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 DECEMBER 31, 1997
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: 0-20724
WATSON WYATT & COMPANY
(Exact name of registrant as specified in its charter)
DELAWARE 53-0181291
(State or other (I.R.S. Employer
jurisdiction of Identification No.)
incorporation or
organization)
6707 DEMOCRACY BOULEVARD
SUITE 800
BETHESDA, MD 20817
(Address of principal executive offices, including zip code)
(301) 581-4600
(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
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of February 10, 1997.
COMMON STOCK, $1.00 PAR VALUE 17,056,899
- ----------------------------- ----------------
Class Number of Shares
<PAGE>
<TABLE>
<CAPTION>
WATSON WYATT & COMPANY
CONSOLIDATED STATEMENTS OF OPERATIONS
(THOUSANDS OF U.S. DOLLARS, EXCEPT PER SHARE AMOUNTS)
Quarters Ended December 31, Six Months Ended December 31,
--------------------------- -----------------------------
1997 1996 1997 1996
---------- ---------- ---------- ----------
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Fees $ 135,588 $ 125,014 $ 269,063 $ 252,511
Costs of providing services:
Salaries and employee benefits 65,460 56,966 129,667 119,630
Occupancy and communications 15,588 21,466 30,807 40,463
Professional and subcontracted services 25,385 22,773 45,108 43,166
Other 7,624 6,381 14,624 12,044
---------- ---------- ---------- ---------
114,057 107,586 220,206 215,303
General and administrative expenses 13,330 10,621 23,708 20,533
Depreciation and amortization 7,000 5,865 13,514 11,226
---------- ---------- ---------- ---------
134,387 124,072 257,428 247,062
Income from operations 1,201 942 11,635 5,449
Other:
Interest income 237 174 486 457
Interest expense (1,017) (492) (1,426) (767)
Loss from affiliates (344) (1,812) (782) (3,117)
---------- ---------- ---------- ---------
Income before income taxes and minority interest 77 (1,188) 9,913 2,022
Provision for (benefit from) income taxes:
Current 1,091 (412) 5,606 1,092
Deferred (134) - - -
---------- ---------- ---------- ---------
957 (412) 5,606 1,092
---------- ---------- ---------- ---------
Income before minority interest (880) (776) 4,307 930
Minority interest in net income
of consolidated subsidiaries (97) (43) (141) (84)
---------- ---------- ---------- ---------
Net income $ (977) $ (819) $ 4,166 $ 846
========== ========== ========== =========
Earnings per share $ (0.06) $ (0.05) $ 0.23 $ 0.05
========== ========== ========== =========
</TABLE>
See accompanying notes
-2-
<PAGE>
<TABLE>
<CAPTION>
WATSON WYATT & COMPANY
CONSOLIDATED BALANCE SHEETS
(THOUSANDS OF U.S. DOLLARS)
December 31, June 30,
1997 1997
---------- ----------
(Unaudited)
Assets
<S> <C> <C>
Cash and cash equivalents $ 8,308 $ 26,257
Receivables from clients:
Billed, net of allowances of $4,748 and $2,525 80,964 67,393
Unbilled 57,328 56,368
---------- ----------
138,292 123,761
Other current assets 9,961 7,287
---------- ----------
Total current assets 156,561 157,305
Investment in affiliates 59,063 52,516
Fixed assets 36,433 37,045
Deferred income taxes 39,025 39,025
Deferred software and development costs 30,101 32,869
Other intangible assets 2,683 2,661
Other assets 8,970 10,357
---------- ----------
$ 332,836 $ 331,778
========== ==========
Liabilities, Redeemable Common Stock, and Permanent Shareholders' Equity
Accounts payable and accrued liabilities $ 91,393 $ 103,415
Note payable and book overdrafts 17,597 408
Income taxes payable 5,110 3,563
Deferred income taxes 28,612 28,612
---------- ----------
Total current liabilities 142,712 135,998
Accrued retirement benefits 88,576 86,697
Deferred rent and accrued lease losses 12,894 14,938
Other noncurrent liabilities 6,870 9,908
Minority interest in subsidiaries 423 351
Redeemable Common Stock - $1 par value:
25,000,000 shares authorized;
17,528,479 and 18,130,429 issued
and outstanding; at redemption value 92,901 96,091
Permanent shareholders' equity:
Adjustment for redemption value
