<PAGE> 1
UNITED STATES
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 QUARTER ENDED JUNE 30, 1999
OR
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
COMMISSION FILE NUMBER: 000-26970
DIAMOND TECHNOLOGY PARTNERS INCORPORATED
(Exact name of registrant as specified in its charter)
DELAWARE 36-4069408
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
875 N. MICHIGAN AVENUE, SUITE 3000
CHICAGO, ILLINOIS 60611
(Address of Principal Executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (312) 255-5000
Indicate by check mark whether the Registrant (1) has filed all reports
required to be filed by Section 13 or 15 (d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
Registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days. Yes X No
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date:
As of July 31, 1999, there were 10,093,973 shares of Class A Common
Stock and 3,506,388 shares of Class B Common Stock of the Registrant
outstanding.
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DIAMOND TECHNOLOGY PARTNERS INCORPORATED
QUARTERLY REPORT ON FORM 10-Q
FOR THE FISCAL QUARTER ENDED JUNE 30, 1999
TABLE OF CONTENTS
PART I -- FINANCIAL INFORMATION:
Item 1: Financial Statements
Consolidated Balance Sheets as of June 30, 1999 and March 31, 1999.. 2
Consolidated Statements of Operations for the Three Months
Ended June 30, 1999 and 1998........................................ 3
Consolidated Statements of Cash Flows for the Three Months Ended
June 30, 1999 and 1998.............................................. 4
Notes to Consolidated Financial Statements.......................... 5
Item 2: Management's Discussion and Analysis of Financial Condition and
Results of Operations............................................... 7
Item 3: Quantitative and Qualitative Disclosure about Market Risk........... 10
PART II -- OTHER INFORMATION:
Item 6: Exhibits and Reports on Form 8-K.................................... 11
SIGNATURES.................................................................. 12
1
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DIAMOND TECHNOLOGY PARTNERS INCORPORATED
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
JUNE 30, MARCH 31,
1999 1999
------- --------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents............................................................ $37,470 $ 47,698
Accounts receivable, net of allowance of $573 and
$419 as of June 30, 1999 and March 31, 1999, respectively......................... 12,045 10,434
Prepaid expenses..................................................................... 892 1,790
Deferred income taxes................................................................ 735 735
------- --------
Total current assets........................................................ 51,142 60,657
Computers, equipment and training software, net......................................... 4,327 3,419
Other assets............................................................................ 3,184 3,010
Intangibles, net........................................................................ 6,753 -
------- --------
Total assets................................................................ $65,406 $ 67,086
======= ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable..................................................................... $ 2,338 $ 1,468
Note payable, current portion........................................................ 500 -
other accrued liabilities............................................................ 5,631 12,317
------- --------
Total current liabilities................................................... 8,469 13,785
Note payable, less current portion...................................................... 500 -
------- --------
Total liabilities........................................................... 8,969 13,785
Stockholders' equity:
Preferred Stock, $1.00 par value, 2,000 shares
authorized, no shares issued...................................................... - -
Class A common stock, $.001 par value, 40,000 shares
authorized, 10,500 issued as of June 30, 1999 and
10,005 issued as of March 31, 1999................................................ 10 10
Class B common stock, $.001 par value, 20,000 shares
authorized, 3,491 issued as of June 30, 1999 and
3,649 issued as of March 31, 1999................................................. 3 4
Additional paid-in capital........................................................... 45,166 42,152
Notes receivable from sale of common stock........................................... (183) (32)
Retained earnings.................................................................... 19,449 16,451
------- --------
64,445 58,585
Less Class A Common Stock in treasury, at cost, 424 shares
and 304 shares held at June 30, 1999 and March 31, 1999,
respectively......................................................................... 8,008 5,284
------- --------
Total stockholders' equity.................................................. 56,437 53,301
------- --------
Total liabilities and stockholders, equity.................................. $65,406 $ 67,086
======= ========
</TABLE>
See accompanying notes to consolidated financial statements
2
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DIAMOND TECHNOLOGY PARTNERS INCORPORATED
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT PER SHARE DATA)
(UNAUDITED)
