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 QUARTERLY PERIOD ENDED MARCH 31, 1998
Commission File No. 0-24946
KNIGHT TRANSPORTATION, INC.
(Exact name of registrant as specified in its charter)
Arizona 86-0649974
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
5601 West Buckeye Road
Phoenix, Arizona
85043
(Address of Principal Executive Offices)
(Zip Code)
Registrant's telephone number, including area code: 602-269-2000
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
--------------- ------------
The number of shares outstanding of registrant's Common Stock, par value $0.01
per share, as of May 13, 1998 was 14,942,760 shares.
<PAGE>
KNIGHT TRANSPORTATION, INC.
INDEX
<TABLE>
<CAPTION>
PART I - FINANCIAL INFORMATION Page Number
<S> <C> <C>
Item 1. Financial Statements
Consolidated Balance Sheets as of 1
March 31, 1998 and December 31, 1997
Consolidated Statements of Income for the Three 3
Month Periods Ended March 31, 1998 and March 31, 1997
Consolidated Statements of Cash Flows for the 4
Three Month Periods Ended March 31, 1998 and
March 31, 1997
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of Financial 7
Condition and Results of Operations
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 Security Holders 10
Item 5. Other Information 10
Item 6 Exhibits and Reports on Form 8-K 10
Signatures 12
Index to Exhibits 14
</TABLE>
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
KNIGHT TRANSPORTATION, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
as of March 31, 1998, and December 31, 1997
March 31, 1998 December 31, 1997
-------------- -----------------
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 903,201 $ 512,339
Accounts receivable, net 12,134,679 11,934,364
Inventories and supplies 1,431,098 402,076
Prepaid expenses 2,654,478 694,434
Deferred tax asset 2,349,100 1,907,800
------------ ------------
Total current assets 19,472,556 15,451,013
------------ ------------
PROPERTY AND EQUIPMENT:
Land and improvements 4,322,837 4,322,837
Buildings and improvements 2,017,322 1,855,092
Furniture and fixtures 2,460,837 2,146,637
Shop and service equipment 1,033,983 1,018,636
Revenue equipment 77,601,043 75,695,123
Leasehold improvements 443,161 432,467
------------ ------------
87,879,183 85,470,792
Less: Accumulated depreciation (21,813,240) (20,025,293)
------------ ------------
PROPERTY AND EQUIPMENT, net 66,065,943 65,445,499
OTHER ASSETS 2,989,600 1,793,284
------------ ------------
$ 88,528,099 $ 82,689,796
============ ============
The accompanying notes are an integral part of these consolidated financial
statements.
1
<PAGE>
KNIGHT TRANSPORTATION, INC. AND SUBSIDIARIES
Consolidated Balance Sheets (continued)
as of March 31, 1998 and December 31, 1997
<TABLE>
<CAPTION>
March 31, 1998 December 31, 1997
-------------- -----------------
LIABILITIES AND SHAREHOLDERS' EQUITY
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable $ 4,615,842 $ 4,847,070
Accrued liabilities 4,545,468 3,082,413
Claims accrual 3,718,395 3,463,322
Line of credit 2,000,000 2,000,000
Current portion of long-term debt -- 14,171
----------- -----------
Total current liabilities 14,879,705 13,406,976
DEFERRED INCOME TAXES 13,822,858 12,485,085
----------- -----------
Total liabilities 28,702,563 25,892,061
----------- -----------
COMMITMENTS AND CONTINGENCIES
SHAREHOLDERS' EQUITY:
Preferred stock, $0.01 par value; -- --
authorized 50,000,000 shares,
none issued and outstanding
Common stock, $0.01 par value; 149,335 149,244
authorized 100,000,000 shares; 14,933,463 and
14,924,423, issued and outstanding shares at
March 31, 1998 and December 31, 1997, respectively
Additional paid-in capital 24,105,761 24,007,385
Retained earnings 35,570,440 32,641,106
----------- -----------
Total shareholders' equity 59,825,536 56,797,735
----------- -----------
$88,528,099 $82,689,796
=========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
2
<PAGE>
KNIGHT TRANSPORTATION, INC. AND SUBSIDIARIES
Consolidated Statements of Income
<TABLE>
<CAPTION>
Three Months Ended
March 31,
-----------------------------------
1998 1997
------------ ------------
<S> <C> <C>
OPERATING REVENUE $ 28,258,506 $ 21,322,548
------------ ------------
OPERATING EXPENSES:
Salaries, wages and benefits 8,330,096 6,045,096
Fuel 2,765,506 2,175,571
Operations and maintenance 1,701,094 1,236,119
Insurance and claims 803,895 486,744
Operating taxes and licenses 1,125,960 897,645
Communications 236,409 130,774
Depreciation and amortization 2,796,854 2,125,596
Purchased transportation 4,870,821 4,172,940
Miscellaneous operating expenses 604,290 522,585
------------ ------------
23,234,925 17,793,070
