1
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 Exchange
Act of 1934.
For the quarterly period ended June 30, 1997
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
Commission File Number: 000-21433
-------------
FORRESTER RESEARCH, INC.
(Exact name of registrant as specified in its charter)
Delaware 04-2797789
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
1033 Massachusetts Avenue
Cambridge, Massachusetts 02138
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (617) 497-7090
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 [ ]
As of August 8, 1997, 8,351,045 shares of the registrant's common stock
were outstanding.
2
FORRESTER RESEARCH, INC.
INDEX TO FORM 10-Q
Page
----
PART I. FINANCIAL INFORMATION
ITEM 1. Financial Statements 3
Consolidated Balance Sheets at June 30, 1997 and
December 31, 1996 3
Consolidated Statements of Income for the Three and Six Months
Ended June 30, 1997 and 1996 4
Consolidated Statements of Cash Flows for the Six Months Ended
June 30, 1997 and 1996 5
Notes to Consolidated Financial Statements 6
ITEM 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 7
PART II. OTHER INFORMATION 11
ITEM 1. Legal Proceedings 11
ITEM 2. Changes in Securities 11
ITEM 3. Defaults Upon Senior Securities 11
ITEM 4. Submission of Matters to a Vote of Security-Holders 11
ITEM 5. Other Information 11
ITEM 6. Exhibits and Reports on Form 8-K 11
EXHIBITS Statement Regarding Computation of Per Share Earnings 13
2
3
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
- -----------------------------
FORRESTER RESEARCH, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
ASSETS
JUNE 30, DECEMBER 31,
1997 1996
CURRENT ASSETS:
Cash and cash equivalents $ 1,782 $34,382
Marketable securities 46,114 10,258
Accounts receivable, net 9,293 8,100
Deferred commissions 1,051 1,341
Prepaid expenses and other current assets 868 230
------- -------
Total current assets 59,108 54,311
------- -------
Property and equipment, net 3,203 2,471
------- -------
Total assets $62,311 $56,782
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 1,140 $ 1,200
Customer deposits 214 139
Accrued expenses 3,150 3,201
Accrued income taxes 75 227
Deferred revenue 21,354 17,816
Deferred income taxes 276 437
------- -------
Total current liabilities 26,209 23,020
------- -------
STOCKHOLDERS' EQUITY:
Preferred stock, $.01 par value
Authorized--500,000 shares
Issued and outstanding--none - -
Common stock, $.01 par value
Authorized--25,000,000 shares
Issued and outstanding--8,329,498 shares and 8,300,000
shares at June 30, 1997 and December 31, 1996, respectively 83 83
Additional paid-in capital 33,388 33,211
Retained earnings 2,643 410
Unrealized (loss) gain on marketable securities (12) 58
------- -------
Total stockholders' equity 36,102 33,762
------- -------
Total liabilities and stockholders' equity $62,311 $56,782
======= =======
See accompanying notes.
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4
FORRESTER RESEARCH, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1997 1996 1997 1996
REVENUES:
Core research $7,121 $4,128 $13,299 $ 7,774
Advisory services and other 2,005 1,188 3,998 2,288
------ ------ ------- -------
Total revenues 9,126 5,316 17,297 10,062
------ ------ ------- -------
OPERATING EXPENSES:
Cost of services and fulfillment 3,081 2,010 5,998 3,746
Selling and marketing 3,298 2,104 6,426 3,945
General and administrative 1,014 516 1,835 1,134
Depreciation and amortization 272 120 505 212
------ ------ ------- -------
Total operating expenses 7,665 4,750 14,764 9,037
------ ------ ------- -------
Income from operations 1,461 566 2,533 1,025
INTEREST INCOME, NET 583 121 1,227 231
------ ------ ------- -------
Income before income tax provision 2,044 687 3,760 1,256
INCOME TAX PROVISION 829 35 1,527 65
------ ------ ------- -------
Net income $1,215 $ 652 $ 2,233 $ 1,191
====== ====== ======= =======
PRO FORMA INCOME TAX ADJUSTMENT (Note 2) 243 443
------ -------
PRO FORMA NET INCOME (Note 2) $ 409 $ 748
====== =======
NET INCOME PER COMMON SHARE $ .14 $ .07 $ .25 $ .12
====== ====== ======= =======
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 8,809 6,293 8,804 6,293
====== ====== ======= =======
See accompanying notes.
