<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996.
[ ] TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE
SECURITIES AND EXCHANGE ACT OF 1934
For the transition period from to
Commission file number 0 - 26728
Tel-Save Holdings, Inc.
----------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware
----------------------------------------------------
(State or other jurisdiction of incorporation or organization)
23-2827736
----------------------------------------------------
(I.R.S. Employer Identification No.)
22 Village Square New Hope, Pa. 18938
----------------------------------------------------
(Address of principal executive offices - Zip code)
Registrant's telephone number, including area code: 215-862-1500
----------------------------------------------------
Former name, former address and former fiscal year,
if changes since last report.
Indicate by check 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
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS:
Indicate by check mark whether the registrant has filed all documents and
reports required to be filed by Section 12,13, or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court
Yes No
APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding
of each of the issuer's classes of common stock, as of the latest practicable
date.
Common Stock, $.01 par value, 28,034,000 shares outstanding as of May 14, 1996.
-1-
<PAGE>
TEL-SAVE HOLDINGS, INC.
FORM 10-Q
MARCH 31, 1996
TABLE OF CONTENTS
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets as of March 31, 1996
and December 31, 1995 3
Consolidated Statements of Income for the three
months ended March 31, 1996 and 1995 4
Consolidated Statement of Stockholders' Equity for the
three months ended March 31, 1996 5
Consolidated Statements of Cash Flows for the three
months ended March 31, 1996 and 1995 6
Notes to Consolidated Financial Statements 7
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 9
PART II - OTHER INFORMATION
Items 1 - 6 14
Signatures 15
-2-
<PAGE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
TEL-SAVE HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(In thousands, except for share data)
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
---- ----
(Unaudited)
<S> <C> <C>
Assets:
Current:
Cash and cash equivalents $26,116 $41,211
Accounts receivable, trade net of allowance for
uncollectible accounts of $822 and $804, respectively 20,666 19,088
Advances to partitions and note receivables 5,379 3,563
Due from broker 1,810 1,100
Note receivable from stockholder - current 4,990 -
Prepaid expenses and other current assets 691 194
--- ---
Total current assets 59,652 65,156
Property and equipment, net of accumulated depreciation of
$291 and $250, respectively 11,396 2,667
Intangibles, net of accumulated amortization of $2,050 and
$1,574, respectively 2,529 1,490
Note receivable from stockholder - 2,075
other assets 1,462 -
----- ---
Total assets $75,039 $71,388
========= ===========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued expenses:
Trade and other $13,903 $12,622
Partitions 4,966 3,047
Sales and excise taxes payable 1,590 1,406
Other 392 514
Securities sold short, at cost to purchase 1,810 1,100
Income taxes payable 3,674 2,375
Note payable to stockholder - current - 5,921
----- -----
Total current liabilities 26,335 26,985
Deferred credits 160 280
Deferred income taxes payable 2,776 2,809
----- -----
Total liabilities 29,271 30,074
------ ------
Commitments and contingencies
Stockholders' equity
Preferred stock, $.01 par value, 5,000,000 shares
authorized; no shares outstanding - -
Common stock - $.01 stated value, 100,000,000
authorized; 19,500,000 issued and outstanding 195 195
Additional paid-in capital 38,322 37,245
Retained earnings 7,251 3,874
----- -----
Total stockholders' equity 45,768 41,314
------ ------
Total liabilities and stockholders' equity $75,039 $71,388
=============================================================== ======= =======
</TABLE>
See accompanying notes to consolidated financial statements.
