UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(MARK ONE)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
FOR THE PERIOD ENDED MARCH 31, 1996
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 0-23394
-------
XPEDITE SYSTEMS, INC.
- - --------------------------------------------------------------------------------
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 22-2903158
- - --------------------------------- ------------------------------
(STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER IDENTIFICATION
INCORPORATION OR ORGANIZATION) NUMBER)
446 HIGHWAY 35
EATONTOWN, NEW JERSEY 07724
- - --------------------------------- ------------------------------
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
(908) 389-3900
- - --------------------------------------------------------------------------------
(REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE)
NOT APPLICABLE
- - --------------------------------------------------------------------------------
(FORMER NAME, FORMER ADDRESS AND FORMER FISCAL YEAR, IF CHANGED SINCE LAST
REPORT)
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 PERIODS 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 ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
INDICATE BY CHECK MARK WHETHER THE REGISTRANT HAS FILED ALL DOCUMENTS AND
REPORTS REQUIRED TO BE FILED BY SECTIONS 12, 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 SUBSEQUENT TO THE DISTRIBUTION OF SECURITIES UNDER A PLAN
CONFIRMED BY THE COURT. YES NO
--- ---
APPLICABLE ONLY TO CORPORATE ISSUERS
INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER'S CLASSES OF
COMMON STOCK, AS OF THE LATEST PRACTICAL DATE.
COMMON STOCK, $.01 PAR VALUE, 7,715,249 SHARES AS OF MAY 10, 1996.
<PAGE>
XPEDITE SYSTEMS, INC.
- INDEX -
PAGE NO.
PART I - FINANCIAL INFORMATION
ITEM 1 - Financial Statements (unaudited)
Consolidated Balance Sheets - March 31, 1996 and December
31, 1995 3
Consolidated Statements of Income
- Three months ended March 31, 1996 and 1995 4
Consolidated Statement of Stockholders' Equity (Deficit)
- Three months ended March 31, 1996 5
Consolidated Statements of Cash Flows
- Three months ended March 31, 1996 and 1995 6
Notes to Consolidated Financial Statements 7
ITEM 2 - Management's Discussion and Analysis of Financial Condition
and Results of Operations 8
PART II - OTHER INFORMATION
ITEM 4 - Submission of matters to a vote of security holders 11
ITEM 6 - Exhibits and Reports on Form 8-K 11
SIGNATURES 13
Page 2
<PAGE>
PART I
ITEM 1. XPEDITE SYSTEMS, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
ASSETS
------
<CAPTION>
MARCH 31, 1996 DECEMBER 31, 1995
----------------------------------
(unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents ...................................................... $ 6,947,115 $ 9,076,250
Accounts receivable, net of reserve for allowances and doubtful accounts of
$1,075,000 at March 31, 1996 and $993,000 at December 31, 1995................ 18,670,463 16,567,118
Deferred income taxes ......................................................... 2,406,663 2,406,663
Other current assets ........................................................... 3,402,677 2,324,129
----------------- ------------------
Total current assets .................................................... 31,426,918 30,374,160
Property, plant and equipment , net ................................................. 16,622,673 16,235,393
Customer lists, net of accumulated amortization of $1,172,000 at March 31, 1996 and
$897,000 at December 31, 1995..................................................... 7,447,621 6,935,206
Purchased software, net of accumulated amortization of $1,114,000 at March 31, 1996
and $886,000 at December 31, 1995................................................. 3,450,131 3,591,852
Costs in excess of fair value of net assets acquired, net of accumulated
amortization of $286,000 at March 31, 1996 and $78,000 at December 31, 1995...... 8,018,624 8,226,593
Investments in affiliates, at cost .................................................. 494,187 510,390
Loans to affiliate .................................................................. 3,220,485 2,525,102