FOR THE QUARTER
ENDED JUNE 30,
----------------------
1999 1998
------- -------
Net revenues........................................... $25,718 $18,375
------- -------
Operating expenses:
Project personnel and related expenses.............. 13,945 9,899
Professional development and recruiting............. 2,085 1,951
Marketing and sales................................. 1,598 1,044
Management and administrative support............... 3,539 2,549
------- -------
Total operating expenses.................... 21,167 15,443
------- -------
Income from operations................................. 4,551 2,932
Interest income, net................................... 365 597
------- -------
Income before taxes.................................... 4,916 3,529
Income taxes........................................... 1,917 1,394
------- -------
Net income.................................. $ 2,999 $ 2,135
======= =======
Basic earnings per share of common stock............... $ 0.22 $ 0.16
Diluted earnings per share of common stock............. $ 0.19 $ 0.14
Shares used in computing basic earnings per
share of common stock............................... 13,535 13,147
Shares used in computing diluted earnings
per share of common stock........................... 15,937 15,651
See accompanying notes to consolidated financial statements
3
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DIAMOND TECHNOLOGY PARTNERS INCORPORATED
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
FOR THE QUARTER
ENDED JUNE 30,
---------------------------
1999 1998
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net income...................................................... $ 2,999 $ 2,135
Adjustments to reconcile net income to net cash used in
operating activities:
Depreciation and amortization.................................. 440 244
Changes in assets and liabilities, net of effects
of acquisition:
Accounts receivable......................................... 232 (299)
Prepaid expenses and other.................................. 950 (569)
Accounts payable............................................ 743 (248)
other assets and liabilities................................ (9,865) (3,768)
-------- --------
Net cash used in operating activities.................... (4,501) (2,505)
-------- --------
Cash flows from investing activities:
Capital expenditures, net....................................... (996) (429)
Payment for purchase of company................................. (3,027) -
Other assets.................................................... - (193)
-------- --------
Net cash used in investing activities.................... (4,023) (622)
-------- --------
Cash flows from financing activities:
Stock issuance costs............................................ - (1,523)
Common stock issued............................................. 1,019 20,053
Purchase of treasury stock...................................... (2,723) -
-------- --------
Net cash provided (used in) by financing activities...... (1,704) 18,530
-------- --------
Net increase (decrease) in cash and cash equivalents............... (10,228) 15,403
Cash and cash equivalents at beginning of period................... 47,698 31,437
-------- --------
Cash and cash equivalents at end of period......................... $ 37,470 $ 46,840
======== ========
Supplemental disclosure of cash flow information:
Cash paid during the period for interest........................ $ 6 $ -
Cash paid during the period for income taxes.................... 202 1,233
Supplemental disclosure of noncash investing and
financing activities:
Issuance of common stock for notes.............................. $ 183 $ -
Issuance of acquisition note payable............................ 1,000 -
Issuance of common stock in acquisition......................... 1,842 -
</TABLE>
See accompanying notes to consolidated financial statements
4
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DIAMOND TECHNOLOGY PARTNERS INCORPORATED
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
A. BASIS OF REPORTING
The accompanying consolidated financial statements of Diamond
Technology Partners Incorporated (the "Company") include the accounts of the
Company and its wholly owned subsidiary. All significant intercompany
transactions and balances have been eliminated in consolidation. Certain prior
period amounts have been reclassified to conform with current period
presentation. In the opinion of management, the consolidated financial
statements reflect all normal and recurring adjustments which are necessary for
a fair presentation of the Company's financial position, results of operations,
and cash flows as of the dates and for the periods presented. The consolidated
financial statements have been prepared in accordance with generally accepted
accounting principles for interim financial information. Consequently, these
statements do not include all the disclosures normally required by generally
accepted accounting principles for annual financial statements nor those
normally made in the Company's Annual Report on Form 10-K. Accordingly,
reference should be made to the Company's Annual Report on Form 10-K for
additional disclosures, including a summary of the Company's accounting
policies, which have not changed. The consolidated results of operations for the
three months ended June 30, 1999 are not necessarily indicative of results for
the full year.
