<PAGE>
________________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1997
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 0-13984
DIVERSIFIED CORPORATE RESOURCES, INC.
(Exact name of registrant as specified in its charter)
TEXAS 75-1565578
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
12801 NORTH CENTRAL EXPRESSWAY
SUITE 350
DALLAS, TEXAS 75243
(Address of principal executive offices)
Registrant's telephone number, including area code: (972) 458-8500
Former name, former address and former fiscal year if changed since last report:
Indicate by check mark whether registrant (1) has filed all reports required 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
------- -------
Number of shares of common stock of the registrant outstanding on May 30, 1997,
was 1,785,312
Total Number of pages for
this 10-Q/A filing: 11
---
<PAGE>
DIVERSIFIED CORPORATE RESOURCES, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
ASSETS
MARCH 31, DECEMBER 31,
1997 1996
----------- -----------
CURRENT ASSETS:
Cash and cash equivalents........................ $ 489,430 $ 612,512
Trade accounts receivable, less allowances
of approximately $486,000 and $494,000,
respectively.................................... 3,643,828 3,387,138
Notes receivable-related party................... 9,645 9,326
Prepaid expenses and other current assets........ 110,695 34,443
----------- -----------
TOTAL CURRENT ASSETS........................... 4,253,598 4,043,419
EQUIPMENT, FURNITURE AND LEASEHOLD
IMPROVEMENTS, NET................................ 1,032,178 807,997
OTHER ASSETS:
Investment in and advances to joint venture...... 210,305 152,905
Notes receivable-related party................... 19,210 21,690
Other............................................ 210,232 177,879
----------- -----------
$ 5,725,523 $ 5,203,890
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Trade accounts payable and accrued expenses...... $ 3,514,318 $ 3,329,616
Book overdraft................................... - 98,158
Borrowing under factoring and loan agreements.... 526,056 400,682
Other short-term debt............................ 182,459 97,652
Current maturities of long-term debt............. 16,880 21,834
----------- -----------
TOTAL CURRENT LIABILITIES...................... 4,239,713 3,947,942
DEFERRED LEASE RENTS............................... 12,064 -
LONG-TERM DEBT..................................... 67,669 68,157
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Preferred stock, $1.00 par value; 1,000,000
shares authorized, none issued.................. - -
Common stock, $.10 par value; 10,000,000
shares authorized, 1,881,161 shares issued...... 188,116 188,116
Additional paid-in capital....................... 3,615,151 3,615,151
Accumulated deficit.............................. (2,067,153) (2,301,108)
Common stock held in treasury (245,849 shares
at cost)........................................ (185,175) (185,175)
Receivables from related party................... (144,862) (129,193)
----------- -----------
TOTAL STOCKHOLDERS' EQUITY..................... 1,406,077 1,187,791
----------- -----------
$ 5,725,523 $ 5,203,890
=========== ===========
See notes to consolidated financial statements.
2
<PAGE>
DIVERSIFIED CORPORATE RESOURCES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
FOR THE THREE MONTHS ENDED
MARCH 31,
--------------------------
1997 1996
----------- -----------
NET SERVICE REVENUES:
Permanent placement............................. $ 3,680,408 $ 2,777,261
Specialty services.............................. 1,875,772 1,557,402
Contract placement.............................. 1,722,418 1,879,336
----------- -----------
7,278,598 6,213,999
COST OF SERVICES.................................. 5,334,043 4,505,688
----------- -----------
GROSS MARGIN...................................... 1,944,555 1,708,311
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES...... (1,747,385) (1,227,009)
OTHER INCOME (EXPENSES):
Loss from joint venture operations.............. (11,212) (34,368)
Interest expense, net........................... (70,525) (69,017)
Other, net...................................... 32,758 10,179
----------- -----------
(48,979) (93,206)
----------- -----------
INCOME BEFORE INCOME TAXES AND EXTRAORDINARY
ITEM............................................ 148,191 388,096
INCOME TAXES-current benefit (provision).......... 42,681 (50,021)
----------- -----------
INCOME BEFORE EXTRAORDINARY ITEM.................. 190,872 338,075
EXTRAORDINARY ITEM - gain on debt restructuring... 43,083 -
----------- -----------
NET INCOME........................................ $ 233,955 $ 338,075
=========== ===========
PRIMARY EARNINGS PER SHARE:
Income before extraordinary item................ $ .11 $ .19
Extraordinary item.............................. .02 -
----------- -----------
Total......................................... $ .13 $ .19
=========== ===========
Weighted average common and common equivalent
shares outstanding.............................. 1,844,741 1,758,211
=========== ===========
FULLY DILUTED EARNINGS PER SHARE:
Income before extraordinary item................ $ .11 $ .19
Extraordinary item.............................. .02 -
----------- -----------
Total......................................... $ .13 $ .19
=========== ===========
Weighted average common and common equivalent
shares outstanding.............................. 1,850,800 1,758,211
=========== ===========
See notes to consolidated financial statements.
