<PAGE>
---------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
FOR THE QUARTER ENDED SEPTEMBER 30, 1998
COMMISSION FILE NUMBER 1-13286
--------------
DUFF & PHELPS CREDIT RATING CO.
(Exact name of Registrant as specified in its Charter)
ILLINOIS 36-3569514
(State of Incorporation) (I.R.S. Employer
Identification No.)
55 EAST MONROE STREET, CHICAGO, ILLINOIS 60603 (312)368-3100
(Address of principal executive offices) (Registrant's telephone number)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the Registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes X No
--- ---
On October 31, 1998, the registrant had 4,636,515 shares of common stock
outstanding.
- - -------------------------------------------------------------------------------
<PAGE>
DUFF & PHELPS CREDIT RATING CO. AND SUBSIDIARIES
Quarter Ended September 30, 1998
Index
<TABLE>
<CAPTION>
<S> <C>
PART I. - FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Condensed Statements of Income 1
Three Months Ended September 30, 1998 and
Three Months Ended September 30, 1997
Consolidated Condensed Statements of Income 2
Nine Months ended September 30, 1998 and
Nine Months ended September 30, 1997
Consolidated Balance Sheets 3
September 30, 1998 and December 31, 1997
Consolidated Statements of Cash Flows 4
Nine Months Ended September 30, 1998 and
Nine Months Ended September 30, 1997
Notes to the Consolidated Financial Statements 5-7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF 8-10
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
PART II. - OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K 10
</TABLE>
<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. CONSOLIDATED FINANCIAL STATEMENTS
DUFF & PHELPS CREDIT RATING CO. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(In Thousands, Except Per Share Data)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Three Months
Ended Ended
September 30, September 30,
1998 1997
------------- -------------
<S> <C> <C>
REVENUES (NOTE 1) $19,108 $16,710
EXPENSES
Employment expenses 8,031 7,131
Other operating expenses 3,604 4,411
Name usage fees--paid to former
parent (Note 2) 500 500
Depreciation and amortization (Note 1) 718 555
------- -------
Total expenses 12,853 12,597
OPERATING INCOME 6,255 4,113
Other income 365 91
Interest income (expense) (Note 3) 56 (131)
------- -------
EARNINGS BEFORE INCOME TAXES 6,676 4,073
Income taxes 2,892 1,793
------- -------
NET EARNINGS $ 3,784 $ 2,280
------- -------
------- -------
Basic weighted average shares outstanding
(Note 1) 4,808 4,909
BASIC EARNINGS PER SHARE (NOTE 1) $ 0.79 $ 0.46
Diluted weighted average shares outstanding
(Note 1) 5,246 5,238
DILUTED EARNINGS PER SHARE (NOTE 1) $ 0.72 $ 0.44
</TABLE>
-1-
The accompanying notes to the consolidated financial statements are
an integral part of these statements.
<PAGE>
DUFF & PHELPS CREDIT RATING CO. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(In Thousands, Except Per Share Data)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Nine Months
Ended Ended
September 30, September 30,
1998 1997
------------- -------------
<S> <C> <C>
REVENUES (NOTE 1) $62,391 $47,999
EXPENSES
Employment expenses 25,552 20,004
Other operating expenses 11,941 12,081
Name usage fees--paid to former parent (Note 2) 1,500 1,500
Depreciation and amortization (Note 1) 2,096 1,629
------- -------
Total expenses 41,089 35,214
OPERATING INCOME 21,302 12,785
Other income 606 317
Interest income (expense) (Note 3) (138) (348)
------- -------
EARNINGS BEFORE INCOME TAXES 21,770 12,754
Income taxes 9,374 5,456
------- -------
NET EARNINGS $12,396 $7,298
------- -------
------- -------
Basic weighted average shares outstanding (Note 1) 4,820 5,035
BASIC EARNINGS PER SHARE (NOTE 1) $ 2.57 $ 1.45
Diluted weighted average shares
outstanding (Note 1) 5,255 5,331
DILUTED EARNINGS PER SHARE (NOTE 1) $ 2.36 $ 1.37
</TABLE>
-2-
The accompanying notes to the consolidated financial statements are
an integral part of these statements.
