<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ending June 30, 1997
Commission File Number 33-26019-LA
Long Distance Direct Holdings, Inc.
(Exact name of small business issuer as specified in its charter)
Nevada 33-0323376
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) Identification No.)
1 Blue Hill Plaza, Pearl River, NY 10965
-----------------------------------------
Issuer's telephone number: 914-620-0765
________________________________________________________
(Former name, former address and former fiscal year,
if changed since last report)
Check whether the issuer (1) filed all reports required to be filed by
Section 13 or 15 (d) of the Exchange Act during the past 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
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS
The number of shares outstanding of the issuer's common equity, as of June 30,
1997 is 8,927,318.
Transitional small business disclosure Format (check one):
Yes No X
--- ---
<PAGE> 2
Part I-Financial Information
Item 1-Financial Statements
LONG DISTANCE DIRECT HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
30-JUN
------
1997 DECEMBER 31,
---- -----------
(UNAUDITED) 1996
------------ ------------
<S> <C> <C>
ASSETS
- ------
CURRENT ASSETS
Cash $ 910,790 $ 962,471
Accounts receivable (net of allowance for
doubtful accounts of $566,069 and $318,976, respectively) 4,058,962 1,125,986
Other current assets 932,528 924,431
-------------------------
Total Current Assets 5,902,280 3,012,888
-------------------------
PROPERTY AND EQUIPMENT
Furniture and equipment 194,691 156,926
Computer equipment and software 421,377 257,108
Leasehold improvements 116,915 91,720
-------------------------
732,983 505,754
Less: accumulated depreciation $ 258,159 193,576
-------------------------
474,824 312,178
-------------------------
OTHER ASSETS 127,711 129,623
OFFICER'S LOANS 221,416 260,735
-------------------------
6,726,231 3,715,424
=========================
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Accounts payable 3,525,508 1,453,796
Accrued expenses 265,219 353,681
Sales and excise taxes payable 482,722 490,716
-------------------------
Total Current Liabilities 4,273,449 2,298,193
-------------------------
STOCKHOLDERS' DEFICIT
Common stock - par value $.001 per share;
authorized 30,000,000 shares; issued
and outstanding 8,927,000 shares 8,927 6,598
Additional paid in capital 10,938,290 8,477,420
Accumulated deficit (8,494,435) (7,066,787)
-------------------------
Total Stockholders' Equity 2,452,782 1,417,231
-------------------------
$ 6,726,231 $3,715,424
=========================
</TABLE>
See notes to Consolidated Financial Statements
<PAGE> 3
LONG DISTANCE DIRECT HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
<TABLE>
<CAPTION>
(UNAUDITED)
THREE MONTHS YEAR TO DATE THREE MONTHS YEAR TO DATE
------------- ------------ ------------- -------------
ENDED 6/30/97 6/30/97 ENDED 6/30/96 6/30/96
------------- ------------ ------------- -------------
<S> <C> <C> <C> <C>
REVENUES $2,632,111 $4,729,313 $1,665,409 $3,463,502
CUSTOMER REBATES AND REFUNDS 2,759 3,963 $3,805 7,589
----------------------------------------------------------
NET REVENUES 2,629,352 4,725,350 1,661,604 3,455,913
COST OF SERVICES 2,204,216 3,746,938 $1,024,728 2,139,809
----------------------------------------------------------
Gross Profit 425,136 978,412 636,876 1,316,104
----------------------------------------------------------
OPERATING EXPENSES
Sales and marketing 176,303 248,122 $158,022 316,173
General and administrative 1,229,971 2,156,774 $689,642 1,377,114
----------------------------------------------------------
Total Operating Expenses 1,406,274 2,404,896 847,664 1,693,287
----------------------------------------------------------
LOSS FROM OPERATIONS (981,138) (1,426,484) (210,788) (377,183)
OTHER EXPENSES (INCOME)
Interest expense -- 1,164 33,651 65,339
Interest income -- -- (580) (1,612)
-- -- -- --
----------------------------------------------------------
Total Other Expenses (Income) -- 1,164 33,071 63,727
----------------------------------------------------------
NET LOSS ($981,138) (1,427,648) ($243,859) ($440,910)
==========================================================
NET LOSS PER SHARE (0.11) (0.18) (0.06) (0.11)
</TABLE>
<PAGE> 4
LONG DISTANCE DIRECT HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
SIX MONTHS ENDED
30-Jun-97 30-Jun-96
--------- ---------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net loss ($1,427,648) ($440,910)
Adjustments to reconcile net loss to
net cash used in operating activities:
