<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 March 31, 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 1-10263
--------
T/SF COMMUNICATIONS CORPORATION
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 73-1341805
- ---------------------------- -----------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
2407 East Skelly Drive, Tulsa, Oklahoma 74105
- ------------------------------------- -----------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (918) 747-2600
--------------------------
N/A
- -----------------------------------------------------------------------------
(Former Name of Registrant)
Securities registered pursuant to Section 12(b) of the Act: Common Stock, $0.10
Par Value Per Share.
At May 13, 1997, there were 3,301,652 shares of the registrant's Common Stock
outstanding.
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>
T/SF COMMUNICATIONS CORPORATION
INDEX
Page No.
PART I Financial Information
Item 1
------
Consolidated Balance Sheets - March 31,
1997 (unaudited) and December 31, 1996 4-5
Consolidated Statements of Operations -
Three Months Ended March 31, 1997 and 6
1996 (unaudited)
Consolidated Statements of Cash Flows -
Three Months Ended March 31, 1997 and
1996 (unaudited) 7-8
Notes to Consolidated Financial
Statements 9-10
Item 2
------
Management's Discussion and Analysis of
Financial Condition and Results of
Operations 10-11
PART II Other Information
Item 6
------
Exhibits and Reports on Form 8-K 11
2
<PAGE>
PART I
Item 1. Financial Information
3
<PAGE>
T/SF COMMUNICATIONS CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
----------- ------------
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 2,955 $ 2,257
Accounts receivable, less reserve for doubtful
accounts of $490 in 1997 and $412 in 1996 11,283 10,194
Inventories 138 193
Deferred tax assets 669 896
Contract receivable and other current assets 2,245 2,604
Refundable income taxes 2,102 2,102
-------- ---------
Total current assets 19,392 18,246
-------- ---------
NOTES RECEIVABLE AND INVESTMENTS 1,095 1,203
-------- ---------
PROPERTY, PLANT AND EQUIPMENT, AT COST:
Exposition equipment 3,107 3,107
Data processing and office furniture and
equipment 9,721 8,635
-------- ---------
12,828 11,742
Less - accumulated depreciation 7,788 7,182
-------- ---------
5,040 4,560
-------- ---------
DEFERRED TAX ASSETS 563 578
-------- ---------
INTANGIBLES AND OTHER ASSETS, NET 31,700 31,395
-------- ---------
$ 57,790 $ 55,982
======== =========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
4
<PAGE>
T/SF COMMUNICATIONS CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
(Unaudited)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Notes payable $ 2,020 $ 500
Accounts payable 4,849 3,496
Accrued liabilities 3,498 5,028
Deferred revenue 4,129 2,343
Current portion of long-term debt 998 1,133
-------- ---------
Total current liabilities 15,494 12,500
-------- ---------
LONG-TERM DEBT 2,908 3,493
-------- ---------
DEFERRED CONTRACT LIABILITIES AND CREDITS 1,599 1,803
-------- ---------
STOCKHOLDERS' EQUITY:
Preferred stock, $10 par value, 1,000 shares
authorized - -
Common stock, $.10 par value, 10,000 shares
authorized 328 332
Additional paid-in capital 12,425 13,754
Retained earnings 25,036 24,100
-------- ---------
Total stockholders' equity 37,789 38,186
-------- ---------
$ 57,790 $ 55,982
======== =========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
5
<PAGE>
T/SF COMMUNICATIONS CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share amounts)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-------------------------
1997 1996
-------- ---------
(Unaudited)
<S> <C> <C>
REVENUES:
Operating revenues $ 17,130 $ 13,684
Interest income and other 296 420
-------- ---------
17,426 14,104
-------- ---------
COSTS AND EXPENSES:
Operating costs 10,744 8,738
General and administrative 3,763 3,147
Interest 155 151
Depreciation and amortization 1,112 884
-------- ---------
15,774 12,920
-------- ---------
INCOME BEFORE INCOME TAXES 1,652 1,184
PROVISION FOR INCOME TAXES (716) (478)
-------- ---------
NET INCOME $ 936 $ 706
======== =========
PER SHARE AMOUNTS:
Earnings per common and common
equivalent share $ 0.26 $ 0.20
======== =========
CASH DIVIDENDS PER COMMON SHARE $ 0.00 $ 0.00
======== =========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
6
<PAGE>
T/SF COMMUNICATIONS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
------------------
1997 1996
------- ------
(Unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 936 $ 706
------ ------
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation and amortization 1,112 884
Accretion of interest expense 80 59
Loss on sale of assets 206 -
Changes in assets and liabilities:
Accounts receivable and refundable
income taxes (988) (382)
Inventories 55 (3)
Contract receivable and
other current assets (233) (483)
Intangibles and other assets 6 -
Accounts payable and accrued liabilities (409) 152
Deferred revenue 1,786 1,576
Deferred income taxes 242 (213)
------ ------
Total adjustments 1,857 1,590
------ ------
Net cash provided by operating activities 2,793 2,296
------ ------
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
7
<PAGE>
T/SF COMMUNICATIONS CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Continued)
(In thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
--------------------
1997 1996
------- -------
(Unaudited)
<S> <C> <C>
CASH FLOWS FROM INVESTING ACTIVITIES:
Collections on contract and notes receivable 533 306
Capital expenditures (1,455) (548)
Proceeds from the sale of assets 35 -
Payments for acquisitions, net of cash acquired (328) -
Payments on deferred contract liabilities (216) (184)
------- -------
Net cash used in investing activities (1,431) (426)
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments of long-term debt (831) (486)
Borrowings under bank lines-of-credit 1,500 -
Issuance of common stock 40 28
Repurchase of common stock (1,373) -
------- -------
Net cash used in financing activities (664) (458)
------- -------
NET INCREASE IN CASH AND CASH EQUIVALENTS 698 1,412
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD 2,257 13,383
------- -------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 2,955 $14,795
======= =======
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
8
<PAGE>
T/SF COMMUNICATIONS CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
- --------------------------------------------------------------------------------
For the three months ended March 31, 1997 and 1996
1. Basis of Presentation
The accompanying unaudited consolidated 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 of the Securities and Exchange Commission. Accordingly, the
financial statements do not include all of the information and notes 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.
