SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
......................................
FORM 10Q
Quarterly Report Under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Quarter Ended Commission file number 0-15389
September 30, 1995
Group 1 Software, Inc.
Incorporated in Delaware IRS EI No. 52-1483562
4200 Parliament Place, Suite 600, Lanham, MD 20706-1844
Telephone Number: (301) 731-2300
Indicate by check mark whether the registrant (1) has filed 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
------------- -----------
Class Shares Outstanding Effective
Common Stock, $.01 par value November 8, 1995
4,293,072
<PAGE>
<TABLE>
GROUP 1 SOFTWARE, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands)
<CAPTION>
September 30, March 31,
1995 1995
(Unaudited) (Audited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 1,328 $ 1,619
Marketable securities 2,109 3,780
Trade and installment accounts receivable,
less allowance of $1,887 and $1,633 16,887 18,426
Income tax benefit 391 521
Deferred income taxes 2,386 2,060
Prepaid expenses and other assets 2,632 2,387
------ ------
Total current assets 25,733 28,793
Installment accounts receivable, long-term 3,648 3,657
Property and equipment, net 2,814 2,595
Computer software, net of accumulated
amortization of $14,802 and $12,286 20,011 18,556
Other assets 768 1,580
------ ------
Total assets $ 52,974 $ 55,181
====== ======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 1,934 $ 2,442
Current portion of long-term debt 606 652
Accrued expenses 2,491 4,020
Accrued compensation 1,417 2,813
Current deferred revenues 11,316 10,900
Due to parent 689 996
------ ------
Total current liabilities 18,453 21,823
Long-term debt, net of current portion 318 561
Long-term deferred revenues 3,728 3,714
Deferred income taxes 2,467 2,459
------ ------
Total liabilities 24,966 28,557
------ ------
Commitments and contingent liabilities
Stockholders' equity:
Common Stock, $0.01 par value, 10,000 shares
authorized; 4,293 issued and outstanding 43 43
Preferred stock, $0.01 par value, 1,000,000
shares authorized - none issued and - - - - - -
outstanding
Capital contributed in excess of par value 5,184 5,184
Retained earnings 22,770 21,424
Unrealized loss on investments, net - - - (45)
Cumulative foreign currency translation 11 18
------ ------
Total stockholders' equity 28,008 26,624
------ ------
Total liabilities and stockholders' equity $ 52,974 $ 55,181
====== ======
</TABLE>
See notes to consolidated financial statements.
<PAGE>
<TABLE>
GROUP 1 SOFTWARE, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(in thousands, except per share data)
Unaudited
<CAPTION>
For the Three For the Six
Month Period Ended Month Period Ended
September 30, September 30,
1995 1994 1995 1994
(FY96) (FY95) (FY96) (FY95)
<S> <C> <C> <C> <C>
Revenue:
Software license and related
revenue $ 5,084 $ 4,657 $ 9,801 $ 8,286
Maintenance and other revenue 4,997 4,309 9,665 8,322
------ ------ ------ ------
Total revenue 10,081 8,966 19,466 16,608
------ ------ ------ ------
Costs and expenses:
Software license expense 1,595 1,383 3,566 2,584
Maintenance and service expense 2,010 1,575 3,753 3,084
Research, development and
indirect support 568 400 1,097 839
Selling and marketing 3,386 2,899 6,415 5,578
General and administrative 1,061 1,058 2,154 1,917
Provision for doubtful accounts 287 410 522 660
------ ------ ------ ------
Total costs and expenses 8,907 7,725 17,507 14,662
------ ------ ------ ------
Operating earnings 1,174 1,241 1,959 1,946
Non-operating income, net 101 19 180 11
------ ------ ------ ------
Earnings before provision for
income taxes 1,275 1,260 2,139 1,957
Provision for income taxes 467 479 793 737
------ ------ ------ ------
Net earnings $ 808 $ 781 $ 1,346 $ 1,220
====== ====== ====== ======
Earnings per share of common stock $ 0.19 $ 0.18 $ 0.31 $ 0.28
====== ====== ====== ======
Weighted average number of common
and common equivalent shares
outstanding 4,358 4,306 4,339 4,305
</TABLE>
See notes to consolidated financial statements.