<PAGE>
DUFF & PHELPS CREDIT RATING CO. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In Thousands)
<TABLE>
<CAPTION>
September 30, December 31,
ASSETS 1998 1997
------------ -----------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS:
Cash and cash equivalents $ 1,920 $ 955
Accounts receivable, net of allowance for doubtful
accounts of $502 and $323, respectively 11,319 12,233
Other current assets 1,130 973
------- -------
Total current assets 14,369 14,161
OFFICE FURNITURE, EQUIPMENT AND LEASEHOLD
IMPROVEMENTS, net of accumulated depreciation
of $5,032 and $3,748, respectively (Note 1) 5,154 4,914
OTHER ASSETS:
Intangible assets (Note 1) 1,786 2,015
Goodwill (Note 1) 21,786 22,346
Other long-term investments 2,525 2,010
Other long-term assets 40 58
------- -------
TOTAL ASSETS $45,660 $45,504
------- -------
------- -------
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accrued compensation and employment taxes $ 8,104 $ 8,169
Accounts payable 3,016 3,275
Accrued income tax (308) (719)
Advance service fee billings to clients (Note 1) 838 1,259
Other current liabilities 0 29
------- -------
Total current liabilities 11,650 13,451
LONG-TERM DEBT (Note 3) 0 7,000
OTHER LONG-TERM LIABILITIES (Note 1) 3,221 1,776
STOCKHOLDERS' EQUITY:
Preferred stock, no par value: 3,000 shares
authorized, zero outstanding 0 0
Common stock, no par value; 15,000 shares
authorized, 4,740 and 4,807 shares
issued and outstanding, respectively 0 363
Retained earnings 30,789 22,914
------- -------
TOTAL STOCKHOLDERS' EQUITY 30,789 23,277
------- -------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $45,660 $45,504
------- -------
------- -------
</TABLE>
-3-
The accompanying notes to the consolidated financial statements are
an integral part of these statements.
<PAGE>
DUFF & PHELPS CREDIT RATING CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Nine Months
Ended Ended
September 30, September 30,
1998 1997
------------- -------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net earnings $ 12,396 $ 7,298
Decrease (increase) in accounts receivable 914 (2,247)
Increase (decrease) in accrued compensation
and employment taxes (65) 292
Increase (decrease) in advance service fee
billings (421) 432
Depreciation and amortization 2,096 1,629
Decrease in income taxes payable (291) (369)
Increase (decrease) in other assets and
and liabilities - net 979 (553)
-------- --------
Cash provided by operating activities 15,608 6,482
-------- --------
CASH FLOWS FROM INVESTING ACTIVITIES:
Increase in other long-term investments (515) (507)
Purchase of office furniture, equipment
and leasehold improvements-net of
retirements (1,525) (990)
-------- --------
Cash used in investing activities (2,040) (1,497)
-------- --------
CASH FLOWS FROM FINANCING ACTIVITIES:
Decrease (increase) in deferred financing costs 19 (11)
Dividends paid to shareholders (435) (453)
Issuances of common stock 604 967
Repurchase of common stock (5,791) (9,215)
Increase of long-term debt 8,000 16,750
Decrease of long-term debt (15,000) (12,750)
-------- --------
Cash used in financing activities (12,603) (4,712)
-------- --------
NET CHANGE IN CASH 965 273
-------- --------
CASH, BEGINNING OF PERIOD 955 0
-------- --------
CASH, END OF PERIOD $ 1,920 $ 273
-------- --------
-------- --------
</TABLE>
-4-
The accompanying notes to the consolidated financial statements are
an integral part of these statements.
