<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For The Third Quarter Ended September 30, 1998 Commission File #0-19240
U.S. HOMECARE CORPORATION
(Exact name of registrant as specified in its charter)
New York 13-2853680
- ------------------------------- -----------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
Two Hartford Square West
Suite 300
Hartford, Connecticut 06106
- ------------------------------- -----------------------------------
(Address of principal executive office) (Zip Code)
Registrant's telephone number, (860) 278-7242
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 / /
Number of Shares of Registrant's Common Stock Outstanding
September 30, 1998: 13,098,497
<PAGE> 2
U.S. HOMECARE CORPORATION
INDEX
<TABLE>
<CAPTION>
Page Number
-----------
<S> <C>
Part I - Financial Information
Item 1 Consolidated Balance Sheets as of
September 30, 1998 and December 31, 1997 3
Consolidated Statements of Operations
for the three months ended September 30, 1998
and 1997. 4
Consolidated Statements of Operations
for the nine months ended September 30, 1998
and 1997. 5
Consolidated Statements of Cash Flows
for the nine months ended September 30, 1998 and 1997. 6
Notes to Unaudited Consolidated
Financial Statements. 7 - 9
Item 2 Management's Discussion and Analysis
of Financial Condition and Results of Operations. 10 - 13
Item 3 Market Risk Disclosure 14
Part II - Other Information
Item 1 Legal Proceedings 14
Item 2 Changes in Securities and Use of Proceeds 14
Item 3 Defaults Upon Senior Securities 14
Item 4 Other Information 14
Item 5 Exhibits & Reports on Form 8-K 15
Signatures 16
</TABLE>
<PAGE> 3
U.S. HOMECARE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except per share data)
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
-------- --------
(unaudited) (audited)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 127 $ 313
Accounts receivable, net of allowance
For doubtful accounts of $475 and $581 5,145 5,147
Other current assets 889 1,339
-------- --------
TOTAL CURRENT ASSETS 6,161 6,799
-------- --------
PROPERTY AND EQUIPMENT, net 662 841
-------- --------
OTHER ASSETS
Excess cost over net assets acquired, net
of accumulated amortization of $799 and $736 1,435 1,497
Intangible assets, net of accumulated
Amortization of $5,716 and $5,502 271 485
Other 825 756
-------- --------
TOTAL OTHER ASSETS 2,531 2,738
-------- --------
TOTAL ASSETS $ 9,354 $ 10,378
======== ========
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES
Current maturities of long-term debt $ 8,363 $ --
Accounts payable 4,317 2,528
Accrued expenses 2,651 2,961
Accrued payroll and related costs 1,568 1,655
-------- --------
TOTAL CURRENT LIABILITIES 16,899 7,144
-------- --------
OTHER LIABILITIES
Long-term debt -- 7,577
Other long-term liabilities 1,745 2,128
-------- --------
TOTAL OTHER LIABILITIES 1,745 9,705
-------- --------
TOTAL LIABILITIES 18,644 16,849
-------- --------
STOCKHOLDERS' DEFICIT
Common stock, $0.01 par value, 40,000,000 shares authorized, 131 121
13,098,497 and 12,130,353 shares outstanding
Preferred stock, $1 par value, 5,000,000 authorized, 328,569 328 328
shares outstanding
Additional paid-in capital 47,139 47,077
Accumulated deficit (56,888) (53,997)
-------- --------
TOTAL STOCKHOLDERS' DEFICIT (9,290) (6,471)
-------- --------
TOTAL LIABILITIES & STOCKHOLDERS' DEFICIT $ 9,354 $ 10,378
======== ========
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
-3-
<PAGE> 4
U.S. HOMECARE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended
September 30,
1998 1997
-------- --------
(unaudited)
<S> <C> <C>
Net revenues $ 11,239 $ 12,195
Cost of revenues, primarily
payroll and related costs 7,918 7,879
-------- --------
Gross profit 3,321 4,316
Operating expenses:
Selling, general and administrative expenses 4,675 4,609
