<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 February 28, 1997
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 issuer's
classes of common stock, as of the latest practical date.
COMMON STOCK, $.01 PAR VALUE
11,684,854 SHARES OUTSTANDING ON February 28, 1997,
_____________________
<PAGE>
FORM 10-Q
NICHOLS RESEARCH CORPORATION
QUARTERLY REPORT FOR THE PERIOD ENDED FEBRUARY 28, 1997
INDEX
Part I. FINANCIAL INFORMATION
Item 1. Financial Statements
Statements of Income for the Three Months and Six
Months Ended February 28,1997 and February 29, 1996
(Unaudited)
Balance Sheets as of February 28, 1997 and August 31,
1996 (Unaudited)
Statements of Changes in Stockholders' Equity for the
Six Months Ended February 28, 1997 and February 29, 1996
(Unaudited)
Statements of Cash Flows for the Six Months Ended February 28,
1997 and February 29, 1996 (Unaudited)
Notes to Financial Statements(Unaudited)
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Part II. OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
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 Six Months Ended
-------------------------- ----------------------------
February 28, February 29, February 28, February 29,
1997 1996 1997 1996
------------------------------------------------------------
(amounts in thousands except share data)
<S> <C> <C> <C> <C>
Revenues........................ $ 91,974 $ 49,003 $ 174,821 $ 98,033
Costs and expenses:
Direct and allocable costs.... 81,871 41,351 154,519 83,022
General and administrative
expenses.................... 5,726 4,559 11,528 8,980
------------------------------------------------------------
Total costs and expenses.. 87,597 45,910 166,047 92,002
------------------------------------------------------------
Operating profit................ 4,377 3,093 8,774 6,031
Other income (expense):
Interest expense.............. (268) (88) (336) (127)
Other income, principally
interest.................... 221 215 483 487
Equity in earnings of
unconsolidated affiliates... 143 - 280 -
Minority interest in
consolidated subsidiaries... (110) - (230) -
------------------------------------------------------------
Income before income taxes...... 4,363 3,220 8,971 6,391
Income taxes.................... 1,583 1,169 3,256 2,326
------------------------------------------------------------
Net income...................... $ 2,780 $ 2,051 $ 5,715 $ 4,065
============================================================
Earnings per common share....... $ .23 $ .20 $ .47 $ .41
============================================================
Weighted average number of
common and common equivalent
shares.......................... 12,336,505 10,083,622 12,264,837 10,023,540
============================================================
</TABLE>
NOTE: The Company has not declared or paid dividends in any of the periods
presented. All references to the number of shares and per share
amounts have been restated to reflect the effect of a three-for-two
stock split effective October 21, 1996.
<PAGE>
FORM 10-Q
NICHOLS RESEARCH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
February 28, August 31,
1997 1996
-------------------------------
(amounts in thousands)
ASSETS
Current assets:
Cash and temporary cash investments......... $ 10,154 $ 21,419
Accounts receivable......................... 105,418 90,232
Deferred income taxes....................... 1,519 1,519
Other....................................... 4,261 2,384
Total current assets..................... 121,352 115,554
-------------------------------
Long-term investments.......................... 4,285 4,483
Property and equipment:
Computers and related equipment............. 18,464 17,182
Furniture, equipment and improvements....... 7,680 6,915
Equipment - contracts....................... 5,771 5,771
-------------------------------
31,915 29,868
Less accumulated depreciation.................. 16,605 14,721
-------------------------------
Net property and equipment................ 15,310 15,147
Goodwill (net of accumulated amortization)..... 20,366 21,004
Investment in affiliates....................... 8,191 4,099
Other assets................................... 2,654 1,677
-------------------------------
Total assets................................... $ 172,158 $ 161,964
===============================
NOTE: All references to the number of shares and per share amounts have
been restated to reflect the effect of a three-for-two stock split
effective October 21, 1996.
