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, 1996
OR
__ Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
Commission File Number: 0-24986
EMCARE HOLDINGS INC.
(Exact name of registrant as specified in its charter)
Delaware 13-3645287
(State or other jurisdiction of (I.R.S. Employer Identification
incorporation or organization) Number)
1717 Main Street, Suite 5200
Dallas, Texas 75201
(Address of registrant's principal executive offices)
Telephone Number (214) 712-2000
(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 April 30, 1996, there were 8,122,940 shares of the Registrant's
Common Stock, par value $.01 per share, outstanding.
See Exhibit Index on Page 14
Page 1 of 15
<PAGE>
EMCARE HOLDINGS INC.
INDEX
PART I. Financial Information Page No.
--------
Item 1. Financial Statements
Consolidated Statements of Income-
Quarters Ended March 31, 1996 and
1995 3
Consolidated Balance Sheets-
March 31, 1996 and December 31, 1995 4
Consolidated Statements of Cash Flows-
Quarters Ended March 31, 1996 and
1995 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
PART II. Other Information
Item 1. Legal Proceedings 12
Item 6. Exhibits 12
Signature 13
2
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
EMCARE HOLDINGS INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share amounts)
(Unaudited)
Three Months Ended
March 31,
----------------------
1996 1995
-------- ---------
Net revenue .................................... $ 44,235 $ 34,540
Professional expenses .......................... 35,315 27,154
------ ------
Gross profit ................................... 8,920 7,386
Expenses:
General and administrative .................. 4,245 3,927
Depreciation and amortization ............... 809 405
--- ---
5,054 4,332
----- -----
Income from operations ......................... 3,866 3,054
Interest expense ............................... (172) (146)
Interest income ................................ 72 344
-- ---
Income before income taxes ..................... 3,766 3,252
Income tax expense ............................. 1,431 1,236
----- -----
Net income ..................................... $ 2,335 $ 2,016
======== ========
Net income per share ........................... $ 0.28 $ 0.25
======== ========
Weighted average shares outstanding ............ 8,433 7,911
===== =====
See accompanying notes.
3
<PAGE>
EMCARE HOLDINGS INC.
CONSOLIDATED BALANCE SHEETS
(Dollars in thousands)
March 31, December 31,
1996 1995
--------- -----------
(Unaudited)
ASSETS
Current Assets:
Cash and cash equivalents ...................... $ 7,103 $ 7,781
Marketable securities .......................... -- 1,507
Accounts receivable, net ....................... 31,049 29,813
Prepaid insurance .............................. 5,008 166
Other current assets ........................... 1,151 600
------- -------
Total current assets ............................... 44,311 39,867
Furniture and office equipment, net ................ 3,681 3,384
Deferred tax asset ................................. 983 949
Other assets:
Goodwill ....................................... 29,606 29,602
Contracts ...................................... 7,064 7,064
Non-competition agreements ..................... 4,141 4,141
Deferred financing costs and other ............. 703 493
------- -------
41,514 41,300
Less accumulated amortization .................. 5,293 4,757
------- -------
36,221 36,543
------- -------
Total assets ....................................... $85,196 $80,743
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Accounts payable .................................... $ 248 $ 254
Accrued expenses:
Physician fees .................................... 8,584 8,520
Accrued salaries and other compensation ........... 2,193 3,280
Collection fees ................................... 1,222 1,637
Accrued federal and state income taxes ............ 1,404 1,781
Other accrued liabilities ......................... 2,129 2,242
Deferred tax liability .............................. -- 249
Short-term debt and current portion of
long-term obligations .............................. 5,820 2,956
----- -----
Total current liabilities ............................... 21,600 20,919
Long-term obligations, less current portion ............. 2,334 2,500
Professional liability insurance ........................ 4,644 4,594
Commitments and contingencies
Stockholders' equity:
Preferred stock, $0.01 par value:
Authorized shares - 5,000,000
No shares issued or outstanding .................... -- --
Common stock, $0.01 par value:
Authorized shares - 25,000,000
Issued and outstanding shares - 8,117,000 at
March 31, 1996 and 8,011,000 at December 31, 1995 .. 81 80
Additional paid-in capital ........................... 42,577 41,025
Retained earnings .................................... 13,960 11,625
------- -------
Total stockholders' equity .............................. 56,618 52,730
------- -------
Total liabilities and stockholders' equity .............. $85,196 $80,743
======= =======
See accompanying notes.
