<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 October 31, 1996
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
For the transition period from ___________ to ____________
Commission File Number: 0-24132
ABR INFORMATION SERVICES, INC.
(Exact Name of Registrant as Specified in its Charter)
Florida 59-3228107
------- ----------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
34125 U.S. Highway 19 North, Palm Harbor, Florida 34684-2116
- ------------------------------------------------- ----------
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including area code: (813) 785-2819
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 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 the latest practicable date:
<TABLE>
<S> <C> <C> <C>
Class: Voting Common Stock, $.01 Par Value Outstanding at December 10, 1996: 13,635,064
Class: Nonvoting Common Stock, $.01 Par Value Outstanding at December 10, 1996: None
</TABLE>
1
<PAGE> 2
ABR INFORMATION SERVICES, INC.
INDEX TO FORM 10-Q
<TABLE>
<CAPTION>
Page
Number
<S> <C> <C>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Statements of Income for the three
months ended October 31, 1995 and 1996 3
Consolidated Balance Sheets as of July 31, 1996 and
October 31, 1996 4
Consolidated Statements of Cash Flows for the three months
ended October 31, 1995 and 1996 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 9
PART II. OTHER INFORMATION
Item 5. Other Information 12
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 14
</TABLE>
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
Item 1.
ABR INFORMATION SERVICES, INC.
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three months ended
October 31,
----------------------------
1995 1996
---------- -----------
<S> <C> <C>
Revenue $5,614,304 $10,389,193
Operating expenses:
Cost of services 3,044,463 5,914,580
Selling, general and administrative 1,380,993 2,146,940
Other operating 49,870 60,665
---------- -----------
Total operating expenses 4,475,326 8,122,185
---------- -----------
Interest income, net 160,040 1,960,062
---------- -----------
Income before income taxes 1,299,018 4,227,070
Income taxes 515,582 1,615,707
---------- -----------
Net income $ 783,436 $ 2,611,363
========== ===========
Net income per share $ .08 $ .19
========== ===========
Weighted average shares outstanding 10,159,740 14,009,537
========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
3
<PAGE> 4
ABR INFORMATION SERVICES, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
ASSETS
July 31, 1996 October 31, 1996
(Unaudited)
------------- ----------------
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 14,088,396 $ 18,372,658
Investments 147,111,102 144,558,769
Accounts receivable, net of allowance
for doubtful accounts of $38,894
and $43,612, respectively 3,870,539 5,696,560
Prepaid expenses and other 1,282,952 1,773,863
------------ ------------
Total current assets 166,352,989 170,401,850
PROPERTY AND EQUIPMENT, net 14,539,898 15,171,964
SOFTWARE DEVELOPMENT COSTS, net of accumulated
amortization of $220,535 and $327,543, respectively 6,181,973 6,795,784
GOODWILL, INTANGIBLES AND OTHER ASSETS, net 15,498,745 15,283,360
------------ ------------
TOTAL ASSETS $202,573,605 $207,652,958
============ ============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 615,663 $ 797,807
Accrued expenses 762,442 818,962
Customer accounts deposits 18,019,405 19,190,758
Unearned revenue 647,093 -
Income taxes payable 483,663 1,304,981
------------ ------------
Total current liabilities 20,528,266 22,112,508
DEFERRED INCOME TAXES 895,555 1,449,341
SHAREHOLDERS' EQUITY
Preferred Stock - authorized 2,000,000 shares of
$.01 par value; no shares issued - -
Common Stock - authorized, 100,250,000
shares of $.01 par value; issued and outstanding,
13,588,194 and 13,624,845 shares, respectively 135,882 136,249
Additional paid in capital 169,879,717 170,209,312
Retained earnings 11,134,185 13,745,548
------------ ------------
TOTAL SHAREHOLDERS' EQUITY 181,149,784 184,091,109
------------ ------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $202,573,605 $207,652,958
============ ============
</TABLE>
The accompanying notes are an integral part of these statements.
