<PAGE>
================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Form 10-Q
[ X ] Quarterly Report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarter ended September 30, 1996
-----------------------
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the transition period from
--------------
Commission File Number 0-26138
--------------
Dendrite International, Inc.
----------------------------
(Exact name of registrant as specified in its charter)
New Jersey 22-2786386
- -------------------------------- --------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
---------------------------------------
1200 Mt. Kemble Avenue
Morristown, NJ 07960
201-425-1200
----------------------------------------
(Address, including zip code and telephone
number (including area code) of registrant's
principal executive offices)
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 last 90 days
y X n
----- -----
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the last practicable date.
Class Shares Outstanding at November 12, 1996
------------------- ---------------------------------------
Common Stock 11,158,506
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1
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DENDRITE INTERNATIONAL, INC.
INDEX
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION
- ------------------------------
Item 1. Financial Statements (unaudited) Page No.
--------
<S> <C>
Consolidated Statements of Operations
Three months and nine months ended September 30, 1996 and 1995....... 3
Consolidated Balance Sheets
September 30, 1996 and December 31, 1995............................. 4
Consolidated Statements of Cash Flows
Nine months ended September 30, 1996 and 1995......................... 5
Notes to Consolidated Financial Statements.............................. 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations............................................... 7
<CAPTION>
PART II - OTHER INFORMATION
- ---------------------------
<S> <C>
Item 6. Exhibits and Reports on Form 8-K........................................ 12
Signatures.............................................................. 12
</TABLE>
2
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Dendrite International, Inc.
Consolidated Statements of Operations
(In thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
September 30, September 30,
------------------------ ------------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
REVENUES:
License fees $ 3,532 $ 1,275 $ 7,646 $ 3,617
Services 15,065 13,107 42,435 34,540
--------------- -------------- --------------- --------------
18,597 14,382 50,081 38,157
--------------- -------------- --------------- --------------
COST OF REVENUES:
Cost of license fees 185 107 554 321
Cost of services 7,112 5,678 19,904 15,336
--------------- -------------- --------------- --------------
7,297 5,785 20,458 15,657
--------------- -------------- --------------- --------------
Gross margin 11,300 7,523 29,623 22,500
--------------- -------------- --------------- --------------
OPERATING EXPENSES:
Selling, general and administrative 6,817 5,001 18,816 15,113
Research and development 2,115 1,413 5,115 3,377
Write off of in-process
research and development costs - - 2,640 -
--------------- -------------- --------------- --------------
8,932 6,414 26,571 18,490
--------------- -------------- --------------- --------------
Operating income 2,368 1,109 3,052 4,010
INTEREST (INCOME) EXPENSE (386) 5 (896) 10
OTHER EXPENSE 3 (176) 106 (351)
--------------- -------------- --------------- --------------
Income before income taxes 2,751 1,280 3,842 4,351
INCOME TAXES 1,066 925 2,491 1,725
--------------- -------------- --------------- --------------
NET INCOME $ 1,685 $ 355 $ 1,351 $ 2,626
=============== ============== =============== ==============
NET INCOME PER SHARE $ 0.15 $ 0.13 $ 0.12 $ 0.26
=============== ============== =============== ==============
SHARES USED IN COMPUTING
NET INCOME PER SHARE 11,489 11,088 11,464 10,108
=============== ============== =============== ==============
</TABLE>
The accompanying notes are an integral part of these statements.
3
<PAGE>
Dendrite International, Inc.