greater than amounts paid in by shareholders (36,248) (37,674)
Retained earnings 26,988 24,633
Cumulative translation gain (loss) (2,280) 836
Commitments and contingencies
---------- ----------
$ 332,836 $ 331,778
========== ==========
</TABLE>
See accompanying notes
-3-
<PAGE>
<TABLE>
<CAPTION>
WATSON WYATT & COMPANY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(THOUSANDS OF U.S. DOLLARS)
Six Months Ended December 31,
-----------------------------
1997 1996
---------- ----------
(Unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net income $ 4,166 $ 846
Adjustments to reconcile net income to net cash
provided by operating activities:
Provision for doubtful receivables from clients 5,872 5,712
Depreciation 7,107 6,563
Amortization of deferred software and development costs
and other intangible assets 5,031 4,662
Loss from affiliates 782 3,117
Minority interest in net income of consolidated subsidiaries 141 84
Other (201) (26)
(Increase) decrease in assets:
Receivables from clients (20,403) (12,493)
Income taxes receivable (145) -
Other current assets (2,529) (2,723)
Other assets 1,088 (1,559)
Increase (decrease) in liabilities:
Accounts payable and accrued liabilities (12,022) (7,966)
Income taxes payable 1,547 (10,845)
Accrued retirement benefits 1,879 4,429
Deferred rent (2,044) 8,058
Other noncurrent liabilities (3,688) 2,107
---------- ----------
Net cash used by operating activities (13,419) (34)
---------- ----------
Cash flows from investing activities:
Purchases of fixed assets (5,791) (6,782)
Investment in software and development costs (1,912) (5,272)
Investment in affiliates (7,325) (6,500)
---------- ----------
Net cash used in investing activities (15,028) (18,554)
---------- ----------
Cash flows from financing activities:
Net borrowings and bank overdrafts 17,189 13,100
Issuances of Redeemable Common Stock 525 260
Repurchases of Redeemable Common Stock (4,100) (8,111)
---------- ----------
Net cash provided by financing activities 13,614 5,249
---------- ----------
Cumulative translation gain (loss) (3,116) 203
---------- ----------
Decrease in cash and cash equivalents (17,949) (13,136)
Cash and cash equivalents at beginning of period 26,257 21,694
---------- ----------
Cash and cash equivalents at end of period $ 8,308 $ 8,558
========== ==========
</TABLE>
See accompanying notes
-4-
<PAGE>
<TABLE>
<CAPTION>
WATSON WYATT & COMPANY
CONSOLIDATED STATEMENTS OF CHANGES IN PERMANENT SHAREHOLDERS' EQUITY
(THOUSANDS OF U.S. DOLLARS)
Excess of Redemption
Cumulative Value Over Amounts
Retained Translation Paid in by
Earnings Gain Shareholders
------------- ------------- -------------
<S> <C> <C> <C>
Balance at June 30, 1997 $ 24,633 $ 836 $ (37,674)
Net income 4,166 - -
Effect of repurchases of 708,203 shares of
common stock (various prices per share) (1,811) - 1,811
Foreign currency translation adjustment - (3,116) -
Adjustment of redemption value for change
in formula book value per share - - (385)
------------- ------------- -------------
Balance at December 31, 1997 (unaudited) $ 26,988 $ (2,280) $ (36,248)
============= ============= =============
</TABLE>
See accompanying notes
-5-
<PAGE>
WATSON WYATT & COMPANY
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. The accompanying unaudited consolidated financial statements of Watson
Wyatt & Company and its subsidiaries, (collectively, "Watson Wyatt" or
"the Company"), are presented in accordance with the rules and regulations
of the Securities and Exchange Commission and do not include all of the
disclosures normally required by generally accepted accounting
principles. In the opinion of management, these statements reflect all
adjustments, consisting only of normal recurring adjustments, which are
necessary for a fair presentation of the consolidated financial statements
for the interim periods. The consolidated financial statements should be
read in conjunction with the audited consolidated financial statements and
notes thereto contained in the Company's Form 10-K for the year ended June
30, 1997.
