SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
- - ---------- THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended May 31, 1996
------------
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
- - ---------- OF THE SECURITIES AND EXCHANGE ACT OF 1934
For the transition period from to
------- ----------
Commission File No. 0-19350
-------
ViroGroup, Inc.
(Exact name of registrant as specified in its charter)
Florida 59-1671036
- - ------------------------------- -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
428 Pine Island Road SW
Cape Coral, Florida 33991
- - -------------------------------------- ----------
(Address of principal executive office) (zip code)
Registrant's telephone number including area code: (941) 574-1919
--------------
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
-------- --------
The number of shares outstanding of the registrant's common stock, $.01 Par
Value, as of July 14, 1996 was 6,361,708.
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<PAGE>
VIROGROUP, INC. AND SUBSIDIARIES
INDEX TO FORM 10-Q
QUARTER ENDED MAY 31, 1996
Page
Part I- Financial Information
Consolidated Balance Sheets
May 31, 1996 and August 31, 1995........................................3
Consolidated Statements of Operations
Three Months Ended May 31, 1996 and
May 31, 1995............................................................4
Consolidated Statements of Operations
Nine Months Ended May 31, 1996 and
May 31, 1995............................................................5
Consolidated Statements of Cash Flows
Nine Months Ended May 31, 1996 and
May 31, 1995............................................................6
Notes to Consolidated Financial Statements...............................7
Management's Discussion and Analysis of
Financial Condition and Results of Operations.........................10
Part II - Other Information.............................................14
Signature Page..........................................................15
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<PAGE>
VIROGROUP, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
MAY 31, 1996 AND AUGUST 31, 1995
<TABLE>
<CAPTION>
May 31, August 31,
1996 1995
------------ ------------
<S> <C> <C>
(Unaudited)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents ............................. $ 71,014 $ 104,793
Accounts receivable, net of allowance for doubtful
accounts of $541,455, and $635,561, respectively .... 3,918,088 4,165,103
Unbilled accounts receivable .......................... 1,161,660 1,683,764
Prepaid income taxes .................................. 26,840 155,800
Prepaid expenses and other ............................ 142,085 231,310
------------ ------------
Total current assets ............................ 5,319,687 6,340,770
LONG-TERM RECEIVABLES, net .................................. 2,076,314 2,050,074
PROPERTY AND EQUIPMENT, net ................................. 646,590 948,679
OTHER ASSETS ................................................ 40,474 71,430
------------ ------------
$ 8,083,065 $ 9,410,953
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable ...................................... $ 1,081,334 $ 1,450,985
Accrued liabilities ................................... 1,779,015 2,291,992
Current maturities of long-term debt .................. -- 9,791
Current maturities of capitalized lease obligations ... 13,322 27,334
Notes payable ......................................... 1,999,172 1,089,705
------------ ------------
Total current liabilities ....................... 4,872,843 4,869,807
LONG-TERM DEBT, net of current maturities ................... -- 99,437
CAPITALIZED LEASE OBLIGATIONS, net of current maturities .... -- 8,049
SHAREHOLDERS' EQUITY:
Preferred stock, $.01 par value, 50,000,000 shares
authorized, 0 shares outstanding .................... -- --
Common stock, $.01 par value, 50,000,000 shares
authorized, 6,361,708 issued and outstanding ........ 63,617 63,617
Additional paid-in capital ............................ 18,277,869 18,277,869
Accumulated deficit ................................... (15,131,264) (13,907,826)
------------ ------------
Total shareholders' equity ...................... 3,210,222 4,433,660
------------ ------------
$ 8,083,065 $ 9,410,953
============ ============
</TABLE>
The accompanying notes to consolidated financial statements
are an integral part of these balance sheets.
