<PAGE> 1
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 March 31, 1997
[ ] 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: 0-23540
GULF SOUTH MEDICAL SUPPLY, INC.
--------------------------------------------------------
(Exact name of registrant as specified in its charter)
DELAWARE 64-0831411
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification No.)
ONE WOODGREEN PLACE, MADISON, MISSISSIPPI 39110
--------------------------------------------------------
(Address of principal executive offices) (Zip Code)
(601) 856-5900
--------------------------------------------------------
(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 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
--- ---
As of March 31, 1997 there were 16,308,564 shares of common stock
outstanding.
<PAGE> 2
GULF SOUTH MEDICAL SUPPLY, INC.
INDEX
PART I FINANCIAL INFORMATION
PAGE
----
ITEM 1. FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets as of
March 31, 1997 (unaudited) and December 31,
1996 1
Condensed Consolidated Statements of Income
(unaudited) for the three-months ended March
31, 1997 and 1996 2
Condensed Consolidated Statements of Cash
Flows (unaudited) for the three-months ended
March 31, 1997 and 1996 3
Notes to Condensed Consolidated Financial
Statements (unaudited) 4
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND
RESULTS OF OPERATIONS 6
PART II OTHER INFORMATION 11
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
SIGNATURES 12
<PAGE> 3
GULF SOUTH MEDICAL SUPPLY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE DATA)
<TABLE>
<CAPTION>
March 31, December 31,
1997 1996
-------------- --------------
(unaudited)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents ........................... $ 44,380 $ 76,054
Trade accounts receivable,
less allowance for doubtful
accounts of $1,713 in 1997
and $1,651 in 1996 ................................ 48,660 48,404
Inventories ......................................... 26,221 27,189
Prepaid income taxes ................................ -- 1,501
Prepaid expenses and other .......................... 1,911 1,113
Deferred income taxes ............................... 1,485 1,485
-------------- --------------
Total current assets .............................. 122,657 155,746
Property and equipment:
Land ................................................ 567 567
Building ............................................ 1,276 1,270
Equipment ........................................... 3,352 3,127
-------------- --------------
5,195 4,964
Accumulated depreciation ............................ (1,250) (1,092)
-------------- --------------
3,945 3,872
Other assets:
Goodwill ........................................... 35,165 34,824
Deferred income taxes .............................. 1,965 1,965
Other assets........................................ 1,513 1,564
-------------- --------------
38,643 38,353
-------------- --------------
Total assets ........................................ $ 165,245 $ 197,971
============== ==============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable to others ............................. $ -- $ 25,321
Trade accounts payable .............................. 11,713 14,381
Accrued expenses and other current liabilities ...... 5,395 8,970
Current portion of long-term debt ................... -- 5,000
-------------- --------------
Total current liabilities ......................... 17,108 53,672
Stockholders' equity:
Preferred stock, $.01 par value:
Authorized shares -- 1,000,000
Issued and outstanding shares - none
Common stock, $.01 par value:
Authorized shares -- 30,000,000
Issued and outstanding shares -
16,308,564 in 1997 and
16,264,923 in 1996 ................................ 163 163
Paid-in capital ........................................ 115,706 115,679
Retained earnings ...................................... 32,268 28,457
-------------- --------------
Total stockholders' equity ......................... 148,137 144,299
-------------- --------------
Total liabilities and
stockholders' equity .............................. $ 165,245 $ 197,971
============== ==============
</TABLE>
See accompanying notes.
Note: The balance sheet at December 31, 1996 has been derived from the
audited financial statements at that date but does not include all of
the information and footnotes required by generally accepted
accounting principles for complete financial statements.
1
<PAGE> 4
GULF SOUTH MEDICAL SUPPLY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended March 31,
--------------------------------
1997 1996
-------------- --------------
<S> <C> <C>
Net sales ........................................ $ 64,609 $ 40,235
Cost of sales .................................... 49,919 30,647
-------------- --------------
Gross profit ..................................... 14,690 9,588
Selling, general and administrative expenses ..... 8,804 5,159
Intangible amortization expense .................. 294 30
Acquisition and merger expenses .................. -- 512
-------------- --------------
Operating income ................................. 5,592 3,887
Interest expense ................................. (12) (52)
Interest income .................................. 477 --
-------------- --------------
Income before income taxes ....................... 6,057 3,835
Income tax expense ............................... 2,246 1,513
-------------- --------------
Net income ....................................... $ 3,811 $ 2,322
============== ==============
Net income per share (Note 4) .................... $ 0.23 $ 0.17
============== ==============
Weighted average shares outstanding (Note 4) ..... 16,538 14,047
============== ==============
</TABLE>
See accompanying notes.
