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 June 30, 1997.
[ ] 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 August 11, 1997, approximately 5,554,951 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 JUNE 30, 1997
TABLE OF CONTENTS
- ---------------------------------------------------------
PART I. FINANCIAL INFORMATION PAGE
Item 1. Financial Statements
Condensed balance sheets, June 30, 1997 and
December 31, 1996 3
Condensed statements of operations for the three
months ended June 30, 1997 and 1996 4
Condensed statements of operations for the six
months ended June 30, 1997 and 1996 5
Condensed statements of cash flows for the six
months ended June 30, 1997 and 1996 6
Notes to condensed financial statements 7
Item 2. Management's Discussion and Analysis or
Plan of Operation 9
PART II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of
Security Holders 14
Item 6. Exhibits and Reports on Form 8-K 14
SIGNATURES 15
EXHIBIT INDEX 16
<PAGE>
PART I. Financial Information
Item 1. Financial Statements
TIMBERLINE SOFTWARE CORPORATION
CONDENSED BALANCE SHEETS
JUNE 30, 1997 AND DECEMBER 31, 1996
- ----------------------------------------------------------------
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
----------- -----------
<S> <C> <C>
ASSETS
- ------
Current assets:
Cash and cash equivalents $ 3,542,888 $ 3,128,703
Temporary investments 5,865,268 1,447,521
Accounts receivable, less allowance
for doubtful accounts
(June 30, 1997, $166,407;
December 31, 1996, $178,674) 3,260,540 3,693,679
Other receivables 213,140 156,839
Inventories 267,645 308,751
Other current assets 1,123,960 905,545
----------- -----------
Total current assets 14,273,441 9,641,038
----------- -----------
Property and equipment 7,846,746 7,236,600
Less accumulated depreciation
and amortization 4,397,415 3,969,984
----------- -----------
Property and equipment - net 3,449,331 3,266,616
----------- -----------
Capitalized software costs - net 1,252,453 1,110,023
Purchased software - net 675,502 602,774
Investments - 3,319,147
Other assets 102,655 102,629
----------- -----------
Total $19,753,382 $18,042,227
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
Current liabilities:
Accounts payable $ 534,838 $ 763,645
Accrued commissions/royalties 196,993 193,915
Deferred revenues 6,636,475 5,962,047
Accrued employee expenses 923,580 1,143,052
Other current liabilities 254,120 253,627
----------- -----------
Total current liabilities 8,546,006 8,316,286
----------- -----------
Accrued rent expense 55,362 65,124
Deferred income taxes 856,000 746,000
Shareholders' equity:
Common stock, without par value
authorized, 8,000,000 shares;
issued - June 30, 1997,5,548,251
shares; December 31, 1996,
5,465,526 shares 369,883 364,368
Additional paid in capital 2,652,222 2,282,129
Retained earnings 7,252,518 6,268,320
Unrealized holding gain on
investments 21,391 -
----------- -----------
Total shareholders' equity 10,296,014 8,914,817
----------- -----------
Total $19,753,382 $18,042,227
=========== ===========
</TABLE>
See notes to condensed financial statements.
<PAGE>
TIMBERLINE SOFTWARE CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS ENDED JUNE 30, 1997 AND 1996
- ----------------------------------------------------------------
<TABLE>
<CAPTION>
1997 1996
---------- ----------
<S> <C> <C>
Net revenue $8,224,968 $6,813,126
---------- ----------
Cost and expenses:
Cost of revenue 907,351 856,316
Customer support 1,578,515 1,546,605
Product development 1,717,644 1,032,371
Sales and marketing 1,432,588 1,553,517
General and administrative 1,116,413 1,042,777
---------- ----------
Total cost and expenses 6,752,511 6,031,586
---------- ----------
Income from operations 1,472,457 781,540
Other income 104,403 98,010
---------- ----------
Income before income taxes 1,576,860 879,550
Provision for income taxes 594,000 337,000
---------- ----------
Net income $ 982,860 $ 542,550
========== ==========
Earnings per share $ .17 $ .10
========== ==========
Weighted average common shares
outstanding 5,719,539 5,687,194
========== ==========
</TABLE>
See notes to condensed financial statements.
