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Data Processing Resources Corporation Reports Second Fiscal Quarter Revenue Up 88% and Net Income Up 92%

Highlights:

- Acquisition of the Assets of S3G; Expands Specialty Services Offerings

- Opening of Full-Service Branch in San Diego

- Acceleration of Internal Growth Rate to 33%

NEWPORT BEACH, Calif., March 4 /PRNewswire/ -- Data Processing Resources Corporation (Nasdaq: DPRC) today reported revenues, net earnings and earnings per share for the second fiscal quarter ended January 31, 1998.

Commenting on the results, Mary Ellen Weaver, Chairman and Chief Executive Officer, stated, "We have posted another great quarter at DPRC. The internal growth rate of 33% represents a sixth consecutive quarter in which this rate has increased. In addition, on January 27, 1998, we acquired substantially all the assets of S3G, Inc. ("S3G") of Austin, Texas and also in January 1998 opened a new full-service branch in San Diego. We are confident both S3G and the San Diego office will enable DPRC to expand and strengthen our service offerings and contribute to our growth rate."

Operating Results

Revenues for the second fiscal quarter were $44,783,000, up 88.3%, compared with $23,777,000 for the same period last year. Gross margins for the second fiscal quarter were 27.2% representing improved gross margins over the 23.6% in the comparable period last year. Earnings before interest, taxes and amortization ("EBITA") were $4,918,000, or 11.0% of revenue, up 131.0%, from $2,129,000 or 9.0% of revenue for the same period last year. Net income was $2,417,000, up 91.7%, or $0.21 per share (up 31.3%). This compares with $1,261,000, or $0.16 per share for the same period last year. Weighted average shares outstanding were 11,512,000, up 42.7% from 8,065,000 a year ago.

Internal Growth Rate

The internal growth rate for the second quarter of fiscal 1998, after deducting the contribution from the businesses acquired in fiscal 1997, was approximately 33%. This rate represents increasing improvements from the 14%, 20%, 23%, 28% and 32% previously reported as "internal growth" rates in the first through fourth quarters of fiscal 1997 and the first quarter of 1998, respectively.

Expansion of Gross Margins

Commenting on the continued success of the gross margin improvement program, Michael A. Piraino, Chief Financial Officer, said, "We have reported gross margin at 27.2% for the second quarter of fiscal 1998, up from 23.6% in the same period last year. Our gross margin improvement program is no less important to DPRC's continued earnings growth than our acquisitions and branch expansion programs."

Acquisition of S3G

On January 28, 1998, DPRC announced the acquisition of substantially all the assets of S3G, which was founded by Michael G. McCarthy. S3G maintains its sales, recruiting, training and development "lab" offices in Austin, Texas. S3G's information technology staffing ("IT") business engages primarily in software implementation for Lawson Software. The Lawson Software platform is an enterprise-wide resource planning ("ERP") client/server business application specializing in financials, human resources, procurement and supply chain management.

"The acquisition reflects DPRC's strategy of expanding the specialty service offerings as a method not only of penetrating new customers but also expanding our relationships with existing customers," said David M. Connell, DPRC's President and Chief Operating Officer. "This new practice now joins DPRC's other specialty services which include Year 2000 Compliance, Network Management and HelpDesk, Tandem and Internet services," he concluded.

Opened Full-Service Branch in San Diego

In response to client demand, DPRC opened a full service branch facility in San Diego, Calif. It is expected that the new branch will serve as an incubator for the implementation of a new IT staffing practice in support of software engineering firms. The local economy in San Diego is strong and the greater San Diego area is considered one of the fastest growing metropolitan service areas in the country and home to many large "high tech" companies who are in need of IT staffing services.

The Company from time to time makes forward-looking disclosures in its public disclosures, including, without limitation, statements relating to the Company's growth and strategies and statements regarding its development and acquisition activities. In the Company's filings under the federal securities laws, including its annual, periodic and current reports, the Company identifies important factors that could cause the Company's results to differ materially from those contained in such forward looking statements. Reference is hereby made to such disclosures.

Data Processing Resources Corporation provides information technology staffing services through a network of sixteen branch facilities and three international recruiting offices to a diverse group of corporate clients through a database of highly qualified technical consultants. Additional information on DPRC is available via the Internet's World Wide Web at http://www.dprc.com. For more investor information via facsimile, please call 800-PRO-INFO and enter client code DPRC.

