<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934 FOR THE QUARTERLY PERIOD ENDED JULY 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 NO. 0-27694
SCB COMPUTER TECHNOLOGY, INC.
(Exact name of registrant as specified in its charter)
TENNESSEE 62-1201561
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1365 W. BRIERBROOK ROAD
MEMPHIS, TENNESSEE 38138
(Address of principal executive offices)
901-754-6577
(Registrant's telephone number, including area code)
NOT APPLICABLE
(Former name, former address and former fiscal year,
if changed since last report)
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 September 10, 1999, there were 24,711,965 outstanding shares of
the registrant's common stock.
<PAGE> 2
Index to Form 10-Q
SCB Computer Technology, Inc.
<TABLE>
<CAPTION>
Page
Number
------
<S> <C>
Part I. Financial Information
Item 1. Financial Statements (Unaudited)
Condensed consolidated balance sheets as of July 31, 1999 and April 30, 1999 ........... 3
Condensed consolidated statements of income for the three months ended July 31, 1999
and July 31, 1998 ...................................................................... 4
Condensed consolidated statements of cash flows for the three months ended July 31, 1999
and July 31, 1998 ...................................................................... 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 ............................. 10
Part II. Other Information
Item 1. Legal Proceedings ...................................................................... 10
Item 6. Exhibits and Reports on Form 8-K ....................................................... 10
Signature ....................................................................................... 11
</TABLE>
2
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
SCB COMPUTER TECHNOLOGY, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
<TABLE>
<CAPTION>
JULY 31, APRIL 30,
1999 1999
------------- -------------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
CASH AND CASH EQUIVALENTS $ 5,467,481 $ 5,318,259
ACCOUNTS RECEIVABLE 33,975,338 38,556,723
OTHER CURRENT ASSETS 6,510,436 6,028,506
------------- -------------
TOTAL CURRENT ASSETS 45,953,255 49,903,488
INVESTMENT IN DIRECT FINANCING LEASES 13,772,386 16,229,954
EQUIPMENT UNDER OPERATING LEASES (NET) 7,623,758 4,826,291
FIXED ASSETS:
BUILDINGS 1,348,293 1,348,293
FURNITURE, FIXTURES AND EQUIPMENT 32,521,490 29,675,296
ACCUMULATED DEPRECIATION (9,010,094) (6,753,640)
------------- -------------
24,859,689 24,269,949
LAND 209,912 209,912
------------- -------------
25,069,601 24,479,861
GOODWILL (NET) 51,075,428 45,085,230
OTHER 5,510,399 6,322,010
------------- -------------
TOTAL ASSETS $ 149,004,827 $ 146,846,834
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
ACCOUNTS PAYABLE-TRADE $ 8,024,046 $ 6,763,376
ACCRUED EXPENSES 8,509,089 8,513,652
SHORT TERM LOAN 7,000,000 0
CURRENT PORTION OF LONG TERM DEBT 14,864,289 15,307,385
CURRENT PORTION - NONRECOURSE DEBT 1,000,000 0
DEFERRED REVENUE 1,311,685 1,244,623
------------- -------------
TOTAL CURRENT LIABILITIES 40,709,109 31,829,036
LONG TERM DEBT 26,124,749 33,754,628
NOTES PAYABLE-NONRECOURSE 16,586,125 16,224,198
OTHER LONG TERM LIABILITIES 3,954,515 5,612,769
SHAREHOLDERS' EQUITY 61,630,329 59,426,203
------------- -------------
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 149,004,827 $ 146,846,834
============= =============
</TABLE>
See accompanying notes.