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<PAGE>
VIROGROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Three Months Ended May 31, 1996 and 1995
(Unaudited)
1996 1995
----------- -----------
GROSS REVENUES ................................. $ 3,461,516 $ 4,950,690
COST OF GROSS REVENUES ......................... 2,366,980 4,185,441
----------- -----------
Gross profit ............................. 1,094,536 765,249
SELLING, GENERAL & ADMINISTRATIVE EXPENSES,
including rentals to related party of
$46,500 in 1996 and 1995 ................. 1,688,065 2,401,139
----------- -----------
Loss from operations ..................... (593,529) (1,635,890)
OTHER EXPENSE:
Net interest expense ..................... (44,002) (46,438)
Other, net ............................... (1,201) (15,959)
----------- -----------
Loss before income taxes ................. (638,732) (1,698,287)
PROVISION (BENEFIT) FOR INCOME TAXES ........... 20,545 (65,103)
----------- -----------
Net loss ................................. $ (659,277) $(1,633,184)
=========== ===========
NET LOSS PER COMMON SHARE ...................... $ (.10) $ (.56)
=========== ===========
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING ..... 6,361,708 3,180,854
=========== ===========
The accompanying notes to consolidated financial
statements are an integral part of these statements.
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<PAGE>
VIROGROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
Nine Months Ended May 31, 1996 and 1995
(Unaudited)
1996 1995
----------- -----------
GROSS REVENUES ................................. $ 11,022,001 $ 16,453,252
COST OF GROSS REVENUES ......................... 7,481,766 12,066,168
------------ ------------
Gross profit ............................. 3,540,235 4,387,084
SELLING, GENERAL & ADMINISTRATIVE EXPENSES,
including rentals to related party of
$139,500 in 1996 and 1995 ................ 4,630,291 6,305,918
------------ ------------
Loss from operations ..................... (1,090,056) (1,918,834)
OTHER INCOME (EXPENSE):
Net interest expense ..................... (134,863) (107,998)
Other, net ............................... 5,059 157,956
------------ ------------
Loss before income taxes ................. (1,219,860) (1,868,876)
PROVISION (BENEFIT) FOR INCOME TAXES ........... 3,578 (126,103)
------------ ------------
Net loss ................................. $ (1,223,438) $ (1,742,773)
============ ============
NET LOSS PER COMMON SHARE ...................... $ (.19) $ (.68)
============ ============
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING ..... 6,361,708 3,180,854
============ ============
The accompanying notes to consolidated financial
statements are an integral part of these statements.
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<PAGE>
VIROGROUP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF
CASH FLOWS Nine Months Ended
May 31, 1996 and 1995
(Unaudited)
<TABLE>
<CAPTION>
1996 1995
----------- ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss ........................................ $ (1,223,438) $ (1,742,773)
------------ ------------
Adjustments to reconcile net loss to net
cash used in operating activities
Depreciation and amortization ................ 299,754 506,256
Provision for bad debts ...................... 29,864 362,247
Loss on disposition of property and equipment 6,152 32,443
Discount on writedown of long-term receivables
to estimated fair value ..................... -- 619,764
Changes in assets and liabilities:
Decrease (increase) in-
Accounts receivable ...................... 217,151 391,588
Unbilled accounts receivable ............. 522,104 (439,651)
Prepaid income taxes ..................... 128,960 46,656
Prepaid expenses and other assets ........ 93,941 224,383
Increase (decrease) in-
Accounts payable ......................... (369,514) (179,161)
Accrued liabilities, net of accrued
preferred stock dividends payable of
$140,000 in 1995 ....................... (512,976) (105,768)
------------ ------------
Total adjustments ........................ 415,436 1,458,757
------------ ------------
Net cash used in operating activities ........... (808,002) (284,016)
------------ ------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment ............. (32,874) (103,583)
Proceeds from sale of property and equipment .... 28,992 11,600
------------ ------------
Net cash used in investing activities ......... (3,882) (91,983)
------------ ------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes payable ..................... 7,286,493 11,647,157
Repayment of notes payable ...................... (6,376,962) (11,132,971)
Repayment of long-term debt ..................... (109,365) (11,286)
Repayment of capitalized lease obligations ...... (22,061) (44,049)
Payment of preferred stock dividends ............ -- (280,000)
Issuance of note payable ........................ -- 99,437
------------ ------------
Net cash provided by financing activities ..... 778,105 278,288
------------ ------------
DECREASE IN CASH AND CASH EQUIVALENTS ................. (33,779) (97,711)
CASH AND CASH EQUIVALENTS, beginning of period ........ 104,793 126,665
------------ ------------
CASH AND CASH EQUIVALENTS, end of period .............. $ 71,014 $ 28,954
============ ============
SUPPLEMENTAL DISCLOSURES:
Interest paid ................................... $ 136,929 $ 88,667
============ ============
Income taxes paid ............................... $ 24,246 $ 12,586
============ ============
</TABLE>
The accompanying notes to consolidated financial
statements are an integral part of these statements.