-3-
<PAGE>
TEL-SAVE HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
(In thousands, except for per share data)
For the Three Months
Ended March 31,
---------------
1996 1995
---- ----
Sales $51,065 $36,617
Cost of sales 44,233 31,243
------ ------
Gross profit 6,832 5,374
Selling, general and administrative 2,286 1,161
----- -----
Operating income 4,546 4,213
Other income, net 872 46
----- -----
Income before provision for income taxes 5,418 4,259
Provision for income taxes 2,041 -
----- -----
Net income $ 3,377 $ 4,259
========== =========
Pro forma:
Income before provision for income taxes $ 4,259
Pro forma provision for income taxes 1,704
-----
Pro forma net income $ 2,555
========== =========
Net income per share - Primary $ .16 $ .17
========== =========
Weighted average common and common equivalent 21,543 15,373
shares outstanding - Primary ========== =========
Net income per share - Fully Diluted $ .15 $ .17
========== =========
Weighted average common and common equivalent 22,929 15,395
shares outstanding - Fully Diluted ========== =========
See accompanying notes to consolidated financial statements.
-4-
<PAGE>
TEL-SAVE HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE THREE MONTHS ENDED MARCH 31, 1996
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
Common Stock Additional
------------ Paid-in Retained
Shares Amount Capital Earnings Total
------ ------ ------- -------- -----
<S> <C> <C> <C> <C> <C>
Balance, January 1, 1996 19,500 $ 195 $37,245 $ 3,874 $41,314
Net income - - - 3,377 3,377
Issuance of warrants to
partitions - - 1,077 - 1,077
------ ---------- ----- -------- -----
Balance, March 31, 1996 19,500 $ 195 $38,322 $7,251 $45,768
====== ======== ======= ====== =======
</TABLE>
See accompanying notes to consolidated financial statements.
-5-
<PAGE>
TEL-SAVE HOLDINGS, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
(In thousands)
<TABLE>
<CAPTION>
For the Three Months
Ended March 31,
---------------
1996 1995
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income $ 3,377 $4,259
Adjustment to reconcile net income to net cash provided
by (used in) operating activities:
Unrealized loss on securities sold short 50 -
Provision for bad debts 17 (33)
Depreciation and amortization 517 213
Deferred credits (120) (120)
(Increase) decrease in:
Accounts receivable - trade (1,595) (696)
Advances to partitions and notes receivables (1,816) 115
Prepaid expenses and other current assets (497) 1,568
Other assets (1,463) -
Increase (decrease) in:
Accounts and partition payables and accrued expenses 3,263 8,192
Income taxes payable 1,266 -
----- ------
Net cash provided by operating activities 2,999 13,498
----- ------
Cash flows from investing activities:
Acquisition of intangibles (439) (100)
Capital expenditures (8,770) (45)
Proceeds from securities sold short 660 -
Liability to purchase securities sold short (710) -
Loans to stockholder (2,915) -
------ ------
Net cash used in investing activities (12,174) (145)
------- ------
Cash flows from financing activities:
Proceeds from loan transactions - 1,300
Payments of loan transactions - (1,300)
Payments to related parties - (7,855)
Payment of note payable to stockholder (5,920) -
------ -------
Net cash used in financing activities (5,920) (7,855)
------ ------
Net increase (decrease) in cash and cash equivalents (15,095) 5,498
Cash and cash equivalents, at beginning of period 41,211 11
------ --
Cash and cash equivalents, at end of period $26,116 $5,509
======= ======
</TABLE>
See accompanying notes to consolidated financial statements.
-6-
<PAGE>
TEL-SAVE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
The consolidated financial statements include the accounts of Tel- Save
Holdings, Inc. and its two wholly-owned subsidiaries, Tel-Save, Inc. and TS
Investment Corporation, and have been prepared as if the entities had
operated as a single consolidated group since their respective dates of
incorporation. All intercompany balances and transactions have been
eliminated.
The consolidated financial statements and related notes thereto as of March
31, 1996 and for the three months ended March 31, 1996 and 1995 are
presented as unaudited but in the opinion of management include all
adjustments necessary to present fairly the information set forth therein.
These adjustments consist solely of normal recurring accruals. The
consolidated balance sheet information for December 31, 1995 was derived
from the audited financial statements included in the Company's Form 10-K.
