-----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, U/ARZic4c1Eycd87KwC99QwwDPDGnjwIYMvk747GVrjEVF7cSjlOVqXcfBuLF9ia /jp/TVy+A6+0tk0Ysbf6bQ== 0000891020-99-001917.txt : 19991115 0000891020-99-001917.hdr.sgml : 19991115 ACCESSION NUMBER: 0000891020-99-001917 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19990930 FILED AS OF DATE: 19991112 FILER: COMPANY DATA: COMPANY CONFORMED NAME: DATA DIMENSIONS INC CENTRAL INDEX KEY: 0000026990 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROGRAMMING SERVICES [7371] IRS NUMBER: 060852458 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-04748 FILM NUMBER: 99751026 BUSINESS ADDRESS: STREET 1: ONE BELLEVUE CENTER STREET 2: 411 108TH AVENUE NE SUITE 2100 CITY: BELLEVUE STATE: WA ZIP: 98004 BUSINESS PHONE: 4256881000 MAIL ADDRESS: STREET 1: ONE BELLEVUE CENTER STREET 2: 411 108TH AVENUE NE SUITE 2100 CITY: BELLEVUE STATE: WA ZIP: 98004 10-Q 1 FORM 10-Q FOR THE QUARTER ENDED SEPTEMBER 30, 1999 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, DC 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, 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 0-4748 --------------------- Data Dimensions, Inc. - -------------------------------------------------------------------------------- (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER) Delaware 06-0852458 - -------------------------------------------------------------------------------- (Name or Other jurisdiction of (IRS employer identification no.) incorporation or organization) One Bellevue Center, 411 - 108th Avenue NE, Suite 2100, Bellevue, WA 98004 (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code (425) 688-1000 ------------------------------ Indicate by check 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 . ----- ----- Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date Common Stock: 13,657,462 shares as of October 29, 1999 - -------------------------------------------------------------------------------- Page 1 2 DATA DIMENSIONS, INC. Index
Page Number ------ PART I - FINANCIAL INFORMATION. Item 1. Consolidated Financial Statements. Consolidated Balance Sheets at September 30, 1999 (unaudited) and December 31, 1998. 3 Consolidated Statements of Operations for the three month and nine month periods ended September 30, 1999 and 1998 (unaudited). 4 Consolidated Statements of Comprehensive Income for the three month and nine month periods ended September 30, 1999 and 1998 (unaudited). 4 Consolidated Statements of Cash Flows for the nine month periods ended September 30, 1999 and 1998 (unaudited). 5 Notes to Consolidated Financial Statements. 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. 8 Item 3. Quantitative and Qualitative Disclosure About Market Risk. 11 PART II - OTHER INFORMATION. Item 4. Exhibits and Reports on Form 8-K. 11 SIGNATURES 12
Page 2 3 PART I - FINANCIAL INFORMATION Item 1. Financial Statements DATA DIMENSIONS, INC. CONSOLIDATED BALANCE SHEETS (In thousands)
September 30, December 31, 1999 1998 ------------- ------------ (unaudited) Current assets: Cash and cash equivalents $ 6,600 $ 776 Accounts receivable, net 23,172 36,876 Prepaid and other current assets 4,154 2,850 Deferred income taxes 1,799 1,140 -------- -------- Total current assets 35,725 41,642 Equipment and furniture, net 6,152 8,467 Investment in product development, net -- 1,016 Other assets 623 812 -------- -------- Total assets $ 42,500 $ 51,937 ======== ======== Current liabilities: Accounts payable $ 2,202 $ 4,571 Accrued compensation and commissions 6,139 6,157 Other accrued liabilities 3,270 3,596 Current portion of capital lease obligations 1,341 1,161 Income taxes payable -- 5,997 Deferred income taxes 276 797 -------- -------- Total current liabilities 13,228 22,279 Capital lease obligations, net of current portion 1,243 1,976 Other long term liabilities 183 180 -------- -------- Total liabilities 14,654 24,435 -------- -------- Commitments and contingencies (Note 2) Stockholders' equity: Common stock, $.001 par value; 20,000 shares authorized; 13,549 and 13,521 outstanding 13 13 Additional paid in capital 24,628 24,539 Treasury stock, at cost, 112 shares in 1999 and 1998 (3,034) (3,034) Retained earnings 6,397 6,104 Cumulative comprehensive loss (158) (120) -------- -------- Total stockholders' equity 27,846 27,502 -------- -------- Total liabilities and stockholders' equity $ 42,500 $ 51,937 ======== ========
The accompanying notes are an integral part of these financial statements. Page 3 4 DATA DIMENSIONS, INC. CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (Unaudited)