Deferred income taxes................................................................ 1,815,237 1,815,237
Other assets ........................................................................ 2,623,994 2,668,838
----------------- ------------------
Total.................................................................... $ 75,119,870 $ 72,882,771
============== =============
LIABILITIES AND STOCKHOLDERS' EQUITY (DEFICIT)
----------------------------------------------
Current liabilities:
Accounts payable................................................................ $ 12,672,152 $ 10,712,562
Accrued expenses ............................................................... 6,586,000 7,127,162
Current portion of long-term debt .............................................. 10,683,403 10,652,747
Current portion of capital lease obligations ................................... 292,483 307,232
Income taxes payable............................................................ 3,092,183 3,254,114
Other current liabilities....................................................... 95,280 588,115
----------------- ------------------
Total current liabilities................................................ 33,421,501 32,641,932
Long-term debt ...................................................................... 34,292,952 35,763,421
Long-term portion of capital lease obligations ...................................... 548,962 559,257
Deferred income taxes ............................................................... 4,789,117 4,786,300
Other liabilities ................................................................... 950,360 247,809
Stockholders' equity (deficit):
Common Stock, $.01 par value, authorized 15,000,000; issued and outstanding
7,775,606 at March 31, 1996, and 7,773,399 shares at
December 31, 1995............................................................ 77,756 77,734
Additional paid-in capital...................................................... 48,927,676 48,921,115
Accumulated deficit............................................................. (47,672,454) (49,898,797)
Less: Treasury stock; 72,000 at March 31, 1996, and
December 31, 1995; at cost .................................................. (216,000) (216,000)
----------------- ------------------
Total stockholders' equity (deficit)..................................... 1,116,978 (1,115,948)
----------------- ------------------
Total.................................................................... $ 75,119,870 $ 72,882,771
============== =============
</TABLE>
Page 3
<PAGE>
XPEDITE SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(unaudited)
THREE MONTHS ENDED MARCH 31,
----------------------------
1996 1995
Net revenues:
Domestic service revenues .... $ 18,382,092 $ 10,978,892
International service revenues 9,876,537 --
System sales and other ....... 1,824,981 953,900
------------ ------------
Total net revenues ......... 30,083,610 11,932,792
Cost of sales:
Operations, line charges and
support engineering ...... 12,922,236 4,015,882
Cost of sales of systems ..... 877,343 424,083
------------ ------------
Total cost of sales ........ 13,799,579 4,439,965
------------ ------------
Gross margin ......................... 16,284,031 7,492,827
Operating expenses:
Selling and marketing ........ 6,452,363 3,278,537
General and administrative ... 2,054,120 815,478
Research and development ..... 1,209,686 771,229
Depreciation and amortization 1,688,161 499,249
------------ ------------
Total operating expenses ... 11,404,330 5,364,493
------------ ------------
Operating income ..................... 4,879,701 2,128,334
Interest income ...................... 114,350 207,957
Interest expense ..................... (1,006,663) --
Other income ......................... 100,126 --
------------ ------------
Income before income taxes ........... 4,087,514 2,336,291
Income tax expense ................... 1,720,200 771,000
------------ ------------
Net income ........................... $ 2,367,314 $ 1,565,291
============ ============
Net income per Common Share .......... $ 0.29 $ 0.23
============ ============
Weighted average shares outstanding .. 8,115,000 6,884,400
============ ============
See notes to consolidated financial statements.