These interim financial statements should be read in conjunction with that
report. The interim results are not necessarily indicative of the results
for any future periods.
2. Stock Split
On February 16, 1996, the Company's Board of Directors approved a
three-for-two split of the common stock in the form of a 50% stock
dividend. The additional shares resulting from the stock split were
distributed on March 15, 1996, to all stockholders of record at the close
of business on February 29, 1996. The consolidated balance sheet as of
December 31, 1995 reflects the recording of the stock split as if it had
occurred on December 31, 1995. Further, all references in the consolidated
financial statements to average number of shares outstanding and related
prices, per share amounts, warrant and stock option data have been restated
for all periods to reflect the stock split.
3. Income Taxes
On June 1, 1991, the Company, with the consent of its stockholders, elected
to be taxed as an S Corporation. As a result of the election, all earnings
of the Company were taxed directly to the stockholders. On September 19,
1995, the Company terminated its S Corporation status. Pro forma tax
provisions have been calculated as if the Company's results of operations
were taxable as a C Corporation under the Internal Revenue Code for the
three months ended March 31, 1995.
-7-
<PAGE>
TEL-SAVE HOLDINGS, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Continued)
4. Subsequent Events
(a) Authorized Shares and Option Plan Amendments
On April 15, 1996, the stockholders of the Company adopted the
following amendments:
(1) to increase the authorized shares of the Company's $0.01 par
value common stock to 100,000,000 shares;
(2) to increase the number of shares that can be issued under the
Company's 1995 Employee Stock Option Plan to 2,500,000 shares.
(b) 1996 Public Offering
The Company consummated a public offering (the "1996 Offering") of
9,284,000 shares of common stock, including the underwriter's
over-allotment, at a price of $17.50 per share in April and May, 1996.
Of the 9,284,000 shares offered, 8,534,000 were sold by the Company and
750,000 were sold by the majority stockholder. Proceeds of the 1996
Offering to the Company, less underwriting discounts of $9,302,060,
were $140,042,940. Expenses for the 1996 Offering are estimated at
$850,000 resulting in net proceeds to the Company of approximately
$139,192,940. The majority stockholder used a portion of his proceeds
to repay his outstanding indebtedness, including interest, to the
Company.
-8-
<PAGE>
TEL-SAVE HOLDINGS, INC. AND SUBSIDIARIES
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Introduction
The Company was founded in 1989 as a switchless reseller of AT&T
long distance services to small and medium-sized businesses. In the
third quarter of 1996, in connection with the deployment of One
Better Net ("OBN"), the Company expects to complete the
installation of its five AT&T-manufactured switches, forming a
nationwide long distance network.
The Company's sales to date have been derived from the resale of
long distance services. The Company's cost of sales consists
principally of charges for bundled long distance services, as
charged by AT&T, partition charges, net of usage and other
discounts, which are based on the usage of partitions, and end user
billing and support. The Company believes that, historically, the
competitive terms of its contract tariffs with AT&T and its ability
to manage and distribute data are the primary reasons for its sales
increases. In 1992, the Company negotiated a contract tariff with
AT&T, resulting in lower rates than its previous contract tariffs.
In July 1994, the Company obtained two new contract tariffs with
AT&T, resulting in further reduced rates for the AT&T-SDN service
and competitive terms for AT&T 800 Service, which the Company then
began to market actively.
While the Company has been successful in the past at negotiating
with and obtaining new contract tariffs from AT&T at favorable
rates, the Company intends to lessen its dependence on such AT&T
tariffs by deploying OBN to reduce costs in the future. As a result
of the deployment of OBN, the Company will pay "unbundled" charges,
paying access charges directly to LECs and charges for use of the
AT&T network transmission facilities directly to AT&T. The Company
will avoid paying the all-inclusive "bundled" charge to AT&T under
AT&T contract tariffs for switching and transmission services and
payment of LEC access fees. The total cost per call to the Company
for such "unbundled" charges and OBN's overhead is expected to be
less than the "bundled" charge currently paid to AT&T.
