================================================================================
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
[X] Quarterly Report Pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934
For the period ended August 31, 1999
[ ] Transition Report Pursuant to Section 13 or
15(d) of the Securities Exchange Act of 1934
For the transition period from to
------ -----
Commission File Number: 0-8656
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TSR, Inc.
- --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 13-2635899
- ------------------------------------ ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
400 Oser Avenue, Hauppauge, NY 11788
- --------------------------------------------------------------------------------
(Address of principal executive offices)
516-231-0333
- --------------------------------------------------------------------------------
(Registrant's telephone number)
None
- --------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since lastreport)
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. [X] Yes [ ] No
SHARES OUTSTANDING
------------------
5,203,926 shares of common stock, par value $.01 per share,
as of September 30, 1999
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Page 1
<PAGE>
TSR, INC. AND SUBSIDIARIES
INDEX
Page
Number
------
Part I. Financial Information:
Item 1. Financial Statements:
Consolidated Condensed Balance Sheets -
August 31, 1999 and May 31, 1999......................... 3
Consolidated Condensed Statements of Earnings -
For the three months ended August 31, 1999 and 1998...... 4
Consolidated Condensed Statements of Cash Flows -
For the three months ended August 31, 1999 and 1998...... 5
Notes to Consolidated Condensed Financial Statements....... 6
Item 2. Management's Discussion and Analysis....................... 7
Part II. Other Information.................................................. 10
Signatures.................................................................. 10
Page 2
<PAGE>
Part I. Financial Information
Item 1. Financial Statements
TSR, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
<TABLE>
<CAPTION>
August 31, May 31,
ASSETS 1999 1999
------------ ------------
<S> <C> <C>
Current Assets:
Cash and cash equivalents (Note 6) ..................... $ 5,656,514 $ 2,234,723
Marketable securities (Note 7) ......................... 4,458,274 5,898,272
Accounts receivable (net of allowance for
doubtful accounts of $173,000) ...................... 13,101,145 14,226,289
Other receivables ...................................... 174,920 167,415
Prepaid expenses ....................................... 41,133 44,731
Prepaid and recoverable income taxes ................... 12,550 98,789
Deferred income taxes .................................. 59,000 59,000
----------- -----------
Total current assets .............................. 23,503,536 22,729,219
Equipment and leasehold improvements, at cost
(net of accumulated depreciation and amortization
of $1,869,000 and $1,833,000) ....................... 127,718 161,315
Other assets ............................................. 34,400 35,276
Deferred income taxes .................................... 262,000 265,000
----------- -----------
$23,927,654 $23,190,810
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts and other payables ............................. $ 286,111 $ 305,067
Accrued and other liabilities ........................... 4,126,378 3,774,513
Advances from customers ................................. 2,384,888 1,206,137
Income taxes payable .................................... 719,150 140,548
---------- -----------
Total current liabilities ............................. 7,516,527 5,426,265
---------- -----------
Shareholders' Equity:
Preferred stock, $1 par value, authorized
1,000,000 shares; none issued ....................... -- --
Common stock, $.01 par value, authorized
25,000,000 shares; issued 6,078,326 shares .......... 60,783 60,783
Additional paid-in capital .............................. 4,134,053 4,134,053
Retained earnings ....................................... 18,919,393 17,764,087
---------- -----------
23,114,229 21,958,923
Less: Treasury Stock, 869,400 and 576,500 shares
at cost ............................................... 6,703,102 4,194,378
---------- -----------
16,411,127 17,764,545
---------- -----------
$23,927,654 $23,190,810
========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated condensed
financial statements.
