<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[X] Quarterly report pursuant to section 13 or 15(d) of the Securities Exchange
Act of 1934 for the quarterly period ended September 30, 1997
Commission file number: 1-8306
AIR EXPRESS INTERNATIONAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 36-2074327
(State or Other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization)
120 Tokeneke Road, Darien, Connecticut 06820
(203) 655-7900
(Address of, Including Zip Code, and Telephone Number, Including Area Code,
of Registrant's Principal Executive Offices)
NONE
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 Sections 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 3 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
Indicate the number of shares outstanding of each of the registrant's classes of
common stock, as of the latest practicable date (applicable only to corporate
registrants).
The number of shares of common stock outstanding as of November 12, 1997 was
34,526,143 (Net of 132,388 Treasury Shares).
<PAGE>
AIR EXPRESS INTERNATIONAL CORPORATION
September 1997 Form 10-Q Quarterly Report
Table of Contents
Part I - Financial Information
Page
Item 1. Financial Statements
Condensed Consolidated Balance Sheets as at
September 30, 1997 and December 31, 1996............ 2
Condensed Consolidated Statements of Operations -
three months and nine months ended September 30, 1997
and 1996............................................ 3
Consolidated Statements of Cash Flows -
nine months ended September 30, 1997 and 1996....... 4
Notes to Condensed Consolidated Financial
Statements.......................................... 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations............................ 8
Part II - Other Information
Item 1. Legal Proceedings.............................................. 11
Item 6. Exhibits and Reports on Form 8-K............................... 11
<PAGE>
<TABLE>
Page 2
AIR EXPRESS INTERNATIONAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
Sept 30, 1997 Dec 31, 1996
(Unaudited)
Assets
<S> <C> <C>
Current Assets:
Cash and cash equivalents ......................... $ 64,346 $ 46,516
Accounts receivable, (less allowance for
doubtful accounts of $4,302 and $4,721) .......... 372,355 346,323
Other current assets .............................. 7,460 6,295
Total current assets ........................ 444,161 399,134
Investment in unconsolidated affiliates .............. 18,821 13,991
Restricted funds ..................................... 18,692 --
Property, plant and equipment (less accumulated
depreciation and amortization of $55,703
and $53,455) ........................................ 59,453 61,112
Deposits and other assets ............................ 16,758 15,226
Goodwill (less accumulated amortization
of $11,982 and $10,673) ............................. 85,684 91,866
Total assets ................................ $ 643,569 $ 581,329
Liabilities and stockholders' investment
Current Liabilities:
Current portion of long-term debt ................. $ 3,010 $ 3,915
Bank overdrafts payable ........................... 1,580 2,058
Transportation payables ........................... 192,935 166,686
Accounts payable .................................. 51,562 50,201
Accrued liabilities ............................... 62,066 61,347
Income taxes payable .............................. 8,735 14,691
Total current liabilities ................... 319,888 298,898
Long-term debt .................................... 32,914 16,616
Other liabilities ................................. 6,454 6,729
Total liabilities ........................... 359,256 322,243
Stockholders' Investment:
Capital stock-
Preferred (authorized 1,000,000 shares,
none outstanding) ................................ -- --
Common, $.01 par value (authorized 40,000,000
shares, issued 34,617,938 and 34,179,227 shares .. 346 342
Capital surplus ................................... 141,988 137,060
Cumulative translation adjustments ................ (22,776) (15,633)
Retained earnings ................................. 168,106 137,989
287,664 259,758
Less: 131,451 and 40,958 shares of treasury stock,
at cost ....................................... (3,351) (672)
Total stockholders' investment .................... 284,313 259,086
Total liabilities and stockholders' investment .... $ 643,569 $ 581,329
</TABLE>
The accompanying notes are an integral part of these
financial statements.