Depreciation and amortization 64,583 31,269
Amortization of note discount
Imputed interest on personal guarantee
Financing expenses
Provision for doubtful accounts 336,029 126,417
Changes in assets and liabilities:
(Increase) decrease in accounts receivable (3,180,069) (821,711)
(Increase) decrease in other current assets (8,097) (234,338)
(Increase) decrease in other assets 1,912 (145,707)
Increase in accounts payable 2,071,712 798,219
Increase (decrease) in accrued expenses (177,398) (212,281)
Increase (decrease) in sales and excise taxes payable (7,994) (172,678)
----------- ----------
Total Adjustments to Net Loss (899,322) (630,810)
----------- ----------
Net Cash Used in Operating Activities (2,326,970) (1,071,720)
----------- ----------
CASH FLOWS USED IN INVESTING ACTIVITIES
Acquisition of property and equipment (227,229) (36,015)
----------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds (payment) of notes payable 0 330,200
Proceeds (payment) of related party loans 39,319 235,490
Proceeds from private placement (net of certain expenses) 2,463,199 1,147,201
----------- ----------
Net Cash Provided by Financing Activities 2,502,518 1,712,891
----------- ----------
NET INCREASE (DECREASE) IN CASH (51,681) 605,156
----------- ----------
CASH - Beginning of Period 962,471 207,666
CASH - End of Period $910,790 $812,822
</TABLE>
<PAGE> 5
LONG DISTANCE DIRECT HOLDINGS, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
In the opinion of management, the accompanying unaudited financial statements
contain all adjustments necessary to present fairly the Company's position as
of June 30, 1997 and December 31, 1996 and results of its operations and cash
flows for the three month periods ending June 30, 1997 and June 30, 1996.
The accounting policies followed by the Company are set forth in Note 2 to the
Company's financial statements in the Form 10KSB for the period ending
December 31, 1996.
<PAGE> 6
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.
The following discussion and analysis should be read in conjunction
with the Financial Statements and the notes thereto appearing herein. This
report contains forward-looking statements which involve risks and
uncertainties. The Company's actual results could differ materially from those
anticipated in these forward-looking statements as a result of certain factors,
including those set forth in this discussion and analysis and elsewhere in this
report.
1
<PAGE> 7
RESULTS OF OPERATIONS
SIX MONTHS ENDED JUNE 30, 1997 AS COMPARED TO SIX MONTHS ENDED JUNE 30, 1996.
Gross revenues for the six months ended June 30, 1997 were $4,729,313
as compared to $3,463,502 for the six months ended June 30, 1996. The increase
in sales is attributable to revenue realized from the Company's new marketing
ventures. The Company's televised marketing program generated $1.1 million or
24% of total revenue through the sale of marketing kits sold during the program
and $1.4 million or 31% of total revenue in billed and unbilled telephone
service.
Revenue for the period ended 6/30/97 includes a significant volume of
unbilled revenue in respect of certain new customers which were acquired by LDDI
since January 1, 1997 and processed through MCI and which form a large
proportion of the customers who were generated from the Company's televised
marketing program. The accounts in question were confirmed to LDDI's service
but, due to software problems at MCI, the Company has not yet received the
benefit of these billings. The Company is in discussions with MCI to resolve the
problem, to determine an appropriate level of compensation for the error and to
ensure that this problem does not recur with regard to future orders sent to
MCI. MCI has assured the Company that the problem is being investigated and
will be resolved. There can be no certainty, however, that the result of these
discussions will be favorable to the Company or that the unbilled revenues will
ultimately be recovered by the Company.
In May, 1996, the Company, through its wholly owned subsidiary, Long
Distance Direct Marketing, Inc., entered into an arrangement with Guthy-Renker
Distribution, Inc., ("GRD") an infomercial producer and promoter, to produce and
market a thirty minute infomercial selling the right to become an independent
sales representative of the Company. Under the original contract, the Company
was responsible for financing the loss incurred from the sale of kits sold
during the program. In the six months ended June 30, 1997, the Company recorded
losses from the sale of kits amounting to $243,603.
