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 September 30, 1997
or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange
Act of 1934.
Commission File Number: 000-21433
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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 November 5, 1997, 8,386,851 shares of the registrant's common stock were
outstanding.
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FORRESTER RESEARCH, INC.
INDEX TO FORM 10-Q
PART I. FINANCIAL INFORMATION PAGE
ITEM 1. Financial Statements
Consolidated Balance Sheets at September 30, 1997 and December
31, 1996 3
Consolidated Statements of Income for the Three and Nine
Months Ended September 30, 1997 and 1996 4
Consolidated Statements of Cash Flows for the Nine Months
Ended September 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
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
FORRESTER RESEARCH, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share data)
ASSETS
SEPTEMBER 30, DECEMBER 31,
1997 1996
CURRENT ASSETS:
Cash and cash equivalents $ 1,896 $34,382
Marketable securities 46,625 10,258
Accounts receivable, net 12,163 8,100
Deferred commissions 1,169 1,341
Prepaid expenses and other current assets 1,134 230
------- -------
Total current assets 62,987 54,311
Property and equipment, net 4,260 2,471
------- -------
Total assets $67,247 $56,782
======= =======
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 1,100 $ 1,200
Customer deposits 449 139
Accrued expenses 3,230 3,201
Accrued income taxes -- 227
Deferred revenue 24,244 17,816
Deferred income taxes 306 437
------- -------
Total current liabilities 29,329 23,020
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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--8,338,575 shares and 8,300,000
shares at September 30, 1997 and December 31, 1996, respectively 84 83
Additional paid-in capital 33,809 33,211
Retained earnings 3,975 410
Unrealized gain on marketable securities 50 58
------- -------
Total stockholders' equity 37,918 33,762
------- -------
Total liabilities and stockholders' equity $67,247 $56,782
======= =======
See accompanying notes.
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FORRESTER RESEARCH, INC.
CONSOLIDATED STATEMENTS OF INCOME
(In thousands, except per share data)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1997 1996 1997 1996
REVENUES:
Core research $ 8,033 $ 4,811 $21,332 $12,585
Advisory services and other 2,084 1,501 6,082 3,789
------- ------- ------- -------
Total revenues
10,117 6,312 27,414 16,374
------- ------- ------- -------
OPERATING EXPENSES:
Cost of services and fulfillment 3,383 2,165 9,381 5,911
Selling and marketing 3,516 2,289 9,942 6,234
General and administrative 1,214 581 3,049 1,715
Depreciation and amortization 348 148 853 360
------- ------- ------- -------
Total operating expenses 8,461 5,183 23,225 14,220
------- ------- ------- -------
Income from operations 1,656 1,129 4,189 2,154
INTEREST INCOME, NET 586 123 1,813 354
------- ------- ------- -------
Income before income tax provision 2,242 1,252 6,002 2,508
INCOME TAX PROVISION 910 61 2,437 126
------- ------- ------- -------
Net income $ 1,332 $ 1,191 $ 3,565 $ 2,382
======= ======= ======= =======
PRO FORMA INCOME TAX ADJUSTMENT (Note 2) 475 918
------- -------
PRO FORMA NET INCOME (Note 2) $ 716 $ 1,464
======= =======
NET INCOME PER COMMON SHARE $ .15 $ .11 $ .40 $ .23
======= ======= ======= =======
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING 8,872 6,293 8,844 6,293
======= ======= ======= =======
See accompanying notes.
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FORRESTER RESEARCH, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
NINE MONTHS ENDED
SEPTEMBER 30,
1997 1996
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 3,565 $ 2,382
Adjustments to reconcile net income to net cash provided by
operating activities-
Depreciation and amortization 853 360
Deferred income taxes (130) --
Accretion of discount on marketable securities (429) (149)
Unrealized loss on available-for-sale securities (8) (18)
Changes in assets and liabilities-
Accounts receivable (4,062) (2,779)
Deferred commissions 173 (336)
Prepaid expenses and other current assets (905) (362)
Accounts payable (100) 312
Customer deposits 310 26
Accrued expenses 29 461
Accrued income taxes (227) --
Deferred revenue 6,427 4,903
--------- -------
Net cash provided by operating activities 5,496 4,800
--------- -------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment, net (2,642) (1,450)
Purchase of marketable securities (216,529) (6,874)
Proceeds from sales and maturities of marketable securities 180,591 3,962
--------- -------
Net cash used in investing activities (38,580) (4,362)
--------- -------
CASH FLOWS FROM FINANCING ACTIVITIES:
Distributions to stockholder -- (170)
Net proceeds of stock options exercised 598 --
--------- -------
Net cash provided by financing activities 598 (170)
--------- -------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (32,486) 268
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 34,382 998
--------- -------
CASH AND CASH EQUIVALENTS, END OF PERIOD $ 1,896 $ 1,266
========= =======
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid for income taxes $ 2,865 $ 85
========= =======
See accompanying notes.