2
<PAGE> 5
GULF SOUTH MEDICAL SUPPLY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended March 31,
--------------------------------
1997 1996
-------------- --------------
<S> <C> <C>
OPERATING ACTIVITIES
Net cash provided by (used in) operating activities .................. $ 404 $ (2,990)
INVESTING ACTIVITIES
Purchase of building and equipment ................................... (200) (146)
Purchase of operating assets of American Medical Products, Inc. ..... (1,633) --
(Increase) decrease in other assets .................................. 51 (92)
-------------- --------------
Net cash used in investing activities ................................ (1,782) (238)
FINANCING ACTIVITIES
Principal payment on notes payable-others ............................ (25,321) --
Net borrowings (payments) under revolving line of credit ............. (5,000) 1,997
Proceeds from exercise of stock options .............................. 25 171
-------------- --------------
Net cash provided by (used in) financing activities .................. (30,296) 2,168
-------------- --------------
Net decrease in cash and cash equivalents ............................ (31,674) (1,060)
Cash and cash equivalents at beginning of period ..................... 76,054 2,147
-------------- --------------
Cash and cash equivalents at end of period ........................... $ 44,380 $ 1,087
============== ==============
NON-CASH TRANSACTIONS:
Tax benefit of stock options exercised ............................... $ -- $ 105
============== ==============
</TABLE>
See accompanying notes.
3
<PAGE> 6
GULF SOUTH MEDICAL SUPPLY, INC.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS (UNAUDITED)
MARCH 31, 1997
(IN THOUSANDS, EXCEPT SHARE DATA)
1. BASIS OF PRESENTATION
The accompanying unaudited condensed 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, these condensed consolidated
financial statements do not include all of the information and footnotes
required by generally accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for fair presentation have been
included. All intercompany transactions have been eliminated in consolidation.
Operating results for the three-month period ended March 31, 1997 are not
necessarily indicative of the results that may be expected for the year ended
December 31, 1997. For further information, refer to the consolidated financial
statements and footnotes thereto for the year ended December 31, 1996 included
in the Gulf South Medical Supply, Inc.'s Annual Report on Form 10-K.
2. ACQUISITIONS
On March 24, 1997, the Company acquired certain operating assets and
liabilities of American Medical Products, Inc. for $1,633 in a transaction
accounted for using the purchase method of accounting. The purchase price has
been allocated on the basis of fair values of the assets acquired and
liabilities assumed. Accordingly, the results of operations of the Company
include American Medical Products, Inc. from the date acquired.
3. CREDIT FACILITIES AND NOTES PAYABLE
The Company has a $15,000 revolving credit facility which matures September 25,
1998, all of which was available at March 31, 1997. Borrowings bear interest,
at the option of the Company, at prime or at LIBOR plus 1% to 2.5% per annum. A
facility fee of .125% per annum is charged on the unused portion of the
revolving credit facility. Substantially all of the Company's assets would
collateralize any borrowings in excess of $7,500. The revolving credit facility
contains numerous restrictive covenants and financial ratio requirements.
4. NET INCOME PER COMMON SHARE
Net income per common share is computed by dividing net income applicable to
common stock based on the weighted average number of shares outstanding during
the three months ended March 31, 1997 and 1996 (16,538,354 and 14,047,309
shares, respectively). Common equivalent shares
4
<PAGE> 7
relating to the stock options and warrants outstanding during the three months
ended March 31, 1997 and 1996, when dilutive, have been calculated using the
treasury stock method based on the higher of the average or the ending market
value of the common stock during the three month periods ended March 31, 1997
and 1996.
In February 1997, the Financial Accounting Standards Board issued Statement No.
128, Earnings per Share, which is required to be adopted on December 31, 1997.
At that time, the Company will be required to change the method currently used
to compute earnings per share and to restate all prior periods. Under the new
requirements for calculating primary earnings per share, the dilutive effects
of stock options will be excluded. The impact of Statement No. 128 on the
calculation of primary and fully diluted earnings per share for the three
months ended March 31, 1997 and 1996 is not expected to be material.
5
<PAGE> 8
ITEM 2: MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion and analysis of the Company's financial condition and
results of operations should be read in conjunction with the Company's
Condensed Consolidated financial statements included elsewhere herein.
Certain of the statements contained herein are forward-looking statements and
involve risks and uncertainties, and the Company's actual experience may differ
materially from that discussed below. Factors that may cause such a difference
include, but are not limited to, those discussed in "Factors Affecting Future
Performance" as well as future events that have the effect of reducing the
Company's available cash balances, such as unanticipated operating losses or
capital expenditures related to possible future acquisitions.
