-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, VaKy3Wnv0TjikEHCj6v1pd/+qERgci7RmA004cfVXMnEkIYi+a25yUEhqQPdmKzz UcYD0kzyO+og5BfnJjVs5w== 0000899243-99-001133.txt : 19990518 0000899243-99-001133.hdr.sgml : 19990518 ACCESSION NUMBER: 0000899243-99-001133 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990517 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DA CONSULTING GROUP INC CENTRAL INDEX KEY: 0001051209 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-BUSINESS SERVICES, NEC [7389] IRS NUMBER: 760418488 STATE OF INCORPORATION: TX FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-24055 FILM NUMBER: 99628256 BUSINESS ADDRESS: STREET 1: 5847 SAN FELIPE RD STE 3700 CITY: HOUSTON STATE: TX ZIP: 77057 BUSINESS PHONE: 7133613000 MAIL ADDRESS: STREET 1: 5847 SAN FELIPE RD STREET 2: STE 3700 CITY: HOUSTON STATE: TX ZIP: 77057 10-Q 1 1ST QUARTER FORM 10-Q 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 MARCH 31, 1999. OR [_] 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: 00-24055 DA CONSULTING GROUP, INC. (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) TEXAS 76-0418488 (STATE OR OTHER JURISDICTION OF (I.R.S. EMPLOYER INCORPORATION OR ORGANIZATION) IDENTIFICATION NO.) 5847 SAN FELIPE ROAD, SUITE 3700 HOUSTON, TEXAS 77057 (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (713) 361-3000 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 [_] NUMBER OF SHARES OF COMMON STOCK OUTSTANDING AT MAY 11, 1999 -- 6,350,074 DA CONSULTING GROUP, INC. INDEX PART I FINANCIAL INFORMATION Page No. -------- Item 1. Financial Statements Condensed Consolidated Balance Sheet as of December 31, 1998 and March 31, 1999 (unaudited)................................ 3 Condensed Consolidated Statement of Income for the Three Months ended March 31, 1998 and 1999 (unaudited).............. 4 Condensed Consolidated Statement of Cash Flows for the Three Months ended March 31, 1998 and 1999 (unaudited).............. 5 Notes to Condensed Consolidated Financial Statements........... 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations..................................... 8 Item 3. Quantitative and Qualitative Disclosures About Market Risk..... 11 PART II OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K............................. 12 Signatures............................................................. 13 2 PART I--FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS DA CONSULTING GROUP, INC. CONDENSED CONSOLIDATED BALANCE SHEET (in thousands, except share amounts)
DECEMBER 31, MARCH 31, 1998 1999 ---------------- --------------- ASSETS (Unaudited) -------- Current Assets: Cash and cash equivalents..................................... $ 9,971 $ 5,898 Short-term investments........................................ 10,033 6,075 Accounts receivable: Trade, net................................................... 15,980 22,929 Other........................................................ 35 51 Unbilled revenue.............................................. 1,589 1,656 Income taxes receivable....................................... 1,310 78 Prepaid expenses and other current assets..................... 626 1,301 ------- ------- Total current assets......................................... 39,544 37,988 ------- ------- Property and equipment, net................................... 8,759 11,211 Other assets.................................................. 182 130 Intangible assets, net........................................ 418 414 ------- ------- Total assets....................................... $48,903 $49,743 ======= ======= LIABILITIES AND SHAREHOLDERS' EQUITY -------------------------------------- Current Liabilities: Accounts payable.............................................. $ 2,954 $ 4,212 Accrued expenses.............................................. 8,903 8,401 Deferred income............................................... 1,345 1,188 Income taxes payable.......................................... 592 294 Deferred income taxes......................................... 165 201 ------- ------- Total current liabilities.................................... 13,959 14,296 ------- ------- Commitments and contingencies Shareholder's equity: Preferred stock, $0.01 par value: 10,000,000 shares authorized -- -- Common stock, $0.01 par value: 40,000,000 shares authorized; 6,571,777 shares issued; 6,550,074 and 6,455,074 shares outstanding at December 31, 1998 and March 31, 1999 respectively........................................... 65 65 Additional paid-in capital.................................... 29,359 29,359 Retained earnings............................................. 6,398 7,866 Accumulated other comprehensive income........................ (762) (861) Treasury stock, at cost: 21,703 at December 31, 1998 and 116,703 shares at March 31, 1999............................ (116) (982) ------- ------- Total shareholders' equity................................... 34,944 35,447 ------- ------- Total liabilities and shareholders' equity............ $48,903 $49,743 ======= =======