Deployment of OBN is also expected to increase the Company's gross
profit as a percentage of sales ("gross margin"), which has
declined over the past three years. Gross margin has decreased as a
result of the Company's offering higher volume discounts to new
and/or larger partitions. Such discounts reduce the amount charged
by the Company to the partition. The Company expects to increase
its gross margin as a result of the lower costs associated with
providing services on OBN. However, operating income may not
experience the same rate of growth because of increased expenses
related not only to operating and maintaining OBN and converting
existing end users to OBN, but also to the costs associated with
the Company's expansion of its direct marketing efforts and
delivery of Competitive Telecommunications Provider ("CTP")
services.
-9-
<PAGE>
TEL-SAVE HOLDINGS, INC. AND SUBSIDIARIES
Results of Operations
The following tables sets forth for the periods indicated certain
financial data as a percentage of sales:
Percentage of Sales
---------------------------
For the Three Months Ended
March 31,
---------------------------
1996 1995(A)
---- -------
Sales 100.0% 100.0%
Cost of sales 86.6 85.3
----- -----
Gross profit 13.4 14.7
----- -----
Selling, general and administrative 4.5 3.2
----- -----
Operating income 8.9 11.5
Other income, net 1.7 0.1
----- -----
Income before provision for income taxes 10.6 11.6
Provision for income taxes 4.0 4.6
----- -----
Net income 6.6% 7.0%
===== =====
(A) Pro forma tax provisions have been calculated as if the Company's results of
operations were taxable as a C corporation (the Company's current tax status)
for the three months ended March 31, 1995. Prior to September 20, 1995, the
Company was an S corporation with all earnings taxed directly to its
shareholders.
-10-
<PAGE>
TEL-SAVE HOLDINGS, INC. AND SUBSIDIARIES
Three Months Ended March 31, 1996 to the Three Months Ended March 31, 1995
Sales. Sales increased by 39.5% to $51.1 million in the first quarter of 1996
from $36.6 million in the first quarter of 1995. The increase in sales related
primarily to the continued expansion of the Company's distribution network of
partitions, as well as increases in the number of orders submitted by the
Company's existing partitions. In addition, significant marketing efforts
focused on inbound 800 service resulted in sales of $18.1 million for the three
month period ended March 31, 1996 versus $9.7 million for the three month period
ended March 31, 1995.
Cost of Sales. The Company's costs of sales increased by 41.6% to $44.2 million
in the first three months of 1996 from $31.2 million in the first quarter of
1995. The increase in cost of sales resulted primarily from the increase in
sales of AT&T- SDN and inbound 800 services.
Gross Margin. Gross margin decreased to 13.4% in the first quarter of 1996 from
14.7% during the first quarter of 1995. The decrease in gross margin was
attributable primarily to higher volume discounts to certain partitions.
Selling, general and administrative expenses. Selling, general and
administrative expenses increased by 97% to $2.3 million in the first quarter of
1996 from $1.2 million in the first quarter of 1995. The increase in selling,
general and adminis trative expenses was due primarily to the costs associated
with hiring additional management personnel to support the Company's continuing
growth, increased fees for professional services and initial costs associated
with the Company's direct marketing effort.
Provision for income taxes. The Company's effective tax rate declined to 37.7%
for the three months ended March 31, 1996 from the pro forma effective tax rate
of 40.0% for the three months ended March 31, 1995 due to an anticipated lower
effective state tax rate in 1996.
-11-
<PAGE>
TEL-SAVE HOLDINGS, INC. AND SUBSIDIARIES
Liquidity and Capital Resources
The Company consummated its initial public offering of 5,175,000 shares of
Common Stock in September and October 1995. The Company received net proceeds
from such offering of approximately $42.8 million, of which $4.5 million was
used to pay the minority stockholder. As of March 31, 1996, the Company had cash
and cash equivalents of approximately $26.1 million.