Consolidated Balance Sheets
(In thousands, except per share data)
(unaudited)
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
---- ----
ASSETS
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 8,045 $ 11,530
Short-term investments 10,075 10,955
Accounts receivable 22,700 14,699
Prepaid expenses and other 1,773 1,292
Deferred tax assets 1,156 1,157
--------------- ---------------
Total current assets 43,748 39,633
PROPERTY AND EQUIPMENT, net 3,508 3,602
CAPITALIZED SOFTWARE DEVELOPMENT COSTS, net 2,574 2,032
GOODWILL, net 788 -
--------------- ---------------
$ 50,618 $ 45,267
=============== ===============
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable 1,973 $ 1,002
Income taxes payable 434 2,528
Accrued compensation and benefits 3,255 2,174
Other accrued expenses 2,937 2,102
Deferred revenues 1,514 3,172
Total current liabilities 10,113 10,978
--------------- ---------------
DEFERRED RENT 732 464
DEFERRED TAXES 1,465 1,515
STOCKHOLDERS' EQUITY:
Preferred stock, no par value, 10,000,000 shares
authorized, none issued - -
Common stock, no par value, 50,000,000 shares
authorized: 11,158,506 and 10,675,581 shares issued 31,843 26,809
and outstanding
Retained earnings 7,920 6,570
Deferred compensation (924) (502)
Unrealized holding gain on short-term investments (8) 14
Cumulative translation adjustments (524) (581)
--------------- ---------------
Total stockholders' equity 38,307 32,310
--------------- ---------------
$ 50,618 $ 45,267
=============== ===============
</TABLE>
The accompanying notes are an integral part of these statements.
4
<PAGE>
Dendrite International, Inc.
Consolidated Statements of Cash Flows
(In thousands)
(unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1996 1995
---- ----
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 1,351 $ 2,626
Adjustments to reconcile net income to net cash provided by
(used in) operating activities:
Depreciation and amortization 2,162 1,049
Deferred income taxes (benefit) 0 (333)
Write off of in-process research and development costs 2,640 -
Changes in assets and liabilities:
Increase in accounts receivable (8,001) (1,271)
(Increase) decrease in prepaid expenses and other (481) 615
Increase (decrease) in accounts payable and accrued expenses 2,760 69
Increase in deferred rent 268 282
Increase (decrease) in income taxes payable (2,094) 1,604
Increase (decrease) in deferred revenues (1,658) 87
-------------- -----------
Net cash provided by (used in) operating activities (3,053) 4,728
-------------- -----------
INVESTING ACTIVITIES:
Purchases of short-term investments (6,040) (12,220)
Sales of short-term investments 6,920 3,460
Payment for purchase of SRCI (3,500) -
Purchases of property and equipment (810) (1,135)
Additions to capitalized software development costs (1,082) 691)
-------------- -----------
Net cash used in investing activities (4,512) (10,586)
-------------- -----------
FINANCING ACTIVITIES:
Payments on capital lease obligations $ - (5)
Issuance of Common Stock from stock
offering, net 4,395 18,770
Purchase of common stock - (132)
Issuance of Common Stock 238 178
-------------- -----------
Net cash provided by financing activities 4,633 18,811
-------------- -----------
-------------- -----------
EFFECT OF FOREIGN EXCHANGE RATE CHANGES ON CASH (553) (280)
-------------- -----------
NET INCREASE IN CASH AND CASH EQUIVALENTS (3,485) 12,673
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 11,530 3,910
-------------- -----------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 8,045 $ 16,583
============== =============
</TABLE>
The accompanying notes are an integral part of these statements.
5
<PAGE>
Dendrite International, Inc.
Notes To Unaudited Consolidated Financial Statements
1. BASIS OF PRESENTATION
The consolidated financial statements as of September 30, 1996 and for the
three and nine month periods ended September 30, 1996 and 1995 are unaudited
and reflect all adjustments (consisting only of normal recurring adjustments)
which are, in the opinion of management, necessary for a fair presentation of
the financial position and operating results for the interim periods. The
consolidated financial statements should be read in conjunction with the
notes thereto, together with management's discussion and analysis of
financial condition and results of operations, contained in this report on
Form 10-Q.
2. SALE OF COMMON STOCK
The Company has consummated two public offerings of its Common Stock
which closed on July 6, 1995 and March 13, 1996 respectively. The Company
offered and sold 1,500,000 and 300,000 shares of Common Stock at a public
offering price of $14.50 and $18.25 per share, respectively. The net
proceeds to the Company from the public offerings, after payment of offering
expenses, were approximately $18,770,000 and $4,395,000, respectively. An
additional 1,490,000 and 2,805,000 shares, respectively, of Common Stock
(including 390,000 and 405,000 shares, respectively, purchased by the
underwriters upon the exercise in full of over-allotment options) were
offered and sold by certain stockholders of the Company. The Company did not
receive any proceeds from the sale of shares by selling stockholders.