Results of operations for the three months ended March 31, 1997, are not
necessarily indicative of the results to be expected for the year ending
December 31, 1997. For further information, refer to the consolidated financial
statements and related notes thereto included in the Company's annual report on
Form 10-K for the year ended December 31, 1996.
2. Common Stock and Earnings Per Share
Weighted average common and common equivalent shares issued and outstanding
during the three months ended March 31, 1997, were 3,556,000 and the weighted
average equivalent shares for the three months ended March 31, 1996, were
3,518,000.
3. Recent Pronouncement
In February, 1997, the Financial Accounting Standards Board issued
Statement No. 128, Earnings Per Share ("SFAS No. 128"), which establishes new
standards for computing and presenting earnings per share. The provisions of
SFAS No. 128 are effective for earnings per share calculations for periods
ending after December 15, 1997. At that time, the Company will be required to
change the method currently used to compute earnings per share and to restate
all prior periods. If the provisions of SFAS No. 128 had been adopted in the
first quarter of 1997, earnings per share would have been as follows:
Three Months Ended March 31,
----------------------------
1997 1996
------------- -------------
Earnings per share:
Basic $0.28 $0.21
Diluted $0.26 $0.20
9
<PAGE>
4. Income Taxes
The income tax provision for the three months ended March 31, 1997 and
1996, does not bear a normal relationship to the statutory federal income tax
rate of 34%, mainly as a result of amortization of goodwill related to
acquisitions and state income taxes.
5. Related Party Transaction
In January, 1997, 50,000 shares of common stock of the Company was acquired
for $27.50 per share, the weighted average closing market price on the American
Stock Exchange for one week prior to the purchase less $0.50 discount per share,
or an aggregate cash payment of $1,375,000, from Boatman's Trust Company, a five
percent (5%) holder of the Company's common stock prior to this transaction, as
Trustee of the Hayden Barnett Kiser Charitable Unitrust.
Item 2. Management's Discussion and Analysis of Financial Condition and Results
-----------------------------------------------------------------------
of Operations
-------------
Results of Operations
---------------------
In August, 1996, the Company acquired 100% of CORSEARCH, Inc. ("CORSEARCH"),
a provider of trademark and tradename research. In February, 1997, the Company
increased its ownership in Casino Publishing Company, publisher of the trade
journal, Casino Executive, to 86%, which is included in the Company's
consolidated operations since that date.
Revenues of $17,426,000 for the three months ended March 31, 1997, were
$3,322,000 higher than the three months ended March 31, 1996. Information
services revenue increased approximately $3,065,000 in 1997 of which
approximately $2,050,000 is attributable to CORSEARCH and $825,000 is
attributable to continued growth in employment histories volume and criminal
record volume. Exposition services revenue only increased $200,000 in 1997
since the quarter ended March 31, 1996 included some bi-annual trade shows, thus
most of the 1997 increase is the effect of higher fees for exhibitor services
which were effective in early 1996. Gaming media services (formerly publishing)
revenue increased approximately $200,000 in 1997 related to the Casino Executive
trade journal.
Interest income and other for the three months ended March 31, 1997, is
lower than the same period in 1996, which is substantially all attributable to
interest earned on cash and short-term investments in 1996 prior to the use of
the cash to acquire CORSEARCH.
Operating costs for the three months ended March 31, 1997, are $2,006,000
higher than the same period in 1996. Information services costs increased
approximately $1,200,000 for the three months ended March 31, 1997, as compared
with 1996, which increases consisted of $797,000 related to CORSEARCH, $245,000
related to criminal records volume increase and the remainder related to new
products. Exposition services costs increased approximately $520,000 during the
three months ended March 31, 1997, as compared with the same period in 1996,
attributable to the mix of products and the direct costs related thereto and
additional payroll costs in the first quarter of 1997 related to the increase in
operating personnel throughout 1996.
10
<PAGE>
Gaming media services costs are approximately $250,000 higher during the three
months ended March 31, 1997, related mainly to Casino Executive.
General and administrative expenses are $616,000 higher for the three months
ended March 31, 1997, as compared with the same period in 1996, substantially
all of which are attributable to CORSEARCH and Casino Executive. Included in
1996 was a provision for losses on prepaid production costs, which prepayments
had been made to a digital information vendor during 1995 and early 1996.
Interest expense did not change significantly during three months ended
March 31, 1997, as compared with the same period in 1996, because lower interest
expense due to principal payments on debt during the past year was offset by
interest on new debt related to the acquisition of CORSEARCH.
Depreciation and amortization increased approximately $228,000 for the three
months ended March 31, 1997, as compared with the same period in 1996,
substantially all related to CORSEARCH, including amortization of goodwill
related to this acquisition.
Provision for income taxes as a percent of income before income taxes is
higher than the statutory federal income tax rate and higher in 1997 as compared
with 1996 since goodwill amortization related to acquisitions is not deductible
for income tax purposes.
Financial Condition
-------------------
The changes in the Company's financial condition during the three months
ended March 31, 1997, are mainly seasonal changes related to the Company's
operations. Additional advances on the bank line of credit of $1,500,000 during
the quarter ended March 31, 1997, were used to repurchase common stock of the
Company and acquisition of additional ownership interest in Casino Publishing
Company.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits.
10.1 Employment Arrangement dated December 3, 1996, with Michael
Goodwin
10.2 Employment Agreement dated January 1, 1997, with Richard A.
Wimbish
27 Financial data schedule
(b) Reports on Form 8-K.
No report on Form 8-K was filed during the quarter ended March 31,
1997.
11
<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.