In August, 1997, the Company entered into an agreement with
Credit Education Center, L.L.C. ("CEC") whereby CEC will market LDDI's
telephone service in conjunction with its own services. To date, the Company has
received approximately 4,500 new accounts through this arrangement and expects
to realize revenue from these new accounts in the last quarter of 1997.
The Company has begun to establish its own in-house
telemarketing facility and intends to increase expenditures on direct mail
activities. Due to its marketing strategies,the Company is poised for growth in
revenue and customer base but there can be no assurance that its marketing
ventures will produce substantial increases in revenue.
In the first quarter of 1996, Congress passed legislation allowing the
entry of long-distance carriers into the local market and local carriers into
the long distance market to
2
<PAGE> 8
foster greater competition within the telephone industry. While this may lead to
increased competition for the Company in the long distance market from local
carriers, management plans to enter into the local market in order to increase
its overall market share. The Company is presently in the process of obtaining
certification to provide local service to its customers.
The Company also entered the residential market in 1996. Previously,
the Company sold exclusively to commercial customers. The Company has signed an
agreement with MCI which allows the "LECs" (Local Exchange Carriers) to bill and
collect on behalf of the Company. Although the Company continues to bill its
customers directly, it will continue to keep under review whether to bill its
residential customers through the LEC's.
Management believes that the Company's systems, which will be further
upgraded in the third quarter of 1997 to provide quicker response times for the
customer service and collections functions, are capable of supporting the
anticipated growth in the Company's revenues. There can be no assurance,
however, that the Company's systems will be capable of handling such growth, if
any.
Gross profit was $978,412 and $1,316,104 for the six months ended June
30,1997 and 1996, respectively. As a percentage of net sales, the gross profit
margins for the six months ended June 30, 1997 and 1996 were 21% and 38%,
respectively. This decrease is mainly attributable to a loss incurred with
respect to the sale of marketing kits sold through the Company's televised
marketing program.
The Company recently entered into a new four-year contract tariff with
AT&T - which supersedes its contract dated September 1, 1995 - which became
effective March 1, 1997 for the supply of inbound and outbound telephone
service. The Company's minimum quarterly purchase requirement remains constant
at $1,200,000 in years one to three and increases to $1,475,000 in year four.
(This quarterly purchase requirement of $1,200,000 is the same as the Company's
obligation under its previous contract with AT&T dated September 1, 1995).
Failure to achieve the minimum will require payment of the shortfall by the
Company. Under the contract tariff, the Company is obligated to make payments
equal to its minimum purchase requirement for the outstanding term of the
agreement if there is an early termination thereof. The Company has received
more favorable pricing from AT&T on both domestic and international usage under
the new contract. In addition, AT&T has agreed to issue a credit waiving the
entire cumulative shortfall charged under the previous contract (approximately
$2.3 million as of December 31, 1996, none of which has been reflected in the
Company's financial statements included herein) within thirty days after the
Company discharges its past due obligation to AT&T. As of June 2, 1997, the
Company satisfied its past due obligation and AT&T has agreed to issue the
Company a credit waiving the entire shortfall balance in the amount of $2.3
million.
On March 1, 1996 the Company signed an individually negotiated
agreement with MCI under which the Company is authorized to resell various MCI
services, including outbound long-distance and local long distance, inbound
long-distance, calling cards, debit
3
<PAGE> 9
cards, teleconferencing and MCI enhanced services. The agreement, which was
amended in September 1996, February, 1997, and April, 1997, superseded a prior
agreement signed August 1995 under which MCI was unable to provide service as a
result of software problems between MCI and the LECs. This new contract, which
requires higher minimum purchase levels than the prior agreement but affords
better prices, including more favorable pricing on international usage, is
subject to an 18 month ramp period commencing April, 1996 followed by a 30 month
service period.
During the first eight months of the ramp period, the Company had no
minimum purchase obligations. During the ninth through twelfth months, the
Company is obliged to purchase $250,000 of usage per month; during the
thirteenth through fifteenth month, $500,000; during the sixteenth through
eighteenth month, $750,000; and during the thirty month service period
$1,000,000 per month. In the event that the Company fails to meet its minimum
purchase requirements, it must pay MCI 15% of the difference between the amount
used and the respective minimum monthly requirement.
