<PAGE>
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, 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 0-7416
SHARED MEDICAL SYSTEMS CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 23-1704148
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
51 Valley Stream Parkway
Malvern, Pennsylvania 19355
(Address of principal executive offices) (Zip Code)
(610) 219-6300
(Registrant's telephone number, including area code)
Not Applicable
(Former name, former address, and former fiscal year, if changed since last
report)
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
----- ------
On April 30, 1997, there were 24,875,628 shares of Common Stock outstanding.
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements.
SHARED MEDICAL SYSTEMS CORPORATION
CONSOLIDATED BALANCE SHEET
------------------------------------
(Amounts in thousands)
<TABLE>
<CAPTION>
March 31 December 31
1997 1996*
---------- -----------
(unaudited)
<S> <C> <C>
ASSETS
Current Assets:
Cash and short-term investments................... $ 10,838 $ 40,286
Accounts receivable, net.......................... 226,798 212,061
Prepaid expenses and other current assets......... 33,758 24,980
---------- -----------
Total Current Assets............................ 271,394 277,327
Property and Equipment, net........................ 98,174 102,532
Computer Software, net............................. 52,895 51,331
Other Assets....................................... 71,839 76,288
---------- -----------
$494,302 $507,478
========== ===========
LIABILITIES AND STOCKHOLDERS' INVESTMENT
Current Liabilities:
Notes payable..................................... $ 23,319 $ 21,941
Current portion of long-term debt and
capital leases................................... 2,704 4,144
Dividends payable................................. 5,221 4,944
Accounts payable.................................. 21,591 27,042
Accrued expenses.................................. 43,144 56,323
Current deferred revenues......................... 35,336 42,422
Accrued and current deferred income taxes......... 19,715 14,862
---------- -----------
Total Current Liabilities....................... 151,030 171,678
---------- -----------
Deferred Revenues.................................. 9,175 9,048
---------- -----------
Long-Term Debt and Capital Leases.................. 14,342 15,361
---------- -----------
Deferred Income Taxes.............................. 27,054 26,054
---------- -----------
Commitments
Stockholders' Investment:
Preferred stock, par value $.10;
authorized 1,000,000 shares; none issued........ - -
Common stock, par value $.01; authorized
60,000,000 shares; 28,922,704 shares issued in
1997 and 28,835,333 in 1996..................... 289 288
Paid-in capital.................................. 51,125 48,721
Retained earnings................................ 304,790 295,915
Common stock in treasury, at cost, 4,060,330
shares in 1997 and 4,035,101 in 1996............ (55,789) (55,782)
Cumulative translation adjustment................ (7,714) (3,805)
---------- -----------
Total Stockholders' Investment.................. 292,701 285,337
---------- -----------
$494,302 $507,478
========== ===========
</TABLE>
* Restated to reflect the acquisition of American Healthware Systems, Inc. in
February 1997, which was accounted for as a pooling of interests.
The accompanying notes are an integral part of this statement.
2
<PAGE>
SHARED MEDICAL SYSTEMS CORPORATION
CONSOLIDATED STATEMENT OF INCOME
-----------------------------------
(Amounts in thousands, except for
per share amounts)
<TABLE>
<CAPTION>
Three Months Ended
March 31
--------------------------
1997 1996*
---------- ----------
(unaudited)
<S> <C> <C>
Revenues:
Service and system fees.................... $183,980 $162,224
Hardware sales............................. 25,899 10,870
---------- ----------
209,879 173,094
---------- ----------
Cost and Expenses:
Operating and development.................. 87,920 76,983
Marketing and installation................. 59,084 53,258
General and administrative................. 17,109 14,703
Cost of hardware sales..................... 22,345 9,444
Interest................................... 685 804
---------- ----------
187,143 155,192
---------- ----------
Income Before Income Taxes.................. 22,736 17,902
Provision for Income Taxes.................. 8,640 6,734
---------- ----------
Net Income.................................. $ 14,096 $ 11,168
========== ==========
Net Income Per Common Share................. $.56 $.44
========== ==========
Number of shares used to compute per share
amounts.................................... 25,368 25,340
========== ==========
Dividends Declared Per Common Share......... $.21 $.21
========== ==========
</TABLE>
* Restated to reflect the acquisition of American Healthware Systems, Inc. in
February 1997, which was accounted for as a pooling of interests.
The accompanying notes are an integral part of this statement.
