<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
-------------------------------------------------------
FORM 10-Q
Quarter Report Under Section 13 or 15(d)
of the Securities Exchange Act of 1934
-------------------------------------------------------
For Quarter Ended March 31, 1997 Commission File Number 0-23360
COUNTRY WIDE TRANSPORT SERVICES, INC.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in charter)
DELAWARE 95-4105996
- --------------------------------------------------------------------------------
(State or other jurisdiction of incorporation (I.R.S. Employer
or organization) Identification No.)
119 Despatch Drive, East Rochester, NY 14445
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(716) 381-5470
- --------------------------------------------------------------------------------
(Registrant's telephone number, including area code)
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
----- ----
The number of shares of common stock outstanding as of April 30, 1997 was
21,240,487
1
<PAGE>
COUNTRY WIDE TRANSPORT SERVICES, INC.
and Consolidated Subsidiary Companies
INDEX
PART I - FINANCIAL INFORMATION PAGE
Item 1. Financial Statements:
Condensed Consolidated Balance Sheets--March 31, 1997
and June 30, 1996 3
Condensed Consolidated Statements of Operations--Three Months Ended
March 31, 1997 and 1996, and Nine Months Ended
March 31, 1997 and 1996 5
Condensed Consolidated Statements of Cash Flows--Nine
Months Ended March 31, 1997 and 1996 7
Notes to Condensed Consolidated Financial Statements 9
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations 12
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 14
Item 5. Other Information 14
Item 6. Exhibits and reports on form 8K 14
SIGNATURES 15
2
<PAGE>
COUNTRY WIDE TRANSPORT SERVICES, INC.
and Consolidated Subsidiary Companies
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
<TABLE>
<CAPTION>
March 31, June 30,
1997 1996*
--------------- ------------
(Unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash $ 5 $ 37
Accounts receivable, net 3,456 5,199
Accounts receivable, miscellaneous 48 85
Driver advances 11 203
Inventories -- 29
Prepaid expenses 63 380
--------------- ------------
Total current assets 3,583 5,933
Property and equipment, net 119 3,580
Other assets:
Deposits -- 270
Excess of purchase price over fair market value of net assets acquired, net 2,668 4,825
--------------- ------------
Total Assets $ 6,370 $ 14,608
--------------- ------------
--------------- ------------
</TABLE>
* Condensed from audited financial statements.
Continued
3
<PAGE>
COUNTRY WIDE TRANSPORT SERVICES, INC.
and Consolidated Subsidiary Companies
CONDENSED CONSOLIDATED BALANCE SHEETS
(In Thousands)
<TABLE>
<CAPTION>
March 31, June 30,
1997 1996*
------------- --------------
(Unaudited)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
Current liabilities:
Notes payable and current portion of long-term debt $ 1,962 $ 4,329
Accounts payable and accrued liabilities 5,570 5,584
------------- --------------
Total current liabilities 7,532 9,913
Long-term debt, less current portion -- 2,616
Liabilities in excess of assets of discontinued subsidiary 1,022 --
Liabilities in excess of assets of discontinued operations 52 177
------------- --------------
Total liabilities 8,606 12,706
------------- --------------
Stockholders' equity (deficit):
Preferred stock, $.01 par value, 5,000,000 shares authorized,
issuable in series, none issued -- --
Common stock, $.02 par value, 30,000,000 shares authorized,
960,200 shares issued and outstanding at March 31, 1997
and June 30, 1996, respectively 96 96
Warrants 40 40
Additional paid-in capital 6,763 6,763
Retained earnings (9,135) (4,997)
------------- --------------
Total stockholders' equity (deficit) (2,236) 1,902
------------- --------------
Total liabilities and stockholders' equity (deficit) $ 6,370 $ 14,608
------------- --------------
------------- --------------
</TABLE>
The accompanying notes are an integral part of these condensed
consolidated financial statements.