3
<PAGE>
DIVERSIFIED CORPORATE RESOURCES, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
FOR THE THREE MONTHS ENDED
MARCH 31,
--------------------------
1997 1996
--------- ---------
CASH FLOW FROM OPERATING ACTIVITIES:
Net income..................................... $ 233,955 $ 338,075
Adjustments to reconcile net income to cash
provided by operating activities:
Extraordinary item........................... (43,083) -
Depreciation and amortization................ 61,911 44,652
Provision for allowances..................... (7,849) (64,410)
Equity in loss of joint venture.............. 11,212 34,368
Write-down of long-lived assets.............. - 37,462
Deferred lease rents......................... 12,064 (15,759)
Changes in operating assets and liabilities:
Accounts receivable.......................... (248,841) (683,211)
Prepaid expenses and other current assets.... (76,252) (5,357)
Other assets................................. - 11,273
Trade accounts payable and accrued expenses.. 227,785 416,412
--------- ---------
Cash provided by operating activities...... 170,902 113,505
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures........................... (286,092) (102,281)
Deposits....................................... 500 (7,004)
Loans and advances to related parties.......... (15,669) (25,000)
Repayment from related parties................. 2,161 9,942
Net advances to joint venture.................. (68,612) 2,198
--------- ---------
Cash used in investing activities.......... (367,712) (122,145)
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowing under other short-term debt.......... 84,807 -
Increase in borrowings under factoring and
loan arrangements............................. 125,374 87,816
Principal payments under long-term debt
obligations................................... (5,442) (10,346)
Book overdraft................................. (98,158) (73,069)
Other.......................................... (32,853) -
--------- ---------
Cash provided by financing activities...... 73,728 4,401
--------- ---------
Decrease in cash and cash equivalents.... (123,082) (4,239)
Cash and cash equivalents at beginning
of year................................. 612,512 6,239
--------- ---------
Cash and cash equivalents at end
of period............................... $ 489,430 $ 2,000
========= =========
See notes to consolidated financial statements.
4
<PAGE>
DIVERSIFIED CORPORATE RESOURCES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. BASIS OF PRESENTATION
The consolidated financial statements include the operations of Diversified
Corporate Resources, Inc. and its subsidiaries (the "Company"), all of which are
wholly owned. The financial information for the three months ended March 31,
1997 and 1996, is unaudited but includes all adjustments (consisting only of
normal recurring accruals) which the Company considers necessary for a fair
presentation of the results for the period. The financial information should be
read in conjunction with the consolidated financial statements for the year
ended December 31, 1996, included in the Company's annual report on Form 10-K.
Operating results for the three months ended March 31, 1997, are not necessarily
indicative of the results that may be expected for the entire year ending
December 31, 1997.
RECLASSIFICATIONS AND RESTATEMENT
Certain amounts in the December 31 and March 31, 1996, consolidated
financial statements have been reclassified to conform to the 1997 presentation.
