<PAGE> 1
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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 quarterly period ended March 31, 2000
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 0-20034
ELITE INFORMATION GROUP, INC.
(Exact name of registrant as specified in its charter)
DELAWARE 41-1522214
-------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
5100 WEST GOLDLEAF CIRCLE
LOS ANGELES, CALIFORNIA 90056
------------------------ -----
(Address of principal executive offices) (Zip code)
(323) 642-5200
(Registrant's telephone number, 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 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 [ ].
As of May 5, 2000 there were 9,415,473 shares of Common Stock, $.01 par
value, outstanding.
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Page 1 of 12
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ELITE INFORMATION GROUP, INC.
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
NUMBER
------
<S> <C>
PART I FINANCIAL INFORMATION:
Item 1. Financial Statements
Consolidated Statement of Operations -
Three months ended March 31, 2000
and March 31, 1999 3
Consolidated Balance Sheet -
March 31, 2000 and December 31, 1999 4
Consolidated Statement of Cash Flows -
Three months ended March 31, 2000 and
March 31, 1999 5
Notes to Consolidated Financial Statements 6 - 7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 7 - 10
Item 3. Quantitative and Qualitative Disclosures about Market Risk 10
PART II OTHER INFORMATION:
Item 6. Exhibits and Reports on Form 8-K 11
SIGNATURE 12
</TABLE>
----------------------------
PRODUCTS MENTIONED IN THIS REPORT ARE USED FOR IDENTIFICATION PURPOSES ONLY AND
MAY BE TRADE NAMES OR TRADEMARKS OF ELITE INFORMATION GROUP, INC., ITS
SUBSIDIARIES OR THIRD PARTIES.
----------------------------
2
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PART I - FINANCIAL INFORMATION:
Item 1. Financial Statements
ELITE INFORMATION GROUP, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(In thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three months ended
March 31,
--------------------------
2000 1999
----------- --------
<S> <C> <C>
Net revenue $ 13,334 $ 12,988
-------- --------
Operating expenses:
Cost of revenue 7,723 7,926
Research and development 1,321 1,007
Sales and marketing 2,233 2,423
General and administrative 1,700 1,374
-------- ----------
Total operating expenses 12,977 12,730
-------- ----------
Operating income 357 258
Loss on disposition of non-strategic business unit -- (295)
Interest income, net 445 163
-------- ----------
Income from continuing operations before income tax 802 126
Income tax provision for continuing operations (365) (59)
-------- ----------
Income from continuing operations 437 67
-------- ----------
Discontinued Operations:
Loss from discontinued operations, net of income tax -- (49)
-------- ----------
Net income $ 437 $ 18
======== ==========
Net income per share - continuing operations
- Basic $ 0.05 $ 0.01
- Diluted $ 0.05 $ 0.01
Net income (loss) per share - discontinued operations
- Basic $ -- $ (0.01)
- Diluted $ -- $ (0.01)
Net income per share
- Basic $ 0.05 $ 0.00
- Diluted $ 0.05 $ 0.00
Weighted average shares outstanding
- Basic 8,492 8,261
- Diluted 8,753 8,400
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements
3
<PAGE> 4
ELITE INFORMATION GROUP, INC.