T/SF COMMUNICATIONS CORPORATION
(Registrant)
Date: May 13, 1997 By: /s/ Howard G. Barnett, Jr.
---------------------------------------------
Howard G. Barnett, Jr.
Chairman, Chief Executive Officer
and President
Date: May 13, 1997 By:/s/ J. Gary Mourton
--------------------------------------------
J. Gary Mourton, Senior Vice
President-Finance and Chief
Financial Officer
12
<PAGE>
Exhibit Index
-------------
Exhibit
Number Description
- ------- -----------
10.1 Employment Arrangement dated December 3, 1996, with Michael Goodwin
10.2 Employment Agreement dated January 1, 1997, with Richard A. Wimbish
27 Financial Data Schedule
13
<PAGE>
Exhibit 10.1
[LETTERHEAD OF T/SF COMMUNICATIONS APPEARS HERE]
December 3, 1996
Mr. Michael Goodwin
45 Fieldstone Road
Stamford, CT 06902
Re: Employment Arrangement
Dear Mike:
This letter is to formalize our recently agreed-to employment arrangement.
Please review this carefully and, if it complies with your understanding of our
agreement, please execute the enclosed copy in the space provided and return it
to me as soon as possible. By executing this letter agreement, we have agreed
as follows:
1. You are employed as the President and Chief Executive Officer of the
"Exposition Services Division" of T/SF Communications Corporation ("T/SF").
Such division is an "on paper" unit of T/SF composed of two corporate entities,
Galaxy Registration, Inc. ("Galaxy") and Atwood Convention Publishing, Inc.
("Atwood"). As President of the "Exposition Services Division," you shall also
be President and Chief Executive Officer of each of Atwood and Galaxy. From a
legal standpoint, you'll become an employee of Galaxy, but will spend sufficient
time at Atwood to meet your leadership obligations to that entity.
2. Your employment will commence on December 9, 1996, and will extend
through December 31, 1997, subject to termination as described below and subject
to extension, on a year to year basis, by mutual agreement of the parties. We
have agreed that you will take an unpaid leave for the week of December 23,
1996.
3. As President and Chief Executive Officer of Galaxy and Atwood you will
be expected to devote your full business time and attention and best efforts to
their business. As President and Chief Executive Officer, you will have the
authority, responsibility and accountability to supervise, manage, lead and
conduct all aspects of the business of Atwood and Galaxy. This includes
providing the necessary leadership, strategic direction and long range planning,
as well as hiring and firing authority with respect to all of their employees
and the right to determine compensation of such employees. In the performance of
these duties, you will be subject at all times to the direction of the Board of
Directors of each of Atwood and Galaxy and the budgets and business plan
approved by such Boards of Directors, as well as to the supervision as Chairman
of the Board of each of Atwood and Galaxy (currently myself). During the term of
your employment, you will be a member of the Board of Directors of both Atwood
and Galaxy and any other corporate entity which may become a part of the
"Exposition Services Division."
<PAGE>
Mr. Michael Goodwin
December 3, 1996
Page 2
4. Your compensation shall consist of the following components:
A. A base salary of $160,000 annually ($13,333.38 per month), payable in
accordance with Galaxy's normal payment schedule (appropriately pro
rated for the employment time during December, 1996). You will have a
bonus possibility for 1997 of up to $50,000, determined and payable as
follows:
. One-third of the maximum bonus, or $16,667, based on Atwood and
Galaxy achieving their combined Plans for 1997, which Plans are
currently being finalized. This will be payable based on one-half
of the bonus being paid if Galaxy and Atwood achieve 90% of their
combined Plan with each additional 1% (up to 100%) of the amount of
Plan achieved over 90% earning an additional 5% of this possible
bonus amount. Thus, for example, if they earned 95% of their
combined Plan, you would receive 75% of this portion of the bonus,
or $12,500.
. An additional one-third of the maximum bonus, or $16,667, based on
Atwood and Galaxy, on a combined basis, exceeding their combined
1997 Plan. This will be payable based on 5% of this portion of the
bonus being payable for each 1% over Plan achieved by Atwood and
Galaxy on a combined basis. For example, if Atwood and Galaxy, on a
combined basis, exceed their combined Plans by 10%, you would
receive 50% of this bonus amount or $8,333. One hundred percent of
this bonus amount is achieved at 120% of the combined Plans.
. The remaining one-third, or $16,667, will be discretionary and
determined by me, as Chairman of the Board of Atwood and Galaxy. It
is intended that we will have discussions during the course of the
year to flesh out specific "MBO's" that can be guideposts to
measuring the achievement of this bonus potential.
. For purposes of determining bonus, "achieving Plan" means achieving
the operating income number, pre-tax, for Atwood and Galaxy on a
combined basis determined under our historical accounting
practices. Bonuses are payable within 90 days after the end of the
year to allow for final accounting adjustments.
B. For 1997, we guarantee you a minimum bonus of $20,000 (the "Guaranteed
Bonus"), which will be reduced by any amount earned under the bonuses
described in A above. For example, if a total bonus of $15,000 is
earned under A, you will receive $5,000 of the Guaranteed Bonus. If,
however, $20,000 or
<PAGE>
Mr. Michael Goodwin
December 3, 1996
Page 3
more is earned as a bonus under A, nothing will be paid from the
Guaranteed Bonus.
C. At the next meeting of the Board of Directors of T/SF anticipated to
be held in January, 1997, you will be granted options on 20,000 shares
of Common Stock of T/SF on the following terms:
. The options will be granted at a strike price equal to the market
value of the T/SF Common Stock on the date the options are granted.
. The options will be issued under T/SF's 1994 Incentive Stock Plan,
a copy of which is enclosed for your information.
. The options will vest 100% on the date which is three years
following the date of grant.
D. All payments to you will be made subject to normal deductions,
including social security and other withholding taxes.
E. You will be entitled to participate in Galaxy's group medical and
hospitalization insurance plan and any other group insurance or
general employee benefit plans, such as 401(k) plan, provided by
Galaxy, upon the same terms as all other employees of Galaxy.