3
<PAGE>
SHARED MEDICAL SYSTEMS CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
------------------------------------
(Amounts in thousands)
<TABLE>
<CAPTION>
Three Months Ended
March 31
-----------------------
1997 1996*
--------- ----------
(unaudited)
<S> <C> <C>
Cash Flows from Operating Activities:
Net Income...................................... $ 14,096 $ 11,168
Adjustments to reconcile net income to net
cash used for operating activities -
Depreciation and amortization................ 9,527 9,369
Asset (increase) decrease -
Accounts receivable........................ (11,269) (5,740)
Prepaid expenses and other current assets.. (8,777) (1,852)
Other assets............................... 98 1,387
Liability increase (decrease) -
Accounts payable and accrued expenses...... (18,630) (25,049)
Accrued and current deferred income taxes.. 4,853 851
Deferred revenues.......................... (6,959) (4,599)
Deferred income taxes...................... 1,000 532
Other........................................ (1,991) (452)
--------- ----------
Net cash used for operating activities..... (18,052) (14,385)
--------- ----------
Cash Flows from Investing Activities:
Property and equipment additions................ (3,498) (4,111)
Investment in computer software................. (4,269) (3,493)
Dispositions of equipment....................... - 205
--------- ----------
Net cash used for investing activities..... (7,767) (7,399)
--------- ----------
Cash Flows from Financing Activities:
Dividends paid.................................. (4,944) (4,885)
Exercise of stock options....................... 2,404 4,195
Increase in notes payable....................... 1,378 16,931
Payments of long-term debt and capital
lease obligations.............................. (2,460) (1,191)
Change in treasury stock........................ (7) (313)
--------- ----------
Net cash (used for) provided by
financing activities...................... (3,629) 14,737
--------- ----------
Net Decrease in Cash and Short-Term Investments.. (29,448) (7,047)
Cash and Short-Term Investments, Beginning
of Period....................................... 40,286 25,473
--------- ----------
Cash and Short-Term Investments, End of Period... $ 10,838 $ 18,426
========= ==========
</TABLE>
* Restated to reflect the acquisition of American Healthware Systems, Inc. in
February 1997, which was accounted for as a pooling of interests.
The accompanying notes are an integral part of this statement.
4
<PAGE>
SHARED MEDICAL SYSTEMS CORPORATION
----------------------------------
Notes to Consolidated Financial Statements - March 31, 1997 (unaudited):
1. Basis of Presentation:
The information furnished in this Form 10-Q reflects all normal and
recurring adjustments which are, in the opinion of management, necessary for
a fair presentation of the financial statements contained herein.
Prior period financial statements have been restated to reflect the
Company's business combination with American Healthware Systems, Inc. (AHS),
which was completed on February 28, 1997 and accounted for as a pooling of
interests.
2. Business Combination:
On February 28, 1997, the Company completed a merger with AHS, a provider of
financial information systems and facilities management services to health
organizations in New York State. Under the terms of the merger agreement,
the Company issued 1,255,325 shares of the Company's common stock in
exchange for all outstanding shares of AHS. This transaction was accounted
for as a pooling of interests. AHS is currently operating as a wholly owned
subsidiary of the Company.
Separate operating results for Shared Medical Systems Corporation (SMS) and
AHS for the three months ended March 31, 1996 are as follows (amounts in
thousands):
<TABLE>
<CAPTION>
Three Months Ended
March 31, 1996
--------------------
(unaudited)
<S> <C>
Revenues:
SMS................. $170,352
AHS................. 2,742
------------------
$173,094
==================
Net Income:
SMS................. $10,803
AHS................. 365
------------------
$11,168
==================
</TABLE>
3. Accounts Receivable:
At March 31, 1997 and December 31, 1996, the Company's trade accounts
receivable were reduced by allowances for doubtful accounts of $8,476,000
and $8,094,000, respectively.
4. Property and Equipment:
The major classes of property and equipment at March 31, 1997 and
December 31, 1996 were as follows (amounts in thousands):
<TABLE>
<CAPTION>
March 31 December 31
1997 1996
-------- -----------
(unaudited)
<S> <C> <C>
Land and land improvements...... $ 11,603 $ 11,630
Buildings....................... 61,982 61,993
Equipment....................... 182,245 181,786
-------- -----------
255,830 255,409
Less accumulated depreciation
and amortization.............. 157,656 152,877
-------- -----------
$ 98,174 $102,532
======== ===========
</TABLE>
5
<PAGE>
SHARED MEDICAL SYSTEMS CORPORATION
----------------------------------
5. Computer Software:
The accumulated amortization for capitalized internally produced computer
software and purchased software at March 31, 1997 and December 31, 1996 was
$58,253,000 and $55,016,000, respectively.