<PAGE>
FORM 10-Q
NICHOLS RESEARCH CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED) CONTINUED
February 28, August 31,
1997 1996
-------------------------------
(amounts in thousands except
per share data)
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable.......................... $ 32,824 $ 31,032
Accrued compensation and benefits......... 10,296 9,037
Income taxes payable...................... - 238
Current maturities of long-term debt...... 762 764
Other..................................... 1,457 1,808
-------------------------------
Total current liabilities.................... 45,339 42,879
Deferred income taxes........................ 1,340 1,340
Long-term debt:
Industrial development bonds.............. 1,557 1,777
Long-term notes........................... 2,691 3,007
-------------------------------
Total long-term debt.................... 4,248 4,784
Minority interest in consolidated
subsidiaries............................... 315 -
Stockholders' equity:
Common stock, par value $.01 per share
Authorized - 20,000,000 shares
Issued - 11,853,354 and 11,651,018
shares,respectively................... 119 117
Additional paid-in capital................ 61,309 59,071
Retained earnings......................... 60,776 55,061
Less cost of treasury stock - 168,500
shares................................... (1,288) (1,288)
-------------------------------
Total stockholders' equity............. 120,916 112,961
-------------------------------
Total liabilities and stockholders' equity... $ 172,158 $ 161,964
===============================
NOTE: All references to the number of shares and per share amounts have been
restated to reflect the effect of a three-for-two stock split
effective October 21, 1996.
<PAGE>
FORM 10-Q
NICHOLS RESEARCH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN
STOCKHOLDERS' EQUITY (UNAUDITED)
<TABLE>
<CAPTION>
Additional Total
Common Stock Paid-In Retained Treasury Stockholders'
Shares Amount Capital Earnings Stock Equity
-----------------------------------------------------------------------------
(amounts in thousands except share data)
For the Six Months Ended February 28, 1997
------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Balance, August 31, 1995.... 11,651,018 $ 117 $ 59,071 $ 55,061 $ (1,288) $ 112,961
Exercise of stock options... 167,594 2 1,504 - - 1,506
Employee stock purchases.... 34,742 - 734 - - 734
Net Income.................. - - - 5,715 - 5,715
-----------------------------------------------------------------------------
Balance, February 28, 1997.. 11,853,354 $ 119 $ 61,309 $ 60,776 $ (1,288) $ 120,916
=============================================================================
For Six Months Ended February 29, 1996
--------------------------------------------
Balance, August 31, 1995.... 9,658,841 $ 97 $ 24,225 $ 45,669 $ (2,143) $ 67,848
Exercise of stock options... 187,952 2 1,127 - - 1,129
Employee stock purchases.... 32,628 - 431 - - 431
Net income.................. - - - 4,065 - 4,065
-----------------------------------------------------------------------------
Balance, February 29, 1996.. 9,879,420 $ 99 $ 25,783 $ 49,734 $ (2,143) $ 73,473
=============================================================================
</TABLE>
NOTE: All references to the number of shares and per share amounts have
been restated to reflect the effect of a three-for- two stock split
effective October 21, 1996.
<PAGE>
FORM 10-Q
NICHOLS RESEARCH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
For the Six Months Ended
February 28, February 29,
1997 1996
-------------------------------
(amounts in thousands)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income................................... $ 5,715 $ 4,065
Adjustments to reconcile net income to net
cash provided (used) by operating
activities:
Depreciation and amortization............. 2,835 2,059
Equity in earnings of unconsolidated
affiliates................................ (280) -
Minority interest......................... 315 -
Changes in assets and liabilities net of
effects of acquisitions:
Accounts receivable....................... (15,386) 4,643
Other assets.............................. (2,664) (597)
Accounts payable.......................... 1,792 (6,240)
Accrued compensation and benefits......... 1,259 306
Income taxes payable...................... (238) (969)
Other current liabilities................. (351) 511
------------------------------
Total adjustments......................... (12,718) (287)
------------------------------
Net cash provided (used) by operating
activities........................... (7,003) 3,778
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment........... (2,047) (2,022)
Payment for investment in affiliates......... (4,092) (1,031)
Purchase of long-term investments............ (75) -
Proceeds from the sale of long-term
investments................................ 250 -
------------------------------
Net cash used by investing activities.. (5,964) (3,053)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock....... 2,240 1,560
Payments of long-term debt................... (538) (697)
Proceeds from borrowings on line of credit... 15,000 -
Payments of line of credit borrowings........ (15,000) -
-------------------------------
Net cash provided by financing
activities........................... 1,702 863
<PAGE>
-------------------------------
FORM 10-Q
NICHOLS RESEARCH CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED)
(CONTINUED)
For the Six Months Ended
February 28, February 29,
1997 1996
------------------------------
(amounts in thousands)
Net increase (decrease) in cash and temporary
cash investments.......................... (11,265) 1,588
Cash and temporary cash investments at
beginning of period....................... 21,419 17,196
------------------------------
Cash and temporary cash investments at end
of period................................. $ 10,154 $ 18,784
==============================
NON-CASH TRANSACTIONS:
Adjustment to purchase price allocation...... $ 200 $ -
<PAGE>
FORM 10-Q
NICHOLS RESEARCH CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
February 28, 1997
Note 1 - Basis of Presentation
---------------------
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 majority-owned
subsidiaries and joint ventures. All significant intercompany
balances and transactions have been eliminated in consolidation.