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5
FORRESTER RESEARCH, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
SIX MONTHS ENDED
JUNE 30,
1997 1996
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 2,233 $ 1,191
Adjustments to reconcile net income to net cash provided by
operating activities-
Depreciation and amortization 505 212
Deferred income taxes (160) -
Accretion of discount on marketable securities (325) (109)
Unrealized loss on available-for-sale securities (71) (63)
Changes in assets and liabilities-
Accounts receivable (1,193) (1,249)
Deferred commissions 290 (225)
Prepaid expenses and other current assets (638) (156)
Accounts payable (61) 260
Customer deposits 75 38
Accrued expenses (51) 189
Accrued income taxes (151) -
Deferred revenue 3,538 3,005
--------- -------
Net cash provided by operating activities 3,991 3,093
--------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment (1,237) (1,078)
Purchase of marketable securities (120,371) (5,319)
Proceeds from sales and maturities of marketable securities 84,840 3,156
--------- -------
Net cash used in investing activities (36,768) (3,241)
--------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions to stockholder - (135)
Net proceeds of stock options exercised
177 -
--------- -------
Net cash provided by (used in) financing activities 177 (135)
--------- -------
NET DECREASE IN CASH AND CASH EQUIVALENTS (32,600) (283)
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 34,382 998
--------- -------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 1,782 $ 715
========= =======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for income taxes $ 1,839 $ 80
========= =======
See accompanying notes.
5
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FORRESTER RESEARCH, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Note 1 -- Interim Consolidated Financial Statements
The accompanying unaudited interim consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and pursuant to the rules and regulations of the
Securities and Exchange Commission for reporting on Form 10-Q. Accordingly,
certain information and footnote disclosure required for complete financial
statements are not included herein. It is recommended that these financial
statements be read in conjunction with the consolidated financial statements and
related notes of Forrester Research, Inc. (the "Company") as reported in the
Company's Annual Report on Form 10-K for the year ended December 31, 1996. In
the opinion of management, all adjustments (consisting of normal recurring
adjustments) considered necessary for a fair presentation of financial position,
results of operations, and cash flows at the dates and for the periods presented
have been included. The consolidated balance sheet presented as of December 31,
1996 has been derived from the consolidated financial statements that have been
audited by the Company's independent public accountants. The results of
operations for the three and six months ended June 30, 1997 may not be
indicative of the results that may be expected for the year ended December 31,
1997, or any other period.
Note 2 -- Pro Forma Income Tax Adjustment and Pro Forma Net Income
The Company was an S corporation under section 1362 of the Internal Revenue Code
of 1986, as amended, until prior to the closing of its initial public offering.
As an S corporation, the taxable income of the Company was passed through to the
sole stockholder and was reported on his individual federal and state income tax
returns. The Company is now taxed as a C corporation and accordingly is subject
to federal and state income taxes at prevailing corporate rates. The statements
of income for the three-and six-month periods ended June 30, 1996 include a pro
forma income tax adjustment to reflect an estimate of the income taxes that
would have been recorded if the Company had been a C corporation for those
periods. The Company has calculated this amount based on the statutory tax rate
for 1996.
Note 3 -- Recent Accounting Pronouncement
In February 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards (SFAS) No. 128, Earnings Per Share. This
statement established standards for computing and presenting earnings per share
and applies to entities with publicly traded common stock or potential common
stock. SFAS No. 128 is effective for periods ending after December 15, 1997 and
early adoption is not permitted. When adopted, the statement will require
restatement of prior years' earnings per share. The Company will adopt this
statement for its quarter and year ended December 31, 1997. Assuming that SFAS
No. 128 had been implemented, basic earnings per share and diluted earnings per
share would not have materially differed from the net income per share disclosed
in the Consolidated Statements of Income.