CONSOLIDATED BALANCE SHEET
(In thousands, except share and per share data)
<TABLE>
<CAPTION>
March 31, December 31,
2000 1999
----------- ------------
(Unaudited)
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 33,582 $ 31,152
Receivables 19,589 23,669
Deferred income taxes 3,699 3,321
Other current assets 663 972
-------- --------
Total current assets 57,533 59,114
Property and equipment 2,799 2,503
Software costs 583 718
Intangible assets 3,340 3,557
Other assets 188 224
-------- --------
$ 64,443 $ 66,116
======== ========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable-trade $ 5,490 $ 5,260
Accrued compensation 2,320 2,860
Other accrued liabilities 3,859 5,042
Deferred revenue 14,674 16,871
Income taxes payable 1,828 414
-------- --------
Total current liabilities 28,171 30,447
-------- --------
Deferred income taxes 804 804
-------- --------
Other liabilities 7 2
-------- --------
Stockholders' equity:
Common stock, $.01 par value; Authorized 20,000,000 shares;
Issued shares were 9,406,873 and 9,355,373, respectively 94 94
Paid-in capital 39,162 39,384
Less treasury stock, at cost, 876,286 shares
and 950,743 shares, respectively (4,219) (4,604)
Accumulated earnings (deficit) 424 (11)
-------- --------
35,461 34,863
-------- --------
$ 64,443 $ 66,116
======== ========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements
4
<PAGE> 5
ELITE INFORMATION GROUP, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(In thousands)
(Unaudited)
<TABLE>
<CAPTION>
Three months ended
March 31,
----------------------
2000 1999
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 437 $ 18
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 583 1,167
Deferred income taxes (378) (215)
Loss on sale of non-strategic business unit -- 295
Changes in assets and liabilities excluding effects
of disposition of non-strategic business unit
Receivables 4,080 1,142
Accounts payable - trade 230 (1,704)
Accrued compensation (398) (504)
Deferred revenue and customer deposits (2,196) 281
Income taxes 1,413 61
Other, net (956) (310)
-------- --------
Net cash provided by operating activities 2,815 231
-------- --------
Cash flows from investing activities:
Purchase of property and equipment (406) (206)
Cash used in disposition of non-strategic business unit -- (714)
-------- --------
Net cash used for investing activities (406) (920)
-------- --------
Cash flows from financing activities:
Proceeds from issuance of common stock 21 --
-------- --------
Net cash provided by financing activities 21 --
-------- --------
Net increase (decrease) in cash and cash equivalents 2,430 (689)
Cash and cash equivalents, beginning of period 31,152 15,273
-------- --------
Cash and cash equivalents, end of period $ 33,582 $ 14,584
======== ========
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements
5
<PAGE> 6
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
NOTE 1 - BASIS OF PRESENTATION
For the periods presented, the consolidated financial statements of Elite
Information Group, Inc. ("Elite" or the "Company") reflect as continuing
operations the results of operations and financial position of the Company's
wholly owned subsidiary Elite Information Systems, Inc. Additionally, during the
third quarter of 1999, the Company began start-up operations of its new
Elite.com subsidiary, the results for which are reflected in the Company's
financial statements beginning in the second half of last year. During the
second quarter of 1999 the Company sold its Customer Relationship Management
business ("CRM") (see Note 2). The operating results for CRM are presented in
the Consolidated Statement of Operations as discontinued operations and prior
periods have been restated to reflect the Company's continuing operations. Also,
on March 5, 1999 the Company sold all of the outstanding shares of The
Minicomputer Company of Maryland, Inc. ("TMC") to a holding company owned by TMC
management.
The consolidated financial statements of the Company include all
adjustments of a normal recurring nature which, in the opinion of management,
are necessary for a fair presentation of financial position as of March 31, 2000
and results of operations and cash flows for the interim periods presented. The
results of operations for the three months ended March 31, 2000 are not
necessarily indicative of the results to be expected for the entire year.
The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and Article 10 of
Regulation S-X. Accordingly, certain information and footnotes required by
generally accepted accounting principles are not included herein. These interim
financial statements should be read in conjunction with the consolidated
financial statements and notes thereto for the year ended December 31, 1999 as
reported by the Company in its Annual Report on Form 10-K.
Certain prior year amounts have been reclassified to conform with current
year presentation.
NOTE 2 - DISCONTINUED OPERATIONS
On May 19, 1999 the Company sold its Customer Relationship Management
business, based in Charlotte, North Carolina, to Science Applications
International Corporation ("SAIC"). During the second quarter ended June 30,
1999, the Company recorded a gain on sale of discontinued operations of $4.9
million, after an income tax provision of $2.9 million, related to this
disposition. The gain on sale included certain transaction costs and reserve
provisions associated with the sale. The Company received approximately $14.3
million in cash proceeds from the transaction.
