<PAGE>
U.S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended September 30, 1996.
[ ] TRANSITION REPORT UNDER SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from _______ to ______.
Commission File Number 0-16376
TIMBERLINE SOFTWARE CORPORATION
(Name of small business issuer in its charter)
Oregon 93-0748489
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
9600 S.W. Nimbus Avenue, Beaverton, Oregon 97008
(Address of principal executive offices) (Zip code)
(503) 626-6775
Issuer's telephone number
Check whether the issuer (1) 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 [ ]
At November 8, 1996, 5,465,526 shares of common stock of the
registrant were outstanding.
Transitional Small Business Disclosure Format (Check one):
Yes [ ] No [x]
<PAGE>
TIMBERLINE SOFTWARE CORPORATION
FORM 10-QSB FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1996
TABLE OF CONTENTS
- ---------------------------------------------------------
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed balance sheets, September 30, 1996 and
December 31, 1995 ............................... 3
Condensed statements of operations for the three
months ended September 30, 1996 and 1995....... . 4
Condensed statements of operations for the nine
months ended September 30, 1996 and 1995 ...... . 5
Condensed statements of cash flows for the nine
months ended September 30, 1996 and 1995 ..... .. 6
Notes to condensed financial statements ....... ... 7
Item 2. Management's Discussion and Analysis or
Plan of Operation ............................... 9
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K ................. 15
SIGNATURES ................................................. 15
EXHIBIT INDEX .............................................. 16
<PAGE>
PART I. Financial Information
Item 1. Financial Statements
TIMBERLINE SOFTWARE CORPORATION
CONDENSED BALANCE SHEETS
SEPTEMBER 30, 1996 AND DECEMBER 31, 1995
- -----------------------------------------------------------------
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
----------- -----------
<S> <C> <C>
ASSETS
- ------
Current assets:
Cash and cash equivalents $ 1,194,629 $ 3,856,533
Temporary cash investments 3,091,832 3,439,000
Accounts receivable, less allowance
for doubtful accounts
(September 30, 1996, $178,674;
December 31, 1995, $225,909) 2,751,761 3,185,737
Other receivables 217,139 81,025
Inventories 292,030 326,311
Other current assets 982,143 614,190
----------- -----------
Total current assets 8,529,534 11,502,796
----------- -----------
Property and equipment 7,106,401 5,738,256
Less accumulated depreciation
and amortization 3,921,123 3,374,494
----------- -----------
Property and equipment - net 3,185,278 2,363,762
----------- -----------
Cash investments 3,323,894 -
Capitalized software costs - net 991,805 245,669
Purchased software - net 443,769 176,151
Other assets 93,457 96,510
----------- -----------
Total $16,567,737 $14,384,888
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Current liabilities:
Accounts payable $ 875,474 $ 562,622
Accrued commissions/royalties 128,316 258,398
Accrued income taxes - 79,427
Deferred revenues 5,664,544 5,337,973
Accrued employee expenses 933,070 1,148,231
Other current liabilities 222,302 222,585
----------- -----------
Total current liabilities 7,823,706 7,609,236
----------- -----------
Accrued rent expense 70,005 56,891
Deferred income taxes 652,000 358,000
Shareholders' equity:
Common stock, without par value
authorized, 8,000,000 shares;
issued September 30, 1996,
5,403,576 shares;
December 31, 1995,
5,188,591 shares 360,239 345,906
Additional paid in capital 2,079,783 1,304,997
Retained earnings 5,582,004 4,709,858
----------- -----------
Total shareholders' equity 8,022,026 6,360,761
----------- -----------
Total $16,567,737 $14,384,888
=========== ===========
</TABLE>
See notes to condensed financial statements.<PAGE>
TIMBERLINE SOFTWARE CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
- ----------------------------------------------------------------
<TABLE>
<CAPTION>
1996 1995
---------- ----------
<S> <C> <C>
Net revenue $6,945,025 $5,766,128
---------- ----------
Cost and expenses:
Cost of revenue 875,833 537,488
Customer support 1,793,867 1,292,178
Product development 1,419,100 1,247,164
Sales and marketing 1,663,209 1,462,365
General and administrative 958,968 887,776
---------- ----------
Total cost and expenses 6,710,977 5,426,971
---------- ----------
Income from operations 234,048 339,157
Other income 105,967 84,888
---------- ----------
Income before income taxes 340,015 424,045
Provision for income taxes 2,000 130,000
---------- ----------
Net income $ 338,015 $ 294,045
========== ==========
Earnings per share $ .06 $ .05
========== ==========
Weighted average common shares
outstanding 5,692,207 5,523,702
========== ==========
See notes to condensed financial statements.