4
<PAGE>
COUNTRY WIDE TRANSPORT SERVICES, INC.
and Consolidated Subsidiary Companies
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In Thousands, except Per Share Data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
March 31, March 31,
-------------------------- --------------------------
1997 1996 1997 1996
----------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
Transportation revenue $ 6,149 $ 11,212 $ 26,737 $ 36,612
----------- ----------- ---------- -----------
Operating costs and expenses:
Purchased transportation 5,277 7,853 19,970 25,714
Salaries and related expenses 423 1,416 3,161 4,351
Operating expenses 33 1,475 1,131 3,812
Revenue equipment rentals -- 465 827 1,438
General supplies and expenses 182 662 2,379 1,784
Depreciation and amortization 41 312 2,592 982
----------- ----------- ---------- -----------
Total operating costs and expenses 5,956 12,183 30,060 38,081
----------- ----------- ---------- -----------
Operating income (loss) 193 (971) (3,323) (1,469)
Other income (expense):
Interest expense (24) (195) (375) (539)
Interest income -- -- -- 33
Other, net -- (36) -- (36)
(Loss) on the sale of business division -- (222) -- (222)
Gain (loss) on disposition of assets -- (16) (406) 125
----------- ----------- ---------- -----------
Income (loss) from continuing operations
before provision for income taxes and
discontinued operations 169 (1,440) (4,104) (2,108)
Income tax expense (benefit) 13 34 34 34
----------- ----------- ---------- -----------
Income (loss) from continuing operations 156 (1,474) (4,138) (2,142)
----------- ----------- ---------- -----------
</TABLE>
Continued
5
<PAGE>
COUNTRY WIDE TRANSPORT SERVICES, INC.
and Consolidated Subsidiary Companies
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
(In Thousands, except Per Share Data)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
March 31, March 31,
-------------------------- -------------------------
1997 1996 1997 1996
------------ ----------- ------------ ----------
<S> <C> <C> <C> <C>
Income (loss) from continuing operations $ 156 $ (1,474) $ (4,138) $ (2,142)
Discontinued operations:
(Loss) from operations of discontinued
business segments, net of applicable
income tax of $(263) for the three and six
months ended March 31, 1996. -- (483) -- (1,279)
------------ ----------- ------------ ----------
Net income (loss) before extraordinary item 156 (1,957) (4,138) (3,421)
Extraordinary item:
Gain on forgiveness of debt of discontinued
operations, net of applicable income tax
expense of $1,630 (note 5) -- -- -- 2,370
------------ ----------- ------------ ----------
Net income (loss) $ 156 $ (1,957) $ (4,138) $ (1,051)
------------ ----------- ------------ ----------
------------ ----------- ------------ ----------
Income (loss) per common share:
Continuing operations $0.16 $ (1.54) $ (4.31) $ (2.23)
Discontinued operations -- (0.50) -- (1.33)
Extraordinary item -- -- -- 2.47
------------ ----------- ------------ ----------
Net income (loss) per common share $ 0.16 $ (2.04) $ (4.31) $ (1.09)
------------ ----------- ------------ ----------
------------ ----------- ------------ ----------
Weighted average number of common
shares (note 7) 960,097 960,097 960,097 960,097
------------ ----------- ------------ ----------
------------ ----------- ------------ ----------
</TABLE>
The accompanying notes are an integral part of these condensed
consolidated financial statements.
6
<PAGE>
COUNTRY WIDE TRANSPORT SERVICES, INC.
