<PAGE>
==================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 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 May 31, 1996
____________
OR
( ) TRANSITION REPORT PURSUANT TO
SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For The Transition Period From _____________
To _____________
_________________________
Nichols Research Corporation
Commission File Number 0-15295
(Exact name of registrant as specified in its charter)
_____________________
DELAWARE 63-0713665
___________________________ _________________
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification no.)
4040 Memorial Parkway, South
Huntsville, Alabama 35802-1326
(205) 883-1140
(Address, including zip code, of principal offices)
_____________________
NO CHANGE
(Former name, address and fiscal year if changed since last
report)
_____________________
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 issuerOs
classes of common stock, as of the latest practical date.
COMMON STOCK, $.01 PAR VALUE
6,514,116 SHARES OUTSTANDING ON May 31, 1996
_____________________
==================================================================
<PAGE>
FORM 10-Q
NICHOLS RESEARCH CORPORATION
QUARTERLY REPORT FOR THE PERIOD ENDED MAY 31, 1996
INDEX
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Statements of Income for the Three
Months and Nine Months Ended May 31, 1996 and May 31, 1995
(Unaudited)
Condensed Consolidated Balance Sheets as of May 31, 1996 and
August 31, 1995 (Unaudited)
Condensed Consolidated Statements of Changes in Stockholders'
Equity for the Nine Months Ended May 31, 1996 and May 31, 1995
(Unaudited)
Condensed Consolidated Statements of Cash Flows for the Nine
Months Ended May 31, 1996 and May 31, 1995 (Unaudited)
Notes to Condensed Consolidated Financial Statements
(Unaudited)
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Part II. OTHER INFORMATION
Item 1. Legal Proceedings
Item 6. Exhibits and Reports on Form 8-K
Signatures
<PAGE>
FORM 10-Q
NICHOLS RESEARCH CORPORATION
PART I - FINANCIAL INFORMATION
Item 1 - Financial Statements
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
For the Three Months Ended For the Nine Months Ended
-------------------------- -------------------------
May 31, May 31, May 31, May 31,
1996 1995 1996 1995
-----------------------------------------------------
(amounts in thousands except share data)
<S> <C> <C> <C> <C>
Revenues...................... $ 55,169 $ 44,444 $ 153,202 $ 116,848
Costs and expenses:
Direct and allocable costs... 46,713 38,183 129,735 101,165
General and administrative
expenses..................... 4,899 3,791 13,879 8,648
--------------------------------------------------
Total costs and expenses. 51,612 41,974 143,614 109,813
--------------------------------------------------
Operating profit.............. 3,557 2,470 9,588 7,035
Other income (expense):
Interest expense............. (99) (57) (226) (65)
Other income, principally
interest..................... 262 516 749 1,188
--------------------------------------------------
Income before income taxes.... 3,720 2,929 10,111 8,158
Income taxes.................. 1,344 1,100 3,670 3,025
--------------------------------------------------
Net income.................... $ 2,376 $ 1,829 $ 6,441 $ 5,133
==================================================
Earnings per share............ $ .35 $ .29 $ .96 $ .83
==================================================
Weighted average number of
common and common
equivalent shares............ 6,859,862 6,299,391 6,741,527 6,211,111
==================================================
</TABLE>
NOTE: The Company has not declared or paid dividends in any of the
periods presented.
See accompanying notes.
<PAGE>
FORM 10-Q
NICHOLS RESEARCH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
May 31, August 31,
1996 1995
---------------------------------
(amounts in thousands)
ASSETS
Current assets:
Cash and temporary cash investments...... $ 13,064 $ 17,196
Accounts receivable...................... 67,094 53,103
Deferred income taxes.................... 1,351 1,351
Other.................................... 2,416 1,593
---------------------------------
Total current assets................... 83,925 73,243
Long-term investments..................... 4,495 4,530
Property and equipment:
Computers and related equipment.......... 15,866 11,973
Furniture, equipment and improvements.... 6,282 5,149
Equipment - contracts.................... 5,771 5,771
---------------------------------
27,919 22,893
Less accumulated depreciation............ 13,768 11,434
---------------------------------
Net property and equipment............. 14,151 11,459
Goodwill (net of accumulated
amortization)............................ 20,774 8,803
Other assets.............................. 4,341 2,844
---------------------------------
Total assets.............................. $127,686 $100,879
See accompanying notes.
