<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
......................................
FORM 10Q
Quarterly Report Under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For the Quarter Ended December 31, 1996 Commission file number 0-15389
GROUP 1 SOFTWARE, INC.
Incorporated in Delaware IRS EI No. 52-1483562
4200 Parliament Place, Suite 600, Lanham, MD 20706-1844
Telephone Number: (301) 918-0400
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
------- ---------
Shares Outstanding Effective
Class February 10, 1997
- -------------------------------- 4,293,697
Common Stock, $.01 par value
<PAGE> 2
GROUP 1 SOFTWARE, INC.
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS)
<TABLE>
<CAPTION>
DECEMBER 31, MARCH 31,
1996 1996
(UNAUDITED) (AUDITED)
------------ ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 1,970 $ 1,716
Marketable securities - - - 1,979
Trade and installment accounts receivable,
less allowance of $3,474 and $2,409 27,501 24,142
Deferred income taxes 2,276 1,931
Prepaid expenses and other assets 3,100 2,820
------------ ------------
Total current assets 34,847 32,588
Installment accounts receivable, long-term 6,326 5,985
Property and equipment, net 3,037 3,030
Computer software, net 25,706 22,242
Other assets 1,887 2,006
------------ ------------
Total assets $ 71,803 $ 65,851
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term borrowings $ 7,500 $ - - -
Accounts payable 3,692 2,359
Current portion of long-term debt 103 565
Accrued expenses 4,954 7,044
Accrued compensation 2,521 3,386
Current deferred revenues 10,571 12,650
Due to parent company 1,057 1,160
------------ ------------
Total current liabilities 30,398 27,164
Long-term debt, net of current portion 230 320
Deferred revenues 5,390 4,363
Deferred income taxes, net 4,780 3,583
------------ ------------
Total liabilities 40,798 35,430
------------ ------------
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 shares
authorized - none issued and outstanding - - - - - -
Capital contributed in excess of par value 5,189 5,189
Retained earnings 25,705 25,125
Unrealized losses on investments, net - - - (2)
Cumulative foreign currency translation 68 66
------------ ------------
Total stockholders' equity 31,005 30,421
------------ ------------
Total liabilities and stockholders' equity $ 71,803 $ 65,851
============ ============
</TABLE>
See notes to consolidated financial statements.
1
<PAGE> 3
GROUP 1 SOFTWARE, INC.
CONSOLIDATED STATEMENTS OF EARNINGS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
UNAUDITED
<TABLE>
<CAPTION>
For the Three Month Period For the Nine Month Period
Ended December 31, Ended December 31,
------------------------------- ------------------------------
1996 1995 1996 1995
(FY97) (FY96) (FY97) (FY96)
------------ ------------ ----------- -----------
<S> <C> <C> <C> <C>
Revenue
Software licenses and related revenue $ 8,525 $ 6,045 $ 21,061 $ 15,846
Maintenance and service revenue 6,106 4,809 17,351 14,474
------------ ------------ ----------- -----------
Total revenue 14,631 10,854 38,412 30,320
Costs and expenses:
Software licenses expenses 2,665 1,885 6,758 5,335
Maintenance and service expense 2,982 1,763 8,533 5,654
Research, development and indirect support 801 605 2,415 1,604
Selling and marketing 5,593 4,027 14,850 10,447
General and administrative 1,212 1,129 3,269 3,354
Provision for doubtful accounts 475 454 1,311 976
------------ ------------ ----------- -----------
Total costs and expenses 13,728 9,863 37,137 27,370
------------ ------------ ----------- -----------
Operating earnings 903 991 1,274 2,950
Non-operating income (expense), net (162) 24 (379) 204
------------ ------------ ----------- -----------
Earnings before provision for income taxes 741 1,015 896 3,154
Provision for income taxes 264 374 316 1,166
------------ ------------ ----------- -----------
Net earnings 477 641 580 1,988
------------ ------------ ----------- -----------
Earnings per share of common stock: $ 0.11 $ 0.15 $ 0.13 $ 0.46
============ ============ =========== ===========
Weighted average number of common and common
equivalent shares outstanding 4,321 4,326 4,325 4,335
</TABLE>
See notes to consolidated financial statements.