Operating results for CRM are classified as discontinued operations on the
Company's Consolidated Statement of Operations. Revenue applicable to
discontinued operations for the first quarter of 1999 was $6,708,000. The loss
from discontinued operations for 1999 is net of an income tax benefit of
$(47,000).
NOTE 3 - SIGNIFICANT TRANSACTIONS
On December 14, 1999 the Company entered into a merger agreement to be
acquired by Solution 6 Holdings Limited ("Solution 6") (ASX:SOH), which is based
in Sydney, Australia. As contemplated in the merger agreement, on December 21,
1999 Solution 6 initiated an all cash tender offer to purchase 100% of the
outstanding shares of Elite common stock. The tender offer was conditioned upon,
among other things, obtaining necessary regulatory approvals including clearance
of the transaction from the Federal Trade Commission ("FTC"). On May 11, 2000,
the Company announced that it had terminated its merger agreement with Solution
6 because of the FTC's opposition to the merger.
6
<PAGE> 7
NOTE 4 - NEW ACCOUNTING PRONOUNCEMENT
In December 1999, the Securities and Exchange Commission released Staff
Accounting Bulletin No. 101 ("SAB 101") that provides the staff's views in
applying generally accepted accounting principles to selected revenue
recognition issues. The Company is currently required to adopt SAB 101 for the
second quarter of 2000. Management is in the process of analyzing the effect, if
any, that the provisions of SAB 101 will have on the Company's consolidated
results of operations, financial condition or cash flows.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
RESULTS OF OPERATIONS
The consolidated financial statements of Elite Information Group, Inc.
("Elite" or the "Company") reflect the results of operations and financial
position of the Company's wholly owned subsidiary Elite Information Systems,
Inc. Additionally, during the third quarter of 1999, the Company began start-up
operations of its new Elite.com subsidiary, the results of which are reflected
in the Company's financial statements beginning in the second half of last year.
Elite.com began offering its services to customers in the first quarter of 2000.
During the second quarter of 1999, the Company sold its Customer
Relationship Management business ("CRM") (see Note 2 of Notes to Consolidated
Financial Statements included in Item 1). The operating results for CRM are
presented on the Consolidated Statement of Operations as discontinued operations
and prior periods have been restated to reflect the Company's continuing
operations. Also, on March 5, 1999 the Company sold all of the outstanding
shares of The Minicomputer Company of Maryland, Inc. ("TMC") to a holding
company owned by TMC management.
Based in Los Angeles, California, Elite Information Systems is an
international software product and services company that provides a
comprehensive suite of financial and practice management software applications
for law firms and other professional services organizations of all sizes.
Elite's software products are often sold with related services to aid the
customer in implementation, data conversion and user training efforts.
Elite.com provides Internet-based time tracking and billing services to
smaller professional services companies including legal, management consulting,
computer systems consulting and integration, accounting and engineering.
Elite.com utilizes hosted, Internet-based applications and services delivered
through its various partners and alliances.
The Company's revenue for the first quarter ended March 31, 2000 totaled
$13.3 million. This compares to revenue for the first quarter of 1999 of $13.0
million. Compared to the first quarter of 1ast year, revenue for this year
includes significantly lower new contract and related implementation services
revenues offset by higher maintenance revenues and higher revenues generated
from additional sales to existing customers. The increase in maintenance
revenues for the current year reflects the continued expansion of the Company's
customer base.
The reduction in new contract revenues for the Company in the first quarter
of 2000 versus the prior year can be attributed to a lower level of new business
and a corresponding reduction in backlog, which represents the amount of
unearned software license and implementation services revenue on signed customer
contracts. Such backlog totaled $11.6 million at December 31, 1999, compared to
$26.4 million at the end of 1998. The Company's backlog as of December 31, 1998
reflected exceptional new contract signing levels in the second half of 1998 due
in part to customers'Y2K planning, but correspondingly lower new business levels
for 1999 contributed to a significant reduction in backlog.