F. In addition to the compensation described above, you will be entitled
to reimbursement of your actual out-of-pocket expenses incurred in the
conduct of the business of Atwood and Galaxy, including, but not
limited to, appropriate professional dues and travel and entertainment
expenses related to the business of Atwood and Galaxy, all of which
expenses will be limited to ordinary and necessary items and which
will be supported by vouchers, receipts or similar documentation to
the extent practicable and as required by law.
G. It is recognized that you currently live in Connecticut and do not
intend to move your family until the summer of 1997. Accordingly,
through August 31, 1997, Galaxy will reimburse you from time to time
for hotel or apartment expenses for time spent in the Frederick,
Maryland, area, as well as reimbursing you for hotel or apartment
expenses in the Overland Park, Kansas, area when visiting Atwood. All
such expenses shall be reasonable and subject to discussion with the
Chairman of the Board of Galaxy. In addition, Galaxy
<PAGE>
Mr. Michael Goodwin
December 3, 1996
Page 4
will reimburse you for the reasonable cost of relocating your family
to the Frederick, Maryland, area during the summer of 1997.
H. You will be entitled to an annual vacation of an aggregate of 15 work
days per year, with pay, at such times as will not unduly interfere or
hamper the operation of Atwood's and Galaxy's business and subject to
Galaxy's normal vacation policies.
5. This employment arrangement may be terminated only upon the occurrence of
one or more of the following events and, in the event of any such termination,
you will receive those amounts set forth below:
A. By Galaxy upon your permanent disability or a temporary disability for
a period in excess of four consecutive months or for six months in any
one year. For this purpose, "disability" means any physical or mental
disability rendering you unable to perform substantially all of your
usual duties and responsibilities. Disability will be determined by a
medical doctor selected by you and us together. In the event of
termination pursuant to this provision, you will be entitled to the
compensation and benefits provided in any long term disability
insurance policy, if any, maintained by Galaxy and Galaxy will
continue the payment of your base salary, at the monthly rate in
effect as of the date of disability, for a period of the greater of
six months or through December 31, 1997, plus the payment of the
Guaranteed Bonus on March 31, 1998.
B. Upon your death, in which event Galaxy will continue the payment of
your base salary, at the monthly rate in effect as of the date of
death, for the later of six months or December 31, 1997, plus the
payment of the Guaranteed Bonus on March 31, 1998. Such amounts shall
be paid to your estate or designated beneficiary. You will also be
entitled to the benefit of any life insurance maintained on your
behalf by Galaxy in keeping with normal benefit plans for all
employees of Galaxy.
C. You have the right to terminate this agreement in the event of a
substantial breach of this agreement by Galaxy, T/SF or Atwood. To
effect termination by reason of a substantial breach, you must give
notice to the President of T/SF detailing the nature of the breach and
we will have 30 days (10 days in the case of a non-payment breach) of
receipt of such notice to cure the problem. In the event of your
termination of this agreement for a substantial breach, you will be
entitled to receive your base salary, at the then monthly amount,
through the later of twelve months after the termination or December
31, 1997, and to receive the payment of the Guaranteed Bonus on March
31, 1998.
<PAGE>
Mr. Michael Goodwin
December 3, 1996
Page 5
D. Galaxy may terminate this agreement for any reason. If this agreement
is terminated other than "for cause," you shall be entitled to receive
a severance payment equal to 12 months salary (plus, as to 1997, the
Guaranteed Bonus) on March 31, 1998 at the then current monthly base
pay. This severance right shall continue during your entire employment
by Galaxy, even after December 31, 1997, unless superseded by a
written agreement executed by you and T/SF. If your employment is
terminated "for cause," you will be entitled to severance pay equal to
one month's base pay. For this purpose, "for cause" shall only mean
one of the following:
. Your material breach of your duties or obligations under the terms
and provisions of this Agreement;
. Your dishonesty, fraud, misappropriation or embezzlement in the
course of, related to or connected with, the business of Atwood,
Galaxy or T/SF;
. Your conviction of a felony; or
. Your failure to act in accordance with the directions and
guidelines established from time to time by the Board of Directors
and/or the Chairman of the Board of Atwood or Galaxy, provided that
such directions and guidelines are put in place to meet Atwood's,
Galaxy's or T/SF's legitimate business objectives.
Prior to termination of this Agreement "for cause," you will be given
written notice detailing the nature of the "for cause" and, except in
the case of termination for conviction of a felony or employee
dishonesty, fraud, misappropriation or embezzlement, you shall have 30
days from the date of receipt of such notice to cure the issues. Your
failure to cure the same within such 30 days will give Galaxy the
right to proceed with the termination.
6. You agree that during or subsequent to your employment with Atwood,
Galaxy and T/SF, you will not divulge, disclose or make accessible to any person
or company any knowledge or information, customer or client information,
processes, trade secrets, plans or material with respect to any secret,
confidential or sensitive research or development work, business plans, products
or production methods of Atwood, Galaxy or T/SF, except as may be necessary in
the furtherance and conduct of their business as an employee of theirs during
the period you are so employed.
<PAGE>
Mr. Michael Goodwin
December 3, 1996
Page 6
If the foregoing correctly sets forth your understanding of our agreement,
please execute in the space provided below and return one copy for our files.
Yours very truly,
T/SF COMMUNICATIONS CORPORATION
/s/ Howard G. Barnett, Jr.
Howard G. Barnett, Jr.
Chairman, President and Chief Executive Officer
"T/SF"
GALAXY REGISTRATION, INC.
/s/ Howard G. Barnett, Jr.
Howard G. Barnett, Jr.
Chairman of the Board and Chief Executive
Officer "Galaxy"
ATWOOD CONVENTION PUBLISHING, INC.
/s/ Howard G. Barnett, Jr.
Howard G. Barnett, Jr.
