=====================================================================
UNITED STATES
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 PERIOD ENDED JUNE 30, 1996
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 0-11453
AMERICAN PHYSICIANS SERVICE GROUP, INC.
(Exact name of registrant as specified in its charter)
TEXAS 75-1458323
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification No.)
1301 CAPITAL OF TEXAS HIGHWAY AUSTIN, TEXAS 78746
(Address of principal executive offices) (Zip Code)
(512) 328-0888
(Registrant's telephone number, including area code)
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
------- -------
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
NUMBER OF SHARES
OUTSTANDING AT
TITLE OF EACH CLASS JULY 31, 1996
-------------------- ----------------
Common Stock, $.10 par value 4,080,204
============================================================================
<PAGE>
PART I
FINANCIAL INFORMATION
-2-
<PAGE>
AMERICAN PHYSICIANS SERVICE GROUP, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED)
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1996 1995 1996 1995
---------- --------- ---------- ---------
<S> <C> <C> <C> <C>
Revenues:
Financial services $1,822 3,199 4,152 6,029
Computer systems/software 743 1,106 1,590 2,379
Real estate 169 167 338 329
Investments and other 157 104 267 522
---------- --------- ---------- ---------
Total revenues 2,891 4,576 6,347 9,259
Expenses:
Financial service expense 1,761 2,658 3,766 5,199
Computer systems/software 715 953 1,592 2,059
Real estate 129 125 257 248
General and administrative (174) 358 89 1,097
Interest 13 20 29 46
---------- --------- ---------- ---------
Total expenses 2,444 4,114 5,732 8,649
---------- --------- ---------- ---------
Operating income (loss) 447 462 615 610
Equity in earnings of unconsolidated
affiliate (Note 3) (72) 303 328 604
---------- --------- ---------- ---------
Earnings from continuing operations
before income taxes 376 765 943 1,214
Income tax expense 40 262 106 417
Loss from discontinued operations net of income tax
benefit of $0 and $25, and 0$ and $72 for the three
and six months in 1996 and 1995, respectively. 0 (47) 0 (139)
---------- --------- ---------- ---------
Net earnings $336 456 837 658
========== ========= ========== =========
Earnings per common share:
Primary $0.08 0.12 0.19 0.18
========== ========= ========== =========
Fully Diluted $0.08 0.12 0.19 0.17
========== ========= ========== =========
Primary weighted average shares outstanding 4,346 3,808 4,293 3,727
========== ========= ========== =========
Fully Diluted weighted average shares outstanding 4,360 3,808 4,353 3,764
========== ========= ========== =========
</TABLE>
See accompanying notes to consolidated financial statements
- 3 -
<PAGE>
AMERICAN PHYSICIANS SERVICE GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In thousands)
June 30, December 31,
1996 1995
------------- -------------
ASSETS
Current Assets:
Cash and cash investments $8,820 6,798
Marketable securities (Note 2) 371 2,004
Trading account securities 549 1,014
Notes receivable - current 196 223
Management fees and other receivables 743 1,748
Receivable from clearing broker 1,241 780
Deferred income taxes (132) 159
Prepaid expenses and other 311 312
------------- -------------
Total current assets 12,099 13,038
Notes receivable, less current portion 123 83
Property and equipment 2,034 2,129
Investment in Prime Medical Services, Inc. 7,740 7,412
Other assets 1,233 1,078
------------- -------------
Total Assets $23,229 23,740
============= =============
See accompanying notes to consolidated financial statements
- 4 -
<PAGE>
AMERICAN PHYSICIANS SERVICE GROUP, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS (UNAUDITED)
(In thousands)
June 30, December 31,
1996 1995
----------- -----------
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current installments of obligations under
capital leases $238 299
Accounts payable - trade 318 353
Accrued compensation 223 861
Accrued expenses and other liabilities (Note 5) 3,218 3,501
Federal income taxes payable (222) 558
--------- ----------
Total current liabilities 3,775 5,572
Long-term obligations 492 574
--------- ----------
Total liabilities 4,267 6,146
Shareholders' Equity:
Preferred stock, $1.00 par value, 1,000,000
shares authorized ---- ----
Common stock, $0.10 par value, shares
authorized 20,000,000; issued 4,080,204
at 6/30/96 and 3,663,871 at 12/31/95 403 366
Additional paid-in capital 5,010 4,530
Unrealized holding gains 14 0
Retained earnings 13,535 12,698
--------- ----------
Total shareholders' equity 18,962 17,594
Total Liabilities and Shareholders' Equity $23,229 23,740
========= ==========
See accompanying notes to consolidated financial statements
- 5 -
<PAGE>
AMERICAN PHYSICIANS SERVICE GROUP, INC.