<PAGE>
<TABLE>
GROUP 1 SOFTWARE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Unaudited
<CAPTION>
For the Six Month
Period Ended September 30,
1995 1994
(FY96) (FY95)
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 1,346 $ 1,220
Adjustments to reconcile earnings from
operations to net cash from operating
activities:
Amortization expense 2,524 1,823
Depreciation expense 408 338
Provision for doubtful accounts 522 660
Deferred income taxes (318) 271
Gain on disposal of assets --- (7)
Change in assets and liabilities:
Accounts receivable 1,027 (664)
Other current assets (245) (505)
Income tax benefit 130 104
Other assets 812 (15)
Accounts payable (508) 179
Accrued expenses (2,925) 250
Due to parent (307) 225
Deferred revenues 430 (361)
------- -------
Net cash provided by operating activities: 2,896 3,518
------- -------
Cash flows from investing activities:
Purchase and development of computer software (3,971) (2,775)
Purchase of equipment and improvements (636) (260)
Purchase of marketable securities --- (3,650)
Sale of marketable securities 1,716 ---
Note receivable from parent --- 14
------- -------
Net cash used in investing activities (2,891) (6,671)
------- -------
Cash flows from financing activities:
Proceeds from short-term borrowings 4,566 ---
Reduction of short-term borrowing (4,566) ---
Reduction of long-term debt (289) (322)
------- -------
Net cash used in financing activities (289) (322)
------- -------
Effect of exchange rate changes on cash (7) ---
------- -------
Net decrease in cash and cash equivalents (291) (3,475)
Cash and cash equivalents at beginning of period 1,619 5,674
------- -------
Cash and cash equivalents at end of period $ 1,328 $ 2,199
======= =======
</TABLE>
See notes to consolidated financial statements.
<PAGE>
Group 1 Software, Inc.
Notes to Consolidated Financial Statement
1. The financial statements for the three and six months ended
September 30, 1995 and 1994, are unaudited. In the opinion of
management, all adjustments considered necessary for a fair
presentation have been included. Limited footnote information is
presented, in accordance with quarterly reporting requirements. The
results of operations for the three and six months ended September 30,
1995, are not necessarily indicative of the results for the year ended
March 31, 1996. The information contained in the audited financial
statements and the notes thereto for the year ended March 31, 1995,
should be read in connection with this unaudited interim financial
information.
2. Research and development expense, before the capitalization of
computer software development costs, amounted to approximately
$4,438,000 and $3,420,000 for the six months ended September 30, 1995
and 1994, respectively.
3. Earnings per share of common stock have been computed using the
weighted average number of common and dilutive common equivalent shares
outstanding. Common equivalent shares result from the dilutive effect
of warrants and stock options, calculated under treasury methods.
4. In October, 1995, Statement of Financial Accounting Standard
Number 123, "Accounting for Stock-based Compensation" was issued. This
pronouncement changes the financial accounting and reporting for stock
based employee compensation plans. The Company has yet to quantify the
impact of adopting this new standard.
5. Certain amounts have been reclassified to conform with the current
period presentation.
<PAGE>
Item 2. Management's Discussion and Analysis of Results of
Operations and Financial Condition
Results of Operations
For the quarter ended September 30, 1995 (the second fiscal
quarter), the Company's revenue of $10,081,000 increased 12% from the
$8,966,000 reported for the comparable period in the prior year. For
the six month period of fiscal 1996, revenue totaled $19,466,000
compared with $16,608,000 for the first six month period the prior
year. Net earnings for the quarter ended September 30, 1995 were
$808,000 or $0.19 per share as compared with $781,000 or $0.18 per
share in fiscal 1995. For the six month period of fiscal 1996, net
earnings were $1,346,000 or $0.31 per share compared with $1,220,000 or
$0.28 per share the prior year.
Software license fees and related revenues of $5,084,000 for the
second fiscal quarter increased 9% from the prior year. For the six
month period, software license and related revenues of $9,801,000 were
18% above the prior year. Sales of DOC1, the statement preparation
software, and NADIS, the data integrity software, represented $764,000
and $1,684,000 for the three and six month periods, respectively; there
was no revenue for these systems in the prior year. License fees from
all other large systems products, including Open Systems software,
decreased $90,000 for the three month period but increased $234,000
over the prior year six month period. Licensing of PC software
decreased $243,000 in the quarter versus the same period the prior
year, and decreased $403,000 for the six month period; these decreases
were due to delays in new product releases. Maintenance and other
revenues of $4,997,000 for the quarter increased 16% over the prior
year, and for the six month period, at $9,665,000, were 16% above the
comparable period the prior year. Maintenance contract revenue
increased over the prior year by $377,000 for the three months and
$732,000 for the six months of 1996. Professional service and other
revenue increased in the second quarter and six month period ending
September 30, 1995 by $311,000 and $611,000, respectively. These
increases in revenues were due primarily to professional services
associated with the DOC1 system.