Page 3
<PAGE>
<TABLE>
TSR, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
FOR THE THREE MONTHS ENDED AUGUST 31, 1999 AND 1998
<CAPTION>
Three Months Ended
August 31,
1999 1998
---- ----
<S> <C> <C>
Revenues ................................................... $ 20,954,694 $ 20,465,532
Cost of sales .............................................. 16,161,693 15,060,372
Selling, general and administrative expenses ............... 2,864,087 3,359,264
Research and development expenses .......................... -- 148,171
------------ ------------
19,025,780 18,567,807
Income from operations ..................................... 1,928,914 1,897,725
Other income:
Interest and dividend income .......................... 92,041 67,886
Gain (loss) from marketable securities, net ........... 11,351 (27,782)
------------ ------------
Income before income taxes ................................. 2,032,306 1,937,829
Provision for income taxes ................................. 877,000 850,000
------------ ------------
Net income ............................................ $ 1,155,306 $ 1,087,829
============ ============
Basic net income per common share .......................... $ 0.22 $ 0.18
============ ============
Weighted average number of common shares outstanding ....... 5,276,976 5,988,276
============ ============
Diluted net income per common share ........................ $ 0.22 $ 0.18
============ ============
Weighted average number of diluted common shares outstanding 5,276,976 5,988,276
============ ============
</TABLE>
The accompanying notes are an integral part of these consolidated condensed
financial statements.
Page 4
<PAGE>
TSR, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED AUGUST 31, 1999 AND 1998
<TABLE>
Three Months Ended
August 31,
1999 1998
---- ----
<CAPTION>
Cash flows from operating activities:
<S> <C> <C>
Net income .................................................. $ 1,155,306 $ 1,087,829
Adjustments to reconcile net income
to net cash provided by operating
activities:
Depreciation and amortization ........................... 35,907 139,534
Deferred income taxes ................................... 3,000 (12,000)
Loss (gain) from marketable securities, net ............. (11,351) 27,782
Changes in assets and liabilities:
Accounts receivable .................................... 1,125,144 (6,969)
Other receivables ...................................... (7,505) (23,820)
Prepaid expenses ....................................... 3,598 54,251
Prepaid and recoverable income taxes ................... 86,239 59,691
Other assets ........................................... 876 (22,500)
Accounts payable and accrued expenses .................. 332,909 570,070
Income taxes payable ................................... 578,602 480,863
Advances from customers ................................ 1,178,751 35,616
----------- -----------
Net cash provided by operating activities ................... 4,481,476 2,390,347
----------- -----------
Cash flows from investing activities:
Proceeds from maturities and sales of
marketable securities ................................ 1,451,349 487,185
Purchases of marketable securities ...................... -- (474,240)
Purchases of fixed assets ............................... (2,310) (21,981)
----------- -----------
Net cash provided by (used in) investing
activities ............................................ 1,449,039 (9,036)
----------- -----------
Cash flows from financing activities:
Purchase of treasury stock .............................. (2,508,724) --
----------- -----------
Net cash used in financing activities ................... (2,508,724) --
----------- -----------
Net increase in cash and cash equivalents ........................ 3,421,791 2,381,311
Cash and cash equivalents at beginning
of period ..................................................... 2,234,723 2,425,122
----------- -----------
Cash and cash equivalents at end of period ....................... $ 5,656,514 $ 4,806,433
=========== ===========
Supplemental Disclosures:
Income tax payments ......................................... $ 212,000 $ 321,000
=========== ===========
Interest paid................................................ $ -- $ --
=========== ===========
</TABLE>
The accompanying notes are an integral part of these consolidated condensed
financial statements.
Page 5
<PAGE>
TSR, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
AUGUST 31, 1999
1. The accompanying unaudited consolidated condensed financial statements have
been prepared in accordance with generally accepted accounting principles
for interim financial information and with the instructions of Form 10- Q
of Regulation S-X. Accordingly, they do not include all the information and
notes required by generally accepted accounting principles for complete
financial statements. For further information refer to the Company's
consolidated financial statements and notes thereto included in the
Company's Annual Report on Form 10-K for the year ended May 31, 1999.
2. In the opinion of the Company, the accompanying unaudited consolidated
condensed financial statements contain all adjustments (consisting of only
normal recurring accruals) necessary to present fairly the consolidated
financial position, the consolidated results of operations, and
consolidated cash flows for the periods presented.
3. The Company is primarily engaged in the business of providing computer
programming consulting services. The Company provides technical computer
personnel to companies to supplement their in-house information technology
capabilities. In addition, the Company provided services converting
software applications to be Year 2000 compliant utilizing Catch/21 a Year
2000 software solution which automates, to a significant extent, the
conversion process.