</TABLE>
<PAGE>
TIMBERLINE SOFTWARE CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
- ----------------------------------------------------------------
<TABLE>
<CAPTION>
1996 1995
----------- -----------
<S> <C> <C>
Net revenue $20,436,348 $17,630,909
----------- -----------
Cost and expenses:
Cost of revenue 2,540,034 1,908,080
Customer support 4,872,304 3,693,811
Product development 3,434,944 3,776,898
Sales and marketing 5,038,638 4,389,605
General and administrative 2,891,060 2,867,803
----------- -----------
Total cost and expenses 18,776,980 16,636,197
----------- -----------
Income from operations 1,659,368 994,712
Other income 301,055 269,776
----------- -----------
Income before income taxes 1,960,423 1,264,488
Provision for income taxes 627,000 449,000
----------- -----------
Net income $ 1,333,423 $ 815,488
=========== ===========
Earnings per share $ .24 $ .15
=========== ===========
Weighted average common shares
outstanding 5,633,202 5,426,771
=========== ===========
See notes to condensed financial statements.
</TABLE>
<PAGE>
TIMBERLINE SOFTWARE CORPORATION
CONDENSED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1996 AND 1995
- ----------------------------------------------------------------
<TABLE>
<CAPTION>
1996 1995
---------- -----------
<S> <C> <C>
Net cash provided by
operating activities $2,424,605 $2,329,662
---------- ----------
Cash flows from investing
activities:
Payments for property
and equipment (1,520,056) (749,964)
Capitalized software costs (918,619) (58,021)
Proceeds from temporary
cash investments 4,600,000 3,500,000
Purchase of temporary and other
cash investments (7,576,726) (3,488,763)
Other investing activities 1,050 15,713
---------- ---------
Net cash used in investing
activities (5,414,351) (781,035)
---------- ---------
Cash flows from financing
activities:
Proceeds from issuance of
common stock 789,119 421,520
Common stock reacquired - (160,098)
Dividends paid (461,277) (273,683)
---------- ----------
Net cash provided by (used in)
financing activities 327,842 (12,261)
---------- ----------
Net increase (decrease) in cash
and cash equivalents (2,661,904) 1,536,366
Cash and cash equivalents,
beginning of the year 3,856,533 1,411,611
---------- ----------
Cash and cash equivalents,
end of period $1,194,629 $2,497,977
========== ==========
Supplemental information:
Cash paid during the period for
income taxes $1,069,502 $1,034,150
========== ==========
See notes to condensed financial statements.
</TABLE>
<PAGE>
TIMBERLINE SOFTWARE CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS
- ----------------------------------------------------------------
1. Condensed financial statements
Certain information and note disclosures normally included
in financial statements prepared in accordance with
generally accepted accounting principles have been omitted
from these condensed financial statements. These condensed
financial statements should be read in conjunction with the
financial statements and notes thereto included in the
Company's Form 10-KSB for the year ended December 31, 1995.
The balance sheet at December 31, 1995 has been condensed
from the audited balance sheet as of that date. The results
of operations for the three and nine month periods ended
September 30, 1996 and 1995 are not necessarily indicative
of the operating results for the full year.
In the opinion of management, all adjustments, consisting of
normal recurring adjustments, have been made to present
fairly the Company's financial position at September 30,
1996 and the results of its operations and its cash flows
for the three and nine month periods ended September 30,
1996 and 1995.