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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 nine months ended September 30, 1997 may not be indicative of
the results that may be expected for the year ending 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 nine-month periods ended September 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 that
period. 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 ending 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 future activities and results include, among others, the need
to attract and retain professional staff, the Company's ability to manage
growth, possible variations in the Company's quarterly operating results, the
Company's dependence on renewals of its membership-based research services,
dependence on key personnel, risks associated with the Company's ability to
anticipate market trends and offer 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.
Memberships to Forrester's Strategy Research Services 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
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 36% to $40.8 million at September 30,
1997 from $30.0 million at December 31, 1996. No single client company accounted
for more than 3% of agreement value at September 30, 1997. The Company's
experience is that a substantial portion of client companies renew expiring
contracts for an equal or higher level of total core research and advisory
service fees each year. Approximately 78%
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of Forrester's client companies with memberships expiring during the nine months
ended September 30, 1997 renewed one or more memberships for the Company's
products and services. The renewal rate was 74% for 1996. The increase in
retention rate is primarily due to an increased focus by the Company on renewing
existing clients. 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 NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1997 1996 1997 1996
Core research 79% 76% 78% 77%
Advisory services and other 21 24 22 23
--- --- --- ---
Total revenues 100 100 100 100
Cost of services and fulfillment 34 34 34 36
Selling and marketing 35 37 37 38
General and administrative 12 9 11 11
Depreciation and amortization 3 2 3 2
--- --- --- ---
Income from operations 16 18 15 13
Interest income 6 2 7 2
--- --- --- ---
Income before income tax provision 22 20 22 15
Provision for income taxes 9 1 9 1
--- --- --- ---
Net income 13% 19% 13% 14%
=== === === ===
Pro forma income tax adjustment 8 6
--- ---
Pro forma net income 11% 8%
=== ===
THREE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
REVENUES. Total revenues increased 60% to $10.1 million in the three months
ended September 30, 1997 from $6.3 million in the three months ended September
30, 1996. Revenues from core research increased 67% to $8.0 million in the three
months ended September 30, 1997 from $4.8 million in the three months ended
September 30, 1996. Increases in total revenues and revenues from core research
were primarily attributable to an increase in the number of client companies to
982 at September 30, 1997 from 863 at September 30, 1996, sales of additional
Strategy Research Services to existing clients, and the introduction of six new
Strategy Research Services since January 1, 1996. No single client company
accounted for more than 3% of revenues for the three months ended September 30,
1997.
Advisory services and other revenues increased 39% to $2.1 million in the
three months ended September 30, 1997 from $1.5 million in the three months
ended September 30, 1996. This increase was primarily attributable to demand for
the Partners and Strategy Review Programs.
Revenues attributable to customers outside the United States increased 58%
to $2.1 million in the three months ended September 30, 1997 from $1.3 million
in the three months ended September 30, 1996
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9
and remained constant as a percentage of total revenues at 21% for the three
months ended September 30, 1997 and 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 remained
constant as a percentage of total revenues at 34% in the three months ended
September 30, 1997 and 1996. These expenses increased 56% to $3.4 million in the
three months ended September 30, 1997 from $2.2 million in the three months
ended September 30, 1996. The expense increase in this period was principally
due to increased analyst staffing for Strategy Research Services and related
compensation expense.
SELLING AND MARKETING. Selling and marketing expenses decreased as a
percentage of total revenues to 35% in the three months ended September 30, 1997
from 37% in the three months ended September 30, 1996. These expenses increased
54% to $3.5 million in the three months ended September 30, 1997 from $2.3
million in the three months ended September 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 12% in the three months ended September 30,
1997 from 9% in the three months ended September 30, 1996. These expenses
increased 109% to $1.2 million in the three months ended September 30, 1997 from
$581,000 in the three months ended September 30, 1996. The increase in expense
was principally due to staffing increases in operations, finance, and IT, and
investment in the Company's infrastructure. The increase in expense as a
percentage of total revenues was primarily due to investment in the Company's
infrastructure, including new financial systems.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization expense
increased 136% to $348,000 in the three months ended September 30, 1997 from
$148,000 in the three months ended September 30, 1996. The increase in expense
was principally due to the purchase of computer equipment, software, and office
furnishings, and leasehold improvements to support business growth.
INTEREST INCOME. Interest income increased to $586,000 in the three months
ended September 30, 1997 from $123,000 in the three months ended September 30,
1996. This increase resulted from the Company's higher cash 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 September 30,
1997, the Company recorded a tax provision of $910,000, reflecting an effective
tax rate of 40.5%. During the three months ended September 30, 1996, the Company
recorded a pro forma tax provision of $536,000, reflecting an effective tax rate
of 42.8%.
NINE MONTHS ENDED SEPTEMBER 30, 1997 AND 1996
REVENUES. Total revenues increased 67% to $27.4 million in the nine months
ended September 30, 1997 from $16.4 million in the nine months ended September
30, 1996. Revenues from core research increased 70% to $21.3 million in the nine
months ended September 30, 1997 from $12.6 million in the nine months ended
September 30, 1996. Increases in total revenues and revenues from core research
were primarily attributable to an increase in the number of client companies to
982 at September 30, 1997 from 863 at September 30, 1996, sales of additional
Strategy Research Services to existing clients and the introduction of six new
Strategy Research Services since January 1, 1996. No single client company
accounted for more than 3% of revenues for the nine months ended September 30,
1997.