2
<PAGE> 4
GROUP 1 SOFTWARE, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
UNAUDITED
<TABLE>
<CAPTION>
FOR THE NINE-MONTH
PERIOD ENDED DECEMBER 31,
--------------------------------
1996 1995
(FY97) (FY96)
-------------- -------------
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 580 $ 1,988
Adjustments to reconcile earnings from operations
to net cash from operating activities:
Amortization expense 4,448 3,839
Depreciation expense 704 614
Provision for doubtful accounts receivable 1,311 976
Deferred income taxes 852 863
Change in assets and liabilities:
Increase in accounts receivable (5,011) (1,724)
Increase in prepaid expenses and other current assets (280) (181)
Decrease (increase) in other assets 119 (518)
Increase (decrease) in accounts payable 1,333 (361)
Decrease in accrued expenses (2,955) (1,670)
Increase (decrease) due to parent company (103) 277
Increase (decrease) in deferred revenues (1,052) 1,069
---------- ----------
Net cash provided by (used in) operating activities (54) 5,172
---------- ----------
Cash flows from investing activities:
Purchase and development of computer software (7,896) (6,144)
Purchase of equipment and improvements (727) (953)
Purchase of marketable securities (3,984) - - -
Sale of marketable securities 5,965 1,807
---------- ----------
Net cash used by investing activities (6,642) (5,290)
---------- ----------
Cash flows from financing activities:
Proceeds from short-term borrowings 18,865 7,159
Reduction of short-term borrowings (11,365) (7,159)
Reduction of long-term debt (552) (194)
---------- ----------
Net cash provided by (used in) financing activities 6,948 (194)
---------- ----------
Net increase (decrease) in cash and cash equivalents 252 (312)
Gain (loss) on currency translation 2 (22)
Cash and cash equivalents at beginning of period 1,716 1,619
---------- ----------
Cash and cash equivalents at end of period $ 1,970 $ 1,285
========== ==========
</TABLE>
See notes to consolidated financial statements.
3
<PAGE> 5
GROUP 1 SOFTWARE, INC.
Notes to Consolidated Financial Statements
1. The financial statements for the three and nine months ended December 31,
1996 and 1995, 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
months ended December 31, 1996, are not necessarily indicative of the
results for the year ending March 31, 1997. The information contained in
the audited financial statements and the notes thereto for the year ended
March 31, 1996, should be referred to in connection with the unaudited
interim financial information.
2. Research and development expense, before the capitalization of computer
software development costs, amounted to approximately $8,163,000 and
$6,701,000 for the nine months ended December 31, 1996 and 1995,
respectively.
3. Earnings per share of common stock in the accompanying financial statements
have been computed using the weighted average number of common and common
equivalent shares outstanding. Common equivalent shares result from the
dilutive effect of stock options, calculated under the treasury stock
method.
4. Certain amounts have been reclassified to conform with the current period
presentation.
4
<PAGE> 6
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
RESULTS OF OPERATIONS
For the quarter ended December 31, 1996 the Company's revenues of $14.6 million
increased 35% from the $10.9 million reported for the comparable period the
prior year. Net earnings for the quarter ended December 31, 1996, were $0.5
million or $0.11 per share compared with net earnings of $0.6 million or $ 0.15
per share in fiscal 1996. For the nine months ended December 31, 1996, the
Company's revenue was $38.4 million compared with $30.3 million the prior year.
The Company's net earnings for the nine month period were $0.6 million or $0.13
per share compared with $ 2.0 million or $ 0.46 per share the prior year. The
decline in profitability was attributed to costs associated with implementation
of the United States Postal Service's new mail classification regulations which
became effective July 1, 1996. In addition, the Company incurred higher sales,
marketing, and development expenditures associated with its expansion into the
customer information management, database marketing and electronic document
systems markets, including the recently acquired WorldTrak and DataDesigns
products. Higher interest expense also contributed to the decline in
profitability.
