<PAGE>
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------------
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ........ to .........
COMMISSION FILE NUMBER 33-27603
-----------------------------
DIRECTCOM, INC.
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 22-2942013
- ------------------------------- -------------------
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
3 Garret Mountain Plaza
West Paterson, New Jersey 07424
----------------------------------------
(Address of principal executive offices)
(201) 523-2500
----------------------------------------------------
(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
--- ----
<PAGE>
DIRECTCOM, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
SEPTEMBER 30, 1997
NOTE 1 - CHANGE OF NAME
On September 5, 1997 the Company, previously called North American Integrated
Marketing, Inc., changed its name to DirectCom, Inc..
NOTE 2 - BASIS OF PRESENTATION
The accompanying unaudited financial statements have been prepared in accordance
with generally accepted accounting principles for interim financial information
and with the instructions to Form 10-Q and Article 10 of Regulation S-X.
Accordingly, they do not include all of the information and footnotes required
by generally accepted accounting principles for complete financial statements.
In the opinion of management, all adjustments (consisting of normal recurring
accruals) considered necessary for a fair presentation have been included.
Operating results for the nine month period ended September 30,1997, are not
necessarily indicative of the results that may be expected for the year ended
December 31, 1997. For further information, refer to the financial statement
footnotes thereto included in the Company's annual report on Form 10-K for the
year ended December 31, 1996.
NOTE 3 - ACQUISITIONS
Effective October 1, 1996, pursuant to a Stock Purchase Agreement dated
September 30, 1996, the Company acquired 82% of the outstanding common stock of
Color Graphics, Inc. for a total consideration of $1,909,283. The
consideration consisted of $1,000,000 in cash paid by the Company, $286,000 in
cash paid by Color Graphics, Inc., the assumption of liabilities totaling
$250,000 and the transfer of a life insurance policy valued at $210,806 by Color
Graphics, Inc.. In addition, Color Graphics, Inc. assigned an accounts
receivable of $464,000 which Color Graphics, Inc. had previously written off.
The Company has assigned a value of $162,477 to this receivable for purchase
accounting. The Company obtained the $1,000,000 from North American
Communications, Inc. (NAC), a related party. The Company also granted to a
consultant an option to acquire 10 % of the Color Graphics, Inc. stock at an
exercise price of $1,058.82 per share or $30,000 in the aggregate through
September 30, 2001 for his role in consummating the acquisition. On July 21,
1997 the Company purchased the option from the consultant for $750,000, which
increased the total consideration to $2,659,283. The acquisition was accounted
for as a purchase and the excess of the cost over fair value of the net assets
acquired of $309,745 was included in "Other Assets" in the accompanying
consolidated balance sheet and is being amortized over a fifteen year period on
a straight line basis. The operations of Color Graphics, Inc. are included in
the accompanying consolidated financial statement from the date of acquisition.
<PAGE>
NOTE 4 - INVENTORIES
Inventories consist of the following:
<TABLE>
<CAPTION>
September 30, December 31,
1997 1997
---- ----
<S> <C> <C>
Paper $252,917 $321,623
Other raw materials 101,308 81,628
Work-in-process 164,728 62,866
-------- --------
$518,953 $466,117
======== ========
</TABLE>
NOTE 5 - FURNITURE AND EQUIPMENT
Furniture and equipment consists of the following:
<TABLE>
<CAPTION>
September 30, December 31,
1997 1996
---- ----
<S> <C> <C>
Machinery and equipment $3,777,438 $3,561,995
Office furniture and equipment 120,016 105,742
Transportation equipment 128,321 135,737
Computer equipment and software 782,377 432,185
Leasehold improvements 61,703 61,703
Construction in progress 674,504 63,496
---------- ----------
5,544,359 4,360,858
Accumulated depreciation and
amortization (794,310) (511,795)
---------- ----------
$4,750,049 $3,849,063
========== ==========
</TABLE>
<PAGE>
NOTE 6 - SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
<TABLE>
<CAPTION>
September 30,
-------------
1997 1996
----------- -----------
<S> <C> <C>
Cash paid during the period for:
Interest $ 277,153 $ 853
=========== ===========
Income taxes $ 2,437,502 $ 21,043
=========== ===========
</TABLE>
Non-cash investing and financing activities:
Acquisition of option
<TABLE>
<CAPTION>
<S> <C> <C>
Cost of option $ 750,000 $ -
Debt incurred (500,000) -
----------- -----------
Cash paid $ 250,000 $ -
=========== ===========
</TABLE>
NOTE 7 - COMMON and PREFERRED STOCK
In April, 1997, the stockholders approved a proposal to adopt certain amendments
to the Company's Certificate of Incorporation to (1) effect a 1 - for- 12
reverse stock split of the Company's common stock and (2) to change the total
number of shares the Company is authorized to issue to 70,000,000 shares,
consisting of 60,000,000 of common stock, having a par value of $.00001 per
share and 10,000,000 shares of preferred stock, having a par value of $.00001
per share. All references in the accompanying financial statements to the number
of common shares and per-share amounts for 1996 have been restated to reflect
the reverse stock split.