2. Accounting pronouncement
In October 1995, the Financial Accounting Standards Board
issued SFAS No. 123, "Accounting for Stock-Based
Compensation." SFAS No. 123 requires expanded disclosures
of stock-based compensation arrangements with employees and
encourages (but does not require) compensation cost to be
measured based on the fair value of the equity instrument
awarded. Companies are permitted, however, to continue to
apply Accounting Principles Board (APB) Opinion No. 25,
"Accounting for Stock issued to Employees," which recognizes
compensation cost based on the intrinsic value of the equity
instrument awarded. The Company will continue to apply APB
Opinion No. 25 to its stock-based compensation awards to
employees and will disclose the required pro forma effect on
net income and earnings per share in its financial
statements for the year ending December 31, 1996.
3. Stock split
On April 18, 1996, the Company's Board of Directors approved
a three-for-two stock split to shareholders of record on
May 3, 1996. All common shares and per share amounts in
these condensed financial statements have been retroactively
adjusted to reflect this change.
4. Income taxes
In August 1996, legislation was enacted which renewed the
federal research tax credit for the period July 1, 1996
through May 31, 1997. As a result of this legislation and
the recording of research tax credits which were not
previously recognized, the Company revised its estimated
effective income rate for 1996 from 39 percent to 32
percent. The effect of this revision is reflected in the
income tax provision for the three months ended September
30, 1996 which virtually eliminated the income tax expense
for that interim period.
<PAGE>
Item 2. Management's Discussion and Analysis or Plan of
Operation
TIMBERLINE SOFTWARE CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
- ------------------------------------------------------------
Results of Operations
- ---------------------
NET REVENUE. Net revenue increased 20 percent to $6,945,000
in the three months ended September 30, 1996 compared to
$5,766,000 in the comparable period in 1995. A major
component of net revenue, software sales, increased two
percent to $3,126,000 in the 1996 period compared to
$3,071,000 in the 1995 period, primarily due to increased
sales of Construction Gold Extended and the June 1996
release of Construction Gold Standard and Precision
Estimating Standard, the Company's newest Windows-based
software products. The Windows-based software product sales
increased 36 percent in the three months ended September 30,
1996 over the same period in 1995. This increase was
partially offset by decreased sales of the Company's DOS-
based software products in the construction, estimating and
architect and engineer product lines. Overall, construction
and property management software sales increased, sales of
architect and engineer software decreased, and estimating
software sales were relatively constant in the third quarter
of 1996 compared to the same quarter in 1995. Software
sales represented 45 percent of net revenue in the three
months ended September 30, 1996 compared to 53 percent in
the same period in 1995. Management believes software
sales, as a percent of net revenue, will increase in the
coming quarter.
Service fees from maintenance, support and training, which
represented 50 percent and 45 percent of net revenue for the
three months ended September 30, 1996 and 1995,
respectively, increased 32 percent to $3,452,000 in the 1996
period from $2,618,000 for the comparable period in 1995.
The increase in service fees was principally due to a
significant increase in training fees as a result of
increased sales of Construction Gold Extended and
Construction Gold Standard. Maintenance and support fees
also increased significantly as a result of the Company's
larger user base. The Company continues to anticipate that
service fees will represent a significant, but not
necessarily increasing, percentage of net revenue.
For the nine months ended September 30, 1996, net revenue
increased 16 percent to $20,436,000 from $17,631,000 for the
nine months ended September 30, 1995. Software sales
increased seven percent to $10,061,000 compared to
$9,363,000 for the comparable period in 1995, primarily due
to the continued increase in sales of Construction Gold
Extended and sales from the June 1996 release of the
Construction Gold Standard and Precision Estimating Standard
product lines. The increase in software sales was partially
offset by a decrease in architect and engineer software
sales and a large decrease in property management software
sales as a sale to a large national account in the 1995
period did not reoccur in the 1996 period. Software sales
represented 49 percent of net revenue for the nine months
ended September 30, 1996 compared to 53 percent for the same
period in 1995.