The December 31, 1996 consolidated financial statements have been restated and
reclassified from those previously filed in the 1997 first quarter Form 10-Q.
Such restatement and reclassifications are described in Note 1 to the
consolidated financial statements included in the Company's Form 10-K/A-2 for
the year ended December 31, 1996. Additionally, certain reclassifications have
been made to the previously filed March 31, 1997 consolidated financial
statements.
2. EQUIPMENT, FURNITURE AND LEASEHOLD IMPROVEMENTS
Equipment, furniture and leasehold improvements consist of:
MARCH 31, DECEMBER 31,
1997 1996
---------- ----------
Computer equipment............................ $ 881,343 $ 673,699
Office equipment and furniture................ 761,529 697,947
Leasehold improvements........................ 117,651 102,785
---------- ----------
1,760,523 1,474,431
Less accumulated depreciation and
amortization................................ (728,345) (666,434)
---------- ----------
$1,032,178 $ 807,997
========== ==========
3. ACCOUNTS RECEIVABLE FROM RELATED PARTY
During the first quarter of 1997, the Company paid various expenses on
behalf of J. Michael Moore or various entities which he controls amounting to
approximately $16,000. Mr. Moore is the Chairman of the Board and Chief
Executive Officer of the Company. The $16,000 is included in receivables from
related party shown in the Stockholders' Equity section of the Consolidated
Balance Sheet. Of this amount, approximately $10,000 is related to the
litigation defense associated with a lawsuit with Ditto Properties, Inc., in
connection with the Company being named therein as garnishee. (See Part 1,
Item 3, Legal Proceedings, in the Company's Form 10-K for the year ended
December 31, 1996.)
5
<PAGE>
DIVERSIFIED CORPORATE RESOURCES, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
4. INCOME TAXES
The income tax (provision) benefit and the amount computed by applying
the federal statutory income tax rate to income before income taxes differs as
follows:
FOR THE THREE MONTHS
ENDED MARCH 31,
----------------------
1997 1996
-------- ---------
Tax provision (at statutory rate)............. $(79,545) $(114,946)
Utilization of net operating loss
carryforwards................................ 79,545 114,946
Alternative minimum tax....................... - -
State income tax (expense) benefit............ 42,681 (50,021)
-------- ---------
Total....................................... $ 42,681 $ (50,021)
======== =========
5. OTHER SHORT-TERM DEBT
On August 26, 1996, the Company entered into a $300,000 line of credit
agreement for the purchase of fixed assets. Interest is payable monthly at
prime plus 2.5% and the fixed assets financed and certain subordinated accounts
receivable are pledged as collateral. The line of credit of approximately
$182,000 at March 31, 1997, will convert into long-term debt upon $300,000 being
advanced, depending on the Company's continued relationship with the lender.
The long-term debt will have a five year term and bear interest monthly at prime
plus 2.5%.
6. CONTINGENCIES
The Company is named as a garnishee in a lawsuit against the majority
shareholder, which the Company believes is without merit. As the result of an
Agreed Temporary Order dated October 24, 1996, the Company was non-suited in
this matter. The Company has filed a separate lawsuit against the plaintiff
seeking damages and reimbursement of expense, alleging that plaintiffs
interfered with Company business transactions and proposed financings resulting
in delays of certain transactions, lost opportunities, lost profits and other
significant losses. Additionally, the Company has been named in a lawsuit
filed by two former employees claiming damages in excess of $29 million each for
breach of contract and various other allegations. The Company has filed a third
party petition against one of these plaintiffs and a counterclaim against the
other plaintiff. The Company is also involved in certain other litigation and
disputes not previously noted. With respect to all the aforementioned matters,
management believes they are without merit and has concluded that the ultimate
resolution of such will not have a material effect on the Company's consolidated
financial statements.