B. EARNINGS PER SHARE
The Company calculated earnings per share in accordance with Statement
of Financial Accounting Standards No. 128, "Earnings Per Share", and they are
presented in accordance with Securities and Exchange Commission Staff Accounting
Bulletin No. 98.
SFAS 128 establishes standards for computing and presenting earnings
per share (EPS) and requires a dual presentation of basic and diluted earnings
per share. Basic earnings per share is computed using the weighted average
number of common shares outstanding. Diluted earnings per share is computed
using the weighted average number of common shares outstanding and the assumed
exercise of stock options and warrants (using the treasury stock method).
C. BUSINESS COMBINATION
On April 23, 1999, the Company acquired OmniTech Consulting Group, Inc.
("Omnitech"), a Chicago-based change management firm specializing in web-based
and other multimedia corporate learning. Under the terms of the acquisition
agreement, the Company paid $4.0 million in cash, and issued a $1.0 million note
and 115,641 shares of the Company's Class A Common Stock. Additionally, OmniTech
may be paid a maximum of $2 million over the next two years upon achievement of
certain performance measures.
The acquisition is being accounted for under the purchase method of
accounting and, accordingly, the operating results of OmniTech have been
included in the Company's consolidated financial statements since the date of
acquisition. The excess of net assets acquired ("Goodwill") approximated $6.8
million and is being amortized on a straight-line basis over 25 years. The
goodwill recorded at June 30, 1999 is based on current estimates and may be
adjusted in future periods as more information becomes available.
5
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The following summarized unaudited pro forma financial information for
the three months ended June 30, 1999 and 1998 assume the OmniTech acquisition
occurred as of April 1 of each year:
Three months
ended June 30,
(in millions, except per share data) 1999 1998
- --------------------------------------------------------------------------------
Net sales $ 26,262 $ 20,922
Net income 2,900 2,251
Earnings per share
Basic 0.21 0.17
Diluted 0.18 0.14
- --------------------------------------------------------------------------------
These amounts are based upon certain assumptions and estimates, and do
not necessarily represent results which would have occurred if the acquisition
had taken place on the basis assumed above, nor are they indicative of the
results of future combined operations.
6
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MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following information should be read in conjunction with the
information contained in the Consolidated Financial Statements and notes thereto
appearing elsewhere in this Quarterly Report on Form 10-Q. This Quarterly Report
on Form 10-Q contains forward-looking statements that involve risks and
uncertainties. See "Forward-Looking Statements" below.
OVERVIEW
Diamond Technology Partners Incorporated (the "Company" or "Diamond")
is an e-commerce services firm. Positioned as the CEO's guide to e-commerce, the
Company helps its leading national and multinational clients create and
implement digital strategies - business strategies for the digital age. The
Company serves clients primarily in the telecommunications, energy, financial
services, insurance, healthcare, consumer products, and consumer services
industries. The Company offers services in Digital Strategy- development,
program management, e-commerce solution delivery (through its Diamond
Marketspace Solutions (sm) offering), change management and profit improvement.
Diamond was founded upon a belief that effective e-commerce digital strategies
can be conceived only when strategy and technology are considered in tandem, not
in sequence.
The Company's revenues are comprised of professional fees for services
rendered to clients which are generally billed either monthly or semi-monthly in
accordance with the terms of the client engagement. Prior to the commencement of
a client engagement, the Company and its client agree on fees for services based
upon the scope of the project, Diamond staffing requirements and the level of
client involvement. The Company recognizes revenues as services are performed in
accordance with the terms of the client engagement. Out-of-pocket expenses are
reimbursed by clients and offset against expenses incurred and are not included
in recognized revenues. Provisions are made for estimated uncollectible amounts
based on the Company's experience. Although the Company from time to time has
been required to make revisions to its clients' estimated deliverables, to date
none of such revisions has had a material adverse effect on the Company's
operating or financial results.