3
<PAGE> 4
SCB COMPUTER TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months
Ended
July 31,
---------------------------
1999 1998
----------- -----------
<S> <C> <C>
Revenue $44,268,292 $35,488,610
Cost of services 30,695,497 24,042,414
----------- -----------
Gross profit 13,572,795 11,446,196
Selling, general and administrative expenses 9,057,436 6,826,357
TVA settlement and severance payments -- 1,900,000
----------- -----------
Income from operations 4,515,359 2,719,839
Net interest expense 844,789 626,572
----------- -----------
Income before income taxes 3,670,570 2,093,267
Income tax expense 1,471,096 1,197,000
=========== ===========
Net income $ 2,199,474 $ 896,267
=========== ===========
Net income per share - basic $ 0.09 $ 0.04
=========== ===========
Net income per share - diluted $ 0.09 $ 0.04
=========== ===========
Weighted average number of common
shares - basic 24,711,924 24,665,318
=========== ===========
Weighted average number of common
shares - diluted 24,762,646 25,114,168
=========== ===========
</TABLE>
See accompanying notes.
4
<PAGE> 5
SCB COMPUTER TECHNOLOGY, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months
Ended
July 31,
------------------------------
1999 1998
------------ ------------
<S> <C> <C>
OPERATING ACTIVITIES
Net Income $ 2,199,474 $ 896,267
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation included in cost of services 1,108,059 742,227
Depreciation included in SG&A 292,176 297,247
Amortization and other 455,017 398,172
Deferred income taxes (1,524,406) (729,075)
(Increase) decrease in:
Accounts receivable 4,105,394 (4,820,161)
Other assets 308,435 2,378,265
Net investment in direct financing
lease activity 2,457,568 (1,569,268)
Increase (decrease) in:
Accounts payable 1,260,670 1,322,120
Accrued expenses and other 821,015 2,258,445
Accrued TVA settlement (1,658,516) 1,900,000
------------ ------------
Total adjustments 7,625,412 2,177,972
------------ ------------
Net cash provided by operating activities 9,824,886 3,074,239
------------ ------------
INVESTING ACTIVITIES
Purchases of fixed assets (4,188,832) (16,604,073)
Acquisition of businesses (6,600,000) (7,127,473)
------------ ------------
Net cash used in investing activities (10,788,832) (23,731,546)
------------ ------------
FINANCING ACTIVITIES
Borrowings on long-term debt -- 15,000,000
Payments on long-term debt (2,987,105) (2,811,092)
Net borrowings (repayments) under
line of credit (3,649,000) 5,957,333
Short-term loan 7,000,000 --
Other 749,273 2,710,301
------------ ------------
Net cash provided by financing activities 1,113,168 20,856,542
------------ ------------
Net increase in cash 149,222 199,235
Cash at beginning of period 5,318,259 2,983,372
------------ ------------
Cash at end of period $ 5,467,481 $ 3,182,607
============ ============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW
Interest paid $ 861,267 $ 901,471
Income taxes paid $ 460,066 $ 865,759
</TABLE>
See accompanying notes.
5
<PAGE> 6
SCB COMPUTER TECHNOLOGY, INC.
Notes to Condensed Consolidated Financial Statements (Unaudited)
July 31, 1999
Note A - Basis of Presentation
The accompanying unaudited condensed consolidated financial statements of SCB
Computer Technology, Inc. have been prepared in accordance with generally
accepted accounting principles for interim financial information and with the
instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do
not include all of the information and footnotes required by generally accepted
accounting principles for complete financial statements. In the opinion of
management, all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. Operating results for the
three months ended July 31, 1999 are not necessarily indicative of the results
that may be expected for the fiscal year ending April 30, 2000. For further
information, refer to the consolidated financial statements and footnotes
thereto included in the Registrant's Annual Report on Form 10-K, as amended, for
the fiscal year ended April 30, 1999 filed with the Securities and Exchange
Commission.