The accompanying notes are an integral part of the condensed consolidated financial statements. 3 DA CONSULTING GROUP, INC. CONDENSED CONSOLIDATED STATEMENT OF INCOME (In thousands, except share and per share amounts) (Unaudited)
THREE MONTHS ENDED MARCH 31, 1998 1999 ------------ ------------- Revenue........................................... $14,587 $24,129 Cost of revenue................................... 7,740 11,586 ------- ------- Gross profit.................................... 6,847 12,543 Selling and marketing expense..................... 1,221 1,864 Development expense............................... 355 820 General and administrative expense................ 4,279 7,642 ------- ------- Operating income................................ 992 2,217 Interest (expense) income, net.................... (94) 140 Other (expense) income, net....................... (19) (36) ------- ------- Total other (expense) income, net................ (113) 104 ------- ------- Income before taxes............................. 879 2,321 Provision for income taxes........................ 334 853 ------- ------- Net income..................................... $ 545 $ 1,468 ======= ======= Basic earnings per share.......................... $ 0.11 $ 0.22 Weighted average shares outstanding............... 4,808 6,546 Diluted earnings per share........................ $ 0.11 $ 0.22 Weighted average shares outstanding............... 5,053 6,737
The accompanying notes are an integral part of the condensed consolidated financial statements. 4 DA CONSULTING GROUP, INC. CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (In thousands) (Unaudited)
THREE MONTHS ENDED MARCH 31, 1998 1999 ------------- -------------- Cash flows from operating activities: Net income.................................................................... $ 545 $ 1,468 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization............................................... 245 439 Deferred income taxes....................................................... (6) 36 Loss on sale of fixed assets................................................ 4 -- Changes in operating assets and liabilities: Increase in accounts receivable and unbilled revenue..................... (1,313) (7,032) Decrease in income tax receivable........................................ -- 1,232 Increase in prepaid expenses and other current assets.................... (160) (675) Decrease in other assets................................................. -- 52 Increase (decrease) in accounts payable and accrued liabilities.......... 507 (110) Increase (decrease) in deferred income................................... 210 (157) Increase (decrease) in income taxes payable.............................. 99 (298) ------- ------- Total adjustments.................................................. (414) (6,513) ------- ------- Net cash provided by (used in) operating activities................ 131 (5,045) ------- ------- Cash flows from investing activities: Sales of short-term investments............................................... -- 6,218 Purchases of short-term investments........................................... -- (2,260) Purchases of property and equipment........................................... (331) (2,887) ------- ------- Net cash (used in) provided by investing activities................ (331) 1,071 ------- ------- Cash flows from financing activities: Net proceeds from revolving line of credit.................................... 678 -- Net repayments of note payable................................................ (95) -- Stock repurchases............................................................. (25) -- Offering costs................................................................ (965) -- ------- ------- Net cash used in financing activities.............................. (407) -- ------- ------- Effect of changes in foreign currency exchange rate on cash and cash equivalents -- (99) ------- ------- Decrease in cash and cash equivalents.............................. (607) (4,073) Cash and cash equivalents at beginning of year.................................. 3,664 9,971 ------- ------- Cash and cash equivalents at end of period...................................... $ 3,057 $ 5,898 ======= ======= Non-cash activities: Issuance of accounts payable to acquire common stock.......................... -- 866