4. The consolidated condensed financial statements include the accounts of
TSR, Inc. and its wholly-owned subsidiaries. All significant intercompany
balances and transactions have been eliminated in consolidation.
5. The Company recognizes computer programming services revenues as services
are provided. Provided that acceptance is probable, revenue from Catch/21
code conversion is recognized when the converted code is delivered.
6. The Company considers short-term highly liquid investments with maturities
of three months or less at the time of purchase to be cash equivalents.
Cash and cash equivalents were comprised of the following as of August 31,
1999:
Cash in banks ........................... $ 1,746,411
Money Market Funds....................... 3,910,103
----------
$ 5,656,514
===========
7. Marketable securities consists of United States Treasury Bills and equity
securities. The treasury bills with maturities at acquisition in excess of
90 days, are classified as held to maturity investments. The Company's
equity securities are classified as trading securities. The amortized cost,
gross unrealized holding gains, gross unrealized holding losses and fair
value for marketable securities by major security type at August 31, 1999
are as follows:
<TABLE>
<CAPTION>
Gross Gross
Unrealized Unrealized
Amortized Holding Holding
Cost Gains Losses Fair Value
--------- ----------- --------- ---------
<S> <C> <C> <C> <C>
United States Treasury Bills........... $ 4,315,824 -- -- $ 4,315,824
Equity Securities...................... 133,289 26,288 (17,127) 142,450
--------- ----------- --------- ---------
$ 4,449,113 $ 26,288 $ (17,127) $ 4,458,274
========= =========== ========== =========
</TABLE>
8. During fiscal 1999, under a buy-back plan authorized by the Board of
Directors to repurchase up to 600,000 shares of the Company's common stock,
the Company purchased for $4,194,378, 576,500 shares of its common stock at
the market value of the stock on the purchase date. The remaining
authorization under the buy-back plan was completed after year end.
Additionally, in June 1999 the Board of Directors authorized an additional
buy-back of up to 500,000 shares of common stock. During the quarter ended
August 31, 1999, the Company repurchased 292,900 shares of its common stock
at a cost of $2,508,724.
Page 6
<PAGE>
Part I. Financial Information
Item 2.
TSR, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION
The following discussion and analysis should be read in conjunction with the
consolidated condensed financial statements and the notes to the consolidated
condensed financial statements.
Results of Operations
- ---------------------
The following table sets forth for the periods indicated certain financial
information derived from the Company's consolidated statements of earnings.
There can be no assurance that trends in sales growth or operating results will
continue in the future:
<TABLE>
<CAPTION>
3 Months Ended
August 31,
(Dollar Amounts in Thousands)
1999 1998
---- ----
% of % of
Amount Revenues Amount Revenues
------ -------- ------ --------
<S> <C> <C> <C> <C>
Revenues ............................................... $20,955 100.0 $20,466 100.0
Cost of Sales .......................................... 16,162 77.1 15,061 73.6
------- ----- ------- -----
Gross Profit ........................................... 4,793 22.9 5,405 26.4
Selling, General, and Administrative expenses .......... 2,864 13.7 3,359 16.4
Research and Development expenses ...................... -- -- 148 0.7
------- ----- ------- -----
Income from Operations ................................. 1,929 9.2 1,898 9.3
Other Income ........................................... 103 0.5 40 0.2
------- ----- ------- -----
Income Before Income Taxes ............................. 2,032 9.7 1,938 9.5
Provision for Income Taxes ............................. 877 4.2 850 4.2
------- ----- ------- -----
Net Income ............................................. $ 1,155 5.5 $ 1,088 5.3
======= ===== ======= =====
</TABLE>
Revenues
- --------
Revenues consist primarily of revenues from computer programming consulting
services. In addition, the Company's revenues included revenues from its Year
2000 business which commenced in fiscal 1997. Revenues for the quarter ended
August 31, 1999 increased $489,000 or 2.4% over the comparable period in fiscal
1999. For the current quarter 96.9% of revenues were derived from computer
programming consulting services and 3.1% from Year 2000 services, as compared
with 88.6% and 11.4% respectively in fiscal 1999.