The Company reported 12 new signed contracts for the first three months of
2000. The Company also believes that new business levels in the first quarter
were impacted by prospective customers delaying purchase decisions over
uncertainty surrounding the Company's pending merger, which has now been
terminated. At March 31, 2000 the Company's backlog of booked business stood at
$10.6 million. The Company anticipates new business opportunities to increase
now that the uncertainty over its merger status has been resolved. However,
because of its reduced backlog levels, the Company currently expects its
operating results for the next two quarters to remain below levels achieved
during the second half of 1999.
7
<PAGE> 8
Gross profit, which represents net revenue less cost of revenue, for the
three months ended March 31, 2000 was $5.6 million, an increase of 11% over the
$5.1 million in the same period of 1999. The Company's gross margin percent was
42.1% for this year's first quarter compared to 39.0% for the first three months
of last year. The Company's cost of revenue consists primarily of expenses for
deployable resources such as implementation personnel and contract labor,
salaries and related expenses for the Company's customer support department, and
amounts paid to third party software vendors. The increase in the Company's 2000
gross margin percent compared to the first quarter of the prior year is due in
part to recording a higher provision for certain disputed accounts receivable in
the first quarter of last year.
Research and development expenses for this year's first quarter of $1.3
million (or 9.9% of revenue) increased from $1.0 million (or 7.8% of revenue) in
1999. Research and development expenses consist primarily of salaries and
expenses of the Company's research and development personnel and outside
consultants. The higher expenses in 2000 over the same period of last year can
be attributed primarily to costs related to the Company's new Elite.com
subsidiary. The higher expenses for 2000 also reflect ongoing efforts to develop
new versions of the Elite suite of products, as well as new products that will
be brought to market in 2000. The Company is committed to maintaining strong
research and development efforts so it can continue to provide innovative
software solutions as the needs of its customer base and target markets change.
No software development costs were capitalized in either 2000 or 1999.
Sales and marketing expenses totaled $2.2 million (or 16.7% of revenue) for
the first quarter of 2000 compared to $2.4 million (or 18.7% of revenue) in same
period of 1999. Sales and marketing expenses consist primarily of salaries,
commissions, travel and promotional expense. The decrease in first quarter 2000
sales and marketing expenses versus the prior year is primarily due to lower
commissions and incentives related in part to lower contract signing volume.
General and administrative expenses of $1.7 million (or 12.8% of revenue)
for the first quarter of 2000 increased from $1.4 million (or 10.6% of revenue)
in the first quarter of 1999. General and administrative expenses consist mainly
of salaries of corporate executive, legal, financial and human resources
personnel, as well as professional fees and insurance costs. General and
administrative expenses for the current year include approximately $400,000 of
costs incurred for outside legal and consulting services related to Elite's
terminated merger transaction with Solution 6 (See Note 3 of Notes to
Consolidated Financial Statements included in Item 1).
The Company reported net interest income of $445,000 for the first quarter
of 2000 compared to $163,000 for the first quarter of 1999. The increased
interest income in the current year reflects the Company's investment return on
its higher cash and cash equivalent balances. The Company's improved cash
position can be attributed to its positive cash flow from operations and
proceeds received from the May 1999 sale of its CRM business (See Note 2 of
Notes to Consolidated Financial Statements included in Item 1).
The income tax provision for continuing operations for the first three
months of 2000 of $365,000 (45.5% of continuing operations pre-tax income)
exceeds the income tax expense at the statutory rates for this period primarily
due to the permanent difference of non-deductible goodwill amortization and
state income taxes. The income tax provision for continuing operations for the
first quarter of 1999 was $59,000 (representing 46.8% of the continuing
operation's pre-tax income). The Company believes that the effective tax rate in
2000 will remain higher than the statutory rate due to the ongoing
non-deductible goodwill amortization.
YEAR 2000 COMPLIANCE
Overview: Many software products, custom-developed software, and products
embedded with microprocessor chips were designed to store, process or perform
calculations using only the last two digits of a four-digit year date, for
example, "98" rather than "1998". These software systems and embedded products
may assume the first two digits of the year date to be "19" and as such they may
not be able to process dates with years following 1999. For example, "00" may be
treated by certain software systems as the year 1900 rather than the year 2000.
