<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
_________
FORM 10-Q/A
(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 0-27204
TECHFORCE CORPORATION
________________________________________________________________________________
(Exact Name of Registrant as Specified in Its Charter
GEORGIA 58-2082077
- --------------------------------------------------------------------------------
(State of Incorporation) (I.R.S. Employer Identification No.)
15950 Bay Vista Drive, Clearwater, Florida 34620
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, Including Area Code (813) 532-3600
----------------------------
- -------------------------------------------------------------------------------
Former Name, Former Address and Former Fiscal Year, if Changed Since Last Report
Indicated by check X 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 May 7, 1997, there were 8,047,576 shares of the issuer's
common stock outstanding.
<PAGE>
TECHFORCE CORPORATION
FORM 10-Q
QUARTER ENDED MARCH 31, 1997
INDEX
-----
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION PAGE NO.
- ------- --------------------- --------
<C> <S> <C>
Item 1 Financial Statements................................................. 1
. Consolidated Balance Sheet......................................... 1
. Consolidated Statements of Income.................................. 2
. Consolidated Statements of Cash Flows.............................. 3
. Notes to Consolidated Financial Statements......................... 4
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations................................................ 6
Item 3. Quantitative and Qualitative Disclosures About Market Risks.......... 9
PART II. OTHER INFORMATION
- -------- -----------------
Item 1 Legal Proceedings.................................................... 10
Item 2 Changes in Securities................................................ 10
Item 3 Defaults Upon Senior Securities...................................... 10
Item 4 Submission of Matters to a Vote of Shareholders...................... 10
Item 5 Other Information.................................................... 10
Item 6 Exhibits and Reports on Form 8-K..................................... 10
SIGNATURES
- ----------
Signatures....................................................................... 11
EXHIBIT INDEX
- -------------
</TABLE>
<PAGE>
TECHFORCE CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
March 31,1997
(In thousands)
<TABLE>
<CAPTION>
ASSETS
March 31, 1997 December 31, 1996
--------------------- ---------------------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents $ 702 $ 3,943
Investments 5,336 2,299
Accounts receivable, net of Allowance for Doubtful Accounts 13,555 12,687
of $675,941 and $845,000 at Mar 31, 1997 and Dec 31, 1996 respectively
Inventories 4,129 4,446
Net Investment in Sales Type Leases (current portion) 2,705 2,438
Prepaid expenses/Other Assets 797 741
----------------- ----------------
Total current assets 27,224 26,554
----------------- ----------------
PROPERTY, PLANT AND EQUIPMENT
Leasehold improvements 601 582
Office furniture and fixtures 5,126 4,885
Replacement parts 12,862 11,542
Equipment held for rental 834 1,038
----------------- ----------------
19,423 18,047
Less accumulated depreciation (7,482) (6,736)
----------------- ----------------
Total property, plant and equipment, net 11,941 11,311
----------------- ----------------
NET INVESTMENT IN SALES TYPE LEASES 8,788 8,545
----------------- ----------------
Less current portion
ORGANIZATION COSTS AND OTHER ASSETS 71 73
----------------- ----------------
Total assets $ 48,024 $ 46,483
================= ================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Accounts payable $ 3,642 $ 2,583
Accrued expenses 2,187 3,259
Accrued contract labor 482 600
Current maturities of obligations under capital leases,
long-term debt and non-recourse notes payable 2,692 2,644
Line of credit - -
Deferred revenue 3,876 2,722
----------------- ----------------
12,879 11,808
----------------- ----------------
LONG-TERM DEBT AND OTHER LIABILITIES 1,500 1,725
----------------- ----------------
NON-RECOURSE NOTES PAYABLE, net of current maturities 4,221 4,455
----------------- ----------------
STOCKHOLDERS' EQUITY
Common stock 80 80
Additional paid in capital 27,667 27,698
Retained earnings 1,677 717
----------------- ----------------
29,424 28,495
----------------- ----------------
Total liabilities and stockholders' deficit $ 48,024 $ 46,483