Advisory services and other revenues increased 61% to $6.1 million in the
nine months ended September 30, 1997 from $3.8 million in the nine months ended
September 30, 1996. This increase was
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primarily attributable to demand for the Partners and Strategy Review Programs
and the addition of new Forums held in March and May 1997.
Revenues attributable to customers outside the United States increased 77%
to $6.0 million in the nine months ended September 30, 1997 from $3.4 million in
the nine months ended September 30, 1996. Revenues attributable to customers
outside the United States increased as a percentage of total revenues to 22% for
the nine months ended September 30, 1997 from 21% for the nine months ended
September 30, 1996. The increase in revenues and percentage of total revenues
was due primarily to the addition of direct international sales personnel and a
Forum held in London in May 1997. 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 nine months ended
September 30, 1997 from 36% in the nine months ended September 30, 1996. These
expenses increased 59% to $9.4 million in the nine months ended September 30,
1997 from $5.9 million in the nine months ended September 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 nine months ended September 30, 1997
from 38% in the nine months ended September 30, 1996. These expenses increased
59% to $9.9 million in the nine months ended September 30, 1997 from $6.2
million in the nine months ended September 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 remained
constant as a percentage of total revenues at 11% in the nine months ended
September 30, 1997 and 1996. These expenses increased 78% to $3.0 million in the
nine months ended September 30, 1997 from $1.7 million in the nine months ended
September 30, 1996. The increase in expenses was principally due to staffing
increases in operations, finance, and IT and investment in the Company's
infrastructure.
DEPRECIATION AND AMORTIZATION. Depreciation and amortization expense
increased 137% to $853,000 in the nine months ended September 30, 1997 from
$360,000 in the nine months ended September 30, 1996. The increase in this
expense was principally due to the purchase of computer equipment, software, and
office furnishings, and leasehold improvements to support business growth.
INTEREST INCOME. Interest income increased to $1.8 million in the nine
months ended September 30, 1997 from $354,000 in the nine months ended September
30, 1996. This increase resulted from the Company's higher cash balances
resulting from positive cash flows from operations and net proceeds from the
Company's initial public offering.
PROVISION FOR INCOME TAXES. During the nine months ended September 30,
1997, the Company recorded a tax provision of $2.4 million, reflecting an
effective tax rate of 40.5%. During the nine months ended September 30, 1996,
the Company recorded a pro forma tax provision of $1.0 million, reflecting an
effective tax rate of 41.6%.
LIQUIDITY AND CAPITAL RESOURCES
The Company has financed its operations to date through funds generated
from operations. Memberships for core research, which constituted approximately
78% of the Company's revenues for the nine months ended September 30, 1997, are
annually renewable and are generally payable in advance. The Company generated
$5.5 million in cash from operating activities during the nine-month period
ended September 30, 1997.
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During the nine-month period ended September 30, 1997, the Company used
$38.6 million of cash in investing activities, consisting of $2.6 million for
the purchase of property and equipment and $36.0 million for net purchases of
marketable securities. The Company regularly invests excess funds in short- and
intermediate-term interest-bearing marketable securities of investment grade.
As of September 30, 1997, the Company had cash and cash equivalents of $1.9
million and $46.6 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 plans to introduce new Strategy Research Services,
open an office in Europe, and invest in infrastructure over the next six to 18
months. 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 Company did not submit any matters during the third quarter of the fiscal
year covered by this report to a vote of the stockholders through solicitation
or otherwise.
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.
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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: November 10, 1997
By:/s/ DAVID H. RAMSDELL
----------------------------------
David H. Ramsdell
Vice President, Finance, and Treasurer
(principal financial and accounting officer)
Date: November 10, 1997
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Exhibit 11
STATEMENT REGARDING COMPUTATION OF PER SHARE EARNINGS
(In thousands, except per share data)
THREE MONTHS ENDED NINE MONTHS ENDED
SEPTEMBER 30, SEPTEMBER 30,
1997 1996 1997 1996
Computation of income per common share:
Net income (pro forma for 1996) $1,332 $ 716 $3,565 $1,464
====== ====== ====== ======
Shares:
Weighted average shares outstanding 8,359 6,000 8,324 6,000
Add:
Shares issuable from assumed exercise of options as
determined by the application of the treasury stock
method 513 293 520 293
------ ------ ------ ------
Weighted average common and common equivalent
shares outstanding 8,872 6,293 8,844 6,293
====== ====== ====== ======
Net income per common share (pro forma for 1996) $ .15 $ .11 $ .40 $ .23
====== ====== ====== ======
13
5
US DOLLARS
3-MOS
DEC-31-1997
JUL-01-1997
SEP-30-1997
1
1,896,481
46,624,670
12,512,916
350,000
0
62,986,611
5,966,973
1,706,961
67,246,623
29,328,748
0
0
0
83,743
37,834,132
67,246,623
0
10,116,934
0
3,382,348
5,078,739
0
0
2,242,269
910,000
1,332,269
0
0
0
1,332,269
.15
0