<PAGE>
TIMBERLINE SOFTWARE CORPORATION
CONDENSED STATEMENTS OF OPERATIONS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
- ----------------------------------------------------------------
<TABLE>
<CAPTION>
1997 1996
---------- ----------
<S> <C> <C>
Net revenue $15,732,664 $13,491,323
----------- -----------
Cost and expenses:
Cost of revenue 1,830,906 1,664,201
Customer support 3,154,740 2,993,712
Product development 3,542,183 2,306,818
Sales and marketing 3,068,621 3,098,046
General and administrative 2,257,128 2,003,226
----------- -----------
Total cost and expenses 13,853,578 12,066,003
----------- -----------
Income from operations 1,879,086 1,425,320
Other income 207,669 195,088
----------- -----------
Income before income taxes 2,086,755 1,620,408
Provision for income taxes 772,000 625,000
----------- -----------
Net income $ 1,314,755 $ 995,408
=========== ===========
Earnings per share $ .23 $ .18
=========== ===========
Weighted average common shares
outstanding 5,715,565 5,603,376
=========== ===========
</TABLE>
See notes to condensed financial statements.
<PAGE>
TIMBERLINE SOFTWARE CORPORATION
CONDENSED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1997 AND 1996
- ----------------------------------------------------------------
<TABLE>
<CAPTION>
1997 1996
---------- ----------
<S> <C> <C>
Net cash provided by
operating activities $2,626,360 $2,044,146
---------- ----------
Cash flows from investing
activities:
Payments for property,
equipment and purchased software (833,991) (895,548)
Capitalized software costs (346,026) (871,902)
Proceeds from investments 1,910,000 3,500,000
Purchase of investments (2,987,209) (6,058,697)
Other -- 400
---------- ----------
Net cash used in
investing activities (2,257,226) (4,325,747)
---------- ----------
Cash flows from financing
activities:
Proceeds from issuance of
common stock 375,608 592,433
Dividends paid (330,557) (299,294)
---------- ----------
Net cash provided by
financing activities 45,051 293,139
---------- ----------
Net increase (decrease) in cash
and cash equivalents 414,185 (1,988,462)
Cash and cash equivalents,
beginning of the year 3,128,703 3,856,533
---------- ----------
Cash and cash equivalents,
end of period $3,542,888 $1,868,071
========== ==========
Supplemental information:
Cash paid during the period for
income taxes $ 632,193 $ 488,918
========== ==========
</TABLE>
See notes to condensed financial statements.
<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, 1996.
The balance sheet at December 31, 1996 has been condensed
from the audited balance sheet as of that date. The results
of operations for the three and six month periods ended
June 30, 1997 and 1996 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 June 30, 1997 and
the results of its operations and its cash flows for the
three and six month periods ended June 30, 1997 and 1996.
2. Accounting pronouncement
In February 1997, the Financial Accounting Standards Board
(FASB) issued SFAS No. 128, "Earnings per Share," which
establishes new standards for computing and presenting
earnings per share (EPS) to entities having publicly held
common stock or potential common stock. SFAS No. 128
replaces the presentation of a primary EPS with a basic EPS,
requires dual presentation of basic and diluted EPS on the
face of the income statement for entities with complex
capital structures, and additional disclosures regarding the
computation of EPS.
SFAS No. 128 will require changes in the computation and
presentation of the Company's EPS commencing with the
financial statements for the year ending December 31, 1997.
Earlier application of this Statement is not permitted.
However, if the Company computed its EPS for the three and
six month periods ended June 30, 1997 and 1996 in a manner
consistent with SFAS No. 128, the pro forma amounts would
not be materially different from the EPS presently reported.
In June 1997, the FASB issued SFAS No. 130, "Reporting
Comprehensive Income," which established standards for
reporting comprehensive income and its components. This
additional reporting requirement will become effective for
the Company during the year ending December 31, 1998.
In June 1997, the FASB issued SFAS No. 131, "Disclosures
about Segments of an Enterprise and Related Information,"
which established standards for disclosure about operating
segments in annual financial statements and selected
<PAGE>
information about those operating segments in interim
financial statements. It also established standards for
related disclosures about products and services, geographic
areas, and major customers. The new standard will become
effective for the Company during the year ending
December 31, 1998. The Company believes that any segment
information required to be disclosed under SFAS No. 131 will
provide expanded disclosure of operating statement and
balance sheet items. The Company had not yet completed its
analysis on the specific additional information that will be
required under this new standard.