3. NET INCOME PER SHARE COMPUTATION
Net income per share was calculated by dividing net income by the weighted
average number of common shares and dilutive common share equivalents
(computed using the treasury stock method) outstanding during the period,
except where anti-dilutive. The calculation of shares used in computing
net income per share also includes 5,607,000 shares of Series A Convertible
Preferred Stock which converted into 5,607,000 shares of Common Stock upon
the consummation of the initial public offering, as if they were converted to
Common Stock on their original date of issuance.
4. ACQUISITION OF SRCI
On May 1, 1996, the Company acquired 100% of the capital stock of SRCI,
S.A., for FF16,350,000 French Francs, equivalent to approximately USD
$3,198,000. The acquisition has been accounted for using the purchase method
of accounting, whereby the purchase price is allocated to the assets and
liabilities of SRCI based on their fair market values at the acquisition
date. Such allocation has been based on estimates that may be revised at a
later date. The purchase price, including transaction costs, exceeded the
fair market value of the net assets acquired by $3,500,000 of which
$2,640,000 was recorded as a write-off of in-process research and development
costs, with the balance of $860,000 recorded as goodwill which will be
amortized on a straight-line basis over five years. SRCI's results of
operations have been included in the Company's consolidated financial
statements from the date of acquisition.
6
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
Overview
--------
The Company succeeded in 1991 to a business co-founded in 1986 by the
Company's President and Chief Executive Officer and others to provide
comprehensive Electronic Territory Management ("ETM") solutions used to
manage, coordinate and control the activities of large sales forces in
complex selling environments, primarily in the pharmaceutical industry. The
Company's solutions combine advanced software products with a wide range of
specialized support services including implementation services, technical and
hardware support services and sales force support services. The Company
develops, implements and services advanced ETM systems in the United States,
Canada, Western Europe, Japan, Australia, New Zealand, Hong Kong and Brazil
through its own sales, support and technical personnel located in eleven
offices worldwide.
The Company generates revenues from two sources: license fees and
fees from support services. License fees are charged by the Company for use
of its proprietary computer software. Customers generally pay one-time
perpetual license fees for a particular version of the Company's software
based upon the number of users, territory covered and the number of modules
in the particular system licensed by the customer. Certain license contracts
contain customer acceptance provisions which require the Company to customize
the system in accordance with agreed upon specifications before the system is
accepted by the customer. License fee revenue is deferred on contracts with
customer acceptance provisions until such time as the acceptance provisions
are satisfied. To date there have been no instances in which customer
acceptance provisions have led to nonpayment of license fees. Additional
license fees are payable when customers agree to license additional modules,
acquire an upgraded version of the Company's software and/or when the maximum
number of users or initial geographic coverage is exceeded. Beginning in
1995, the Company made available an alternative license fee arrangement known
as a "capitation" agreement which is a long term agreement (currently up to
10 years) under which the customer licenses Dendrite software and upgrades
for an increasing preset annual charge. Under the capitation agreements
there is an annual fee payable each year during the term of the agreement,
and the fee increases each year. The fee encompasses all users in all
geographic regions, and covers all maintenance fees and upgrades. This
differs from the Company's other license agreements, where there is generally
a one-time license fee, and customers pay additional fees for additional
users and modules and future upgrades. If a customer anticipates expanding
the number of users and its geographic reach, the customer can take advantage
of more sophisticated modules and is also confident of the Company's ability
to satisfy its needs, the capitation arrangement is more cost effective than
the traditional license fee arrangement. One customer has executed a
capitation agreement to date. The Company actively markets the concept to
existing and potential customers.
The second and more significant component of the Company's revenues
consist of fees from a wide variety of contracted services which the Company
makes available to its customers, generally under multi-year contracts.
Implementation fees are generated from services provided to design and
implement the ETM solution. Technical and hardware support services are
derived from services related to the operation of the file server and from
the provision of ongoing technical and customer service support including
customization of the software following implementation. Sales force support
fees are derived from organizing and managing support for the customer's
sales force.
Currently, the Company's products are marketed in over 13 countries. The
United States, the United Kingdom and France are the Company's main markets.