================= ================
</TABLE>
<PAGE>
TECHFORCE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
Three months ended
March 31
------------------------
1997 1996
----------- -----------
(Unaudited)
Revenues:
Services $ 10,220 $ 9,355
Hardware 7,441 7,872
---------- ----------
Total revenues 17,661 17,227
---------- ----------
Direct costs:
Services 6,862 6,371
Hardware 5,488 5,672
---------- ----------
Total direct costs 12,350 12,043
---------- ----------
Gross Margin:
Services 3,358 2,984
Hardware 1,953 2,200
---------- ----------
Total gross margin 5,311 5,184
---------- ----------
Gross Margin:
Services 32.9% 31.9%
Hardware 26.2% 27.9%
---------- ----------
Total gross margin 30.1% 30.1%
---------- ----------
Operating costs
Selling and marketing 2,282 2,222
Research and development 332 452
General and administrative 1,147 1,112
---------- ----------
3,761 3,786
---------- ----------
Operating income 1,550 1,398
Interest expense, net 41 2
---------- ----------
Income before taxes 1,509 1,396
Provision for income taxes (549) (489)
---------- ----------
Net income $ 960 $ 907
========== ==========
Net income per common share $ 0.12 $ 0.11
========== ==========
Weighted average common shares outstanding 8,265,472 8,437,825
========== ==========
<PAGE>
TECHFORCE CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(In thousands)
Three Months Ended
March 31
------------------------
1997 1996
----------- -----------
(Unaudited)
Cash flows from operating activities
Net income $ 960 $ 907
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 746 909
Changes in operating assets and liabilities 435 244
---------- ----------
Net cash provided by operating activities 2,141 2,060
Cash Flows from investing activities
Purchase of property and equipment (1,376) (2,763)
Investment in sales-type leases (510) (6,103)
---------- ----------
Net cash used in investing activities (1,886) (8,866)
---------- ----------
Cash flows from financing activities
Borrowings under revolving credit facilities 0 2,599
Repayments of long-term debt (459) (376)
---------- ----------
Net cash (used in) provided by financing activities (459) 2,223
---------- ----------
Net decreased in cash and cash equivalents (204) (4,583)
Cash and cash equivalents, beginning of period 6,242 12,989
---------- ----------
Cash and cash equivalents, end of period $ 6,038 $ 8,406
========== ==========
<PAGE>
TECHFORCE CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
March 31, 1997
(Unaudited)
1. NATURE OF BUSINESS
TechForce Corporation and subsidiaries (collectively, the "Company" and
formerly TechForce, a Georgia general partnership) are engaged in the sale,
design, on-site installation and maintenance, depot repair and support of
computer and data communications networking equipment.
2. BASIS OF FINANCIAL REPORTING
The condensed consolidated financial statements at March 31, 1997 and for
the three month period then ended are unaudited and reflect all adjustments
(consisting only of normal recurring adjustments) which are, in the opinion
of management, necessary for fair presentation of the financial position and
operating results for the interim period. The condensed consolidated
financial statements should be read in conjunction with the consolidated
financial statements and notes thereto, together with management's
discussion and analysis of financial condition and results of operations,
contained in the Company's Annual Report to Shareholders incorporated by
reference in the Company's Annual Report on Form 10-K for the fiscal year
ended December 31, 1996.
3. MAJOR CUSTOMERS
During the quarters ended March 31, 1997, and March 31, 1996, the following
customers individually accounted for more than 10% of the Company's revenue:
Quarter Ended March 31, 1997 Quarter Ended March 31, 1996
---------------------------- ----------------------------
Amount ($000) Percentage Amount ($000) Percentage
-------------- ------------ -------------- ------------
Packard Bell
Electronics, Inc. $3,599 20% $4,432 26%
National Medical
Care $ 977 6% $3,936 23%
The loss of one of these customers could have a severe impact on the results
of the operations of the Company in the near term.
4. LEGAL MATTERS
The Company is involved in certain litigation and claims arising in the
ordinary course of business. In the opinion of management, the ultimate
resolution of these matters will not have a material adverse effect on the
Company's financial position or results of operations.