and Consolidated Subsidiary Companies
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In Thousands)
<TABLE>
<CAPTION>
Nine Months Ended
March 31,
-----------------------------
1997 1996
----------- ------------
<S> <C> <C>
Cash flows from operating activities:
Net (loss) from continuing operations $ (4,138) $ (2,142)
Adjustments to reconcile net (loss) to net cash provided by
operating activities:
Depreciation and amortization 2,592 982
(Gain) Loss on disposal of assets 406 (125)
Loss on disposal of business segment -- 222
Provision for uncollectible accounts receivable (78) 48
(Increase) decrease in:
Accounts receivable 1,821 709
Accounts receivable, miscellaneous 37 (10)
Drivers advances 192 67
Inventories 29 4
Prepaid expenses 317 ( 19)
Deposits 270 (63)
Other assets -- --
Increase (decrease) in:
Accounts payable and accrued liabilities (14) 953
Liabilities in excess of assets of discontinued subsidiaries 1,022 --
Liabilities in excess of assets of discontinued operations (125) --
----------- ------------
Net cash provided by operating activities from continuing operations 2,331 626
----------- ------------
Net (loss) from discontinued operations -- (1,279)
Depreciation and amortization -- 8
Loss on disposition of assets -- 14
Changes in operating assets -- 807
----------- ------------
Net cash (used in) operating activities from discontinued operations -- (450)
----------- ------------
Cash flows from investing activities:
Increase in notes receivable -- (29)
Collections on notes receivable 1 --
Additions to property and equipment (90) (310)
Proceeds from disposal of property and equipment 93 2,328
Proceeds from disposal of business segment -- 50
----------- ------------
Net cash provided by investing activities 4 2,039
----------- ------------
</TABLE>
Continued
7
<PAGE>
COUNTRY WIDE TRANSPORT SERVICES, INC.
and Consolidated Subsidiary Companies
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In Thousands)
<TABLE>
<CAPTION>
Nine Months Ended
March 31,
--------------------------------
1997 1996
----------- -----------
<S> <C> <C>
Cash flows from financing activities:
Principal payments on borrowings (29,925) (45,846)
Proceeds from borrowings 27,558 43,601
----------- -----------
Net cash (used in) financing activities (2,367) (2,245)
----------- -----------
(Decrease) in cash (32) (30)
Cash, beginning of period 37 57
----------- -----------
Cash, end of period $ 5 $ 27
----------- -----------
----------- -----------
Supplemental disclosure of cash flow information:
Cash paid for:
Interest $ 375 $ 499
----------- -----------
----------- -----------
Income taxes $ 34 $ 31
----------- -----------
----------- -----------
Noncash investing and financing transactions:
Purchase of property and equipment with debt or reduction of receivable $ -- $ 3,316
----------- -----------
----------- -----------
Net assets of CK Trucking sold for receivables $ -- $ 14
----------- -----------
----------- -----------
</TABLE>
The accompanying notes are an integral part of these condensed
financial statements.
8
<PAGE>
COUNTRY WIDE TRANSPORT SERVICES, INC.
and Consolidated Subsidiary Companies
Notes to Condensed Consolidated Financial Statements
(Unaudited)
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting policies followed by the Company are set forth in Note 1 to
the Company's consolidated financial statements included in the Company's
Annual Report to Stockholders for the year ended June 30, 1996
2. STATEMENT OF INFORMATION FURNISHED
The accompanying unaudited consolidated financial statements have been
prepared in accordance with Form 10-Q instructions and in the opinion of
management contain all adjustments (consisting of only normal recurring
accruals) necessary to present fairly the financial position as of March
31, 1997, the results of operations for the three months and nine months
ended March 31, 1997 and 1996 and the cash flows for the nine months ended
March 31, 1997 and 1996. The results of operations for the three and nine
month periods ended March 31, 1997 and 1996 are not necessarily indicative
of the results to be expected for the full year. These results have been
determined on the basis of generally accepted accounting principles and
practices applied consistently with those used in the preparation of the
Company's 1996 Annual Report.
Certain information and footnote disclosures normally included in financial
statements presented in accordance with generally accepted accounting
principles have been condensed or omitted pursuant to the rules and
regulations of the Securities and Exchange Commission.
3. PROPERTY AND EQUIPMENT
Property and equipment consisted of the following (000 omitted):
<TABLE>
<CAPTION>
March 31, June 30 Estimated
1997 1996 Useful Lives
----------- ----------- ----------------
<S> <C> <C> <C>
Revenue equipment $ -- $ 3,834 5 to 7 years
Service cars -- 11 5 years
Furniture and office equipment 142 505 4 to 5 years
Leasehold improvements 72 137 Lease term
Machinery and equipment -- 29 5 years
----------- -----------
214 4,516
Less accumulated depreciation
and amortization 95 936
----------- -----------
$ 119 $ 3,580
----------- -----------
----------- -----------
</TABLE>
9
<PAGE>
COUNTRY WIDE TRANSPORT SERVICES, INC.