<PAGE>
DUFF & PHELPS CREDIT RATING CO. AND SUBSIDIARIES
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1 SIGNIFICANT ACCOUNTING POLICIES:
GENERAL
Duff & Phelps Credit Rating Co. (the "Company") is an internationally
recognized credit rating agency which provides ratings and research on
corporate, structured and sovereign financings, as well as insurance claims
paying ability. The Company has offices in Chicago, New York, London and
Hong Kong and operates directly or through international partners in North
America, South America, Europe, Asia and Africa. The Company is also a
designated rating agency in Japan.
On October 31, 1994, the spin-off of the Company from its former parent
company, Phoenix Duff & Phelps Corporation, formerly Duff & Phelps
Corporation ("D&P"), was finalized. The Company's shares, held by D&P, were
distributed October 31, 1994, to D&P shareholders of record on October 26,
1994, as a tax-free distribution for which a favorable tax ruling was
obtained from the Internal Revenue Service. D&P shareholders received one of
the Company's shares for every three shares held of D&P common stock, and
cash payments were made in lieu of fractional shares. The distribution
resulted in the Company operating as a free standing entity whose common
stock is publicly traded on the New York Stock Exchange under the ticker
symbol "DCR."
BASIS OF PRESENTATION
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions. These estimates affect the reported amounts of assets,
liabilities and disclosure of contingent assets and liabilities at the date
of the financial statements. In addition, they affect the reported amounts
of revenues and expenses during the period. Actual results could differ from
these estimates.
The accompanying consolidated financial statements have been prepared in
accordance with generally accepted accounting principles and include those
assets, liabilities, revenues and expenses directly attributable to the
Company's operations in the periods presented. Certain reclassifications
have been made to prior year financial statements to conform with the current
presentation.
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of the
Company and its wholly-owned subsidiaries, Duff & Phelps Credit Rating Co. of
Europe and Duff & Phelps Credit Rating Co. of Asia. All significant
intercompany balances and transactions have been eliminated.
EARNINGS PER SHARE
Earnings per share were computed using the weighted average number of
shares of common stock and common stock equivalents outstanding for each of
the periods presented. Common stock equivalents are based on outstanding
stock options under a non-qualified stock option plan.
-5-
<PAGE>
Following is a reconciliation of the denominator used to calculate basic
earnings per share to the denominator used to calculate diluted earnings per
share for the periods indicated (in thousands):
<TABLE>
<CAPTION>
September 30, 1998 1997
- - ----------------------------------------------------------------------------------------------------
<S> <C> <C>
Basic Weighted Average Shares Outstanding 4,820 5,035
Stock Options Outstanding 1,110 976
Shares Purchased Using Proceeds from Option Exercises & Related Tax Benefit (675) (680)
- - ----------------------------------------------------------------------------------------------------
Diluted Weighted Average Shares Outstanding 5,255 5,331
----- -----
----- -----
</TABLE>
REVENUE RECOGNITION
Rating revenues are typically recognized when services rendered for
credit ratings are complete, generally when billed. Revenues are dependent,
in large part, on levels of debt issuance. The Company's fee schedule
depends on the type and amount of securities rated and the complexity of
securities issued. Research revenues are billed in advance and amortized over
the subscription period. Monitoring fees are billed in advance and are
amortized over the length of the life of the security.
GOODWILL AND INTANGIBLE ASSETS
Goodwill and intangible assets are shown net of accumulated
amortization. Goodwill is amortized over its estimated remaining life of
approximately 30 years, and intangible assets are amortized over remaining
lives of 2 through 11 years.
The Company periodically evaluates whether significant events have
occurred which may require a revision of the estimated useful life of
goodwill and intangible assets or an impairment of the recoverability of
remaining balances. The Company uses an estimate of future discounted cash
flows over the remaining useful life of goodwill and intangible assets to
measure recoverability. Management believes that the full amount of goodwill
and intangible assets is recoverable.