------------ ------------
Income from operations 5,023,581 3,529,478
------------ ------------
OTHER INCOME (EXPENSE):
Interest income 9,136 36,528
Interest expense (48,382) (14,001)
------------ ------------
(39,246) 22,527
------------ ------------
Income before taxes 4,984,335 3,552,005
INCOME TAXES (2,055,000) (1,460,000)
------------ ------------
Net Income $ 2,929,335 $ 2,092,005
============ ============
Net income per common share and common share equivalent:
Basic $ 0.20 $ 0.14
Diluted $ 0.19 $ 0.14
Weighted average number of common
shares and common share equivalents
outstanding:
Basic 14,927,136 14,879,718
Diluted 15,240,101 15,112,151
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
3
<PAGE>
KNIGHT TRANSPORTATION, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------------------------------
1998 1997
----------- -----------
CASH FLOWS FROM OPERATING ACTIVITIES
<S> <C> <C>
Net income $ 2,929,335 $ 2,092,005
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 2,796,853 2,125,596
Allowance for doubtful accounts 25,322 36,780
Deferred income taxes, net 896,473 1,071,372
Changes in assets and liabilities:
(Increase) decrease in receivables (225,638) 531,475
Increase in inventories and supplies (1,029,021) (36,370)
Increase in prepaid expenses (1,960,044) (1,344,033)
Increase in other assets (1,204,930) (42,001)
Increase in accounts payable 1,759,407 623,795
Increase in accrued liabilities and
claims accrual 1,718,128 547,112
----------- -----------
Net cash provided by operating activities 5,705,885 5,605,731
----------- -----------
CASH FLOW FROM INVESTING ACTIVITIES:
Purchase of property and equipment, net of trade-ins (2,646,204) 125,200
----------- -----------
Net cash (used in) provided by investing activities (2,646,204) 125,200
----------- -----------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
4
<PAGE>
KNIGHT TRANSPORTATION, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows (continued)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------------------------------
1998 1997
----------- -----------
CASH FLOW FROM FINANCING ACTIVITIES:
<S> <C> <C>
Proceeds from exercise of stock options 98,467 --
Repayment of debt (14,171) (260,861)
Decrease in accounts payable - equipment (2,753,115) (2,912,994)
----------- -----------
Net cash used in financing activities (2,668,819) (3,173,855)
----------- -----------
NET INCREASE IN CASH AND CASH
EQUIVALENTS 390,862 2,557,076
CASH AND CASH EQUIVALENTS,
beginning of period 512,339 1,244,745
----------- -----------
CASH AND CASH EQUIVALENTS, end of period $ 903,201 $ 3,801,821
=========== ===========
SUPPLEMENTAL DISCLOSURES:
Noncash investing and financing transactions:
Equipment acquired by accounts
payable $ 1,830,629 $ 3,440,282
Cash Flow Information:
Income taxes paid $ 326,776 $ 275,500
Interest paid 48,428 3,842
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
5
<PAGE>
KNIGHT TRANSPORTATION, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Financial Information
The accompanying consolidated financial statements include the parent company
Knight Transportation, Inc., and its wholly owned subsidiaries, Quad-K Leasing,
Inc.; KTTE Holdings, Inc., QKTE Holdings, Inc., Knight Management Services, Inc.
and Knight Dedicated Services Limited Partnership (hereinafter collectively
called the "Company"). All material intercompany items and transactions have
been eliminated in consolidation.
The consolidated financial statements included herein have been prepared
pursuant to the rules and regulations of the Securities and Exchange Commission.
The statements presented do not include all information and footnotes required
to be in conformity with generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring adjustments) considered necessary for a fair presentation
have been included. Results of operations in interim periods are not necessarily
indicative of results for a full year. These consolidated financial statements
and notes thereto should be read in conjunction with the Company's consolidated
financial statements and notes thereto included in the Company's Annual Report
on Form 10-K for the year ended December 31, 1997. The preparation of financial
statements in accordance with generally accepted accounting principles requires
management to make estimates and assumptions. Such estimates and assumptions
affect the reported amounts of assets and liabilities as well as disclosure of
contingent assets and liabilities at the date of the consolidated financial
statements, and the reported amounts of the revenues and expenses during the
reporting periods. Actual results could differ from those estimates.