and Consolidated Subsidiary Companies
Notes to Condensed Consolidated Financial Statements
(Unaudited)
4. ACCOUNTS PAYABLE AND ACCRUED LIABILITIES
Accounts payable and accrued liabilities consisted of the following (000
omitted):
March 31. June 30
1997 1996
------------- -------------
Accounts payable $ 503 $ 1,390
Accrued insurance -- 469
Accrued purchased transportation 4,257 2,766
Other accrued expenses 810 959
------------- -------------
$ 5,570 $ 5,584
------------- -------------
------------- -------------
5. DISCONTINUED OPERATIONS
Having experienced significant losses in the produce sales segment, the
Company's Board of Directors decided on June 26, 1995 to discontinue the
entire segment through an orderly liquidation process which they estimated
would occur over the subsequent two month period. Immediately thereafter,
the Company commenced to close operations and on September 18, 1995 made a
General Assignment of all assets of it's subsidiary, Nationwide Produce
Co., for the pro rata benefit of all creditors of the subsidiary. Revenues
applicable to the discontinued product sales segment were approximately
$52,953,000, $22,723,000 and $20,053,000 for the years ended June 30, 1995,
1994, and 1993, respectively.
During the nine months ended March 31, 1996, the Company recognized a net
gain to the extent of unpaid liabilities of Nationwide Produce Co. (not
guaranteed or assumed by the Company) in excess of assets and operating
losses from July 1, 1995 to date of liquidation amounting to $4,000,000
before income tax.
6. DISCONTINUED SUBSIDIARY
Having experienced significant losses in it's long-haul trucking operation,
the Company's Board of Directors decided on December 20, 1996 to
discontinued it's subsidiary, CW Truck, through an orderly liquidation
process.
On January 3, 1997, the Company made a General Assignment of all assets of
CW Truck for the pro rata benefit of all the creditors. In conjunction
with the General Assignment, the Company, on December 31, 1996, sold all of
its rolling stock assets for the outstanding debt on the equipment.
Revenues applicable to the discontinued subsidiary were approximately
$22,700,000, $29,100,000 and $29,000,000 for the years ended June 30, 1996,
1995 and 1994, respectively. Revenues applicable to the discontinued
subsidiary for the nine months ended March 31, 1997 and 1996 were
$7,587,000 and $14,793,000, respectively.
10
<PAGE>
COUNTRY WIDE TRANSPORT SERVICES, INC.
AND CONSOLIDATED SUBSIDIARY COMPANIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
7. SUBSEQUENT EVENTS
At a meeting of the Board of Directors, and subsequent consent by a
majority of stockholders of the Company, pursuant to article 228 of the
Delaware Corporation Law, the Company amended it's certificate of
incorporation to increase the authorized number of common shares to
30,000,000 at $.02 par value from 10,000,000 at $.02 par value.
Additionally, the Board of Directors, with subsequent consent by a
majority of stockholders, authorized a reverse split of common stock;
exchanging one fully paid and non assemble share of common stock at $.10
par value for each five shares at $.02 par value.
Effective April 25, 1997, the Company completed a private placement to
certain current accredited stockholders of the company, which resulted in
the issuance of 16,440,000 common shares for $1,644,000.
In order to more succinctly describe the weighted average number of
common shares at period ending March 31, 1997, as well as previous
comparative periods the outstanding shares at that time have been adjusted
to reflect the one for five reverse stock split.
11
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
Net income from continuing operations for the quarter ended March 31, 1997
amounted to $156,000 and net loss for the nine months ended March 31, 1997
amounted to $4,138,000 respectively; compared to net losses of $1,474,000 and
$2,142,000 for the prior year periods. The quarter income was realized from
the subsidiary, Vertex Transportation, Inc., since the CW Truck subsidiary
was discontinued effective January 3, 1997.
Third quarter operating revenue declined 45.2% to $6,149,000 from $11,212,000
for the third quarter of the previous fiscal year. The reduction reflects the
discontinuance of CW Truck effective January 3, 1977. Additionally, third
quarter revenue for Vertex Transportation, Inc. declined to $6,149,000 from
$7,165,580 during the third quarter of the previous year due to limitations of
working capital.