NOTE 8 - TREASURY STOCK
On May 13, 1997 the Board of Directors approved the sale of 80,000 shares of
common stock for $150,000.
<PAGE>
ITEM 7: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
GENERAL
The Company has focused its growth strategy on acquiring complementary database
and direct mail marketing companies. The Company intends to build a vertically
integrated company that provides turnkey database marketing products and
services to direct marketers. These services will include database management
and data warehousing, predictive modeling, marketing strategy consulting, agency
creative and design work, production management and direct mail production and
fulfillment. In October 1996, the Company entered the printing business with the
purchase of 82% of the stock of Color Graphics, Inc.. Due to this acquisition
the results of operations for 1997 are not comparable to prior years. See Note
3 of Notes to Financial Statements for additional information concerning this
acquisition.
(A) RESULTS OF OPERATIONS - THREE MONTHS ENDED SEPTEMBER 30, 1997 AND SEPTEMBER
30, 1996
<TABLE>
<CAPTION>
Three Months Ended September 30
-------------------------------
1997 1996
---- ----
Database Printing Database Printing
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Revenues $ 2,831,691 $ 3,388,388 $ 1,395,832 -
Gross profit $ 889,635 $ 1,478,650 $ 636,806 -
Operating income $ 711,166 $ 226,340 $ 293,647 -
</TABLE>
Consolidated net revenues of $6,220,079 in 1997 represent an increase of
$4,824,247 over 1996. Operating income of $937,506 in 1997 represents an
increase of $643,859 over 1996. The increase in the net revenues and operating
income of the Company resulted from the acquisition of Color Graphics, Inc. on
October 1, 1996 and the continued expanding database operations of the Company
for the three month period ended September 30, 1997.
<PAGE>
Revenues
- --------
Net revenues increased $4,824,247 from $1,395,832 to $6,220,079 as compared to
1996. The net revenue increase for the three month period ended September
30,1997 was primarily attributable to a) the acquisition of Color Graphics, Inc.
on October 1, 1996 which provided an increase in revenue of $3,388,388 through
direct mail printing services provided to customers in the financial services
industry and b) sales of database analysis and advertising services to several
new clients including Capital One and MBNA.
Cost of Revenue
- ---------------
The Company's cost of revenue, as a percentage of sales, was 61.9% for the three
month period ended September 30, 1997 as compared to 54.3% for the prior period.
The cost of revenue as a percentage of sales for database was 68.5% for the
current period. The database increase of 14.2% over the prior period resulted
from increased costs associated with the increase in revenue and included the
costs of outside vendors and salary costs related to additional staffing. The
cost of revenue as a percentage of sales for Color Graphics, Inc. was 56.4% for
the current period.
Selling, General and Administrative Expenses
- --------------------------------------------
Selling, general and administrative expenses increased $760,886 in 1997 as
compared to the prior period. The increase in 1997 expenses resulted primarily
from: a) an increase in database expenses and supplies related to computer
equipment. and b) the acquisition of Color Graphics, Inc.. The acquisition of
Color Graphics, Inc. accounted for approximately 84% of the increase for 1997.