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
- --------------------------------------------------------------------------------
OF OPERATIONS
- -------------
OVERVIEW
This Quarterly Report on Form 10-Q contains forward-looking statements
within the meaning of the Private Securities Litigation Reform Act of 1995.
Words such as "expects," "believes," "anticipates," "intends," "plans,"
"estimates," or similar expressions are intended to identify these
forward-looking statements. These statements are based on the Company's current
plans and expectations and involve risks and uncertainties that could cause
actual future activities and results of operations to be materially different
from those set forth in the forward-looking statements. Important factors that
could cause actual results to differ materially from those indicated by
forward-looking statements include, among others, the need to attract and retain
professional staff, management of growth, variability of quarterly operating
results, possible volatility of stock price, dependence on renewals of
membership-based research services, dependence on key personnel, risks
associated with anticipating market trends, new products and services, and
competition. The Company undertakes no obligation to update publicly any
forward-looking statements, whether as a result of new information, future
events, or otherwise.
Forrester Research, Inc. ("Forrester" or the "Company") is a leading
independent research firm offering products and services that help its clients
assess the effect of technology on their businesses. The Company provides
analysis and insight into a broad range of technology areas such as computing,
software, networking, the Internet, and telecommunications, and projects how
technology trends will impact businesses, consumers, and society. Forrester's
clients, which include senior management, business strategists, and information
technology ("IT") and marketing professionals within large enterprises, use
Forrester's prescriptive research to understand and benefit from current
developments in technology and as support for their development and
implementation decisions.
Forrester offers its clients annual memberships to any of its 11
Strategy Research Services. Memberships are renewable contracts, typically
annual and payable in advance. Accordingly, a substantial portion of the
Company's billings are initially recorded as deferred revenue and recognized pro
rata on a monthly basis over the contract period. The Company's other revenues
are derived from advisory services rendered pursuant to Forrester's Partners
Program and Strategy Review Program and from Forrester Technology Management
Forums ("Forums"). The Company's advisory service clients purchase such services
in conjunction with the purchase of core research memberships to Strategy
Research Services, and the contracts for such purchases are also generally
payable in advance. Billings attributable to advisory services are initially
recorded as deferred revenues and recognized as revenue when performed.
Similarly, Forum billings are initially recorded as deferred revenues and are
recognized upon completion of each event.
The Company's operating expenses consist of cost of services and
fulfillment, selling and marketing expenses, general and administrative
expenses, and depreciation and amortization. Cost of services and fulfillment
represent the costs associated with production and delivery of the Company's
products and services, and include the costs of salaries, bonuses, and related
benefits for research personnel, and all associated editorial, travel, and
support services. Selling and marketing expenses include salaries, employee
benefits, travel expenses, promotional costs, sales commissions, and other costs
incurred in marketing and selling the Company's products and services. General
and administrative expenses include the costs of the finance, operations, and
corporate IT groups, and other administrative functions of the Company.
The Company believes that the "agreement value" of contracts to
purchase core research and advisory services provides a significant measure of
the Company's business volume. Forrester calculates agreement value as the
annualized fees payable under all core research and advisory service contracts
in effect at a given point in time, without regard to the remaining duration of
such contracts. Agreement value increased 23% to $36.8 million at June 30, 1997
from $30.0 million at December 31, 1996. No single client company accounted for
more than 3% of agreement value at June 30, 1997. The Company's experience is
that a substantial portion of client companies renew expiring contracts for an
equal or higher
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level of total core research and advisory service fees each year. Approximately
75% of Forrester's client companies with memberships expiring during the six
months ended June 30, 1997 renewed one or more memberships for the Company's
products and services. This renewal rate is not necessarily indicative of the
rate of future retention of the Company's revenue base.