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<PAGE>
VIROGROUP, INC., AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
MAY 31, 1996
(UNAUDITED)
(1) Basis of Presentation
The consolidated balance sheet as of August 31, 1995, which has been derived
from audited statements, and the unaudited interim consolidated financial
statements included herein, have been prepared pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information and
note disclosures normally included in annual financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted pursuant to those rules and regulations, although the Company believes
that the disclosures made are adequate to make the information presented not
misleading.
In the opinion of the Company, the accompanying unaudited consolidated financial
statements contain all adjustments (consisting of only normal recurring
accruals) necessary to present fairly the financial position of the Company as
of May 31, 1996 and August 31, 1995, and the results of operations for the
three-month and nine-month periods ended May 31, 1996 and 1995, and cash flows
for the nine-month periods ended May 31, 1996 and 1995. Results of operations
for the nine-month period ended May 31, 1996 are not necessarily indicative of
the results to be expected for the year ending August 31, 1996.
The accounting policies followed for quarterly financial reporting purposes are
the same as those disclosed in the Company's audited financial statements
contained in its Annual Report on Form 10-K for the year ended August 31, 1995,
as filed with the Securities and Exchange Commission.
(2) Earnings Per Share
Earnings per share is calculated by dividing net income attributed to common
shareholders (net income less preferred stock dividends of $0 and $140,000,
respectively, per quarter for the three and nine months ended May 31, 1996 and
1995) by the weighted average number of common shares and common share
equivalents outstanding during the periods. Common share equivalents are
calculated using the "treasury stock method" and include the number of shares
issuable on exercise of outstanding options and warrants (only if the exercise
prices are below the average quoted market prices of the Company's common stock)
less the number of shares that could have been purchased with the proceeds from
the exercise of options and warrants, based on the average quoted market price
of the Company's common stock during the periods. Common share equivalents are
not considered for periods in which there is a loss, as their impact would be
antidilutive. Primary and fully diluted earnings per share are the same for all
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<PAGE>
periods presented.
(3) Long-Term Receivables
In May, 1996 the Governor of the State of Florida signed a new law which
essentially codified his actions of March, 1995 to curtail the Florida
Underground Storage Tank Program. The 1996 law incorporates the provisions of
the 1995 action including the priority ranking system which limits state work
authorizations and payments to priority sites as funds are currently available
which are estimated to be approximately $60 million annually. In addition, the
new law included a new provision creating an agency to finance the state
estimated unfunded backlog of $450 millon. This agency is charged with financing
the backlog by selling notes.
In exchange for the anticipated quicker payment made possible by this expected
financing, the law mandated the amounts to be paid be discounted by 3.5-9%,
depending upon available funds and application filing dates.
The Company currently estimates that its previously recorded discounts,
approximately $725,000, relating to these long-term receivables are sufficient
to provide for the estimated state mandated discounts. However, due to this
change, the Company will not be accreting the state mandated discounts,
approximately $100,000-$300,000, to interest income over the next two to five
fiscal years as previously disclosed.
(4) Restructuring Charge
Primarily due to the May, 1996 law enacted relating to Florida UST Program
(Reference is made to Note (3), Long-Term Receivables) and a continued decline
in forecasted landfill design work, as well as general market conditions, the
Company in May, 1996 implemented the final phase of its restructuring program.