Computer programming consulting services revenues increased $2,179,000 or 12%
from $18,135,000 in the quarter ended August 31, 1998 to $20,314,000 in the
quarter ended August 31, 1999. This increase resulted from an overall increase
in the number of programmers on billing with clients from approximately 500 at
August 31, 1998 to approximately 550 at August 31, 1999. Growth in revenues is
currently at a slower rate than it has been in the past. The Company believes
that this slower growth is attributable to a delay in new IT projects because
customers are devoting their resources to Year 2000 testing.
Revenues from the Company's Catch/21 Year 2000 compliance services, were
$641,000 for the current quarter versus $2,331,000 in the fiscal 1999 first
quarter. The Company's Year 2000 revenues over the last several quarters have
decreased significantly and the Company expects these revenues will further
decline and are not likely to represent a material portion of the Companies
revenues in the future.
The agreements under which the Year 2000 revenues were recognized provide that
all payments under the agreements are subject to satisfactory conversion of the
applications. Revenues include certain amounts billed or paid prior to the final
acceptance by the customer only for conversion projects where management
believes that acceptance is probable.
Page 7
<PAGE>
Cost of Sales
- -------------
Cost of sales as a percentage of revenues increased from 73.6% in the quarter
ended August 31, 1998 to 77.1% in the quarter ended August 31, 1999. This
increase is primarily attributable to the decrease in Year 2000 revenues for
which cost of sales as a percentage of revenues is less than the computer
programming consulting services business.
In the computer programming consulting services business, cost of sales as a
percentage of sales increased from 77.1% in the quarter ended August 31, 1998 to
78.3% in the quarter ended August 31, 1999. This increase is attributable to
increases in amounts being paid to qualified programming professionals outpacing
the Company's ability to pass these increases on to customers due to competitive
market pressures in the industry. Additional market pressures have also created
an environment where major customers are requiring discounts from existing
pricing.
The Year 2000 business incurred cost of sales of $260,000 in the quarter ended
August 31, 1999 versus $1,080,000 in the prior year quarter. The Company
significantly reduced the number of employees in its Year 2000 Services during
fiscal 1999 and is currently providing such services through contractual
arrangements with certain former employees.
Selling, General and Administrative Expenses
- --------------------------------------------
Selling, general and administrative expenses consist primarily of expenses
relating to account executives, technical recruiters, facilities costs,
management and corporate overhead. These expenses decreased $495,000 or 14.7%
from $3,359,000 in the quarter ended August 31, 1998 to $2,864,000 in the
quarter ended August 31, 1999. This decrease was primarily attributable to the
reduction in Year 2000 services. Selling, general and administrative expenses
related to computer programming consulting services increased $91,000 over the
prior year period to $2,812,000. This increase was primarily attributable to
expenses relating to the hiring of additional account executives and technical
recruiting professionals to broaden the Company's client base and recruit
additional technical consultants in connection with the continuation of the
Company's planned expansion.
In the quarter ended August 31, 1999, approximately $52,000 in selling, general
and administrative expenses were attributable to Year 2000 services. These
expenses consist primarily of management, and facilities expenses. Such expenses
significantly decreased from fiscal 1999. Comparable Year 2000 selling, general
and administrative expenses in the quarter ended August 31, 1998 were $638,000.
Research and Development
- ------------------------
Research and development costs of $148,000 in the quarter ended August 31, 1998
represent amounts expended by the Company to expand Catch/21, the Company's Year
2000 compliance solution, product offerings including XRAY/2000 which stands for
Examination, Repair, and Audit for Year 2000 Compliance, and various testing
utilities. There were no research and development expenses in the quarter ended
August 31, 1999.
Income from Operations
- ----------------------
In the quarter ended August 31, 1999, the computer programming consulting
service business contributed $1,600,000 or 82.9% of the income from operations,
while the Year 2000 business contributed the remaining $329,000 or 17.1%. In the
prior year quarter, the computer programming consulting service business
contributed $1,433,000 or 75.5% of income from operations and the Year 2000
business $465,000 or 24.5%. The Company does not expect Year 2000 services to
materially contribute to income from operations for the balance of its 2000
fiscal year. The Company believes that continued growth in contract computer
programming services will, over time, offset the loss of income from operations
from Year 2000 services.