The results of operations for the six months ended December 31, 1997
are not necessarily indicative of the results that can be expected for the
entire fiscal year ending June 30, 1998. Certain prior year amounts have
been reclassified to conform to the current year presentation.
2. Under the Company's bylaws, the Company is obligated to repurchase its
Redeemable Common Stock. Accordingly, the redemption value of outstanding
shares is classified as Redeemable Common Stock and not as permanent
shareholders' equity. Redeemable Common Stock is equal to the number of
shares outstanding multiplied by the Formula Book Value per share, which
was $5.30 per share at December 31, 1997 and June 30, 1997. Permanent
shareholders' equity includes an adjustment for the difference between the
redemption value of the Redeemable Common Stock and the amounts actually
paid by shareholders for the shares.
3. During the six months ended December 31, 1997, the Company repurchased
708,203 shares of common stock at various prices per share depending upon
the date of redemption. The computation of earnings per share is based
upon the weighted average number of shares of common stock outstanding
during the period. The number of shares used in the computation is
17,679,000 and 17,000,000 for the three months ended December 31, 1997 and
1996, respectively, and 17,831,000 and 17,341,000 for the six months ended
December 31, 1997 and 1996, respectively. The Company has no convertible
debt or stock options outstanding that would dilute earnings per share.
4. The annual sale of common stock to eligible purchasers (as defined in the
Company's bylaws), which in recent years has been announced in December
and completed in March, was deferred until current important issues of
business strategy and financial investments are resolved.
5. Summarized operating results reported by the Company's affiliate,
Wellspring Resources, LLC ("Wellspring"), for the quarter ended December
31, 1997, are an after tax loss of $0.9 million reflecting $15.5 million
in revenue and expenses of $16.4 million. For the six months ended
December 31, 1997, Wellspring reported an after tax loss of $1.4 million
with revenue of $28.7 million and expenses of $30.1 million. The Company
contributed $9.8 million for the six month period to fund Wellspring's
cash operating needs. For the six-month period ended December 31, 1996,
the Company invested $4.0 million in Wellspring. Wellspring's operating
losses and additional cash requirements are expected to continue for the
foreseeable future. The Company and the co-owner of Wellspring, State
Street Bank and Trust ("State Street"), are continuing to fund
-6-
<PAGE>
Wellspring cash requirements while exploring alternative strategies to
address the unexpectedly high levels of investment in Wellspring and the
future operating losses projected by Wellspring.
The Company guarantees certain leases for office premises and equipment for
Wellspring. Minimum rentals under these leases, which are guaranteed
jointly and severally by the Company and State Street, the owners of
Wellspring, are $4.3 million for the remainder of fiscal year 1998 and
aggregate $73.5 million for the remaining lease terms, which expire at
various dates from the present through 2007. In addition, the Company and
State Street guarantee Wellspring's obligation to a customer in the event
of termination without cause. The amount of this guarantee by the Company
at December 31, 1997 was $5.0 million,and declines monthly through the year
2002.
6. During fiscal year 1997, the Company recorded sublease and lease termination
losses of $12.1 million, of which $10.3 million related to the relocation
of the corporate office space. The corporate office relocation to a less
expensive suburban location results in a reduction of occupancy expense
in future years.
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
GENERAL
Watson Wyatt & Company, together with its affiliates and consolidated
subsidiaries, (collectively, "Watson Wyatt" or "the Company"), provides human
resource and employee benefits consulting and administrative/recordkeeping
services. The Company also provides a broad range of services in risk
management and general insurance and investment consulting, and derives fees
from sales of surveys and licensing of software. The Company works with
organizations of all sizes, from the largest multinationals to public
employers and nonprofit institutions.