Software license fees and related revenues of $8.5 million for the third fiscal
quarter increased 41% over the prior year. As a percent of total revenue,
third quarter software license and related revenue was 58% in fiscal 1997
compared with 56% in fiscal 1996. For the nine month period, software license
fees and related revenues of $21.1 million were 33% above the prior year. For
the nine months ended December 31, software license and related revenue as a
percent of total revenue was 55% in fiscal 1997 compared with 52% in fiscal
1996. Software license fees and related revenue for the third quarter and nine
months ended December 31 increased over the prior year in all market areas
except PC products and Customer Information Management Systems for which
revenues were flat.
License fees from Customer Information Management Systems software for the
fiscal third quarter were flat compared with the prior year and for the nine
month period, were $0.3 million above the comparable period in the prior year.
Sales of our WorldTrak product acquired in November 1995 increased but were
partially offset by lower sales of certain other products.
License fees from Database Marketing Systems increased 13% for the fiscal third
quarter. For the nine month period ended December 31, 1996, revenues increased
22% over the comparable period of the prior year. The increase resulted from
higher sales of our DataDesigns products (acquired in August 1995) and also
increased sales of traditional Database Marketing products. During the
quarter, the Company completed an exclusive product licensing agreement with
Unica Technologies to market its predictive modeling software under the
tradename Model 1.
Licensing of Electronic Document Systems decreased 4% in the fiscal third
quarter. For the nine month period ended December 31, 1996, Electronic
Document Systems license fees increased 51% over the comparable period of the
prior year.
5
<PAGE> 7
The Company's core Mailing Efficiency software license fees for the fiscal
third quarter increased 57% over the same period in the prior year. For the
nine months ended December 31, 1996 revenues increased 31% over the comparable
period in the prior year. The increases were primarily due to continued growth
of the Open Systems product suite and the new international postal software
partially offset by declines in PC product revenue. Mainframe revenue also
increased during the period.
Maintenance and other revenue of $6.1 million for the quarter increased 27%
over the prior year. For the nine month period, maintenance and other revenue
of $17.4 million was 20% above the comparable period in the prior year.
Maintenance and other revenue accounted for 42% and 45% of total revenue for
the quarter and nine months ended December 31, 1996 compared with 44% and 48%
for the comparable periods in the prior year. Recognized maintenance fees were
$4.3 million and $13.3 million for the quarter and nine months ended December
31, 1996, increases of 6% and over the comparable periods of the prior year.
Professional and educational service revenues of $1.8 million and $4.1 million
for the quarter and nine months ended December 31, 1996 were 200% and 116%
higher than in the comparable periods of the prior year.
Group 1 expects maintenance renewal revenue to grow at a lower percentage than
in prior years due to the high rate of conversion to Open System products,
which conversion typically includes multi-year maintenance agreements. In
addition, as a result of the delay in releasing certain software which fully
complied with all new United States Postal Service reclassification regulations
the Company extended maintenance contracts by six months for users of its
Mailstream products. It is anticipated that the other service revenues will
continue to increase as a percentage of Group 1's revenue, resulting from the
growth of DOC1, WorldTrak and Data Designs products which require more
consulting and professional services than do the Company's traditional products
During the fiscal third quarter, total operating costs of $13.7 million
amounted to 94% of revenue compared with $9.9 million or 91% of revenue during
the same period the prior year. For the nine months ended December 31, 1996
total operating costs of $37.1 million were 97% of revenue as compared with
$27.4 million or 90% of revenue in the prior year. Of the increase in cost,
approximately $1.1 million and $2.8 million for the quarter and nine month
period, respectively, were related to DataDesigns, WorldTrak and Latin American
operations for which there were no material prior year costs.
Software license expense increased to $2.7 million for the three months ended
December 31, 1996, from $1.9 in the comparable period in last fiscal year,
representing 31% of software license and related revenues in both periods. For
the nine months ended December 31, 1996 and 1995, software license expense
represented 32% and 34% of software license and related revenue respectively.