Consolidated Statements of Cash Flows (Unaudited)
(In thousands)
Six Months Ended
June 30,
1996 1995
--------- ---------
Cash flows from operating activities:
Cash received from customers $7,103 10,600
Cash paid to suppliers and employees (6,637) (9,089)
Change in trading account securities 465 (922)
Change in receivable from to clearing broker (461) 1,081
Interest paid (29) (46)
Income taxes paid (603) (382)
Interest, dividends and other investment
proceeds 195 515
--------- ---------
Net cash provided by (used in) operating
activities 33 1,757
Cash flows from investing activities:
Proceeds from the sale of marketable securities 1,655 937
Payments for purchase property and equipment (85) (308)
Funds loaned to others (65) ---
Collection of notes receivable 49 1,077
Other 62 ---
--------- --------
Net cash provided by investing
activities 1,616 1,706
Cash flows from financing activities:
Repayment of long term obligations (144) (185)
Exercise of stock options 517 197
--------- --------
Net cash provided by (used in) financing
activities 373 12
--------- --------
Net change in cash and cash equivalents $2,022 3,475
========= =========
Cash and cash equivalents at beginning of period 6,798 3,266
--------- --------
Cash and cash equivalents at end of period $8,820 6,741
========= ========
See accompanying notes to consolidated financial statements
- 6 -
<PAGE>
AMERICAN PHYSICIANS SERVICE GROUP, INC.
Consolidated Statements of Cash Flows, continued
(In thousands)
Six Months Ended
June 30,
1996 1995
---------- ----------
Reconciliation of net earnings to net cash from
operating activities:
Net earnings $837 658
Adjustments to reconcile net earnings to net cash
from operating activities:
Depreciation and amortization 175 204
Gain on sale of securities (55) ---
Undistributed earnings of affiliate (328) (604)
Change in federal income tax payable (780) (35)
Provision for deferred tax asset 284 (1)
Change in trading securities 465 (922)
Change in receivable from clearing broker (461) 1,081
Change in management fees & other receivables 1,005 1,137
Change in prepaids & other current assets 1 402
Change in long term assets (154) (39)
Change in trade payables (35) (536)
Change in accrued expenses & other liabilities (921) 412
---------- ----------
Net cash from operating activities $33 1,757
========== ==========
Summary of non-cash transactions:
At January 1, 1994, the Company began recording marketable securities at fair
value, with unrealized holding gains and losses (net of tax) reported as a
separate component of shareholders' equity, per Statement of Financial
Accounting Standards #115. The effect of this resulted in an increase to
unrealized holding gains of $14, a decrease to deferred tax assets of $8 and an
increase to marketable securities of $22 for the six months ended June 30, 1996
compared to December 31, 1995.
See accompanying notes to consolidated financial statements
- 7 -
<PAGE>
AMERICAN PHYSICIANS SERVICE GROUP, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1996
(Unaudited)
1. GENERAL
The accompanying unaudited consolidated financial statements have been prepared
in conformity with the accounting principles stated in the audited financial
statements for the year ended December 31, 1995 and reflect all adjustments
which are, in the opinion of management, necessary for a fair statement of the
financial position as of June 30, 1996 and the results of operations for the
periods presented. These statements have not been audited or reviewed by the
Company's independent certified public accountants. The operating results for
the interim periods are not necessarily indicative of results for the full
fiscal year.
The notes to consolidated financial statements appearing in the Company's Annual
Report on Form 10-KSB for the year ended December 31, 1995 filed with the
Securities Exchange Commission should be read in conjunction with this Quarterly
Report on Form 10-QSB. There have been no significant changes in the information
reported in those notes other than from normal business activities of the
Company.
Certain reclassifications have been made to amounts presented in prior periods
to be consistent with the 1996 presentation.