Service fees from maintenance, support and training, which
represented 48 percent and 45 percent of net revenue for the
nine months ended September 30, 1996 and 1995, respectively,
increased 22 percent to $9,762,000 in the 1996 period from
$8,003,000 for the comparable period in 1995. The increase
in service fees was principally due to the increase in
maintenance and support fees resulting from the Company's
larger user base and, to a lesser degree, an increase in
training fees arising from sales of the Construction Gold
Extended and Construction Gold Standard.
COST OF REVENUE. Cost of revenue, as a percentage of net
revenue, increased to 13 percent for the three months ended
September 30, 1996 from nine percent for the comparable
period in 1995. For the nine months ended September 30,
1996, cost of revenue, as a percentage of net revenue, was
12 percent compared to 11 percent for the comparable period
in 1995. These percentage increases were primarily due to
higher costs associated with the significant increase in
training in 1996 and lower software costs in 1995 as a
result of a refund for services rendered from a vendor which
provided software assembly and shipping services to the
Company.
OPERATING EXPENSES. Operating expenses increased 19 percent
to $5,835,000 for the three months ended September 30, 1996
from $4,889,000 for the comparable period in 1995. For the
nine months ended September 30, 1996, operating expenses
also increased 10 percent to $16,237,000 from $14,728,000
for the same period in 1995.
Customer support expenses increased 39 percent to $1,794,000
for the three months ended September 30, 1996 from
$1,292,000 for the same period in 1995. For the nine months
ended September 30, 1996, customer support expenses
increased 32 percent to $4,872,000 from $3,694,000 for the
comparable period in 1995. The increases were primarily due
to additional personnel costs required to handle the
increased demand for support and training services resulting
from the increased sales of Construction Gold Extended and
Construction Gold Standard. The Company anticipates
continuing increases in customer support expenses in order
to meet the demands of its customers and to maintain a high
quality level of service.
Product development expenses increased 14 percent to
$1,419,000 for the three months ended September 30, 1996
from $1,247,000 for the comparable period in 1995. For the
nine months ended September 30, 1996, product development
expenses decreased nine percent to $3,435,000 from
$3,777,000 for the same period in 1995. The decrease in
expenses for the nine months ended September 30, 1996 from
the same period in 1995 was principally due to the
capitalization of expenses in 1996 related to the
development of the software products operating in the
Windows environment for the estimating and construction
product lines released at the end of June 1996. The amount
of product development costs capitalized was $47,000 and
$38,000 respectively, for the three months ended September
30, 1996 and 1995 and $919,000 and $58,000, respectively,
for the nine months ended September 30, 1996 and 1995.
Without the effect of the capitalization of product
development expenses, total product development expenses
increased 14 percent for both the three and nine months
ended September 30, 1996 over the comparable periods in
1995. This was due primarily to additional personnel
required to maintain the Company's existing software
products and to develop and test the new software products
in the Windows environment. The Company anticipates that
eventually all of its products will operate in the Windows
environment and that additional personnel will be required
in the future. Capitalized product development costs are
amortized to cost of revenue over the estimated life of the
software products after the products have been released for
sale.
Sales and marketing expenses increased 14 percent to
$1,663,000 in the three months ended September 30, 1996 from
$1,462,000 for the comparable period in 1995. For the nine
months ended September 30, 1996, sales and marketing
expenses increased 15 percent to $5,039,000 from $4,390,000
for the same period in 1995. The increases were primarily
due to increases in marketing personnel and advertising
expenses and product marketing expenses for the new Windows-
based software products. Sales and marketing expenses
remained relatively constant at approximately 24 to 25
percent of net revenue for the three and nine months ended
September 30, 1996 and 1995.