The accompanying notes are an integral part of the condensed consolidated financial statements. 5 DA CONSULTING GROUP, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (1) ORGANIZATION AND BUSINESS DA Consulting Group, Inc. and its subsidiaries (the "Company") is a leading international provider of education for employees of companies implementing business information technology. (2) BASIS OF PRESENTATION The unaudited condensed consolidated financial statements included herein have been prepared by the Company without an audit pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted, pursuant to such rules and regulations. The unaudited condensed consolidated financial statements should be read in conjunction with the Company's consolidated financial statements and the notes thereto as of and for the year ended December 31, 1998, included in the Company's Form 10-K. The unaudited condensed consolidated financial information included herein reflects all adjustments, consisting only of normal recurring adjustments, which are necessary, in the opinion of management for a fair presentation of the Company's financial position, results of operations and cash flows for the interim periods presented. Certain reclassifications have been made to prior year amounts to conform to the current year presentation. The results of operations for the interim periods presented herein are not necessarily indicative of the results to be expected for the full year. (3) PUBLIC STOCK OFFERING In connection with the consummation of the Company's initial public offering in April 1998, the Company sold 1.7 million shares of its common stock. Additionally in May 1998, the Company sold an additional 42,586 shares of its common stock pursuant to and in connection with the underwriters' over-allotment option. The Company received aggregate net proceeds of approximately $21.1 million from the sale of such shares, (collectively, the "Public Stock Offering") after deducting the underwriting discount and other Public Stock Offering expenses. (4) COMPREHENSIVE INCOME Comprehensive income is comprised of two components: net income and other comprehensive income. Other comprehensive income refers to revenues, expenses, gains and losses that under generally accepted accounting principles are recorded as an element of stockholders' equity and are excluded from net income. Other comprehensive income is comprised of foreign currency translation adjustments from international subsidiaries. The components of comprehensive income are listed below: Quarter Ended March 31, ----------------------- 1998 1999 --------- -------- (in thousands) Net income.............................. $545 $1,468 Other comprehensive income (loss)....... - (99) ---- ------ Comprehensive income............... $545 $1,369 ==== ====== 6 (5) EARNINGS PER SHARE Basic earnings per share has been computed based on the weighted average number of common shares outstanding during the applicable period. Diluted earnings per share includes the number of shares issuable upon exercise of stock options, less the number of shares that could have been repurchased with the exercise proceeds, using the treasury stock method. The following table summarizes the Company's computation of earnings per share for the three months ended March 31, 1998 and 1999 (in thousands, except share and per share amounts):
THREE MONTHS ENDED MARCH 31, --------------------------------- 1998 1999 -------------- ------------- Basic earnings per share...................................... $ 0.11 $ 0.22 ============== ============= Net income.................................................... $ 545 $1,468 ============== ============= Weighted average shares outstanding........................... 4,808 6,546 Computation of diluted earnings per share: Common shares issuable under outstanding stock options...... 449 910 Less shares assumed repurchased with proceeds from exercise of stock options.................................. (204) (719) ------------- ------------ Adjusted weighted average shares outstanding................ 5,053 6,737 ============= ============ Diluted earnings per share.................................... $ 0.11 $ 0.22 ============= ============
Approximately 542,720 antidilutive options were excluded from the calculation of diluted earnings per share for the three months ended March 31, 1999. (6) GEOGRAPHIC FINANCIAL DATA Revenues from the Company's United States operations were approximately $8.5 million and $14.0 million in first quarter of 1998 and 1999, respectively. Operating income for the Company's United States operations were approximately $1.1 million and $1.8 million in the first quarter of 1998 and 1999, respectively. Revenues from the Company's Europe operations were $3.0 million and $6.3 million in the first quarter of 1998 and 1999, respectively. Operating income for the Company's Europe operations were approximately $275,000 and $793,000 in the first quarter of 1998 and 1999, respectively.