The Company's earnings in unconsolidated affiliates and joint
ventures are accounted for using the equity method.
Note 2 - Stock Split
-----------
On October 9, 1996 the Board of Directors declared a three-for-
two stock split which was paid to shareholders of record on
October 21, 1996. The split was effected on November 4, 1996 by
a stock dividend of one share for every two shares of common
stock outstanding, with cash paid in lieu of fractional shares
based on the stock value on record date. All references to the
number of shares and per share amounts have been restated to
reflect the effect of the split for all periods presented.
Note 3 - New Pronouncements
------------------
The Company adopted Financial Accounting Standards Board
Statement No. 121, Accounting for the Impairment of Long-Lived
Assets and for Long-Lived Assets to be Disposed of, on September
1, 1996. The Company has reviewed long-lived assets and
identifiable intangible assets used in operation of the business
and concluded the assets are not impaired.
If events or changes occur to indicate that an impairment does
exist, an assessment of the need for an impairment write-down
will be performed.
Note 4 - Investment in Affiliate
-----------------------
In February 1997, the Company acquired approximately 35 percent of the
outstanding capital stock of Intertech Management Group, Inc. for approximately
$4,025,000. Intertech Management Group, Inc. provides software and data
processing services to the telecommunications industry.
<PAGE>
FORM 10-Q
NICHOLS RESEARCH CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
(CONTINUED)
Note 5 - Reclassification
----------------
Certain prior period amounts have been reclassified to conform with the
current period's presentation.
Note 6 - Subsequent Event
--------------
On March 31, 1997 the Company extended its existing line of credit to
June 30, 1997.
<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 is a leading provider of technical and
information technology (IT) services, including information
processing, systems development and systems integration. The
Company provides these services to a wide range of clients,
including the DOD, other federal agencies, state and local
governments, healthcare and insurance organizations, and
commercial enterprises. The Company's business strategy consists
of three key elements: (i) maintain the Company's leadership in
technology; (ii) apply the Company's technology to create
solutions for new clients; and (iii) make strategic acquisitions
and form alliances to expand the business of the Company and gain
industry knowledge. The Company's business and financial
performance are subject to risks and uncertainties, including
those discussed below.
The Company is organized in four strategic business units,
reflecting the particular market focus of each line of business.
Nichols Federal provides technical services primarily to U.S.
government defense agencies. Nichols InfoFed provides
information and technology services to a variety of governmental
agencies. Nichols InfoTec provides information and technology
services to various commercial clients, other than healthcare or
insurance industry clients. Nichols SELECT provides information
services to clients in the healthcare and insurance industries.
For the six months ended February 28, 1997, the percentage of total
revenues attributable to the four business units were
approximately 54% for Nichols Federal, 36% for Nichols InfoFed,
7% for Nichols InfoTec, and 3% for Nichols SELECT.
Expansion through acquisitions is an important component of
the Company's overall business strategy. The Company has
successfully completed eight strategic acquisitions and alliances
since September 1, 1994. The Company's continued ability to grow
by acquisitions is dependent upon, and may be limited by, the
availability of compatible acquisition candidates at reasonable
prices, the Company's ability to fund or finance acquisitions on
acceptable terms, and the Company's ability to maintain or
enhance the profitability of any acquired business.