General and administrative expenses increased eight percent
to $959,000 for the three months ended September 30, 1996
from $888,000 for the comparable period in 1995, but as a
percentage of net revenue, declined to 14 percent in 1996
from 15 percent in 1995. The increase in expenses was
primarily due to increased personnel and equipment costs
offset in part by lower bad debt expense. For the nine
months ended September 30, 1996, general and administrative
expenses increased one percent to $2,891,000 from $2,868,000
for the same period in 1995 and, as a percentage of net
revenue, declined to 14 percent in 1996 from 16 percent in
1995. The increase in expenses for the nine months ended
September 30, 1996 was primarily due to increased personnel
and equipment costs offset in part by a $245,000 reduction
in bad debt expense. General and administrative expenses
for 1995 included a large bad debt expense for the write-off
of a receivable from a Canadian customer that went bankrupt
in 1995.
PROVISION FOR INCOME TAXES. As a percentage of income
before income taxes, the provision for income taxes was one
percent and 31 percent, respectively, for the three months
ended September 30, 1996 and 1995. For the nine months
ended September 30, 1996 and 1995, these percentages were 32
percent and 36 percent, respectively. The decrease in the
effective tax rate for 1996 was due to the enactment of
legislation in August 1996 which renewed the federal
research tax credit for the period July 1996 through May
1997 and the recording of research and development tax
credits which were not previously recognized.
SALE OF ARCHITECT AND ENGINEER PRODUCT LINE. In September
1996, the Company sold its architect and engineer (A&E)
product line to a non-affiliated privately-held company.
According to the terms of the agreement, the purchaser
acquired the rights and obligations to provide maintenance
and support to the Company's former A&E users, acquired the
Company's A&E-specific software and rights to sell and
modify some of the Company's DOS-based and Windows-based
software products used currently by the A&E users, as well
as the right to use some of the Company's software
development tools. In addition to an initial payment for
the rights acquired above, the purchaser will pay royalties
to the Company on their future service fee revenue and
software sales.
The A&E product line revenue represented approximately six
percent of the Company's net revenue for the nine months
ended September 30, 1996 and eight percent of the Company's
net revenue for the year ended December 31, 1995. The
Company believes that the sale of the A&E product line will
not have a significant effect on the Company's results of
operations for 1996 as the Company anticipates that future
royalty payments will equal or exceed the net operating
income previously generated by that product line. It will
also allow the Company to focus its resources on its major
product lines.
Capital Resources and Liquidity
- -------------------------------
During the nine months ended September 30, 1996, net cash
provided by operations was $2,425,000 compared to $2,330,000
for the same period in 1995. Working capital decreased to
$706,000 at September 30, 1996 from $3,894,000 at December
31, 1995, primarily due to the decrease in cash, cash
equivalents and temporary cash investments. Cash, cash
equivalents and temporary cash investments, which
represented 26 percent of total assets at September 30,
1996, decreased $3,009,000 since December 31, 1995,
principally due to the shifting in 1996 of cash investments
amounting to $3,324,000 from short-term to long-term
maturities. Net accounts receivable at September 30, 1996
decreased $434,000 since December 31, 1995, reflecting a
seasonal decline in sales in September 1996 from December
1995. Other receivables increased $136,000 since December
31, 1995 primarily due to increased accrued interest on cash
investments. Other current assets increased $368,000 since
December 31, 1995 primarily due to an increase in refundable
income taxes. Net property and equipment increased $822,000
since December 31, 1995 due to the purchase of additional
computer equipment for new customer support personnel, the
upgrading of computer equipment for the product development
group, and new equipment for the Company's telecommunication
and management information system. Net purchased software
costs increased $268,000 since December 31, 1995 primarily
due to the purchase of software for the Company's management
information system. Net capitalized software costs
increased $746,000 since December 31, 1995 primarily due to
the addition of $919,000 of capitalized software development
costs during the nine months ended September 30, 1996
related to the development of the new Windows-based software
for the estimating and construction product lines that were
released in June 1996.
Accounts payable increased $313,000 since December 31, 1995
primarily due to the purchase at the end of September 1996
of software for the Company's management information system.