EUROPE, MIDDLE (in thousands) AMERICAS EAST & AFRICA ASIA PACIFIC TOTAL -------- -------------- ------------ ----- THREE MONTHS ENDED MARCH 31, 1998 Revenues.............................. 9,126 3,836 1,625 14,587 Operating income (loss)............... 646 171 175 992 THREE MONTHS ENDED MARCH 31, 1999 Revenues.............................. $15,203 $7,157 $1,769 $24,129 Operating income (loss)............... 1,437 980 (200) 2,217
7 DA CONSULTING GROUP, INC. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS OVERVIEW. The Company is a leading international provider of education for employees of companies which are implementing business information technology. The Company provides customized change communications, education and performance support services designed to maximize its clients' returns on their substantial investments in business information technology. Recognizing the global nature of its existing and prospective client base the Company has built a substantial international presence. The Company is currently organized into three divisions: the Americas Division, which includes its North, South, and Central America operations; the EMEA Division, which includes its Europe, Middle East, and Africa operations; and the Asia Pacific Division, which includes its Australia and Asia operations. RESULTS OF OPERATIONS THREE MONTHS ENDED MARCH 31, 1998 COMPARED TO THREE MONTHS ENDED MARCH 31, 1999 Revenue. Revenue increased by $9.5 million, or 65.4%, from $14.6 million in the first quarter of 1998 to $24.1 million in the first quarter of 1999, reflecting increases both in volume of services and in rates. Revenues from the Americas Division increased by 66.6% from $9.1 million to $15.2 million; revenues from the EMEA Division increased by 86.6% from $3.9 million to $7.2 million; and revenues from the Asia Pacific Division increased by 8.8% from $1.6 million to $1.8 million. The Company ended the first quarter with 913 total employees, up from 590 employees at the end of the same period of the prior year. Gross profit. Gross profit increased by $5.7 million, or 83.2%, from $6.8 million in the first quarter of 1998 to $12.5 million in the first quarter of 1999 and increased as a percent of revenue from 46.9% in the first quarter of 1998 to 52.0% in the first quarter of 1999. This increase in the gross profit margin is primarily attributable to rate increases in the Americas Division and increased staff utilization in all Divisions and tools developed to enhance software systems training. Selling and marketing expense. Selling and marketing expense increased $643,000 or 52.7%, from $1.2 million in the first quarter of 1998 to $1.9 million in the first quarter of 1999, and decreased as a percentage of revenue from 8.4% in the first quarter of 1998 to 7.7% in the first quarter of 1999. This decrease as a percentage of revenue is primarily attributable to increased revenue as described above. Development expense. Development expense increased $465,000, or 131.3%, from $355,000 in the first quarter of 1998 to $820,000 in the first quarter of 1999, and increased as a percent of revenue from 2.4% in the first quarter of 1998 to 3.4% in the first quarter of 1999. The increase is primarily attributable to the Company's expansion of its service offerings and the development of proprietary and third party technologies to be used in the education programs delivered to its clients. The Company also increased its global technology infrastructure and service and support group, which allows the Company to rapidly deploy and support new services. The Company 8 expects that development expense will continue to increase in the future as the Company continues to expand its service offerings. General and administrative expense. General and administrative expense increased by $3.3 million, or 78.6%, from $4.3 million in the first quarter of 1998 to $7.6 million in the first quarter of 1999 and increased as a percentage of revenue from 29.3% in the first quarter of 1998 to 31.7% in the first quarter of 1999. The increase in expense is attributable to the cost of building administrative infrastructure including staff, systems and facilities to support future growth. The Company incurred costs totaling $350,000 during the quarter for the termination of employees. The charges included non-cash items of $143,000. The costs were offset by other gains and previously established reserves. Operating income. Operating income increased by $1.2 million or 123.5%, from $992,000 in the first quarter of 1998 to $2.2 million in the first quarter of 1999 and increased as a percentage of revenue from 6.8% in the first quarter of 1998 to 9.2% in the first quarter of 1999. This increase is composed of the changes described above. Other income (expense) net. Other income (expense), net changed from expense of $113,000 in the first quarter of 1998 to income of $104,000 in the first quarter of 1999. Interest (expense) income, net changed from expense of $94,000 in the first quarter of 1998 to income of $140,000 in the first quarter of 1999. The increase in interest income is due to investment earnings from the Company's