4
<PAGE>
EMCARE HOLDINGS INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in thousands)
(Unaudited)
Three Months Ended
March 31,
--------------------
1996 1995
--------- --------
Operating Activities
- - --------------------
Net income ............................................. $ 2,335 $ 2,016
Adjustments to reconcile net income to
net cash used in operating activities:
Deferred income taxes .............................. (283) (1,182)
Non-cash interest expense .......................... 92 81
Amortization ....................................... 550 304
Depreciation ....................................... 259 101
Changes in operating assets and liabilities,
net of effects of acquisitions:
Accounts receivable .............................. (1,236) (1,675)
Accounts payable and accrued expenses ............ (1,317) 2,411
Professional liability insurance ................. 50 125
Prepaid insurance and other assets ............... (5,393) (4,018)
-------- --------
Net cash used in operating activities .................. (4,943) (1,837)
Investing Activities
- - --------------------
Sales of marketable securities ......................... 1,507 1,130
Purchases of furniture and office equipment ............ (556) (270)
Payments for acquisitions, net of cash acquired ........ -- (5,068)
Other .................................................. (227) (17)
-------- --------
Net cash provided by (used in) investing activities .... 724 (4,225)
Financing Activities
- - --------------------
Proceeds from borrowings ............................... 4,000 4,321
Payments on short-term borrowings and long-term
obligations ........................................... (1,394) (2,565)
Proceeds from exercise of stock options ................ 935 11
-------- --------
Net cash provided by financing activities .............. 3,541 1,767
-------- --------
Net decrease in cash and cash equivalents .............. (678) (4,295)
Cash and cash equivalents at beginning of period ....... 7,781 13,558
-------- --------
Cash and cash equivalents at end of period ............. $ 7,103 $ 9,263
======== ========
Supplemental Disclosures
Cash paid for:
Interest ........................................... $ 69 $ 177
======== ========
Income taxes ....................................... $ 1,520 $ 13
======== ========
See accompanying notes.
5
<PAGE>
EMCARE HOLDINGS INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
March 31, 1996
1. Basis of Presentation
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, they 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 a fair presentation have
been included. Operating results for the three month period ended March 31, 1996
are not necessarily indicative of the results that may be expected for the year
ended December 31, 1996. For further information, refer to the consolidated
financial statements and footnotes thereto included in the EmCare Holdings Inc.
Annual Report incorporated by reference into the Form 10-K for the year ended
December 31, 1995.
2. Accounts Receivable and Net Revenue
Accounts receivable are recorded at net realizable value. The allowance for
contractual adjustments and charity and other adjustments is based on historical
experience and future expectations.
Accounts receivable consist of the following (in thousands):
March 31, December 31,
1996 1995
--------- -----------
Independent billing .................................... $64,579 $61,252
Hospital contract ...................................... 8,791 8,001
Billing receivables .................................... 1,941 2,042
Locum tenens ........................................... 1,387 1,316
-------- ------
76,698 72,611
Less allowance for contractual adjustments
and charity and other adjustments ...................... 45,649 42,798
------ ------
$31,049 $29,813
======= =======
Net revenue consists of the following (in thousands):
Three Months
Ended March 31,
----------------------
1996 1995
--------- ---------
Gross revenue ...................................... $71,943 $57,670
Less provision for contractual adjustments
and charity and other adjustments.................. 27,708 23,130
------- -------
Net revenue ........................................ $44,235 $34,540
======= =======
6
<PAGE>
3. Subsequent Events
On April 1, 1996, the Company acquired an emergency physician practice
management contract providing emergency department services to one hospital in
Houston, Texas for $1.5 million in cash and $375,000 in debt. Additionally,
certain sellers entered into covenants not to compete.