Founded in 1946, Watson Wyatt is owned almost entirely by its active
employees. The Company is incorporated in Delaware, and its principal
executive offices are located at 6707 Democracy Boulevard, Bethesda, MD
20817. Together with its affiliates, it operates globally as Watson Wyatt
Worldwide.
Watson Wyatt's fiscal year ends June 30. The financial statements contained
in this quarterly report reflect consolidated balance sheets as of the end of
the second quarter of fiscal year 1998 (December 31, 1997) and as of the end
of the prior fiscal year 1997 (June 30, 1997), and consolidated statements of
operations, of cash flows and of changes in permanent shareholders' equity
for the three and six months ended December 31, 1997 and 1996.
RESULTS OF OPERATIONS--SIX MONTHS ENDED DECEMBER 31, 1997 COMPARED TO SIX
MONTHS ENDED DECEMBER 31, 1996.
For the first six months of fiscal year 1998 the Company produced net income
of $4.2 million, an increase of $3.3 million from net income of $0.8 million
for the first six months of fiscal year 1997. Fiscal year 1997 results
include a sublease and lease termination loss of $4.7 million ($10.3 million
before taxes) associated with the relocation of the corporate offices in
Washington, D.C. to a less expensive suburban facility and $0.8 million ($1.8
million before taxes) in other lease losses.
Fees for the first six months of fiscal year 1998 total $269.1 million
compared to $252.5 million for the first six months of fiscal year 1997, an
increase of $16.6 million, or 7%. The Company's North American and Latin
-7-
<PAGE>
American consulting offices as well as the Human Capital and Retirement
practices are experiencing strong revenue growth.
Salaries and employee benefit expenses for the second quarter of fiscal year
1998 were $65.5 million, an increase of $8.5 million, from $57.0 million in
the second quarter of fiscal year 1997. The Company incurred salaries and
employee benefit expenses of $129.7 million in the first six months of fiscal
year 1998, an increase of $10.0 million, or 8%, from $119.6 million the prior
fiscal year. The increase in costs is attributable to normal annual salary
increases effective in October and an increase in the number of associates
from the same period in fiscal year 1997.
Occupancy and communication expenses during the second quarter of fiscal year
1998 totaled $15.6 million, a decrease of $5.9 million, or 27%, from the
second quarter of the prior year. For the first six months of fiscal year
1998, occupancy and communication expenses totaled $30.8 million, a decrease
of $9.7 million, or 24%, from the first six months of the prior year. Fiscal
year 1997 includes the $12.1 million in sublease and lease termination losses
primarily from the relocation of the corporate office to lower cost space in
a suburban location. Excluding these lease losses, occupancy and
communications expenses increased by $2.4 million dollars from last year, due
primarily to facility costs of $1.3 million and other office expenses.
Professional and subcontracted services were $25.4 million during the second
quarter of fiscal year 1998, an increase of $2.6 million over the second
quarter of the prior fiscal year. For the first six months of fiscal year
1998, professional and subcontracted services were $45.1 million, an increase
of $1.9 million, or 4%, over $43.2 million for the first six months of fiscal
year 1997. The increase is primarily due to costs charged to the Company by
Wellspring for servicing the retained outsourcing clients net of decreased
expenses from the consulting offices.
Other costs of providing services were $7.6 million for the second quarter of
fiscal year 1998, up $1.2 million, or 19%, from the second quarter of fiscal
year 1997. For the first six months of fiscal year 1998, other costs of
providing services increased by $2.6 million, or 21%, to $14.6 million from
$12.0 million the prior year. The expense growth includes a general increase
in travel expense of $1.0 million, office promotional expense of $1.1
million, and increased publications expense.
General and administrative ("G&A") expenses for the second quarter of fiscal
year 1998 were $13.3 million, a $2.7 million, or 26%, increase from the
second quarter of fiscal year 1997. For the first six months of fiscal year
1998, G&A expenses were $23.7 million, a $3.2 million increase from $20.5
million the prior fiscal year. The increase in expense is primarily
attributable to strategic costs associated with our business strategy
initiatives and higher corporate advertising and promotional expense.
