|
| ||
|
|
Page |
|
PART I. FINANCIAL INFORMATION |
|
|
|
|
|
ITEM 1. Financial Statements |
|
|
Consolidated Balance Sheets as of March 31, 2004 and December 31, 2003 (unaudited) |
1 |
|
|
|
|
Consolidated Statements of Operations for the three-months ended March 31, 2004 and 2003 (unaudited) |
2 |
|
| |
|
Consolidated Statements of Cash Flows for the three-months ended March 31, 2004 and 2003 (unaudited) |
3 |
|
Notes to Consolidated Financial Statements |
4 |
|
|
|
|
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations |
9 |
|
ITEM 3. Quantitative and Qualitative Disclosures About Market Risk |
16 |
|
|
|
|
ITEM 4. Controls and Procedures |
16 |
|
|
|
|
PART II. OTHER INFORMATION |
|
|
|
|
|
ITEM 1. Legal Proceedings |
17 |
|
|
|
|
ITEM 6. Exhibits and Reports on Form 8-K |
17 |
|
|
|
|
SIGNATURES |
18 |
|
|
|
|
EXHIBITS |
19 |
|
| ||
|
| ||
|
March 31, |
|
|
December 31, |
| |||
|
|
2004 |
|
|
2003 |
|||
|
|
|
||||||
|
ASSETS |
|
|
|||||
|
Current assets: |
|
|
|||||
|
Cash and equivalents |
$ |
61,622 |
$ |
54,970 |
|||
|
Restricted cash |
2,879 |
1,672 |
|||||
|
Accounts receivable, net of allowances for doubtful accounts of $1,770 |
|
|
|||||
|
and $2,019 at March 31, 2004 and December 31, 2003, respectively |
38,928 |
41,836 |
|||||
|
Unbilled services |
22,435 |
21,347 |
|||||
|
Prepaid expenses and other current assets |
2,437 |
1,146 |
|||||
|
Current deferred tax assets |
1,660 |
1,660 |
|||||
|
|
|
||||||
|
Total current assets |
129,961 |
122,631 |
|||||
|
Property and equipment, net |
30,902 |
31,457 |
|||||
|
Goodwill |
20,638 |
20,638 |
|||||
|
Deferred tax assets |
5,438 |
5,438 |
|||||
|
Deposits and other assets |
925 |
544 |
|||||
|
|
|
||||||
|
Total assets |
$ |
187,864 |
$ |
180,708 |
|||
|
|
|
||||||
|
|
|
|
|||||
|
LIABILITIES AND STOCKHOLDERS' EQUITY |
|
|
|||||
|
Current liabilities: |
|
|
|||||
|
Current portion of capital lease obligations |
$ |
8,747 |
$ |
8,100 |
|||
|
Accrued payroll, accounts payable and accrued expenses |
30,767 |
32,105 |
|||||
|
Current income tax liabilities |
12,170 |
9,165 |
|||||
|
Client advances and unearned revenue |
4,469 |
4,859 |
|||||
|
|
|
||||||
|
Total current liabilities |
56,153 |
54,229 |
|||||
|
Capital lease obligations, net of current portion |
17,808 |
18,488 |
|||||
|
Other non-current liabilities |
257 |
266 |
|||||
|
|
|
||||||
|
Total liabilities |
74,218 |
72,983 |
|||||
|
|
|
||||||
|
|
|
|
|||||
|
Commitments and contingencies |
|
|
|||||
|
|
|
|
|||||
|
Stockholders' Equity: |
|
|
|||||
|
Preferred stock, $.001 par value, 10,000,000 shares authorized, none issued |
|
|
|||||
|
and outstanding at March 31, 2004 and December 31, 2003, respectively |
|
|
|||||
|
Common stock, $.001 par value, 50,000,000 shares authorized; 23,369,209 and |
|
|
|||||
|
23,094,503 shares issued and outstanding at March 31, 2004 and |
|
|
|||||
|
December 31, 2003, respectively |
23 |
23 |
|||||
|
Additional paid-in-capital |
160,136 |
159,359 |
|||||
|
Deferred compensation |
(72 |
) |
(85 |
) | |||
|
Accumulated other comprehensive earnings |
131 |
103 |
|||||
|
Accumulated deficit |
(46,572 |
) |
(51,675 |
) | |||
|
|
|
||||||
|
Total stockholders' equity |
113,646 |
107,725 |
|||||
|
|
|
||||||
|
Total liabilities and stockholders' equity |
$ |
187,864 |
$ |
180,708 |
|||
|
|
|
||||||
|
| ||
|
For the Three Months | |||||||
|
Ended March 31, | |||||||