2. MARKETABLE SECURITIES
Marketable securities include equity securities and investments in bonds that
are intended to be held less than one year. At January 1, 1994, the Company
began recording these securities at fair value, with unrealized holding gains
and losses reported as a separate component of shareholders' equity, per
SFAS-115.
3. CONTINGENCIES
In conjunction with a settlement agreement, the Company's broker/dealer
subsidiary, APS Financial, has guaranteed the future yield of a customer's
investment portfolio beginning in November 1994 for up to a five and one-half
year period. Management believes that the Company's financial statements
adequately provide for any loss that might occur under this agreement; however,
as defined in AICPA Statement of Position 94-6, it is reasonably possible that
the Company's estimate of loss could change over the remaining term of the
agreement. Management is unable to determine the range of potential adjustment
since it is based on securities markets, which are beyond its ability to
control.
- 8 -
<PAGE>
4. EQUITY IN EARNINGS OF UNCONSOLIDATED AFFILIATE
At June 30, 1996 the Company owned 16% (3,064,000 shares) of the outstanding
common stock of Prime Medical Services, Inc. ("Prime"). This percentage
ownership was decreased from 18% in the first quarter of 1996, due to the
issuance of common stock as part of an acquisition made by Prime during the
second quarter. The Company records its pro-rata share of Prime's results on the
equity basis. Prime is in the business of providing lithotripsy services. The
common stock of Prime is traded in the over-the-counter market under the symbol
"PMSI". Prime is a Delaware corporation which is required to file annual,
quarterly and other reports and documents with the Securities and Exchange
Commission, which reports and documents contain financial and other information
regarding Prime. Such reports and documents may be examined and copies may be
obtained from the offices of the Securities and Exchange Commission.
5. ACCRUED EXPENSES AND OTHER LIABILITIES
Accrued expenses and other liabilities consists of the following:
June Dec
1996 1995
--------- ---------
Taxes payable-other ......................... $ 73,000 150,000
Commissions payable ......................... 0 38,000
Deferred income ............................. 760,000 434,000
Health insurance and other claims payable ... 142,000 73,000
Contractual/legal claims .................... 1,920,000 2,360,000
Vacation payable ............................ 119,000 127,000
Funds held for others ....................... 67,000 51,000
Interest payable ............................ 4,000 5,000
Other ....................................... 133,000 263,000
---------- ----------
$3,218,000 3,501,000
========== ==========
- 9 -
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
REVENUES
Revenues from operations decreased $1,685,000 (36.8%) and $2,912,000
(31.4%) for the three and six month periods ended June 30, 1996, respectively,
compared to the same periods in 1995. Financial services and computer systems
decreased while real estate and investments and other increased during the
second quarter of 1996 compared to the same period in 1995. For the six months
period, revenues from financial services, computer systems and investments and
other decreased while real estate revenues increased.
Financial services revenues decreased $1,377,000 (43.0%) and $1,877,000
(31.1%) for the three and six month periods ended June 30, 1996, respectively,
compared to the same periods in 1995. The decrease for both periods in 1996 was
the result of lower broker/dealer commissions due primarily to unfavorable bond
market conditions. The first six months of 1996 have been characterized by
steady bond yield increases which translates to lower bond prices. The
conditions were reversed for the same six months in 1995 as bond yields
decreased resulting in increasing bond prices. In addition, commissions were
down during the second quarter due, in part, to the loss of an experienced, high
volume broker who left the Company in January, 1996. The loss of this broker,
combined with the loss of another high volume broker in April 1995, has
contributed to a reduction in revenues which the Company has not yet been able
to replace.
Revenues from premium-based insurance management fees were down
$113,000 (9.3%) and $20,000 (0.9%) for the three and six month periods of 1996,
respectively, compared to the same periods in 1995. The second quarter, 1996
decrease was due in part to a timing difference in recognizing management fees
from a large client doctor group. Lower risk management fees also contributed to
the second quarter decrease due primarily to fewer doctors in the "high risk"
category. Therefore, fewer doctors were subject to risk management fees.