Since its inception, the Company has funded its operations primarily from cash
generated by operations and, to a lesser extent, advances from stockholders and
bank borrowings. The Company's cash flow provided by operations was $3.0 million
and $13.5 million for the three months ended March 31, 1996 and 1995,
respectively. Accounts receivable and partition payable increases are primarily
due to growth over the prior year.
The Company's working capital was $33.3 million and $16.5 million at March 31,
1996 and 1995, respectively. The significant increase in working capital is
primarily a result of the completion of the Company's initial public offering.
The Company invested $8.8 million in capital equipment during the three months
ended March 31, 1996, of which $8.6 million was used for the acquisition of
capital equipment and installation costs relating to the deployment of OBN.
In March 1996, the Company negotiated an unsecured, committed line of credit
with PNC Bank, N.A. ("Credit Facility") under which borrowings of up to $50.0
million are available. The Company is required to pay an availability fee of
$62,500 per annum, or 0.125% of the total available borrowings. Interest on
borrowings is payable monthly at PNC Bank's prime rate less 0.5% or LIBOR plus
0.875%, at the Company's option. Principal is payable upon demand by PNC Bank.
Under the terms of the Credit Facility, the Company must maintain certain
financial covenants and adhere to certain restrictions. At March 31, 1996, the
Company had no borrowings outstanding under the Credit Facility. Under the
Company's prior credit facility with Midlantic Bank, N.A. ("Prior Credit
Facility"), the Company could borrow up to $5.0 million. During the three months
ended March 31, 1995, the greatest amount the Company borrowed was $1.3 million,
which was primarily used to make advances to partitions to finance their
marketing activities. At March 31, 1995, the Company had no borrowings under the
Prior Credit Facility.
The Company consummated a public offering (the "1996 Offering") of 9,284,000
shares of common stock, including the underwriter's over-allotment, at a price
of $17.50 per share in April and May, 1996. Of the 9,284,000 shares offered,
8,534,000 were sold by the Company and 750,000 were sold by the majority
stockholder. Proceeds of the 1996 Offering to the Company, less underwriting
discounts of $9,302,060, were $140,042,940. Expenses for the 1996 Offering are
estimated at $850,000 resulting in net proceeds to the Company of approximately
$139,192,940. The majority stockholder used a portion of his proceeds to repay
his outstanding indebtedness, including interest, to the Company.
-12-
<PAGE>
TEL-SAVE HOLDINGS, INC. AND SUBSIDIARIES
The Company intends to use the proceeds from the 1996 Offering to fund the
following: (i) advances to new partitions to enable such partitions to pay
outstanding balances due to their existing long distance providers in order for
such new partitions to move their end users to the Company's service and in
continued advances to existing partitions to support their marketing efforts;
(ii) procurement of additional hardware and software to enhance OBN and
additional costs of conversion to OBN; (iii) equipment necessary for the initial
development and implementation of the Company's CTP services; (iv) expenses of
initiating and providing direct marketing activities; and (v) general corporate
purposes and possible future acquisitions.
The Company has entered into an agreement to purchase a new headquarters
building in New Hope, Pennsylvania for approximately $1.5 million which it
expects to consummate in June 1996.
The Company does not have a significant concentration of credit risk with
respect to accounts receivable due to the large number of partitions and end
users comprising the Company's customer base and their dispersion across
different geographic regions. The Company maintains reserves for potential
credit losses and, to date, such losses have been within the Company's
expectations.
The Company believes that its current cash position, the Credit Facility and the
cash flow expected to be generated from operations, will be sufficient to fund
its capital expenditures, working capital and other cash requirements for at
least the next twelve months.