8
<PAGE> 9
Results of this failure to process the date correctly could include
miscalculations, unpredictable or inconsistent results or complete system
failures. As a software vendor, the so-called "Year 2000 compliance" issue is an
issue that the Company has had to address with respect to its products as well
as software and systems provided by others that the Company uses internally.
During the Year 2000 date transition, the Company did not experience any
failure of mission critical systems nor has it experienced any significant
problem with regard to third party suppliers. Similarly, to management's
knowledge, the Company's customers have not experienced any significant Year
2000 problems with the Company's software products and services. The Company
does not anticipate any material adverse effect to its business or its customers
in the future as a result of Year 2000 related problems; however, it is possible
that such problems might still arise.
Proprietary Software Products and Custom Developed Software: The Company
recognized the need to address the Year 2000 compliance issue and in 1997
established a Year 2000 compliance committee to supervise and monitor the
planning, performance and assessment of the Company's Year 2000 compliance
efforts.
In May 1998, following a period of assessment and testing, the Company
issued its Year 2000 readiness statement, which specifically identified the
current versions of each of the Company's proprietary products that met the
adopted standard. The Company believes that its current versions of proprietary
software products are Year 2000 compliant; however, no assurance can be given
that additional modifications for Year 2000 compliance will not be necessary.
The Company's software products are integrated with its customers' software and
hardware systems and have, in many cases, been uniquely customized to the
customers' specifications. The Company has generally not tested its products as
integrated in its customers' operating environments. The customers' systems with
which the Company's products interoperate may not be Year 2000 compliant which
may affect the operation of the Company's products.
Some of the Company's former customers and current customers presently use
earlier versions of the Company's software products and/or associated custom
code that are not Year 2000 compliant. The Company has made efforts to
communicate with these customers to advise them that they will need to upgrade
to a Year 2000 compliant version of the Company's software product, revise
custom code or implement other alternatives to meet their business needs.
Third Party Products and Products Used Internally: Third party products
integrated within the Company's products are included in the test plans and
compliance efforts that the Company has for its own products. In addition, the
Company has obtained certification of Year 2000 compliance from most third party
vendors whose products are integrated in the Company's products or that are
resold by the Company.
The Company has obtained certification of Year 2000 compliance from each of
the vendors of its internal use information technology systems. The Company has
developed test plans for all critical internal use technology systems and the
testing of these was completed in 1999.
Risks and Costs: Because of the nature of the Company's business, the
Company may be subject to Year 2000 claims or litigation by: its customers;
customers of divested businesses where the Company retained potential product
liabilities, including the CRM business; or other parties. Although the ultimate
outcome of any litigation is uncertain, the Company does not believe that the
ultimate amount of liability, if any, from such actions would have a material
adverse effect on the Company. To date, the Company has not been subject to any
such claims or litigation.
As the Company did not, nor does it expect to, experience any significant
Year 2000 problems at or after the turn of the millennium, the Company does not
currently expect to incur any significant additional costs related to its Year
2000 compliance efforts. All incremental costs associated with the Year 2000
compliance issue will continue to be expensed as incurred.
9
<PAGE> 10
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash and cash equivalents totaled $33.6 million at March 31,
2000 compared to $31.2 million at December 31, 1999. Working capital at March
31, 2000 was $29.4 million compared to $28.7 million at December 31, 1999.
The Company is in the process of negotiating a revolving credit agreement,
which is expected to be effective in the second quarter of 2000. Management
believes that the Company's cash and cash equivalent balances, anticipated cash
flow from operations and other external sources of available credit will be
sufficient to meet the Company's future cash requirements.