<PAGE>
5. In February 1997, the Financial Accounting Standards Board used Statement of
Financial Accounting Standards No. 128, "Earnings per share" (EPS). SFAS 128
establishes new standards for computing and presenting EPS. Specifically,
SFAS 128 replaces the presentation of primary EPS with a presentation of
basic EPS, requires dual presentation of basic and diluted EPS on the face
of the income statement for all entities with complex capital structures,
and requires a reconciliation of the numerator and denominator of the basic
EPS computation to the numerator and denominator of the diluted EPS
computation. SFAS 128 is effective for financial statements issued for
periods ending after December 15, 1997; earlier application si not
permitted. Management has determined that the adoption of SFAS 128 will not
have a material effect on the accompanying financial statements. Other
issued but not required FASB standards are not currently applicable or
material to the Company's operations.
<PAGE>
PART I. FINANCIAL INFORMATION (continued)
- ------- ---------------------------------
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
OVERVIEW
The Company generates revenues from services provided under maintenance
contracts with terms ranging from one to five years and through the sale of its
channel extension hardware and the resale and lease of various data network
hardware supplied by other manufacturers. Revenues from service and maintenance
contracts are either recognized ratably over the contract period or on a per
call basis, as is the case under the Packard Bell agreement. Revenues from
product sales are recognized at the time of delivery. When appropriate,
revenues from leasing are accounted for as sales-type leases where the present
value of all payments, are recorded currently as revenues and the related costs
of the equipment are recorded to cost of sales. The associated interest income
is recognized over the term of the lease. Revenues derived from sales-type
leases for the three months ended March 31, 1997 were $1.0 million. Amortized
interest on such leases totaled $0.13 million for the three month period ended
March 31, 1997.
Management anticipates that revenues from its proprietary channel extension
products and services will gradually decrease over the next few years at a rate
of approximately 10% to 15% per year primarily as a result of a steady trend
toward open-systems environments. Management does not believe that this gradual
decline in such revenues will have a material adverse effect on the Company's
results of operations and financial condition.
The Company experienced an anticipated decline in revenues from Packard
Bell during the three months ended March 31, 1997 as compared to the same period
in 1996. Revenues from Packard Bell represented 20% of total Company revenues
for the three months ended March 31, 1997 compared to 26% for the three months
ended March 31, 1996. This lower level of revenue was generally in line with
revenues from Packard Bell for the preceding three month period. The call volume
level for the three months ended March 31, 1997 may not be indicative of future
call volumes due to recent changes made by Packard Bell in its end user product
warranty.
Packard Bell is invoiced monthly and payment is due no later than 30 days
after the invoice date, with a penalty of 1.5% of the unpaid balance accruing
monthly beginning 60 days after the invoice date. The Company typically
receives payment from Packard Bell approximately 60 days after the billing date,
which is generally a longer payment cycle than experienced under the Company's
other service contracts. In light of the substantial amount of the Company's
total revenues that are attributable to Packard Bell, failure to receive payment
in accordance with past practice under the Packard Bell contract could have a
material adverse on the Company's cash flow.
Continued growth of the Company's customer base and its services can be
expected to continue to place a significant strain on its administrative,
operational and financial resources. The Company's future performance and
profitability will depend in part on its ability to successfully implement
enhancements to its business management systems and to adapt those systems as
necessary to respond to changes in its business. Furthermore, although the
Company has experienced rapid growth in total revenues and has previously been
profitable, its limited operating history makes the prediction of future
operations difficult. There can be no assurance that the Company's revenue
growth will continue in the future or that profitable operating results can be
sustained.
In February 1997, the Financial Accounting Standards Board issued Statement
of Financial Accounting Standards No. 128, "Earnings per Share" (SFAS 128).
SFAS 128 establishes new standards for computing and presenting EPS.
Specifically, SFAS 128 replaces the presentation of primary EPS with a
presentation of basic EPS, requires dual presentation of basic and diluted EPS
on the face of the income statement for all entities with complex capital
structures, and requires a reconciliation of the numerator and denominator of
the basic EPS computation to the numerator and denominator of the diluted EPS
computation. SFAS 128 is effective for financial statements issued for periods
ending after December 15, 1997; earlier application is not permitted. Management
has determined
<PAGE>
that the adoption of SFAS 128 will not have a material effect on the
accompanying financial statements. Other issued but not yet required FASB
standards are not currently applicable or material to the Company's operations.