|
| |||||||
|
|
2004 |
|
|
2003 |
|||
|
|
|
||||||
|
Revenues |
$ |
70,661 |
$ |
43,654 |
|||
|
Operating expenses: |
|
|
|||||
|
Cost of services |
56,311 |
37,856 |
|||||
|
Selling, general and administrative expenses |
6,271 |
5,433 |
|||||
|
|
|
||||||
|
Total operating expenses |
62,582 |
43,289 |
|||||
|
|
|
||||||
|
|
|
|
|||||
|
Operating earnings |
8,079 |
365 |
|||||
|
Interest expense |
(181 |
) |
(106 |
) | |||
|
Interest income |
83 |
103 |
|||||
|
|
|
||||||
|
Earnings from continuing operations before income taxes |
7,981 |
362 |
|||||
|
Income tax provision |
3,033 |
138 |
|||||
|
|
|
||||||
|
Earnings from continuing operations |
4,948 |
224 |
|||||
|
|
|
||||||
|
|
|
|
|||||
|
Earnings (losses) from discontinued operations: |
|
|
|||||
|
Losses from discontinued operations, net of taxes |
-- |
(843 |
) | ||||
|
Gains (losses) on disposals of discontinued operations, net of taxes |
155 |
(553 |
) | ||||
|
|
|
||||||
|
Net earnings (losses) from discontinued operations |
155 |
(1,396 |
) | ||||
|
|
|
||||||
|
|
|
|
|||||
|
Net earnings (losses) |
$ |
5,103 |
$ |
(1,172 |
) | ||
|
|
|
||||||
|
|
|
|
|||||
|
Earnings (losses) per share (see Note 3): |
|
|
|||||
|
Continuing operations: |
|
|
|||||
|
Basic |
$ |
0.22 |
$ |
0.01 |
|||
|
Diluted |
$ |
0.20 |
$ |
0.01 |
|||
|
Discontinued operations: |
|
|
|||||
|
Basic |
$ |
-- |
$ |
(0.06 |
) | ||
|
Diluted |
$ |
0.01 |
$ |
(0.06 |
) | ||
|
Net earnings (losses): |
|
|
|||||
|
Basic |
$ |
0.22 |
$ |
(0.05 |
) | ||
|
Diluted |
$ |
0.21 |
$ |
(0.05 |
) | ||
|
Weighted average common shares outstanding: |
|
|
|||||
|
Basic |
22,906 |
22,892 |
|||||
|
Diluted |
24,405 |
23,104 |
|||||
|
| ||
|
|
For the Three Months
Ended March 31, | ||||||
|
| |||||||
|
|
2004 |
|
|
2003 |
|||
|
|
|
||||||
|
Cash flows from operating activities: |
| ||||||
|
Net earnings (losses) |
$ |
5,103 |
$ |
(1,172 |
) | ||
|
Adjustments to reconcile net earnings (losses) to net cash provided by operating activities: |
|
|
|||||
|
(Earnings) losses from discontinued operations |
(155 |
) |
1,396 |
||||
|
Depreciation |
3,593 |
2,090 |
|||||
|
Amortization |
5 |
4 |
|||||
|
Stock compensation expense |
13 |
132 |
|||||
|
Changes in assets and liabilities, net of effects from discontinued operations: |
|
|
|||||
|
Restricted cash |
(7 |
) |
173 |
||||
|
Accounts receivable, net |
2,908 |
2,741 |
|||||
|
Unbilled services |
(1,088 |
) |
5,072 |
||||
|
Prepaid expenses and other current assets |
(1,291 |
) |
(1,509 |
) | |||
|
Accrued payroll, accounts payable and accrued expenses |
(1,338 |
) |
(1,684 |
) | |||
|
Current income tax liabilities |
3,005 |
353 |
|||||
|
Client advances and unearned revenue |
(390 |
) |
6,522 |
||||
|
Other |
(395 |
) |
381 |
||||
|
|
|
||||||
|
Net cash provided by operating activities |
9,963 |
14,499 |
|||||
|
|
|
||||||
|
|
|
|
|||||
|
Cash flows from investing activities: |
|
|
|||||
|
Proceeds from disposals of discontinued operations |
41 |
867 |
|||||
|
Purchases of property and equipment |
(1,537 |
) |
(573 |
) | |||
|
|
|
||||||
|
Net cash (used in) provided by investing activities |
(1,496 |
) |
294 |
||||
|
|
|
||||||
|
|
|
|
|||||
|
Cash flows from financing activities: |
|
|
|||||
|
Collateralization of obligations under standby letter of credit |
(1,200 |
) |
(788 |
) | |||
|
Repayments of capital lease obligations |
(1,534 |
) |
|||||