Pursuant to this program, in May, the Company closed under-performing offices in
Bakersfield, California, New Orleans, Louisiana and Miami, Florida and downsized
its staff by 38. These actions resulted in a one-time restructuring charge to
Selling, General and Administrative Expenses totaling $307,000 which was charged
to third quarter operations. Of this $307,000, approximately $195,000 is for
severance pay while $102,000 is primarily for lease expenses as well as other
associated expenses of the closed offices. When this amount is combined with the
balance remaining from the April, 1995 restructuring plan, the balance to be
paid relating to restructuring at May 31, 1996 is approximately $274,000 which
is included in accrued liabilities in the accompanying May 31, 1996 balance
sheet. This balance is estimated to be paid as follows; $203,000 in the
remainder of fiscal year 1996, $66,000 in fiscal year 1997, and $5,000 in fiscal
year 1998.
The Company believes the balance of the accrued restructuring charges at May 31,
1996 of $274,000 is adequate to absorb the remaining estimated charges.
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<PAGE>
For the nine months ending May 31, 1996 the closed offices of Bakersfield, New
Orleans and Miami had combined gross revenues of approximately $952,000 and
combined net loss before income taxes of approximately $396,000.
(5) Significant Customer Disclosure
The Company operates in one industry segment, as contemplated by Financial
Accounting Standards Board Statement No. 14. During the nine months ended May
31, 1996, Laidlaw Environmental Services, Inc. and its affiliates accounted for
approximately 20% and another customer, Southern State Utilities, Inc. accounted
for approximately 10% of consolidated gross revenues. At May 31, 1996, amounts
due from these customers aggregated $903,389, and are included in "accounts
receivable, net" in the accompanying consolidated balance sheet.
During the nine months ended May 31, 1995, Laidlaw Environmental Services, Inc.
and its affiliates accounted for approximately 18% and Southern States
Utilities, Inc. accounted for approximately 4% of consolidated gross revenues.
9 of 15
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
Results of Operations
- - ---------------------
Comparison of three months ended May 31, 1996 and 1995. Gross revenues decreased
by 30% to $3,461,516 for the three months ended May 31, 1996, compared to
$4,950,690 for the same period of fiscal year 1995. This 30% decrease in gross
revenues results from changes in each of the Company's operations as follows:
Gross Revenues For the
Three Months Ended
May 31, 1996
------------
% Increase
Operation 1996 1995 (Decrease)
--------- ---- ---- ----------
Enviro Florida $ 791,862 $2,074,978 (62)
Enviro South Carolina/Calif. 1,149,872 1,556,498 (26)
Enviro Tenn/New Orleans 1,098,662 924,194 19
--------- ---------
TOTAL ENVIRO DIVISION 3,042,396 4,555,670 (33)
HYDRO DIVISION 421,120 395,020 7
--------- ---------
TOTAL VIROGROUP, INC. $3,461,516 $4,950,660 (30)
========= =========
Florida operations had a decrease of $1,283,116 (62%) from the prior year. Of
this decrease approximately $340,000 (27%) was due to office closures while the
balance was mainly due to the curtailment of the Florida UST Program. The
majority of the decrease in the South Carolina/California operations was due to
the decrease in landfill design work in California. The 19% increase in
Tennessee/New Orleans operations is entirely due to an increase in work in
Tennessee primarily relating to several large remediation projects which are
expected to last through the balance of the fiscal year offset by a 75% decrease
in New Orleans. Due to the above, the Company, in May, closed the California,
New Orleans and Miami offices (Reference is made in Note (4) to the Notes to the
Consolidated Financial Statements). The Hydro Division gross revenue increase is
mainly due to a large injection well project which is expected to continue to
the end of the fiscal year.
Contracted backlog at May 31, 1996 is approximately $6.0 million. The backlog is
no assurance as to future gross revenues.
Cost of gross revenues is 68.4% and 84.6% for the three months ended May 31,
1996 and 1995 respectively. As a result gross profit increased in 1996 by
approximately $329,000 (43%). This increase is primarily due to a larger
percentage of gross revenues being generated from professional fees which carry
a higher gross profit than
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<PAGE>
subcontracted revenues, combined with a one-time charge of approximately
$719,000 to gross revenues in fiscal year 1995 to record the estimated discounts
on long-term receivables due from the Florida UST Program (Reference is made to
Note (3) to the Consolidated Financial Statements).