THREE MONTHS ENDED MARCH 31, 1997 COMPARED TO THREE MONTHS ENDED MARCH 31, 1996
Total revenues. Total revenues increased 2.5% from $17.2 million for the
three months ended March 31, 1996 to $17.7 million for the three months ended
March 31, 1997 due to increased revenues from enterprise network support and new
PC support revenues offset by declines in service revenues from Packard Bell and
FedEx.
Service revenues. Revenues from services increased 9.2% from $9.4 million
(54.1% of total revenues) for the three months ended March 31, 1996 to $10.2
million (57.9% of total revenues) for the three months ended March 31, 1997.
This increase was attributable to increased service revenues associated with the
Company's enterprise network support services and increased revenues from a new
PC support customer offset by decreases in revenue from services provided to
Packard Bell and FedEx. Revenues from enterprise network support services
increased by 33.3% while revenues from Packard Bell and FedEx decreased by 18.8%
and 11.3%, respectively, for the three months ended March 31, 1997 as compared
to revenues from these services for the three months ended March 31, 1996. The
volume of repair services on certain equipment provided to FedEx for the three
months ended March 31, 1997 may not be indicative of future repair volumes due
to the recent introduction of newer technology equipment by FedEx into its
operation. For the three months ended March 31, 1997 compared to the same
period in 1996, the Company experienced decreases in revenues from its
proprietary channel extension support business in line with its previously
stated expectations.
Hardware revenues. Revenues from hardware products decreased 5.8% from
$7.9 million (45.7% of total revenue) for the three months ended March 31, 1996
to $7.4 million (42.1% of total revenues) for the three months ended March 31,
1997 due to a decrease in revenues from the lease of other manufacturers'
hardware.
Cost of Service. Cost of service increased 7.7% from $6.4 million (68.1% of
service revenues) for the three months ended March 31, 1996 to $6.9 million
(67.1% of service revenues) for the three months ended March 31, 1997. This
increase was in line with overall increases in service revenues for the same
period.
Cost of Hardware. Cost of hardware decreased 3.3% from $5.7 million (72.1%
of hardware revenues) for the three months ended March 31, 1996 to $5.5 million
(73.8% of hardware revenue) for the three months ended March 31, 1997. This
decrease was caused primarily by decreased hardware sales.
Gross Margin. Overall gross margin increased 2.4% from $5.2 million, or
30.1% of total revenues, for the three months ended March 31, 1996 to $5.3
million, or 30.1% of total revenues for the three months ended March 31, 1997.
Gross margin on services increased 12.5% from $3.0 million for the three months
ended March 31, 1996 to $3.3 million for the three months ended March 31, 1997,
while increasing as a percent of revenue from 31.9% to 32.9% respectively.
Gross margin on hardware revenues decreased 12.6% from $2.2 million for the
three months ended March 31, 1996 to $2.0 million for the three months ended
March 31, 1997. This decrease was caused primarily by decreased revenues from
the lease of other manufacturers' equipment. Hardware margins as a percentage
of hardware revenues decreased from 27.9% for the three months ended March 31,
1996 to 26.2% for the three months ended March 31, 1997 primarily as a result of
the decreased proportion of total hardware revenues derived from leasing
activities. The Company has experienced competitive pressure on resale hardware
margins and anticipates continued pressure due to increasing price competition.
Selling and Marketing Expenses. Selling and marketing expenses increased
2.7% from $2.2 million, or 12.9% of total revenues, for the three months ended
March 31, 1996 to $2.3 million, or 12.9% of total revenues, for the three months
ended March 31, 1997. This increase was in line with increases in enterprise
services revenues and new support contract sales activity.
<PAGE>
Research and Development Expenses. Research and development expenses
decreased 36.1% from $0.5 million, or 2.6% of total revenues, for the three
months ended March 31, 1996 to $0.3 million, or 1.9% of total revenues, for the
three months ended March 31, 1997. Increased expenses associated with the
Company's service development activity were offset by reduced internal business
systems support expenses now being reported together with general and
administrative expenses.