Note 2. Recapitalization and Stock Split
On April 22, 1998 the Board of Directors approved a three for two stock split,
effected in the form of a 50 percent stock dividend. The stock split will be
payable on or about May 18, 1998 to stockholders of record at the close of
business on May 1, 1998.
This stock split has been given retroactive recognition in all periods presented
in the accompanying consolidated financial statements.
6
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
Results of Operations
- ---------------------
The Company's operating revenue for the three months ended March 31, 1998
increased by 32.5% to approximately $28.3 million from approximately $21.3
million over the same period in 1997. The increase in operating revenue resulted
from expansion of the Company's customer base and increased volume from existing
customers, which was facilitated by the continued expansion of the Company's
fleet, including an increase in the Company's independent contractor program.
The Company's fleet increased by 25% to 788 tractors (including 202 owned by
independent contractors) as of March 31, 1998, from 629 tractors (including 181
owned by independent contractors) as of March 31, 1997. Along with increases in
operating revenue, the Company's revenue per mile increased to $1.24 per mile
for the three months ended March 31, 1998 from $1.23 per mile for the same
period in 1997. The revenue per mile increase was primarily the result of
tightened capacity in the market place.
Salaries, wages and benefits increased as a percentage of operating revenue to
29.5% for the three months ended March 31, 1998 from 28.4% for the same period
in 1997. These increases were primarily the result of the increase in the ratio
of company drivers to independent contractors to 74% as of March 31, 1998 from
71% as of March 31, 1997. The Company records accruals for workers' compensation
as a component of its claims accrual, and the related expense is reflected in
salaries, wages and benefits expense in its consolidated statements of income.
Fuel expense decreased as a percentage of operating revenue to 9.8% for the
three months ended March 31, 1998 from 10.2% for the same period in 1997,
primarily the result of lower fuel costs per gallon. Independent contractors are
required to pay their own fuel costs.
Operations and maintenance expense increased as a percentage of operating
revenue to 6.0% for the three months ended March 31, 1998 from 5.8% for the
corresponding period in 1997. This increase resulted from the relative increase
in company drivers to independent contractors as well as slightly higher
maintenance costs related to the age of the Company's fleet.
Insurance and claims expense increased as a percentage of operating revenue to
2.8% for the three months ended March 31, 1998 from 2.3% for the same period in
1997. This increase was due to a slight increase in the amount of claims
incurred during the period.
Operating taxes and licenses decreased as a percentage of revenue to 4.0% for
the three months ended March 31, 1998 from 4.2% for the same period in 1997.
This decrease was due to improved utilization of the Company's fleet.
Depreciation and amortization expense decreased as a percentage of revenue to
9.9% for the three month period ended March 31, 1998, from 10.0% for the same
period in 1997 as a result of improved utilization of the Company's fleet.
Purchased transportation decreased as a percentage of operating revenue to 17.2%
for the three months ended March 31, 1998 from 19.6% for the same period in 1997
due to the increase in the Company's revenue per mile. Independent contractors
are compensated at a fixed rate per mile. Also, this decrease was due to the
decrease in the ratio of independent contractors to company drivers to 26% as of
March 31, 1998 from 29% as of March 31, 1997.
7
<PAGE>
Communications expenses, as a percentage of revenue, were slightly higher for
the three months ended March 31, 1998 as compared to the same period in 1997 as
the result of an increase in the cost of communications.
Miscellaneous operating expenses, as a percentage of revenue, were slightly
lower for the three months ended March 31, 1998 as compared to the same period
in 1997 as the result of improved utilization of the Company's fleet.
The Company's operating ratio (operating expenses as a percentage of operating
revenue) for the three months ended March 31, 1998 decreased to 82.2% from 83.4%
for the same period in 1997. Management believes the decrease in the operating
ratio was mainly due to tightened market capacity that resulted in higher
utilization of the Company's fleet and a corresponding increase in revenue per
mile.
For the three month period ended March 31, 1998, net interest expense increased
as a percentage of revenue compared to the same period in 1997, primarily as a
result of the purchase of revenue equipment related to the growth of the
Company's fleet.
Income taxes have been provided at the statutory federal and state rates,
adjusted for certain permanent differences in income for tax purposes.
As a result of the preceding, the Company's net income as a percentage of
operating revenue was 10.4% for the three months ended March 31, 1998, as
compared to 9.8% for the same period in 1997.