7. NEW ACCOUNTING PRONOUNCEMENT
In February, 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standards No. 128, "Earnings per Share"
("Statement 128"), which is effective for periods ending after December 15,
1997. Statement 128 specifies the computation, presentation and disclosure
requirements for earnings per share ("EPS"). Some of the changes made to current
EPS standards include: (i) eliminating the presentation of primary EPS and
replacing it with basic EPS, with the principal difference being that common
stock equivalents are not considered in computing basic EPS, (ii) eliminating
the modified treasury stock method and the three percent materiality provision,
and (iii) revising the contingent share provision and the supplemental EPS data
requirements. Statement 128 also requires dual presentation of basic and
diluted EPS on the face of the income statement, as well as a reconciliation of
the numerator and denominator used in the two computations of EPS. Basic EPS is
defined by Statement 128 as net income from continuing operations divided by the
average number of common shares outstanding without the consideration of common
stock equivalents which may be dilutive to EPS. The Company's current
methodology for computing its fully diluted EPS will not change in future
periods as a result of its adoption of Statement 128.
6
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1997 COMPARED TO THREE MONTHS ENDED MARCH
31, 1996
Net service revenues increased approximately $1.1 million or 17.1% to $7.3
million in the first quarter of 1997, compared to $6.2 million for the
comparable 1996 quarter. First quarter 1997 net service revenues were reduced
by approximately $350,000 for direct write-offs and provisions taken by the
Company for actual and estimated losses for applicants who accepted employment
during the first quarter but did not start work or did not remain in employment
for the guaranteed period compared to $112,000 in 1996, which included an
$81,000 credit for a change in estimates of the December 1995 allowance. In
spite of this provision, permanent placement revenues increased approximately
$903,000 or 32.5% to $3.7 million for the quarter ended March 31, 1997, compared
to $2.8 million for the comparable 1996 quarter. Specialty service revenues
increased approximately $318,000 or 20.4% to $1.9 million for the first quarter
of 1997, compared to $1.6 million for the comparable 1996 quarter. The
increases in permanent placement and specialty services were primarily
attributable to the Company's continued focus on high-end niche employment
markets, such as the information technology and engineering/technical
disciplines. New offices opened since the end of the first quarter in 1996 also
contributed $170,000 to revenues during the first quarter of 1997. Contract
placement revenues decreased approximately $157,000 or 8.3% to $1.7 million in
the first quarter of 1997, compared to $1.9 million for the comparable 1996
quarter. Contract placement revenues declined slightly as a result of a lower
number of people on job assignments than were anticipated for the first quarter
of 1997. The decrease in personnel on assignment was primarily attributable to
certain contracts coming to an end, the Company not replacing these contracts
until late in the quarter, and certain personnel being converted to permanent
positions. In addition, due to unusually high recruiter turnover at the end of
1996, it took management longer to train new recruiters to assist in finding
qualified applicants for its job orders during the first quarter of 1997.
Gross margin increased approximately $237,000 or 13.8 % to $1.9 million in
the first quarter of 1997. Gross margin as a percentage of net service revenues
declined to 26.7% in the first quarter of 1997 compared to 27.5% in the
comparable period in 1996. As discussed above, contract placement revenues were
down as a result of the lower number of personnel on assignment. As the result
of lower contract placement revenues to cover certain field office and recruiter
compensation expenses, contract placement gross margins were lower than
anticipated during the first quarter of 1997.
Selling, general and administrative expenses increased approximately
$520,000 or 42.4% to $1.7 million in the first quarter of 1997 compared to $1.2
million in the comparable quarter in 1996. Selling, general and administrative
expenses as a percentage of net service revenues increased to 24.0% in the first
quarter of 1997 from 19.7% in the comparable quarter in 1996. The dollar
increase was primarily the result of increased marketing and recruiting
expenses, increased expenditures on the Company's back office to support the
growth in sales, and litigation expenses. Included in the increase in selling,
general and administrative expenses were increases in selling expenses of
approximately $82,000, general and administrative expenses of approximately
$329,000 and litigation expenses of approximately $109,000 for the first quarter
of 1997 compared to the comparable quarter in 1996. (See Part 1. Item 3. Legal
Proceedings, in the Company's Form 10-K for the year ended December 31, 1996.)