General and Administrative Expenses. General and administrative expenses
remained constant at $1.1 million, or 6.5% of total revenues, for the three
months ended both March 31, 1996 and 1997.
Operating Income. Operating income increased 10.9% from $1.4 million, or
8.1% of total revenues, for the three months ended March 31, 1996 to $1.6
million, or 8.8% of total revenues, for the three months ended March 31, 1997 as
a result of the factors listed above.
Interest Expense, Net. Net interest expense increased from $2,000 for the
three months ended March 31, 1996 to $41,000, for the three months ended March
31, 1997. Interest income totaled $0.1 million for the three months ended March
31, 1996 and was not material for the three months ended March 31, 1997.
Income Taxes. The Company's effective income tax rate was 36.4% for the
three months ended March 31, 1997, as compared to 35.0% in the same period of
the prior fiscal year. The increase resulted from reduced non-taxable interest
income.
LIQUIDITY AND CAPITAL RESOURCES
The Company's operating activities provided cash of $2.1 million for the
three months ended both March 31, 1996 and 1997. Cash provided by operating
activities for the 1996 period was primarily due to income and increases in
deferred revenue partially offset by increases in accounts receivable and
inventory. Cash provided by operating activities for the 1997 period was
primarily due to net income and increases in current leases receivable and
deferred revenue offset by increases in accounts receivable.
The Company's investing activities used cash of $8.9 million and $1.9
million for the three months ended March 31, 1996 and 1997, respectively. Cash
used in the Company's investing activities for the 1996 and 1997 periods related
to, and the change corresponded to fluctuations in the Company's capitalization
of leases receivable from customers pending the Company's discounting of such
leases, where possible, to third party lending institutions and the purchase of
property, plant and equipment.
Financing activities provided cash of $2.2 million and used cash of $0.5
million for the three months ended March 31, 1996 and 1997, respectively. Cash
provided in the Company's financing activities for the three months ended March
31, 1996 related to borrowings under the Company's credit facility offset
partially by repayments of long term debt. Cash used in the Company's financing
activities for the three months ended March 31, 1997 related to the repayment of
long term debt.
The Company's cash requirements have been financed with cash flow from
operations and borrowings under its revolving credit facility with First Union
National Bank of Florida (the "Bank") since October 1996. Prior to October
1996, the Company's credit facility was with SouthTrust Bank of Georgia, N.A.
The credit facility with the Bank provides for borrowings of up to $15.0 million
based on the value and aging of the Company's eligible accounts and lease
receivables. Borrowings under the line of credit bear interest at the Bank's
quoted variable base rate, which has ranged from 6.9% to 7.2% and was 7.0% as of
March 31, 1997. As of March 31, 1997, the Company had no outstanding balance
under the line of credit and approximately $9.4 million was available for
borrowing thereunder based upon the Company's qualifying accounts and lease
receivables. The Company intends to use its borrowing capacity under the line
of credit on a limited basis primarily for working capital requirements. The
credit facility expires in September, 1998. Although there can be no assurances
that the Bank will do so, the Company believes that the Bank will agree to renew
the facility.
<PAGE>
The Company believes that leasing provides a key competitive advantage in
the sale of long term support agreements and that there are significant extended
lease and used equipment resale opportunities combined with long term support
agreement renewal opportunities at the end of the initial term of leases. In
addition, the Company views leasing as a source of low cost future replacement
spares inventories which can be deployed to reduce future capital commitments
for enterprises network support contracts. As of March 31, 1997, the Company's
investment in capital leases included $6.2 million of leases which had been
discounted via non-recourse notes payable to banks. An additional $7.3 million
represented undiscounted leases, a portion of which the Company expects to
discount in the near future. The Company intends to reduce its working capital
committed to this activity. From time to time this leasing activity places
demands on the Company's working capital based on the timing and availability of
discounting activities with financial institutions.