Computer systems and software sales revenues decreased $363,000 (32.8%)
and $789,000 (33.2%) for the three and six month periods ended June 30, 1996,
respectively, compared to the same periods in 1995. The decrease in both periods
was primarily due to the fact that revenues were recognized in 1995 from ongoing
contracts which were substantially completed by the end of 1995. With no new
contracts being signed in 1996, revenues declined. Partially offsetting these
decreases was much higher consulting fees generated in the first two quarters of
1996 compared to the same period in 1995.
Revenues and expenses will no longer be consolidated beginning July 1,
1996 due to the formation of an alliance effective July 1, 1996 between
International Software Solutions, Inc. ("ISSI") and the Company's software
subsidiary, APS Systems, Inc. Because ISSI will receive 51% equity interest in
APS Systems, the Company will now account for the future earnings of the new
alliance as a single line item on the earnings statement, "Equity in earnings of
unconsolidated affiliate". See Part II Item 5, "Other Information" on this Form
10-QSB.
- 10 -
<PAGE>
Real estate revenues rose $2,000 (1.5%) and $8,000 (3.3%) for the three
and six month periods ended June 30, 1996, respectively, compared to the same
periods in 1995. The increase in revenue was due to rising lease rates. Given
the current economic good health of the Austin real estate market, it is
reasonable to expect rental and occupancy rates to remain favorable throughout
1996.
Investment and other income increased $53,000 (50.8%) but decreased
$255,000 (48.8%) for the three and six month periods ended June 30, 1996,
respectively, compared to the same periods in 1995. The second quarter increase
was primarily due to interest earned on a higher investable cash balance as well
as a gain on the sale of a marketable security. The six month decrease was
primarily due to reimbursements received in February, 1995 for the settlement of
prior litigation. A final reimbursement payment was received in November, 1995.
No such revenues were received in 1996.
EXPENSES
Total expenses decreased $1,670,000 (40.6%) and $2,917,000 (33.7%) for
the three and six month periods ended June 30, 1996, respectively, compared to
the same periods in 1995. Financial services, computer systems and investment &
other decreased for both periods while real estate services showed an increase
for both periods.
Financial services expense decreased $897,000 (33.8%) and $1,432,000
(27.6%) for the three and six month periods ended June 30, 1996, respectively,
compared to the same periods in 1995. The decrease was primarily the result of
lower commissions paid in broker/dealer operations arising from the lower
commission revenues. Reduced legal and professional as well as lower general and
administrative expenses arising from certain cost cutting measures within the
broker/dealer subsidiary have also contributed to the decrease. Expenses at the
insurance management subsidiary were virtually the same for the second quarters
of both years. The six month comparison shows an increase of $29,000 (1.7%) in
1996 due to personnel merit increases.
Computer systems/software expense decreased $237,000 (24.9%) and
$467,000 (22.7%) for the three and six month periods ended June 30, 1996,
respectively, compared to the same periods in 1995. Both period decreases in
1996 were due to lower hardware and software license costs of sales, resulting
directly from the aforementioned decrease in new client sales revenue.
Real estate expense increased $3,000 (2.8%) and $8,000 (3.3%) for the
three and six month periods ended June 30, 1996, respectively, compared to the
same periods in 1995. The increase was primarily due to higher condo association
fees.
- 11 -
<PAGE>
General and administrative expense decreased $532,000 (148.6%) and
$1,007,000 (91.9%) for the three and six month periods ended June 30, 1996,
respectively, compared to the same periods in 1995. The decrease was due to
accruals made in 1995 for certain contingent liabilities associated with ongoing
litigation. Not only were such accruals not necessary in 1996 but some
contractual/legal contingencies accrued in the second and fourth quarters of
1995 were actually reversed due primarily to positive investment returns as well
as the Company's prevailing in litigation.
Interest expense decreased $7,000 (34.8%) and $17,000 (36.6%) for the
three and six month periods ended June 30, 1996, respectively, compared to the
same periods in 1995. The decrease in both periods was due to a lower volume of
margined securities held in inventory at the broker/dealer subsidiary for resale
to clients. A lower inventory requires a lower level of securities purchased on
margin which corresponds to lower interest charged.
DISCONTINUED OPERATIONS
Publications expense was eliminated in 1996 due to the sale, in
October, 1995, of APS Communications Corporation, a publisher of Spanish
language directories of U.S. businesses. The Company is involved in no other
publications-related ventures. In the first six months of 1995, the publications
segment recognized $757,000 in revenues and incurred $968,000 in expenses. The
resulting $211,000 loss was recognized net of tax on the Company's Statement of
Operations.