6. Net Income Per Common Share:
In February 1997, the Financial Accounting Standards Board issued Statement
128 (FAS 128), Earnings Per Share (EPS). This statement is effective for
both interim and annual financial statements for periods ending after
December 15, 1997. FAS 128 replaces primary and fully diluted EPS as
required by Accounting Principles Opinion No. 15 (APB 15) with basic and
diluted EPS, respectively. Under the terms of this statement, basic EPS is
calculated using the weighted average shares of common stock outstanding
during the applicable period, and diluted EPS is calculated using the
weighted average shares of common stock outstanding during the applicable
period and the effects of any potentially dilutive securities such as stock
options. The Company expects that basic EPS will be approximately 2-3%
greater than EPS as previously reported and that diluted EPS will be equal
to EPS as previously reported by the Company under APB 15.
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Material Changes in Financial Condition
- ---------------------------------------
The Company's financial condition has remained strong throughout the three
months ended March 31, 1997. Management is not aware of any potential material
impairments to, or material changes in, the Company's current financial
position.
The most significant requirements for funds now anticipated are for purchases of
equipment and payment of cash dividends. The Company plans to fund anticipated
expenditures primarily through internally generated funds supplemented from time
to time by bank borrowings.
At March 31, 1997, the Company had lines of credit with banks of approximately
$75,876,000, generally at their prime interest rates. At March 31, 1997,
approximately $52,557,000 of these lines of credit were unused.
Material Changes in Results of Operations
- -----------------------------------------
Three Months Ended March 31, 1997 Compared to the Three Months Ended
March 31, 1996.
Revenues
--------
Service and system fees revenues were $183,980,000, an increase of 13.4%
compared to the first quarter of 1996. This increase was primarily due to
higher levels of professional services and system fees. The higher level
of professional services was generally attributable to facilities
management, system installations and support, and consulting fees. The
increase in system fees was due to the installation of systems to new and
existing customers, and the sale of add-on systems during the current
quarter.
6
<PAGE>
SHARED MEDICAL SYSTEMS CORPORATION
----------------------------------
Hardware sales revenues increased to $25,899,000 for the first quarter of
1997 from $10,870,000 in the first quarter of 1996, primarily due to the
installation of IBM mainframe systems to new and existing customers that
process the Company's INVISION product at their site.
Cost and Expenses
-----------------
Operating and development expenses increased to 47.8% of service and system
fees revenues in the first quarter of 1997 from 47.5% for the first quarter
1996. This change was primarily due to increased personnel and related
costs to support the higher levels of professional services provided to
customers.
Marketing and installation expenses decreased to 32.1% of service and
system fees revenues in the first quarter of 1997 from 32.8% in the first
quarter of 1996, primarily due to a slower rate of growth for personnel and
related costs as compared to the growth in service and system fees
revenues, partially offset by increased costs for certain customer-related
expenses caused by higher levels of system installations provided to
customers.
General and administrative expenses, as a percentage of service and systems
fees revenues, increased to 9.3% in the first quarter of 1997 from 9.1% in
the first quarter of 1996. This change was primarily attributable to costs
associated with the Company's business combination with American Healthware
Systems, Inc., partially offset by a slower rate of growth for personnel
and related costs to support the business when compared to the growth in
service and system fees revenues.
Cost of hardware sales decreased to 86.3% of hardware sales revenues in the
first quarter of 1997 from 86.9% in the first quarter of 1996. This change
was primarily due to the different product mixes of systems installed in
each quarter.
Interest expense was $685,000 in the quarter ended March 31, 1997 compared
to $804,000 in the same period in 1996. This change was generally
attributable to a lower level of average outstanding borrowings during the
current period.
Provision for Income Taxes
--------------------------
Income taxes increased $1,906,000 in the quarter ended March 31, 1997 when
compared to the same period in 1996. This change was primarily due to an
increase of $4,834,000 in income before income taxes. The Company's
effective tax rate for federal, state and foreign income taxes was 38.0% in
the first quarter of 1997 and 37.6% in the first quarter of 1996. The
increase in the effective tax rate was primarily due to the change in the
tax status of AHS from an "S" Corporation, which is not subject to federal
income taxes, to a "C" Corporation upon its merger with the Company.
Net Income
----------
Net income was $14,096,000 in the quarter ended March 31, 1997 compared to
$11,168,000 in the quarter ended March 31, 1996 for the reasons discussed
above.