The largest portion of the Company's costs consists primarily of
employee-related expenses for its client-serving professionals and other direct
costs, such as third-party vendor costs and unbilled travel costs associated
with the delivery of services to clients. The remainder of the Company's
costs are comprised of the expenses associated with the development of the
business and the support of its client-serving professionals, such as
professional development and recruiting, marketing and sales, and management and
administrative support. Professional development and recruiting expenses consist
primarily of recruiting and training costs. Marketing and sales expenses consist
primarily of the costs associated with the Company's development and maintenance
of its marketing materials and programs. Management and administrative support
expenses consist primarily of the costs associated with operations, finance,
information systems, facilities and other administrative support for project
personnel.
The Company regularly reviews its fees for services, professional
compensation and overhead costs to ensure that its services and compensation are
competitive within the industry. In addition, Diamond periodically monitors the
progress of client projects with its clients' senior management. The Company
manages activities of its professionals by closely monitoring engagement
schedules and staffing requirements for new engagements. Because most of the
Company's client engagements are, and may be in the future, terminable by the
client without penalty, an unanticipated termination of a client project could
require the Company to maintain underutilized employees.
7
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RESULTS OF OPERATIONS
The following table sets forth for the periods indicated, selected
statements of operations data as a percentage of net revenues:
FOR THE QUARTER
ENDED JUNE 30,
---------------
1999 1998
----- -----
Net revenues 100.0% 100.0%
----- -----
Operating expenses:
Project personnel and related expenses 54.2 53.9
Professional development and recruiting 8.1 10.6
Marketing and sales 6.2 5.7
Management and administrative support 13.8 13.8
----- -----
Total operating expenses 82.3 84.0
----- -----
Income from operations 17.7 16.0
Interest income, net 1.4 3.2
----- -----
Income before taxes 19.1 19.2
Income taxes 7.4 7.6
----- -----
Net income 11.7% 11.6%
===== =====
QUARTER ENDED JUNE 30, 1999 COMPARED TO QUARTER ENDED JUNE 30, 1998
The Company's net income of $3.0 million during the quarter ended June
30, 1999 improved from $2.1 million during the same period in the prior year as
a result of increased revenues, partially offset by an increase in the cost of
its client-serving professionals and an increase in expenses required to support
the Company's growth during the period.
The Company's net revenues increased 40% to $25.7 million during the
quarter ended June 30, 1999 as compared to the same period in the prior year.
The increase in the Company's net revenues reflects an increase in the volume of
services delivered to new clients, as well as the leveraging of the Company's
existing client base by undertaking additional projects for these clients. The
Company served 89 clients during the quarter ended June 30, 1999 as compared to
40 clients during the same period in the prior year.
Project personnel and related expenses increased $4.0 million to $13.9
million during the quarter ended June 30, 1999 as compared to the same period in
the prior year. In aggregate, project personnel and related expenses increased
40.9% from the same period in the prior year due to increases in both the number
and compensation of its client-serving professionals. The Company increased its
client-serving professional staff from 187 at June 30, 1998 to 296 at June 30,
1999. As a percentage of net revenues, project personnel and related expenses
increased from 53.9% to 54.2% during the quarter ended June 30, 1999, as
compared to the same period in the prior year.
Professional development and recruiting expenses increased $134,000
during the quarter ended June 30, 1999 as compared to the same period in the
prior year. This increase reflects the Company's recruiting and training of a
higher number of client-serving professionals and an associated increase in
recruiting and training resources. As a percentage of net revenues, these
expenses decreased to 8.1% as compared to 10.6% during the same period in the
prior year, as a result of the Company's improved operating leverage resulting
from it's net revenue growth.