The lower cost as a percentage of license revenue reflects economies of scale
achieved with license support costs spread over a larger revenue base. The
company expects the cost as a percentage of revenue to remain around these
levels.
6
<PAGE> 8
Maintenance and service expense increased to $3.0 million in the quarter ended
December 31, 1996 from $1.8 million in the comparable period in fiscal 1996,
representing 49% and 37% of maintenance and service revenue, respectively. For
the nine months ended December 31, 1996 and 1995, maintenance and service
expense represented 49% and 39% of maintenance and service revenue,
respectively. The increase in expense and percent of maintenance and service
revenue reflects the proportionately higher percentage of lower margin revenue
derived from service versus maintenance, as well as the costs of distribution
and service of Group 1's software associated with the implementation of the
United States Postal Service's new mail classification regulations effective
July 1, 1996.
Included in maintenance and service expense above are professional and
educational service costs of $1.1 million which were 61% of professional
services revenue for the third quarter compared with $0.5 million and 81% for
the comparable quarter in the prior year. For the nine months ended December
31, 1996 professional and educational service costs were $2.8 million and 68%
of professional service revenue compared with $1.5 million and 79% in the prior
year.
Costs of maintenance were $1.9 million for the third quarter of fiscal 1997
representing 44% of maintenance revenue compared with costs of $1.3 million and
31% of maintenance revenue in the third quarter of fiscal 1996. For the nine
months ended December 31, 1996 maintenance costs of $5.7 million were 43% of
maintenance revenue compared with $4.1 million and 33% in the comparable period
of the prior year. The increased costs as a percentage of revenue were
primarily due to continued higher distribution costs and technical support
expenses for its mail classification software stemming from the United States
Postal Service's postal reclassification regulations which became effective
July 1, 1996. The Company anticipates the cost as a percentage of revenue to
decline as the incremental cost associated with the new postal regulations
declines. Certain of these costs were related to the new DataDesigns and
WorldTrak product lines for which there were no material costs in the prior
year.
Research, development and indirect support expenses (after capitalization of
certain development costs) totaled $0.8 million in the third quarter of fiscal
1997 and $0.6 million in the same quarter the prior year, representing 5% and
6% of total revenue, respectively. For the nine month periods ended December
31, 1996 and 1995, research, development and indirect support expenses were 6%
of revenue for both periods. The increases are due to increased support
requirements for Group 1's expanded computer platforms and internal network
systems, as well as expenses for DataDesigns and WorldTrak for which there were
no material amounts in the prior year. The Company anticipates that these
costs as a percentage of revenue will increase due to the expanded product
offerings.
Selling and marketing expenses totaled $5.6 million or 38% of revenue in the
third quarter of fiscal 1997 and $4.0 million or 37% of revenue in the prior
year. For the nine month period, selling and marketing expenses were 39% and
34% of total revenue in fiscal years 1997 and 1996, respectively. The current
year expenses include $1.7 million for DataDesigns, WorldTrak and Latin
America, for which there were no material costs in the prior year.
Additionally, the current year expenses reflect higher sales compensation
expense associated with the increased revenue, as well as increased staffing
and marketing for the DOC1, NADIS and Open System products. The Company
believes these costs, as a percentage of revenue, will remain around these
levels.
7
<PAGE> 9
General and administrative expenses were $1.2 million or 8% of total revenue
compared with $1.1 million or 10% for the three months ended December 31, 1996
and 1995, respectively. For the nine month period ended December 31 1996,
general and administrative expenses were $3.2 million or 9% of total revenue
compared with $3.3 million or 11% of total revenue in the prior year. The
decrease in the current year is primarily due to lower executive compensation
accruals.
The provision for doubtful accounts was $0.5 million and $1.3 million in fiscal
1997 as compared with $0.5 million and $1.0 million in fiscal year 1996 for the
three and nine months periods ended December 31, respectively. The increase in
the current year provision is based upon the larger accounts receivable
balances at December 31, 1996 as compared with the same period the prior year.