Three Month Periods Nine Month Periods Ended September 30, Ended September 30, ------------------- ------------------- 1999 1998 1999 1998 -------- ------- -------- -------- Revenue Field consulting $ 15,987 $25,526 $ 64,543 $ 60,907 Outsourcing services 2,210 4,169 10,317 8,555 Test centers 2,911 3,731 9,081 10,531 Other 485 1,022 2,149 2,816 -------- ------- -------- -------- Total revenue 21,593 34,448 86,090 82,809 Direct costs 15,725 19,391 55,883 46,889 -------- ------- -------- -------- Gross margin 5,868 15,057 30,207 35,920 Selling, general and administrative expenses 8,296 8,058 27,590 24,452 Non-recurring charges 1,923 757 1,923 757 -------- ------- -------- -------- Income (loss) from operations (4,351) 6,242 694 10,711 Other income (expense) (42) 33 (213) (182) -------- ------- -------- -------- Income (loss) before income tax (4,393) 6,275 481 10,529 Income tax provision (benefit) (1,713) 2,327 188 4,177 -------- ------- -------- -------- Net income (loss) $ (2,680) $ 3,948 $ 293 $ 6,352 ======== ======= ======== ======== Earnings (loss) per share-basic $ (0.20) $ 0.29 $ 0.02 $ 0.48 Earnings (loss) per share-diluted $ (0.20) $ 0.29 $ 0.02 $ 0.47 Weighted average shares outstanding-basic 13,537 13,398 13,533 13,319 Weighted average shares outstanding-diluted 13,537 13,474 13,596 13,469
CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (In thousands) (Unaudited) Net Income (loss) $(2,680) $3,948 $ 293 $ 6,352 Other comprehensive income (loss) - foreign currency translation adjustments 43 5 (38) (124) ------- ------ ----- ------- Comprehensive income (loss) $(2,637) $3,953 $ 255 $ 6,228 ======= ====== ===== =======
The accompanying notes are an integral part of these financial statements. Page 4 5 DATA DIMENSIONS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)
Nine Month Periods Ended September 30, ------------------------ 1999 1998 -------- -------- CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 293 $ 6,352 Adjustments to reconcile net income to net cash provided (used) by operating activities: Depreciation and amortization 4,581 2,193 Deferred income tax provision (benefit) (1,180) 4,177 Non cash portion of non recurring charges 1,055 Changes in certain operating assets and liabilities Accounts receivable 13,704 (17,415) Prepaid and other assets (2,176) (1,097) Accounts payable (2,369) 804 Advanced billings (300) (1,155) Accrued compensation and commissions (18) 1979 Accrued liabilities 203 1,979 Income taxes payable (5,997) -- Other 511 (183) -------- -------- Net cash provided (used) by operating activities 8,307 (2,552) -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES Maturities and sales of investments -- 986 Purchases of equipment and furniture (1,244) (2,585) Investment in product development -- (52) -------- -------- Net cash used by investing activities (1,244) (1,651) -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES Proceeds from short term debt -- 2,300 Payment of capital lease obligations (1,026) (218) Distribution to shareholder (229) (514) Repayment of note payable -- (1,888) Proceeds from issuance of common stock 16 400 -------- -------- Net cash provided (used) by financing activities (1,239) 80 -------- -------- Net increase (decrease) in cash and cash equivalents 5,824 (4,123) Cash and cash equivalents, beginning of period 776 4,734 -------- -------- Cash and cash equivalents, end of period $ 6,600 $ 611 ======== ======== Cash paid during the period for: Interest 296 118 Income tax 6,703 -- Equipment acquired under capital lease 473 --
The accompanying notes are an integral part of these financial statements. Page 5 6 DATA DIMENSIONS, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTE 1: Basis of Presentation The consolidated financial statements present the consolidated financial position and results of operations of Data Dimensions, Inc. and its subsidiaries, ("Data Dimensions" or the "Company") in accordance with the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted in accordance with such rules and regulations. The financial information included herein for the three and nine month periods ended September 30, 1999 and 1998 is unaudited; however, such information reflects all adjustments consisting only of normal recurring adjustments which are, in the opinion of management, necessary for a fair presentation of the consolidated financial position, results of operations, comprehensive income and cash flows for the interim periods. The financial information as of December 31, 1998 is derived from the Company's audited consolidated financial statements. These interim consolidated financial statements should be read in conjunction with the audited consolidated financial statements and related notes thereto, which are included in the Company's 1998 Annual Report on Form 10-K. The results of operations for the 1999 interim periods presented are not necessarily indicative of the results to be expected for the year ended December 31, 1999 or any future interim period, and the Company makes no representation related thereto. Certain amounts have been reclassified in the prior period financial statements to conform with the current year