Amortization and depreciation 327 360
-------- --------
Total operating expenses 5,002 4,969
Loss before interest expense and income taxes (1,681) (653)
Interest expense 246 210
-------- --------
Loss before income taxes (1,927) (863)
Provision for state income taxes 38 37
-------- --------
Net Loss (1,965) (900)
Dividends on preferred stock, paid in common stock 172 172
-------- --------
Net Loss applicable to common shareholders $ (2,137) $ (1,072)
======== ========
Net Loss per share:
Basic $ (0.17) $ (0.10)
======== ========
Diluted $ (0.17) $ (0.10)
======== ========
Weighted average common shares outstanding:
Basic 12,812 10,219
Dilutive effect of stock options -- --
Conversion of preferred shares -- --
======== ========
Diluted 12,812 10,219
======== ========
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
-4-
<PAGE> 5
U.S. HOMECARE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
1998 1997
-------- --------
(unaudited)
<S> <C> <C>
Net revenues $ 35,938 $ 39,924
Cost of revenues, primarily
payroll and related costs 24,225 24,593
-------- --------
Gross profit 11,713 15,331
Operating expenses:
Selling, general and administrative expenses 12,644 12,436
Amortization and depreciation 1,142 1,089
-------- --------
Total operating expenses 13,786 13,525
Income (Loss) before interest expense and income taxes (2,073) 1,806
Interest expense 705 678
-------- --------
(Loss) Income before income taxes (2,778) 1,128
Provision for state income taxes 113 113
-------- --------
Net (Loss) income (2,891) 1,015
Dividends on preferred stock, paid in common stock 517 517
-------- --------
Net (Loss) income applicable to common shareholders $ (3,408) $ 498
======== ========
Net (Loss) Income per share:
Basic $ (0.27) $ 0.05
======== ========
Diluted $ (0.27) $ 0.05
======== ========
Weighted average common shares outstanding:
Basic 12,619 9,941
Dilutive effect of stock options -- 1,819
Conversion of preferred shares -- 7,152
======== ========
Diluted 12,619 18,912
======== ========
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
-5-
<PAGE> 6
U.S. HOMECARE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
<TABLE>
<CAPTION>
Nine months ended September 30,
-------------------------------
1998 1997
------- -------
(unaudited)
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net (loss) income $(2,891) $ 1,016
Adjustments to reconcile net income to
net cash provided by (used in) operating activities:
Depreciation and amortization 1,142 1,089
Provision for bad debts 319 351
Non-cash charges 71 408
Changes in operating assets and liabilities:
Decrease/(increase) in accounts receivable (317) 491
Decrease/(increase) in other current assets 450 (58)
Increase in other assets (575) (527)
(Decrease)/increase in accrued payroll and related costs (87) 29
(Decrease)/increase in accounts payable and accrued expenses 1,479 (2,985)
Decrease in other liabilities (383) (331)
------- -------
Net cash provided by (used in) operating activities (792) (517)
------- -------
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds from disposition of property and equipment 0 192
Purchase of property and equipment (180) (132)
------- -------
Net cash (used in) provided by investing activities (180) 60
------- -------
CASH FLOWS FROM FINANCING ACTIVITIES
Increase (decrease) in bank financing 786 (176)
------- -------
Net cash provided by (used in) financing activities 786 (176)
------- -------
Net decrease in cash and cash equivalents (186) (633)
Cash and cash equivalents, beginning of period 313 647
------- -------
Cash and cash equivalents, end of period $ 127 $ 14
======= =======
CASH PAID DURING THE PERIOD FOR:
Income taxes $ 208 $ 113
======= =======
Interest $ 659 $ 678
======= =======
</TABLE>
See accompanying notes to unaudited consolidated financial statements.