Chairman of the Board and Chief Executive
Officer "Atwood"
/s/ Michael Goodwin
-----------------------------------------------
MICHAEL GOODWIN
"Employee"
<PAGE>
Exhibit 10.2
EMPLOYMENT AGREEMENT
This Employment Agreement (the "Agreement") is made and entered into this
1st day of January, 1997, by and between Transportation Information Services,
Inc., an Oklahoma corporation ("Employer"), and Richard A. Wimbish ("Employee").
R E C I T A L S:
---------------
A. T/SF Communications Corporation ("T/SF"), through its wholly-owned
subsidiary, T/SF Investment Co. ("T/SFIC"), is the owner of 100% of the
issued and outstanding capital stock of Employer.
B. On November 18, 1996, T/SF announced that it had engaged
Prudential Securities Incorporated to pursue a possible sale of or other
transaction involving Employer.
C. Employer and Employee now desire to enter into this Agreement in
order to describe the terms of Employee's employment by Employer and
provide for certain rights of Employee upon any change in control of
Employer.
In consideration of the mutual covenants and agreements contained herein,
the parties agree as follows:
1. EMPLOYMENT. Employer hereby employs Employee and Employee hereby
----------
accepts employment with Employer upon the terms and conditions hereinafter set
forth.
2. TERM. The term of this Agreement shall commence on the date hereof
----
and extend through December 31, 1998, unless sooner terminated as herein
provided.
3. DUTIES. Employee shall devote his full business time and attention
------
and best efforts to the business of Employer. Employee shall serve in the
capacity and office of President of Employer with the duties usually incident to
such office, including but not limited to the following:
(a) The authority, responsibility and accountability to supervise,
manage, lead and conduct all aspects of Employer's business;
(b) Provide leadership, strategic direction and long-term planning;
(c) Prepare and execute business plans for Employer's business
covering each of 1997 and 1998;
(d) Hire, fire, supervise and determine the compensation of all
employees;
(e) Ensure compliance with all applicable laws, regulations and
corporate policies and ethical standards; and
<PAGE>
(f) Ensure integrity of financial reporting and information systems;
subject at all times to the direction of the Chief Executive Officer of
Employer, the Board of Directors of Employer and the budgets and business plans
approved (as such plans may be amended from time to time) by Employer's Board of
Directors.
4. COMPENSATION. As compensation for the performance by Employee of
------------
the duties specified herein and for the obligations of Employee under paragraph
7 hereof, Employee shall be paid the following during the term of this
Agreement.
(a) Base Salary. Commencing on the date hereof and extending through
-----------
December 31, 1997, Employee shall receive a base salary of $13,750.00 per
month ($165,000 annual rate). For the period January 1, 1998, through
December 31, 1998, Employee shall receive a base salary of $14,583.33 per
month ($175,000.00 annual rate).
(b) Bonuses. For each of 1997 and 1998, Employee shall be entitled to
-------
receive a bonus based on a plan which is consistent with the bonus plans
applicable to Employee in previous years. A copy of the Plan for 1997 is
attached as Exhibit "A" to this Agreement. The bonus plan for 1998 shall
be designed on the same general guidelines (e.g. based on achieving
improvements over 1997 with bonus payments to begin at the same approximate
level of achievement of the target growth amounts, etc.) and be designed to
yield a bonus not less than that earned in 1997 assuming that the
improvement in operating income of Employer in 1998 is not less than the
improvement in operating income of Employer in 1997 as compared to 1996.
By execution hereof the parties acknowledge that Employee is subject to
certain separate bonus plans related to "new initiatives" and attached as
Exhibit "B-1" through "B-5" are the bonus plans relating to specific
activities of Employer which are designed to yield income in the future and
for which these separate bonus plans apply. The parties acknowledge that,
by execution hereof, Employee has relinquished any right to a previously
agreed-to bonus plan with respect to any future income of the Company's
previous subsidiary, National Employment Screening Services, Inc.
(c) Deductions. All salary payments to Employee shall be made in
-----------
accordance with Employer's normal payroll practices and shall be made
subject to normal deductions therefrom, including social security and
withholding taxes.
(d) Benefit Plans. Employee shall be entitled to participate in
--------------
Employer's group medical and hospitalization insurance plan, and any other
group insurance or general employee benefit plan provided by Employer, upon
the same terms as all other employees of Employer (which may be changed by
Employer at any time) or upon such other terms (but in no event less
favorable than the terms in effect on the date hereof) as the Board of
Directors of Employer may determine.
5. EXPENSES. In addition to the compensation described above,
--------
Employee shall be entitled to reimbursement of his actual out-of-pocket expenses
incurred in the conduct of Employer's business (including, but not limited to,
appropriate professional dues and travel and entertainment expenses related to
the business of Employer), all of which expenses shall be
2
<PAGE>
limited to ordinary and necessary items and which shall be supported by
vouchers, receipts or similar documentation to the extent practicable and as
required by law.
6. VACATIONS. Employee shall be entitled to annual vacation, with
---------
pay, at such times as will not unduly interfere with or hamper the operation of
Employer's business, as provided in and subject to Employer's normal vacation
policies.
7. NONCOMPETITION.
---------------
(a) Subject to the provisions of paragraph 8(e), at all times
during the period beginning on the date hereof and ending on the date six
months after Employee's termination of employment with Employer, Employee
shall not, directly or indirectly, compete with Employer or own, operate,
manage, have a proprietary interest in, extend financial assistance to,
solicit, or encourage or handle patronage for or serve or be employed by
any other company, firm or enterprise (other than Employer) which is then
engaged in any business engaged in by Employer during Employee's employment
with Employer, in any geographic area or market in which Employer operates
or does business. Provided, however, that Employee may purchase or
otherwise acquire up to two percent of any class of securities of any
enterprise if such securities are listed on any national or regional
securities exchange or have been registered under Section 12(g) of the
Securities Exchange Act of 1934.