presentations. NOTE 2: Contingencies The Company is from time to time involved in various claims and legal proceedings of a nature considered by Company management to be routine and incidental to its business. In the opinion of Company management, after consultation with outside legal counsel, the ultimate disposition of such matters is not expected to have a material adverse effect on the Company's financial position, results of operations or liquidity. NOTE 3: Reconciliation of Earnings (Loss) Per Share Basic earnings per share is computed using the weighted average number of common shares outstanding during the period. Diluted earnings per share is computed using the weighted average number of common shares and dilutive common equivalent shares outstanding during the period. Dilutive common equivalent shares consist of common stock issuable upon exercise of stock options using the treasury stock method. For the three months ended September 30, 1999, all potential common equivalent shares were excluded from the computation of diluted earnings (loss) per share because inclusion would have had an anti-dilutive effect on earnings (loss) per share. Page 6 7 The following provides a reconciliation of the numerators and denominators of the basic and diluted per share computations:
Three Month Periods Nine Month Periods Ended September 30, Ended September 30, 1999 1998 1999 1998 -------- ------- ------- ------- Weighted average shares outstanding 13,537 13,398 13,533 13,319 Dilutive common stock options using the treasury stock method -- 76 63 150 -------- ------- ------- ------- Weighted average diluted shares outstanding 13,537 13,474 13,596 13,469 ======== ======= ======= ======= Net income (loss) $ (2,680) $ 3,948 $ 293 $ 6,352 Earnings (loss) per share - basic $ (0.20) $ 0.29 $ 0.02 $ 0.48 Earnings (loss) per share - diluted $ (0.20) $ 0.29 $ 0.02 $ 0.47
NOTE 4: Non-Recurring Charge A non-recurring charge of $1.9 million was recorded in the quarter ended September 30, 1999. The charge resulted from the Company's transition from providing products and consulting services addressing Year 2000 remediation to providing information technology consulting and other services. The non-recurring charge consists of (in thousands): Capitalized product development $ 388 Asset impairment 667 Severance costs 868 ------ $1,923 ======
Write-off of capitalized product development represents costs associated with the development of the Company's Ardes 2K and IVR products. The Company has decided to discontinue selling these products as they are no longer a part of the Company's core business strategy. Asset impairment reflects the write-down of certain computer equipment at the Company's Outsourcing Services division. This equipment was used specifically in the testing of platforms for compliance with Y2K and due to the shift in the focus to enterprise integration will not be fully utilized. The Company has written these assets down to their estimated net realizable value and intends to hold these assets for potential future projects which could require the specific equipment identified. Severance costs reflect a workforce reduction of approximately 240 individuals primarily in field consulting. Of the non-recurring amount, approximately $528,000 is included in Accrued Compensation and Commissions and reflects severance costs for terminations scheduled for the fourth quarter of 1999. NOTE 5: Subsequent Event On November 1, 1999, the Company settled a lawsuit regarding royalties owed for the use of its Y2K processes. The Company received $1.9 million as a result of the settlement. There was no recognition of the settlement in the financial statements for the quarter ended September 30, 1999. Page 7 8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations This management's discussion and analysis of financial condition and results of operations should be read in conjunction with the discussion and analysis presented in the Company's 1998 Annual Report on Form 10-K. Results of Operations Quarter Ended September 30, 1999 Revenue of $21.6 million in the third quarter ended September 30, 1999 was down 37 percent from the revenue of $34.4 million in the quarter ended September 30, 1998. The decrease resulted primarily from a significant number of Year 2000 consulting contracts being completed during the quarter without being replaced by a commensurate number of non-Year 2000 contracts. This was most evident in field consulting revenue, which decreased 37 percent. Outsourcing services, which does not typically consist of Year 2000 contracts, had two significant projects for outsourcing mainframes to perform Year 2000 testing end during the quarter. As a result, outsourcing services revenue decreased 47 percent. Test center revenue decreased 22 percent and other revenue decreased 53 percent. The decline in Year 2000 projects can be attributed