EQUITY IN EARNINGS OF UNCONSOLIDATED AFFILIATE
The Company's equity in the earnings of Prime Medical Services, Inc.
("Prime") decreased $375,000 and $276,000 (45.7%) for the three and six month
periods ended June 30, 1996, respectively, compared to the same periods in 1995.
The decrease in the second quarter of 1996 was due to two non-recurring
write-offs: (1) costs associated with their acquisition of Lithotripters Inc. on
April 26, 1996; and (2), costs associated with a secondary offering. Without
these non-recurring expenses, Prime's contribution would have increased the
Company's pretax earnings by approximately $601,000, or $0.14 per share in both
the three month and six month periods of 1996.
LIQUIDITY AND CAPITAL RESOURCES
Current assets exceeded current liabilities by $8,365,000 and
$7,466,000 at June 30, 1996, and December 31, 1995, respectively. The increase
is primarily attributable to lower federal income taxes payable and lower
accrued expenses.
- 12 -
<PAGE>
During the quarter, the Company closed a $2,000,000 revolving line of
credit it had established with a bank. In the more than two years since the line
of credit was established no funds were advanced to the Company. Since cash
reserves have always been more than adequate to meet its liquidity requirements,
the Company closed the account as a cost reduction measure.
Capital expenditures through the quarter ended June 30, 1996 were
approximately $85,000 and total capital expenditures are expected to be
approximately $300,000 in 1996.
Management believes that its working capital position together with
funds generated from operations will provide sufficient resources to meet all
present and reasonably foreseeable and capital needs.
- 13 -
<PAGE>
PART II
OTHER INFORMATION
-14-
<PAGE>
Item 1. LEGAL PROCEEDINDS
The Company is involved in various claims and legal actions that have
arisen in the ordinary course of business. The Company believes that the
liability provision in its financial statements is sufficient to cover any
unfavorable outcome related to lawsuits in which it is currently named.
Management believes that liabilities, if any, arising from these actions will
not have a significant adverse effect on the financial condition of the Company.
However, due to the uncertain nature of legal proceedings, the actual outcome of
these lawsuits may differ from the liability provision recorded in the Company's
financial statements.
Item 5. OTHER INFORMATION
Effective July 1, 1996 the Company formed a strategic alliance with
privately-owned International Software Solutions, Inc. ("ISSI") for the purpose
of developing client-oriented software products for the healthcare industry.
Under the agreement, ISSI will develop approximately three million dollars worth
of new products for the Company's computer software subsidiary, APS Systems,
Inc. The Company will contribute approximately one million dollars of capital
into the new venture. ISSI's involvement will accelerate both the enhancement of
existing software products and the development of new software products
incorporating open architecture, client/server technology, graphical user
interfaces and other features to satisfy the growing needs of the healthcare
industry. ISSI will receive a 51% equity interest in APS Systems for its
investment.
As a consequence of ISSI's new majority ownership in APS Systems, Inc.,
beginning July 1, 1996, the Company will no longer consolidate the revenues,
expenses and balance sheet items into its financial data. Rather, the
earnings/losses of APS Systems, Inc. will be reported as a single line item on
the earnings statement, "Equity in earnings/loss of unconsolidated affiliate".
On July 15, 1996 the Company withdrew its offer to sell 2.5 million
shares of Prime Medical Services, Inc. ("Prime") (NASDAQ:PMSI) common stock that
was a part of a public offering by Prime and certain other stockholders of
Prime. This withdrawal reversed a June 5, 1996 announcement that these shares of
Prime common stock would become available for sale as part of a public
offering. As a result of the withdrawal of the offering, Prime retains the
status of an unconsolidated affiliate of the Company.
- 15 -
<PAGE>
On April 26, 1996 Prime Medical Services, Inc. acquired Lithotripters,
Inc., of Fayetteville, North Carolina. The combination of the two entities,
effective May 1, 1996, created the nation's largest lithotripsy company. The
purchase price was $88 million, comprised of $70 million in cash and 1,636,000
common shares of Prime Medical. This issuance of Prime shares has contributed to
a further dilution of the Company's interest in Prime from 19.4% to 16.1%. The
Company feels that increased earnings at Prime, resulting from the acquisition
of Lithotripters, Inc., will offset this dilution of ownership.