4
<PAGE> 5
ABR INFORMATION SERVICES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Three months ended
October 31,
-------------------------------
1995 1996
----------- -----------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 783,436 $ 2,611,363
Adjustments to reconcile net income to
net cash provided by operating activities:
Depreciation and other amortization 170,881 628,223
Amortization of software 12,982 107,009
Deferred income taxes 165,184 553,786
Increase in allowance for doubtful accounts 3,000 4,718
Tax benefit related to exercise of certain stock options - 56,606
Change in operating assets and liabilities:
Accounts receivable 595,896 (1,830,739)
Prepaid expenses and other (263,104) (490,911)
Other assets (164,250) 3,488
Accounts payable (7,296) 182,144
Accrued expenses 197,949 56,520
Unearned revenue (247,875) (647,093)
Customer accounts deposits 1,077,044 1,171,353
Income taxes payable 233,523 821,318
----------- -----------
Net cash provided by operating activities 2,557,370 3,227,785
----------- -----------
Cash flows from investing activities:
Additions to investments (14,290,752) (118,333,913)
Maturity of investments 19,264,787 120,886,246
Additions to property and equipment (315,742) (1,050,267)
Additions to software development costs (473,609) (720,820)
Disposal of fixed assets - 1,875
----------- -----------
Net cash provided by investing activities 4,184,684 783,121
----------- -----------
Cash flows from financing activities:
Payments on bank borrowings (3,287) -
Exercise of common stock options 169,915 273,356
----------- -----------
Net cash provided by financing activities 166,628 273,356
----------- -----------
Net increase in cash and cash equivalents 6,908,682 4,284,262
Cash and cash equivalents at beginning of year 19,403,090 14,088,396
----------- -----------
Cash and cash equivalents at end of period $26,311,772 $18,372,658
=========== ===========
</TABLE>
The accompanying notes are an integral part of these statements.
5
<PAGE> 6
ABR INFORMATION SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
October 31, 1996
NOTE A - DESCRIPTION OF ORGANIZATION AND BUSINESS
ABR Information Services, Inc. (the "Company") is a leading provider
of comprehensive benefits administration, compliance and information services
to employers seeking to outsource their benefits administration functions. The
Company believes it is the largest provider of COBRA compliance services.
COBRA is a federally mandated law related to the portability of employee group
health insurance. The Company also provides benefits administration services
with respect to benefits provided to retirees and inactive employees, including
retiree healthcare, disability, surviving dependent, family leave and severance
benefits. Additionally, the Company provides benefits administration services
with respect to benefits provided to active employees, including enrollment,
eligibility verification, qualified domestic relations order ("QDRO")
administration, HMO consolidation and pension services. These services are
offered on either an "a la carte" or a total outsourcing basis, allowing
customers to outsource certain benefits administration tasks which they find
too costly or burdensome to perform in-house, or to outsource the entire
benefits administration function.
The financial statements have been restated to reflect a three-for-two
stock split completed February 1996 and an acquisition by a pooling of interest
completed June 1996.
The Company is headquartered in Palm Harbor, Florida and provides
information and support services to more than 21,000 employers, including
Fortune 500 companies, insurance companies and other employers. The Company's
operations are in a single business segment, the information services business.
NOTE B - BASIS OF PRESENTATION
The accompanying financial statements have been prepared in accordance
with the instructions to Form 10-Q and do not include all the information and
footnote disclosure required by generally accepted accounting principles for
complete financial statements. The financial statements as of October 31, 1996
and for the three months ended October 31, 1995 and October 31, 1996 are
unaudited and reflect all adjustments (consisting only of normal recurring
adjustments) which are in the opinion of management, necessary for a fair
presentation of the financial position and operating results for the interim
periods. The results of operations for the three months ended October 31, 1996
are not necessarily indicative of results that may be expected for the year
ending July 31, 1997. These financial statements should be read in conjunction
with the audited financial statements of the Company as of July 31, 1995 and
1996, and for each of the three years in the period ended July 31, 1996,
included in the Company's 1996 Annual Report to Shareholders.
NOTE C - NET INCOME PER SHARE
Net income per common share has been computed using the weighted
average of the outstanding Common Stock plus the dilutive Common Stock
equivalents (stock options), using the treasury or the modified treasury stock
method. Primary and fully dilutive calculations result in the same net income
per common share.