On April 30, 1996, the Company acquired all of the outstanding capital
stock of Medical Emergency Service Associates, Inc. ("MESA"), an emergency
physician practice management company providing emergency department services to
eight high volume emergency departments and two occupational medicine clinics in
the Chicago and western Illinois markets. The Company paid the former
stockholders of MESA an aggregate of $7,815,933 and will issue to them 56,355
shares of the Company's common stock, par value $.01 per share. One-third of the
shares will be issued and delivered to the former stockholders of MESA on each
of the next three anniversaries of the closing date. For purposes of the
acquisition, the Company valued the 56,355 shares at $26.617 per share, or an
aggregate of $1,500,000. In addition, the former stockholders of MESA could be
entitled to receive three deferred payments of $325,000 each based upon the
continuation of the hospital contracts, three performance payments in the
aggregate amount of $1,200,000 based upon the adjusted net income attributable
to such contracts, and two incentive earnout payments of up to $1,000,000 each,
also based upon the adjusted net income attributable to such contracts.
The former stockholders of MESA have agreed to continue to work as
employees of MESA. These individuals also agreed not to compete against the
Company for the three years immediately after the acquisition. The Company
allocated $925,000 of the acquisition consideration paid upon consummation of
the acquisition to these covenants not to compete.
4. Contingencies
In June 1995, the Company was informed that the Civil Division of the U.S.
Department of Justice ("DOJ") intended to pursue a civil lawsuit against a
vendor which provides billing services on a contract basis for the Company and a
number of other customers. The DOJ alleges improper coding by the billing
company of charges for programs (Medicare, Medicaid, and CHAMPUS) in violation
of the False Claims Act. Initially, DOJ agreed not to name the Company as a
defendant in the lawsuit, but later informed the Company that DOJ intended to
pursue the lawsuit against the Company, as well as other defendants, unless by
February 1, 1996, settlement discussions were successful. The lawsuit was not
settled by the February 1, 1996, deadline and the Company has now been served in
the lawsuit. Under the Company's contracts with the billing company, the billing
company has agreed to be responsible for all coding errors. The billing company
has advised the Company it is confident the DOJ allegations are incorrect. The
Company does not currently possess sufficient information to determine the
likelihood or amount of potential liabilities, if any.
The Company is also a defendant in various other legal proceedings arising
in the ordinary course of business. Although the results of litigation cannot be
predicted with certainty, management believes that the outcome of the pending
other litigation will not have a material adverse effect on the Company's
consolidated financial statements.
7
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Introduction
EmCare Holdings Inc. is a leading provider of physician practice
management services in hospital emergency departments and related urgent care
centers in the United States (collectively, "EDs"). The Company recruits and
evaluates the credentials of physicians, arranges contracts for their services,
assists in monitoring their performance, and schedules their shifts in the EDs.
The Company also assists the EDs in operational areas such as staff
coordination, quality assurance, and departmental accreditation. In addition,
the Company provides accounting, billing, record keeping, and other
administrative services. The Company has been engaged in emergency physician
practice management primarily in larger hospitals with high volume EDs for more
than 20 years. At March 31, 1996, the Company had management contracts relating
to 75 EDs in 17 states with approximately 2.0 million patient visits per year.
In addition to emergency physician practice management, the Company provides:
(i) billing services for emergency physician practice management contracts, (ii)
temporary (locum tenens) physician placement services across a broad range of
medical specialties, and (iii) physician practice management in areas other than
emergency medicine.
There are an estimated 5,200 hospitals in the United States that have EDs.
Approximately 80% of the hospitals use outsourced physicians to staff their EDs.
The outsourcing groups used to provide ED services are either national groups,
regional groups, or small local groups. The national groups serve approximately
20% of the market. The Company believes that the regional and local groups are
encountering increasing difficulty in: (i) satisfying the record keeping
requirements and other administrative burdens imposed by health care industry
developments and (ii) controlling costs imposed by capitated and other risk
shifting payment systems. As a result, the Company believes that there are
significant consolidation opportunities within the emergency physician practice
management industry.
The Company intends to pursue the growth of its emergency physician
practice management business through acquisitions of local and regional groups.
Beginning in January 1992 and continuing through March 1996, the Company has
added emergency physician practice management contracts covering 21 EDs through
acquisitions. In addition, in September 1995 the Company acquired RTI, an
emergency medicine billing company that provides billing services to emergency
physician groups in eight states. The acquisition of RTI will serve as the
platform for the Company to internalize its billing function. Effective January
1, 1996, the Company began to transition to RTI the billings for approximately
one million patient visits that it outsources per year. The Company intends to
complete this transition over the next year. As of March 31, 1996, the Company
had transitioned 12 EDs as planned representing approximately 300,000 patient
visits to RTI.