Net non-operating expense was $0.2 million for the third quarter and $0.4
million for the nine months ended December 31, 1996 as compared with net
non-operating income of $0.02 million for the quarter ended December 31, 1995
and $0.2 million, for the nine months ended December 31, 1995. These
differences primarily reflect higher net interest expense of $0.2 million for
the quarter and $0.4 million for the nine months ended December 31, 1996.
The Company's effective tax rate was 35% and 37% for the nine month periods
ending December 31, 1996 and 1995, respectively. The current year's rate is
the net effect of a 37% effective tax rate on domestic taxable net income and
33 % on foreign taxable net income.
8
<PAGE> 10
LIQUIDITY AND CAPITAL RESOURCES
The Company's working capital was $4.4 million at December 31, 1996, as
compared with $5.4 million at March 31, 1996. The current ratio was 1.1 to 1
at December 31, 1996, as compared to 1.2 to 1 at March 31, 1996.
The Company provides for its cash requirements through cash funds generated
from operations and from borrowings under its line of credit. On October 8,
1996 the Company entered into a new 2 year uncollateralized $10,000,000 line of
credit arrangement with Crestar Bank. The line of credit bears interest at the
bank's prime rate minus 50 basis points or Libor plus 150 basis points at the
Company's option. The line of credit requires the Company to maintain an EBIT
to interest expense ratio of at least 5 to 1 and limits borrowings under the
facility to 85% of eligible receivables. The Company was in compliance with
these requirements as of December 31, 1996. At December 31, 1996 borrowings
outstanding under the line of credit were $7,500,000; at March 31, 1996, there
were no short-term borrowings.
For the nine months ended December 31, 1996, net earnings of $0.6 million plus
non-cash expenses of $7.3 million provided a total of $7.9 million which was
reduced by cash used for working capital items totaling $8.0 million resulting
in net cash used by operating activities of $0.1 million. The cash used for
working capital items includes $5.0 million increase in accounts receivable and
a $1.1 million decrease in deferred revenue. The increase in accounts
receivable is due to higher revenues. The decrease in deferred revenue is
primarily a result of the conversion of mainframe customers to Open System
products which include multiple year maintenance contracts. The Company
expects this trend to continue. Investment in purchased and developed software
and capital equipment of $8.6 million, partially offset by net proceeds from
the sale of marketable securities of $2.0 million resulted in $6.6 million use
by investing activities. $7.0 million was provided by financing activities,
primarily short-term borrowings under the Company's credit facility.
Group 1's practice of accepting license agreements under installment payment
arrangements substantially increases its working capital requirements.
Generally, these arrangements are for a period of one to five years after a
minimum down payment of 10% of the principal amount of the contract. Interest
currently ranges from 10% to 12%. Installment receivables included in accounts
receivable were $12.3 million and $11.8 million at December 31,1996, and March
31, 1996, respectively. The installment receivable balance, in addition to
Group 1's policy of offering competitive trade terms of payment, make it
difficult to portray accurately a relationship between the outstanding accounts
receivable balance and the current period revenues.
Group 1 continually evaluates the credit and market risks associated with
outstanding receivables. In the course of this review, Group 1 considers many
factors specific to the individual client as well as the concentration of
receivables within industry groups. Group 1's installment receivables are
predominately with service bureau clients who provide computer services to the
direct marketing industry. Many of these clients have limited capital and
insufficient assets to secure their liability with the Company. The service
bureaus are highly dependent on Group 1'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, service bureaus require continuous regulatory product updates from
Group 1. The service bureau industry is also highly competitive and subject to
general economic cycles as they impact.
9
<PAGE> 11
advertising and direct marketing expenditures. Service bureau clients
represent approximately $8.7 million, or 71% of the installment receivables at
December 31, 1996. Group 1 is aware of no current market risk associated with
the installment receivables.