<PAGE>
FORM 10-Q
NICHOLS RESEARCH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
May 31, August 31,
1996 1995
------------------------------
(amounts in thousands except
per share data)
LIABILITIES AND STOCKHOLDERSO EQUITY
Current liabilities:
Accounts payable......................... $ 14,005 $ 16,886
Accrued compensation and benefits........ 9,667 6,897
Income taxes payable..................... 104 969
Note payable............................. 14,500 -
Current maturities of long-term debt..... 1,191 1,187
Other.................................... 3,643 531
-----------------------------
Total current liabilities............ 43,110 26,470
Deferred income taxes..................... 1,195 1,195
Long-term debt:
Industrial development bonds............. 1,777 2,000
Long-term notes.......................... 2,716 3,366
-----------------------------
Total long-term debt................. 4,493 5,366
Stockholders' equity:
Common stock, par value $.01 per share
Authorized - 20,000,000 and
10,000,000 shares, respectively
Issued - 6,626,449 and 6,439,227
shares, respectively................. 66 64
Additional paid-in capital.............. 28,000 24,258
Retained earnings....................... 52,110 45,669
Less cost of treasury stock - 112,333
and 184,377 shares, respectively...... (1,288) (2,143)
-----------------------------
Total stockholders' equity............ 78,888 67,848
-----------------------------
Total liabilities and stockholders'
equity................................... $ 127,686 $ 100,879
See accompanying notes.
<PAGE>
FORM 10-Q
NICHOLS RESEARCH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS'
EQUITY (UNAUDITED)
<TABLE>
<CAPTION>
Additional
Common Stock Paid-In Retained Treasury
Shares Amount Capital Earnings Stock Total
--------------------------------------------------------------
(amounts in thousands except share data)
For the Nine Months Ended May 31, 1996
--------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance, August 31, 1995 6,439,227 $ 64 $ 24,258 $ 45,669 $ (2,143) $ 67,848
Exercise of stock options 155,963 1 1,529 - - 1,530
Employee stock purchases 31,259 1 690 - - 691
Re-issue 72,044 shares of
treasury stock - - 1,523 - 855 2,378
Net income - - - 6,441 - 6,441
----------------------------------------------------------------
Balance, May 31, 1996 6,626,449 $ 66 $ 28,000 $ 52,110 $ (1,288) $ 78,888
================================================================
For the Nine Months Ended May 31, 1995
--------------------------------------
Balance, August 31, 1994 6,262,137 $ 63 $ 22,528 $ 38,467 $ (3,750) $ 57,308
Exercise of stock options 91,038 1 620 - - 621
Employee stock purchases 34,948 - 417 - - 417
Re-issue 138,123 shares of
treasury stock - - 213 - 1,607 1,820
Net income - - - 5,133 - 5,133
----------------------------------------------------------------
Balance, May 31, 1995 6,388,123 $ 64 $ 23,778 $ 43,600 $ (2,143) $ 65,299
================================================================
</TABLE>
See accompanying notes.