Note B - Earnings Per Share
The following is a reconciliation of the numerators and denominators used to
calculate net income per share in the condensed consolidated statements of
income:
<TABLE>
<CAPTION>
Three Months Ended
July 31,
---------------------------
1999 1998
----------- -----------
<S> <C> <C>
Net income $2,199,474 $ 896,267
========== ==========
Denominator for basic earnings per
share - weighted average shares 24,711,924 24,665,318
========== ==========
Effect of dilutive securities-stock options 50,722 448,850
---------- ----------
Denominator for diluted earnings per
share - adjusted weighted average
shares and assumed conversions 24,762,646 25,114,168
========== ==========
Basic earnings per share $ 0.09 $ 0.04
========== ==========
Diluted earnings per share $ 0.09 $ 0.04
========== ==========
</TABLE>
6
<PAGE> 7
Note C - Segment Information
The Company operates in two industry segments - Professional Services and
Enterprise Solutions.
The revenue components of the Professional Services segment consist primarily
of: (1) IT Consulting, including evaluation, design and reengineering of
computer systems, management, quality assurance and technical direction for IT
projects, as well as functional expertise and training and (2) Professional
Staffing, which involves providing skilled IT staff on an as-needed basis.
The revenue components of the Enterprise Solutions segment consist primarily of:
(1) Outsourcing, including system development and integration, maintenance, data
center management, help desk and technical services, remote processing, computer
hardware sales and leasing; (2) Enterprise Resource Planning (ERP) services,
which include planning and evaluation, systems analysis and administration,
implementation and functional support; and (3) E-Services, which include
Enterprise Management Services, Internet application development and design and
implementation of communication networks.
Summarized financial information concerning the operating segments in which the
Company operated at July 31, 1999 and 1998, and for each of the quarters then
ended is shown in the following table:
<TABLE>
<CAPTION>
Three Months Ended
July 31,
-------------------
Operating Segments (In Thousands) 1999 1998
------- -------
<S> <C> <C>
Revenues:
Professional Services $30,290 $24,868
Enterprise Solutions 13,978 10,621
------- -------
$44,268 $35,489
Income From Operations: (a)
Professional Services $ 2,984 $ 3,126
Enterprise Solutions 1,531 1,494
------- -------
$ 4,515 $ 4,620
</TABLE>
(a) The July 1998 income from operations excludes the nonrecurring charge
related to the TVA matter ($1,900,000).
7
<PAGE> 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
Results of Operations
Revenue increased from $35.5 million for the quarter ended July 31, 1998 to
$44.3 million for the quarter ended July 31, 1999, an increase of approximately
24.8%. The increase was attributable primarily to the expansion of the Company's
client base and increases in enterprise solution services and professional
staffing services provided to existing clients.
Gross profit increased from $11.4 million for the first quarter of fiscal 1999
to $13.6 million for the first quarter of fiscal 2000, an increase of
approximately 19.3%. The increase was primarily attributable to the increase in
revenue over the prior periods. Gross profit margin for the quarter decreased
from 32.3% to 30.7%, primarily because of a decrease in the number of billable
days for the first quarter of fiscal 2000.
Other selling, general and administrative expenses increased from $6.8 million
in the first quarter of fiscal 1999 to $9.1 million in first quarter of fiscal
2000, an increase of 33.8%. As a percent of revenue, other selling, general and
administrative expenses increased from 19.2% in the first quarter of fiscal 1999
to 20.5% for the first quarter of fiscal 2000. The increase in the dollar amount
spent is primarily attributable to the increase in staffing as a result of the
Company's building infrastructure for regional business units becoming fully
operational and the start-up costs associated with the e-solutions product line.
The increase, as a percentage of revenue, is primarily attributable to ramp-up
costs associated with building infrastructure. In the first quarter of fiscal
1999, the Company provided for an accrual of $1,900,000, which is reflected
separately on the income statement, in connection with the settlement of the TVA
billing matter as discussed herein. See "Part II - Item 1. Legal Proceedings."
Net interest expense increased from $0.6 million in the first quarter of fiscal
1999 to $0.8 million in the first quarter of fiscal 2000. The increase was
primarily due to financing the acquisition of Global Services, Inc.
Liquidity and Capital Resources
Operating cash flow has historically been the Company's primary source of
liquidity. The Company's net cash provided by operating activities was
approximately $10.2 million and $3.1 million for the first quarters of fiscal
2000 and 1999, respectively. The increase in cash flow was primarily
attributable to reduced accounts receivable.