-6-
<PAGE> 7
U.S. HOMECARE CORPORATION
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
Note 1 - Unaudited Information
In the opinion of the management of U.S. HomeCare Corporation (the
"Company"), the accompanying unaudited consolidated financial statements
contain all adjustments (consisting of only normal recurring accruals)
necessary to present fairly the Company's financial position as of
September 30, 1998 and the results of its operations and its cash flows for
the nine months ended September 30, 1998 and 1997. These consolidated
financial statements should be read in conjunction with the Company's
Annual Report on Form 10-K for the fiscal year ended December 31, 1997.
The results of operations for the nine month period ended September 30,
1998 are not necessarily indicative of the results to be expected for the
full year.
Note 2 - Revenue Recognition
The Company recognizes revenues as the services are performed. The Company
receives retroactive increases and decreases to certain rates. The Company
records such amounts as changes in revenue when it is notified by the
payors or when the amounts are estimable. Certain of the Company's revenues
and related disbursements are subject to audit by third party payors; these
revenues are accrued on an estimated basis in the period the related
services are rendered. Net revenues are adjusted, as required in subsequent
periods, based on final settlement.
Note 3 - Stockholders' Deficit
During the quarter ended September 30, 1998 and 1997, the Company issued
311,743 and 147,916 shares, respectively, of Common Stock as dividends on
the Company's $35.00, 6% Convertible Preferred Stock (the "Preferred
Stock"), and 60,925 and 14,580 shares, respectively, of Common Stock to
directors in lieu of cash fees under the Director Stock Fee Program of the
Company's 1995 Stock Option/Stock Issuance Plan. For the nine months ended
September 30, 1998, the Company issued 869,404 shares of Common Stock as
dividends on the Company's Preferred Stock and of 98,740 shares of Common
Stock to Directors in lieu of cash fees under the Director Stock Fee
Program.
-7-
<PAGE> 8
Note 4 - Commitments and Contingencies
Medicare revenues are based in part on cost reimbursement principles and
are subject to audit and retroactive adjustment by the respective
third-party fiscal intermediaries. Included in accounts payable at
September 30, 1998 and at December 31, 1997 was approximately $1.6 and $0.6
million, respectively, which are estimates of what is to be paid upon
finalization of certain cost reports. In the opinion of management,
additional retroactive adjustments, if any, are not expected to be material
to the consolidated financial statements of the Company.
Note 5 - Debt and Accounts Receivable Securitization
The Company's Receivables Purchase and Servicing Agreement (the
"Securitization Program"), allows the Company to sell for cash an undivided
percentage ownership interest in a designated pool of eligible receivables,
as defined. The Company relies, in part, on this accounts receivable
financing to fund working capital for current operations. The maximum
amount of cash advances (based on eligible accounts receivable) allowed
under the program is $9.3 million as of September 30, 1998. The net
proceeds from the sale of accounts receivable through the Securitization
Program at September 30, 1998 and December 31, 1997 were $6.7 million and
$6.9 million, respectively. The Securitization Program expires during
January 1999.
The Company's Revolving Line of Credit ("RLOC") and the Company's
subordinated credit facility also expire during January 1999. Because these
facilities expire in less than a year, all such outstanding debt has been
classified as current liabilities at September 30, 1998.
Summary of the proforma receivables and debt levels including securitized
financing:
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
------- -------
(in thousands) (in thousands)
<S> <C> <C>
Total Accounts Receivable $12,318 $12,667
Provision for Bad Debt 475 581
------- -------
Net Accounts Receivable $11,843 $12,086
Accounts Receivables Sold to Securitization 6,698 6,939
------- -------
Accounts Receivables, on the Balance Sheet $ 5,145 $ 5,147
======= =======
Days Sales Outstanding (Total Accounts Receivable) 94 88
======= =======
Total Bank Debt, on the Balance Sheet $ 8,363 $ 7,577
Securitization Advances 6,698 6,939
------- -------
Total Bank Financing $15,061 $14,516
======= =======
</TABLE>
-8-
<PAGE> 9
Note 6 - Presentation of Prior Year Information
The presentation of certain prior year information has been reclassified to
conform with the current year presentation.