3. Investments
During the second quarter of 1997, the Company transferred
its investments from the held-to-maturity category to the
available-for-sale category becaue these investments may not
be held to maturity. This transfer resulted from initial
plans to use a portion of the investments to finance the
acquisition of a building site for its new corporate
offices, which is expected to commence construction later in
the year. The Company also intends to use these investments
if additional funds are needed for other purposes.
4. Reclassifications
Certain reclassifications have been made in the 1996
financial statements to conform to the 1997 presentation.
<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 21 percent to $8,225,000 in
the three months ended June 30, 1997 compared to $6,813,000 for
the comparable period in 1996. A major component of net revenue,
software sales, increased 21 percent to $4,282,000 in the 1997
period compared to $3,551,000 in the 1996 period. Software sales
increased in all of the Company's current product lines.
Construction software sales, which constitute over 60 percent of
the Company's total software sales, increased 22 percent in 1997
over the same period in 1996. This was primarily due to increased
sales of Construction Gold Standard, which was released at the
end of June 1996 and the continuing increase in sales of
Construction Gold Extended. Estimating software sales increased
19 percent primarily due to increased sales of Precision
Estimating Standard, which was released at the end of June 1996.
Property management software sales, which represent less than 10
percent of the Company's total software sales, increased 114
percent due to sales of Gold Collection for Property Management,
which was released at the end of March 1997. Total software
sales represented 52 percent of net revenue for the three months
ended June 30, 1997 and 1996. The Company believes that software
sales, as a percentage of net revenue, will continue at about
that same level throughout the remainder of 1997.
Service fees from maintenance, support and training, which
represented 46 percent and 47 percent of net revenue for the
three months ended June 30, 1997 and 1996, respectively,
increased 19 percent to $3,778,000 in the 1997 period from
$3,177,000 for the comparable period in 1996. The increase in
service fees was principally due to a significant increase in
maintenance and support fees as a result of increased software
sales of Construction Gold Extended and Construction Gold
Standard and the continuing increase in the Company's user base.
The Company anticipates that service fees will continue to
represent a significant, but not necessarily an increasing,
percentage of net revenue.
Net revenue increased 17 percent to $15,733,000 for the six
months ended June 30, 1997 compared to $13,491,000 for the
comparable period in 1996. Software sales increased 16 percent
to $8,051,000 in the 1997 period compared to $6,935,000 in the
1996 period. Software sales increased in all of the Company's
current product lines. Construction software sales increased 21
percent in 1997 over the same period in 1996, primarily due to
increased sales of Construction Gold Standard, which was released
at the end of June 1996 and the continuing increase in sales of
Construction Gold Extended. Estimating software sales increased
20 percent due to increased sales of Precision Estimating
Standard, which was released at the end of June 1996. Property
<PAGE>
management software sales increased 33 percent due to sales of
Gold Collection for Property Management, which was released at
the end of March 1997. Total software sales represented 51
percent of net revenue for both the six months ended June 30,
1997 and 1996.
Service fees from maintenance, support and training, which
represented 46 percent and 47 percent of net revenue for the six
months ended June 30, 1997 and 1996, respectively, increased 15
percent to $7,246,000 in the 1997 period from $6,310,000 for the
comparable period in 1996. The increase in service fees was
principally due to a significant increase in maintenance and
support fees as a result of increased software sales of
Construction Gold Extended and Construction Gold Standard and the
continuing increase in the Company's user base.
COST OF REVENUE. Cost of revenue, as a percentage of net
revenue, was 11 percent for the three months ended June 30, 1997
compared to 13 percent for the comparable period in 1996. The
decrease in this percentage was primarily due to lower costs
associated with software sales. For the six months ended
June 30, 1997 and 1996, cost of revenue, as a percentage of net
revenue, remained constant at 12 percent. The Company believes
that cost of revenue, as a percentage of net revenue, will remain
at approximately that same level throughout 1997.