The MCI agreement is subject to increases and decreases in the rate of
discount offered to the Company, depending on the proportion of "new business"
(currently non-MCI business) in the Company's total usage. In addition, rates
paid by the Company to MCI are contingent upon the Company's ability to meet its
minimum purchase requirements. During the first six months of the agreement,
either the Company or MCI had the option to terminate the agreement at will,
with no penalty. Since this six-month period has expired with no notice of
termination by either party, the agreement is to run for the full forty-eight
(48) month term. The Company is currently in negotiation with MCI for an
amendment to the agreement under which, in return for an increased purchase
commitment, it will receive more favorable pricing.
Prior to February 28, 1996, MCI had been unable to provision the
Company's customers. Subsequent to 3/31/96, MCI commenced providing service and
the benefit of this was reflected in the Company's revenues beginning in the
second quarter. In consideration of its inability to provide service under the
August, 1995 contract prior to December 31, 1995, MCI agreed to compensate the
Company in the form of a service credit in an amount not to exceed $1,000,000,
to be applied against its initial usage under the March, 1996 contract.
Sales and marketing expenses were $248,122 and $316,173 for the six
months ended June 30, 1997 and 1996 respectively. As a percentage of gross
sales, sales and marketing expenses decreased from 9% for the six months ended
June 30, 1996 to 5% for the six months ended June 30, 1997. The percentage
decrease is attributable to limited expenditure on account acquisition from
outbound telemarketing firms due to concentration on other marketing strategies
in 1997. The Company plans to continue to utilize outbound telemarketing firms
on a limited basis in conjunction with its other marketing strategies.
4
<PAGE> 10
The Company has begun to establish its own in-house telemarketing facility as
well as utilize direct mail to obtain new customers.
General and administrative expenses were $2,156,774 and $1,377,114 for
the six months ended June 30, 1997, and 1996, respectively. As a percentage of
gross sales, general and administrative expenses for the six months ended June
30, 1997 and 1996 were 46% and 40% respectively. The principal elements which
contributed to the increase in general and administrative expenses are mainly
related to the Company's expansion of its resources in anticipation of increased
levels of sales. Costs which increased from their 1996 levels include payroll
and related administrative costs, and legal and accounting fees. In addition,
costs were incurred in 1997 to purchase additional insurance for Director's &
Officer's liability coverage. In 1997, the Company incurred heavier costs for
regulatory compliance when compared to the second quarter of 1996 as a result of
the Company's attempt to seek certification to provide local service in each
state. The Company incurred costs in 1997 to establish a relationship with a
public relations firm.
Interest expense for the six months ended June 30, 1997 and 1996 was
$1,164 and $65,339 respectively. For the six months ended June 30, 1996,
interest expense related to accrued interest on indebtedness of the Company in
connection with a note incurred in relation to the purchase of the partnership
interest of two of the original limited partners in LDDLP, and various financing
agreements entered into in 1994 to finance the Company's working capital
requirements. The note payable related to the partnership buyout was paid off in
the third quarter of 1996 when litigation was settled. In addition, a majority
of the Company's outstanding loans were converted to equity. Currently, the
Company has no outstanding debt.
The Company incurred a net loss of $1,427,648 for the six months ended
June 30, 1997 compared to a net loss of $440,910 for the six months ended June
30, 1996.
THREE MONTHS ENDED JUNE 30, 1997 COMPARED TO THREE MONTHS ENDED JUNE 30,
1996
Gross revenues for the three months ended June 30, 1997 were $2,632,111
as compared to $1,665,409 for the three months ended June 30, 1996. The increase
in sales is attributable to revenue realized from the Company's new marketing
ventures. The Company's televised marketing program generated $627,928 or 24% of
total revenue through the sale of marketing kits sold during the program and
$928,000 or 35% of total revenue in billed and unbilled telephone service.
Revenue for the three months ended June 30, 1997 includes a significant
volume of unbilled revenue in respect of certain new customers which were
acquired by LDDI since January 1, 1997 and processed through MCI and which
form a large proportion of the customers who were generated from the Company's
televised marketing program. The accounts in question were confirmed to LDDI's
service but, due to software problems at MCI, the Company has not yet received
the benefit of these billings. The Company is in discussions with MCI to
resolve the problem, to determine an appropriate level of compensation for the
error and to ensure that
5
<PAGE> 11
this problem does not recur with regard to future orders sent to MCI. MCI has
assured the Company that the problem is being investigated and will be
resolved. There can be no certainty, however, that the result of these
discussions will be favorable to the Company or that the unbilled revenues will
ultimately be recovered by the Company.