Liquidity and Capital Resources
The growth of the Company's business has required a significant investment in
new revenue equipment. The Company's primary source of liquidity has been funds
provided by operations, term borrowings to finance equipment purchases and the
Company's line of credit. Net cash provided by operating activities totaled
approximately $5.7 million for the first three months of 1998 and approximately
$5.6 million for the corresponding period in 1997.
Capital expenditures for the purchase of revenue equipment, net of trade-ins,
office equipment and leasehold improvements totaled approximately $4.5 million
for the first three months of 1998 and approximately $3.3 million for the same
period in 1997.
Net cash used in financing activities and direct financing was approximately
$2.7 million for the first three months of 1998 compared to approximately $3.2
million for the same period in 1997.
The Company has a $10 million line of credit from its lender and uses that line
to finance the acquisition of revenue equipment and other corporate purposes to
the extent the cost of such acquisitions are not provided by funds from
operations. Under the Company's line of credit, the Company is obligated to
comply with certain financial covenants. At March 31, 1998, the Company had $2
million borrowed under the revolving line of credit.
Management of the Company believes it has adequate liquidity to meet its current
needs. The Company will continue to have significant capital requirements over
the long term, which may require the Company to incur debt or seek additional
equity capital. The availability of this capital will depend upon prevailing
market conditions, the market price of the common stock and other factors over
which the Company has no control, as well as the Company's financial condition
and results of operations.
8
<PAGE>
Seasonality
To date, the Company's revenues have not shown any significant seasonal pattern.
Because the Company has operated primarily in Arizona, California and the
western United States, winter weather has not adversely affected the Company's
business. Expansion of the Company's operations in the midwest, on the east
coast and in the Texas and Louisiana regions could expose the Company to greater
operating variances due to seasonal weather.
Inflation
Many of the Company's operating expenses, including fuel costs and fuel taxes,
are sensitive to the effects of inflation, which could result in higher
operating costs. The effects of inflation on the Company's business during the
three months ended March 31, 1998 were not significant.
Year 2000 Capabilities
The Company's computer systems are Year 2000 compliant, or will be made Year
2000 compliant within the next 12 months. Neither the "Year 2000 issue" nor the
financial effects of any reviews, testing, or modifications the Company may
undertake in response to that issue are expected to have a material adverse
effect on the Company's business or its consolidated financial position, results
of operations or cash flows. At this time, the Company is unable to determine
whether the impact of the "Year 2000 issue" on its customers or suppliers will
affect the Company.
Recently Issued Accounting Pronouncements
In June 1997, the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards No. 130 (SFAS No. 130), Reporting
Comprehensive Income. SFAS No. 130 establishes standards for reporting and
display of comprehensive income and its components (revenues, gains, and losses)
in a full set of general-purpose financial statements. SFAS No. 130 requires
that all items that are required to be recognized under accounting standards as
components of comprehensive income be reported in a financial statement that is
displayed with the same prominence as other financial statements.
Reclassification of financial statements for earlier periods provided for
comparative purposes is required. The adoption of SFAS No. 130 did not have a
material impact on the Company's financial position or results of operations.
Total comprehensive income was $2,929,334 and $2,092,005 for the period ending
March 31, 1998 and March 31, 1997, respectively.
In June, 1997, the FASB issued Statement of Financial Accounting Standards No.
131 (SFAS No. 131), Disclosures About Segments of an Enterprise and Related
Information, which supersedes Statement of Financial Accounting Standards No.
14, Financial Reporting for Segments of a Business Enterprise. SFAS No. 131
establishes standards for the way that public business enterprises report
information about operating segments in annual financial statements and requires
that those enterprises report selected information about operating segments in
interim financial reports issued to shareholders. It also establishes standards
for related disclosures about products and services, geographic areas, and major
customers. This statement is effective for financial statements for periods
beginning after December 15, 1997. However, SFAS No. 131 need not be applied to
interim financial statements in the initial year of adoption. The adoption of
SFAS No. 131 will not have a material impact on the Company's financial position
or results of operations.
9
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
The Company is a party to ordinary, routine litigation and administrative
proceedings incidental to its business. These proceedings primarily involve
personnel matters, including EEOC claims and claims for personal injury or
property damage incurred in the transportation of freight. The Company maintains
insurance to cover liabilities arising from the transportation of freight in
amounts in excess of self-insured retentions. It is the Company's policy to
comply with applicable equal employment opportunity laws and the Company
periodically reviews its policies and practices for equal employment opportunity
compliance.