GENERAL
The Company completed a third public offering on June 12, 1996 pursuant to
which the Company received net proceeds of approximately $91.5 million from the
sale by the Company of 2,223,276 shares of its common stock. The net proceeds
from the offering were used to repay the outstanding balance under the
Company's revolving credit facility ($9.6 million), with the remaining balance
used for, and continuing to be used for, general corporate purposes, including
the possible acquisition of one or more medical supply distributors that serve
complementary markets or supplement the Company's presence in existing markets.
As part of the Company's growth strategy, the Company continually evaluates
potential acquisition candidates. However, the Company presently has no
specific agreements or commitments with respect to any acquisition. Pending
such uses, the net proceeds of the offering are invested in short-term
interest-bearing cash equivalents.
Management of the Company anticipates further downward pressures on gross
margin because of continued price competition influenced primarily by large
chain customers, and continued implementation of the Company's long-term
strategy to expand sales with aggressive pricing. The Company expects that
these pressures on gross margin may be offset to some extent by reducing
selling, general and administrative expenses as a percentage of increased net
sales, and by increasing as a percentage of net sales the sales volume to the
Company's independent and home health customers, which sales have historically
yielded higher gross margins due to the nature of the services involved. To
date, the Company has also offset the decrease in gross margin in part by
participation in volume-based rebate programs offered by vendors.
Notwithstanding these strategies, there can be no assurance that the Company
will be able to offset reductions in gross margin to a significant extent.
Management has determined that certain existing distribution facilities are
non-essential for the Company's distribution activities, and do not meet the
Company's strategic objectives. The Company plans to consolidate such
distribution facilities into its existing larger regional distribution centers.
Management does not anticipate charges related to such distribution facility
closures to be material to the Company's operations or financial position. Such
charges would
6
<PAGE> 9
consist of, among other matters, asset write-offs, relocation and employment
severance costs, and facility lease costs.
The following discussion and analysis compares the results of operations of the
Company for the three months ended March 31, 1997 to the three months ended
March 31, 1996.
RESULTS OF OPERATIONS
Net sales increased by $24.4 million, or 60.6%, to $64.6 million for the three
months ended March 31, 1997 compared to $40.2 million for the same period in
1996. This increase was primarily attributable to the purchase of Gateway
Healthcare Corporation in December 1996 and the purchases of other regional
medical supply distributors subsequent to March 31, 1996, and internal sales
growth through the addition of new customers and increased sales penetration in
existing customer facilities.
Gross profit increased by $5.1 million, or 53.2%, to $14.7 million for the
three months ended March 31, 1997 compared to $9.6 million for the three months
ended March 31, 1996, while gross margin decreased to 22.7% from 23.8% over the
same period. The decrease in gross margin was primarily due to a greater sales
mix of high volume, large chain customers that require more competitive
pricing, offset in part by lower selling and servicing costs associated with
such business, and a continuation of the Company's long-term strategy to
increase sales penetration in existing customer facilities and to expand the
Company's market reach to new customers. Both factors were offset in part by
vendor performance incentives earned by the Company through the achievement of
certain predetermined sales and purchase levels, and the taking of prompt pay
discounts with certain vendors.
Selling, general and administrative expenses increased by $3.9 million, or
75.3%, to $9.1 million for the three months ended March 31, 1997 compared to
$5.2 million for the three months ended March 31, 1996, and as a percentage of
net sales increased to 14.1% from 12.9% over the same period. The increase in
the amount of selling, general and administrative expenses in whole and as a
percentage of net sales, was primarily attributable to salaries, commissions
and other costs associated with increased staffing levels throughout the
Company to support the expansion of the Company's business during the period,
and to costs associated with the operating activities of Gateway Healthcare
Corporation and other regional medical supply distributors purchased subsequent
to March 31, 1996.
The Company incurred acquisition and merger expenses of $512,000 during the
three months ended March 31, 1996 in connection with the acquisition of Bayer
Medical Service Systems, Inc.
Interest expense was $12,000 for the three months ended March 31, 1997,
compared to $52,000 for the same period a year ago. This decrease was a result
of a portion of the net proceeds of the public offering in June 1996 being used
to repay the outstanding balance under the Company's revolving credit facility.
7
<PAGE> 10
Interest income was $477,000 for the three months ended March 31, 1997 compared
to no interest income in the same period a year ago. This increase was
attributable to the net proceeds of the public offering in June 1996, in excess
of the amounts used to pay the Company's outstanding long-term debt, being
invested in short-term interest-bearing cash equivalents.