Gross profit was $425,136 and $636,876 for the three months ended June,
1997 and 1996, respectively. As a percentage of net sales,the gross profit
margins for the three months ended June 30, 1997 and 1996 were 16% and 38 %,
respectively. This decrease is mainly attributable to a loss incurred with
respect to the sale of marketing kits sold through the Company's televised
marketing program.
Sales and marketing expenses were $176,303 and $158,022 for the three
months ended June 30, 1997 and 1996, respectively. As a percentage of gross
sales, sales and marketing expenses decreased from 9% for the three months ended
June 30, 1996 to 7% for the three months ended June 30, 1997. The percentage
decrease is attributable to limited expenditure on account acquisition from
outbound telemarketing firms due to concentration on other marketing strategies
in 1997. The Company plans to continue to utilize outbound telemarketing firms
on a limited basis in conjunction with its other marketing strategies. The
Company has begun to establish its own in-house telemarketing facility as well
as utilize direct mail to obtain new customers.
General and administrative expenses were $1,229,971 and $689,642 for
the three months ended June 30, 1997, and 1996, respectively. As a percentage of
gross sales, general and administrative expenses for the three months ended June
30, 1997 and 1996 were 47 % and 41%, respectively. The principal elements which
contributed to the increase in general and administrative expenses are mainly
related to the Company's expansion of its resources in anticipation of increased
levels of sales. Costs which increased from their 1996 levels include payroll
and related administrative costs, and legal and accounting fees. In addition,
costs were incurred in 1997 to purchase additional insurance for Director's &
Officer's liability coverage. In 1997, the Company incurred heavier costs for
regulatory compliance when compared to the second quarter of 1996 as a result of
the Company's attempt to seek certification to provide local service in each
state. The Company incurred costs in 1997 to establish a relationship with a
public relations firm.
Interest expense for the three months ended June 30, 1997 and 1996 was
$0 and $33,651, respectively. For the three months ended June 30, 1996, interest
expense related to accrued interest on indebtedness of the Company in connection
with a note incurred in relation to the purchase of the partnership interest of
two of the original limited partners in LDDLP, and various financing agreements
entered into in 1994 to finance the Company's working capital requirements. The
note payable related to the partnership buyout was paid off in the third quarter
of 1996 when litigation was settled. In addition, a majority of the
6
<PAGE> 12
Company's outstanding loans were converted to equity. Currently, the Company has
no outstanding debt.
The Company incurred a net loss of $981,138 for the three months ended
June 1997 compared to a net loss of $243,859 for the three months ended June 30,
1996.
LIQUIDITY AND CAPITAL RESOURCES
The Company effected a recapitalization in October, 1995 which
subsequently enabled it to undertake private placements of its common stock
throughout 1995, 1996 and 1997. Since October, 1995, the Company has financed
its operations primarily through the sale of its common stock. In addition to
selling shares of its common stock to provide required working capital, and as
part of the recapitalization, a majority of the Company's loans which had been
outstanding at December 31, 1994 were either repaid or converted to equity in
1995 and 1996. After the recapitalization and through June 30, 1997, the Company
converted approximately $1.7 million of its debt into equity, and raised
approximately $8.8 million in cash (net of certain expenses) from the private
sale of its common stock, the proceeds of which were used primarily for working
capital. In the third quarter of 1996, litigation related to a buy out of two
former partners was settled, and, as a result, the corresponding actual and
contingent indebtedness was canceled. As a result of the private placements
effected during 1996, the Company finished the year with net current assets of
$975,000 and total net assets of $1.4 million, as against net current
liabilities of $3.4 million and a deficiency of assets of $3.2 million at
December 31, 1995. At June 30, 1997, the Company had working capital of
$1,628,831 compared to $975,000 at December 31, 1996. The increase was
attributable to the cash received from the private placement of the Company's
common stock during the first four months of 1997.
The Company has never made a profit since inception in November, 1991.