<PAGE>
FORM 10-Q
NICHOLS RESEARCH CORPORATION
As part of the Company's business strategy to enter new
markets, the Company intends to pursue large systems integration
contracts in both the government and commercial markets, although
competition for such contracts is intense and many of the
Company's competitors have greater resources than the Company.
While such contracts are working capital intensive, requiring
large equipment and software purchases to be funded by the
Company before payment from the customer, the Company believes
such contracts offer attractive revenue growth and margin
expansion opportunities for the Company's range of technical
expertise and capabilities.
The Company's revenues and earnings may fluctuate from
quarter to quarter based on such factors as the number, size and
scope of projects in which the Company is engaged, the
contractual terms and degree of completion of such projects,
expenditures required by the Company in connection with such
projects, any delays incurred in connection with such projects,
employee utilization rates, the adequacy of provisions for
losses, the accuracy of estimates of resources required to
complete ongoing projects, and general economic conditions. Under
certain contracts, the Company is required to purchase, integrate
and deliver to the customer large computer processing systems and
other equipment. Revenues are accrued as costs to deliver these
systems are incurred, and as a result, quarterly revenues will be
impacted by fluctuations related to significant system
integration contracts which occur on a periodic basis depending
on contract terms and modifications.
The Company's services are provided primarily through three
types of contracts: fixed-price, time-and-materials and cost-
reimbursement contracts. Fixed-price contracts require the
Company to perform services under a contract at a stipulated
price. Time-and-materials contracts reimburse the Company for
the number of labor hours expended at an established hourly rate
negotiated in the contract, plus the cost of materials incurred.
Under cost-reimbursement contracts, the Company is reimbursed for
all actual costs incurred in performing the contract to the
extent that such costs are within the contract funding levels
and allowable under the terms of the contract, plus a fee or profit.
The following tables set forth, for the periods indicated,the
percentage which certain items in the consolidated statements of
income bear to consolidated revenues, and the percentage change
of such items for the periods indicated:
<PAGE>
FORM 10-Q
NICHOLS RESEARCH CORPORATION
<TABLE>
<CAPTION>
For the Three Months Ended For the Six Months Ended
February 28, February 29, February 28, February 29,
1997 1996 1997 1996
------------------------------------------------------------
<S> <C> <C> <C> <C>
Revenues........................ 100.0% 100.0% 100.0% 100.0%
Cost and expenses:
Direct and allocable contract
costs........................ 89.0 84.4 88.4 84.7
General and administrative
expenses..................... 6.2 9.3 6.6 9.2
------------------------------------------------------------
Total cost and expenses... 95.2 93.7 95.0 93.9
Operating profit................ 4.8 6.3 5.0 6.1
Other income (expense).......... (.1) .3 .1 .4
------------------------------------------------------------
Income before income taxes...... 4.7 6.6 5.1 6.5
Income taxes.................... 1.7 2.4 1.8 2.4
------------------------------------------------------------
Net income...................... 3.0% 4.2% 3.3% 4.1%
============================================================
The table below presents contract award and backlog data for the
periods indicated:
Six Months Ended
February 28, February 29,
1997 1996
---------------------------------------
(amounts in thousands)
Contract award amount................... $ 391,261 $ 74,172
Backlog (with options).................. $ 1,246,000 $ 479,463
Backlog (without options)............... $ 542,958 $ 283,520
COMPARISON OF OPERATING RESULTS FOR FISCAL SECOND QUARTER 1997 WITH FISCAL
SECOND QUARTER 1996
REVENUES. Revenues increased $43.0 million (87.7%) for the
three months and $76.8 million (78.3%) for the six months ended
February 28, 1997 as compared to the three months and six months
ended February 29, 1996. Fiscal year to date revenues increased
as a result of revenue from the HPCM contracts and the
acquisition of AME completed in May 1996, but decreased as a
result of the completion of the initial FedEx contract in first
quarter 1996.