DEPRECIATION AND AMORTIZATION
Office furniture and equipment are stated at cost less accumulated
depreciation and are depreciated on a straight-line basis over the estimated
remaining lives of the assets, typically 3 to 10 years. Leasehold
improvements are amortized over the remaining lives of the related leases
which on average are 2 to 10 years.
2 RELATED PARTIES:
SERVICE FEES PAID TO D&P
A name use fee agreement in effect between the Company and D&P requiring
payment of $2 million per year is included in the Company's financial results
for the periods presented. Effective September 30, 2000, the name use fee
reduces to $10 thousand per year.
SERVICE FEES PAID TO THE COMPANY
The Company provides D&P with fixed income research services for an
annual fee of $0.9 million. For the periods presented, the fixed income
research fees are included in revenue. The fixed income research agreement
expires on September 30, 2000.
-6-
<PAGE>
3 LONG-TERM DEBT AND SUPPLEMENTAL CASH FLOWS INFORMATION:
Long-term debt obligations were zero at September 30, 1998, and
$7.0 million at a weighted average interest rate of approximately 6.4 percent
at December 31, 1997. Cash interest and fees paid net of interest earned
were $0.1 million for the nine months ended September 30, 1998. Cash
interest and fees were $0.3 million for the nine months ended September 30,
1997.
Dividends paid totaled $0.4 million, and stock repurchases of
115,800 shares amounted to $5.8 million. during nine months ended September 30,
1998.
Income taxes paid were $3.6 million during 1998 and $8.0 million in the
nine months ended September 30, 1998.
4 LITIGATION MATTERS:
The Company and its subsidiaries are from time to time parties to
various legal actions arising in the normal course of business. Management
believes that there are no proceedings pending against the Company or any of
its subsidiaries which, if determined adversely, would have a material
adverse effect on the financial condition or results of operations of the
Company.
5 SUBSEQUENT EVENTS:
Since September 30, 1998, the Company has repurchased an additional
105,000 shares amounting to $4.4 million. Such shares will be used, in part
or whole, to implement the Corporation's stock incentive plans for share
issuances of option exercises. The repurchased shares are accounted for as
cancellations with reductions to paid-in capital for the cash payments.
-7-
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1998, COMPARED WITH
THREE MONTHS ENDED SEPTEMBER 30, 1997
Revenues for the quarter ended September 30, 1998, were $19.1 million,
an increase of 14 percent or $2.4 million, over the $16.7 million recorded in
the third quarter of 1997. Structured Finance rating revenues rose $3.2
million and were offset by a decline in corporate rating revenues of $.8
million.
The growth in third quarter revenues was the result of strong
performance by the structured finance rating businesses, namely the asset
backed and residential and commercial mortgage backed units, which posted a
50 percent revenue increase over last year's third quarter. Partially
offsetting third quarter growth was the decline in corporate rating revenues
of eight percent primarily due to lower issuance fees reflecting difficult
market conditions for domestic corporate and emerging market debt.
International rating revenues, which are incorporated in the above
comparisons and contributed to the overall gains, increased six percent over
last year as a result of strong growth in Europe offset by weaknesses in Asia
and Latin America.
Operating expenses for the three months ended September 30, 1998 were
$12.9 million, an increase of two percent or $0.3 million, over the
previously recorded $12.6 million for the corresponding period in 1997. This
increase was due to an increase in employment expenses and general and
administrative expenses due to the increase in business discussed above.
These increases were offset by a decrease in legal expenses for the period in
1998 versus 1997.
Operating income for the three months ended September 30, 1998, was
$6.3 million, an increase of $2.2 million or 54 percent over the $4.1 million
recorded in 1997.
The Company recorded interest income of $0.1 million in the third quarter
of 1998 versus interest costs of $0.1 million in the third quarter of 1997.
Income tax expense increased proportionately with income before taxes.