The increase in general and administrative expenses was primarily the result of
an increase in the provision for uncollectible accounts to approximately
$204,000 for the first quarter of 1997, compared to $5,000 for the comparable
1996 quarter. The increase in the provision for uncollectable accounts was
primarily the result of a $56,000 reduction in the allowance during the first
quarter of 1996, resulting from a change in estimate of the December 31, 1995
allowance, and an increase in the provision for uncollectible accounts
receivable during the first quarter of 1997 to increase the allowance for bad
debt and for an increase in non-performing accounts aging beyond 75 days at
March 31, 1997. During the first quarter of 1997, the Company also lowered its
provision for estimated outstanding medical insurance claims associated with its
self-insured medical insurance program, which reduced general and administrative
expenses by $50,000.
Other expenses declined approximately $44,000 to $49,000 in the first
quarter of 1997 compared to approximately $93,000 in the comparable quarter in
1996. The decrease in expenses was the result of a decrease in the loss from
joint venture operations and the collection of a receivable previously written
off associated with a prior year sale of assets.
The income tax benefit was approximately $43,000 for the first quarter of
1997, compared to an income tax expense of approximately $50,000 for the first
quarter of 1996. This decrease of approximately $93,000 resulted primarily from
a first quarter 1997 credit of approximately $68,000 relating to an estimated
prior year provision taken by the Company for state income tax expense.
7
<PAGE>
The extraordinary item-gain on debt restructuring, net of income taxes, of
approximately $43,000 during the first quarter of 1997 resulted from the Company
settling certain prior year delinquent accounts payable on a discounted basis.
As a result of the above factors, net income decreased approximately
$104,000 or 30.8% to approximately $234,000 in the first quarter of 1997 as
compared to $338,000 in 1996.
LIQUIDITY AND CAPITAL RESOURCES
Working capital was approximately $14,000 at March 31, 1997, compared to
working capital of approximately $95,000 at December 31, 1996. The decrease in
working capital of approximately $81,000 during the first quarter of 1997 was
primarily due to an increase in the Company's current liabilities, including
borrowings of $85,000 on an equipment line of credit for the purchase of
computer equipment and other fixed assets to build its back office to support
the growth in sales.
Cash flow provided by operating activities of approximately $171,000
resulted primarily from the profitable operations of the Company during the
first quarter of 1997. The Company made capital expenditures of approximately
$286,000 during the first quarter of 1997, primarily to improve its computer
systems, data base operations, and back office operations. As mentioned above,
the Company borrowed approximately $85,000 on a line of credit to purchase
computer equipment to support its back office operations, and increased its
factored accounts receivable borrowings by $125,000 to fund its operations
during the first quarter of 1997.
The Company is continually evaluating various financing strategies to be
utilized in expanding its business and to fund future growth or acquisitions.
Management of the Company anticipates that the cash flow from operations will
provide adequate liquidity to fund its operations for the foreseeable future.
Inflation has not had a significant effect on the Company's operating
results.
8
<PAGE>
PART II OTHER INFORMATION
DIVERSIFIED CORPORATE RESOURCES, INC. AND SUBSIDIARIES
ITEM 1. LEGAL PROCEEDINGS
Not Applicable.
ITEM 2. CHANGES IN SECURITIES
Not Applicable.
ITEM 3. DEFAULTS ON SENIOR SECURITIES
Not Applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not Applicable.
ITEM 5. OTHER INFORMATION
Not Applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. EXHIBITS
10.1* Diversified Corporate Resources, Inc. Amended and Restated 1996
Nonqualified Stock Option Plan (incorporated by reference from
Exhibit 4.3 to the Registrant's Form S-8 (Reg. No. 333-27867))
* Management Compensation Plan
11.1 Statement Regarding Computation of Per Share Earnings included
herein
b. REPORTS ON FORM 8-K
On April 25, 1997, the Company filed a Form 8-K announcing the termination
of Weaver & Tidwell L.L.P. as the Company's independent accounting firm as of
April 18, 1997, and the engagement of Coopers & Lybrand L.L.P. as the Company's
independent accounting firm as of April 22, 1997.