The Company has sustained operating losses of $1,052,236, $1,096,125 and
$1,661,320 for the fiscal years ended December 31, 1994, 1995, and 1996,
respectively, and sustained an operating loss of $981,000 for the six months
ended June 30, 1997. As of June 30, 1997, the Company had an accumulated deficit
of $8,494,435. The Company has historically used substantial amounts of cash in
operations. The Company's expected expanded sales and marketing efforts could
result in significantly higher operating losses in the future. The company's
trend of incurring operating losses is likely to continue until its revenues
reach certain levels materially higher than any achieved to date. There can be
no assurance that the Company will not continue to experience operating losses
in the future or that the Company's revenues will reach such levels.
The Company is obligated to meet minimum purchase requirements with
AT&T and MCI. The Company's contract with AT&T requires the Company to purchase
$1,200,000 per quarter in usage in years one to three beginning in March of 1997
and
7
<PAGE> 13
$1,475,000 per quarter in usage in year four. Under its contract with MCI, the
Company has a minimum purchase obligation of $3,000,000 per quarter beginning in
September of 1997. Failure to achieve these minimums will require payment of the
shortfall by the Company. The Company has not met its minimum purchase
requirements for the six months ended June 30, 1997. Under each of the
agreements, there are provisions for current shortfalls to be made good by
future usage in excess of the minimum commitments. There can be no assurance
that the Company will achieve future excess usage in sufficient amounts to
offset the current shortfall. At the present combined level of its commitments
to AT&T and MCI, and at its current selling margins, the Company will need to
achieve annualized net sales of telephone service, beginning in September of
1997, of approximately $25 million in order to satisfy such commitments. There
can be no assurance that the Company will reach this level of sales.
The Company began to market its product through media advertising in
January of 1997 by broadcasting a thirty-minute infomercial designed to increase
its independent sales force. Under its arrangements with Guthy Renker, the
Company has financed the loss incurred from the sale of kits sold during the
program. In the six months ended June 30, 1997, the Company recorded losses
from the sale of kits amounting to $243,603. The Company is in the process of
preparing a revised infomercial pursuant to negotiations with Guthy Renker,
the producer of the infomercial which may lead to a change in the
responsibility for financing any future losses from the sale of kits sold
during the program.
Currently, the Company does not have a line of credit with its existing
bank. There is no assurance that the Company will be able to secure a line of
credit to finance its operations. Consequently, the Company will be required to
raise substantial additional amounts of capital from the sale of its securities
to finance its operations. There can be no assurance that additional financing
will be available on acceptable terms, if at all.
8
<PAGE> 14
SIGNATURES
In accordance with the requirements of the Securities and Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Dated: August 19, 1997 Long Distance Direct Holdings, Inc.
By:/s/ Steven Lampert
--------------------------
Steven Lampert, President
(Principal Executive Officer)
By:/s/ Michael Preston
--------------------------
Michael Preston, Chief
Financial Officer (Principal
Accounting Officer)
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM PROFIT AND
LOSS STATEMENT AND BALANCE SHEET OF LONG DISTANCE DIRECT HOLDINGS, INC. AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH LONG DISTANCE DIRECT HOLDINGS,
INC. FORM 10QSB.
</LEGEND>
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<EXCHANGE-RATE> 1
<CASH> 910,790
<SECURITIES> 0
<RECEIVABLES> 4,625,031
<ALLOWANCES> 566,069
<INVENTORY> 0
<CURRENT-ASSETS> 5,902,280
<PP&E> 732,983
<DEPRECIATION> 258,159
<TOTAL-ASSETS> 6,726,231
<CURRENT-LIABILITIES> 4,273,449
<BONDS> 0
0
0
<COMMON> 8,927
<OTHER-SE> 2,443,855
<TOTAL-LIABILITY-AND-EQUITY> 6,726,231
<SALES> 4,725,350
<TOTAL-REVENUES> 4,725,350
<CGS> 3,746,938
<TOTAL-COSTS> 248,122
<OTHER-EXPENSES> 1,820,745
<LOSS-PROVISION> 336,029
<INTEREST-EXPENSE> 1,164
<INCOME-PRETAX> (1,427,648)
<INCOME-TAX> 0
<INCOME-CONTINUING> (1,427,648)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,427,648)
<EPS-PRIMARY> (.26)
<EPS-DILUTED> 0
</TABLE>