Net earnings totaled $3.8 million for the three months ended September 30,
1998, a $1.5 million or 65 percent increase over last year. Diluted earnings
per share increased 64 percent to $0.72 versus $0.44 in 1997. Basic earnings
per share increased to $0.79 in 1998 versus $0.46 in 1997. Earnings per share
gains are the result of the performance described above.
NINE MONTHS ENDED SEPTEMBER 30, 1998, COMPARED WITH
NINE MONTHS ENDED SEPTEMBER 30, 1997
Revenues for the nine months ended September 30, 1998, were $62.4 million,
an increase of 30 percent or $14.4 million, over the $48.0 million recorded in
the corresponding period in 1997. Rating revenues accounted for $14.5 million
of the increase and were offset by a decline in other revenues of $0.1 million.
Corporate rating revenues, which increased by 15 percent over 1997, were
benefited by a high level of financing activity by non-financial corporations in
the first six months of 1998 which were slightly offset by lower issuance levels
during the third quarter of the year. Structured finance rating revenues
increased by 54 percent over 1997 and were driven by a high level of real estate
and asset backed financings.
-8-
<PAGE>
International rating revenues, which are incorporated in the above
comparisons and contributed to the overall gains, increased 34 percent over last
year.
Operating expenses for the nine months ended September 30, 1998 were
$41.1 million, an increase of $5.9 million or 17 percent over the $35.2 million
recorded in 1997. This increase was due to an increase in employment expenses
and general and administrative expenses due to the increase in revenues
mentioned above. These increases were offset by a decrease in legal expenses
during 1998 versus 1997.
Operating income for the nine months ended September 30, 1998, was $21.3
million, an increase of $8.5 million or 66 percent over the $12.8 million
recorded in 1997.
Interest expense decreased in the nine months of 1998 due to the reduction
and subsequent elimination of long-term debt during 1998. Income tax expense
increased proportionately with income before taxes.
Net earnings totaled $12.4 million for the nine months ended September 30,
1998, a $5.1 million or 70 percent increase over last year. Diluted earnings
per share increased 72 percent to $2.36 versus $1.37 in 1997. Basic earnings
per share increased to $2.57 in 1998 versus $1.45 in 1997. Earnings per share
gains are primarily the result of the performance described above in addition to
the reduction in shares outstanding due to stock repurchases.
LIQUIDITY AND CAPITAL RESOURCES
The Company has typically financed its operations, which do not require
significant amounts of working capital or capital expenditures, through funds
provided by operations.
For the first nine months ended September 30, 1998, capital expenditures,
net of retirements totaled $1.5 million. These capital expenditures were
primarily for leasehold improvements, computer equipment and office furniture.
The Company expects capital expenditures to approximate $2.0 million in 1998.
Other cash investments of $0.5 million for the first nine months of 1998
included payments made for ownership shares in certain joint ventures.
Financing activities in the first nine months of 1998, included stock
repurchases of 115,800 shares amounting to $5.8 million, net debt payments of
$7.0 million and dividend payments totaling approximately $0.4 million.
The Company has in place a $20.0 million revolving bank credit agreement
that expires December 31, 1999. At September 30, 1998, no borrowings were
outstanding, compared with $7.0 million outstanding at December 31, 1997, at a
weighted average interest rate of 6.4 percent. Commitment fees are accrued on
the unused facility at an annual rate of .25 percent and are paid quarterly.
The bank credit agreement contains the following financial covenants among
others: (i) a minimum net worth test; (ii) a maximum leverage test; and (iii) a
limitation on indebtedness and capital expenditures. The Company is currently
in compliance with such covenants. The bank credit agreement also imposes
certain restrictions on sale of assets, mergers or consolidations, creation of
liens, investments, leases and loans and certain other matters.
The Company believes that funds provided by operations and amounts
available under its credit agreement will provide adequate liquidity for the
foreseeable future.