Interest Expense
- ----------------
Interest expense increased $85,058 in 1997 as compared to the prior period. The
increase resulted primarily from related party long-term debt incurred in
connection with the acquisition of Color Graphics, Inc..
Depreciation and Amortization
- -----------------------------
Depreciation and amortization increased $241,406 in 1997 as compared to the
prior period. The increase resulted primarily from a) the purchase of computer
equipment and software necessary to fulfill the demand by database customers and
to support additional staffing and b) the acquisition of Color Graphics, Inc..
The acquisition of Color Graphics, Inc. accounted for approximately 88% of the
increase for 1997.
<PAGE>
Provision for Income Taxes
- --------------------------
Provision for income taxes increased $258,873 in 1997 as compared to the prior
period. The increase in 1997 was due to the increase in income.
(B) RESULTS OF OPERATIONS - NINE MONTHS ENDED SEPTEMBER 30, 1997 AND SEPTEMBER
30, 1996
<TABLE>
<CAPTION>
Nine Months Ended September 30
------------------------------
1997 1996
---- ----
Database Printing Database Printing
----------- ----------- ----------- ------------
<S> <C> <C> <C> <C>
Revenues $ 7,650,791 $12,460,865 $ 5,792,918 -
Gross profit $ 2,912,951 $ 5,939,401 $ 1,759,426 -
Operating income $ 2,684,173 $ 2,158,462 $ 737,416 -
</TABLE>
Consolidated net revenues of $20,111,656 in 1997 represent an increase of
$14,318,738 over 1996. Operating income of $4,842,635 in 1997 represents an
increase of $4,105,218 over 1996. The increase in the net revenues and operating
income of the Company resulted from the acquisition of Color Graphics, Inc. on
October 1, 1996 and the continued expanding database and advertising operations
for the nine month period ended September 30, 1997.
Revenues
- --------
Net revenues increased $14,318,738 from $5,792,918 to $20,111,656 as compared to
1996. The net revenue increase for the nine month period ended September 1997
was primarily attributable to a) the acquisition of Color Graphics, Inc. on
October 1, 1996 providing an increase in revenue of $12,460,865 through direct
mail printing services provided to customers in the financial services industry
and b) sales of database analysis and advertising services to several new
customers, including Capital One, Citibank and MBNA and increased sales to
existing customers including Fleet Corporation and Beneficial Bank.
<PAGE>
Cost of Revenue
- ---------------
The Company's cost of revenue, as a percentage of sales, was 55.9% for the nine
month period ended September 30, 1997 as compared to 69.6% for the prior period.
The cost of revenue as a percentage of sales for database was 61.9% for the
current period. The database decrease of 7.7% over the prior period is
primarily attributed to decreased costs associated with production services
supplied by a related party. The cost of revenue as a percentage of sales for
Color Graphics, Inc. was 52.3% for the current period.
Selling, General and Administrative Expenses
- --------------------------------------------
Selling, general and administrative expenses increased $1,991,002 in 1997 as
compared to the prior period. The increase in 1997 expenses resulted primarily
from: a) an increase in database expenses and supplies related to computer
equipment. b) costs associated with the relocation, in March, of the corporate
office. and c) the acquisition of Color Graphics, Inc.. The acquisition of Color
Graphics, Inc. accounted for approximately 91% of the increase for 1997.
Interest Expense
- ----------------
Interest expense increased $276,003 in 1997 as compared to the prior period. A
significant portion of the increase in 1997 resulted from the acquisition of
Color Graphics, Inc. The increase resulted primarily from: a) related party
long-term debt incurred in connection with the acquisition of Color Graphics,
Inc. and b) Color Graphics, Inc.'s borrowings on both their revolving line of
credit and equipment loans.
Depreciation and Amortization
- -----------------------------
Depreciation and amortization increased $720,702 in 1997 as compared to the
prior period. The increase resulted primarily from a) the purchase of computer
equipment and software necessary to fulfill the demand by database customers and
to support additional staffing and b) the acquisition of Color Graphics, Inc..
The acquisition of Color Graphics, Inc. accounted for approximately 91% of the
increase for 1997.