On April 1, 1996, the Company acquired an emergency physician practice
management contract providing emergency department services to one hospital in
Houston, Texas. The contract generated net revenues of $2.0 million and 23,000
patient visits for the year ended December 31, 1995.
On April 30, 1996, the Company acquired an emergency physician practice
management company providing emergency department services to eight high volume
emergency departments and two Occupational Medicine clinics in the Chicago and
western Illinois markets. This company generated net revenue of $13.4 million
and 210,000 patient visits for the year ended September 30, 1995.
8
<PAGE>
Results of Operations
The following table sets forth, as a percentage of net revenue, certain
statement of income data for the periods indicated as well as percentage changes
from period to period in the data presented:
Three Months
Ended March 31, 1996
---------------- Compared
1996 1995 to 1995
------ ------ ------
Net revenue ...................................... 100.0% 100.0% 28.1%
Professional expenses ............................ 79.8 78.6 30.1
Gross profit ..................................... 20.2 21.4 20.8
General and administrative expenses .............. 9.6 11.4 8.1
Depreciation and amortization .................... 1.8 1.2 99.8
Income from operations ........................... 8.7 8.8 26.6
Income before income taxes ....................... 8.5 9.4 15.8
Three Months Ended March 31, 1996 and 1995
Net Revenue. Net revenue increased $9.7 million, or 28.1%, to $44.2
million for the three months ended March 31, 1996 from $34.5 million for the
three months ended March 31, 1995. Of this increase, $7.7 million was
attributable to increased revenue from the Company's ED contracts. Net revenue
from other services increased $2.0 million, contributing 5.8% of the 28.1% total
period to period increase. This consists of $1.4 million attributable to the
Company's billing company which was acquired in September 1995, an increase of
$653,000 attributable to the Company's management of primary care physician
group practices, and a decrease of $65,000 attributable to other non-ED
services.
Same store ED contract revenue increased $1.9 million, or 6.7%, to $30.2
million for the three months ended March 31, 1996 from $28.3 million for the
three months ended March 31, 1995, contributing 5.5% of the 28.1% total
period-to-period increase. "Same store" revenue consists of revenue derived from
EDs under management from the beginning of the prior period through the end of
the current period. New ED contracts generated by the Company's marketing
activities contributed $3.8 million of the increase in net revenue, or 11.0% of
the 28.1% total period-to-period increase. Acquisitions contributed $3.6 million
of the increase in net revenue, or 10.4% of the 28.1% total period-to-period
increase. Included in the period-to-period increase in net revenue is a negative
impact of $1.6 million, or 4.6% of the 28.1% total period-to-period increase
caused by the loss of contracts.
Professional Expenses. Professional expenses primarily consist of fees
paid to physicians under contract with the Company, collection fees relating to
independent billing contracts billed by vendors, operating expenses for the
billing company, and professional liability insurance premiums for physicians
under contract. Professional expenses increased by $8.1 million, or 30.1%, to
$35.3 million for the three months ended March 31, 1996 from $27.2 million for
the three months ended March 31, 1995. This increase was primarily attributable
to the addition of new ED contracts. Expenses related to other services
increased $1.9 million from period to period, including $1.3 million related to
the acquired billing company. As a percentage of net revenue, professional
expenses increased to 79.8% in the three months ended March 31, 1996 from 78.6%
in the same period in 1995. The increase in professional expenses as a
percentage of net revenue is primarily due to the operating costs associated
with the billing company acquired in September 1995.
9
<PAGE>
General and Administrative Expenses. General and administrative expenses
increased by $318,000, or 8.1%, to $4.2 million for the three months ended March
31, 1996 from $3.9 million for the three months ended March 31, 1995. This
increase is primarily attributable to the incremental administrative costs
related to the new EDs under management. As a percentage of net revenue, general
and administrative expenses decreased to 9.6% in the three months ended March
31, 1996 from 11.4% in the same period in 1995 as the Company continues to
leverage its infrastructure with greater revenue growth.