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) EXHIBITS
11 Computation of Net Income Per Share at June 30, 1996
and 1995.
(b) CURRENT REPORTS ON FORM 8-K
No current reports on Form 8-K were filed during the quarter
ended June 30, 1996.
- 16 -
<PAGE>
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.
AMERICAN PHYSICIANS SERVICE GROUP, INC.
Date: August 6, 1996 By: /s/ William H. Hayes
------------------------
William H. Hayes, Vice President
and Chief Financial Officer
- 17 -
<PAGE>
EXHIBIT 11
AMERICAN PHYSICIANS SERVICE GROUP, INC.
COMPUTATION OF NET INCOME PER SHARE
FOR THE THREE MONTHS ENDED JUNE 30, 1996 AND 1995
(In thousands, except earnings per share)
Primary Fully Diluted
Earnings Earnings
Per Share Per Share
----------- ----------
1996
Net Income applicable to common stock $336 336
Average number of shares outstanding 4,018 4,018
Average stock option shares 328 342
----------- ----------
Shares for earnings calculation 4,346 4,360
Net income per share $0.08 0.08
=========== ==========
1995
Net Income applicable to common stock $456 456
Average number of shares outstanding 3,423 3,423
Average stock option shares 385 385
----------- ----------
Shares for earnings calculation 3,808 3,808
Net income per share $0.12 0.12
=========== ==========
NOTE:
Primary and fully diluted income per share were computed by dividing
net income by the average number of shares outstanding plus the common
stock equivalents which, would arise from the exercise of dilutive stock
options.
- 18 -
<PAGE>
EXHIBIT 11
AMERICAN PHYSICIANS SERVICE GROUP, INC.
COMPUTATION OF NET INCOME PER SHARE
FOR THE SIX MONTHS ENDED JUNE 30, 1996 AND 1995
(In thousands, except earnings per share)
Primary Fully Diluted
Earnings Earnings
Per Share Per Share
---------- ----------
1996
Net Income applicable to common stock $837 837
Average number of shares outstanding 3,983 3,983
Average stock option shares 310 370
---------- ----------
Shares for earnings calculation 4,293 4,353
Net income per share $0.19 0.19
========== ==========
1995
Net Income applicable to common stock $658 658
Average number of shares outstanding 3,384 3,384
Average stock option shares 343 380
---------- ----------
Shares for earnings calculation 3,727 3,764
Net income per share $0.18 0.17
========== ==========
NOTE:
Primary and fully diluted income per share were computed by dividing
net income by the average number of shares outstanding plus the common
stock equivalents which, would arise from the exercise of dilutive stock
options.
- 19 -
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted
from the June 30, 1996 FORM 10-QSB and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 3-MOS 6-MOS
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1996
<PERIOD-START> APR-01-1996 JAN-01-1996
<PERIOD-END> JUN-30-1996 JUN-30-1996
<CASH> 8,820 8,820
<SECURITIES> 920 920
<RECEIVABLES> 2,180 2,180
<ALLOWANCES> 0 0
<INVENTORY> 21 21
<CURRENT-ASSETS> 12,099 12,099
<PP&E> 5,387 5,387
<DEPRECIATION> 3,353 3,353
<TOTAL-ASSETS> 23,229 23,229
<CURRENT-LIABILITIES> 3,775 3,775
<BONDS> 0 0
0 0
0 0
<COMMON> 403 403
<OTHER-SE> 18,559 18,559
<TOTAL-LIABILITY-AND-EQUITY> 23,229 23,229
<SALES> 0 0
<TOTAL-REVENUES> 2,891 6,347
<CGS> 111 365
<TOTAL-COSTS> 2,447 5,308
<OTHER-EXPENSES> (127) 31
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 13 29
<INCOME-PRETAX> 376 943
<INCOME-TAX> 40 106
<INCOME-CONTINUING> 336 837
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 336 837
<EPS-PRIMARY> 0.08 0.19
<EPS-DILUTED> 0.08 0.19
</TABLE>