Marketing and sales expenses increased from $1.0 million to $1.6
million during the quarter ended June 30, 1999 as compared to the same period in
the prior year primarily as a result of the Company's continued investment in
(i) the publication of its magazine, "Context", which was launched during the
third quarter of fiscal 1998 and (ii) the conduct of one-day digital strategy
executive seminars for prospective clients. As a percentage of net revenues,
these expenses increased from 5.7% to 6.2%.
8
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Management and administrative support expenses increased from $2.5
million to $3.5 million, or 38.8%, during the quarter ended June 30, 1999 as
compared to the same period in the prior year as a result of the additional
facilities, equipment and personnel necessary to support the Company's growth
and increased consulting capacity. As a percentage of net revenues, these
expenses remained constant at 13.8%.
LIQUIDITY AND CAPITAL RESOURCES
During the quarter ended June 30, 1998 the Company sold approximately
650,000 shares of Class A Common Stock. Net proceeds to the Company totaling
approximately $15.9 million were realized in April 1998.
On November 12, 1998, the Company entered into a revolving line of
credit with a commercial bank under which the Company may borrow up to $10.0
million at an annual interest rate based on the prime rate or based on the LIBOR
plus 1.75%, at the Company's discretion. This line of credit has been reduced to
account for letters of credit outstanding. As of June 30, 1999, the Company had
approximately $9.8 million available under this line of credit.
The Company's billings for the quarter ended June 30, 1999 totaled
$31.1 million. These amounts include billings to clients for out-of-pocket
expenses that are reimbursed by clients and are not included in recognized
revenues. The Company's gross accounts receivable balance of $12.6 million at
June 30, 1999 represents 36 days of billings for the quarter.
In September 1998, the Company's Board of Directors authorized the
repurchases, from time to time, of up to one million shares of the Company's
Class A Common Stock. These repurchases were authorized to be made in the open
market or in privately negotiated transactions. At June 30, 1999, the number of
shares purchased under this authorization was approximately 424,000 at an
aggregate cost of approximately $8,008,000. The Company funded the repurchases
through its cash balances.
The Company currently anticipates that amounts available under its
current revolving line of credit, cash generated from operations and existing
cash balances will be sufficient to satisfy its operating cash needs for fiscal
2000. Should the Company's business expand more rapidly than expected, the
Company believes that additional bank credit would be available to fund such
operating and capital requirements. In addition, the Company could consider
seeking additional public or private debt or equity financing to fund future
growth opportunities.
YEAR 2000 ISSUE
Many existing computer programs were designed and developed without
considering the impact of the upcoming change in the century and consequently
use only two digits to identify a year in the date field. If not corrected, many
computer applications could fail or create erroneous results by or at the year
2000 (the "Year 2000 Issue" or "Y2K") . The Company has conducted an assessment
of the potential impact of the Year 2000 Issue on its operations and mission
critical vendors. In light of the fact that the Company has only been in
existence for a little over five years, the Company's key financial, information
and operation systems have been designed to be Year 2000 compliant without the
need for any modifications or conversions. Accordingly, the Company does not
expect the Year 2000 Issue to have a material effect on the Company's
consolidated financial position, results of operation or cash flows.
The Company has participated in certain projects that involve Y2K
issues for some of its clients. Generally,the Company includes provisions in
client contracts that, among other things, disclaim implied warranties, limit
the duration of express warranties, and limit the Company's liability to the
amount of fees paid by the client to the Company in connection with the project.
The Company also maintains insurance to protect against potential liability that
may rise in connection with Y2K issues at its clients. Although the Company has
no reason to believe that any such work will result in litigation against the
Company, it is possible that the Company could be adversely affected by
litigation in connection with these projects. There can be no assurance that the
Company will be able to obtain the desired contractual protections in
agreements, or that any such contractual provisions will prevent clients from
asserting claims against the Company with respect to the Y2K issue. There can
also be no assurance that the contractual protections, if any, obtained by the
9
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Company or the insurance coverage will operate to protect the Company from, or
adequately limit the amount of, any liability arising from claims asserted
against the Company.