<PAGE>
FORM 10-Q
NICHOLS RESEARCH CORPORATION
OPERATING PROFIT. Operating profit increased $1.3 million
(41.5%) for the three months and $2.7 million (45.5%) for the six
months ended February 28, 1997. Costs and expenses were 95.2%
of revenues for the three months and 95.0% for the six months
ended February 28, 1997 as compared to 93.7% for the three months
and 93.9% for the six months ended February 29, 1996. The increase
in direct and allocable costs as a percentage of revenues was
primarily the result of hardware and software acquired for the
HPCM integration contracts. Included in direct and allocable costs are
costs associated with the completion of two significant government
contracts which resulted in a decrease in operating profit of approximately
0.5% for the period ended February 28, 1997. The increase of $2.5 million
in general and administrative expenses for the six month period is primarily
from increases in amortization of goodwill as well as general and
administrative expenses of AME acquired in 1996.
OTHER INCOME. Other income consists primarily of interest income.
Substantially all available cash is invested in interest-bearing accounts
or fixed income instruments.
INTEREST EXPENSE. Interest expense increased $0.2 million for the three
months ended February 28, 1997 as a result of short term borrowings during
the second quarter. At February 28,1997 there were no outstanding borrowings
under the line of credit.
EQUITY IN EARNINGS OF UNCONSOLIDATED AFFILIATES. Equity in earnings
of unconsolidated affiliates primarily represents the Company's share of
earnings from TXEN, Inc. The increase is due to increased revenues and
improved profitability of TXEN.
MINORITY INTEREST. Minority interest primarily represents the
minority partner's share of earnings of Holland Technology Group and
Holland Software Solutions, joint ventures. The increase is a result
of the increased profitability of these ventures which began in fiscal
1996.
INCOME TAXES. Income taxes as a percentage of income before taxes was
36.3% for the six months ended February 28, 1997 as compared to 36.4% for
the six months ended February 29, 1996.
NET INCOME. Net income increased $0.7 million (35.5%) for the three
months and $1.7 million (40.6%) for the six months ended February 28, 1997
as compared to the three months and six months ended February 29, 1996.
The increase is the result of the reasons discussed above.
<PAGE>
FORM 10-Q
NICHOLS RESEARCH CORPORATION
Liquidity and Capital Resources
- -------------------------------
Historically, the Company's positive cash flow from
operations and available credit facilities have provided
adequate liquidity and working capital to fully fund the
Company's operational needs and support the acquisition
activities. Working capital was $76.0 million and $50.7 million
at February 28, 1997 and February 29,1996, respectively. Operating
activities used cash of $7.0 million for the six months ended
February 28, 1997 and provided cash of $3.8 million for the six
months ended February 29, 1996. The Company realized proceeds
from the sale of Common Stock of $2.2 million and $1.6 million
for six months ended February 28, 1997 and February 29, 1996.
The Company has a bank line of credit of $73.5 million which
expires in June 1997, unless renewed. The credit agreement
provides for interest at London Interbank Offered Rate plus 1.25%
and a commitment fee on the unused portion of the line of credit.
Outstanding borrowings are secured primarily by accounts
receivable. As of February 28, 1997 there were no outstanding
borrowings under the line of credit.
Purchases of property and equipment were $2.0 million
for the six months ended February 28, 1997 and February 29, 1996.
On February 5, 1997, the Company acquired approximately 35% of the
outstanding capital stock of Intertech Management Group, Inc., a
provider of software and services to the telecommunications industry.
In fiscal 1996, the Company was awarded the HPCM Contracts
for information system development and computer system
integration activities, which will require the Company to acquire
substantial amounts of computer hardware as part of these
integrated systems. The Company continues to actively pursue
other contracts that could require the integration of significant
computer equipment components. The timing of payments to
suppliers and payments from customers under the Company's system
integration contracts could cause cash flows from operations to
fluctuate from period to period.
The Company believes that its existing capital resources,
together with available borrowing capacity, will be sufficient to
fund operating needs, finance acquisitions of property and
equipment for information technology programs and computer system
integration activities, and make strategic acquisitions, if appropriate.
EFFECTS OF INFLATION
Substantially all contracts awarded to the Company have been
based on proposals which reflect estimated cost increases due to
inflation. Historically, inflation has not had a significant
impact on the Company.