Note 7 - Net Income Per Share
Net Income Per Share - As of December 31, 1997, the Company adopted
Statement of Financial Accounting Standards No. 128 "Earnings Per Share"
("SFAS 128"). As a result, net income per share for the three months and
nine months ended September 30, 1997 has been restated to conform with the
provisions of SFAS 128. Basic net income per share is based on weighted
average number of common shares outstanding. Convertible preferred stock,
warrants, and stock options outstanding are used in the calculation of
diluted earnings per share. For the quarters ended September 30, 1998 and
1997, and for the nine months ended September 30, 1998, conversion of
preferred stock has not been considered in the computation of diluted
earnings per share because to do so would be anti-dilutive.
-9-
<PAGE> 10
U.S. HOMECARE CORPORATION
Management's Discussion and Analysis of
Financial Condition and Results of Operations
This Quarterly Report on Form 10-Q contains certain statements of a
forward-looking nature relating to future events or the future financial
performance of the Company. Such statements are only predictions and the actual
events or results may differ materially from the results discussed in the
forward-looking statements. Factors that could cause or contribute to such
differences include those discussed below as well as those discussed in other
filings made by the Company with the Securities and Exchange Commission.
R E S U L T S O F O P E R A T I O N S
Three Months Ended September 30, 1998
Compared With Three Months Ended September 30, 1997
Net revenues reported for the three month period ended September 30, 1998
were $11,239,000 compared to $12,195,000 for the third quarter of 1997. The
decline is principally the result of a net charge to revenue of $611,000
resulting from revised estimates of Medicare payments for services rendered in
earlier periods (as discussed in Notes 2 and 4) and continued downward pressures
on rates and utilization by government payors.
Cost of revenues as a percentage of net revenues was 70.5% for the third
quarter of 1998, compared with 64.6% in the third quarter of 1997. The increase
in cost of revenues is due primarily to above described revenue charges
resulting from adjustments of prior periods by payors and pressures on rates and
utilization. The resulting gross profits were $3,321,000 and $4,316,000, or
29.5% and 35.4%, for the quarters ended September 30, 1998 and 1997,
respectively. Excluding the impact of prior period payor adjustments, the gross
profit margin would have been 33.2% in the current quarter.
Selling, general and administrative expenses were $4,675,000 in the third
quarter of 1998 as compared to $4,609,000 in the third quarter of 1997. Third
quarter 1998 expenses included $480,000 of accruals relating to revised
estimates of earlier period liabilities related to tax audits for 1989 to 1996,
retrospectively rated workers compensation for 1992 to 1996 and a recently
revised settlement with a vendor to the Company's discontinued home infusion
business. Selling, general and administrative expenses also include $188,000 of
securitization funding expenses for the three months ended September 30, 1998
and $194,000 for the three months ended September 30, 1997.
Net interest expense was $246,000 for the third quarter of 1998 compared to
$210,000 for the third quarter of 1997. The increase resulted from an increase
in borrowed funds. Amortization and depreciation were $327,000 for the third
quarter of 1998 as compared to $360,000 for the third quarter of 1997.
-10-
<PAGE> 11
The Company's net operating losses eliminated any Federal income tax
liability. The income tax provision relates to state tax obligations.
As a result of the foregoing, for the three months ended September 30, 1998,
the Company had net loss of $1,965,000 compared to a net loss of $900,000 for
the corresponding quarter in 1997.
Nine Months Ended September 30, 1998
Compared With Nine Months Ended September 30, 1997
Net revenues reported for the nine month period ended September 30, 1998 were
$35,938,000 compared to $39,924,000 for the first three quarters of 1997. The
decline is principally the result of the impact of continuing rate reductions by
government payors including a net charge to revenue of $724,000 resulting from
revised estimates of Medicare payments for services rendered in earlier periods.
Cost of revenues as a percentage of net revenues was 67.4% for the first
three quarters of 1998, compared with 61.6% in the first three quarters of 1997.