RESULTS OF OPERATIONS
The following table sets forth certain financial data as a percentage
of total revenues for the periods indicated:
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
--------------------- ----------------------
1997 1996 1997 1996
Core research 78% 78% 77% 77%
Advisory services and other 22 22 23 23
--- --- --- ---
Total revenues 100 100 100 100
--- --- --- ---
Cost of services and fulfillment 34 37 35 37
Selling and marketing 36 40 37 39
General and administrative 11 10 10 11
Depreciation and amortization 3 2 3 2
--- --- --- ---
Income from operations 16 11 15 11
Interest income 6 2 7 2
--- --- --- ---
Income before income tax provision 22 13 22 13
Provision for income taxes 9 1 9 1
--- --- --- ---
Net income 13% 12% 13% 12%
=== === === ===
Pro forma income tax adjustment 4 5
--- ---
Pro forma net income 8% 7%
=== ===
THREE MONTHS ENDED JUNE 30, 1997 AND 1996
REVENUES. Total revenues increased 72% to $9.1 million in the three
months ended June 30, 1997 from $5.3 million in the three months ended June 30,
1996. Revenues from core research increased 73% to $7.1 million in the three
months ended June 30, 1997 from $4.1 million in the three months ended June 30,
1996. Increases in total revenues and revenues from core research were primarily
attributable to an increase in the number of client companies to 927 at June 30,
1997 from 885 at June 30, 1996, further penetration of existing clients, and the
introduction of five new Strategy Research Services since January 1, 1996. No
single client company accounted for more than 3% of revenues for the three
months ended June 30, 1997.
Advisory services and other revenues increased 69% to $2.0 million in
the three months ended June 30, 1997 from $1.2 million in the three months ended
June 30, 1996. This increase was primarily attributable to demand for the
Partners and Strategy Review Programs and the addition of a new Forum held in
May 1997.
Revenues attributable to customers outside the United States increased
101% to $2.2 million in the three months ended June 30, 1997 from $1.1 million
in the three months ended June 30, 1996, and increased as a percentage of total
revenues to 24% for the three months ended June 30, 1997 from 21% for
8
9
the three months ended June 30, 1996. The increase in revenues was due primarily
to the addition of direct international sales personnel. The Company invoices
its international clients in U.S. dollars.
COST OF SERVICES AND FULFILLMENT. Cost of services and fulfillment
decreased as a percentage of total revenues to 34% in the three months ended
June 30, 1997 from 37% in the three months ended June 30, 1996. These expenses
increased 53% to $3.1 million in the three months ended June 30, 1997 from $2.0
million in the three months ended June 30, 1996. The expense increase in this
period was principally due to increased analyst staffing for Strategy Research
Services and related compensation expense. The decrease as a percentage of total
revenues was principally due to the Company's increased leverage of its core
research.
SELLING AND MARKETING. Selling and marketing expenses decreased as a
percentage of total revenues to 36% in the three months ended June 30, 1997 from
40% in the three months ended June 30, 1996. These expenses increased 57% to
$3.3 million in the three months ended June 30,1997 from $2.1 million in the
three months ended June 30, 1996. The increase in expenses was principally due
to the addition of direct salespersons and increased sales commission expense
associated with increased revenues. The decrease as a percentage of total
revenues was principally due to increased productivity of the Company's sales
force.
GENERAL AND ADMINISTRATIVE. General and administrative expenses
increased as a percentage of total revenues to 11% in the three months ended
June 30, 1997 from 10% in the three months ended June 30, 1996. These expenses
increased 97% to $1.0 million in the three months ended June 30, 1997 from
$515,696 in the three months ended June 30, 1996. The increase in expenses and
increase in expense as a percentage of total revenue was principally due to
staffing increases in operations, finance, and IT.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization expense
increased 127% to $272,197 in the three months ended June 30, 1997 from $120,058
in the three months ended June 30, 1996. The increase in this expense was
principally due to purchases of computer equipment, software, and office
furnishings, and leasehold improvements to support business growth.