Depreciation and amortization expense increased $1.1 million in the second
quarter of fiscal year 1998 over the second quarter of fiscal year 1997.
Similarly, for the first six months of fiscal year 1998, depreciation and
amortization increased $2.3 million, or 20%, over the prior year expense of
$11.2 million. The increased expense is primarily due to the amortization of
capitalized software and development costs.
Income before income taxes and minority interest of $9.9 million for the
first six months of fiscal year 1998 resulted in a tax provision of $5.6
million, or an effective tax rate of 57%, compared to 54% in fiscal year
1997. The higher effective tax rate for the six months ended December 31,
1997 is due to a change in the mix of foreign and domestic income.
-8-
<PAGE>
Loss from affiliates was $0.8 million for the six months ended December 31,
1997 compared to $3.1 million for the six months ended December 31, 1996.
The majority of these losses result from the Company's affiliate,
Wellspring. The apparent improvement for the six months ended December 31,
1997 over the same period in 1996 is due to the commencement by Wellspring of
some client services yielding increased operating revenues. However,
Wellspring does not project operating profits in the future as they begin the
amortization of software development costs, and the Company anticipates that
Wellspring will continue to experience significant operating losses for the
foreseeable future. Wellspring is also requiring cash investments in fiscal
1998 at the same levels as fiscal 1997, which exceed the Company's financial
plan.
Wellspring provides services for certain clients ("Retained Clients") under
contract with the Company. The costs of such services also continue to
exceed the Company's financial plan and Wellspring's budgeted amounts.
The Company and State Street continue to fund Wellspring while exploring
alternative strategies to address the unexpectedly high levels of investment
in Wellspring and the projected future operating losses for Wellspring. The
strategic alternatives for Wellspring currently being considered by the
Company and State Street include the possible reduction or cessation of the
Company's involvement with Wellspring. Such alternatives could result in the
write-off of all or part of the Company's investment in Wellspring and the
Retained Clients and the incurrence of significant costs necessary to
downsize the outsourcing business.
LIQUIDITY AND CAPITAL RESOURCES.
The Company relies primarily on funds from operations and short-term
borrowings as its sources of liquidity. The Company believes that it has
access to ample financial resources to finance its growth, meet its
commitments to affiliates as well as support ongoing operations. The
Company's cash and cash equivalents at December 31, 1997 totaled $8.3
million, compared to $26.3 million at June 30, 1997. The Company had
borrowings outstanding under its line of credit of $12.9 million at December
31, 1997 and no borrowings at June 30, 1997.
CASH FROM OPERATIONS. Cash flows from operating activities were $13.4
million less for the six months ended December 31, 1997 compared to the
previous year. Net income was up $3.3 million, offset by increased
investments in accounts receivable of $7.9 million and payment of accounts
payable of $4.1 million. Receivable increases are due to greater consulting
input in 1997. Greater accounts payable payments in 1997 resulted from the
increased bonus payment in 1997. Income tax payments were greater in October
1996 for fiscal 1995 than in October 1997 for fiscal 1996. Deferred rent
decreased as sublease losses accrued in 1996 were paid in 1997. Noncurrent
liabilities decreased due to decreased deferred fee income of $5.1 million.
The Company's ratio of current assets to current liabilities was 1.1 at
December 31, 1997 and 1.2 at June 30, 1997.
CASH FROM INVESTING ACTIVITIES. Investing activity cash outflow was $15.0
million for the six months of fiscal year 1998, versus $18.6 million for the
same period in fiscal year 1997. The decrease in investing activities cash
outflows was due to increased investment, by $0.8 million, in Wellspring to
fund the development effort and operating losses offset by lower investment
in software and development costs by $3.4 million.