Selling, general and administrative expense for the three months decreased by
approximately $713,000 (30%) to $1,688,065 compared to $2,401,139 for the same
period of fiscal year 1995. The majority of this decrease is due to personnel
downsizing, office closures and a reduction in fixed expenses plus increased
utilization of direct personnel. This decrease was partially offset by an
increase in expenses resulting from approximately $307,000 in restructuring
charges (Reference is made to Note (4) of the Notes to the Consolidated
Financial Statements). The provision for income taxes increase from the prior
year is primarily due to an adjustment to an income tax receivable recorded in
the prior year combined with the Company's utilization of all tax loss
carry-backs.
The net loss for the three months ended May 31, 1996 was $659,277 or 19.0% of
gross revenues compared to $1,633,184 or 33.0% or gross revenues for the prior
year. This decrease in the net loss is primarily due to an increase in gross
profit, and a decrease in selling, general and administrative expenses combined
with the one-time discount charges to prior year gross revenues.
The net loss per common share for the three months ended May 31, 1996 was $.10,
while for the same period of the prior year, the net loss was $.56 per share.
For the current year, the net loss per common share was calculated using
weighted average common shares outstanding of 6,361,708. For the prior year, the
net loss per common share was calculated after the deduction from net income of
$140,000 for preferred stock dividends and using weighted average common shares
outstanding of 3,180,854.
Comparison of the nine months ended May 31, 1996 and 1995. Gross revenues
decreased by 33% to $11,022,001 for the nine months ended May 31, 1996, compared
to $16,453,252 for the same period of fiscal year 1995. This 33% decrease in
gross revenues results from changes in gross revenues at each of the Company's
operations as follows:
Gross Revenues For the
Nine Months Ended
May 31, 1996
% Increase
Operation 1996 1995 (Decrease)
--------- ---- ---- ----------
Enviro Florida $ 3,134,529 $7,490,277 (58)
Enviro South Carolina/Calif. 3,673,316 4,593,734 (20)
Enviro Tenn/New Orleans 2,673,823 3,467,595 (23)
---------- ----------
TOTAL ENVIRO DIVISION 9,481,668 15,551,606 (39)
HYDRO DIVISION 1,540,333 901,646 71
---------- ----------
TOTAL VIROGROUP, INC. $11,022,001 $16,453,252 (33)
========== ==========
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<PAGE>
Florida operations had a decrease in gross revenues of $4,355,748 from the prior
year. Of this decrease, approximately $1,334,191 or 31% was due to office
closures, and the balance was due to the curtailment of the Florida UST program.
The majority of the decrease in the South Carolina/California operations of
$920,418 was due to a decline in landfill design work in California. The
Tennessee and New Orleans gross revenue decrease of $793,772 is primarily due to
a decrease in gross revenues associated with a New Orleans due diligence project
and a Department of Energy project completed in the prior year. The Hydro
division gross revenues increase of $638,687 is mainly the result of a large
injection well project which should continue into the fourth quarter of the
current fiscal year. Partially as a result of the decreases, the Company in May,
1996 closed the California, New Orleans and Miami offices (Reference is made to
Note (4) of the Notes to the Consolidated Financial Statements).
Cost of gross revenues is 67.9% for the nine months ended May 31, 1996, compared
to 73.3% for the same period of the prior year. This decrease in costs is the
result of a larger percentage of gross revenue being generated by professional
fees than by subcontractors, revenues from professional fees carry a higher
gross profit than revenues from subcontracted expenses, plus improved
utilization of personnel combined with the effect on the prior year of recording
the discounts on the Florida UST Program receivables.
Selling, general and administrative expenses for the nine months ended May 31,
1996 decreased by approximately $1,676,000 or 27% to $4,630,291 compared to
$6,305,918 for the same period of fiscal 1995. The majority of the decrease is
due to staff downsizing, office closures, and reductions in fixed expenses,
which was partially offset by the $307,000 one-time restructuring charge
(Reference is made to Note (4) to the Consolidated Financial Statements).
Net interest expense increased due to an increase in interest rates as well as
in amounts borrowed. Other income, net, decreased primarily due to the inclusion
in the prior year of a net gain of $153,000 on the favorable settlement of
contract claims. The decrease in the benefit for income taxes results from the
utilization of prior year tax loss carrybacks.