Revenues from international markets of $548,000 and $1,769,000 for
the quarter and six month periods represented 5% and 9% of total
revenue, respectively, up from 1% and 2% in the comparable periods of
the prior year. A significant portion of the increase in international
revenues in the first six months of fiscal 1996 arose from Group 1
Software Europe, Ltd. (previously Archetype Systems, Ltd.), a wholly-
owned subsidiary acquired as of December 31, 1995, for which there is
no prior year comparison.
During the current quarter, total operating costs and expenses of
$8,907,000 amounted to 88% of total revenue as compared with $7,725,000
or 86% of total revenue during the comparable period in the prior year.
Total operating costs and expenses for the Company were 90% and 88% of
total revenue for the six months ended September 30, 1995 and 1994,
respectively. The current year operating costs and expenses versus the
prior year include Group 1 Software Europe, Ltd. for which there is no
prior year comparison.
Software license expense increased to $1,595,000 for the three
months ended September 30, 1995, from $1,383,000 in the comparable
prior year period, representing 31% of software license and related
revenue in the current period and 30% in the prior year period. For
the six months ended September 30, 1995 and 1994, software license
expense represented 36% and 31% of software license and related
revenue, respectively. Maintenance and service expense increased to
$2,010,000 in the current period from $1,575,000 in fiscal 1995,
representing 40% and 37% of maintenance and service revenue,
respectively. For the six months ended September 30, 1995 and 1994,
maintenance and service expense represented 39% and 37% of maintenance
and service revenue, respectively. The current year expenses reflect
increased staffing and support costs related to the DOC1 and Nadis
products and services for which there is no prior year comparison.
Additionally, amortization expense for the current quarter increased
$335,000 and for the six month period increased $605,000, reflecting
new and enhanced product releases for all computer platforms as well
as the amortization of acquired software. Amortization increased as
a percent of total revenue to 12% for both the three and six month
period compared with 10% in both periods of the prior year.
Group 1 expects amortization of software to continue to increase as a
percent of revenue due to continuing capitalization of internal
software development expenditures and the costs related to existing
software acquisition agreements. During the quarter, other direct
costs associated with new customer orders and existing customer updates
decreased to approximately 8% and 9% for the three and six month periods
in the current year versus 10% in the same periods of the prior year.
Other direct costs as a percent of revenue decreased versus the prior year
due to the mix of products sold this year which directly affects fulfillment
and distribution costs as well as royalty expense. Group 1 expects the cost
of maintenance and other services to increase as the customer base expands.
Research, development and indirect support expenses totaled
$568,000 in the second quarter of fiscal 1996, and $400,000 in fiscal
1995, representing 6% and 4% of total revenue, respectively. For the
six month period, research development and indirect support expenses
were 6% and 5% of total revenue, respectively. These expense increases
over the prior year were due to support requirements for the Company's
expanded variety of computer platforms served, as well as its internal
network system.
Selling and marketing expenses totaled $3,386,000, or 34% of total
revenue in the second quarter of fiscal 1996, as compared with
$2,899,000, or 32% of total revenue in the prior year. For the six
month period, selling and marketing expenses were 33% and 34% of total
revenue for fiscal years 1996 and 1995. The increase in expenses in
the current quarter and for the six month period compared with the
prior year reflects increased staffing and related costs to support
changing requirements in the selling of the highly technical DOC1 and
NADIS products.
General and administrative expenses increased $3,000 to $1,061,000
for the quarter and increased by $237,000 to $2,154,000 for the six
month period ended September 30, 1995. While compensation expenses
decreased the administrative expenses in both the quarter and the six
month period ending September 30, 1995, these decreases were offset by
the addition of administrative support costs associated with Group 1
Software Europe, Ltd. which have no prior year comparison. The provision
for doubtful accounts was $287,000 and $522,000 in fiscal year 1996
compared with $410,000 and $660,000 in fiscal year 1995, for the three
and six month periods, respectively. The reduction in the provision
for doubtful accounts reflects the Company's experience to date.