On December 6, 1996, the shareholders of the Company voted in favor of
an amendment to the Company's Articles of Incorporation increasing the number
of authorized shares of voting Common Stock, $.01 par value per share, from
20,000,000 to 100,000,000. The balance sheet contained herein reflects this
amendment.
6
<PAGE> 7
ABR INFORMATION SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
NOTE D - COMMITMENTS
Management estimates that as of the end of October 31, 1996,
approximately $4.9 million will be required in order for the Company to
complete the current software projects. Additionally, management estimates
that as of October 31, 1996, approximately $6.1 million will be required to
complete the cost of improvements to be made to a 110,000 square foot facility
purchased in 1996.
NOTE E - BUSINESS ACQUISITIONS
On December 15, 1995, the Company acquired all of the outstanding
capital stock of Bullock Associates, Inc., which was subsequently renamed ABR
Benefits Services, Inc. ("BSI"), for $12.5 million, with an additional $2.0
million payable upon the attainment of certain revenue requirements during 1996
and 1997. This acquisition was accounted for as a purchase. BSI is located in
Princeton, New Jersey, and provides COBRA administration, retiree insurance
administration, insurance continuation billing and collection, pension benefits
administration, QDRO administration and educational benefit administration
services as well as administration for other employee benefits programs such as
employee discount plans, adoption programs, program rebates and emergency loans.
The following unaudited pro forma balances have been derived from the
historical financial statements of the Company and BSI and adjusts such
information to give effect to the acquisition of BSI. The balances for the
three months ended October 31, 1995 assume that the acquisition of BSI occurred
on August 1, 1995. The unaudited pro forma financial information is not
necessarily indicative of the results which would actually have occurred had
the transaction been in effect on the dates and for the period indicated or
which may result in the future.
<TABLE>
<CAPTION>
Three months ended
October 31,
(in thousands, except per share data)
-------------------------------------
1995
------
<S> <C>
Revenue $8,013
Operating income 1,795
Net income 1,052
Net income per share $ .10
</TABLE>
7
<PAGE> 8
ABR INFORMATION SERVICES, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
NOTE F - SUBSEQUENT EVENTS
Effective November 12, 1996, Vincent Addonisio was removed as
Executive Vice President, Chief Financial Officer and Treasurer of the Company
due to differences with the Board of Directors. Mr. Addonisio joined the board
of directors of another company that recently completed its initial public
offering. He also serves as a member of several committees of such board,
including the executive committee. Mr. Addonisio neither requested nor
received approval prior to joining such company's board. The Board of
Directors believes Mr. Addonisio to be in violation of his employment contract.
The Board of Directors also believes that the company whose board Mr. Addonisio
joined is an actual or potential competitor of the Company in important areas
of its business. Mr. Addonisio has filed a lawsuit against the Company
alleging breach of his employment contract and against the Company and James E.
MacDougald, Chairman of the Board, President and Chief Executive Officer of the
Company, alleging defamation. The lawsuit alleges that Mr. MacDougald has
made false statements regarding Mr. Addonisio to both the financial community
and the media. Mr. MacDougald denies these allegations. The Company and Mr.
MacDougald, while intending to vigorously defend this lawsuit, are currently
engaged in discussions with Mr. Addonisio in an attempt to reach a settlement.
Mr. Addonisio was a party to an employment contract with the Company and his
removal, as well as the lawsuit, involves various elements of his compensation
arrangements. The Company does not believe that such litigation, or any
settlement relating thereto, will have a material adverse effect on the
Company's financial position, but no assurances can be given in this regard.
8
<PAGE> 9
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction
with the Financial Statements and notes thereto appearing elsewhere in this
Form 10-Q.
OVERVIEW
The Company's revenues currently are generated from three sources.
First, the Company generates revenues through its COBRA compliance services.
Second, the Company generates revenue from providing administration services
with respect to benefits provided to retirees and inactive employees. Third,
the Company generates revenue from providing administration services with
respect to benefits provided to active employees.