investments of proceeds from the Public Stock Offering, which was completed in April 1998, compared to borrowings on the Company's line of credit during the same prior year period. Provision for income taxes. The Company's effective tax rate was 38.0% in the first quarter of 1998 compared to 36.8% in the first quarter of 1999. The decrease in the effective rate is due to increased income in lower taxing jurisdictions. Net income. The Company's net income increased by $923,000, or 169.4%, from $545,000 in the first quarter of 1998 to $1.5 million in the first quarter of 1999. Diluted earnings per share increased from $0.11 in the first quarter of 1998 to $0.22 in the first quarter of 1999 for reasons discussed above. LIQUIDITY AND CAPITAL RESOURCES The Company's cash and cash equivalents were $5.9 million at March 31, 1999, compared to $10.0 million at December 31, 1998. The Company's working capital was $23.7 million at March 31, 1999 and $25.6 million at December 31, 1998. The Company's operating activities required cash of $5.0 million for the three months ended March 31, 1999, compared to $131,000 provided by operations for the same period in 1998. The increase in cash used in operations resulted primarily from increased accounts receivable due to the timing of contract completions and obtaining benchmarks on various contracts. The increase also resulted from differences in the timing of payments of accounts payable and accrued liabilities in the three months ended March 31, 1999, compared to the same period in 1998. Increased accounts receivable days sales outstanding have returned to lower levels for the quarter ended March 31, 1999 as compared to the quarter ended March 31, 1998. Investing activities provided cash of $1.1 million in the three months ended March 31, 1999, compared to the use of cash of $331,000 for the same period in 1998 primarily due to sales of short term investments offset by purchases of property and equipment. Financing activities used cash of $407,000 for the three months ended March 31, 1998, which primarily consisted of Public Stock Offering costs offset by proceeds from the line of credit during that period. There were no cash flows from financing activities for the same period in 1999. On March 29, 1999, the Board of Directors authorized the Company to repurchase up to 250,000 shares of its outstanding common stock. The Company repurchased 95,000 9 shares of its own stock during the quarter ended March 31, 1999 and as of the date of this report had purchased an additional 105,000 shares. The Company has a $5.0 million unsecured revolving line of credit with a commercial bank, which bears interest at the prime rate of interest plus 0.5%. The Company may utilize this line of credit to finance a portion of its working capital needs. During 1999, the Company plans approximately $10.0 million in capital expenditures, primarily for office furniture, computer and office equipment and leasehold improvements to support the anticipated growth in its professional and administrative staff. Capital expenditures in the first quarter of 1999 were $2.9 million, of which $1.5 million was related to the implementation costs of the Company's primary information system. The Company believes its current cash balances, cash from future operations, and its revolving line of credit will be sufficient to meet the Company's working capital and cash needs for at least the next twelve months. FORWARD-LOOKING STATEMENTS. This Quarterly Report on Form 10-Q contains certain statements that are not historical facts which constitute forward-looking statements within the meaning of the Private Securities Legislation Reform Act of 1995 which provides a safe harbor for forward-looking statements. These forward-looking statements, including those relating to Year 2000 compliance issues, are subject to substantial risks and uncertainties that could cause the Company's actual results, performance or achievements to differ materially from those expressed or implied by these forward-looking statements. When used in this Report, the words "anticipate," "believe," "expect" and similar expressions as they relate to the Company or its management are intended to identify such forward-looking statements. Actual future results and trends may differ materially from historical results as a result of certain factors, including but not limited to: dependence on SAP AG and the ERP software market, risks associated with management of a geographically dispersed organization, fluctuating quarterly results, the need to attract and retain professional employees, substantial competition, dependence on key personnel, risks associated with management of growth, rapid technological change, limited protection of proprietary expertise, methodologies and software, as well as those set forth in the Liquidity and Capital Resources section of Management's Discussion and Analysis section in the Company's final prospectus dated April 24, 1998 and Form 10-K as filed with the Securities and Exchange Commission. YEAR 2000 COMPLIANCE ISSUES. Assessment: The Company has analyzed and identified the anticipated consequences