(b) The benefits of this paragraph 7 shall flow to and be
enforceable by any of Employer, T/SF and/or Buyer, and their respective
successors and permitted assigns. The parties hereto recognize that,
because of the nature of the subject matter of this paragraph 7, it would
be impractical and extremely difficult to determine Employee's and/or
T/SF's or Buyer's actual damages in the event of a breach of any of such
provisions. Accordingly, if Employee commits a breach, or threatens to
commit a breach, of this paragraph, Employer and/or T/SF or any of their
successors or permitted assigns shall give Employee written notice of such
violation and if Employee has not cured such violation or otherwise ceased
to act in violation of this paragraph 7 within twenty (20) days of the
giving of such notice, Employer and/or T/SF or any of their successors or
permitted assigns shall have the following rights and remedies:
(i) to have the provisions of this paragraph 7 specifically
enforced, by injunctive or other equitable relief, by any court having
equity jurisdiction, it being acknowledged and agreed by Employee that
any such breach or threatened breach will cause irreparable injury to
Employer and/or T/SF or their successors and permitted assigns and
that an injunction may be issued against Employee to stop or prevent
any such breach or threatened breach; and
(ii) concurrent with the above remedy, to discontinue any
payments due to Employee under this Agreement.
In the event that an action shall be instituted to specifically enforce
Employee's obligations hereunder (or under paragraph 9 below), Employee
shall, to the fullest extent permitted by
3
<PAGE>
applicable law, waive the defense that the party or parties seeking
enforcement have an adequate remedy at law and shall interpose no
opposition, legal or otherwise, as to the propriety of pursing specific
performance as a remedy and shall not request any bonding for the issuance
of the relief sought. It is agreed that the curing of such violation shall
not prevent any party from seeking recovery of its actual damages resulting
from such violation.
8. TERMINATION. This Agreement may be terminated only as provided in
-----------
paragraph 11D or upon the occurrence of one or more of the following events, and
in the event of any such termination Employee shall receive under this Agreement
only those amounts specifically set forth in this paragraph 8:
(a) By Employer upon the permanent disability of Employee or his
temporary disability for a period in excess of four (4) consecutive months,
or six (6) months in any one year. "Disability" for this purpose shall be
deemed to be any physical or mental disability rendering Employee unable to
perform substantially all of his usual duties and responsibilities for
Employer. The Disability of Employee will be determined by a medical
doctor selected by written agreement of the Employer and the Employee upon
the request of either party by notice to the other. If the Employer and
Employee cannot agree on the selection of a medical doctor, each of them,
within ten (10) days of written request by either Employer or Employee,
will select a medical doctor and the two medical doctors will select a
third medical doctor who will determine whether Employee has a Disability.
The determination of the medical doctor selected under this paragraph 8(a)
will be binding on both parties. In the event of a termination pursuant to
this subparagraph, Employee shall be entitled to such compensation and
benefits as are provided in any long-term disability insurance policy or
certificate, if any, covering Employee maintained by Employer and Employer
shall continue the payment of Employee's base salary, at the monthly rate
in effect as of the date of disability, for a period of not less than six
(6) months from the date of the determination of the disability.
(b) Upon Employee's death, in which event Employer shall be
obligated to continue the payment of the base salary amount payable under
paragraph 4 herein, at the monthly rate in effect as of the date of death,
for six (6) months after the date of death. All such amounts shall be paid
to Employee's estate or designated beneficiary.
(c) Employee shall have the right to terminate his obligations
under this Agreement in the event of the substantial breach of this
Agreement by Employer (a "Substantial Breach", as defined in paragraph 8(e)
below), in which case Employee shall be entitled to receive his base salary
(as in effect at the time of the breach) for the remaining term of this
Agreement, plus any amounts coming due under paragraph 11, as well as any
other remedies available to Employee under law, equity or otherwise. To
effect termination by reason of a Substantial Breach pursuant to paragraph
8(e) below, Employee must give written notice of such breach to Employer at
the address and in the manner set forth in paragraph 12(g) below,
specifying in reasonable detail the nature of the breach and the
provision(s) of such paragraph 8(e) upon which the termination is based,
4
<PAGE>
and Employer shall have failed to cure such breach within thirty (30) days
(ten (10) days in the case of a nonpayment breach) of its receipt of such
notice.
(d) By Employer by written notice for "cause." "Cause" for
termination shall be limited to one or more of the following:
(i) Employee's material breach of his duties or obligations
under the terms or provisions of this Agreement;
(ii) Employee's dishonesty (which dishonesty has a material
adverse effect on the business, financial condition or net income of
Employer), fraud, misappropriation or embezzlement in the course of,
related to or connected with, the business of Employer;
(iii) Employee's conviction of a felony; or
(iv) Employee's failure to devote his full business time,
attention and best efforts to the business of Employer or related
professional activities; provided, that Employee may spend personal
time on or be involved (where such time spent or involvement does not
prevent Employee from devoting his full business time, attention and
best efforts to the business of Employer) with personal activities,
investments or community affairs which don't conflict with other
provisions of this Agreement.
Prior to the termination of this Agreement by Employer pursuant to
subparagraphs 8(d)(i) or (iv) above, Employer shall give written notice of
its intent to terminate Employee, specifying in reasonable detail the
nature of the breach and the provision(s) of the Agreement upon which the
termination is based. Employee shall have thirty (30) days from the date
of his receipt of such notice to cure the breach or breaches, and
Employee's failure or inability to cure same shall give Employer the right
to proceed with termination. The foregoing notice and curative provisions
shall not apply to a termination under subparagraph 8(d)(i) by reason of a
breach of any provision of paragraph 7 of this Agreement for which notice
was given and the breach remained uncured after the thirty (30) days'
notice period provided for in subparagraph 7(d) hereof. In the event of
termination of this Agreement for any of the causes enumerated in this
subparagraph (d), Employer's obligation to pay Employee shall be limited
solely to the payment of (x) an amount equal to one (1) month's then
current base salary (as of the date of termination), and (y) other accrued
benefits (such as accrued vacation pay and accrued benefits under any
retirement, savings or other employee benefit plans of Employer) through
the date of such termination.