The first source of revenue for the Company, COBRA compliance
services, is generated primarily from its qualifying event agreements with
employers and through capitation agreements with insurance companies. Through
qualifying event agreements, the Company receives a fixed, per occurrence fee
from its customers for each qualifying event. A qualifying event occurs when
an employee or his or her dependents experience a loss of coverage under a
group healthcare plan. The amount of the fixed fee varies depending on the
method of the qualifying event notification mailing, which is selected by the
customer. Through capitation agreements, insurance companies designate the
Company as the administrator of COBRA compliance for their group insurance
clients that are subject to COBRA. The Company is paid a monthly fee for each
employee covered by the group plan. The revenue generated under a capitation
agreement is not dependent on the triggering of a qualifying event, but is
determined based on the number of employees covered by the group plan at the
beginning of each month. The Company also receives an administrative fee
typically equal to 2% of the monthly health insurance premium that is paid by
or on behalf of each continuant. In addition, the Company generates revenues
from customers for additional COBRA compliance and healthcare administration
services, both on a one-time and continuous basis. These additional revenues
include new account fees paid to the Company when it is retained by a new
customer. During the first three months of fiscal 1996 and the first three
months of fiscal 1997, 81.5% and 63.0%, respectively, of the Company's revenues
were attributable to the Company's COBRA compliance services.
The second source of the Company's revenue is administration services
with respect to benefits provided to retirees and inactive employees, including
retiree healthcare, disability, surviving dependent, family leave and severance
benefits. During the first three months of fiscal 1996 and the first three
months of fiscal 1997, 5.8% and 17.1%, respectively, of the Company's revenues
were attributable to the Company's administration services for retirees and
inactive employees.
The third source of the Company's revenues is administration services
with respect to benefits provided to active employees. Through this service,
the Company provides benefits administration services for active employees,
such as enrollment, eligibility verification, QDRO administration, Flexible
Spending Account admnistration and pension services. During the first three
months of fiscal 1996 and the first three months of fiscal 1997, 12.7% and
19.9%, respectively, of the Company's revenues were attributable to benefits
administration services for active employees.
9
<PAGE> 10
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (continued)
RESULTS OF OPERATIONS
The following table sets forth for the periods indicated, the
percentage of revenue represented by certain items reflected in the Company's
statements of income as restated to reflect the acquisition by a pooling of
interest.
<TABLE>
<CAPTION>
Three months ended
October 31,
-----------------------
1995 1996
---- ----
<S> <C> <C>
Revenue 100.0% 100.0%
Cost of services 54.2 56.9
Selling, general and administrative expenses 24.6 20.7
Other operating expenses .9 .6
----- -----
Operating income 20.3 21.8
Interest income (net) 2.9 18.9
Income taxes 9.2 15.6
----- -----
Net income 14.0% 25.1%
===== =====
</TABLE>
THREE MONTHS ENDED OCTOBER 31, 1996 COMPARED TO THREE MONTHS ENDED OCTOBER 31,
1995
Revenues increased $4.8 million, or 85.0%, to $10.4 million during the
three months ended October 31, 1996 from $5.6 million in the three months ended
October 31, 1995. Of the $4.8 million increase in revenues, $2.0 million was
attributable to increased revenues from COBRA compliance services, $1.4 million
was attributable to increased revenues from retiree/inactive employee benefits
administration, and approximately $1.4 million was due to increased revenues
from active employee benefits administration.
The increase in COBRA compliance revenues increased primarily as a
result of the addition of new customers and as a result of the acquisitions.
The increase in revenues from retiree/inactive employee benefits
administration was primarily attributable to the addition of new customers
obtained by the Company and through acquisitions during the three months ended
October 31, 1996 who were not customers of the Company during the three months
ended October 31, 1995.
The increase in revenues from active employee benefits administration
was primarily attributable to the addition of new customers obtained by the
Company and through acquisitions who were not customers of the Company during
the same period of 1995.