7
<PAGE>
SHARED MEDICAL SYSTEMS CORPORATION
----------------------------------
PART II - OTHER INFORMATION
Item 2. Changes in Securities
On February 28, 1997 the Company issued 1,255,325 shares of its Common Stock to
the two former shareholders of American Healthware Systems, Inc. (AHS) in
exchange for all of the outstanding shares of AHS, in a transaction exempt under
Section 4(2) and Regulation D of the Securities Act of 1933, as amended. On
March 20, 1997 the Company filed a registration statement on Form S-3
registering for resale the shares of its Common Stock issued in connection with
the business combination with AHS. Such registration statement was declared
effective by the Securities and Exchange Commission on April 10, 1997. A post-
effective amendment to the registration statement was filed April 30, 1997 and
was declared effective on May 7, 1997.
Item 6. Exhibits and Reports on Form 8-K.
(a) The following exhibits are included in this report:
No. Description
---- -----------------------------------------------------------
(27) Financial Data Schedules:
For the Three Months Ended March 31, 1997
Restated for the Year Ended December 31, 1996
Restated for the Nine Months Ended September 30, 1996
Restated for the Six Months Ended June 30, 1996
Restated for the Three Months Ended March 31, 1996
Restated for the Year Ended December 31, 1995
Restated for the Nine Months Ended September 30, 1995
Restated for the Six Months Ended June 30, 1995
Restated for the Three Months Ended March 31, 1995
Restated for the Year Ended December 31, 1994
(b) No reports on Form 8-K were filed during the three-month
period ended March 31, 1997.
8
<PAGE>
SHARED MEDICAL SYSTEMS CORPORATION
----------------------------------
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.
SHARED MEDICAL SYSTEMS CORPORATION
----------------------------------
Registrant
May 15, 1997 /S/Terrence W. Kyle
- ------------ -------------------------------------------
Date Terrence W. Kyle
Senior Vice President, Treasurer,
and Assistant Secretary,
Principal Financial Officer and
Duly Authorized Officer
9
<PAGE>
SHARED MEDICAL SYSTEMS CORPORATION
----------------------------------
Exhibit Index
No. Description
--- ------------------------------------------------------------
(27) Financial Data Schedules:
For the Three Months Ended March 31, 1997
Restated for the Year Ended December 31, 1996
Restated for the Nine Months Ended September 30, 1996
Restated for the Six Months Ended June 30, 1996
Restated for the Three Months Ended March 31, 1996
Restated for the Year Ended December 31, 1995
Restated for the Nine Months Ended September 30, 1995
Restated for the Six Months Ended June 30, 1995
Restated for the Three Months Ended March 31, 1995
Restated for the Year Ended December 31, 1994
10
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<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> 10,838
<SECURITIES> 0
<RECEIVABLES> 235,274
<ALLOWANCES> 8,476
<INVENTORY> 0
<CURRENT-ASSETS> 271,394
<PP&E> 255,830
<DEPRECIATION> 157,656
<TOTAL-ASSETS> 494,302
<CURRENT-LIABILITIES> 151,030
<BONDS> 14,342
0
0
<COMMON> 289
<OTHER-SE> 292,412
<TOTAL-LIABILITY-AND-EQUITY> 494,302
<SALES> 25,899
<TOTAL-REVENUES> 209,879
<CGS> 22,345
<TOTAL-COSTS> 147,004
<OTHER-EXPENSES> 17,109
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 685
<INCOME-PRETAX> 22,736
<INCOME-TAX> 8,640
<INCOME-CONTINUING> 14,096
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 14,096
<EPS-PRIMARY> .56
<EPS-DILUTED> .56
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 40,286
<SECURITIES> 0
<RECEIVABLES> 220,155
<ALLOWANCES> 8,094
<INVENTORY> 0
<CURRENT-ASSETS> 277,327
<PP&E> 255,409
<DEPRECIATION> 152,877
<TOTAL-ASSETS> 507,478