Operating costs for the three month period ending March 31, 1997 decreased by
$6,227,000 and decreased $8,021,000 for the nine months ended March 31, 1997
from the prior year periods, respectively. As a percentage of sales, operating
costs for the three and nine month periods ending March 31, 1997 decreased 11.8%
and increased 8.4% for the respective prior year periods. The change is
primarily attributable to the discontinuance of CW Truck, effective January 3,
1997.
Having experienced significant losses in the produce segment, the Company's
board of Directors decided on June 26, 1995 to wind down and discontinue the
entire product sales segment through an orderly liquidation which was estimated
to occur over the subsequent two month period. Immediately thereafter, the
Company commenced to close the operations and on September 18, 1995 made a
General Assignment of all assets of it's subsidiary, Nationwide Produce Co., for
the pro rata benefit of all creditors of the subsidiary. During the three and
six months ended December 31, 1995, the Company's product sales segment
generated a net loss of $33,000 and $795,000, respectively. Results of operation
for the product sales segment have been classified as discontinued operations in
the Company's financial statements for all periods presented.
During the nine months ended March 31, 1996, the Company recognized a net
gain to the extent of unpaid liabilities of Nationwide Produce Co. (not
guaranteed or assumed by the Company) in excess of assets and operating
losses from July 1, 1995 to the date of liquidation amounting to $4,000,000
before income tax.
Having experienced significant losses in it's long-haul trucking operation, the
Company's Board of Directors decided on December 20, 1996 to discontinued it's
subsidiary, CW Truck, through an orderly liquidation process. On January 3,
1997, the Company made a General Assignment of all assets of CW Truck for the
pro rata benefit of all the creditors. In conjunction with the General
Assignment, the Company, on December 31, 1996, sold all of its rolling stock
assets for the outstanding debt on the equipment. Revenues applicable to the
discontinued subsidiary for the nine months ended March 31, 1997 and 1996 were
$7,587,000 and $14,793,000, respectively. During the nine month period ended
March 31, 1997 CW Truck generated a net loss of $4,442,000. Results of operation
for CW Truck have been classified as continuing operations in the Company's
financial statements for all periods presented
The decreased sales of the Vertex Transportation, Inc. subsidiary for the three
month period ended March 31, 1997 of $6,149,000 from $7,165,580 in the prior
year period can be attributed to a limitation of working capital and a concern
for the financial viability of the subsidiary given the liquidation of CW Truck
on January 3, 1997.
12
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
As of March 31, 1997, the Company had a loan agreement with a commercial bank
dated June 30, 1996, where the Company utilized a credit facility which provides
for maximum borrowing of $3,700,000. Borrowing are limited to 80% of eligible
accounts receivable and at March 31, 1997 the outstanding indebtedness under the
credit facility was $1,962,000 and is classified as a current liability in the
Company's financial statements. The agreement bears interest at the bank's
prime rate plus 3%.
At April 29, 1997, the Company, through it's Vertex Transportation, Inc.
subsidiary, had secured new financing with a commercial bank. The new
facility is a three year contract which allows for borrowing of up to
$4,000,000 which are limited to 80% of eligible accounts receivable. The
agreement bears an interest rate of the bank's prime rate plus 2 1/2%.
Effective April 29, 1997 the Company's previous revolving credit line, in the
amount of $2,173,171 was paid.
As of June 30, 1996, due to certain loan covenant violations with the Company's
previous lender along with the Company's inability to obtain waivers and
restated covenants for future periods with the same previous lender, along with
losses from operations and negative working capital at June 30, 1996, caused the
Company's independent auditors to question the Company's ability to continue as
a going concern.
At March 31, 1997, the Company's ratio of current assets to current liabilities
and its debt to equity were 0.5:1 and (2.6).1 respectively, as compared to 0.6:1
and 6.7:1 respectively at June 30, 1996.