Net non-operating income of $180,000 for the six month period
includes gains on investments of $163,000 and net interest income of
$25,000, offset by other expenses of $8,000. For the prior year six
month period, net non-operating income of $11,000 was comprised of net
interest income of $71,000, a loss on investments of $69,000 and other
income items of $9,000.
The Company's effective tax rate was 37% and 38% in fiscal 1996
and 1995, respectively. The Company believes that its effective tax
rate for fiscal 1996 may increase, if the research and development
credits available under tax regulations which expired June 30, 1995 are
not extended.
Liquidity and Capital Resources
The Company's working capital on September 30, 1995, was $7,280,000 as
compared with $6,970,000 at March 31, 1995. The current ratio was 1.4 to 1
on September 30, 1995, as compared with 1.3 to 1 on March 31, 1995.
The Company provides for its cash requirements through cash funds
generated from operations. Additionally, the Company maintains an
uncollateralized $5,000,000 line of credit arrangement with Signet Bank
(Maryland), a major Mid-Atlantic regional bank, with interest at the bank's
prime rate. At September 30, 1995, there were no borrowings under this
facility.
Net earnings of $1,346,000 plus non-cash expenses of $3,136,000 provided
a total of $4,482,000 cash from operating activities. Additionally, the
decrease in accounts receivable provided cash of $1,027,000. Cash was
decreased by a reduction in accrued expenses and accounts payable of
$3,433,000; all other working capital items increased cash provided by
operating activities by $820,000. Expenditures for investments in software
development and capital equipment of $4,607,000 were offset by proceeds from
the sale of short-term investments of $1,716,000 resulting in cash flows used
in investing activities of $2,891,000. Cash flows from financing activities
represent decreases in long-term debt of $289,000.
The Company's practice of accepting license agreements under installment
payment arrangements substantially increases its working capital
requirements. Generally, these arrangements are for a period from three to
five years after a down payment of 10% of the principal amount of the
contract. Interest typically ranges from 9.5% to 13.0%. Installment
receivables included in accounts receivable were $8,250,000 and $8,834,000 at
September 30,1995, and March 31, 1995, respectively. The installment
receivable balance, in addition to the Company's policy of offering
competitive trade terms of payment, makes it difficult to accurately portray
a relationship between the outstanding accounts receivable balance and the
current period revenues.
The Company continually evaluates the credit and market risks associated
with outstanding receivables. In the course of this review, the Company
considers many factors specific to the individual client as well as the
concentration of receivables within industry groups. The Company's
installment receivables are predominately with clients (service bureaus)
who provide computer services to the direct marketing industry. Typically,
these clients have limited capital and insufficient assets to secure their
liability to the Company. The service bureaus are highly dependent on the
Company's software and services to offer their customers the economic
benefits of postal discounts and mailing efficiency. To qualify for the
U. S. Postal Service and Canada Post Corporation postal discounts, the
the service bureaus require continuous regulatory product updates by the
Company. The service bureau industry is also highly competitive and subject
to general economic cycles, as they impact advertising and direct marketing
expenditures. The Company is aware of no current market risk associated with
the installment receivables. These clients represent approximately
$6,820,000, or 83% of the installment receivables at September 30, 1995.
As of September 30, 1995, the Company's capital resource commitments
consisted primarily of non-cancelable operating lease commitments for office
space and equipment. The Company believes that its current debt services,
minimum lease obligations and other short-term and long-term liquidity
needs can be met from cash flows from operations. The Company believes that
its long-term liquidity needs are minimal and no large capital expenditures
are anticipated, except for the continuing investment in capitalized software
development costs which the Company believes can be funded from operations.
Historically, the Company has been able to negotiate capital leases for its
acquisition of equipment.
In August, 1995, the Company entered into a definitive agreement with
DataDesigns, Inc. of Las Vegas, Nevada to acquire certain assets including
title to all of its software products. The Company paid $484,000 in cash at
closing and will pay a percentage of the Company's sales of these products
during the subsequent five years.
Recent Accounting Developments
In October, 1995, Statement of Financial Accounting Standard Number 123,
"Accounting for Stock-based Compensation" was issued. This pronouncement
changes the financial accounting and reporting for stock based employee
compensation plans. The Company has yet to quantify the impact of adopting
this new standard.