to many companies having completed their Year 2000 work or being in the process of doing so. There is also evidence that many companies are deferring new information technology (IT) projects or investments until after the Year 2000 date change has passed. This effect was evident in the quarter ended September 30, 1999 and is expected to continue in the quarter ending December 31, 1999. The Company expected the decline in Year 2000 projects, however the Company's non-Year 2000 services, including IT consulting, quality assurance and testing, and data center and application outsourcing, did not provide enough revenue in the quarter ended September 30, 1999 to compensate for the loss of Year 2000 contract revenue. Direct costs decreased 19 percent in the quarter ended September 30, 1999 from the quarter ended September 30, 1998. This decrease did not compensate for the decline in revenue as gross margin declined 61 percent in the quarter ended September 30, 1999 from the quarter ended September 30, 1998. Gross margin as a percentage of revenue decreased from 44 percent to 27 percent. This decline was a result of having too many consultants on staff as the Year 2000 contracts ended. During the quarter approximately 80 consultants were terminated as part of the work force adjustment and the Company expects to terminate an additional 130 consultants in the fourth quarter. The associated severance costs have been included in the non-recurring charge. Selling, General and Administrative expenses increased 3 percent in the quarter ended September 30, 1999 over the quarter ended September 30, 1998. The increase was primarily due to higher employee related costs and higher legal costs. In order to address costs in light of the declining revenue, several actions, primarily personnel reductions, were taken to reduce costs. Costs related to reduction in personnel costs have been included in non-recurring charges. In the quarter ended September 30, 1999, the Company recorded a non-recurring charge of $1.9 million. Since 1991, the Company has derived a significant percentage of its business in consulting on projects associated with Year 2000 remediation projects. As this source of revenue will no longer be a prominent portion of the continuing business strategy, the Company is redirecting its service offerings to enterprise integration solutions, quality assurance and testing and outsourcing. In transitioning to this business strategy, the Company has reduced its workforce of field consultants in order to align the workforce with the current level of demand for its service offerings. The Company has also reduced general and administrative staffing levels to reflect lower expected revenues in the near future. Additionally, the Company wrote off capitalized development costs associated with the Ardes 2K and IVR products. These products were specifically designed to assist in the remediation of Year 2000 issues. The Company has determined that these products are not aligned with the future business strategy and therefore will no longer sell these products, and therefore has written off all capitalized costs associated with the products. Page 8 9 Asset impairments reflect the write-down of certain computer equipment at the Company's Outsourcing Services division. This equipment was used specifically in the testing of platforms for compliance with Y2K and due to the shift in focus to enterprise integration will not be fully utilized. The Company has written these assets down to their estimated net realizable value and intends to hold these assets for potential future projects which could require the specific equipment identified. Other income (expense) recorded in 1999 and 1998 consists primarily of the interest component of capital leases, and in 1998 interest income from investments. The annual effective tax rate in 1999 is 39 percent compared to 37 percent in 1998. Three Quarters Ended September 30, 1999 Revenue of $86.1 million in the three quarters ended September 30, 1999 was 4 percent higher than the revenue of $82.8 million in the three quarters ended September 30, 1998. Field consulting revenue increased 6 percent, outsourcing services revenue increased 21 percent, test center revenue decreased 14 percent and other revenue decreased 24 percent. The increase in revenue from field consulting was primarily due to Year 2000 contracts. The decrease in other revenue is primarily a result of de-emphasizing the Company's product offering. The Company has discontinued development and marketing of the existing products and will continue supporting them only during the remaining product life cycle. Direct costs increased 19 percent in the three quarters ended September 30, 1999 over the three quarters ended September 30, 1998. The increase in direct costs, coupled with the 4 percent increase in revenue led to a 16 percent decrease in gross