<PAGE>
<TABLE>
Page 3
AIR EXPRESS INTERNATIONAL CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In thousands, except
per share data)
Three Months Ended Nine Months Ended
September 30, September 30,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Revenues .................. $ 395,405 $ 340,928 $1,133,151 $ 956,375
Operating expenses:
Transportation .......... 270,401 228,614 773,450 645,185
Terminal ................ 68,008 61,317 196,521 169,458
Selling, general and
administrative ......... 37,258 35,457 111,744 100,411
Operating profit .......... 19,738 15,540 51,436 41,321
Other income (expense):
Interest, net ........... 375 258 853 (1,557)
Other, net .............. 1,179 1,060 3,531 3,087
1,554 1,318 4,384 1,530
Income before provision
for income taxes ......... 21,292 16,858 55,820 42,851
Provision for income taxes 7,929 6,232 20,876 16,369
Net income ................ $ 13,363 $ 10,626 $ 34,944 $ 26,482
Income per common share:
Primary ............... $ .38 $ .32 $ 1.00 $ .85
Fully diluted ......... $ .38 $ .31 $ .99 $ .81
Weighted average number of
common shares (000's):
Primary ............... 35,446 33,537 35,034 31,097
Fully diluted ......... 35,628 34,685 35,354 34,611
</TABLE>
The accompanying notes are an integral part of these
financial statements.
<PAGE>
<TABLE>
Page 4
AIR EXPRESS INTERNATIONAL CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
(Dollars in thousands)
1997 1996
<S> <C> <C>
Cash flows from operating activities:
Net income ......................................... $ 34,944 $ 26,482
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization .................... 9,868 7,214
Amortization of goodwill ......................... 1,935 1,754
Amortization of bond discount .................... -- 115
Deferred income taxes ............................ (85) 357
Equity in earnings of unconsolidated affiliates .. (1,834) (983)
Losses (gains) on sales of assets ................ 12 (129)
Changes in assets and liabilities, net of
business acquisitions:
(Increase) in accounts receivable, net ............ (31,143) (16,079)
(Increase) decrease in other current assets ....... (557) 55
(Increase) decrease in other assets ............... (1,456) 1,764
Increase (decrease) in transportation payables ... 28,357 (12,744)
Increase (decrease) in accounts payable .......... 2,620 (5,902)
Increase in accrued liabilities .................. 816 4,732
(Decrease) increase in income taxes payable ....... (5,229) 1,979
(Decrease) in other liabilities ................... (75) (1,181)
Total adjustments ............................ 3,229 (19,048)
Net cash provided by operating activities ....... 38,173 7,434
Cash flows from investing activities:
Business acquisitions, net of cash acquired ....... -- (7,386)
Restricted funds .................................. (18,692) --
Other investing activities ........................ 700 (1,320)
Proceeds from sales of assets ..................... 624 381
Capital expenditures .............................. (12,038) (8,959)
Investment in unconsolidated affiliates ........... (3,776) (71)
Net cash used in investing activities ........... (33,182) (17,355)
Cash flows from financing activities:
Net (repayments) borrowings in bank overdrafts
payable ............................................ (418) 627
Additions to long-term debt ......................... 19,055 290
Payment of long-term debt ........................... (1,564) (1,297)
Issuance of common stock ............................ 4,932 1,479
Payment of cash dividends ........................... (4,466) (3,218)
Purchase of treasury stock .......................... (2,679) (55)
Net cash provided (used) by financing
activities ..................................... 14,860 (2,174)
Effect of foreign currency exchange rates on cash ....... (2,021) (907)
Net increase (decrease) in cash and cash equivalents .... 17,830 (13,002)
Cash and cash equivalents at beginning of period ........ 46,516 54,463
Cash and cash equivalents at end of period .............. $ 64,346 $ 41,461
</TABLE>
The accompanying notes are an integral part of these
financial statements.
<PAGE>
Page 5
AIR EXPRESS INTERNATIONAL CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
A. The consolidated balance sheet at September 30, 1997, the consolidated
statements of operations for the three-month and nine-month periods ended
September 30, 1997 and 1996, and the consolidated statements of cash flows
for the nine-month periods ended September 30, 1997 and 1996 were prepared
by the Company without audit. In the opinion of management, all adjustments
necessary to present fairly the financial position, results of operations,
and cash flows for the interim periods were made. Certain items in the
September 30, 1996 financial statements were reclassified to conform to the
classification of September 30, 1997 financial statements.
Certain information and footnote disclosures, normally included in
financial statements prepared in accordance with generally accepted
accounting principles, were condensed or omitted. Accordingly, these
condensed consolidated financial statements should be read in conjunction
with the consolidated financial statements and notes thereto included in
the Company's annual report to stockholders for the year ended December 31,
1996.