Page 4
<PAGE>
<TABLE>
XPEDITE SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (DEFICIT)
(unaudited)
<CAPTION>
ADDITIONAL
COMMON STOCK PAID-IN ACCUMULATED TREASURY STOCK
SHARES AMOUNT CAPITAL DEFICIT SHARES AMOUNT TOTAL
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1995 7,773,399 $77,734 $48,921,115 $(49,898,797) (72,000) $(216,000) $(1,115,948)
Exercise of stock options........... 2,207 22 6,561 - - - 6,583
Cumulative translation
adjustment....................... - - - (140,971) - - (140,971)
Net income.......................... - - - 2,367,314 - - 2,367,314
--------- ------- ----------- ------------ ------- --------- -----------
BALANCE, MARCH 31, 1996 7,775,606 $77,756 $48,927,676 $(47,672,454) (72,000) $(216,000) $(1,116,978)
========= ======= =========== ============= ======= ========= ============
</TABLE>
Page 5
<PAGE>
<TABLE>
XPEDITE SYSTEMS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(unaudited)
<CAPTION>
THREE MONTHS ENDED MARCH 31,
----------------------------
1996 1995
---- ----
<S> <C> <C>
OPERATING ACTIVITIES:
Net (loss) income ..................................... $ 2,367,314 $ 1,565,291
Adjustments to reconcile net (loss) income to net cash
provided by operating activities:
Depreciation and amortization ................... 1,899,434 573,065
Other non-cash (gains) losses ................... 65,838
Deferred income taxes ........................... 12,972
Change in operating assets and liabilities:
Accounts receivable ............................. (2,139,187) (768,323)
Other current assets ............................ (1,061,127) 285,009
Other assets .................................... (50,382) (78,200)
Accounts payable ................................ 1,396,854 (978,134)
Accrued expenses ................................ 139,171 459,802
Other liabilities ............................... 147,414 --
Income taxes payable ............................ (271,092) 237,750
---------- ----------
Net cash provided by operating activities ............. 2,507,209 1,296,260
INVESTING ACTIVITIES:
Acquisition of property, equipment, computer software (1,646,943) (1,188,649)
Acquisition of businesses ........................... (756,996) --
Purchase of held-to-maturity securities ............. -- (3,899,352)
Loans to affiliate .................................. (695,383) (332,131)
---------- ----------
Net cash used in investing activities ................. (3,099,322) (5,420,132)
FINANCING ACTIVITIES:
Repayments loans and notes payable .................. (1,518,007) --
Repayments of capital lease obligations ............. (17,804) (9,983)
Net proceeds from issuance of Common Stock .......... 6,583 8,212
Net cash provided by (used in) financing activities ... (1,529,228) (1,771)
Effect of exchange rate changes on cash ............... (7,794) (340)
---------- ----------
(Decrease) increase in cash and cash equivalents ...... (2,129,135) (4,125,983)
Cash and cash equivalents at beginning of year ........ 9,076,250 10,320,933
---------- ----------
------------
Cash and cash equivalents at end of year .............. $ 6,947,115 $ 6,194,950
============ ============
</TABLE>
Page 6
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. General
A. The financial information included herein is unaudited; however, such
information has been prepared in accordance with generally accepted
accounting principles and reflects all adjustments, consisting solely
of normal recurring adjustments which are, in the opinion of
management, necessary for a fair statement of results for the interim
periods. Operating results for the three month period ended March 31,
1996, are not necessarily indicative of the results that may be
expected for the year ended December 31, 1996. For further information,
refer to the consolidated financial statements and footnotes thereto
included in the Xpedite Systems, Inc. 1995 Annual Report.
B. The consolidated financial statements include the accounts of the
Company and its subsidiaries. All intercompany accounts and
transactions have been eliminated in consolidation.
C. The financial statements of the Company's foreign subsidiaries have
been translated into U.S. dollars in accordance with FASB Statement No.
52, Foreign Currency Translation. All balance sheet accounts have been
translated using the exchange rate in effect at the balance sheet date,
and income statement amounts have been translated using the average
exchange rate for the period. Gains and losses resulting from changes
in exchange rates are insignificant, and have been included as a
component of shareholders' equity.
Page 7
<PAGE>
ITEM 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Three Months Ended March 31, 1996, Compared to Three Months
Ended March 31, 1995
The Company acquired Vitel, Swift, and Comwave (collectively "the acquisitions")
on November 20, 1995. Net revenues and results of operations for the
acquisitions are included in those of the Company for the three months ended
March 31, 1996. As a result of the acquisitions, the Company is classifying net
service revenue as either "international" or "domestic". The Company defines
domestic service revenues as those generated by the Company's U.S. and Canadian
sales forces. All other service revenues are defined by the Company as
international service revenues.
For the three months ended March 31, 1996, net revenues increased by 152.1% to
$30.1 million as compared to the same period in 1995. Net service revenues
increased by 157.4% to $28.3 million for the three months ended March 31, 1996,
as compared to the three months ended March 31, 1995. The acquisitions
contributed approximately $14.0 million in net service revenues; $4.1 million in
domestic revenue and $9.9 million in international revenue. Prior to the
acquisitions, the Company had no international service revenues. The remaining
increase in domestic net service revenues resulted primarily from the efforts of
the Company's sales force in penetrating new markets and exploring expanded
applications in existing markets.