-9-
<PAGE>
Anticipated commitments of funds are estimated at $27.7 million for the
remainder of fiscal year 1998, including expected purchases of capital assets
and 50% of the capital requirements of Wellspring. The Company expects
operating cashflows to provide for the Company's cash needs. However, if the
Company proceeds with certain strategic alternatives being considered with
respect to its investment in Wellspring, it may be necessary for the Company
to borrow under its revolving line of credit to meet cash needs.
The Company's revolving credit line matures on January 5, 2001. As of
December 31, 1997, $35.9 million dollars of the credit line was available to
the Company as revolving credit for operating needs, compared to $37.0
million on December 31, 1996.
CASH FROM FINANCING ACTIVITIES. Cash flow provided by financing activities
was $13.6 million for the first six months of fiscal year 1998, versus $5.2
million in the preceding fiscal year. The increase is due primarily to the
higher level of borrowing and bank overdrafts of $4.1 million in fiscal year
1998 and $4.0 million less in stock repurchases.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Watson Wyatt is from time to time a defendant in various lawsuits which arise
in the ordinary course of business. These disputes typically involve claims
relating to employment matters or the rendering of professional services.
The management of the Company does not believe that any such currently
pending or threatened litigation is likely to have a material adverse effect
on the business or financial condition of Watson Wyatt.
ITEM 2. CHANGES IN SECURITIES
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Board Election
At the fifty-first annual meeting of shareholders of the Company, held on
November 20, 1997, the shareholders elected sixteen (16) nominees to the
Board. Proxies representing 14,424,198 shares were received (total shares
outstanding as of the Record Date were 17,704,328) and the results of the
voting were as follows:
-10-
<PAGE>
NOMINEES TO THE BOARD FOR WITHHOLD
Charles A. Clemens 13,811,345 612,854
Paul R. Daoust 13,076,139 1,348,060
Paula A. DeLisle 14,199,641 224,558
David B. Friend 13,701,085 723,114
John J. Gabarro 13,816,518 607,681
John J. Haley 14,144,815 279,384
Gary T. Hallenbeck 12,531,961 1,892,238
Ira T. Kay 14,147,526 276,673
Brian E. Kennedy 14,236,877 187,322
Robert D. Masding 14,213,589 210,610
R. Michael McCullough 14,132,698 291,501
Gail E. McKee 13,467,077 957,122
Paul V. Mee 13,381,099 1,043,100
A.W. Smith, Jr. 13,378,484 1,045,715
John A. Steinbrunner 14,142,998 281,201
A. Grahame Stott 14,007,481 416,718
ITEM 5. OTHER INFORMATION
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
a. Exhibits
None
b. Reports on Form 8-K
None
-11-
<PAGE>
SIGNATURES
Pursuant to the requirements 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.
Watson Wyatt & Company
(Registrant)
/S/ A. W. Smith, Jr. February 10, 1997
- -------------------- -----------------
Name: A. W. Smith, Jr. Date
Title: President and Chief
Executive Officer
/S/ Barbara L. Landes February 10, 1997
- --------------------- -----------------
Name: Barbara L. Landes Date
Title: Vice President, Finance and
Chief Financial Officer
-12-
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> Jun-30-1998
<PERIOD-START> Jul-01-1997
<PERIOD-END> Dec-31-1997
<CASH> 8,308
<SECURITIES> 0
<RECEIVABLES> 143,040
<ALLOWANCES> 4,748
<INVENTORY> 0
<CURRENT-ASSETS> 156,561
<PP&E> 134,985
<DEPRECIATION> 98,552
<TOTAL-ASSETS> 332,836
<CURRENT-LIABILITIES> 142,712
<BONDS> 108,340
0
0
<COMMON> 17,528
<OTHER-SE> 63,833
<TOTAL-LIABILITY-AND-EQUITY> 332,836
<SALES> 0
<TOTAL-REVENUES> 269,063
<CGS> 220,206
<TOTAL-COSTS> 257,428
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,426
<INCOME-PRETAX> 9,913
<INCOME-TAX> 5,606
<INCOME-CONTINUING> 4,307
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 4,166
<EPS-PRIMARY> 0.23
<EPS-DILUTED> 0
</TABLE>