<CURRENT-LIABILITIES> 171,678
<BONDS> 15,361
0
0
<COMMON> 288
<OTHER-SE> 285,049
<TOTAL-LIABILITY-AND-EQUITY> 507,478
<SALES> 80,695
<TOTAL-REVENUES> 779,074
<CGS> 68,493
<TOTAL-COSTS> 566,472
<OTHER-EXPENSES> 62,198
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,589
<INCOME-PRETAX> 78,322
<INCOME-TAX> 29,322
<INCOME-CONTINUING> 49,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 49,000
<EPS-PRIMARY> 1.93
<EPS-DILUTED> 1.93
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 20,852
<SECURITIES> 0
<RECEIVABLES> 203,918
<ALLOWANCES> 7,111
<INVENTORY> 0
<CURRENT-ASSETS> 245,122
<PP&E> 249,136
<DEPRECIATION> 147,980
<TOTAL-ASSETS> 470,472
<CURRENT-LIABILITIES> 141,946
<BONDS> 15,919
0
0
<COMMON> 287
<OTHER-SE> 277,599
<TOTAL-LIABILITY-AND-EQUITY> 470,472
<SALES> 51,590
<TOTAL-REVENUES> 556,456
<CGS> 43,922
<TOTAL-COSTS> 407,899
<OTHER-EXPENSES> 45,871
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,667
<INCOME-PRETAX> 56,097
<INCOME-TAX> 21,026
<INCOME-CONTINUING> 35,071
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 35,071
<EPS-PRIMARY> 1.38
<EPS-DILUTED> 1.38
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> JUN-30-1996
<CASH> 17,727
<SECURITIES> 0
<RECEIVABLES> 201,403
<ALLOWANCES> 6,171
<INVENTORY> 0
<CURRENT-ASSETS> 238,442
<PP&E> 250,525
<DEPRECIATION> 149,498
<TOTAL-ASSETS> 454,985
<CURRENT-LIABILITIES> 134,927
<BONDS> 16,616
0
0
<COMMON> 287
<OTHER-SE> 268,977
<TOTAL-LIABILITY-AND-EQUITY> 454,985
<SALES> 37,292
<TOTAL-REVENUES> 366,816
<CGS> 32,095
<TOTAL-COSTS> 266,081
<OTHER-EXPENSES> 30,102
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,711
<INCOME-PRETAX> 36,827
<INCOME-TAX> 13,830
<INCOME-CONTINUING> 22,997
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 22,997
<EPS-PRIMARY> .91
<EPS-DILUTED> .91
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 18,426
<SECURITIES> 0
<RECEIVABLES> 188,521
<ALLOWANCES> 6,095
<INVENTORY> 0
<CURRENT-ASSETS> 228,713
<PP&E> 243,024
<DEPRECIATION> 144,771
<TOTAL-ASSETS> 439,258
<CURRENT-LIABILITIES> 124,581
<BONDS> 17,664
0
0
<COMMON> 286
<OTHER-SE> 262,609
<TOTAL-LIABILITY-AND-EQUITY> 439,258
<SALES> 10,870
<TOTAL-REVENUES> 173,094
<CGS> 9,444
<TOTAL-COSTS> 130,241
<OTHER-EXPENSES> 14,703
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 804
<INCOME-PRETAX> 17,902
<INCOME-TAX> 6,734
<INCOME-CONTINUING> 11,168
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 11,168
<EPS-PRIMARY> .44
<EPS-DILUTED> .44
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 25,473
<SECURITIES> 0
<RECEIVABLES> 180,480
<ALLOWANCES> 6,347
<INVENTORY> 0
<CURRENT-ASSETS> 225,614
<PP&E> 243,651
<DEPRECIATION> 142,487
<TOTAL-ASSETS> 442,518
<CURRENT-LIABILITIES> 134,818
<BONDS> 17,939
0
0
<COMMON> 285
<OTHER-SE> 252,982
<TOTAL-LIABILITY-AND-EQUITY> 442,518
<SALES> 58,132
<TOTAL-REVENUES> 662,111
<CGS> 47,872
<TOTAL-COSTS> 489,518
<OTHER-EXPENSES> 55,232
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,043
<INCOME-PRETAX> 66,446
<INCOME-TAX> 25,437
<INCOME-CONTINUING> 41,009
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 41,009
<EPS-PRIMARY> 1.64
<EPS-DILUTED> 1.64
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 23,988
<SECURITIES> 0
<RECEIVABLES> 172,197
<ALLOWANCES> 6,315
<INVENTORY> 0
<CURRENT-ASSETS> 215,313
<PP&E> 243,090
<DEPRECIATION> 140,456
<TOTAL-ASSETS> 433,617
<CURRENT-LIABILITIES> 146,427
<BONDS> 4,453
0
0
<COMMON> 284
<OTHER-SE> 245,540
<TOTAL-LIABILITY-AND-EQUITY> 433,617
<SALES> 41,148
<TOTAL-REVENUES> 478,234
<CGS> 33,887
<TOTAL-COSTS> 352,671
<OTHER-EXPENSES> 40,629
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 2,067
<INCOME-PRETAX> 48,980
<INCOME-TAX> 18,714
<INCOME-CONTINUING> 30,266
<DISCONTINUED> 0
<EXTRAORDINARY> 0
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