System sales and other net revenues increased by 91.3% to $1.8 million for the
three months ended March 31, 1996, compared to the same period in 1995. The
increase was primarily the result of an increased volume of sales of system
upgrades and expansion equipment, and related royalty revenue.
The Company's gross margins were 54.1% and 62.8% for the three months ended
March 31, 1996, and 1995, respectively. Service margin rates decreased to 54.3%
for the first quarter of 1996, as compared to 63.4% for the same period in 1995.
The decline in service margins resulted primarily from the acquisitions'
international service revenues which are sold at a lower gross margin but on
average generate a higher retained revenue per page. Partially offsetting the
impact of the lower international gross margin were lower long distance rates
resulting from favorable negotiations with the Company's primary
telecommunications service providers, completion of additional direct
interconnections with local exchange carriers, and the interconnection of the
Company's systems with those acquired in November 1995. Domestic service margins
were also impacted by a reduction of approximately 11.5% in the average price
charged to customers to deliver a Fax Broadcast page, as compared with the first
quarter of the prior year. This reduction was in response to competition in the
market in which the Company operates. The Company expects further domestic price
reductions of approximately 10% over the next year, in response to competitive
pressures, and that any future reduction in pricing will be partially offset by
further reductions in fax delivery costs. In addition, the Company expects that
an increase in the volume of revenues and increased operating efficiencies will
also mitigate the impact on domestic margins of declining prices. Margin rates
on system sales and other revenues also decreased slightly to 51.9% for the
three months ended March 31, 1996, compared to 55.5% for the same period in
1995, primarily as a result of product mix.
Selling and marketing expenses increased by 96.8% to $6.5 million for the three
months ended March 31, 1996, as compared to the same period in 1995. Selling and
marketing expenses as a percentage of net revenues decreased to 21.4% for the
three months ended March 31, 1996, from 27.5% for the three months ended March
31, 1995. The acquisitions accounted for $2.4 million of the increase. The
remainder of the increase is attributed primarily to the expansion of the
Page 8
<PAGE>
Company's domestic direct sales force, customer care and sales support
functions, in response to the increase in revenues. As of March 31, 1996, the
Company employed approximately 175 direct sales employees both domestically and
internationally, as compared with 103 domestically at March 31, 1995.
General and administrative expenses increased by 151.9% to $2.1 million for the
three months ended March 31, 1996, as compared to the same period in 1995. The
acquisitions accounted for $1.1 million of the increase, with the remainder
primarily resulting from additional administrative overhead costs relating to
the Company's growth. General and administrative expenses as a percentage of net
revenues were 6.8% for the three months ended March 31, 1996, and the three
months ended March 31, 1995.
Research and development expenses increased by 56.9% for the three months ended
March 31, 1996, to $1.2 million, as compared to the same period in 1995. The
acquisitions accounted for $0.3 million of this increase. The remaining increase
was primarily due to costs for developing enhancements and new services and
features, and integration of the Company's systems. Research and development
expenses as a percentage of net revenues decreased to 4.0% for the three months
ended March 31, 1996, from 6.5% for the three months ended March 31, 1995.
Depreciation and amortization increased by 238.1% for the three months ended
March 31, 1996, to $1.7 million. The increase in depreciation and amortization
is attributable to additional capital equipment for expansion of the Company's
systems to support the growth in revenue, combined with depreciation and
amortization of tangible and intangible assets related to the acquisitions.
Operating income increased by 129.3% to $4.9 million for the three months ended
March 31, 1996, as compared with the same period in 1995, primarily resulting
from increased net service revenues. Operating income as a percentage of net
revenues decreased to 16.2% for the three months ended March 31, 1996, as
compared with 17.8% for the three months ended March 31, 1995.