Management believes that cash from operations and borrowings available
under its revolving credit facility together with current cash balances will be
sufficient to finance its working capital needs and capital expenditure
requirements for at least the next 12 months. Although no assurance can be
given, management believes that cash from operations together with available
sources of financing, including additional bank debt, will be sufficient to fund
the company's capital requirements for the foreseeable future beyond such 12
month period. The Company does not currently have any material commitments for
capital expenditures.
The above "Management's Discussion and Analysis of Financial Condition and
Results of Operations" contains forward-looking statements that involve risks
and uncertainties. The Company's actual results could differ materially from
those anticipated in these forward-looking statements as a result of certain
factors.
Item 3. Quantitative and Qualitative Disclosures About Market Risks.
Not Applicable.
<PAGE>
PART II OTHER INFORMATION
- ------- -----------------
Item 1. Legal Proceedings
Not Applicable.
Item 2. Changes in Securities
Not Applicable.
Item 3. Defaults Upon Senior Securities
Not Applicable.
Item 4. Submission of Matters to a Vote of Shareholders
Not Applicable.
Item 5. Other Information
Not Applicable.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit No. Description
----------- -----------
11.1 TechForce Corporation and Subsidiaries
Computation of Earnings Per Share of Common
Stock.
27 Summary Financial Data
(b) No reports on Form 8-K were filed during the period.
<PAGE>
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 dully authorized.
TECHFORCE CORPORATION
Date: May 12, 1997 /s/ Jerrel W. Kee
--------------------------------------------
Jerrel W. Kee
Chief Financial Officer
(principal financial and accounting officer)
<PAGE>
EXHIBIT INDEX
-------------
<TABLE>
<CAPTION>
EXHIBIT NO. PAGE
- ----------- ----
<S> <C>
(a) Exhibit No. Description
----------- -----------
11.1 TechForce Corporation and Subsidiaries Computation of Earnings Per
Share of Common Stock.
27 Summary Financial Data
(b) No reports on Form 8-K were filed during the period
</TABLE>
<PAGE>
TECHFORCE CORPORATION AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE OF COMMON STOCK
FOR THE THREE MONTHS ENDED MARCH 31, 1997 AND MARCH 31, 1996
EXHIBIT 11.1
<TABLE>
<CAPTION>
Quarter Ended Quarter Ended
March 31, 1997 March 31, 1996
---------------- ----------------
<S> <C> <C>
Primary:
Weighted average shares outstanding..................... 7,979,909 7,905,500
Net effect on dilutive securities, based on the
treasury stock and if-converted methods............... 285,563 532,325
---------------- ----------------
Total Shares used in computation............................ 8,265,472 8,437,825
Net Income.................................................. $ 960,000 $ 907,000
Net income per common and equivalent share.................. $ 0.12 $ 0.11
Fully diluted:
Weighted average shares outstanding..................... 7,979,909 7,905,500
Net effect of dilutive securities, based on the
treasury stock and if-converted methods............... 285,573 533,303
---------------- ----------------
Total Shares used in computation............................ 8,265,482 8,438,803
Net Income.................................................. $ 960,000 $ 907,000
Net income per common and common equivalent share........... $ 0.12 $ 0.11
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM TECHFORCE
CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEET MARCH 31, 1997 (IN
THOUSANDS) AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<PERIOD-START> JAN-01-1997
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 702
<SECURITIES> 5,336
<RECEIVABLES> 14,231
<ALLOWANCES> 676
<INVENTORY> 4,129
<CURRENT-ASSETS> 27,224
<PP&E> 19,423
<DEPRECIATION> 7,482
<TOTAL-ASSETS> 48,024
<CURRENT-LIABILITIES> 12,879
<BONDS> 3,213
0
0
<COMMON> 80
<OTHER-SE> 29,344
<TOTAL-LIABILITY-AND-EQUITY> 48,024
<SALES> 7,441
<TOTAL-REVENUES> 17,661
<CGS> 5,488
<TOTAL-COSTS> 12,350
<OTHER-EXPENSES> 3,761
<LOSS-PROVISION> 676
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1,509
<INCOME-TAX> 549
<INCOME-CONTINUING> 1,550
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 960
<EPS-PRIMARY> 0.12
<EPS-DILUTED> 0.12
</TABLE>