Other Income
- ------------
Other income resulted primarily from interest and dividend income which
increased by $24,000 to $92,000 due to higher average available investable funds
in the quarter ended August 31, 1999. Additionally, the Company also had a net
gain of $11,000 from marketable securities due to mark to market adjustments of
its equity portfolio.
Income Taxes
- ------------
The effective income tax rate decreased to 43.2% in the quarter ended August 31,
1999 from 43.9% in the quarter ended August 31, 1998 because of lower state and
local taxes.
Page 8
<PAGE>
Liquidity, Capital Resources and Changes in Financial Condition
- ---------------------------------------------------------------
The Company expects that cash flow generated from operations together with its
cash and marketable securities will be sufficient to provide the Company with
adequate resources to meet its cash requirements.
At August 31, 1999, the Company had working capital of $15,987,000 and cash and
cash equivalents of $5,657,000 as compared to working capital of $17,303,000 and
cash and cash equivalents of $2,235,000 at May 31, 1999. Working capital
decreased primarily due to the Company's purchase of $2,509,000 of treasury
stock in the quarter ended August 31, 1999.
The Company had positive net cash flow of $4,481,000 from operations during the
quarter ended August 31, 1999 as compared to positive net cash flow from
operations of $2,390,000 in the quarter ended August 31, 1998. The Company had
net income of $1,155,000, in the quarter ended August 31, 1999. The Company also
had additional cash flow as a result of the decrease in the accounts receivable
of $1,125,000, an increase in advances from customers of $1,179,000 and an
increase in income taxes payable of $579,000. The decrease in accounts
receivable occurred primarily because the rate of collections exceeded the rate
of revenue growth. The increase in advances from customers resulted from a
significant prepayment made by one customer. Although it is likely this
prepayment will be used in full, any unused balances will be returned to the
customer. The increase in accounts payable and accrued expenses resulted
primarily from the increase in cost of sales. The increase in income taxes
payable occurred because the federal income tax payment for the quarter was due
after the end of the quarter.
Cash flow provided by investing activities resulted primarily from the maturity
of United States Treasury Bills in the current quarter.
Cash flow used in financing activities of $2,509,000 in the quarter ended August
31, 1999 resulted from the repurchase of 292,900 shares of common stock. As of
August 31, 1999, the Company has repurchased a total of 869,400 shares at an
average price of $7.71 or a total cost of $6,703,102. The Company has completed
the initial buy back authorization of 600,000 shares and the Company's board of
directors has authorized the repurchase of up to an additional 500,000 shares of
its common stock. No time limit has been placed on the duration of the share
repurchases. Subject to applicable securities laws, such purchases will be at
times and in amounts as the Company deems appropriate and may be discontinued at
any time. The Company has no obligation or commitment to repurchase all or any
portion of the shares covered by the authorization.
The Company's capital resource commitments at August 31, 1999 consisted of lease
obligations on its branch and corporate facilities. The Company intends to
finance these lease commitments from cash flow provided by operations, available
cash and short-term marketable securities.
The Company's cash and marketable securities were sufficient to enable it to
meet its cash requirements during the quarter ended August 31, 1999. The Company
has available a revolving line of credit of $5,000,000 with a major money center
bank, which the Company believes provides sufficient financing if the need
arose. As of August 31, 1999 no amounts were outstanding under this line of
credit.
Year 2000 Information
- ---------------------
Readiness for Year 2000
The Company has only limited internal systems which it believes could be
affected by Year 2000 issues. The Company's principal information technology
(IT) systems are its resume search (which contains its databases of IT
professionals), payroll, billing, and general ledger systems. The Company
believes that its search, payroll and billing software systems were designed and
programmed to be Year 2000 compliant. The Company's general ledger system
required an upgrade to be Year 2000 compliant and the Company has recently
implemented the upgrade. The cost of the upgrade was not material. The Company's
management is engaged in ongoing assessment, remediation and testing of the
readiness of its systems for handling the Year 2000. The Company is not
currently aware of any non-IT systems which are material to the Company and
contain embedded chip systems which have Year 2000 issues. Although the
assessment, remediation and testing of the IT and non-IT systems is ongoing,
management does not believe that it will have material Year 2000 problems
relating to its IT and non-IT systems. The Company's management currently
believes that it will be successful in identifying and resolving any potential
deficiencies in its systems with respect to Year 2000 issues, that all material
systems will be compliant by the Year 2000 and that the cost to address the Year
2000 issue will not be material.