The Company's historical capital expenditures have related primarily to the
acquisition of office buildings used as the Company's corporate headquarters.
With the acquisition of The Partners Group and the up-front purchases of
equipment relating to their outsourcing contracts, the Company expects its
capital expenditures to increase over prior periods. In the first quarter of
fiscal 2000, the Company had approximately $4.2 million in capital expenditures,
the substantial majority of which were related to purchases of equipment
associated with new outsourcing contracts and equipment to complete the Emerging
Technology Center in Phoenix.
At July 31, 1999, the Company had approximately $5.5 million of available cash
and $2.0 million available for future borrowing under its credit facility.
Primarily as a result of the Company's recent acquisitions, borrowings have
become a more significant source of liquidity. The Company believes that its
cash flows from operations and borrowings under its credit facility will be
sufficient to meet the Company's needs for at least the next twelve months.
8
<PAGE> 9
The Company and its significant subsidiaries have a credit facility with a
commercial bank. The credit facility is comprised of a revolving line of credit
and a term loan. The revolving line of credit initially provided for borrowings
of up to $30 million, but was reduced to $26.3 million on August 1, 1999, and
will continue to reduce by $1.25 million quarterly until it matures on October
1, 2000. The Company uses the borrowings under the revolving line of credit for
general corporate purposes, including acquisitions. At July 31, 1999, there was
$12,805,635 outstanding under the term loan. The repayment schedule for the term
loan requires monthly principal and interest payments of $353,845. The term loan
matures on July 15, 2002. The Company used the term loan to fund the purchase of
certain equipment utilized in an outsourcing engagement. Borrowings under the
credit facility bear interest at a rate equal to LIBOR plus a spread, which
varies based on certain financial ratios. At July 31, 1999, borrowings under the
credit facility bore interest at the rate of 6.68% per year. The Company is
negotiating with its lender to increase the amount available for borrowing under
the credit facility.
In May 1999, the Company used a short-term loan of $7 million from this
commercial bank to fund the acquisition of Global Services, Inc. This term loan
matures on September 17, 1999, and the outstanding principal bears interest at a
rate of 6.42%.
The Company also has a $5 million line of credit with a bank, which bears
interest at a rate of prime less 0.55% (7.70% at July 31, 1999) and is due upon
demand. At July 31, 1999, $4,974,288 was outstanding under this line of credit
which is secured by various computer equipment.
Year 2000
In fiscal 1999, the Company derived about 10% of its revenue from Year 2000
("Y2K") consulting services and anticipates that such percentage will decrease
in fiscal 2000. During the first quarter of fiscal 2000, the percentage remained
at 10%. Many of the Company's engagements, particularly with regard to Y2K
services, involve projects that are critical to the operations of its clients'
businesses and provide benefits that may be difficult to quantify. Any failure
in a client's system could result in a claim for substantial damages against the
Company, regardless of the Company's responsibility for such failure.
Furthermore, any litigation, regardless of its outcome, could result in
substantial costs to the Company, diversion of management's attention from
operations, and negative publicity, any of which could adversely affect the
Company's results of operations and financial condition.
Because the Company's business includes the assessment of clients' Y2K problems
and the recommendation and implementation of solutions to such problems, the
Company has long been aware of the potential adverse effects on a company if its
systems are not Y2K compliant. The Company has also made an assessment of its
computer systems and applications. This assessment only indicated that some
minor adjustments needed to be done in order to get the operating systems,
software and hardware ready for Y2K. Therefore the cost for Y2K remediation has
not been material. All required fixes that the Company is presently aware of
have been made. The Company's suppliers have also verified that all computers,
software, telephones, alarms, battery backups, and generators that have been
purchased by the Company are now Y2K compliant after loading any required fixes.