DATA PROCESSING RESOURCES CORPORATION

CONSOLIDATED STATEMENTS OF INCOME (unaudited)

FOR THE THREE MONTHS ENDED JANUARY 31, 1998 AND 1997
 Increase
 (Decrease)
 1998 % 1997 % %
 Revenues $44,783,000 100.0% $23,777,000 100.0% 88.3%


Cost of Professional
 Services 32,610,000 72.8% 18,172,000 76.4% 79.5%
 Gross Margin 12,173,000 27.2% 5,605,000 23.6% 117.2%


Selling, General and

Administrative
 Expenses 7,920,000 17.7% 3,665,000 15.4% 116.1%
 Operating Income 4,253,000 9.5% 1,940,000 8.2% 119.2%
 Interest Income, net 62,000 0.1% 124,000 0.5% (50.0)%


Income Before Provision
 For Income Taxes 4,315,000 9.6% 2,064,000 8.7% 109.1%


Provision For Income
 Taxes 1,898,000 4.2% 803,000 3.4% 136.4%
 Net Income $2,417,000 5.4% $1,261,000 5.3% 91.7%


Net Income Per Share
 - Basic $0.22 $0.16


Net Income Per Share
 - Diluted $0.21 $0.16


Weighted Average Shares
 Outstanding -Basic 11,102,000 7,703,000 44.1%


Weighted Average Shares
 Outstanding -Diluted 11,512,000 8,065,000 42.7%


Supplemental Operating Data:

Earnings Before Interest,

Taxes and
 Amortization $4,918,000 11.0% $2,129,000 9.0% 131.0%
 Branch Locations 16 10 60.0%


Approximate Number of

Consultants on
 Assignment 1,642 1,091 50.5%


DATA PROCESSING RESOURCES CORPORATION

CONSOLIDATED STATEMENTS OF INCOME (unaudited)

FOR THE SIX MONTHS ENDED JANUARY 31, 1998 AND 1997
 Increase
 (Decrease)
 1998 % 1997 % %
 Revenues $89,877,000 100.0% $43,911,000 100.0% 104.7%


Cost of Professional
 Services 65,300,000 72.7% 33,606,000 76.5% 94.3%
 Gross Margin 24,577,000 27.3% 10,305,000 23.5% 138.5%


Selling, General and

Administrative
 Expenses 15,947,000 17.7% 6,518,000 14.8% 144.7%
 Operating Income 8,630,000 9.6% 3,787,000 8.6% 127.9%
 Interest Income, net 189,000 0.2% 326,000 0.7% (42.0)%


Income Before Provision
 For Income Taxes 8,819,000 9.8% 4,113,000 9.4% 114.4%


Provision For Income
 Taxes 3,880,000 4.3% 1,604,000 3.7% 141.9%
 Net Income $4,939,000 5.5% $2,509,000 5.7% 96.9%


Net Income Per Share
 - Basic $0.45 $0.33


Net Income Per Share
 - Diluted $0.43 $0.32


Weighted Average Shares
 Outstanding -Basic 11,068,000 7,597,000 45.7%


Weighted Average Shares
 Outstanding -Diluted 11,484,000 7,965,000 44.2%


Supplemental Operating Data:

Earnings Before Interest,

Taxes and
 Amortization $10,049,000 11.2% $4,087,000 9.3% 145.9%


DATA PROCESSING RESOURCES CORPORATION

CONSOLIDATED BALANCE SHEETS
 January 31, July 31,
 ASSETS 1998 1997
 Current Assets: (unaudited)
 Cash and Cash Equivalents $15,295,000 $17,812,000


Accounts Receivable (net of allowance

for doubtful accounts of $640,000

and $262,000 as of January 31, 1998
 and July 31, 1997, respectively) 28,144,000 21,839,000


Prepaid Expenses and Other
 Current Assets 1,940,000 1,076,000
 Total Current Assets 45,379,000 40,727,000
 Property, net 2,618,000 1,429,000
 Other Assets 413,000 158,000
 Intangible Assets, net 97,012,000 67,973,000
 $145,422,000 $110,287,000


LIABILITIES AND SHAREHOLDERS' EQUITY

Current Liabilities:

Accounts Payable and Accrued
 Liabilities $9,509,000 $9,003,000
 Income Taxes Payable 219,000 1,489,000
 Deferred Income Taxes 55,000 55,000
 Total Current Liabilities 9,783,000 10,547,000
 Long-Term Deferred Income Taxes 81,000 81,000
 Long-Term Debt 25,500,000 --


Commitments and Contingencies

Shareholders' Equity:

Preferred Stock; 2,000,000 shares

authorized; no shares issued and

outstanding

Common Stock; 20,000,000 shares

authorized; 11,300,745 and 11,013,686

shares issued and outstanding as of

January 31, 1998 and July 31, 1997,
 respectively 95,452,000 90,472,000
 Additional Paid-in Capital 2,676,000 2,196,000
 Retained Earnings 11,930,000 6,991,000
 Total Shareholders' Equity 110,058,000 99,659,000
 $145,422,000 $110,287,000


SOURCE Data Processing Resources Corporation
 -0- 03/04/98


/CONTACT: Michael A. Piraino, Chief Financial Officer of Data Processing Resources Corporation, 714-553-1102, ext. 146/

/Web site: http://www.dprc.com/

(DPRC)

CO: Data Processing Resources Corporation ST: California IN: CPR SU: ERN

CM-MR -- CGW021 -- 8643 03/04/98 07:00 EST http://www.prnewswire.com
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Date:Mar 4, 1998
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