Interest income decreased to $0.1 million for the three months ended March 31,
1996, as compared with $0.2 million for the three months ended March 31, 1995,
as a result of utilizing available cash in connection with the acquisitions. For
the three months ended March 31, 1996, the Company also incurred interest
expense of $1.0 million, primarily related to the $40.0 million term loan, which
was entered into to finance the acquisitions.
Income tax expense for the three months ended March 31, 1996, was $1.7 million
or 42% of income before income taxes, compared to 33% for the same period in
1995. The effective rate for the three months ended March 31, 1996, exclusive of
amortization of costs in excess of fair value of the acquisitions (a
non-deductible item), was 40%.
As a result of the factors discussed above, the Company's net income increased
by 51.2% to $2.4 million for the three months ended March 31, 1996, as compared
with $1.6 million for the comparable period in 1995. Net income per Common share
increased by 26.1% to $0.29 for the three months ended March 31, 1996, from
$0.23 for the three months ended March 31, 1995.
Page 9
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
There was no balance outstanding on the Company's $5.0 million revolving credit
facility at March 31, 1996. The Company entered into a $40.0 million term loan
to finance the acquisitions of ViTel, Swift, and Comwave. The term loan is
payable in quarterly installments of $1.25 million increasing periodically to
$2.25 million with a final payment in November 2001. During the three months
ended March 31, 1996, the Company made a principal payment on the term loan
amounting to $1.25 million. Subordinated notes in the principal amounts of $5.1
million were issued to the sellers of ViTel. The notes do not accrue interest
until May 20, 1996, at which time they begin to accrue interest at 17% per annum
until November 1996, and thereafter at the rate of 12% per annum until maturity
in January 2002. Interest on the notes is payable annually by the issuance of
additional notes in principal amount equal to the interest payment. In the event
that all unpaid principal and accrued interest is not paid in full on or prior
to November 20, 1996, the aggregate principal amount of the notes will increase
to approximately $7.4 million. It is the Company's intention to prepay the notes
prior to November 20, 1996, with approximately 350,000 shares of the Company's
Common Stock. The Company also has notes payable to banks and to former owners
of ViTel totaling $1.2 million at March 31, 1996, payable in monthly and
quarterly payments through September 1998.
At March 31, 1996 the Company had $6.9 million in cash and cash equivalents. The
working capital deficit of $2.0 million at March 31, 1996, resulted from funding
the acquisitions in November 1995. Operations generated $2.5 million in cash for
the three months ended March 31, 1996, compared to $1.3 million for the same
period in 1995.
Net cash used in investing activities for the three months ended March 31, 1996,
was $3.1 million as compared with $5.4 million for the same period in 1995. The
Company's primary capital expenditures are investments in computer systems and
equipment, ____ and telecommunications systems. During the three months ended
March 31, 1996, the Company made additional loans to Xpedite Systems, GmbH
("Xpedite Germany") of $0.7 million. The Company also used $0.8 million to
acquire the domestic customer base of a foreign company.
The Company has Put/Call agreements with each of Xpedite Germany, Xpedite
Systems, S.A. and Xpedite Systems, Ltd. The purchase prices payable in
connection with the exercise of such "call" or "put" options is based on, among
other things, certain formulas set forth in the agreements. Due to the
uncertainties as to the ability of these companies to achieve certain financial
results and as to whether the conditions set forth in the Put/Call agreements
will be met, the Company believes that the put and call agreements will not
become exercisable in the next twelve months.
The Company believes that its sources of capital, including internally generated
funds, and cash available on the revolving credit agreement will be adequate to
satisfy its debt requirements and anticipated capital needs for the next twelve
months. However, the Company may nevertheless elect to finance its future
capital requirements through additional equity or debt financing.
Page 10
<PAGE>
PART II - OTHER INFORMATION
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS.