Provision for Income Taxes
- --------------------------
Provision for income taxes increased $1,694,970 in 1997, as compared to the
prior period. The increase in 1997 was due to the increase in income.
<PAGE>
Inflation
- ---------
Inflation and price increases do not materially affect the Company's gross
profit margin as contract prices are adjusted at the same time increases are
implemented by outside vendors.
B) LIQUIDITY AND CAPITAL RESOURCES
-------------------------------
<TABLE>
<CAPTION>
9/30/97 12/31/96
------- --------
<S> <C> <C>
Working capital $ 3,511,747 $ 2,705,915
Cash 1,688,344 1,080,630
9/30/97 9/30/96
------- --------
Cash provided by (used in) operating
activities 3,788,522 (306,712)
Cash used in investing activities (1,337,071) (180,282)
Cash (used in) provided by financing
activities (1,843,737) 487,435
</TABLE>
Working capital increased as of September 30, 1997 by $805,832 over working
capital as of December 31, 1996. The increase is primarily the result of
increased cash flow from operations which resulted in higher cash levels.
The increase in cash flows from operations resulted primarily from improved
profitability and strong cash collections.
The increase in cash used in investing activities resulted primarily from higher
capital expenditures to support the Company's growth.
The increase in cash used in financing activities resulted primarily from the
repayments of the Company's debt.
At September 30, 1997 the Company had an outstanding debt of $3,004,847
primarily in the form of notes payable.
At September 30, 1997 the amount available under the Company's lines of credit
was approximately $3,500,000.
The Company anticipates that current cash balances as well as anticipated cash
flows from operations will be sufficient to meet its working capital and capital
expenditure needs at least through December 31, 1997.
<PAGE>
DIRECTCOM, INC.
CONSOLIDATED BALANCE SHEETS
ASSETS
(UNAUDITED)
<TABLE>
<CAPTION>
9/30/97 12/31/96
----------- -----------
<S> <C> <C>
CURRENT ASSETS
CASH $ 1,688,344 $ 1,080,630
ACCOUNTS RECEIVABLE, LESS ALLOWANCE FOR DOUBTFUL ACCOUNTS
OF $161,173 IN 1997 AND $53,093 IN 1996 3,403,619 4,236,638
INVENTORIES 518,953 466,117
PREPAID AND OTHER CURRENT ASSETS 568,390 422,259
----------- -----------
TOTAL CURRENT ASSETS 6,179,306 6,205,644
PROPERTY, PLANT AND EQUIPMENT, NET 4,750,049 3,849,063
OTHER ASSETS 575,449 179,101
----------- -----------
TOTAL ASSETS $11,504,804 $10,233,808
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
NOTE PAYABLE $ - $ 466,593
CURRENT MATURITIES OF LONG-TERM DEBT 453,000 275,175
ACCOUNTS PAYABLE 562,460 764,913
ACCOUNTS PAYABLE - RELATED COMPANY 942,125 371,315
INCOME TAXES PAYABLE - 703,482
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES 709,974 818,776
DEFERRED REVENUE - 99,475
----------- -----------
TOTAL CURRENT LIABILITIES 2,667,559 3,499,729
LONG-TERM DEBT 3,051,847 2,952,713
LONG-TERM DEBT - RELATED COMPANY - 925,000
DEFERRED INCOME TAXES 542,200 542,200
OTHER LONG-TERM LIABILITIES 154,993 284,096
MINORITY INTEREST 786,332 571,816
SHAREHOLDERS' EQUITY
PREFERRED STOCK $.00001 PAR VALUE - AUTHORIZED
10,000,000 SHARES; ISSUED AND OUTSTANDING: NONE - -
COMMON STOCK, $.00001 PAR VALUE - AUTHORIZED
60,000,000 SHARES; ISSUED AND OUTSTANDING:
3,341,674 SHARES, OF WHICH 240,000 SHARES IN 1997
AND 320,000 SHARES IN 1996 ARE HELD AS TREASURY STOCK. 401 401