As of December 31, 1996, 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 liquidity needs can be met from cash flows
from operations and current credit facilities. The Company believes that its
long-term liquidity needs, principally for continuing investment in capitalized
software development costs, can be funded from operations and current credit
facilities. Historically, the Company has been able to negotiate capital
leases for its acquisition of equipment.
10
<PAGE> 12
PART II OTHER INFORMATION
ITEM 1. Legal Proceedings
NONE
ITEM 2. Changes in Securities
NONE
ITEM 3. Defaults Upon Senior Securities
NONE
ITEM 4. NONE
ITEM 5. Other Information
NONE
ITEM 6. Exhibits and Reports on Form 8-K
Exhibit 11
No filings on Form 8-K have been made during the quarter
11
<PAGE> 13
PART IV
Listing of Exhibits
*11.0 Computation of earnings per share.
--------------------------------------
* Filed herewith
12
<PAGE> 14
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
Group 1 Software, Incorporated
Date: February 12, 1997
/s/ Mark Funston
Mark Funston
Chief Financial Officer
13
<PAGE> 15
Index of Exhibits
<TABLE>
<CAPTION>
Page
Number
------
<S> <C> <C>
11.0 Computation of earnings per share. 15
</TABLE>
14
<PAGE> 1
EXHIBIT 11
GROUP 1 SOFTWARE, INC.
COMPUTATION OF EARNINGS PER SHARE
(IN THOUSANDS, EXCEPT PER SHARE DATA)
UNAUDITED
<TABLE>
<CAPTION>
For the Three Month Period For the Nine Month Period
Ended December 31, Ended December 31,
------------------------------ -----------------------------
1996 1995 1996 1995
(FY97) (FY96) (FY97) (FY96)
----------- ------------ ----------- -----------
<S> <C> <C> <C> <C>
Net earnings $ 477 $ 641 $ $ 1,988
Primary earnings (A) 477 641 580 1,988
=========== ============ =========== ===========
Fully diluted earnings (B) 477 641 580 1,988
=========== ============ =========== ===========
Weighted average shares outstanding 4,321 4,293 4,324 4,293
Dilutive common stock equivalents for primary
earnings per share --- 33 1 42
----------- ------------ ----------- -----------
Weighted average shares and common equivalent
shares outstanding for primary earnings per
share (C) 4,321 4,326 4,325 4,335
=========== ============ =========== ===========
Additional equivalent shares assuming full
dilution - - - - - - - - - - - -
----------- ------------ ---------- -----------
Weighted average shares and common equivalent
shares for fully diluted earnings per share (D) 4,321 4,326 4,325 4,335
=========== ============ =========== ===========
Earnings per share
Primary (A)/(C)$ 0.11 $ 0.15 $ 0.13 $ 0.46
=========== ============ =========== ===========
Fully Diluted (1) (B)/(D)$ 0.11 $ 0.15 $ 0.13 $ 0.46
=========== ============ =========== ===========
</TABLE>
(1) 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.
15
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 1,970,000
<SECURITIES> 0
<RECEIVABLES> 30,975,000
<ALLOWANCES> 3,474,000
<INVENTORY> 0
<CURRENT-ASSETS> 34,847,000
<PP&E> 3,037,000
<DEPRECIATION> 0
<TOTAL-ASSETS> 71,803,000
<CURRENT-LIABILITIES> 30,398,000
<BONDS> 0
0
0
<COMMON> 43,000
<OTHER-SE> 30,962,000
<TOTAL-LIABILITY-AND-EQUITY> 71,803,000
<SALES> 0
<TOTAL-REVENUES> 14,631,000
<CGS> 6,448,000
<TOTAL-COSTS> 13,728,000
<OTHER-EXPENSES> 162,000
<LOSS-PROVISION> 475,000
<INTEREST-EXPENSE> 162,000
<INCOME-PRETAX> 741,000
<INCOME-TAX> 264,000
<INCOME-CONTINUING> 477,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 477,000
<EPS-PRIMARY> 0.11
<EPS-DILUTED> 0.11
</TABLE>