The increase in cost of revenues is primarily due to rate reductions discussed
above. The resulting gross profits were $11,713,000 and $15,331,000 or 32.6% and
38.4%, for the nine months ended September 30, 1998 and 1997, respectively.
Excluding the impact of prior period payor adjustments, the gross profit margin
for the first nine months of 1998 would have been 33.9%.
Selling, general and administrative expenses were $12,644,000 in the first
three quarters of 1998 as compared to $12,436,000 in the first three quarters of
1997. The net increase reflects the effect of $690,000 of revised estimates of
liabilities related to tax audits for 1989 to 1996, retrospectively rated
workers compensation for 1992 to 1996, and a recently revised settlement with a
vendor to the Company's discontinued home infusion business. Selling, general
and administrative expenses also include $562,000 of securitization funding
expenses for the nine months ended September 30, 1998 and $488,000 for the nine
months ended September 30, 1997.
Net interest expense was $705,000 for the first three quarters of 1998 as
compared to $678,000 for the first three quarters of 1997. The increase resulted
from an increase in borrowed funds. Amortization and depreciation were
$1,142,000 for the first three quarters of 1998 as compared to $1,089,000 for
the first three quarters of 1997, primarily due to amortization of deferred
costs of refinancing the Company's credit facilities.
The Company's net operating losses eliminated any Federal income tax
liability. The income taxes noted relate to state tax obligations.
As a result of the foregoing, for the nine months ended September 30, 1998,
the Company had a net loss of $2,891,000 compared to net income of $1,015,000
for the corresponding nine months in 1997.
-11-
<PAGE> 12
FINANCIAL CONDITION
As of September 30, 1998, the Company's cash and cash equivalents totaled
$127,000 compared to $313,000 at December 31, 1997. Undrawn funds available from
the Company's Revolving Line of Credit was approximately $256,000 at September
30, 1998.
The Company is not in compliance with the financial covenants of its
revolving credit agreement. Noncompliance with financial covenants gives the
banks the right to declare the amounts outstanding under the Company's credit
facilities immediately due and payable. The Company has obtained waivers from
its banks for this non-compliance.
The Company believes that its existing credit facilities, together with cash
generated from operations, will be sufficient to fund the Company's operations
and debt obligations through 1998. Beyond 1998, the Company believes that it
will need to increase and extend or replace its existing credit facilities to
ensure sufficient funding of the Company's operations. The Company is currently
discussing with its current creditors and others such expanded and extended
financing. There can be no assurance that the Company will obtain such expanded
and extended financing. Failure to obtain such financing would have a material
adverse effect on the Company's business, financial condition and results of
operations.
FACTORS AFFECTING THE COMPANY'S BUSINESS
The Company's future business, financial condition and results of operations
are dependent on the Company's ability to successfully provide home health care
services to its customers and to successfully collect for such services.
Inherent in this process are a number of risks that the Company must carefully
manage in order to be successful. Some of these risks are: dependence on
referral sources; dependence on reimbursement by third party payors including
Medicaid and Medicare; pricing pressures which the health care industry is
currently experiencing as a result of market-driven reforms; complying with the
federal and state regulations which apply to home health care agencies;
fundamental changes in the health care industry which could be brought about by
health care reform; the need to refinance or extend the Company's existing
credit facilities, including the Securitization Program, which are scheduled to
mature in January 1999; complying with the financial covenants in the Company's
revolving line of credit, subordinated credit facility and Securitization
Program; competing effectively with other home health care providers; attracting
and retaining senior management personnel and branch level management as well as
qualified health care professionals and paraprofessionals; maintaining adequate
liability insurance; and lack of liquidity in the market for the Company's
common stock and the potential volatility of the price of the Company's common
stock. The failure to manage such risks successfully could have a material
adverse effect on the Company's business, financial condition and results of
operations.