INTEREST INCOME. Interest income increased to $583,000 in the three
months ended June 30, 1997 from $121,000 in the three months ended June 30,
1996. This increase was principally due to an increase in the Company's cash and
marketable security balances resulting from positive cash flows from operations
and net proceeds from the Company's initial public offering.
PROVISION FOR INCOME TAXES. During the three months ended June 30,
1997, the Company recorded a tax provision of $829,000, reflecting an effective
tax rate of 40.5%. During the three months ended June 30, 1996, the Company
recorded a pro forma tax provision of $278,000, reflecting an effective tax rate
of 40.5%.
SIX MONTHS ENDED JUNE 30, 1997 AND 1996
REVENUES. Total revenues increased 72% to $17.3 million in the six
months ended June 30, 1997 from $10.1 million in the six months ended June 30,
1996. Revenues from core research increased 71% to $13.3 million in the six
months ended June 30, 1997 from $7.8 million in the six months ended June 30,
1996. Increases in total revenues and revenues from core research were primarily
attributable to an increase in the number of client companies to 927 at June 30,
1997 from 885 at June 30, 1996, further penetration of existing clients, and the
introduction of five new Strategy Research Services since January 1, 1996. No
single client company accounted for more than 3% of revenues for the six months
ended June 30, 1997.
Advisory services and other revenues increased 75% to $4.0 million in
the six months ended June 30, 1997 from $2.3 million in the six months ended
June 30, 1996. This increase was primarily attributable to demand for the
Partners and Strategy Review Programs and the addition of new Forums held in
March and May 1997.
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Revenues attributable to customers outside the United States increased
89% to $4.0 million in the six months ended June 30, 1997 from $2.1 million in
the six months ended June 30, 1996 and increased as a percentage of total
revenues to 22% for the six months ended June 30, 1997 from 21% for the six
months ended June 30, 1996. The increase in revenues was due primarily to the
addition of direct international sales personnel. The Company invoices its
international clients in U.S. dollars.
COST OF SERVICES AND FULFILLMENT. Cost of services and fulfillment
decreased as a percentage of total revenues to 35% in the six months ended June
30, 1997 from 37% in the six months ended June 30, 1996. These expenses
increased 60% to $6.0 million in the six months ended June 30, 1997 from $3.7
million in the six months ended June 30, 1996. The expense increase in this
period was principally due to increased analyst staffing for Strategy Research
Services and related compensation expense. The decrease as a percentage of total
revenues was principally due to the Company's increased leverage of its core
research.
SELLING AND MARKETING. Selling and marketing expenses decreased as a
percentage of total revenues to 37% in the six months ended June 30, 1997 from
39% in the six months ended June 30, 1996. These expenses increased 63% to $6.4
million in the six months ended June 30, 1997 from $3.9 million in the six
months ended June 30, 1996. The increase in expense was principally due to the
addition of direct salespersons and increased sales commission expense
associated with increased revenues. The decrease as a percentage of total
revenues was principally due to increased productivity of the Company's sales
force.
GENERAL AND ADMINISTRATIVE. General and administrative expenses
increased as a percentage of total revenues to 11% in the six months ended June
30, 1997 from 10% in the six months ended June 30, 1996. These expenses
increased 62% to $1.8 million in the six months ended June 30, 1997 from $1.1
million in the six months ended June 30, 1996. The increase in expenses and
increase in expense as a percentage of total revenue was principally due to
staffing increases in operations, finance, and IT.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization expense
increased 138% to $504,711 in the six months ended June 30, 1997 from $211,857
in the six months ended June 30, 1996. The increase in this expense was
principally due to purchases of computer equipment, software, and office
furnishings, and leasehold improvements to support business growth.
INTEREST INCOME. Interest income increased to $1.2 million in the six
months ended June 30, 1997 from $231,000 in the six months ended June 30, 1996.