FORWARD LOOKING STATEMENTS
This Quarterly Report on Form 10-Q may contain certain "forward-looking
statements" within the meaning of Section 21E of the Securities Exchange Act of
1934, as amended, and Section 27A of the Securities Act of 1933, as amended,
that represent the Company's expectations or beliefs concerning future events or
projected financial results. Such forward-looking statements are about matters
that are inherently subject to risks and uncertainties. Factors that could
influence the matters discussed in certain forward-looking statements include
the timing and amount of revenue that may be recognized by the Company,
continuation of current expense trends, absence of unforeseen changes in the
Company's markets, continued acceptance of the Company's existing services and
products in the Company's existing markets and the acceptance of these services
and products in new markets, the ability to timely complete the development of
new products and services, customer acceptance of new products and services and
general changes in the economy, Year 2000 risks discussed in the "Year 2000
Compliance" section of this 10-Q report, as well as matters discussed in "Risks
and Uncertainties" in the Company's Annual Report on Form 10-K for the year
ended December 31, 1999. There can be no assurance that such future events or
projected results will be achieved, and actual results could differ materially.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company has limited exposure to market risk for changes in interest
rates related to the Company's cash and cash equivalents. The Company maintains
an investment policy designed to ensure the safety and preservation of its cash
and cash equivalents by limiting default risk, market risk and reinvestment risk
by depositing its cash and cash equivalents in major financial institutions.
10
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PART II - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A) EXHIBITS:
Exhibit No. Description
----------- -----------
11 Computation of earnings per share
27 Financial Data Schedule, which is submitted electronically
to the Securities and Exchange Commission for information
only and not filed.
(B) REPORTS ON FORM 8-K:
None.
11
<PAGE> 12
SIGNATURE
Pursuant to the requirements of Section 13 or 15(d) of the Securities and
Exchange Act of 1934, the Registrant has duly caused this report to be signed on
its behalf by the undersigned, thereunto duly authorized.
ELITE INFORMATION GROUP, INC.
Date: May 12, 2000 By: /s/ Barry D. Emerson
------------- ----------------------------------
Barry D. Emerson, Vice President,
Treasurer, Chief Financial Officer
12
<PAGE> 1
EXHIBIT 11
ELITE INFORMATION GROUP, INC.
COMPUTATION OF EARNINGS PER SHARE
(In thousands, except per share data)
(Unaudited)
<TABLE>
<CAPTION>
Three months ended
-----------------------
March 31, March 31,
2000 1999
---------- ----------
<S> <C> <C>
Net income from continuing operations $ 437 $ 67
Loss from discontinued operations (49)
--------- ---------
Net income $ 437 $ 18
========= =========
Basic earnings per share:
Weighted average common shares outstanding 8,492 8,261
========= =========
Net income from continuing operations $ 0.05 $ 0.01
Loss from discontinued operations (0.01)
--------- ---------
Net income per common share $ 0.05 $ 0.00
========= =========
Diluted earnings per share:
Weighted average common shares outstanding 8,492 8,261
Addition from assumed exercise of stock options 261 139
--------- ---------
Weighted average common and common equivalent
shares outstanding 8,753 8,400
========= =========
Net income from continuing operations $ 0.05 $ 0.01
Loss from discontinued operations (0.01)
--------- ---------
Net income per common and common equivalent share $ 0.05 $ 0.00
========= =========
</TABLE>
13
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> US DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-2000
<PERIOD-START> JAN-01-2000
<PERIOD-END> MAR-31-2000
<EXCHANGE-RATE> 1
<CASH> 33,582,000
<SECURITIES> 0
<RECEIVABLES> 21,442,000
<ALLOWANCES> (1,853,000)
<INVENTORY> 0
<CURRENT-ASSETS> 57,533,000
<PP&E> 5,363,000
<DEPRECIATION> (2,564,000)
<TOTAL-ASSETS> 64,443,000
<CURRENT-LIABILITIES> 28,171,000
<BONDS> 0
0
0
<COMMON> 94,000
<OTHER-SE> 35,367,000
<TOTAL-LIABILITY-AND-EQUITY> 64,443,000
<SALES> 13,334,000
<TOTAL-REVENUES> 13,334,000
<CGS> 7,723,000
<TOTAL-COSTS> 7,723,000
<OTHER-EXPENSES> 5,254,000
<LOSS-PROVISION> 277,000
<INTEREST-EXPENSE> (445,00)
<INCOME-PRETAX> 802,000
<INCOME-TAX> (365,000)
<INCOME-CONTINUING> 437,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 437,000
<EPS-BASIC> $0.05
<EPS-DILUTED> $0.05
</TABLE>