-9-
<PAGE>
YEAR 2000
The Year 2000 issue is the result of computer programs using a two-digit format,
instead of four digits to indicate years, which could cause a system failure or
other computer errors in connection with year 2000 computing. The Company is
taking steps to ensure that all systems will be fully compliant with Year 2000
requirements. The company has adopted a Year 2000 compliance program and is
currently in the assessment and renovation phases of such program. Certain
material software applications are already fully compliant. The Company is
soliciting written assurances from outside software vendors and third parties
that their software will be century-compliant. The Company believes that
substantially all its internal systems will be in compliance prior to the
commencement of the Year 2000. The Company believes it will have no material
business risk from such Year 2000 issues. Accordingly, the Company has not
established a contingency plan. The cost to ensure compliance is estimated to
be immaterial to the results of operations at this time.
SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995.
This report contains forward-looking statements that are subject to risks and
uncertainties, including but not limited to the following: the Company's
performance is highly dependent on corporate debt issuances and structured
finance transactions, which may decrease for any number of reasons including
changes in interest rates and adverse economic conditions; the Company's
performance is affected by the demand for and market acceptance of the Company's
services; and the Company's performance may be impacted by changes in the
performance of the financial markets and general economic conditions.
Accordingly, actual results may differ materially from those set forth in the
forward-looking statements. Attention is also directed to other risk factors
set forth in documents filed by the Company with the Securities and Exchange
Commission.
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
<TABLE>
<CAPTION>
<S> <C>
Exhibit No. Description
27 Financial Data Schedule
</TABLE>
-10-
<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.
Duff & Phelps Credit Rating Co.
November 10, 1998 /s/ Marie C. Becker
_______________________________________
Marie C. Becker
Group Vice President, Accounting & Finance
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED STATEMENTS OF OPERATION FOUND ON
PAGES 1 AND 2 OF THE COMPANY'S FORM 10-Q FOR THE YEAR-TO-DATE, AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> SEP-30-1998
<CASH> 1,920
<SECURITIES> 0
<RECEIVABLES> 11,319
<ALLOWANCES> 502
<INVENTORY> 0
<CURRENT-ASSETS> 14,369
<PP&E> 5,154
<DEPRECIATION> 5,032
<TOTAL-ASSETS> 45,660
<CURRENT-LIABILITIES> 11,650
<BONDS> 0
0
0
<COMMON> 0
<OTHER-SE> 30,789
<TOTAL-LIABILITY-AND-EQUITY> 45,660
<SALES> 0
<TOTAL-REVENUES> 62,391
<CGS> 0
<TOTAL-COSTS> 40,759
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (138)
<INCOME-PRETAX> 21,770
<INCOME-TAX> 9,374
<INCOME-CONTINUING> 12,396
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12,396
<EPS-PRIMARY> 2.57
<EPS-DILUTED> 2.36
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED STATEMENTS OF OPERATION FOUND ON
PAGES 1 AND 2 OF THE COMPANY'S FORM 10-Q FOR THE YEAR TO DATE, AND IS QUALIFIED
IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 273
<SECURITIES> 0
<RECEIVABLES> 12,545
<ALLOWANCES> 356
<INVENTORY> 0
<CURRENT-ASSETS> 13,524
<PP&E> 8,554
<DEPRECIATION> 3,847
<TOTAL-ASSETS> 44,606
<CURRENT-LIABILITIES> 10,959
<BONDS> 9,500
0
0
<COMMON> 0
<OTHER-SE> 24,130
<TOTAL-LIABILITY-AND-EQUITY> 44,606
<SALES> 0
<TOTAL-REVENUES> 47,999
<CGS> 0
<TOTAL-COSTS> 34,897
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 348
<INCOME-PRETAX> 12,754
<INCOME-TAX> 5,456
<INCOME-CONTINUING> 7,298
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 7,298
<EPS-PRIMARY> 1.45
<EPS-DILUTED> 1.37
</TABLE>