margin year to year. As described above, the number of consultants was too high as Year 2000 projects were completed and actions were taken to adjust the workforce to the revenue level. SG&A expenses increased 13 percent in the three quarters ended September 30, 1999 over the three quarters ended September 30, 1998, primarily due to an increase in employee related costs associated with the Company's transition from Year 2000 work to enterprise integration services. Liquidity and Capital Resources The Company utilized its $10 million line of credit during the three quarters ended September 30, 1999 to fund a significant federal income tax payment early in the year and to cover occasional short term cash requirements. At September 30, 1999, the Company had no borrowings outstanding under its line of credit and had a cash balance of $6.6 million. Working capital increased $3.1 million and the current ratio improved from 1.9 to 1 to 2.7 to 1 from December 31, 1998 to September 30, 1999. Accounts receivable decreased $13.7 million from December 31, 1998, resulting in an improvement in cash flow from operations. The Company anticipates that it will be able to meet its cash requirements for the foreseeable future through cash generated by operations and occasional use of its line of credit. Year 2000 Compliance The Year 2000 issue is the result of computer programs that were written using two digits rather than four to identify the applicable year. Any of the Company's computer equipment, software and devices with embedded technology that are time-sensitive may mistakenly identify a date field using "00" as the year 1900, rather than the year 2000. State of Readiness The Company provides Year 2000 consulting services to Fortune 500 companies and government agencies and is employing the same methods and processes to complete its own internal Year 2000 project that it provides to its customers. The Company has established a Year 2000 task force, comprised Page 9 10 of members representing the different business operations of the Company, to assess and remediate the impact of the Year 2000 on its IT and non-IT systems, material third party relationships, and service and product offerings. As identified by the task force, the Year 2000 issues facing Data Dimensions that may have a material impact on its ability to continue its business practices as usual through the change of the century include: internal business systems; internet and intranet service; telecommunications; power; and the compliance and readiness of the Company's third party suppliers, vendors, and customers. The task force has divided the Company's Year 2000 project into three major phases: (1) assessment and planning; (2) implementation; and (3) verification and contingency planning. The Company is completing the verification and contingency planning phase. Through this process, the Company did not become aware of any information which indicates that the magnitude of the Company's Year 2000 problem is material. During the implementation phase of the project, the Company replaced obsolete systems and updated (or repaired) the hardware, applications and data so they are Year 2000 compliant. During the verification and contingency planning phase of the project, the Company performed acceptance testing and returned updated applications to production as well as removed any unused and outdated hardware and software. The Company is in the process of finalizing and testing its contingency plans. In addition to its own compliance efforts, the Company conducted an assessment of third parties with which it has material relationships to determine if they are Year 2000 compliant. The Company contacted its key vendors and suppliers by the distribution of questionnaires. A majority of the vendors and suppliers have responded to the questionnaire with assurance that they will be Year 2000 compliant. The Company is in the process of developing contingency plans for those vendors and suppliers that will not be fully Year 2000 compliant. Prior to the start of the Company's Year 2000 project, implementation of a new enterprise-wide integrated accounting package to provide for the financial needs of the organization was completed. This software has been warranted by the vendor to be Year 2000 compliant. Similarly, the operating system used by Data Dimensions Information Services, Inc., the Company's subsidiary which outsources mainframe computer processing services, also has been warranted by the vendor to be Year 2000 compliant. Finally, the Company has replaced its phone and voicemail systems with new, Year 2000 compliant systems to better provide for the expanding communication needs of the organization. Costs to Address Year 2000 Issues The total estimated cost of the project is approximately $1.0 million. These costs consist primarily of the cost of labor needed to complete