Cost of services increased 94.3% to $5.9 million during the three
months ended October 31, 1996 from $3.0 million during the three months ended
October 31, 1995. The increase in cost of services was attributable to the
addition of data processing, information systems and customer service personnel
to support growth, the result of the acquisitions and the amortization of
software placed in service during the fourth quarter of 1996. As a percentage
of revenues, cost of services increased to 56.9% from 54.2% for the same
periods. This increase as a percentage of revenues resulted from increasing
the operating infrastructure to support the Company's growth.
10
<PAGE> 11
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (continued)
Selling, general and administrative expenses increased 55.5% to $2.1
million during the three months ended October 31, 1996 from $1.4 million in the
three months ended October 31, 1995. The increase in selling, general and
administrative expenses was primarily attributable to the addition of
marketing, management and administrative personnel to support the Company's
growth. As a percentage of revenues, selling, general and administrative
expenses decreased to 20.7% from 24.6% for the same periods. The decrease as a
percentage of revenues resulted primarily from the acquisitions which had lower
selling, general and administrative expenses as a percent of revenue, and from
operating efficiencies from allocating expenses over a larger revenue base.
Other operating expenses increased 21.6% to $61,000 during the three
months ended October 31, 1996 from $50,000 in the three months ended October
31, 1995.
Interest income increased $1.8 million to $2.0 million during the
three months ended October 31, 1996 from $160,000 in the three months ended
October 31, 1995. This increase is a result of the investment of the proceeds
from the secondary stock offering completed in March 1996.
Income taxes increased 213.4% to $1.6 million during the three months
ended October 31, 1996 from $516,000 during the three months ended October 31,
1995. The Company's effective tax rate decreased to 38.2% from 39.7% for the
same period.
As a result of the foregoing, the Company's net income increased
233.3% to $2.6 million during the three months ended October 31, 1996 from
$783,000 in the three months ended October 31, 1995. Net income per share was
$.19 for the quarter ended October 31, 1996 compared to $.08 for the prior year
period.
LIQUIDITY AND CAPITAL RESOURCES
In March 1996, the Company completed a secondary stock offering which
provided, net cash after offering expenses, $151 million to its operations.
Net cash provided by operating activities was $3.2 million for the three months
ended October 31, 1996 compared to $2.6 million for the same period of 1995.
As of October 31, 1996 and July 31, 1996, the Company's working capital and
current ratio were $148.3 million and 7.7-to-1 and $145.8 million and 8.1-to-1,
respectively. The Company invests excess cash balances in short-term
investment grade securities, such as money market investments, obligations of
the U.S. government and its agencies, and obligations of state and local
government agencies.
During the three months ended October 31, 1996, the Company's capital
expenditures were $1.8 million.
The Company recently purchased a 110,000 square foot facility situated
on 12.7 acres of land in Palm Harbor, Florida. As of October 31, 1996, the
cost of improvements to be made by the Company to such facility has been
estimated to be $6.1 million. Management estimates that this operating
facility will be ready to occupy by June of 1997.
Management estimates that as of October 31, 1996, approximately $10.3
million will be required in order for the Company to purchase equipment,
furniture, hardware and to complete the current software projects.
11
<PAGE> 12
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS - (continued)
The Company has a five-year, $15.0 million unsecured credit
facility. The Company has agreed to maintain all of its assets free and clear
of all liens, encumbrances and pledges, except purchase money security
interests in specific equipment in an aggregate amount of less than $500,000 as
long as the credit facility remains outstanding or any indebtedness thereunder
remains unpaid. Interest on the principal balance outstanding under this line
of credit accrues at a floating interest rate equal to the prime rate or, at
the Company's option, to the 30-day London Interbank Offering Rate (LIBOR),
plus an applicable interest rate margin between 1% and 2% based on certain
financial ratios. The credit facility contains certain financial covenants
requiring the maintenance of cash and cash equivalents and investments equal to
or greater than customer account deposits, a funded debt to EBITDA ratio of a
maximum of 2.25-to-1, a debt service coverage ratio of not less than 1.35-to-1,
as well as the maintenance of certain funded debt to tangible net worth ratio.
As of October 31, 1996, the Company was in compliance with all such covenants
and there were no amounts outstanding under the credit facility.