<PAGE>
FORM 10-Q
NICHOLS RESEARCH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the Nine Months Ended
May 31, May 31,
1996 1995
-----------------------------
(amounts in thousands)
Cash flows from operating activities:
Net income.............................. $ 6,441 $ 5,133
Adjustments to reconcile net income
to net cash provided (used) by
operating activities:
Depreciation and amortization.......... 3,070 2,017
Loss on sale of investments............ - 34
Changes in assets and liabilities net
of effects of acquisitions:
Accounts receivable.................... (6,959) (2,535)
Other assets........................... (677) 823
Accounts payable....................... (4,917) (2,373)
Accrued compensation and benefits...... 1,658 2,300
Income taxes payable................... (865) 703
Other current liabilities.............. 1,687 241
----------------------------
Total adjustments.................. (7,003) 1,210
----------------------------
Net cash provided (used) by operating
activities.............................. (562) 6,343
Cash flows from investing activities:
Purchase of property and equipment...... (3,113) (1,328)
Payment for non-compete agreement....... - (900)
Payments for acquisitions, net of cash
acquired............................... (14,763) (2,869)
Payments for investment in affiliates... (1,546) (1,535)
Proceeds from sale of long-term
investments............................ - 3,284
----------------------------
Net cash used by investing activities... (19,422) (3,348)
Cash flows from financing activities:
Proceeds from issuance of common stock.. 2,221 1,039
Proceeds from sale of treasury stock.... - 734
Proceeds from industrial development
bonds.................................. - 2,225
Proceeds from note payable.............. 14,500 -
Payments of long-term debt.............. (869) (1,003)
----------------------------
Net cash provided by financing
activities............................. 15,852 2,995
----------------------------
Net increase (decrease) in cash......... (4,132) 5,990
<PAGE>
FORM 10-Q
NICHOLS RESEARCH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED) (CONTINUED)
Cash and temporary cash investments at
beginning of period.................... 17,196 19,355
----------------------------
Cash and temporary cash investments at
end of period.......................... $ 13,064 $ 25,345
============================
Non-cash transactions:
Deferred compensation resulting from
the exercise of restricted stock
options and issuance of treasury
stock.................................. $ - $ 81
Issuance of treasury stock as
consideration in acquisition........... 2,378 1,005
See accompanying notes.
<PAGE>
FORM 10-Q
NICHOLS RESEARCH CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
May 31, 1996
Note 1 - Basis of Presentation and Organization
The condensed consolidated financial statements (and all other
information in this report) have not been examined by independent
auditors, but in the opinion of the Company, all adjustments,
consisting of the normal recurring accruals necessary for a fair
presentation of the results for the period, have been made. The
condensed consolidated financial statements include the accounts
of Nichols Research Corporation and its wholly-owned subsidiaries.
All significant intercompany balances and transactions have been
eliminated in consolidation.
On July 9, 1996, the Company announced the renaming and
modification of four internal business areas to reflect continued
evolution and development within the Company. The names and
organizations will be used to better capture and focus the Company
into specific markets, domains, clients, and cultures appropriate
to the respective line of business. The names are Nichols InfoFed
(Government I/T), Nichols Federal (Defense and Intelligence),
NicholSELECT (Healthcare and Insurance I/T), and Nichols InfoTec
(Commercial I/T).
Note 2 - Investments and Affiliates
In October 1995, the Company entered into an agreement to purchase
1,000 shares of Series B Preferred Stock of HealthGate Data
Corporation (HealthGate). HealthGate provides a biomedical and
health information system on the World Wide Web. The agreement
provides for four equal purchase installments of $400,000,
contingent upon HealthGate achieving certain milestones as defined
in the agreement. Three installments have been made as of May 31,
1996. The 1,000 shares of Preferred Stock are convertible to 20%
of the common stock on a fully diluted basis at the date of the
agreement.
In January 1996, the Company invested approximately $200,000 to
acquire a 50% interest in a joint venture, HealthShare, LLC.
HealthShare's mission is to provide an integrated information
system and support services that enhance the quality and
efficiency of healthcare delivery at a reduced cost.
<PAGE>
FORM 10-Q
NICHOLS RESEARCH CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED) (CONTINUED)
On May 31, 1996, the Company entered into a stock purchase
agreement and purchased all of the issued and outstanding capital
stock of Advanced Marine Enterprises, Inc. (AME), a Virginia
corporation. The purchase price was approximately $17,522,000, of
which $15,122,000 was payable in cash and $2,400,000 was paid in
Common Stock of the Company. The cash was borrowed under the
Company's existing credit agreement. The transaction was
accounted for as a purchase and, accordingly, the purchase price
and liabilities assumed have been allocated to the assets
acquired, including goodwill of approximately $12,500,000 to be
amortized over 15 years. The Consolidated Balance Sheet at May
31, 1996 includes the accounts of AME.
Note 3 - Reclassification
Certain prior period amounts have been reclassified to conform
with the current period's presentation.