(e) The termination of this Agreement for any reason shall not
affect the provisions of paragraphs 7, 9 and 10 hereof, which shall remain
in full force and effect, except as follows: in the event of the
termination of this Agreement by Employee pursuant to paragraph 8(c) hereof
Employee due to the Substantial Breach hereof by Employer, the provisions
of paragraph 7 hereof and the portions of paragraph 10 hereof that would
otherwise prohibit Employee from contacting customers and prospective
5
<PAGE>
customers of Employer shall no longer apply to Employee. For purposes of
this Agreement, Substantial Breach shall be deemed to mean (i) the non-
payment of amounts due to Employee hereunder (and not cured within
applicable notice and cure periods), (ii) termination of Employee without
"cause" hereunder, or (iii) relocation of the primary business offices of
Employer which causes Employee to have to relocate out of the Tulsa,
Oklahoma, metro area.
9. OWNERSHIP OF PRODUCTS, ETC. Employee hereby acknowledges and
--------------------------
agrees that any intellectual property, invention (whether patentable, subject to
copyright or trademark protection or otherwise), process, application,
device, product, production procedure, publication, marketing or product, or
other idea (all referred to herein as "Intellectual Property") which shall have
been conceived, commenced, or developed by Employee, in whole or in part, at any
time during Employee's full-time employment with Employer prior to the date
hereof or during the term of this Agreement shall be the sole and exclusive
property of Employer, and Employee shall not be entitled to any additional or
special compensation in connection with any such item. It is acknowledged that
Employer would be irreparably harmed if Employee should breach the provisions of
this paragraph. Accordingly, Employer is granted the right of specific
performance to enforce the provisions of this paragraph.
10. CONFIDENTIALITY. Employee covenants and agrees that Employee
---------------
shall not, during or subsequent to Employee's employment with Employer, divulge,
furnish, disclose or make accessible to any person or company, any knowledge or
information, techniques, customer or client information, processes, promotional
idea, trade secrets, prospective customer information, plans, devices, or
material with respect to any secret, confidential or sensitive research or
development work, promotions, business plans, designs, services, products or
production methods of Employer or T/SF (or their successors and assigns) or with
respect to any other secret, confidential or sensitive aspect of the business of
Employer or T/SF (or their successors and assigns), except as may be necessary
in the furtherance and conduct of Employer's or T/SF's (or their successor's and
assign's) business as an employee of Employer for the period Employee is so
employed. Provided, however, that the restrictions on disclosure in this
subparagraph shall not apply with respect to any of the above-described
knowledge, information, documents or ideas to the extent that the same shall
have become known to the trade or public pursuant to disclosure (a) by sources
other than Employee (and for which Employee is not directly or indirectly
responsible), or (b) by Employee, Employer and/or other employees of Employer or
its representatives in the course of the "auction" and sale of Employer which
commenced in 1996, as described in paragraph 11 below.
11. SALE OF EMPLOYER. As noted in the Recitals, on November 18,
-----------------
1996, T/SF announced that it had engaged Prudential Securities Incorporated to
explore strategic alternatives, including the possible sale, with respect to
Employer. If and to the extent that a change in control of Employer (meaning a
transaction which results in T/SF, T/SFIC (the direct parent of Employer), or
the stockholders of T/SF immediately prior to such transaction, not controlling
more than 50% of the voting capital stock of Employer, either directly or
indirectly) occurs during 1997, the following additional rights and obligations
shall apply:
6
<PAGE>
A. Employee is the owner of certain stock options issued under the
1994 Incentive Stock Plan of T/SF with respect to shares of Common Stock of
T/SF, as follows:
Date of Grant Date of Option Number of
of Option Vesting Option Price Shares
------------- -------------- ------------ ---------
1/25/94 1/97 $ 4.250 22,500
3/18/96 3/99 $13.875 10,000
With respect to all such options, upon a change in control of Employer (or
immediately prior thereto if necessary to meet the obligations of Employer and
T/SF hereunder), the following shall apply:
(i) All options shall be deemed vested in Employee, regardless of any
other terms of such options; and
(ii) Subject to the reasonable consent of Employee, such options shall be
converted to other securities, options or cash of a value equal to
the then "premium" in such options on the date immediately preceding
the closing of the change in control transaction. For purposes
hereof, the option "premium" is equal to the fair value of a share
of T/SF Common Stock less the applicable option price. For purposes
hereof, the "fair value" of T/SF Common Stock shall be based on the
average closing price of the Common Stock on the American Stock
Exchange for the ten trading days preceding the valuation date.
B. The termination provisions of paragraph 8 shall be amended by the
addition of the following subparagraph (f):
"(f) If Employee's employment with Employer is terminated for any
reason other than as provided in paragraphs 8(a), (b) or (d)
hereof, Employee shall be entitled to a severance payment of
base salary at the then current monthly rate for the greater of
twelve months or the remaining term of this Agreement. This
severance provision shall continue for as long as Employee is
employed by Employer, shall survive the end of the term of this
Agreement and shall also be deemed to apply to a termination by
Employee pursuant to paragraph 8(c) hereof."
C. Upon the closing of a change of control transaction affecting
Employer, Employee shall be paid a sum equal to 0.5 x 1% of the "sale price" in
any such transaction plus an amount equal to the following:
X = 10,000 x $(A-23)
X = amount due to Employee
A = average closing price of T/SF Common Stock on the American
Stock Exchange for the ten trading days preceding a closing of
the change in control transaction.
7
<PAGE>
For purposes hereof, the "sale price" shall be the fair value of all
consideration actually received by T/SF, T/SFIC or the stockholders of T/SF in
such transaction; provided, that if less than 100% of Employer is affected by
the change in control, e.g., the stockholders of T/SF or T/SF retain an
interest, directly or indirectly, in Employer, the amount due Employee under
this provision shall be based on an equivalent value of the consideration
received for the portion of Employer sold or transferred increased to the
equivalent value for 100% of Employer.