The Company ended the March 31, 1997 period with $5,000 of cash and negative
working capital of $3,949,000. Based upon the Company's expected cash flow from
operations and funds available as of April 29, 1997, from it's new credit
facility, management believes that the Company's capital resources are
sufficient to meet it present and anticipated operating needs.
Effective April 25, 1997, the Company completed a private placement with certain
current accredited stockholders of the Company which resulted in the issuance of
16,440,000 common shares for $1,644,000.
13
<PAGE>
COUNTRY WIDE TRANSPORT SERVICES, INC.
and Consolidated Subsidiary Companies
Part II. Other Information
ITEM 1. LEGAL PROCEEDINGS
During the month of September 1995 the Company's transportation
subsidiary, CW Truck, had a cargo claim that approximated $600,000
filed against it by one of it's customers. The insurance carrier
citing certain exceptions in the cargo policy declined to pay the
claim and referred the issue to litigation on February 27, 1996. The
Company initiated legal action against the issuance carrier and its
agent. The customer additionally filed a cross claim against the
Company. Management has fully reserved this claim in it's financial
statements at March 31, 1997.
ITEM 5. OTHER INFORMATION
During the quarter ended June 30, 1995, the Company discontinued it's
product sales segment which was operated by the Company's wholly owned
subsidiary, Nationwide Produce Co. since July 1992 when the Company
acquired all of the outstanding stock of Nationwide from Martrade, Ltd. The
Company's discontinuance of the product sales segment culminated in the
filing of a General Assignment during September 1995 of all assets of
Nationwide Produce Co. for the pro rata benefit of all creditors of the
subsidiary.
During the quarter ended December 31, 1996 the Company discontinued all
operations relating to it's wholly owned subsidiary, CW Truck. On January
3, 1997 the Company made a General Assignment of all the assets of CW Truck
for the pro rata benefit of all creditors of the subsidiary. In conjunction
with the General Assignment the Company, on December 31, 1996, sold all the
rolling stock assets of the Company for all the outstanding debt on the
equipment.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits: None.
(b) Reports on Form 8-K:
1. Effective April 30, 1997, the Company's subsidiary, Vertex
Transportation, Inc. secured a new three-year revolving line
of credit at $4 million with Marine Midland Bank NA. This
increased line will replace its old credit facility at
improved terms for the Company.
2. Country Wide Transport also completed a private placement to
certain existing accredited stockholders in the amount of
$1,644,000, in exchange for Company stock. The proceeds
will be used as working capital for its Vertex
Transportation, Inc. subsidiary.
3. The Company received approval from a majority of it's
stockholders as well as it's Board of Directors to increase
the authorized number of common shares to 30 million from 10
million shares.
4. Country Wide Transport is instituting a 1-for-5 reverse
stock split, effective May 15, 1997.
14
<PAGE>
COUNTRY WIDE TRANSPORT SERVICES, INC.
and Consolidated Subsidiary Companies
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on it's behalf by the
undersigned thereunto duly authorized.
COUNTRY WIDE TRANSPORT SERVICES, INC.
Registrant
DATED: May 14, 1997 S/Timothy Lepper
-------------------------------------
Timothy Lepper
President and Chief Financial Officer
15
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> JUN-30-1997
<PERIOD-END> MAR-31-1997
<CASH> 5
<SECURITIES> 0
<RECEIVABLES> 3500
<ALLOWANCES> 44
<INVENTORY> 0
<CURRENT-ASSETS> 3583
<PP&E> 214
<DEPRECIATION> 95
<TOTAL-ASSETS> 6370
<CURRENT-LIABILITIES> 7532
<BONDS> 0
0
0
<COMMON> 96
<OTHER-SE> (2332)
<TOTAL-LIABILITY-AND-EQUITY> 6370
<SALES> 26737
<TOTAL-REVENUES> 26737
<CGS> 0
<TOTAL-COSTS> 30060
<OTHER-EXPENSES> 406
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 375
<INCOME-PRETAX> (4104)
<INCOME-TAX> 34
<INCOME-CONTINUING> (4138)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (4138)
<EPS-PRIMARY> (4.31)
<EPS-DILUTED> 0
</TABLE>