Statements included herein which are not historical facts are
forward-looking statements. These statements are based upon information
available to the Company on the date hereof. Inherent in these statements
are a variety of risks and other factors, both known and unknown, which may
cause the Company's actual results to differ materially from those in
forward-looking statements. Accordingly, the realization of forward-looking
statements is not certain, and all such statements should be evaluated
based upon the applicable risks and uncertainties affecting the Company.
Consequently, the results of operations for the three and nine month
periods ended September 30, 1997 are not necessarily indicative of the
results of operations expected for the full year ending December 31, 1997.
B. Interest, net was as follows:
<TABLE>
Three Months Ended Nine Months Ended
September 30, September 30,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Interest expense ........ $ (310) $ (355) $(1,089) $(3,367)
Interest income ......... 685 613 1,942 1,810
$ 375 $ 258 $ 853 $(1,557)
</TABLE>
C. Other, net was as follows:
<TABLE>
Three Months Ended Nine Months Ended
September 30, September 30,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Equity in earnings
of unconsolidated
affiliates ............. $ 986 $ 600 $ 2,603 $ 1,780
Foreign exchange gains .. 171 431 940 1,178
Other ................... 22 29 (12) 129
$ 1,179 $ 1,060 $ 3,531 $ 3,087
</TABLE>
<PAGE>
Page 6
D. Supplemental disclosures of cash flow information:
<TABLE>
Three Months Ended Nine Months Ended
September 30, September 30,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Interest and income
taxes paid:
Interest ............... $ 101 $ 216 $ 652 $ 2,776
Income taxes ........... 5,014 3,703 19,458 9,825
$ 5,115 $ 3,919 $ 20,110 $12,601
</TABLE>
Non-cash investing and financing activities:
On July 8, 1996, as a result of conversions of the 6.0% Convertible
Subordinated Debentures ("Debentures"), the Company issued 4,936,134 shares
of its Common Stock valued at approximately $74.5 million.
E. Common Stock Split:
On June 19, 1997, the Company's Board of Directors declared a three-for-two
split of the Company's Common Stock, payable in the form of a stock
dividend. The additional shares were distributed on July 25, 1997 to
shareholders of record on July 11, 1997. Accordingly, all share and per
share information throughout the consolidated financial statements have
been restated to reflect this split.
F. Long-Term Debt:
The Company entered into a ground lease agreement dated July 1, 1997 with
the Port Authority of New York/New Jersey in conjunction with a lease
development agreement entered into with the New York City Industrial
Development Agency for the construction of a 135,000 square foot air cargo
facility terminal building at John F. Kennedy International Airport. The
Company will finance the development in part through the issuance of
tax-exempt New York City Industrial Development Agency Special Facility
Revenue Bonds (1997 Air Express International Corporation Project), Series
1997, in aggregate principal amount of $19.0 million due July 1, 2024 (the
"Series 1997 Bonds").
Interest shall initially be payable at a weekly rate set by the Remarketing
Agent using the minimum rate necessary (as determined by the Remarketing
Agent based on the examination of tax-exempt obligations comparable to the
Series 1997 Bonds known by the Remarketing Agent to have been priced or
traded under then-prevailing market conditions) for the Remarketing Agent
to sell the Series 1997 Bonds on the effective date of such weekly rate at
a price equal to 100% of their principal amount (without regard to accrued
interest). The Company may from time to time change the method of
determining the interest rate on the Series 1997 Bonds to a daily, weekly,
<PAGE>
Page 7
commercial paper or long-term interest rate. If the appropriate interest
rate is not or cannot be determined for whatever reason, the method of
determining interest on the Series 1997 Bonds shall be equal to the Public
Securities Association Municipal Index or such other weekly high-grade
index comprised of seven-day, tax-exempt variable rate demand notes
produced by Municipal Market Data, Inc. In no event shall the interest rate
on the Series 1997 Bonds exceed the maximum annual interest rate of 15.0%.
The Series 1997 Bonds are fully secured by an irrevocable direct-pay letter
of credit issued by a U.S. Bank with a termination date of July 16, 2002.
The Company is obligated to reimburse the U.S. Bank for amounts drawn under
the letter of credit in accordance with a reimbursement agreement between
the Company and the U.S. Bank (the "Reimbursement Agreement"). The Series
1997 Bonds may be redeemed in whole or in part at the direction of the
Company. Among the various covenants contained in the Reimbursement
Agreement, the Company is to maintain certain ratios and balances as to
minimum stockholders' investment, debt to stockholders' investment and
fixed charge coverage. The Company is in compliance with all conditions of
the Reimbursement Agreement.