The Company does not materially rely on individual third party vendors and
suppliers and accordingly does not believe that the Year 2000 readiness of third
party vendors or suppliers will have a material impact on its business.
Nonetheless, the Company's business is dependent on third parties, such as
public utilities, electric systems, telecommunication systems, mail and
overnight delivery services. The Company's business could be materially
adversely affected by disruption in services provided by such entities, or by
conditions resulting from Year 2000 issues generally affecting companies with
which it does business.
Page 9
<PAGE>
The Company's management believes the impact of the Year 2000 will not cause any
material disruptions in the Company's operations. However, the impact of such
potential disruptions is difficult to assess and accordingly there is a risk
that there will be disruptions which could have a material adverse effect on the
Company.
As discussed above, the Company is engaged in ongoing Year 2000 assessment,
remediation and testing. Following the completion of the process the Company
plans to conduct a Year 2000 simulation of its IT systems. The results of this
simulation and the Company's overall assessment will be taken into account in
determining the nature and extent of any contingency plans.
Forward-Looking Statements
- --------------------------
Certain statements contained in "Management's Discussion and Analysis of
Financial Condition and Results of Operations", including statements concerning
the development of the Company's Catch/21 solution, future prospects and the
Company's future cash flow requirements are forward looking statements, as
defined in the Private Securities Litigation Reform Act of 1995. Actual results
may differ materially from those projections in the forward looking statements
which statements involve risks and uncertainties, including but not limited to
the following: risks relating to the competitive nature of the markets for
computer programming consulting services, the extent to which growth in the
Company's contract computer programming services will offset the anticipated
loss of Year 2000 profits, concentration of the Company's business with certain
customers and uncertainty as to the Company's ability to bring in new customers
and the Company's readiness for the Year 2000.
TSR, INC. AND SUBSIDIARIES
Part II. Other Information
Item 6. Exhibits and Reports on Form 8K
(a). Exhibit 27: Financial Data Schedule
(b). Reports on Form 8K: None
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.
TSR, INC.
-------------------------------
(Registrant)
Date: October 1, 1999 /s/ J.F. HUGHES
-----------------------------------------------
J.F. Hughes, Chairman,
President and Treasurer
Date: October 1, 1999 /s/ JOHN G. SHARKEY
-----------------------------------------------
John G. Sharkey, Vice President,
Finance
Page 10
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
TSR, INC. AND SUBSIDIARIES
Exhibit 27, Financial Data Schedule to Report
on Form 10Q, August 31, 1999
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-mos
<FISCAL-YEAR-END> May-31-2000
<PERIOD-END> Aug-31-1999
<CASH> $5,656,514
<SECURITIES> 4,458,274
<RECEIVABLES> 13,274,409
<ALLOWANCES> 173,264
<INVENTORY> 0
<CURRENT-ASSETS> 25,503,536
<PP&E> 1,996,389
<DEPRECIATION> 1,868,671
<TOTAL-ASSETS> 23,927,654
<CURRENT-LIABILITIES> 7,516,527
<BONDS> 0
0
0
<COMMON> 60,783
<OTHER-SE> 16,350,344
<TOTAL-LIABILITY-AND-EQUITY> 23,927,654
<SALES> 0
<TOTAL-REVENUES> 20,954,694
<CGS> 0
<TOTAL-COSTS> 16,161,693
<OTHER-EXPENSES> 2,864,087
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 2,032,306
<INCOME-TAX> 877,000
<INCOME-CONTINUING> 1,155,306
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,155,306
<EPS-BASIC> 0.22
<EPS-DILUTED> 0.22
</TABLE>