Income taxes increased by $733,000 to $2.2 million for the three months ended
March 31, 1997 compared to $1.5 million for the same period in 1996. This
increase was attributable to higher taxable income, which was partially offset
by a decrease in the effective tax rate of 37.1% for the three months ended
March 31, 1997, as compared to 39.5% for the same period in 1996. The decrease
in the effective tax rate was primarily due to tax-exempt interest income as a
percentage of pre-tax income being higher in the three months ended March 31,
1997 as compared to the same period in 1996.
LIQUIDITY AND CAPITAL RESOURCES
The Company's principal cash requirements to date have been to fund working
capital in order to support growth of net sales. During the three months ended
March 31, 1997, the Company funded its working capital requirements principally
with cash generated from operations and the sale of equity securities.
The Company's working capital was $105.5 million and its current ratio was 7.2
at March 31, 1997 as compared to working capital of $102.1 million and a
current ratio of 2.9 at December 31, 1996. Included in working capital are cash
and cash equivalents from the Company's public offering in June 1996.
The Company has a revolving credit facility of $15.0 million, all of which was
available at March 31, 1997. Borrowings bear interest, at the option of the
Company, at prime or LIBOR plus an amount ranging from 1% to 2.5% per annum. A
facility fee of .125% per annum is charged on the unused portion of the
revolving credit facility. Substantially all of the Company's assets would
collateralize any borrowings in excess of $7.5 million under the revolving
credit facility, which contains numerous restrictive covenants and financial
ratio requirements.
The Company has consolidated, and plans to consolidate, certain distribution
facilities into its larger regional distribution centers which has resulted,
and may continue to result, in cash expenditures in excess of those required in
the ordinary course of business. See "Factors Affecting Future Performance".
The Company expects that available cash, borrowings available under its
existing revolving credit facility and funds generated from operations will be
sufficient to fund its operations through the first quarter of 1998.
The Company made capital expenditures totaling $200,000 for the three months
ended March 31, 1997, primarily to purchase additional telephone and computer
equipment, and to fund various warehouse improvements.
8
<PAGE> 11
FACTORS AFFECTING FUTURE PERFORMANCE
The Company's future operating results may be affected by various trends and
factors which are beyond the Company's control. These include adverse changes
in general economic conditions and changes in federal and state regulation
affecting the Company's customers. Accordingly, past trends should not be used
to anticipate future results and trends. Further, the Company's prior
performance should not be presumed to be an accurate indicator of future
performance.
The Company faces intense competition from a variety of regional, local and
national distributors. Barriers to entry in the long-term care distribution
industry are relatively low, and the risk of new competitors entering the
market, particularly on a local level, is high. In response to competitive
pressures, the Company has in the past lowered, and may in the future lower,
selling prices in order to maintain or increase market share, which has
resulted, and may in the future result, in lower gross margins. Certain of the
Company's current competitors, including many national distributors, have
substantially greater capital resources, sales and marketing experience, and
distribution capabilities than the Company. Certain of these national
distributors may have cost advantages over the Company due to their ability to
purchase products in large volumes. The Company may experience significant
pricing pressures from these and other competitors which could adversely affect
the Company's operating results.
A key element of the Company's growth strategy is to augment its internal
growth with the acquisition of medical supply distributors, and inventory and
facilities of such distributors, that serve complementary markets or that
supplement the Company's presence in existing markets. Certain of these
businesses may be marginally profitable or unprofitable. In order to achieve
anticipated benefits from these acquisitions, the Company must successfully
integrate the acquired businesses with its existing operations, and no
assurance can be given that the Company will be successful in this regard. In
the past the Company has incurred one-time costs and expenses in connection
with acquisitions and it is likely that similar one-time costs and expenses may
be incurred in connection with future acquisitions, including the write-off of
unsold inventory and unused assets. In addition, attractive acquisitions are
difficult to identify and complete for a number of reasons, including
competition among prospective buyers and the possible need to obtain regulatory
approval. There can be no assurance that the Company will be able to complete
future acquisitions. In order to finance such acquisitions, it may be necessary
for the Company to raise additional funds either through public or private
financings, including bank borrowings. Any financing, if available at all, may
be on terms which are not favorable to the Company. The Company may also issue
shares of its Common Stock to acquire such businesses, which may result in
dilution to the Company's existing stockholders.