<PAGE>
FORM 10-Q
NICHOLS RESEARCH CORPORATION
PART II - OTHER INFORMATION
Item 4 - Submission of Matters to a Vote of Security Holders
On January 9, 1997, the annual meeting of the Company's stockholders was held
at the Corporate Headquarters in Huntsville, Alabama. Proxies were solicited
and cast by the Company's transfer agent, ChaseMellon Shareholder Services, New
York, New York. Matters put to vote and acted upon were the election of the
Board of Directors of the Company, amendment to the Nichols Research Corporation
1991 Stock Option Plan, the Non-Employee Officer and Director Stock Option Plan,
the 1988 Employees' Stock Purchase Plan, the 1989 Incentive Stock Option Plan
and the ratification of the Company's external auditors.
All directors were elected for a term of one year and will serve until the next
annual meeting. Directors elected were as follows:
For Withheld
---------- --------
Chris H. Horgen 10,136,420 286,047
Michael J. Mruz 10,131,892 290,575
Roy J. Nichols 10,139,380 283,087
Patsy L. Hattox 10,135,728 286,739
Roger P. Heinisch 10,143,247 279,220
John R. Wynn 10,130,835 291,632
William E. Odom 10,143,247 279,220
James R. Thompson, Jr. 10,143,237 279,230
Phil E. Depoy 10,142,661 279,806
Thomas L. Patterson 10,139,497 282,970
The Nichols Research Corporation 1991 Stock Option Plan was amended. Voting
for amendment were 10,236,547 shares, voting against were 132,573 shares, and
35,504 shares abstained.
The Non-Employee Officer and Director Stock Option Plan was amended. Voting
for amendment were 10,247,873 shares, voting against 121,893 shares, and
35,881 shares abstained.
The 1988 Employees' Stock Purchase Plan was amended. Voting for amendment were
10,240,920 shares, voting against 130,707 shares, and 34,020 shares abstained.
The 1989 Incentive Stock Option Plan was amended. Voting for amendment were
10,240,019 shares, voting against 131,458 shares, and 34,170 shares abstained.
Ernst & Young LLP was ratified to serve as the Company's independent auditors
for the fiscal year ending August 31, 1997. Voting for ratification were
10,370,304 shares, voting against were 8,236 shares, and 28,106 shares
abstained.
<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 not filed any reports on Form 8-K for the six
months ended February 28, 1997.
<PAGE>
FORM 10-Q
NICHOLS RESEARCH CORPORATION
SIGNATURES
MANAGEMENT REPRESENTATION
-------------------------
The accompanying unaudited Consolidated Balance Sheets at
February 28, 1997, and August 31, 1996 as well as the
Consolidated Statements of Income, Consolidated Statements of
Changes in Stockholders' Equity and Consolidated Statements of
Cash Flows for the six months ended February 28, 1997 and 1996,
have been prepared in accordance with instructions to Form 10-Q
and do not include all of the information and footnotes required
by generally accepted accounting principles for complete
financial statements. In the opinion of management, all
adjustments, consisting only of normal recurring accruals,
considered necessary for a fair presentation have been included.
April 14, 1997 Allen E. Dillard
- ---------------------------- ----------------------
Date Allen E. Dillard
Vice President and
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
April 14, 1997 By: Allen E. Dillard
- ---------------------------- -----------------------
Date Allen E. Dillard
Vice President and
Chief Financial Officer
(Principal Finance and
Accounting Officer)
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<CURRENCY> US
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> AUG-31-1997
<PERIOD-END> FEB-28-1997
<EXCHANGE-RATE> 1
<CASH> 10,154
<SECURITIES> 0
<RECEIVABLES> 105,418
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 121,352
<PP&E> 31,915
<DEPRECIATION> 16,605
<TOTAL-ASSETS> 172,158
<CURRENT-LIABILITIES> 45,339
<BONDS> 4,248
0
0
<COMMON> 119
<OTHER-SE> 120,797
<TOTAL-LIABILITY-AND-EQUITY> 172,158
<SALES> 174,821
<TOTAL-REVENUES> 174,821
<CGS> 154,519
<TOTAL-COSTS> 154,519
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 336
<INCOME-PRETAX> 8,971
<INCOME-TAX> 3,256
<INCOME-CONTINUING> 5,715
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,715
<EPS-PRIMARY> .47
<EPS-DILUTED> .47
</TABLE>