<PAGE>
FORM 10-Q
NICHOLS RESEARCH CORPORATION
Item 2 - Management's Discussion and Analysis of Financial
Condition and Results of Operations
Results of Operations
The Company provides information systems and technology services
to agencies of the Department of Defense, non-defense federal
agencies, state governments and commercial entities. The major
portion of the Company's revenues results from services performed
under U.S. Government contracts, either directly or through
subcontracts.
The following tables set forth, for the periods indicated, the
amount and percentage change for certain items in the consolidated
statements of income and the percentages such items bear to
consolidated revenues.
<TABLE>
<CAPTION>
For the Three Months Ended For the Nine Months Ended
May 31, 1996 Compared May 31, 1996 Compared
to the Three Months Ended to the Nine Months Ended
May 31, 1995 May 31, 1995
Amount of Percentage Amount of Percentage
Change Change Change Change
--------------------------------------------------------
(amounts in thousands)
<S> <C> <C> <C> <C>
Revenues................. $ 10,725 24.1 % $ 36,354 31.1 %
Cost and expenses:
Direct and allocable
costs................... 8,530 22.3 28,570 28.2
General and
administrative
expenses............... 1,108 29.2 5,231 60.5
Total cost and
expenses............ 9,638 23.0 33,801 30.8
Operating profit......... 1,087 44.0 2,553 36.3
Other income (expense),
net..................... (296) (64.5) (600) (53.4)
Income before income
taxes................... 791 27.0 1,953 23.9
Income taxes............. 244 22.2 645 21.3
Net income............... $ 547 29.9% $ 1,308 25.5 %
</TABLE>
<PAGE>
FORM 10-Q
NICHOLS RESEARCH CORPORATION
<TABLE>
<CAPTION>
For the Three Months Ended For the Nine Months Ended
May 31, May 31, May 31, May 31,
1996 1995 1996 1995
---------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues................. 100.0 % 100.0 % 100.0 % 100.0 %
Cost and expenses:
Direct and allocable
costs................... 84.7 85.9 84.7 86.6
General and
administrative
expenses................ 8.9 8.5 9.0 7.4
---------------------------------------------------------
Total cost and
expenses............. 93.6 94.4 93.7 94.0
---------------------------------------------------------
Operating profit......... 6.4 5.6 6.3 6.0
Other income (expense),
net..................... 0.3 1.0 0.3 1.0
---------------------------------------------------------
Income before income
taxes................... 6.7 6.6 6.6 7.0
Income taxes............. 2.4 2.5 2.4 2.6
---------------------------------------------------------
Net income............... 4.3 % 4.1 % 4.2 % 4.4 %
=========================================================
</TABLE>
Revenues for the three months ended May 31, 1996 increased 24
percent, or $10.7 million and for the nine months ended May 31,
1996 increased 31 percent, or $36.4 million, as compared to the
three months and nine months ended May 31, 1995. The increase was
primarily the result of the revenues contributed by a significant
information technology services contract with a commercial
customer, and the revenues contributed by two information
technology subsidiaries acquired late in the 1995 fiscal year
(approximately 67% of the increase). The Company also realized an
increase in revenues from its existing contract base.
<PAGE>
FORM 10-Q
NICHOLS RESEARCH CORPORATION
Costs and expenses were 93.6 percent of revenues for the three
months and 93.7 percent of revenues for the nine months ended May
31, 1996, as compared to 94.4 percent for the three months and
94.0 percent for the nine months ended May 31, 1995. The
reduction in direct and allocable costs as a percentage of
revenues is offset by increases in general and administrative
expenses which reflect the efforts to use contract cost reductions
and increased margins to fund planned increases in business
development and marketing efforts, primarily with commercial
market opportunities.
Other income consists primarily of interest income. Substantially
all available cash is invested in interest bearing accounts or
fixed income instruments. The 53.4 percent decrease in other
income for the nine months ended May 31, 1996 as compared to the
nine months ended May 31, 1995 is the result of the use of cash to
make strategic acquisitions and investments in affiliates.