The Registrant's 1995 Annual Meeting of Stockholders (the "Annual
Meeting") was held on January 10, 1996. The matters voted upon at the
Annual Meeting, and the number of votes cast for, against or withheld
with respect to each such matter, as well as the number of abstentions
and broker nonvotes thereon, were as follows:
1. Election of two Class 2 Directors
FOR WITHHELD ABSTAIN
Roy B. Andersen, Jr. 6,285,269 3,904 0
Paul Leslie Hammond 6,285,269 3,904 0
2. Ratification and Approval of the 1996 Incentive Stock Option Plan
FOR AGAINST ABSTAIN
4,388,314 339,774 15,765
3. Ratification of Ernst & Young, LLP as the Registrant's
Independent Public Accountants
FOR AGAINST ABSTAIN
6,286,081 692 2,400
Information with respect to each of the foregoing matters is set forth
in the Registrant's Notice of Annual Meeting, Proxy Statement and form
of proxy mailed on December 12, 1995 to all holders of record of
Common Stock of the Registrant as of December 6, 1995, and filed with
the Commission on December 13, 1995.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) Exhibits
27.1 Financial Data Schedule
(b) Reports on Form 8-K:
Amendment No. 1 on Form 8-K/A, dated as of January 5, 1996, to
Current Report on Form 8-K, with respect to the following
financial statements:
Swift Global Communications, Inc. and Subsidiaries
Consolidated Financial Statements for the years ended
August 31, 1994 and 1995
Swift Global Communications, Inc. and Subsidiary
Consolidated Financial Statements for the years ended
August 31, 1992 and 1993
Page 11
<PAGE>
ITEM 6. (b) Reports on Form 8-K (continued)
ViTel International Holding Company, Inc.
Consolidated Financial Statements for the years ended
June 30, 1994 and 1995
ViTel International Holding Company, Inc.
Consolidated Financial Statements for the years ended
June 30, 1993 and 1992
Comwave Communications AG
Consolidated Report and Financial Statements in U.S. Dollars
for the year ended December 31, 1994 and the nine-month
period ended September 30, 1995
Xpedite Systems, Inc.
Pro Forma Condensed Combined Financial Statements (unaudited)
Amendment No. 2 on Form 8-K/A, dated as of January 12, 1996, to Current
Report on Form 8-K, with respect to the following financial statements:
ViTel International Holding Company, Inc.
Consolidated Condensed Financial Statements
for the nine-month period ended September 30, 1995 (unaudited)
Page 12
<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.
XPEDITE SYSTEMS, INC.
(Registrant)
DATE: May 14, 1996 /s/ ROY B. ANDERSEN, JR.
--------------------------
Roy B. Andersen, Jr.
President, Chief Executive
Officer and Director
(Principal Executive Officer)
DATE: May 14, 1996 /s/ STUART S. LEVY
--------------------
Stuart S. Levy
Vice President, Finance and
Chief Financial Office
(Principal Accounting and Financial Officer)
Page 13
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 6,947,115
<SECURITIES> 0
<RECEIVABLES> 19,745,463
<ALLOWANCES> 1,075,000
<INVENTORY> 0
<CURRENT-ASSETS> 31,426,918
<PP&E> 22,104,294
<DEPRECIATION> 5,481,621
<TOTAL-ASSETS> 75,119,870
<CURRENT-LIABILITIES> 33,421,501
<BONDS> 34,841,914
0
0
<COMMON> 77,756
<OTHER-SE> 1,039,222
<TOTAL-LIABILITY-AND-EQUITY> 75,119,870
<SALES> 30,083,610
<TOTAL-REVENUES> 30,083,610
<CGS> 30,083,610
<TOTAL-COSTS> 13,799,579
<OTHER-EXPENSES> 25,203,909
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,006,663
<INCOME-PRETAX> 4,087,514
<INCOME-TAX> 1,720,200
<INCOME-CONTINUING> 2,367,314
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,367,314
<EPS-PRIMARY> 0.29
<EPS-DILUTED> 0.29
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 0
<SECURITIES> 0
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 0
<DEPRECIATION> 0
<TOTAL-ASSETS> 0
<CURRENT-LIABILITIES> 0
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 0
<SALES> 11,932,792
<TOTAL-REVENUES> 11,932,792
<CGS> 4,439,965
<TOTAL-COSTS> 9,804,458
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 2,336,291
<INCOME-TAX> 771,000
<INCOME-CONTINUING> 1,565,291
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,565,291
<EPS-PRIMARY> 0.23
<EPS-DILUTED> 0.23
</TABLE>
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