G. Restricted Funds:
The restricted funds consist of cash and investments held in trust and
committed for the construction of an air cargo facility terminal building
in accordance with the Company's bond indenture (See Note F). Investments
are stated at cost as it is the intent of the Company to hold the
investments until maturity. The funds are invested in compliance with the
Company's bond indenture which restricts the type, quality and maturity of
investments.
H. Subsequent Event:
During October 1997, the Company sold its 60.0% interest in a foreign
subsidiary for cash of approximately $3.2 million. The sale will result in
a nonrecurring pre-tax gain of approximately $1.9 million, or $1.5 million
after tax, which will be included in the fourth quarter 1997 results of
operations.
<PAGE>
Page 8
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Results of Operations
The Company considers its total business to represent a single segment
comprised of three major services: airfreight forwarding, ocean freight
forwarding, and customs brokerage and other services, all of which are fully
integrated. The following table sets forth the gross revenues and net revenues
(gross revenues minus transportation expenses) for each of these three service
categories, as well as the Company's internal operating expenses (terminal,
selling, general and administrative expenses) and operating profit:
<TABLE>
Three Months Nine Months
Ended September 30, Ended September 30,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Gross Revenues:
Airfreight ........................... $305.9 $257.5 $ 875.2 $733.5
Ocean freight ........................ 54.3 50.4 152.0 139.9
Customs brokerage and other .......... 35.2 33.0 106.0 83.0
Total Gross Revenues ............... $395.4 $340.9 $1,133.2 $956.4
Net Revenues:
Airfreight ........................... $ 79.7 $ 69.4 $ 226.2 $198.9
Ocean freight ........................ 15.4 13.3 43.9 37.8
Customs brokerage and other .......... 29.9 29.6 89.6 74.5
Total Net Revenues ................. 125.0 112.3 359.7 311.2
Internal Operating Expenses:
Terminal ............................. 68.0 61.3 196.5 169.5
Selling, general and administrative... 37.3 35.5 111.8 100.4
Total Internal Operating Expenses... 105.3 96.8 308.3 269.9
Operating Profit ....................... $ 19.7 $ 15.5 $ 51.4 $ 41.3
</TABLE>
Consolidated gross revenues for the third quarter and nine months ended
September 30, 1997 increased 16.0% to $395.4 million and 18.5% to $1,133.2
million, respectively, over the comparable periods in 1996. Additionally, the
increase in gross revenues for the quarter and nine months included the negative
effect of approximately $15.3 million and $26.0 million, respectively, resulting
from a stronger U.S. dollar when converting foreign currency revenues into U.S.
dollars for financial reporting purposes. Consolidated net revenues for the
third quarter and first nine months of 1997 increased 11.3% to $125.0 million
and 15.6% to $359.7 million, respectively, over the comparable 1996 periods.
Gross airfreight revenues for the third quarter and first nine months of
1997 increased 18.8% to $305.9 million and 19.3% to $875.2 million,
respectively, over the comparable 1996 periods. Airfreight net revenues for the
third quarter and first nine months of 1997 increased 14.8% to $79.7 million and
13.7% to $226.2 million, respectively, over the comparable 1996 periods. The
increases in gross and net revenues from airfreight services for both the
<PAGE>
Page 9
quarter and nine months were attributable to increases in shipments and the
total weight of cargo shipped. For the quarter, shipments increased 18.8% and
the weight of cargo shipped increased 15.0% over the third quarter of 1996. The
significant increase in the number of shipments in the quarter was due to a
large increase in United States domestic shipments (the United States domestic
business accounted for only 3.0% of consolidated revenues for the third
quarter). Excluding United States domestic shipments, the increase in airfreight
shipments was 8.0% for the quarter. For the nine month period, shipments
increased 15.3% and the weight of cargo shipped increased 17.7% over the first
nine months of 1996. The gross margin (net revenues as a percentage of gross
revenues) for the third quarter and first nine months of 1997 decreased .9% from
27.0% to 26.1% and 1.3% from 27.1% to 25.8%, respectively, when compared to the
comparable 1996 periods. The decreases were mainly due to reduced yields
associated with the increases in the weight of cargo shipped.