9
<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.
DIVERSIFIED CORPORATE RESOURCES, INC.
Registrant
DATE: June 18, 1997 By: /s/ J. Michael Moore
-----------------------------------
J. Michael Moore,
CHIEF EXECUTIVE OFFICER
DATE: June 18, 1997 By: /s/ M. Ted Dillard
-----------------------------------
M. Ted Dillard
PRESIDENT AND SECRETARY
<PAGE>
EXHIBIT 11.1
DIVERSIFIED CORPORATE RESOURCES, INC. AND SUBSIDIARIES
STATEMENT REGARDING EARNINGS PER SHARE
FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND 1996
1997 1996
--------- ---------
PRIMARY
SHARES OUTSTANDING:
Weighted average number of shares outstanding... 1,635,312 1,758,211
Net effect of dilutive stock options (1)........ 209,429 -
--------- ---------
Total........................................... 1,844,741 1,758,211
========= =========
Income before extraordinary item.................. $ 190,872 $ 338,075
========= =========
Earnings per common share before
extraordinary item.............................. $ 0.11 $ 0.19
========= =========
Income from extraordinary item.................... $ 43,083 $ -
========= =========
Earnings per common share from
extraordinary item.............................. $ 0.02 $ -
========= =========
Net income........................................ $ 233,955 $ 338,075
========= =========
Net income per common share....................... $ 0.13 $ 0.19
========= =========
FULLY DILUTED
SHARES OUTSTANDING:
Weighted average number of shares outstanding... 1,635,312 1,758,211
Net effect of dilutive stock options (1)........ 215,488 -
--------- ---------
Total........................................... 1,850,800 1,758,211
========= =========
Income before extraordinary item.................. $ 190,872 $ 338,075
========= =========
Earnings per common share before
extraordinary item.............................. $ 0.11 $ 0.19
========= =========
Income from extraordinary item.................... $ 43,083 $ -
========= =========
Earnings per common share from
extraordinary item.............................. $ 0.02 $ -
========= =========
Net income........................................ $ 233,955 $ 338,075
========= =========
Net income per common share....................... $ 0.13 $ 0.19
========= =========
(1) The effects of dilutive stock options are based upon the treasury stock
method using average market price during the period for primary amounts,
and the higher of average market price or the market price at the end of
the period for fully diluted amounts.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM
THE CONSOLIDATED FINANCIAL STATEMENTS OF DIVERSIFIED CORPORATE RESOURCES,
INC. AND SUBSIDIARIES AS OF AND FOR THE THREE MONTHS ENDED MARCH 31, 1997
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 489,430
<SECURITIES> 0
<RECEIVABLES> 4,129,828
<ALLOWANCES> 486,000
<INVENTORY> 0
<CURRENT-ASSETS> 4,253,598
<PP&E> 1,760,523
<DEPRECIATION> 728,345
<TOTAL-ASSETS> 5,725,523
<CURRENT-LIABILITIES> 4,239,713
<BONDS> 67,669
0
0
<COMMON> 188,116
<OTHER-SE> 1,217,961
<TOTAL-LIABILITY-AND-EQUITY> 5,725,723
<SALES> 7,278,598
<TOTAL-REVENUES> 7,278,598
<CGS> 5,334,043
<TOTAL-COSTS> 7,081,428
<OTHER-EXPENSES> (21,546)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 70,525
<INCOME-PRETAX> 148,191
<INCOME-TAX> (42,681)
<INCOME-CONTINUING> 190,872
<DISCONTINUED> 0
<EXTRAORDINARY> 43,083
<CHANGES> 0
<NET-INCOME> 233,955
<EPS-PRIMARY> .13
<EPS-DILUTED> .13
</TABLE>