FORWARD-LOOKING STATEMENTS
Statements contained anywhere in this report that are not historical
facts contain forward-looking statements including such statements identified by
the words "anticipate", "believe", "estimate", "expect" or similar terminology
used with respect to the Company and its management. These forward-looking
statements are subject to risks and uncertainties which could cause the
Company's actual results, performance and prospects to differ materially from
those expressed in, or implied by, the forward-looking statements. The
forward-looking statements speak only as of the date hereof and the Company
undertakes no obligation to revise or update them to reflect events or
circumstances that arise in the future. Readers are cautioned not to place undue
reliance on forward-looking statements. For a statement of the Risk Factors that
might adversely affect the Company's operating or financial results, see Exhibit
99.1 to this Quarterly report on Form 10-Q.
QUANTITATIVE AND QUALITATIVE DISCLOSURE ABOUT MARKET RISK
There have been no material changes since March 31, 1999.
10
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PART II. OTHER INFORMATION
ITEM 1 - 5
None
ITEM 6 EXHIBITS and REPORTS on FORM 8-K
(a) Exhibits
3.1 Articles of Incorporation (filed as Exhibit 3.1 to the
Registration Statement on Form S-1 (File No. 333-17785)
and incorporated herein by reference)
3.2 By-Laws (filed as Exhibit 3.2 to the Registration
Statement on Form S-1 (File No. 333-17785) and
incorporated herein by reference)
27. Financial Data Schedule
99.1 Risk Factors (filed as Exhibit 99.1 to the
Company's Annual Report on Form 10-K for the
fiscal year ended March 31, 1999 and
incorporated herein by reference)
(b) Reports on Form 8-K
None
11
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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.
DIAMOND TECHNOLOGY PARTNERS INCORPORATED
Date: August 13, 1999 BY: /s/ MELVYN E. BERGSTEIN
---------------------------
Melvyn E. Bergstein
Chairman, Chief Executive officer and
Director
Date: August 13, 1999 By: /s/ KARL E. BUPP
--------------------
Karl E. Bupp
Vice President, Chief Financial officer
and Treasurer
12
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DIAMOND TECHNOLOGY PARTNERS INCORPORATED
EXHIBIT INDEX
EXHIBIT
NO. DESCRIPTION
- ------- -----------
3.3 Articles of Incorporation (filed as Exhibit 3.1 to the Registration
Statement on Form S-1 (File No. 333-17785) and incorporated herein by
reference)
3.4 By-Laws (filed as Exhibit 3.2 to the Registration Statement on Form
S-1 (File No. 333 17785) and incorporated herein by reference)
27 Financial Data Schedule (for SEC use only)
99.1 Risk Factors (filed as Exhibit 99.1 to the Company's Annual Report on
Form 10-K for the fiscal year ended March 31, 1999 and incorporated
herein by reference)
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS AND STATEMENTS OF OPERATIONS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAR-31-2000
<PERIOD-START> APR-01-1999
<PERIOD-END> JUN-30-1999
<CASH> 37,470
<SECURITIES> 0
<RECEIVABLES> 12,618
<ALLOWANCES> 573
<INVENTORY> 0
<CURRENT-ASSETS> 51,142
<PP&E> 7,812
<DEPRECIATION> 3,485
<TOTAL-ASSETS> 65,406
<CURRENT-LIABILITIES> 8,469
<BONDS> 0
0
0
<COMMON> 13
<OTHER-SE> 56,424
<TOTAL-LIABILITY-AND-EQUITY> 65,406
<SALES> 0
<TOTAL-REVENUES> 25,718
<CGS> 0
<TOTAL-COSTS> 0
<OTHER-EXPENSES> 21,167
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 4,916
<INCOME-TAX> 1,917
<INCOME-CONTINUING> 2,999
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,999
<EPS-BASIC> .22
<EPS-DILUTED> .19
</TABLE>