Ocean freight gross revenues for the third quarter and first nine months of
1997 increased 7.7% to $54.3 million and 8.6% to $152.0 million, respectively,
over the comparable 1996 periods. Ocean freight net revenues for the third
quarter and first nine months of 1997 increased 15.8% to $15.4 million and 16.1%
to $43.9 million, respectively, over the comparable 1996 periods. The increases
in both the gross and net ocean freight revenues were due to increased shipping
volumes from existing customers and the Company's continuing penetration into
the ocean freight market.
Customs brokerage and other gross revenues for both the third quarter and
first nine months of 1997 increased 6.7% to $35.2 million and 27.7% to $106.0
million, respectively, over the comparable 1996 periods. Customs brokerage and
other net revenues for the third quarter and first nine months of 1997 increased
1.0% to $29.9 million and 20.3% to $89.6 million, respectively, over the
comparable 1996 periods. The slight increase in customs brokerage and other net
revenues in the third quarter reflected the increase in foreign activity which
was offset by a decrease in the United States. The decrease in the United States
was due to a decline in the Canadian border activity. The increases for the
first nine months of 1997 for both the gross and net customs brokerage and other
revenues were mainly attributable to the Company's continuing efforts to expand
its customs brokerage activities to existing and new customers.
Internal operating expenses increased $8.5 million or 8.8% for the third
quarter and $38.4 million or 14.2% for the first nine months of 1997 over the
comparable periods in 1996. These increases were mainly attributable to the
additional expenses incurred in connection with greater shipping volumes.
Operating profit for the third quarter of 1997 increased $4.2 million or
27.1% over the third quarter of 1996. For the first nine months of 1997,
operating profit increased $10.1 million or 24.5% over the comparable 1996
period.
Interest expense for the third quarter of 1997 was marginally lower than
the comparable 1996 period. For the first nine months of 1997, interest expense
decreased approximately $2.3 million when compared to the comparable 1996
period. The decrease was due primarily to the elimination of interest expense
associated with the Debentures (See Note D) which were converted on or before
July 8, 1996.
<PAGE>
Page 10
The effective income tax rate for the third quarter of 1997 was marginally
higher than the comparable 1996 period. For the first nine months of 1997, the
effective income tax rate decreased to 37.4% from 38.2% for the comparable 1996
period. The decrease was largely the result of a shift in the mix of worldwide
earnings to countries with lower effective income tax rates, along with a
reduction in the total of nondeductible expenses as a percentage of pre-tax
income.
During October 1997, the Company sold its 60.0% interest in a foreign
subsidiary (See Note H). As a result, the Company will record a nonrecurring
pre-tax gain of approximately $1.9 million, or $1.5 million after tax, in the
fourth quarter of 1997.
In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128, Earnings Per Share ("FASB 128"),
which establishes standards for computing and presenting earnings per share.
FASB 128 will be effective for periods ending after December 15, 1997. Adoption
of this accounting standard is not expected to have a material impact upon the
Company's earnings per share computations assuming the current capital
structure.
Liquidity and Capital Resources
At September 30, 1997, cash and cash equivalents increased approximately
$17.8 million to $64.3 million from $46.5 million at December 31, 1996. For the
first nine months of 1997, the Company's primary source of cash was
approximately $38.2 million from operating activities, while its primary uses
were for: capital expenditures of $12.0 million, investment in unconsolidated
affiliates of $3.8 million and dividend payments of $4.5 million. Cash flow
provided by operating activities increased approximately $30.7 million over the
first nine months of 1996. This increase was impacted by the on-going
integration of prior years' acquisitions which has resulted in improvements in
the management of working capital. Working capital increased approximately $24.0
million in the nine months to $124.3 million. The increase was mainly due to the
increase in profits.
Capital expenditures increased approximately $3.0 million from $9.0 million
for the nine months of 1996 to $12.0 million for the nine months of 1997. The
capital expenditures were primarily for improvement and expansion of facilities
and management information services.
At September 30, 1997, the Company had available for future borrowings
approximately $71.8 million of its $75.0 million revolving credit facility. The
Company utilized approximately $3.2 million under this facility mainly for
letters of credit issued in connection with its insurance programs.
Additionally, various of the Company's foreign subsidiaries maintained overdraft
facilities with foreign banks, aggregating approximately $18.1 million, of which
approximately $1.6 million was outstanding.