the Company's readiness and compliance project. The approximate labor cost incurred through September 30, 1999 was $800,000. The decision by the Company to acquire new accounting and phone software and equipment, and the timing thereof, arose in the ordinary course of the growth of the Company, and is not considered a cost associated with the Year 2000 issue. Risks of Year 2000 Issues The failure to correct a material Year 2000 problem could result in an interruption in, or a failure of, certain normal business activities or operations. If such failures occur, the Company's results of operations, liquidity, and financial condition could be materially and adversely affected and the Company may be required to incur unanticipated expenses to remedy any problems not addressed by the Company's compliance efforts. Additionally, if any of the Company's material suppliers or vendors are not fully Year 2000 compliant, it is possible that a system failure or miscalculations causing disruptions in the Company's operations or potential problems with its product and service offerings could result. Contingency Plans Part of the Company's Year 2000 project includes the preparation of contingency plans. The Company is in the process of completing and testing its contingency plans. Page 10 11 Forward-Looking Statements and Associated Risks The foregoing and the discussion and analysis presented in the Company's 1998 Annual Report in Form 10-K and subsequent quarterly reports on Form 10-Q contain certain forward-looking statements, including, among others (i) the potential extent of the Year 2000 problem; (ii) anticipated trends in the Company's financial condition and results of operations (including expected changes in the Company's gross margin and general, administrative and selling expenses); (iii) the Company's business strategies for expanding its presence in the computer services industry and positioning itself for non-Year 2000 markets; and (iv) the Company's ability to distinguish itself from its current and future competitors. These forward-looking statements are based largely on the Company's current expectations and are subject to a number of risks and uncertainties, some of which are described in the Issues and Uncertainties section of the discussion and analysis included in the Company's 1998 Annual Report on Form 10-K. The Company does not provide forecasts of future financial performances. While Company management is optimistic about the Company's long-term prospects, these issues and uncertainties, among others, should be considered. Actual results could differ materially from these forward-looking statements. Important factors to consider in evaluating such forward-looking statements include (i) the shortage of reliable market data regarding the Year 2000 consulting market; (ii) changes in external competitive market conditions that might impact trends in the Company's results of operations; (iii) unanticipated working capital or other cash requirements; (iv) changes in the Company's business strategies or an inability to execute its strategies due to unanticipated changes in the overall information technology consulting market; (v) the Company's ability to recruit new employees and retain current employees during the implementation of the business strategy, and (vi) various competitive factors that may prevent the Company from competing successfully in the marketplace. In view of these risks and uncertainties, there can be no assurance that the forward-looking statements contained in the Company's Annual Report on Form 10-K and subsequent quarterly reports on Form 10-Q will, in fact, transpire. Item 3. Quantitative and Qualitative Disclosure About Market Risk Not Applicable. PART II - OTHER INFORMATION Item 4. Exhibits and reports on Form 8-K (a) The following exhibits are filed as a part of this report, and this list is intended to constitute the exhibit index:
Exhibit No. ----------- 27. Financial Data Schedule
(b) There were no reports on Form 8-K filed during the quarter ended September 30, 1999. Page 11 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. Data Dimensions, Inc. (Registrant) November 12, 1999 /s/ Peter A. Allen ----------------- ---------------------------------------------------- Date Peter A. Allen, President and Chief Executive Officer November 12, 1999 /s/ Laurence C. Leslie ----------------- ---------------------------------------------------- Date Laurence C. Leslie, Executive Vice President, Chief Financial Officer and Secretary (Principal Financial and Accounting Officer) Page 12 EX-27 2 FINANCIAL DATA SCHEDULE
5 1,000 3-MOS DEC-31-1999 JUL-01-1999 SEP-30-1999 6,600 0 25,261 1,549 0 35,725 14,710 8,558 42,500 13,228 0 0 0 21,607 6,239 42,500 21,593 21,593 15,725 15,725 10,219 0 280 (4,393) (1,713) 0 0 0 0 (2,680) (0.20) (0.20)
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