With the exception of Germany and Spain, the Company's most recently formed
subsidiaries, all of the Company's other foreign operations have reached
break-even. It has been the Company's experience with start-up operations in
foreign countries, that a reasonable length of time must pass before market
share and critical mass allows the Company to be profitable. The Company is
confident that its' business development efforts will enable it to be
successful in these markets. The Company expects its foreign
7
<PAGE>
operations to grow and to continue to account for a material part of its
revenues. Operating results generated in local currencies are translated into
United States dollars at the average exchange rate in effect for the
reporting period.
Results of Operations
---------------------
Three Months Ended September 30, 1995 and 1996
Revenues. Total revenues increased $4,215,000 or 29% from $14,382,000 in
the three months ended September 30, 1995 to $18,597,000 in the three months
ended September 30, 1996 as a result of an increase in the installed base of
Dendrite systems, both from new and existing customers. Fluctuations in the
Company's revenues depend on a number of factors, some of which are beyond
the Company's control. These factors include, among others, the timing of
contracts, delays in customer acceptance of the Company's software, the
length of the sales cycless, customer budget changes and changes in pricing
policy by the Company or its competitors.
License fee revenues increased to $3,532,000 in the three months ended
September 30, 1996 from $1,275,000 in the three months ended September 30,
1995. This increase was primarily attributable to the effect on license fee
revenues of the factors discussed in the previous paragraph. The Company
typically expects to realize a greater percentage of its license fee revenues
for the year in the last two quarters of the year with a lower percentage in
the first two quarters of the year.
Service revenues increased 15% from $13,107,000 in the three months ended
September 30, 1995 to $15,065,000 in the three months ended September 30,
1996. These quarterly increases in service revenues are primarily the result
of an increase in the Company's installed base of Dendrite systems both from
new and existing customers.
Cost of Revenues. Cost of revenues increased 26% from $5,785,000 in the
three months ended September 30, 1995 to $7,297,000 in the three months ended
September 30, 1996 primarily due to an increase in the number of service
representatives and technical staff and, to a lesser extent, an increase in
associated support costs. This increase was directly related to the increase
in service revenues.
Cost of license fees represent the amortization of capitalized software
development costs. Cost of license fees increased from $107,000 in the three
months ended September 30, 1995 to $185,000 in the three months ended
September 30, 1996. This increase was due to the increase in software
development and enhancement costs capitalized in 1995 and amortized beginning
in 1996.
Cost of service revenues increased from $5,678,000 in the three months
ended September 30, 1995 to $7,112,000 in the three months ended September
30, 1996. As a percentage of service revenues, cost of service revenues
increased from 43% of service revenues for the three months ended
September 30, 1995 to 47% of service revenues for the three months ended
September 30, 1996. This increase is attributed to additional costs incurred
related to the use of external personnel for certain technical support and
training necessary to accommodate the new and existing client base.
Selling, General and Administrative (SG&A). SG&A expenses increased 36%
from $5,001,000 in the three months ended September 30, 1995 to $6,817,000 in
the three months ended September 30, 1996. The increase in 1996 was
primarily attributable to increased staff and, to a lesser extent, an
increase in facilities growth to support operations and sales. As a
percentage of revenues, SG&A expenses increased from 35% for the three months
ended September 30, 1995 to 37% for the three months ended September 30,
1996.
8
<PAGE>
Research and Development. Research and development expenses increased 50%
from $1,413,000 in the three months ended September 30, 1995 to $2,115,000 in
the three months ended September 30, 1996, while increasing to 11% as a
percentage of revenues. The increase in research and development expenses in
1996 is attributed to increased staff and resources required to continue
development of updates and upgrades for the Company's Series 6 software
product and for the development of prototypes for the next series of
products.
Provision for Income Taxes. The effective tax rate is 39% for the three
months ended September 30, 1996 as compared to 39% for the three months ended
September 30, 1995.
Nine Months Ended September 30, 1995 and 1996
Revenues. Total revenues increased $11,924,000 or 31% from $38,157,000 in
the nine months ended September 30, 1995 to $50,081,000 in the nine months
ended September 30, 1996 as a result of an increase in the installed base of
Dendrite systems, both from new and existing customers.