-12-
<PAGE> 13
YEAR 2000 COMPLIANCE
The Company has determined that it will need to modify, upgrade or replace
portions of its third party application and mainframe operating systems software
so that its computer systems will function properly with respect to dates in the
Year 2000 and beyond. The Company has been assured by its third party
application vendor that a year 2000 compliant version of the software will be
made available in 1999. The Company is currently in the process of selecting and
purchasing necessary upgrades to its mainframe operating software and expects to
be year 2000 compliant in this area by June 30, 1999. The Company also has
initiated discussions with its significant suppliers, large customers and
financial institutions to determine that those parties have appropriate plans to
remediate Year 2000 issues where their systems interface with the Company's
systems or otherwise impact its operations. The Company is assessing the extent
to which its operations are vulnerable should those organizations fail to
properly remediate their computer systems, and as of the date hereof is not able
to quantify the impact on the Company, if any, of failures of those
organizations to remediate Year 2000 issues properly.
-13-
<PAGE> 14
U.S. HOMECARE CORPORATION
Item 3. Market Risk Disclosures
None.
Part II - Other Information
Item 1. Legal Proceedings
None.
Item 2. Changes in Securities and Use of Proceeds
None.
Item 3. Defaults Upon Senior Securities
None.
Item 4. Other Information
As disclosed in the Company's latest proxy statement, the
deadline for submitting proposals to be considered for inclusion in
the Company's Proxy Statement for the 1999 Annual Meeting is January
8, 1999. In addition, pursuant to the Company's By-Laws, shareholder
proposals intended for presentation at the 1999 Annual Meeting that
are not intended to be considered for inclusion in the Company's
Proxy Statement for the 1999 Annual Meeting must be received by the
Secretary of the Company no earlier than March 23, 1999 and later
than April 17, 1999.
Pursuant to recent amendments to Rule 14a-4(c)(1) under the
Securities Exchange Act of 1934, as amended, the Company will have
discretionary voting authority if a proponent does not notify the
Company by March 27, 1999 of their intent to present a proposal from
the floor at the 1999 Annual Meeting of Shareholders or of their
intent to commence a proxy solicitation for the 1999 annual Meeting
of Shareholders.
-14-
<PAGE> 15
Item 5. Exhibits and Reports on Form 8-K
A. Exhibits - The following exhibits are filed herewith or
incorporated herein.
None.
B. Reports on Form 8-K
1. No Reports on Form 8-K were filed during the quarter for
which this report is filed.
-15-
<PAGE> 16
U.S. HOMECARE CORPORATION
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.
U.S. HomeCare Corporation
/s/ Sophia V. Bilinsky
- --------------------------- ------------------------------------------
Date President and Chief Executive Officer
(Principal Executive Officer)
/s/ Clifford G. Johnson
- --------------------------- ------------------------------------------
Date Vice President Finance and Administration
and Chief Financial Officer
(Principal Financial Officer)
-16-
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S UNAUDITED FINANCIAL STATEMENTS DATED AS OF SEPTEMBER 30, 1998 AND IS
QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 127
<SECURITIES> 0
<RECEIVABLES> 5,620
<ALLOWANCES> 475
<INVENTORY> 0
<CURRENT-ASSETS> 6,161
<PP&E> 7,805
<DEPRECIATION> 7,143
<TOTAL-ASSETS> 9,354
<CURRENT-LIABILITIES> 16,899
<BONDS> 0
0
328
<COMMON> 131
<OTHER-SE> (9,749)
<TOTAL-LIABILITY-AND-EQUITY> 9,354
<SALES> 35,938
<TOTAL-REVENUES> 35,938
<CGS> 0
<TOTAL-COSTS> 24,225
<OTHER-EXPENSES> 13,786
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 705
<INCOME-PRETAX> (2,778)
<INCOME-TAX> 113
<INCOME-CONTINUING> (2,891)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (2,891)
<EPS-PRIMARY> (0.27)
<EPS-DILUTED> (0.27)
</TABLE>