The Company depends on a limited number of large customers for a significant
portion of its net sales, including Beverly Enterprises which accounted for
19.6% of net sales for the year ended December 31, 1996. Consolidation among
long-term care providers and the growth of the Company's business with large
chains could increase such dependence. The loss of, or significant declines in
the level of purchases by, one or more of these customers would have a material
adverse effect on the Company's operating results. Although the Company has not
to date experienced any failure to collect accounts receivable from its largest
customers, an adverse
9
<PAGE> 12
change in the financial condition of any of these customers, including as a
result of a change in governmental or private reimbursement programs, could
have a material adverse effect upon the Company's operating results. In
addition, the expansion of the Company's business with large chains has in the
past resulted in competitive pricing pressures and lower operating margins and
such pressure on margins may continue in the future.
A key element of the Company's growth strategy is to increase sales to existing
and new customers, including large chains and independent operators, by adding
one or more new strategic distribution centers or expanding existing
distribution centers and by hiring additional direct sales or other personnel
and through national account sales efforts. Such efforts will result in
increased operating expenses. There can be no assurance that the establishment
of new strategic distribution centers, the expansion of existing distribution
centers, the addition of new sales or other personnel or national account sales
efforts will result in additional revenues or operating income.
As a result of changes occurring in the long-term care market, both the nature
of the Company's customer base as well as products and services required by its
customers are changing. The failure of the Company's management to effectively
respond to and manage changing business conditions, including changes in
customer requirements and changes to the Company's overall product mix, could
have an adverse effect on the Company's operating results.
Because the Company believes that its success to date is dependent in part upon
its ability to provide prompt, accurate and complete service to its customers
on a price-competitive basis, any disruption in its day-to-day operations or
material increases in its cost of procuring and delivering products could have
an adverse effect on its operating results. In order to provide prompt and
complete service to its customers, the Company maintains a significant
investment in product inventory. Although the Company closely monitors its
inventory exposure through a variety of inventory control procedures and
policies, there can be no assurance that such procedures and policies will
continue to be effective or that unforeseen product developments or price
changes will not adversely affect the Company's operating results.
10
<PAGE> 13
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) The following exhibits are included herein:
(11) Statement re: Computation of Earnings per Share
(27) Financial Data Schedule
(b) Amended Current Report on Form 8-K, dated December 26, 1996, as
amended on March 21, 1997, amending and restating Item 7 to
report the financial statements of Gateway Healthcare
Corporation and the pro forma combined financial statements of
the Company giving effect to the acquisition of all the
outstanding capital stock of Gateway Healthcare Corporation.
11
<PAGE> 14
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.
GULF SOUTH MEDICAL SUPPLY, INC.
Date: May 14, 1997 By: /s/ Guy W. Edwards
-----------------------------------
Guy W. Edwards
Senior Vice President and
Chief Financial Officer
12
<PAGE> 15
INDEX TO EXHIBITS
EXHIBIT NO.
11 Statement re: Computation of Earnings per Share
27 Financial Data Schedule
<PAGE> 1
EXHIBIT 11
GULF SOUTH MEDICAL SUPPLY, INC.
EXHIBIT (11) - STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE
THREE MONTHS ENDED MARCH 31, 1997 AND 1996
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
1997 1996
------------ ------------
<S> <C> <C>
Average common shares outstanding .............................................. 16,286 13,832
Net effect of common stock options - based on the treasury method using
assumed fair market value equal to the higher of the average or the
ending market value of the common stock during the three months ended
March 31, 1997 and 1996 .................................................... 252 215
------------ ------------
Weighted average number of common shares ....................................... 16,538 14,047
============ ============
Net income ..................................................................... $ 3,811 $ 2,322
============ ============
Net income per share ........................................................... $ 0.23 $ 0.17
============ ============
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S FINANCIAL STATEMENTS FOR THE THREE-MONTH PERIODS ENDED MARCH 31, 1997
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> MAR-31-1997
<CASH> 44,380
<SECURITIES> 0
<RECEIVABLES> 50,373
<ALLOWANCES> 1,713
<INVENTORY> 26,221
<CURRENT-ASSETS> 122,657
<PP&E> 5,195
<DEPRECIATION> 1,250
<TOTAL-ASSETS> 165,245
<CURRENT-LIABILITIES> 17,108
<BONDS> 0
0
0
<COMMON> 163
<OTHER-SE> 147,974
<TOTAL-LIABILITY-AND-EQUITY> 165,245
<SALES> 64,609
<TOTAL-REVENUES> 64,609
<CGS> 49,919
<TOTAL-COSTS> 49,919
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 12
<INCOME-PRETAX> 6,057
<INCOME-TAX> 2,246
<INCOME-CONTINUING> 3,811
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,811
<EPS-PRIMARY> .23
<EPS-DILUTED> .23
</TABLE>