OPERATING EXPENSES. Operating expenses increased 13 percent to
$5,845,000 for the three months ended June 30, 1997 from
$5,175,000 for the comparable period in 1996. For the six months
ended June 30, 1997, operating expenses increased 16 percent to
$12,023,000 from $10,402,000 for the same period in 1996.
Customer support expenses increased two percent to $1,579,000 for
the three months ended June 30, 1997 from $1,547,000 for the same
period in 1996. For the six months ended June 30, 1997, customer
support expenses increased five percent to $3,155,000 from
$2,994,000 for the comparable period in 1996. The increase was
primarily due to increased personnel and equipment costs required
to handle the increased demand for support and consulting
services resulting from the increased sales of Construction Gold
Extended and Construction Gold Standard software. The Company
anticipates customer support expenses to continue to increase for
the remainder of 1997 in order to meet the demands of its
customers and to maintain a high quality level of service.
Product development expenses increased 66 percent to $1,718,000
for the three months ended June 30, 1997 from $1,032,000 for the
comparable period in 1996. For the six months ended June 30,
1997, product development expenses increased 54 percent to
$3,542,000 from $2,307,000 for the same period in 1996. The
increase was primarily due to increased personnel costs,
additional personnel to develop on-line help and training
materials for the new software products, and a reduction in the
amount of capitalized software development costs in 1997 compared
to 1996. Capitalized software development costs, which reduce
the amount of product development expenses recognized, amounted
to $221,000 for the three months ended June 30, 1997 compared to
$625,000 for the same period in 1996. For the six months ended
<PAGE>
June 30, 1997 capitalized software development costs amounted to
$346,000 compared to $872,000 for the comparable period in 1996.
The Company anticipates additional capitalized software
development costs in 1997, which will occur primarily in the
third quarter.
Sales and marketing expenses decreased eight percent to
$1,433,000 in the three months ended June 30, 1997 from
$1,554,000 for the comparable period in 1996. For the six months
ended June 30, 1997, sales and marketing expenses decreased one
percent to $3,068,000 from $3,098,000 in the same period for
1996. As a percentage of net revenue, sales and marketing
expenses decreased to 17 percent for the three months ended
June 30, 1997 from 23 percent in 1996. For the six months ended
June 30, 1997 and 1996, the percentages were 20 percent and 23
percent, respectively. The decrease in expenses was primarily
due to lower trade show expenses and a reduction in sales
personnel costs.
General and administrative expenses increased seven percent to
$1,116,000 for the three months ended June 30, 1997 from
$1,043,000 for the comparable period in 1996. For the six months
ended June 30, 1997, general and administrative expenses
increased 13 percent to $2,257,000 from $2,003,000 for the same
period in 1996. As a percentage of net revenue, these expenses
decreased to 14 percent for the three amd six months ended
June 30, 1997 from 15 percent for the same periods in 1996. The
increase in expenses was primarily due to increased personnel and
equipment costs.
PROVISION FOR INCOME TAXES. As a percentage of income before
income taxes, the provision for income taxes remained constant at
38 percent for the three months ended June 30, 1997 and 1996.
For the six months ended June 30, 1997 and 1996, the provision
for income taxes, as a percentage of income before income taxes,
was 37 percent and 39 percent, respectively. The year-to-date
tax rate was lower in 1997 than in 1996 primarily due to the
effect on the provision of estimated research and development tax
credits for 1997. The income tax provision for the six months
ended June 30, 1996 did not take into effect any such tax credits
as there was no legislation enacted at that time for any research
and development tax credit.
Capital Resources and Liquidity
- -------------------------------
During the six months ended June 30, 1997, net cash provided by
operations was $2,626,000 compared to $2,044,000 for the same
period in 1996. Working capital has increased to $5,727,000 at
June 30, 1997 from $1,325,000 at December 31, 1996, primarily due
to the increase in cash, cash equivalents, and temporary
investments. Cash, cash equivalents, and temporary investments,
which represented 48 percent of total assets at June 30, 1997,
increased $4,832,000 since December 31, 1996, primarily due to
cash provided by operations and a reclassification of investments
from long-term to short-term. Investments were previously
classified in the held-to-maturity category, and accordingly,
<PAGE>
many of the investments were classified as long-term investments,
based on their maturity date. However, the investments have been
transferred into the available-for-sale category and have been
classified as current assets. Net accounts receivable at
June 30, 1997 decreased $433,000 since December 31, 1996,
reflecting a seasonal decline in revenue in June 1997 from
December 1996. Other current assets increased $218,000 since
December 31, 1996 primarily due to an increase in prepaid
insurance costs and prepaid and refundable income taxes.