Item 2. Changes in Securities
Not Applicable
Item 3. Defaults Upon Senior Securities
Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders
Not Applicable
Item 5. Other Information
Not Applicable
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits required by Item 601 of Regulation S-K
No. Description
--- -----------
Exhibit 4 Instruments defining the rights of
security holders, including
indentures
(a) Articles 4, 10 and 11 of the
Restated Articles of Incorporation
of the Company. (Incorporated by
reference to Exhibit 3.1 to the
Company's Report on Form 10-K for
the fiscal year ended December 31,
1994.)
(b) Sections 2 and 5 of the Amended and
Restated By-laws of the Company.
(Incorporated by reference to
Exhibit 3.2 to the Company's Report
on Form 10-K for the fiscal year
ended December 31, 1995.)
10
<PAGE>
Exhibit 11 Schedule of Computation of Net
Income Per Share
Exhibit 27 Financial Data Schedule
(b) Reports on Form 8-K
The Company did not file any reports on Form 8-K during the three month
period ended March 31, 1998.
11
<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 duly authorized.
KNIGHT TRANSPORTATION, INC.
Date: May 13, 1998 By: /s/ Kevin P. Knight
-----------------------------------
Kevin P. Knight
Chief Executive Officer
Date: May 13, 1998 By: /s/ Clark Jenkins
-----------------------------------
Clark Jenkins
Chief Financial Officer and
Principal Financial Officer
12
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
EXHIBITS TO
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1998
Commission File No. 0-24946
13
<PAGE>
KNIGHT TRANSPORTATION, INC.
INDEX TO EXHIBITS TO FORM 10-Q
<TABLE>
<CAPTION>
Sequentially
Exhibit No. Description Numbered Pages(1)
- ----------- ----------- -----------------
<S> <C> <C>
Exhibit 4 Instruments defining the rights of security holders,
including indentures
(a) Articles 4, 10 and 11 of the Restated Articles of
Incorporation of the Company. (Incorporated by
reference to Exhibit 3.1 to the Company's Report on
Form 10-K for the fiscal year ended
December 31, 1994.)
(b) Sections 2 and 5 of the Amended and Restated By-laws
of the Company. (Incorporated by reference to Exhibit
3.2 to the Company's Report on Form 10-K for the
fiscal year ended December 31, 1995.)
Exhibit 11 Schedule of Computation of Net Income Per Share
Exhibit 27 Financial Data Schedule
</TABLE>
(1) The page numbers where exhibits (other than those incorporated by reference)
may be found are indicated only on the manually signed report.
14
KNIGHT TRANSPORTATION, INC.
AND SUBSIDIARIES
SCHEDULE OF COMPUTATION OF NET INCOME PER SHARE
Three Months Ended
March 31,
1998 1997
---- ----
Basic and diluted:
Weighted average common shares
outstanding - basic 14,927,136 14,879,718
Effect of stock options (1) 312,965 232,433
----------- -----------
Weighted average common share and
common share equivalents outstanding
- diluted 15,240,101 15,112,151
=========== ===========
Net Income $ 2,929,335 $ 2,092,005
Net income per common share and common
share equivalent
Basic $ .20 $ .14
=========== ===========
Diluted $ .19 $ .14
=========== ===========
Notes:
(1) Amount calculated using the treasury stock method.
EXHIBIT 11
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S CONSOLIDATED FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> MAR-31-1998
<EXCHANGE-RATE> 1
<CASH> 903,201
<SECURITIES> 0
<RECEIVABLES> 12,617,644
<ALLOWANCES> 482,965
<INVENTORY> 1,431,098
<CURRENT-ASSETS> 19,472,556
<PP&E> 87,879,183
<DEPRECIATION> 21,813,240
<TOTAL-ASSETS> 88,528,099
<CURRENT-LIABILITIES> 14,879,705
<BONDS> 0
0
0
<COMMON> 149,335
<OTHER-SE> 59,676,201
<TOTAL-LIABILITY-AND-EQUITY> 88,528,099
<SALES> 0
<TOTAL-REVENUES> 28,258,506
<CGS> 0
<TOTAL-COSTS> 23,234,925
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 39,246
<INCOME-PRETAX> 4,984,335
<INCOME-TAX> 2,055,000
<INCOME-CONTINUING> 2,929,335
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,929,335
<EPS-PRIMARY> .20
<EPS-DILUTED> .19
<FN>
RECAPITALIZATION AND STOCK SPLIT
On April 22, 1998 the Board of Directors approved a three for two stock split,
effected in the form of a 50 percent stock dividend. The stock split will be
payable on or about May 18, 1998 to stockholders of record at the close of
business on May 1, 1998. Prior Financial Data Schedules have not been restated
for this recapitalization and stock split.
</FN>
</TABLE>
