -------- --------
--------- -------- --------
</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 Nine Months
Ended September 30,
---------------------
1995 1994
-------- --------
<S> <C> <C>
Cash Flows from Operating Activities:
Net loss $ (3,733) $ (2,957)
Adjustments to reconcile net loss to net
cash used in operating activities (4,476) (7,724)
-------- --------
Net cash used in operating activities (8,209) (10,681)
-------- --------
Cash Flows from Investing Activities:
Proceeds from disposition and distribution from
real estate joint ventures and real estate owned 1,167 344
Purchases of equipment and leasehold
improvements (1,561) (1,526)
-------- --------
Net cash used in investing activities (394) (1,182)
-------- --------
Cash Flows from Financing Activities:
Proceeds from borrowing -- 6,000
Repayment of notes payable (270) (199)
Proceeds from issuance of common stock -- 37
-------- --------
Net cash provided by (used in) financing
activities (270) 5,838
-------- --------
Net decrease in cash and cash equivalents (8,873) (6,025)
Cash and cash equivalents at beginning of period 23,371 16,406
-------- --------
Cash and cash equivalents at end of period $ 14,498 $ 10,381
-------- --------
-------- --------
--------------------------------
Supplemental Disclosure of Cash Flow Information:
Cash paid during the period for:
Interest $ 1,320 $ 1,281
Income taxes 1,000 351
</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 nine month periods ended September 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
Convertible 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 Nine Months
Ended Ended
September 30, September 30,
----------------------- ----------------------
1995 1994 1995 1994
--------- ------- -------- --------
<S> <C> <C> <C> <C>
Senior Convertible Preferred Stock:
Accretion of liquidation preference $ -- $ 461 $ -- $1,365
Undeclared dividends 516 -- 1,530 --
Junior Convertible Preferred Stock:
Accretion of liquidation preference -- 197 -- 588
Undeclared dividends 207 -- 617 --
------- ------ ------ ------
$ 723 $ 658 $2,147 $1,953
------- ------ ------ ------
------- ------ ------ ------
</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 lawsuit entitled
JOHSZ ET AL. V. KOLL COMPANY, ET AL., and a related lawsuit entitled
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. A trial date of January 8, 1996 has been set in the
JOHSZ case. 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 and asset 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 nine months of 1995, total revenues of $129.4 million increased by
$2.5 million, or 2.0% over 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 $1.5 million and $1.1
million, respectively. However, the Pacific Northwest region experienced a
decrease of $2.9 million which had a significant impact on the net loss for the
period.
Other real estate services fees of $25.3 million for the year-to-date period
increased by $2.4 million or 10.5% over the comparable 1994 period, primarily as
a result of heightened business services activities in the Company's property
management operations.
Total revenue of $47.4 million for the third quarter of 1995 increased by
$358,000 or .8% over total revenue of $47.0 million for the third quarter of
1994. Third quarter commercial brokerage commissions of $38.7 million were at
the same level as the 1994 comparable period. Increased property management and
asset management fees accounted for nearly all of the increase in other real
estate services fees over the third quarter of 1995.
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. As a percentage of total commercial real estate
brokerage commission revenue, commercial brokerage salespersons' participation
expense for the first nine months and the third quarter of 1995 increased by 100
and 160 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. As of September 30, 1995, the
Company has increased its salesforce by 7% over the December 31, 1994 level.
Total costs and expenses, other than real estate brokerage commissions expense
and special charges and unusual items, increased by $2.9 million, or 4.1%, to
$73.1 million for the first nine months of 1995 compared to the same period in
1994. This increase related primarily to personnel costs due to increased
business activity levels in the property management operations and to a lesser
degree, increases in business development activities relating to the commercial
brokerage business.
Total costs and expenses, other than real estate brokerage commission expense
and special charges and unusual items, for the third quarter of 1995 were $24.4
million compared to $23.8 million for the third quarter of 1994. This increase
related primarily to personnel costs as described above.
Special charges and unusual items were favorably adjusted by $835,000 for the
first nine months of 1995 compared to $827,000 for the comparable 1994 period.
The 1995 adjustment included $370,000 related to the reversal of a portion of
the remaining lease liability and certain transaction fees for the Southern
California residential brokerage operations sold in November 1994. The remainder
of the 1995 adjustment, and the entire 1994 adjustment, related to changes in
estimates and reduction of reserves established at the end of 1993 for the
closure of certain offices.
As of September 30, 1995, the Company had current accrued severance and office
closure costs of approximately $1.5 million of which $468,000 of accrued
severance costs and $476,000 of accrued office closure costs, net of anticipated
sublease income, are expected to be paid in cash. As of September 30, 1995,
approximately $1.0 million of the $1.3 million of long-term accrued office
closure costs, net of anticipated sublease income, are expected to be paid in
cash over the next seven years. For the nine month period ended September 30,
1995, the Company paid $1.1 million in cash for the accrued severance and office
closure costs described above.
Other income, net for the third quarter of 1995 included $818,000 representing
the recognition of the net effect of the sale of a note secured by certain real
estate. On the year-to-date basis,
10
<PAGE>
other income, net also includes a $490,000 earnout payment related to the sale
of a commercial brokerage operation in 1991.