<PAGE>
Page 11
In July 1997, with the issuance of the Industrial Development Revenue Bonds
(See Note F), the Company's long-term debt increased $19.0 million and
correspondingly its debt to equity ratio (total long-term debt as a percentage
of stockholders' investment) was 12.6% at September 30, 1997 as compared to 7.9%
at December 31, 1996.
In June 1997, the Company's Board of Directors authorized an increase in
the quarterly cash dividend from four cents ($.04) to five cents ($.05) per
share.
Management believes that the Company's available cash and sources of
credit, together with expected future sources of credit and cash generated from
operations, will be sufficient to satisfy its anticipated needs for working
capital, capital expenditures and dividends.
PART II - OTHER INFORMATION
Item 1. - Legal Proceedings
The Company believes that there are no legal proceedings, other than ordinary
routine litigation incidental to the business of the Company, to which the
Company or any of its subsidiaries is a party. Management is of the opinion that
the ultimate outcome of existing legal proceedings, if adverse, would not have a
material effect on the Company's consolidated financial position.
Item 6. - Exhibits and Reports on Form 8-K
a) Exhibits:
Exhibit 11 - Computation of Earnings Per Common Share.
Exhibit 27 - Financial Data Schedule.
b) Reports on Form 8-K:
None.
<PAGE>
Page 12
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Air Express International Corporation
(Registrant)
Date: November 14, 1997 /s/ Dennis M. Dolan
Dennis M. Dolan
Vice President and
Chief Financial Officer
(Principal Financial Officer)
Date: November 14, 1997 /s/ Walter L. McMaster
Walter L. McMaster
Vice President - Controller
(Principal Accounting Officer)
<TABLE>
<CAPTION>
Exhibit 11
AIR EXPRESS INTERNATIONAL CORPORATION AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER COMMON SHARE
(Unaudited)
(In thousands, except
per share amounts)
Three Months Ended Nine Months Ended
September 30, September 30,
<S> <C> <C> <C> <C>
1997 1996 1997 1996
Primary:
Net income applicable to
common shares .................... $13,363 $10,626 $34,944 $26,482
Weighted average of common
shares outstanding ............... 34,428 32,904 34,302 30,560
Common share equivalents ........... 1,018 633 732 537
Average common shares out-
standing ......................... 35,446 33,537 35,034 31,097
Earnings per common share .......... $ .38 $ .32 $ 1.00 $ .85
Fully diluted:
Weighted average of common
shares outstanding ............... 34,428 32,904 34,302 30,560
Common share equivalents ........... 1,200 663 1,052 641
Common shares issuable upon
assumed conversion of subor-
dinated debentures ............... -- 1,118 -- 3,410
Average common shares
outstanding ...................... 35,628 34,685 35,354 34,611
Earnings per common share .......... $ .38 $ .31 $ .99 $ .81
<FN>
Primary earnings per share was computed by dividing net income by the
weighted average common and common share equivalents outstanding during the
period. For the quarter and nine months ended September 30, 1996, fully
diluted earnings per share was calculated assuming the conversion of the
Debentures and the elimination of the associated interest expense, net of
tax, of approximately $.73 million and $1.46 million, respectively.
Effective July 8, 1996, the Company completed the redemption for all of its
Debentures. Therefore, the Debentures and related interest expense were not
a component of the Company's fully diluted earnings per share calculation
for the quarter and nine months ended September 30, 1997.
</FN>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 64,346
<SECURITIES> 0
<RECEIVABLES> 376,657
<ALLOWANCES> 4,302
<INVENTORY> 0
<CURRENT-ASSETS> 444,161
<PP&E> 115,156
<DEPRECIATION> 55,703
<TOTAL-ASSETS> 643,569
<CURRENT-LIABILITIES> 319,888
<BONDS> 32,914
<COMMON> 346
0
0
<OTHER-SE> 310,094
<TOTAL-LIABILITY-AND-EQUITY> 643,569
<SALES> 0
<TOTAL-REVENUES> 1,133,151
<CGS> 0
<TOTAL-COSTS> 773,450
<OTHER-EXPENSES> 196,521
<LOSS-PROVISION> 805
<INTEREST-EXPENSE> 1,089
<INCOME-PRETAX> 55,820
<INCOME-TAX> 20,876
<INCOME-CONTINUING> 34,944
<DISCONTINUED> 0
<EXTRAORDINARY> 0
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