Depreciation and Amortization. Depreciation and amortization consist
principally of amortization of goodwill, contracts and non-competition
agreements entered into in connection with business acquisitions. Depreciation
and amortization increased by $404,000, or 99.8%, to $809,000 for the three
months ended March 31, 1996 from $405,000 for the three months ended March 31,
1995, principally due to business acquisitions.
Interest Income/Expense. Interest expense increased by $26,000, or 17.8%,
to $172,000 for the three months ended March 31, 1996 from $146,000 for the
three months ended March 31, 1995. Interest income decreased by $272,000, or
79.1%, to $72,000 for the three months ended March 31, 1996 from $344,000 for
the three months ended March 31, 1995, primarily due to lower cash balances
available for investment in the first quarter of 1996. Cash balances were higher
in the first quarter of 1995 as a result of the Company's initial public
offering in December 1994.
Income Taxes. The Company's effective tax rate remained unchanged at 38.0%
from period to period.
Liquidity and Capital Resources
At March 31, 1996, the Company had $22.7 million in working capital, an
increase of $3.8 million from December 31, 1995. At March 31, 1996, the
Company's principal sources of liquidity consisted of (i) cash and cash
equivalents aggregating $7.1 million, (ii) accounts receivable totaling $31.0
million, and (iii) $47 million in borrowing capacity under a revolving line of
credit (the "Revolver") with a syndicate of lenders.
In the three months ended March 31, 1996, $4.9 million in cash was used to
support operating activities. This amount reflects the increase in accounts
receivable due to growth in the number of EDs, an increase in prepaid insurance,
and a decrease in accounts payable and accrued expenses. Cash of $734,000 was
provided by investing activities for the three months ended March 31, 1996 as
the proceeds from the sale of marketable securities exceeded the purchase of
furniture and office equipment. Cash of $3.5 million was provided by financing
activities for the three months ended March 31, 1996 as proceeds from borrowings
and the exercise of stock options exceeded payments on obligations. In the three
months ended March 31, 1995, $1.8 million in cash was used to support operating
activities. This amount reflects the increase in accounts receivable due to
growth in the number of EDs and an increase in prepaid insurance. Cash of $4.2
million was used in investing activities for the three months ended March 31,
1995 primarily to acquire CEA. Cash of $1.8 million was provided by financing
activities for the three months ended March 31, 1995 as borrowings exceeded
payments on obligations.
10
<PAGE>
Accounts receivable are a key component of the Company's working capital.
Accounts receivable totaled $31.0 million at March 31, 1996, an increase of $1.2
million over December 31, 1995. The timing of payments on the Company's accounts
receivable can vary significantly depending on whether the related contract is a
hospital-based or independent billing contract. Independent billing receivables
have a significantly longer collection cycle than hospital-based billing
receivables because of the process of billing and collecting from third-party
payor programs and private payors. The number of days revenue in average
receivables was 63 days for the three months ended March 31, 1996, compared to
61 days for the three months ended March 31, 1995. In connection with
independent billing contracts, the Company incurs, and can expect to incur in
the future, negative cash flow during the start-up phase (typically six months
or more after the contract is initiated).
The Company anticipates that funds generated from operations, together
with funds available under the Revolver, will be sufficient to meet its working
capital requirements and debt obligations and to finance any necessary capital
expenditures for the foreseeable future. Expansion of the Company's business
through acquisitions may require additional funds, which, to the extent not
provided by internally generated sources, cash and cash equivalents, and the
Revolver, would require the Company to seek additional debt or equity financing.
Factors That May Affect Future Results of Operations and Financial Condition
The Company operates in a constantly changing health care environment.
While overall prospects are positive, results may vary in response to a number
of factors, including the pace of new business and acquisition activity,
reimbursement rates and developments in the Department of Justice (DOJ) civil
lawsuit. The foregoing statements and other statements in this Item 2 not based
upon historical fact are forward-looking statements that involve risks and
uncertainties, and actual results could differ materially from these
expectations. Important factors that could cause actual results to differ
materially from the forward-looking statements include the pace of new business
and acquisition activity, changes in reimbursement rates, developments in the
DOJ civil lawsuit (see Part I, Item 1, Note 4, "Contingencies" for a detailed
discussion), the implementation of the Health Care Financing Administration's
new guidelines for documentation of Medicare and Medicaid claims and the
transition of the Company's billing activities from outside vendors to RTI.