PAID-IN CAPITAL 499,814 499,814
RETAINED EARNINGS 3,956,658 1,263,039
----------- -----------
4,456,873 1,763,254
LESS TREASURY STOCK, AT COST (155,000) (305,000)
----------- -----------
4,301,873 1,458,254
----------- -----------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $11,504,804 $10,233,808
=========== ===========
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<PAGE>
DIRECTCOM, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THREE MONTH PERIOD ENDED SEPTEMBER 30
(UNAUDITED)
<TABLE>
<CAPTION>
1997 1996
---------- ----------
<S> <C> <C>
REVENUES
DATABASE $2,831,691 $1,395,832
PRINTING - RELATED PARTY 495,633 -
PRINTING 2,892,755 -
---------- ----------
TOTAL REVENUES 6,220,079 1,395,832
COST OF REVENUE
DATABASE - RELATED COMPANY 1,402,630 289,488
DATABASE - OTHER 539,696 469,538
PRINTING 1,909,738 -
---------- ----------
TOTAL COST OF REVENUE 3,852,064 759,026
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSE 1,074,417 313,531
INTEREST EXPENSE 85,355 297
DEPRECIATION AND AMORTIZATION 270,737 29,331
---------- ----------
TOTAL COSTS AND EXPENSES 5,282,573 1,102,185
---------- ----------
INCOME BEFORE INCOME TAXES AND MINORITY INTEREST 937,506 293,647
PROVISION FOR INCOME TAXES 318,753 59,880
---------- ----------
INCOME BEFORE MINORITY INTEREST 618,753 233,767
MINORITY INTEREST IN INCOME OF SUBSIDIARY 11,400 -
---------- ----------
NET INCOME $ 607,353 $ 233,767
========== ==========
EARNINGS PER SHARE $0.20 $0.07
========== ==========
WEIGHTED AVERAGE COMMON SHARES
USED IN COMPUTING EARNINGS PER SHARE 3,101,674 3,181,674
========== ==========
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
<PAGE>
DIRECTCOM, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR NINE MONTH PERIOD ENDED SEPTEMBER 30
(UNAUDITED)
<TABLE>
<CAPTION>
1997 1996
----------- -----------
<S> <C> <C>
REVENUES
DATABASE $ 7,650,791 $ 5,792,918
PRINTING - RELATED PARTY 1,839,534 -
PRINTING 10,621,331 -
----------- -----------
TOTAL REVENUES 20,111,656 5,792,918
COST OF REVENUE
DATABASE - RELATED COMPANY 3,203,534 2,900,837
DATABASE - OTHER 1,534,306 1,132,655
PRINTING 6,521,464 -
----------- -----------
TOTAL COST OF REVENUE 11,259,304 4,033,492
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSE 2,938,254 947,252
INTEREST EXPENSE 277,153 1,150
DEPRECIATION AND AMORTIZATION 794,310 73,608
----------- -----------
TOTAL COSTS AND EXPENSES 15,269,021 5,055,502
----------- -----------
INCOME BEFORE INCOME TAXES AND MINORITY INTEREST 4,842,635 737,416
PROVISION FOR INCOME TAXES 1,934,500 239,530
----------- -----------
INCOME BEFORE MINORITY INTEREST 2,908,135 497,886
MINORITY INTEREST IN INCOME OF SUBSIDIARY 214,516 -
----------- -----------
NET INCOME $ 2,693,619 $ 497,886
=========== ===========
EARNINGS PER SHARE $0.88 $0.23
=========== ===========
WEIGHTED AVERAGE COMMON SHARES
USED IN COMPUTING EARNINGS PER SHARE 3,062,385 2,168,035
=========== ===========
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
<PAGE>
DIRECTCOM, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR NINE MONTH PERIOD ENDED SEPTEMBER 30
(UNAUDITED)
<TABLE>
<CAPTION>
1997 1996
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
NET INCOME $ 2,693,619 $ 497,886
ADJUSTMENTS TO RECONCILE NET INCOME
TO NET CASH PROVIDED BY OPERATING ACTIVITIES:
DEPRECIATION AND AMORTIZATION 794,310 73,608
MINORITY INTEREST 214,516 -