Deferred revenues increased $327,000 in the same period
primarily due to increased billings for annual maintenance
and support services and for training classes. This
increase was offset in part by the elimination of deferred
revenue related to the sale of the architect and engineer
software product line. Revenue from annual maintenance and
support service billings is recognized monthly over the
terms of the contracts while revenue from training billings
is recognized when the training occurs. Accrued employee
expenses decreased $215,000 during the first nine months of
1996 primarily due to accrued profit sharing expense at the
end of 1995 with no corresponding expense at September 30,
1996. Deferred income taxes increased $294,000 since
December 31, 1995, primarily due to the establishment of
additional deferred income tax liability on the increase in
net capitalized software costs.
During the first nine months of 1996, the Company declared
three quarterly cash dividends amounting to $461,000. In
October 1996, the Company's Board of Directors declared a
regular quarterly cash dividend of $.03 per share. The
Company anticipates continuing to pay quarterly cash
dividends.
In April 1996, the Company's Board of Directors approved a
three-for-two common stock split to shareholders of record
on May 3, 1996. All common shares and per share amounts in
this Report have been retroactively adjusted to reflect this
change.
The Company maintains no line of credit as it believes its
cash reserves are sufficient to provide anticipated working
capital needs for at least the next twelve months. It is
anticipated that all future capital expenditures for the
remainder of the year will be funded through current cash
balances and cash provided by operations.
Safe Harbor for Forward-Looking Statements
- ------------------------------------------
From time to time, the Company or its representatives have
made or may make forward-looking statements, orally or in
writing, including in this Report. Such forward-looking
statements may be included in, without limitation, press
releases, oral statements made with the approval of an
authorized executive officer of the Company and filings with
the Securities and Exchange Commission. The words or
phrases "anticipates", "expects", "will continue",
"estimates", "projects", or similar expressions are intended
to identify "forward-looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995.
The Company's forward-looking statements are subject to
certain risks, trends, and uncertainties that could cause
actual results to vary materially from anticipated results,
including, without limitation, the following: delays in new
product releases caused by programming errors or "bugs",
failures by the Company's outside vendors to perform as
promised, changes in the software operating systems for
which the Company's products are written, or increased
competition and changes in general market conditions.
<PAGE>
PART II. Other Information
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
(27) Financial Data Schedule
(b) Reports on Form 8-K
No Form 8-K was filed during the three months
ended September 30, 1996.
SIGNATURES
In accordance with the requirements of the Securities
Exchange Act of 1934, the registrant caused this report to
be signed on its behalf by the undersigned, thereunto duly
authorized.
TIMBERLINE SOFTWARE CORPORATION
-------------------------------
(Registrant)
Date November 12, 1996 /s/ Thomas P. Cox
Thomas P. Cox, Senior Vice
President-Finance
(Chief Financial Officer)
<PAGE>
FORM 10-QSB
Exhibit Index
Exhibit Page
- ------- ----
(27) Financial Data Schedule 17
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION
EXTRACTED FROM TIMBERLINE SOFTWARE CORPORATION'S
CONDENSED FINANCIAL STATEMENTS CONTAINED IN ITS
QUARTERLY REPORT ON FORM 10-QSB FOR THE PERIOD ENDING
SEPTEMBER 30, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<MULTIPLIER> 1
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 1,194,629
<SECURITIES> 3,091,832
<RECEIVABLES> 2,930,435
<ALLOWANCES> 178,674
<INVENTORY> 292,030
<CURRENT-ASSETS> 8,529,534
<PP&E> 7,106,401
<DEPRECIATION> 3,921,123
<TOTAL-ASSETS> 16,567,737
<CURRENT-LIABILITIES> 7,823,707
<BONDS> 0
<COMMON> 360,238
0
0
<OTHER-SE> 7,661,787
<TOTAL-LIABILITY-AND-EQUITY> 16,567,737
<SALES> 20,436,345 <F1>
<TOTAL-REVENUES> 20,436,345
<CGS> 2,540,034
<TOTAL-COSTS> 18,776,980
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,960,423
<INCOME-TAX> 627,000
<INCOME-CONTINUING> 1,333,423
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,333,423
<EPS-PRIMARY> .24
<EPS-DILUTED> .24
<FN>
<F1> Amount includes revenue from services which is not
separately presented for interim reports.
</FN>
</TABLE>