License fee revenues increased from $3,617,000 in the nine months ended
September 30, 1995 to $7,646,000 in the nine months ended September 30, 1996
due to an increase in the installed base of Dendrite Systems, both from new
and existing customers. The company typically expects to realize a greater
percentage of its license fee revenues for the year in the last two quarters
of the year with a lower percentage in the first two quarters of the year.
Service revenues increased 23% from $34,540,000 in the nine months ended
September 30, 1995 to $42,435,000 in the nine months ended September 30, 1996
as a result of an increase in the Company's installed base of Dendrite
systems, from both new and existing customers.
Revenues from Pfizer, Inc., Eli Lilly and Company and Rhone-Poulenc Rorer,
Inc. in the aggregate accounted for approximately 59% and 55% of the
Company's revenues for the nine months ended September 30, 1995 and 1996
respectively.
Cost of Revenues. Cost of revenues increased 31% from $15,657,000 in the
nine months ended September 30, 1995 to $20,458,000 in the nine months ended
September 30, 1996 primarily due to an increase in the number of service
representatives and technical staff and, to a lesser extent, an increase in
associated support costs. This increase is directly related to the increase
in service revenues.
Cost of license fees represent the amortization of capitalized software
development costs. Cost of license fees increased from $321,000 in the nine
months ended September 30, 1995 to $554,000 in the nine months ended
September 30, 1996. I This increase is due to increased software development
and enhancement costs incurred and capitalized in 1995 and amortized
beginning in 1996.
Cost of service revenues increased from $15,336,000 in the nine months
ended September 30, 1995 to $19,904,000 in the nine months ended
September 30, 1996. As a percentage of service revenues, cost of service
revenues increased from 44% of service revenues for the nine months ended
September 30, 1995 to 47% of service revenues for the nine months ended
September 30, 1996. This increase is attributed to additional costs incurred
related to the use of external personnel for certain technical support and
training necessary to accommodate the new and existing client base.
Selling, General and Administrative (SG&A). SG&A expenses increased 25%
from $15,113,000 in the nine months ended September 30, 1995 to $18,816,000
in the nine months ended September 30, 1996. The increase in 1996 was
primarily attributed to increased staff and, to
9
<PAGE>
a lesser extent, an increase in facilities growth to support operations and
sales. As a percentage of revenues, SG&A expenses decreased from 40% for the
nine months ended September 30, 1995 to 38% for the nine months ended
September 30, 1996. This decrease is primarily due to service revenues
accelerating at a higher rate than the growth in SG&A expense.
Research and Development. Research and development expense increased 51%
from $3,377,000 in the nine months ended September 30, 1995 to $5,115,000 in
the nine months ended September 30, 1996. As a percentage of revenues,
research and development expenses increased from 9% for the nine months ended
September 30, 1995 to 10% for the nine months ended September 30, 1996. The
increase in research and development expenses in 1996 is attributed to
increased staff and resources required to continue development of updates and
upgrades for the Company's Series 6 software product and for the development
of prototypes for the next series of products.
Write-off of In-process Research and Development Costs. The Company
incurred a one-time charge of $2,640,000 to record the write-off of in-
process research and development costs resulting from the acquisition of
SRCI. The amount represents the estimated fair values related to incomplete
research and development projects that were acquired as determined by
independent appraisals. The technology acquired will require substantial
additional development by the Company. These costs are included in the
Company's research and development expense from the date of acquisition.
Provision for Income Taxes. Excluding the non-deductible write-off of in-
process research and development costs, the effective tax rate was 38% for
the nine months ended September 30, 1996 as compared to the effective tax
rate of 40% for the nine months ended September 30, 1995.
Variability of Quarterly Results
Fluctuations in the Company's quarterly revenues depend on a number of
factors, some of which are beyond the Company's control. These factors
include, among others, the timing of contracts, delays in customer acceptance
of the Company's software, the length of the sales cycle, customer budget
changes and changes in the pricing policy by the Company or its competitors.
The Company establishes its expenditure levels for product development and
other operating expenses based in large part on its expected future revenues.