that the Year 2000 issue may have on its worldwide operations. The major systems in use by the Company may be affected by the Year 2000 issue. However, the Company has taken the significant steps described below toward minimizing the risk associated with non-compliance. Internal Project: During 1998, the Company began to implement plans to ensure that its systems continue to meet its internal and external requirements. During the first quarter of 1999, the Company completed the Year 2000 remediation of its corporate headquarters and Americas division based on currently available information. The Company expects to complete this remediation process for its EMEA and Asia Pacific divisions in the second quarter of 1999. Implementation of the SAP system is scheduled for completion during the third quarter of 1999. Internal Systems: In addition to computer and software systems, the Company recognizes that the use of internal systems such as telephone systems and other business-related items may be affected by the Year 2000 issue. The Company is currently addressing the potential effects and the cost to mitigate these effects, and believes that the necessary steps can be taken to upgrade or replace these items without a material impact on the Company's financial position. 10 Third Parties: The Company has communicated and will continue to communicate with third parties with which the Company does business in order to identify, to the extent possible, the status of such parties' Year 2000 readiness. Although these companies have confirmed that they will indeed be compliant by the Year 2000, the Company has limited or no control over the actions taken by these third parties. Accordingly, there can be no assurance that all third parties with which the Company does business will successfully resolve all of their Year 2000 compliance issues. The failure of these third parties to resolve their Year 2000 compliance issues could have an adverse effect on the Company. The Company's present analysis of its worst case scenario included Year 2000 failures in the telecommunications and electricity industries that may cause disruptions in the Company's operations, thus causing an inability to provide services to customers and temporary financial losses. Contingency Plan: While the Company is in the process of addressing its Year 2000 issues prior to being affected by them, there can be no assurances as to the ultimate success of the Company's compliance efforts. Uncertainties exist as to the Company's ability to detect all Year 2000 problems. If the progress of its current conversion project deviates from the expected timeline, the Company will implement its contingency plan to convert the one known existing non- compliant financial system over a one-month period. Management believes that current monitoring and actions provide ample response time to avoid material and adverse effects on the Company's business and financial results, however, the Company is unable to quantify at this time the potential effect of any customer or Company non-compliance on the Company's business or financial results. The Company has completed nearly 50% of its system conversions at March 31, 1999. The total expected cost of the Company's current systems conversion is approximately $7.8 million, including $3.3 million that has already been expended. This conversion is not necessary in order for the Company to become Year 2000 compliant. The cost of converting the only non-compliant system would be nominal. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK The Company holds short-term investments which consist of variable rate municipal debt instruments. The Company uses a sensitivity analysis technique to evaluate the hypothetical effect that changes in market interest rates may have on the fair value of the Company's investments. At March 31, 1999, the potential decrease in the fair value of investments assuming a ten percent adverse change in the market rates is not significant. 11 DA CONSULTING GROUP, INC. PART II--OTHER INFORMATION ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. (a) Exhibits Exhibit 27 - Financial Data Schedule. (b) Reports on Form 8-K No reports on Form 8-K were filed during the reporting period ended March 31, 1999. 12 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. DA CONSULTING GROUP, INC. (registrant) Dated: May 17, 1999 By: /s/ Nicholas H. Marriner ------------------------------------------ Nicholas H. Marriner Chairman and Chief Executive Officer By: /s/ Dennis C. Fairchild ------------------------------------------ Dennis C. Fairchild Chief Financial Officer, Secretary and Treasurer 13 EX-27 2 FINANCIAL DATA SCHEDULE
5 1,000 3-MOS 3-MOS DEC-31-1998 DEC-31-1999 JAN-01-1998 JAN-01-1999 MAR-31-1998 MAR-31-1999 3,057 5,898 0 6,075 11,742 23,658 (171) (678) 0 0 17,159 37,988 3,593 13,510 (1,000) (2,299) 22,048 49,743 13,585 14,296 0 0 0 0 0 0 48 65 8,415 35,382 22,048 49,743 14,587 24,129 14,587 24,129 7,740 11,586 7,740 11,586 5,855 10,326 0 0 94 0 879 2,321 334 853 545 1,468 0 0 0 0 0 0 545 1,468 0.11 0.22 0.11 0.22
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