The following example will serve to illustrate this provision:
Assumptions:
. T/SFIC sells 75% of Employer in 1997 for $50,000,000 in cash.
. The average closing price of T/SF stock for the ten trading days
preceding closing was $33.00.
Employee would receive the following:
0.5 x 1% X ($50,000,000 / 0.75) = $333,333.33
plus
10,000 x $(33 - 23) = $100,000.00
-----------
Total $433,333.33
If the change of control transaction is part of a transaction in which at least
80% of the operating subsidiaries of T/SF also have a change of control, the
provisions of this subparagraph 11C shall not apply and no bonus hereunder would
be due to Employee by reason of such transaction.
D. If there is no change in control transaction affecting Employer in
1997, Employer reserves the right to terminate this Employment Agreement with no
continuing obligation to Employee (including, without limitation, under this
paragraph 11) by written notice to Employee stating that Employer and/or T/SF
have abandoned the effort to sell or otherwise effect a transaction with respect
to Employer. In the event of any such termination, Employee's employment shall
revert to an "at will" arrangement equivalent to that in effect prior to the
entering to of this Employment Agreement, subject to any other agreement then
entered into between Employer and Employee.
12. MISCELLANEOUS.
-------------
(a) This Agreement shall not be assignable by either Employer or
Employee except upon their mutual written consent, except that this
Agreement may be assigned by Employer to a buyer of substantially all of
the assets of Employer who agrees to assume the obligations of Employer and
to recognize and honor the rights of Employee hereunder.
(b) If any of the covenants or agreements contained herein, or
any part hereof, is held to be unenforceable for any reason, the remainder
of this Agreement shall be construed as if such provision or part thereof
was not included herein. Any provision of
8
<PAGE>
this Agreement held invalid or unenforceable only in part or degree will
remain in force and effect to the extent not held invalid or unenforceable.
(c) This Agreement shall be interpreted and enforced in
accordance with the laws of the State of Oklahoma with respect to
agreements made and to be performed in such state.
(d) This Agreement constitutes the entire understanding of the
parties with respect to the employment of Employee and supersedes all prior
written or oral agreements between and/or among T/SF, Employer and Employee
with respect to the subject matter hereof. This Agreement may not be
amended, except by a written amendment executed by both Employee and
Employer.
(e) This Agreement may be executed in multiple counterparts, each
of which shall be deemed an original and all of which together shall
constitute one and the same instrument.
(f) This Agreement shall be binding upon Employer and Employee,
and, to the extent herein provided, shall inure to the benefit of Employer,
T/SF and Employee and their or his respective successors and permitted
assigns, heirs and legal representatives.
(g) Any notice, request, instruction or other document to be
given hereunder by any party hereto to any other party shall be in writing
and delivered personally, or sent by registered, certified mail or
overnight air courier, as follows:
IF TO EMPLOYER, TO:
Transportation Information Services, Inc.
c/o T/SF Communications Corporation
Attention: Howard G. Barnett, Jr.
2407 East Skelly Drive
Tulsa, Oklahoma 74105
AND IF TO EMPLOYEE, TO:
Richard A. Wimbish, President
Transportation Information Services, Inc.
Suite 200, Grant Building
4110 S. 100th East Avenue
Tulsa, OK 74146
Or at such other address for a party as shall be specified by like notice.
Any notice which is delivered personally in the manner provided herein
shall be deemed to have been duly given to the party to whom it is directed
upon actual receipt by such party. Any notice which is addressed and
mailed in the manner herein provided shall be conclusively
9
<PAGE>
presumed to have been given to the party to whom it is addressed at the
close of business, local time of the recipient, on the third (3rd) day
after the day it is so placed in the mail.
IN WITNESS WHEREOF, the parties hereto have executed and delivered
this Agreement as of the date first written above.
TRANSPORTATION INFORMATION
SERVICES, INC.
/s/ Richard A. Wimbish By: /s/ Howard G. Barnett, Jr.
- --------------------------------- -----------------------------------------
Richard A. Wimbish Howard G. Barnett, Jr.
Chairman and Chief Executive Officer
"Employee" "Employer"
10
<PAGE>
T/SF Communications Corporation and T/SF Investment Co. hereby
unconditionally guarantee the full and prompt performance of all obligations of
Transportation Information Services, Inc. under this Employment Agreement, and
otherwise agree to be bound by the terms hereof to the extent applicable to
them. This guarantee shall expire and be null and void upon any change in
control transaction affecting Employer.
T/SF COMMUNICATIONS CORPORATION
By: /s/ Howard G. Barnett, Jr.
-----------------------------------------------
Howard G. Barnett, Jr.
President and Chief Executive Officer
T/SF INVESTMENT CO.
By: /s/ J. Gary Mourton
-----------------------------------------------
J. Gary Mourton
President
11
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1997, OF T/SF COMMUNICATIONS
CORPORATION AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 2,955
<SECURITIES> 0
<RECEIVABLES> 11,773
<ALLOWANCES> 490
<INVENTORY> 138
<CURRENT-ASSETS> 19,392
<PP&E> 12,828
<DEPRECIATION> 7,788
<TOTAL-ASSETS> 57,790
<CURRENT-LIABILITIES> 15,494
<BONDS> 2,908
0
0
<COMMON> 328
<OTHER-SE> 37,461
<TOTAL-LIABILITY-AND-EQUITY> 57,790
<SALES> 17,130
<TOTAL-REVENUES> 17,426
<CGS> 10,744
<TOTAL-COSTS> 10,744
<OTHER-EXPENSES> 4,875
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 155
<INCOME-PRETAX> 1,652
<INCOME-TAX> 716
<INCOME-CONTINUING> 936
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 936
<EPS-PRIMARY> .26
<EPS-DILUTED> .26
</TABLE>