Net property and equipment and purchased software increased
$255,000 since December 31, 1996. Exclusive of depreciation and
amortization expense, which amounted to $571,000, equipment and
software purchases amounted to $834,000 during the six months
ended June 30, 1997. Purchases relate primarily to acquisition
of new computer equipment, upgrade of the telecommunication
system, and expenditures related to the acquisition of a building
site and construction of new corporate offices, which is to
commence in the latter part of 1997. Expenditures for equipment
and software is expected to be funded through current cash
balances and cash provided by operations. The acquisition of the
building site and construction of the new corporate offices is
expected to be funded through a combination of existing cash and
investment balances, and construction loans.
Net capitalized software costs increased $142,000 since
December 31, 1996 due primarily to the capitalization of software
development costs related to Gold Collection for Property
Management and new construction and estimating software expected
to be released in the second half of 1997.
Accounts payable decreased $229,000 since December 31, 1996,
primarily due to a decline in amounts owed for outside software
development, marketing costs, and other professional services at
June 30, 1997. Deferred revenues increased $674,000 in the same
period primarily due to increased billings for annual maintenance
and support services. Accrued employee expenses decreased
$219,000 since December 31, 1996 primarily as a result of the
payment of the Company's 1996 contribution to its 401(k) plan.
For the first six months of 1997, the Company has declared two
regular quarterly cash dividends totaling $.06 per share, or
$331,000. In July 1997, the Company's Board of Directors
increased the quarterly dividend rate to $.04 per share. The
Company anticipates continuing to pay quarterly cash dividends.
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," "believes," "expects," "will
continue," "estimates," "projects," or similar expressions are
<PAGE>
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, delays
in acceptance of the Company's products in the marketplace,
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 4. Submission of Matters to a Vote of Security Holders
The Company held its annual meeting of shareholders on
April 29, 1997. Shareholders took the following actions at
the meeting:
1. The shareholders voted to elect all of management's
nominees to the Company's Board of Directors. The
following table sets forth information with respect to
votes cast for and against each nominee:
Votes Votes Shares
For Withheld Not Voted
John Gorman 5,090,593 10,233 371,300
Curtis L. Peltz 5,090,418 10,408 371,300
Leslie F. Clarke,II 5,090,593 10,233 371,300
James A. Meyer 5,090,493 10,333 371,300
Donald L. Tisdel 5,089,893 10,933 371,300
There were no broker non-votes.
2. The shareholders voted to ratify management's selection
of auditors for 1997 by the affirmative vote of
5,072,521 shares, with 18,439 shares voting against the
proposal, 9,866 shares abstaining, and 371,300 shares
not voted. There were no broker non-votes.
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
June 30, 1997.
<PAGE>
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)
/s/ Thomas P. Cox
Date August 13, 1997 _____________________________
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>
<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 ENDED JUNE 30, 1997 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> JUN-30-1997
<CASH> 3,542,888
<SECURITIES> 5,865,268
<RECEIVABLES> 3,426,947
<ALLOWANCES> 166,407
<INVENTORY> 267,645
<CURRENT-ASSETS> 14,273,441
<PP&E> 7,846,746
<DEPRECIATION> 4,397,415
<TOTAL-ASSETS> 19,753,382
<CURRENT-LIABILITIES> 8,546,006
<BONDS> 0
<COMMON> 369,883
0
0
<OTHER-SE> 9,926,131
<TOTAL-LIABILITY-AND-EQUITY> 19,753,382
<SALES> 15,732,664 <F1>
<TOTAL-REVENUES> 15,732,664
<CGS> 1,830,906
<TOTAL-COSTS> 8,527,829
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 2,086,755
<INCOME-TAX> 772,000
<INCOME-CONTINUING> 1,314,755
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,314,755
<EPS-PRIMARY> .23
<EPS-DILUTED> .23
<FN>
<F1> Amount includes revenue from services which is not
separately presented for interim reports
</FN>
</TABLE>