The Company believes that its cash, investments, its cash flow from
operations and the funds available from its credit facility will be adequate to
meet the Company's expected capital requirements for the foreseeable future.
PART II. OTHER INFORMATION
Item 5. Other Information
Effective November 12, 1996, Vincent Addonisio was removed as
Executive Vice President, Chief Financial Officer and Treasurer of the Company
due to differences with the Board of Directors. Mr. Addonisio joined the board
of directors of another company that recently completed its initial public
offering. He also serves as a member of several committees of such board,
including the executive committee. Mr. Addonisio neither requested nor
received approval prior to joining such company's board. The Board of
Directors believes Mr. Addonisio to be in violation of his employment contract.
The Board of Directors also believes that the company whose board Mr. Addonisio
joined is an actual or potential competitor of the Company in important areas
of its business. Mr. Addonisio has filed a lawsuit against the Company
alleging breach of his employment contract and against the Company and James E.
MacDougald, Chairman of the Board, President and Chief Executive Officer of the
Company, alleging defamation. The lawsuit alleges that Mr. MacDougald has
made false statements regarding Mr. Addonisio to both the financial community
and the media. Mr. MacDougald denies these allegations. The Company and Mr.
MacDougald, while intending to vigorously defend this lawsuit, are currently
engaged in discussions with Mr. Addonisio in an attempt to reach a settlement.
Mr. Addonisio was a party to an employment contract with the Company and his
removal, as well as the lawsuit, involves various elements of his compensation
arrangements. The Company does not believe that such litigation, or any
settlement relating thereto, will have a material adverse effect on the
Company's financial position, but no assurances can be given in this regard.
The Board of Directors has named Reva R. Maskewitz as acting Chief
Financial Officer pending the outcome of a search for a new Chief Financial
Officer. Ms. Maskewitz has served the Company and/or its subsidiaries as the
Controller since 1989 and Vice President - Finance since 1991. The Board of
Directors has appointed a committee of directors, consisting of James E.
MacDougald, Mark M. Goldman and Thomas F. Costello, to oversee the search for
one or more suitable replacements to fill, on a permanent basis, the vacancies
created by Mr. Addonisio's removal.
On November 20, 1996, Mr. Addonisio resigned as a Director of the
Company and withdrew as a nominee for election as a Director at the 1996 Annual
Meeting of Shareholders. The Board did not propose for election at the Annual
Meeting a successor director or nominee to Mr. Addonisio and has reduced the
size of the Board to four directors.
12
<PAGE> 13
PART II. OTHER INFORMATION (Continued)
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
27 Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K
None
13
<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.
Date: December 13, 1996 ABR INFORMATION SERVICES, INC.
/s/ Reva R. Maskewitz
----------------------------------------
Reva R. Maskewitz
Vice President and Controller,
Acting Chief Financial Officer and
Treasurer
14
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM ABR
INFORMATION SERVICES, INC. FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FORM 10-Q.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUL-31-1997
<PERIOD-START> AUG-01-1996
<PERIOD-END> OCT-31-1996
<CASH> 18,372,658
<SECURITIES> 144,558,769
<RECEIVABLES> 5,740,172
<ALLOWANCES> 43,612
<INVENTORY> 0
<CURRENT-ASSETS> 170,401,850
<PP&E> 18,147,975
<DEPRECIATION> 2,976,011
<TOTAL-ASSETS> 207,652,958
<CURRENT-LIABILITIES> 22,112,508
<BONDS> 0
0
0
<COMMON> 136,249
<OTHER-SE> 183,954,860
<TOTAL-LIABILITY-AND-EQUITY> 207,652,958
<SALES> 10,389,193
<TOTAL-REVENUES> 10,389,193
<CGS> 5,914,580
<TOTAL-COSTS> 2,146,940
<OTHER-EXPENSES> 60,665
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (1,960,062)
<INCOME-PRETAX> 4,227,070
<INCOME-TAX> 1,615,707
<INCOME-CONTINUING> 2,611,363
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,611,363
<EPS-PRIMARY> .19
<EPS-DILUTED> .19
</TABLE>