GAIN ON ASSET DISPOSITION (4,573) -
(INCREASE) DECREASE IN:
ACCOUNTS RECEIVABLE, NET 833,019 681,930
INVENTORY (52,836) -
PREPAID AND OTHER CURRENT ASSETS (146,131) (56,706)
INCREASE (DECREASE) IN:
ACCOUNTS PAYABLE (202,453) 25,828
ACCOUNTS PAYABLE - RELATED COMPANY 570,810 (1,747,845)
INCOME TAXES PAYABLE (703,482) 203,609
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES (108,802) 58,278
DEFERRED REVENUE (99,475) (43,300)
----------- -----------
NET CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES 3,788,522 (306,712)
CASH FLOWS FROM INVESTING ACTIVITIES:
CAPITAL EXPENDITURES (1,254,988) (180,282)
PROCEEDS FROM SALE OF ASSETS 17,500 -
INCREASE IN OTHER ASSETS (99,583) -
----------- -----------
NET CASH USED IN INVESTING ACTIVITIES (1,337,071) (180,282)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
REPAYMENTS OF NOTES PAYABLE (466,593) -
REPAYMENTS OF LONG-TERM DEBT (408,041) (12,565)
REPAYMENTS OF LONG-TERM DEBT - RELATED COMPANY (990,000)
SALE OF TREASURY STOCK 150,000 -
SALE OF DEBENTURE - 500,000
DECREASE IN LONG TERM LIABILITIES (129,103) -
----------- -----------
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES (1,843,737) 487,435
----------- -----------
NET INCREASE IN CASH 607,714 441
CASH AT BEGINNING OF YEAR 1,080,630 520,865
----------- -----------
CASH AT END OF YEAR $ 1,688,344 $ 521,306
=========== ===========
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
<PAGE>
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
-----------------
There is no material litigation or other proceeding currently pending against
the registrant.
ITEM 2. CHANGE IN SECURITIES
--------------------
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
-------------------------------
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
---------------------------------------------------
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
(A) Exhibit Index
Exhibit Number Description
-------------- ------------
27 Financial Data Schedule
(B) Reports on Form 8-K
The Company filed a report on Form 8-K dated September 9, 1997 reporting its
change of name under Item 5 of the Report.
<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.
DIRECTCOM, INC.
(REGISTRANT)
November 12, 1997 /s/ Robert Paltrow
---------------------------------------
(signature)
Name: Robert Paltrow
Title: Treasurer
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<S> <C> <C>
<PERIOD-TYPE> 9-MOS 9-MOS
<FISCAL-YEAR-END> DEC-31-1997 DEC-31-1996
<PERIOD-START> JAN-01-1997 JAN-01-1996
<PERIOD-END> SEP-30-1997 SEP-30-1996
<CASH> 1,688,344 1,080,630
<SECURITIES> 0 0
<RECEIVABLES> 3,564,792 4,289,731
<ALLOWANCES> 161,173 53,093
<INVENTORY> 518,953 466,117
<CURRENT-ASSETS> 6,179,306 6,205,644
<PP&E> 5,544,359 4,176,663
<DEPRECIATION> 794,310 327,600
<TOTAL-ASSETS> 11,504,804 10,233,808
<CURRENT-LIABILITIES> 2,667,559 3,499,729
<BONDS> 0 0
0 0
0 0
<COMMON> 401 401
<OTHER-SE> 499,814 499,814
<TOTAL-LIABILITY-AND-EQUITY> 11,504,804 11,504,804
<SALES> 19,859,761 5,785,118
<TOTAL-REVENUES> 20,111,656 5,792,918
<CGS> 10,249,066 3,252,653
<TOTAL-COSTS> 11,259,304 4,033,492
<OTHER-EXPENSES> 2,885,254 938,252
<LOSS-PROVISION> 53,000 9,000
<INTEREST-EXPENSE> 277,153 1,150
<INCOME-PRETAX> 4,842,635 737,416
<INCOME-TAX> 1,934,500 239,530
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 2,693,619 497,886
<EPS-PRIMARY> .88 .23
<EPS-DILUTED> 0 0
</TABLE>