-13-
<PAGE>
TEL-SAVE HOLDINGS, INC. AND SUBSIDIARIES
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
(a) On April 15, 1996 the stockholders of the Company at the
Company's Annual Meeting of Stockholders approved an
amendment of the Company's Amended and Restated Certificate
of Incorporation ("Certificate of Incorporation") to
increase to 100,000,000 the authorized shares of the
Company's $0.01 par value Common Stock ("Common Stock").
The Company's authorized capital stock prior to the
Amendment consisted of 30,000,000 shares of Common Stock.
The Amendment made no change to the 5,000,000 authorized
shares of undesignated preferred stock, $.01 par value.
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
None
Item 5. Other Information
None
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 11 Computation of Net Income Per Share
Exhibit 27 Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended
March 31, 1996.
-14-
<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.
Date: May 14, 1996 TEL-SAVE HOLDINGS, INC. AND SUBSIDIARIES
By: /s/ Daniel Borislow
-----------------------------------------------
Daniel Borislow
Chairman of the Board,
Chief Executive Officer and Director
By: /s/ Joseph A. Schenk
-----------------------------------------------
Joseph A. Schenk
Chief Financial Officer, Treasurer and Director
By: /s/ Kevin R. Kelly
-----------------------------------------------
Kevin R. Kelly
Controller
-15-
<PAGE>
Exhibit 11
TEL-SAVE HOLDINGS, INC. AND SUBSIDIARIES
COMPUTATION OF NET INCOME PER SHARE
(In thousands)
For the Three Months
Ended March 31,
-------------------------
1996 1995(A)
---- -------
Net income $ 3,377 $ 2,555
======== ========
PRIMARY
Weighted average common and common
equivalent shares outstanding - Primary:
Weighted average shares 19,500 14,325
Weighted average equivalent shares 2,043 1,048
------- -------
Weighted average common and common
equivalent shares - Primary 21,543 15,373
------- -------
Net income per share - Primary $ .16 $ .17
======== ========
FULLY DILUTED
Weighted average common and common equivalent
shares outstanding - Fully Diluted:
Weighted average shares 19,500 14,325
Weighted average equivalent shares 3,429 1,070
------- -------
Weighted average common and common
equivalent shares - Fully Diluted 22,929 15,395
------- -------
Net income per share - Fully Diluted $ .15 $ .17
======== ========
(A) Pro forma tax provisions have been calculated as if the Company's results of
operations were taxable as a C corporation (the Company's current tax status)
for the three months ended March 31, 1995. Prior to September 20, 1995, the
Company was an S corporation with all earnings taxed directly to its
shareholders.
<PAGE>
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
UNAUDITED CONSOLIDATED BALANCE SHEET AS OF MARCH 31, 1996 AND THE UNAUDITED
CONSOLIDATED STATEMENT OF INCOME FOR THE THREE MONTHS ENDED MARCH 31, 1996 OF
TEL-SAVE HOLDINGS, INC. AND SUBSIDIARIES AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1996
<EXCHANGE-RATE> 0
<CASH> 26,116,000
<SECURITIES> 0
<RECEIVABLES> 21,488,000
<ALLOWANCES> 822,000
<INVENTORY> 0
<CURRENT-ASSETS> 59,652,000
<PP&E> 11,687,000
<DEPRECIATION> 291,000
<TOTAL-ASSETS> 75,039,000
<CURRENT-LIABILITIES> 26,335,000
<BONDS> 0
<COMMON> 195,000
0
0
<OTHER-SE> 45,573,000
<TOTAL-LIABILITY-AND-EQUITY> 75,039,000
<SALES> 0
<TOTAL-REVENUES> 51,065,000
<CGS> 0
<TOTAL-COSTS> 44,233,000
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 5,418,000
<INCOME-TAX> 2,041,000
<INCOME-CONTINUING> 3,377,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 3,377,000
<EPS-PRIMARY> 0.16
<EPS-DILUTED> 0.15
</TABLE>