The net loss for the nine months ended May 31, 1996 was $1,223,438, or 11.1% of
gross revenues compared to a net loss of $1,742,773, or 10.6% of gross revenues,
for the same period of the prior year. This increase in percentages is primarily
the result of decreases in gross revenue and in other income, partially offset
by decreases in cost of sales.
The net loss per common share for the nine months ended May 31, 1996 was $.19,
compared to a net loss per common share of $.68 for the same period of the prior
year. Weighted average common shares outstanding for the current year are
6,361,708. For the prior year, the net loss per common share was calculated
after the deduction of $420,000 for preferred stock dividends and using weighted
average common shares outstanding of 3,180,854.
12 of 15
<PAGE>
Liquidity and Capital Resources
- - -------------------------------
The Company's operating activities used net cash of $808,002. This cash was
primarily used to pay accounts payable associated with the Florida UST Program
as well as to pay accrued liabilities associated with the restructuring program.
The payment of accounts payable was necessitated by law to complete the Florida
UST projects in progress prior to filing for reimbursement with the State.
Accounts receivable and unbilled accounts receivable provided net cash of
approximately $739,000 as the result of completing work-in-progress at year-end.
Also, net income tax refunds provided cash of approximately $129,000. In
addition, there were non-cash charges to the net loss of depreciation, and the
amortization of prepaid expenses and the provision for bad debts which totaled
approximately $454,000, while the net loss was $1,223,000. The net cash used in
operating activities was primarily provided by net borrowings under the
Company's revolving credit line.
Working capital at May 31, 1996 was approximately $447,000 for a decrease of
$1,024,000 when compared to the same date of the prior year. The decrease in
working capital was mainly due to a decrease in accounts and unbilled
receivables of $739,000, which is reflective of the decrease in revenues,
together with completion of work-in-progress at prior fiscal year-end.
Although current assets decreased, current liabilities remained essentially
constant during this nine month period. The accounts payable and accrued
liabilities decrease of $882,000, which was primarily due to gross revenue
reduction combined with the pay-off of liabilities associated with the long-term
receivables due from the Florida UST program, was mainly financed with net
additional borrowings of similar amount under the Company's revolving credit
line.
Inflation has not significantly affected the Company's financial position or
operations. Borrowings under the new $3.0 million line of credit bear interest
at the prime rate of the lender less .25%. The prime rate at May 31, 1996 was
8.25%. No assurance can be given that inflation or the prime rate will not
significantly fluctuate, either of which could adversely affect the Company.
13 of 15
<PAGE>
PART II - OTHER INFORMATION
None
EXHIBITS AND REPORTS ON FORM-8K
Exhibit 27 - Financial Data Schedule (Electronic filing only)
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<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.
VIROGROUP, INC.
Date: 07/12/96 By: /S/ Sylvester O. Ogden
--------------------------------------
Sylvester O. Ogden, President, and
Chief Executive Officer, and Chairman
Date: 07/12/96 By: /S/ Larry Ackerly
--------------------------------------
Larry Ackerly, Chief Financial Officer
15 of 15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF VIROGROUP, INC. FOR THE NINE MONTHS ENDED MAY 31, 1996,
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> AUG-31-1996
<PERIOD-START> SEP-01-1995
<PERIOD-END> MAY-31-1996
<CASH> 71
<SECURITIES> 0
<RECEIVABLES> 4,459
<ALLOWANCES> 541
<INVENTORY> 0
<CURRENT-ASSETS> 5,320
<PP&E> 2,704
<DEPRECIATION> 2,058
<TOTAL-ASSETS> 8,083
<CURRENT-LIABILITIES> 4,873
<BONDS> 0
<COMMON> 64
0
0
<OTHER-SE> 18,278
<TOTAL-LIABILITY-AND-EQUITY> 8,083
<SALES> 11,022
<TOTAL-REVENUES> 11,022
<CGS> 7,482
<TOTAL-COSTS> 7,482
<OTHER-EXPENSES> (5,059)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 135
<INCOME-PRETAX> (1,220)
<INCOME-TAX> 4
<INCOME-CONTINUING> (1,224)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (1,224)
<EPS-PRIMARY> (.19)
<EPS-DILUTED> (.19)
</TABLE>