As a result, should revenues fall below expectations, operating results are
likely to be adversely and disproportionately affected because only a small
portion of the Company's expenses vary with its revenues. In addition, the
Company's quarterly revenues from software license fees and related income
may vary due to seasonal and cyclical factors. The Company typically
realizes a greater percentage of its license fees and service revenues for
the year in the third and fourth quarters with a lower percentage in the
first and second quarters. In the future, to the extent the percentage of
revenue from service revenues from existing customers of the Company
continues to increase, and to the extent more customers choose to enter into
long-term agreements to license software and upgrades for an increasing
preset annual charge, seasonal and cyclical trends in the Company's revenues
may be reduced.
Liquidity and Capital Resources
The Company has historically financed its operations primarily through
cash generated by operations. Net cash used in operating activities was
$3,053,000 during the nine months ended September 30, 1996 compared to cash
provided by operating activities of $4,728,000 during the nine months ended
September 30, 1995. Cash provided by operating activities for the nine months
ended September 30, 1995 decreased compared to the nine months ended
September 30, 1995 primarily due to the increase in accounts receivable and
the decrease in income taxes payable, which were partially offset by an
increase in accounts payable.
10
<PAGE>
The Company utilized $4,512,000 of cash in investing activities in the
first nine months of 1996 compared to $10,586,000 in the first nine months of
1995. The decrease is primarily attributable to a reduction in investment
activity since the closure of the initial public offering. The Company's net
cash provided by financing activities has been primarily limited to the
issuance of common stock from the two public offerings.
The Company maintains a $5,000,000 revolving line of credit agreement with
Chase Manhattan Bank N.A. The agreement provides for borrowings up to
$1,000,000 in local currencies directly by the Company or certain of its
overseas subsidiaries and is available to finance working capital needs and
possible future acquisitions. The $5,000,000 line of credit is secured by
substantially all of the Company's assets. The $5,000,000 line of credit
agreement requires the Company to maintain a minimum consolidated net worth,
among other covenants, measured quarterly which is equal to the Company's net
worth as of December 31, 1994 plus 50% of net income earned after December
31, 1994. This covenant has the effect of limiting the amount of cash
dividends the Company may pay. At September 30, 1996 there were no
borrowings outstanding under the agreement.
At September 30, 1996, the Company's working capital was approximately
$33,635,000. The Company has no significant capital spending or purchasing
commitments other than normal purchase commitments and commitments under
facility and capital leases. The Company believes that the proceeds from the
offerings, available funds, anticipated cash flows from operations and its
line of credit will satisfy the Company's projected working capital and
capital expenditure requirements through at least the next two years.
11
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
(a) Not Applicable.
(b) The Company did not file any Reports on Form 8-K during the quarter
for which this report is filed.
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.
Date: November ___, 1996
DENDRITE INTERNATIONAL, INC.
(Registrant)
By: /s/ John E. Bailye
-------------------------------
John E. Bailye, President and
Chief Executive Officer
By: /s/ Charles Warczakowski
-------------------------------
Charles Warczakowski, V. P. Finance and
Treasurer (Principal Financial Officer)
12
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 9-MOS 9-MOS
<FISCAL-YEAR-END> DEC-31-1996 DEC-31-1995
<PERIOD-START> JAN-01-1996 JAN-01-1995
<PERIOD-END> SEP-30-1996 SEP-30-1995
<CASH> 8,045 11,530
<SECURITIES> 10,075 10,955
<RECEIVABLES> 22,700 14,699
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 43,748 39,633
<PP&E> 3,508 3,602
<DEPRECIATION> 1,536 1,769
<TOTAL-ASSETS> 50,618 45,267
<CURRENT-LIABILITIES> 10,113 10,978
<BONDS> 0 0
0 0
0 0
<COMMON> 31,843 26,809
<OTHER-SE> 6,464 5,501
<TOTAL-LIABILITY-AND-EQUITY> 50,618 45,267
<SALES> 0 0
<TOTAL-REVENUES> 50,081 38,157
<CGS> 0 0
<TOTAL-COSTS> 20,458 15,657
<OTHER-EXPENSES> 26,571 18,490
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 0 10
<INCOME-PRETAX> 3,842 4,351
<INCOME-TAX> 2,491 1,725
<INCOME-CONTINUING> 0 0
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 0
<CHANGES> 0 0
<NET-INCOME> 1,351 2,626
<EPS-PRIMARY> .12 .26
<EPS-DILUTED> .12 .26
</TABLE>