<PAGE>
Part II. Other Information
Item 1. Legal Proceedings
NONE
Item 2. Changes in Securities
NONE
Item 3. Defaults Upon Senior Securities
NONE
Item 4. The following matters were submitted to, and approved by,
the required vote of security holders of the Company at the
Company's most recent annual Shareholder's meeting held on
September 12, 1995.
1. To elect three (3) directors to hold office until the third annual
meeting of stockholders of the Company following their election and
until the election and qualification of their successors.
Nominees For Withheld
Joseph R. Sullivan 4,040,487 121,908
Charles A. Crew 4,040,487 121,908
Charles A. Mele 4,040,487 121,908
2. To approve the adoption of the Company's 1995 Incentive Stock
Option, Non-Qualified Stock Option and Stock Appreciation Unit
Plan.
For Against Abstain
3,815,981 339,277 7,137
3. To approve the adoption of the Company's 1995 Non-Employee
Directors' Stock Option Plan.
For Against Abstain
4,016,441 135,392 10,562
Item 5. Other Information.
NONE
Item 6. Exhibits and reports on Form 8-K.
(a) The Company did not file any reports on Form 8-K during the
quarter ended September 30, 1995.
<PAGE>
PART IV
Listing of Exhibits
3.1 Certificate of Incorporation.
3.2 By-laws, as amended.
3.3 Certificate of Amendment of Certificate of Incorporation of Group 1
Software, Inc., dated January 22, 1993.
3.4 Amendment to By-Laws.
10.02 Management and Services Agreement with COMNET Corporation - 1994,
(incorporated by reference to Exhibit 10.12 to the Company's Annual
Report on Form 10-K for the year ended March 31, 1991).
10.03 Tax Sharing Agreement with COMNET Corporation - 1991 (incorporated
by reference to Exhibit 10.13 to the Company's Annual Report on Form
10-K for the year ended March 31, 1991).
10.04 Employment Agreement between Ronald F. Friedman and Group 1 Software
- 1990, (incorporated by reference to Exhibit 10.15 to the Company's
Annual Report on Form 10-K for the year ended March 31, 1991).
10.05 Revolving Line of Credit with Signet Bank/Maryland, (incorporated by
reference to Exhibit 10.16 to the Company's Annual Report on Form 10-
K for the year ended March 31, 1991).
10.06 Agreement with R. L. Polk & Company, (incorporated by reference to
Exhibit 10.19 to the Company's Annual Report on Form 10-K for the
year ended March 31, 1991).
10.07 First Amendment to Employment Agreement by and between Group 1
Software, Inc. and Ronald F. Friedman dated June 24, 1991,
(incorporated by reference to Exhibit 10.24 to the Company's
Quarterly Report on Form 10-Q for the quarter ended June 30, 1991).
10.08 Amended and Restated Employment Agreement dated January 28, 1992 by
and between Group 1 Software, Inc. and Robert S. Bowen (incorporated
by reference to Exhibit 10.25 to the Company's Quarterly Report on
Form 10-Q for the quarter ended December 31, 1991).
10.09 Product Development Agreement by and between Deos, Inc. and Group 1
Software, Inc. dated November 1, 1990, as amended (incorporated by
reference to Exhibit 10.12 to the Company's Annual Report for the
year ended March 31, 1992).
10.10 Distribution Agreement by and between Group 1 Software, Inc. and
Cortex Konsultkollegium AB (Sweden) dated July 18, 1991
(incorporated by reference to Exhibit 10.19 of the Company's
Quarterly Report on Form 10-Q for the quarter ended September 30,
1992).
10.11 Agreement for the purchase and sale of assets by Group 1 Software,
Inc. and Arc Tangent, Inc. signed on October 15, 1992 (incorporated
by reference to Exhibit 10.14 to the Company's Quarterly Report on
Form 10-Q for the quarter ended December 31, 1992).
10.12 Definitive Agreement for purchase of assets of Promark Software,
Inc., dated as of October 14, 1993 (incorporated by reference to
Exhibit 10.15 of the Company's Quarterly Report on Form 10-Q for the
quarter ended September 30, 1993.)
10.13 Agreement for computer services with Computer Data Systems, Inc.
dated April 6, 1994.
10.14 Agreement for purchase and sale of assets by and among Post Saver
Systems, Inc., Theodore Kruse and Group 1 Software, Inc., dated June
23, 1994.
10.15 Letter of Intent between Group 1 Software, Inc. and Archetype
Systems, Ltd. dated as of April 15, 1994.