11
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
In June 1995, the Company was informed that the Civil Division of the U.S.
Department of Justice ("DOJ") intended to pursue a civil lawsuit against a
vendor which provides billing services on a contract basis for the Company and a
number of other customers. The DOJ alleges improper coding by the billing
company of charges for programs (Medicare, Medicaid, and CHAMPUS) in violation
of the False Claims Act. Initially, DOJ agreed not to name the Company as a
defendant in the lawsuit, but later informed the Company that DOJ intended to
pursue the lawsuit against the Company, as well as other defendants, unless by
February 1, 1996, settlement discussions were successful. The lawsuit was not
settled by the February 1, 1996, deadline and the Company has now been served in
the lawsuit. Under the Company's contracts with the billing company, the billing
company has agreed to be responsible for all coding errors. The billing company
has advised the Company it is confident the DOJ allegations are incorrect. The
Company does not currently possess sufficient information to determine the
likelihood or amount of potential liabilities, if any. The civil lawsuit, United
States ex rel. Theresa Semtner v. Emergency Physicians Billing Services, Inc.,
et al. (Cause No. 94-CB-617), was filed under seal on April 29, 1994, in United
States District Court Western District of Oklahoma in Oklahoma City, Oklahoma.
The civil action seeks treble damages, plus civil penalties of $10,000 for each
false claim, all costs of the action, and other relief as the Court deems just
and equitable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
A. Exhibits
11.1 Computation of Net Income Per Share
27.1 Financial Data Schedule
B. Form 8-K
There were no reports on Form 8-K filed for the three months ended March
31, 1996.
12
<PAGE>
SIGNATURE
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.
Dated: May 14, 1996
EMCARE HOLDINGS INC.
(Registrant)
By: /s/ Robert F. Anderson, II
--------------------------
Robert F. Anderson, II
Chief Financial Officer, Senior
Vice President, Treasurer,
and Secretary
13
<PAGE>
EXHIBIT INDEX
Exhibit No. Description Page
- - ----------- ----------- ----
11.1 Computation of Net Income Per Share 15
27.1 Financial Data Schedule 16
14
EXHIBIT 11.1
EMCARE HOLDINGS INC.
COMPUTATION OF NET INCOME PER SHARE
(In thousands, except per share amounts)
Three Months Ended
March 31,
----------------------
1996 1995
--------- ---------
Primary:
Weighted average number of common shares
outstanding during the period ....................... 8,045 7,539
Weighted average shares issuable upon
exercise of outstanding stock options
using the "treasury stock" method ................... 388 372
------ ------
Weighted average shares outstanding .................. 8,433 7,911
====== ======
Net income .......................................... $2,335 $2,016
====== ======
Net income per share .............................. $ 0.28 $ 0.25
====== ======
Fully diluted:
Weighted average number of common shares
outstanding during period ........................... 8,045 7,539
Weighted average shares issuable upon
exercise of outstanding stock options
using the "treasury stock" method ................... 416 515
------ ------
Weighted average shares outstanding .................. 8,461 8,054
====== ======
Net income ........................................... $2,335 $2,016
====== ======
Net income per share ............................... $ 0.28 $ 0.25
====== ======
15
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FORM 10-Q FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1996, 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-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 7,103
<SECURITIES> 0
<RECEIVABLES> 76,698
<ALLOWANCES> 45,649
<INVENTORY> 0
<CURRENT-ASSETS> 44,311
<PP&E> 6,631
<DEPRECIATION> 2,950
<TOTAL-ASSETS> 85,196
<CURRENT-LIABILITIES> 21,600
<BONDS> 0
0
0
<COMMON> 81
<OTHER-SE> 56,537
<TOTAL-LIABILITY-AND-EQUITY> 85,196
<SALES> 44,235
<TOTAL-REVENUES> 44,235
<CGS> 35,315
<TOTAL-COSTS> 35,315
<OTHER-EXPENSES> 5,024
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 172
<INCOME-PRETAX> 3,766
<INCOME-TAX> 1,431
<INCOME-CONTINUING> 3,866
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,335
<EPS-PRIMARY> 0.28
<EPS-DILUTED> 0.28
</TABLE>