This increase was principally due to an increase in the Company's cash and
marketable security balances resulting from positive cash flows from operations
and net proceeds from the Company's initial public offering.
PROVISION FOR INCOME TAXES. During the six months ended June 30, 1997,
the Company recorded a tax provision of $1.5 million, reflecting an effective
tax rate of 40.5%. During the six months ended June 30, 1996, the Company
recorded a pro forma tax provision of $508,000, reflecting an effective tax rate
of 40.5%.
LIQUIDITY AND CAPITAL RESOURCES
The Company has financed its operations to date through funds generated
from operations. Memberships for core research, which constituted approximately
77% of the Company's revenues for the six months ended June 30, 1997, are
annually renewable and are generally payable in advance. The Company generated
$4.0 million in cash from operating activities during the six-month period ended
June 30, 1997.
During the six-month period ended June 30, 1997, the Company used $36.8
million of cash in investing activities, consisting of $1.2 million for the
purchase of property and equipment, and $35.6
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11
million for net purchases of marketable securities. The Company regularly
invests excess funds in short- and intermediate-term interest-bearing
obligations of investment grade.
As of June 30, 1997, the Company had cash and cash equivalents of $1.8
million and $46.1 million in marketable securities. The Company does not have a
line of credit and does not anticipate the need for one in the foreseeable
future. The Company currently has no material capital commitments, but
anticipates continued investment in its facilities and management information
systems. The Company believes that its current cash balance, marketable
securities, and cash flows from operations will satisfy working capital,
financing activities, and capital expenditure requirements for at least the next
two years.
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
- --------------------------
The Company is not currently a party to any material legal proceedings.
ITEM 2. CHANGES IN SECURITIES
- ------------------------------
None.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
- ----------------------------------------
None.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS
- ------------------------------------------------------------
The Annual Meeting of Stockholders was held on May 13, 1997. At such meeting,
the stockholders elected the following persons to the Board of Directors by the
following votes:
Total Vote For Total Vote Withheld
Each Director From Each Director
-------------- -------------------
Robert M. Galford 7,993,159 48,300
Michael H. Welles 7,993,159 48,300
ITEM 5. OTHER INFORMATION
- --------------------------
None.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- -----------------------------------------
(a) Exhibits
11 Statement Regarding Computation of Per Share Earnings
(b) Reports on Form 8-K
None.
11
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
Forrester Research, Inc.
By: /s/ GEORGE F. COLONY
-----------------------------------------
George F. Colony
Chairman of the Board, President, and
Chief Executive Officer
Date: August 8, 1997
By: /s/ DAVID H. RAMSDELL
-----------------------------------------
David H. Ramsdell
Vice President, Finance, and Treasurer
(principal financial and accounting officer)
Date: August 8, 1997
12
1
Exhibit 11
STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS
(In thousands, except per share data)
THREE MONTHS ENDED SIX MONTHS ENDED
JUNE 30, JUNE 30,
1997 1996 1997 1996
Computation of income per common share:
Net income (pro forma for 1996) $1,215 $ 409 $2,233 $ 748
====== ====== ====== ======
Shares:
Weighted average shares outstanding 8,310 6,000 8,306 6,000
Add:
Shares issuable from assumed exercise of options as
determined by the application of the treasury stock
method 499 293 498 293
------ ------ ------ ------
Weighted average common and common equivalent
shares outstanding 8,809 6,293 8,804 6,293
====== ====== ====== ======
Net income per common share (pro forma for 1996) $ .14 $ .07 $ .25 $ .12
====== ====== ====== ======
13
5
U.S. DOLLARS
3-MOS
DEC-31-1997
APR-01-1997
JUN-30-1997
1
1,782,123
46,114,277
9,543,180
250,000
0
59,107,606
4,561,987
(1,358,489)
62,311,105
26,209,222
0
0
0
83,295
33,387,997
62,311,105
0
9,126,410
0
3,080,677
4,584,882
0
0
2,043,530
829,000
1,214,530
0
0
0
1,214,530
.14
0