10.16 Agreement between Group 1 Software, Inc. and Archetype Systems, Ltd.
for acquisition of the entire share capital of Archetype Systems,
Ltd., dated as of December 30, 1994.
10.17 Fourth Amendment to Employment Agreement, dated as of March 1, 1994,
by and between Group 1 Software, Inc., and Ronald F. Friedman.
10.18 Sublease, dated March 1, 1994, by and between COMNET Corporation and
Group 1 Software, Inc.
10.19 Agreement to Extend Management and Services Agreement, dated April
1, 1994, by and between COMNET Corporation and Group 1 Software,
Inc.
10.20 Fifth Amendment to Employment Agreement, dated as of April 1, 1995,
by and between Group 1 Software, Inc. and Ronald F. Friedman.
10.21 Group 1 Software, Inc., Deferred Compensation Plan.
10.22 Group 1 Software, Inc., Deferred Compensation Trust, dated as of
June 1, 1995.
*10.23 Definitive Agreement for purchase of assets of DataDesigns, Inc.,
dated August 23, 1995.
16.1 Change in Registrant's Independent Accountant on Form 8-K dated
January 26, 1990, (incorporated by reference to Exhibit 16.1 of the
Company's Quarterly Report on Form 10-Q for the quarter ended June
30, 1991.)
*11.0 Computation of earnings per share.
22.0 Subsidiaries of the Registrant.
23.0 Consent of Independent Accountants.
___________________________________
*Filed herewith
<PAGE>
Exhibit 11
<TABLE>
GROUP 1 SOFTWARE, INC.
Computation of Earnings Per Share
(in thousands, except per share data)
Unaudited
<CAPTION>
For the Three For the Six
Month Period Ended Month Period Ended
September 30, September 30,
1995 1994 1995 1994
(FY96) (FY95) (FY96) (FY95)
<S> <C> <C> <C> <C>
Net earnings: $ 808 $ 781 $ 1,346 $ 1,220
Primary earnings $ 808 $ 781 $ 1,346 $ 1,220
====== ====== ====== ======
Fully diluted earnings $ 808 $ 781 $ 1,346 $ 1,220
====== ====== ====== ======
Weighted average shares 4,293 4,293 4,293 4,293
outstanding
Dilutive common stock equivalents
for primary earnings per share 65 13 46 12
------ ------ ------ ------
Weighted average shares and common
equivalent shares outstanding
for primary earnings per share 4,358 4,306 4,339 4,305
====== ====== ====== ======
Additional equivalent shares
assuming full dilution --- --- --- ---
Weighted average shares and common
equivalent shares for fully
diluted earnings per share 4,358 4,306 4,339 4,305
====== ====== ====== ======
Earnings per share
Primary $ 0.19 $ 0.18 $ 0.31 $ 0.28
====== ====== ====== ======
Fully diluted <F1> $ 0.19 $ 0.18 $ 0.31 $ 0.28
====== ====== ====== ======
<FN>
<F1> Not presented on the Consolidated Statements of Earnings because
fully diluted earnings per share had a differential less than
3% of primary earnings per share.
</TABLE>
<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.
Group 1 Software, Inc.
Date: November 14, 1995 /s/Charles A. Crew
Charles A. Crew
Vice President
Chief Financial Officer
<PAGE>
Index of Exhibits
*10.23 Definitive Agreement for purchase of assets of
DataDesign, Inc., dated August 23, 1995. 16
*11.0 Computation of earnings per share. 13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE SECOND
QUARTER 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH 10-Q.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-START> APR-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 1,328
<SECURITIES> 2,109
<RECEIVABLES> 22,422
<ALLOWANCES> 1,887
<INVENTORY> 0
<CURRENT-ASSETS> 25,733
<PP&E> 6,283
<DEPRECIATION> 3,469
<TOTAL-ASSETS> 52,974
<CURRENT-LIABILITIES> 18,453
<BONDS> 0
<COMMON> 43
0
0
<OTHER-SE> 27,965
<TOTAL-LIABILITY-AND-EQUITY> 52,974
<SALES> 19,466
<TOTAL-REVENUES> 19,466
<CGS> 17,507
<TOTAL-COSTS> 17,507
<OTHER-EXPENSES> (180)
<LOSS-PROVISION> 522
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 2,139
<INCOME-TAX> 793
<INCOME-CONTINUING> 1,346
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,346
<EPS-PRIMARY> .31
<EPS-DILUTED> .31
</TABLE>