Net income increased 29.9 percent, or $547,000 for the three
months and 25.5 percent, or $1,308,000 for the nine months ended
May 31, 1996, as compared to the same periods in the prior year.
The increase is the result of reasons discussed above.
Financial Condition
For the nine months ended May 31, 1996, operating activities used
$562,000 in cash as compared to providing $6,343,000 during the
nine months ended May 31, 1995. The decrease is the result of
changes in working capital requirements. The Company realized
proceeds from the issuance of common stock of $2,222,000 for the
nine months ended May 31, 1996 as compared to $1,039,000 during
the nine months ended May 31, 1995. During the nine months ended
May 31, 1995, the Company also reissued 70,000 shares of treasury
stock, providing cash of $734,000.
Working capital was $40,815,000 at May 31, 1996 as compared to
$51,597,000 at May 31, 1995. The Company's working capital ratios
were 1.9:1 at May 31, 1996 as compared to 3.6:1 at May 31, 1995.
The Company also has $4,495,000 invested primarily in fixed income
instruments which are classified as noncurrent assets at May 31,
1996, as compared to $4,542,000 at May 31, 1995.
The Company has a bank line of credit which provides for borrowing
up to $73,500,000, secured primarily by accounts receivable. On
May 31, 1996, the Company borrowed $14,500,000 under this credit
agreement. The proceeds were used to acquire the outstanding
capital stock of Advanced Marine Enterprises, Inc. (AME), a
Virginia corporation. The Company had no other outstanding
borrowings under the provisions of this line of credit. Long-term
debt includes a term note used to purchase computer hardware for
lease to a customer under a system integration contract. The
proceeds from an Alabama State Industrial Development Bond are
being used to expand information technology programs.
<PAGE>
FORM 10-Q
NICHOLS RESEARCH CORPORATION
Purchases of property and equipment were $3,113,000 during the
nine months ended May 31, 1996, as compared to $1,328,000 during
the nine months ended May 31, 1995. The Company is upgrading its
enterprise information systems as well as replacing capital assets
in the normal course of business.
The Company is actively pursuing new contracts for information
systems development and computer system integration activities
which could require the Company to acquire substantial amounts of
computer hardware. The Company is also regularly evaluating
potential acquisition candidates. The Company believes that its
existing capital resources, together with available borrowing
capacity, are sufficient to fund these activities.
During the nine months ended May 31, 1996, the Company won new
contract awards totaling approximately $449,495,000 as compared to
approximately $135,153,000 for the nine months ended May 31, 1995.
The acquisition of AME provided additional backlog of
approximately $180,000,000. The trend in contract awards is for
increased amounts to be awarded in options.
The Company's backlog at May 31, 1996 and May 31, 1995 was as
follows:
1996 1995
---- ----
Base period contracts and
exercised options, net of
services provided........ $ 519,143,000 $ 289,560,000
Options................... 431,233,000 230,441,000
------------- -------------
Total.................... $ 950,376,000 $ 520,001,000
============= =============
Contracts with the U.S. Government, either directly or through
subcontracts, are the primary source of backlog values.
The Company's business is dependent upon its ability to win new
contracts, the funding levels of awarded contracts and the
Company's ability to perform under contract provisions.
<PAGE>
FORM 10-Q
NICHOLS RESEARCH CORPORATION
PART II - OTHER INFORMATION
Item 1 - Legal Proceedings
On May 31, 1996, the Company purchased all of the capital stock of
Advanced Marine Enterprises, Inc. (AME) pursuant to a Stock
Purchase Agreement which provided for indemnity of the Company by
the Sellers from all damages arising out of or connected with
pending litigation against AME. An Escrow Agreement was signed by
Sellers to provide security for the indemnity obligations assumed
by Sellers under the Stock Purchase Agreement in the amount of
$2,700,000.