NET LOSS
The net loss of $3.7 million or $.67 per common share for the first nine months
of 1995 compared unfavorably to the net loss of $3.0 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.
Net income for the third quarter of 1995 was $596,000 ($.01 loss per common
share) compared to net income of $584,000 ($.02 loss per common share) for the
same period in 1994. While total revenues were nearly the same for both
periods, the third quarter 1995 salaries and wages were $412,000 higher than the
comparable period in 1994 due to the increased business activity levels in the
property management and commercial brokerage activities as discussed above.
Offsetting the impact of higher expenses was the increase in other income, net
as discussed above.
LIQUIDITY AND CAPITAL RESOURCES
Working capital decreased by $2.0 million to $5.4 million during the first nine
months of 1995. Cash and cash equivalents decreased by $8.9 million from
December 31, 1994 to September 30, 1995. The decrease was mainly attributable
to cash used by operations of $8.2 million, which included cash outflows of $4.4
million for 1994 salespersons' and managers' incentive compensation, $5.1
million for deferred salespersons' commission payments, and aggregate interest
payments of $1.3 million on the 9.9% Senior Notes and the Revolving Credit Note.
Major sources of cash provided by operations included $1.0 million and $1.9
million reductions in net prepaid assets and real estate brokerage commissions
receivable, respectively, and the non-cash adjustment for depreciation and
amortization of $1.5 million.
The Company has historically experienced the highest use of operating cash in
the first quarter of the year, primarily related to the timing of incentive and
deferred commission payments combined with the fact that it also historically
experiences its lowest quarterly revenue. Historically, operating cash
requirements reduce significantly with higher and more consistent revenue in the
remaining quarters. Cash used by operations amounted to $10.3 and $.4 million
for the first and second quarters of 1995, respectively. Cash provided by
operations totaled $2.5 million for the third quarter.
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
11
<PAGE>
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.
12
<PAGE>
PART II
OTHER INFORMATION
(Items 2, 3, 4 and 5 are not applicable
for the quarter ended September 30, 1995)
13
<PAGE>
ITEM 1. LEGAL PROCEEDINGS
The Company previously disclosed in its Annual Report on Form 10-K for the
year ended December 31, 1994 the information concerning a lawsuit entitled JOHSZ
ET AL. V. KOLL COMPANY, ET AL., and a related lawsuit entitled 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. A trial
date of January 8, 1996 has been set in the JOHSZ case. 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 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).
(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: November 13, 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 SEPTEMBER 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 nine-month periods ended
September 30, 1995 and 1994
(Unaudited)
(in thousands, except for shares and per share amounts)
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
----------------------------- ---------------------------
1995 1994 1995 1994
------------- ------------- ------------ ------------
<S> <C> <C> <C> <C>
Primary income (loss) per share
applicable to Common Stock:
Weighted average common
shares outstanding 8,814,832 4,261,351 8,808,673 4,146,011
------------- ----------- ----------- -----------
------------- ----------- ----------- -----------
Net income (loss) $ 596 $ 584 $ (3,733) $ (2,957)
Earnings applicable to
Preferred Stock (723) (658) (2,147) (1,953)
------------- ----------- ----------- -----------
Net income (loss) applicable to
Common Stockholders $ (127) $ (74) $ (5,880) $ (4,910)
------------- ----------- ----------- -----------
------------- ----------- ----------- -----------
Net income (loss) per common
share and equivalents applicable
to Common Stock $ (.01) $ (.02) $ (.67) $ (1.18)
------------- ----------- ----------- -----------
------------- ----------- ----------- -----------
Fully-diluted income (loss) per share
applicable to Common Stock:
Weighted average common
shares outstanding 8,814,832 4,261,351 8,808,673 4,146,011
------------- ----------- ----------- -----------
------------- ----------- ----------- -----------
Net income (loss) $ (127) $ (74) $ (5,880) $ (4,910)
------------- ----------- ----------- -----------
------------- ----------- ----------- -----------
Net income (loss) per common
share and equivalents applicable
to Common Stock $ (.01) $ (.02) $ (.67) $ (1.18)
------------- ----------- ----------- -----------
------------- ----------- ----------- -----------
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM 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> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 14,498
<SECURITIES> 0
<RECEIVABLES> 11,826
<ALLOWANCES> 5,218
<INVENTORY> 0
<CURRENT-ASSETS> 26,410
<PP&E> 20,063
<DEPRECIATION> 14,709
<TOTAL-ASSETS> 33,636
<CURRENT-LIABILITIES> 21,022
<BONDS> 0
<COMMON> 90
0
32,143
<OTHER-SE> 57,065
<TOTAL-LIABILITY-AND-EQUITY> 33,636
<SALES> 0
<TOTAL-REVENUES> 131,412
<CGS> 0
<TOTAL-COSTS> 60,119
<OTHER-EXPENSES> 72,284
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,192
<INCOME-PRETAX> (3,183)
<INCOME-TAX> 550
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (3,733)
<EPS-PRIMARY> (.67)
<EPS-DILUTED> (.67)<F1>
<FN>
<F1>Interest income and other income, net are included in Total Revenue.
</FN>
</TABLE>