One of the described cases was PRC, Inc. v. AME, et al, instituted
on January 2, 1996 in the Circuit Court of Arlington County,
Virginia, Chancery No. 96.1 wherein PRC, Inc. in a nine count
complaint (breach of fiduciary duty, intentional interference with
contractual relations, intentional interference with prospective
business and contractual relations, specific performance in breach
of PRC terms and conditions of employment, violation of Virginia
Trade Secrets Act, violation of Virginia Computer Crimes Act,
violation of Virginia Code Annotated 18.2-499, conversion,
request for accounting pursuant to Virginia Code ANN.8.01-31)
sought injunctive relief and both compensatory and punitive
damages. In that action PRC alleged that, among other matters,
AME and certain of its employees conspired to illegally acquire
the PRC Engineering Department, including its employees,
customers, property and proprietary information.
The trial of this non-jury action commenced May 28, 1996 and
concluded on June 19, 1996. At this time the judge orally
announced his tentative findings and conclusions of law awarding
PRC, Inc. monetary damages totaling approximately $4,100,000,
exclusive of attorneysO fees and expenses estimated to be in the
range of $650,000 to $700,000. While the courtOs pronouncement is
presently inconclusive and subject to change, it is an indication
of the amount of the final judgment expected to be entered before
August 1, 1996.
An agreement has been reached wherein Sellers will increase the
funding of the Escrow Agreement to fully cover the anticipated
judgment and accrued interest. The amount now provided in such
agreement is approximately $5,550,000. Management believes that
such amounts will be sufficient to pay any judgements, costs or
expenses that may ultimately result from this matter.
<PAGE>
FORM 10-Q
NICHOLS RESEARCH CORPORATION
Item 6 - Exhibits and Reports on Form 8-K
(a) Exhibits.
Exhibit No. Description
----------- -----------
27 Financial Data Schedule
(b) The Company has filed the following reports on Form 8-K for
the Three Months ended May 31, 1996.
On June 17, 1996, the Company filed Form 8-K with the
Commission reporting the acquisition of all of the outstanding
capital stock of Advanced Marine Enterprises, Inc. (AME), a
Virginia corporation. The purchase agreement was executed and the
acquisition was consumated on May 31, 1996. The financial
statements required by Item 7(a)(4) of Form 8-K shall be
filed by amendment no later than 60 days after June 15, 1996. The
pro forma financial information required by Item 7(b) of Form
8-K shall be filed by amendment no later than 60 days after
June 15, 1996.
<PAGE>
FORM 10-Q
NICHOLS RESEARCH CORPORATION
SIGNATURES
MANAGEMENT REPRESENTATION
The accompanying unaudited Consolidated Balance Sheets at May
31, 1996, and August 31, 1995 as well as the Consolidated
Statements of Income for the three months ended May 31, 1996 and
May 31, 1995 and the Consolidated Statements of Income,
Consolidated Statements of Changes in Stockholders' Equity and
Consolidated Statements of Cash Flows for the nine months ended
May 31, 1996 and May 31, 1995, are unaudited by independent public
accountants; however, in the opinion of management, all
adjustments, consisting only of normal recurring adjustments,
necessary for a fair presentation of the results of operations for
the periods presented and financial position for the dates
presented have been made.
July 15, 1996 By:
- ----------------------- ----------------------
Date Allen E. Dillard
Chief Financial
Officer
(Principal Finance and
Accounting Officer)
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.
NICHOLS RESEARCH CORPORATION
July 15, 1996 By:
- ----------------------- ---------------------
Date Allen E. Dillard
Chief Financial
Officer
(Principal Finance and
Accounting Officer)
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> AUG-31-1996
<PERIOD-END> MAY-31-1996
<CASH> 13,064
<SECURITIES> 0
<RECEIVABLES> 67,094
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 83,925
<PP&E> 27,919
<DEPRECIATION> 13,768
<TOTAL-ASSETS> 127,686
<CURRENT-LIABILITIES> 43,110
<BONDS> 4,493
0
0
<COMMON> 66
<OTHER-SE> 78,822
<TOTAL-LIABILITY-AND-EQUITY> 127,686
<SALES> 153,202
<TOTAL-REVENUES> 153,202
<CGS> 129,735
<TOTAL-COSTS> 129,735
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 226
<INCOME-PRETAX> 10,111
<INCOME-TAX> 3,670
<INCOME-CONTINUING> 4,065
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,065
<EPS-PRIMARY> .96
<EPS-DILUTED> .96
</TABLE>