Based on this internal assessment and these external verifications, the Company
believes that its computer systems are ready for Y2K in all material respects
and that problems related to Y2K with its computer systems will pose minimal, if
any, risk of business disruption. Accordingly, the Company believes that the Y2K
problem as it relates to the Company's computer systems will not have a material
adverse effect on the Company's business, results of operations, or financial
condition.
The Company depends on numerous independent external providers of goods and
services. These external businesses include electricity, telephone service and
other utilities as well as financial institutions. The Company does not control
these external businesses and cannot ensure that they and their goods and
services will be ready for Y2K. The most reasonably likely worst case Y2K
scenario for the Company would be for the Company to lose electricity,
communications or banking services.
9
<PAGE> 10
The Company has battery backups and generators in place for loss of
electricity. The Company is seeking to verify the readiness of external
businesses (such as telephone companies and banking institutions); however, if
they were to experience a Y2K problem, particularly a critical one, the
resulting business disruption could have a material adverse effect on the
Company's business, results of operations and financial condition.
Forward Looking Statements
This quarterly report may be deemed to contain certain forward-looking
statements within the meaning of the federal securities laws. Forward-looking
statements are those that express management's view of future performance and
trends, and usually are preceded with "expects", "anticipates", "believes",
"hopes", "estimates", "plans" or similar phrasing. Forward-looking statements
include statements regarding projected operating revenues and costs, liquidity,
capital expenditures, and availability of capital resources as well as Y2K
readiness and potential exposure. Such statements are based on management's
beliefs, assumptions and expectations, which in turn are based on information
currently available to management. Information contained in these
forward-looking statements is inherently uncertain, and the Company's actual
performance and results may differ materially due to a number of factors, most
of which are beyond the Company's ability to predict or control, including the
Company's dependence on key clients; the Company's dependence on the
availability, recruitment, and retention of qualified IT employees; the
Company's dependence on key management personnel; the Company's potential
liability to its clients in connection with the provision of IT services,
particularly Y2K services; the Company's ability to finance, sustain, and manage
growth; the Company's ability to integrate acquired businesses; competition; and
general economic conditions. The Company undertakes no obligation to publicly
release any revision to any forward-looking statement contained herein to
reflect events or circumstances occurring after the date hereof or to reflect
the occurrence of unanticipated events.
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Not applicable.
PART II - OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS.
In September 1998, the Company reached a tentative agreement with the United
States Attorney for the Western District of Tennessee and the Tennessee Valley
Authority (the "TVA") to settle on a civil basis all claims against the Company
relating to the Company's billing practices under its consulting contract with
the TVA. The Company agreed to pay $1,000,000 to the United States government
and $600,000 to the TVA in settlement of all claims against the Company. The
Company provided for an accrual of $1,900,000 in anticipation of the settlement.
The final agreement was executed on May 5, 1999. In connection with the
settlement, a former officer of the Company plead guilty to a single felony
count of submitting a false claim of less than $10,000. Pursuant to the
resignation of such officer from the Company, SCB recorded severance expense of
$800,000 in the fiscal quarter ended October 31, 1998, with non-compete payments
to the former officer aggregating $980,000 being amortized ratably over three
years. The $1,900,000 settlement charge and the $800,000 severance charge are
reflected on the consolidated statement of income under the caption "TVA
settlement and severance payments".
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K.
(a) See Index to Exhibits following the Signature page.
(b) No reports on Form 8-K were filed during the fiscal quarter ended July 31,
1999.
10
<PAGE> 11
Signature
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.
SCB COMPUTER TECHNOLOGY, INC.
Date: September 14, 1999 By: /s/ Gary E. McCarter
----------------------------------
Title: Chief Financial Officer
11
<PAGE> 12
EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit
Number Description of Exhibit
- ------ ----------------------
<S> <C>
2.1 Agreement and Plan of Merger dated as of September 26, 1996, among the
Company, Delta Acquisition, Inc., Delta Software Systems, Inc., and the
shareholders of Delta Software Systems, Inc. including form of
Indemnity and Escrow Agreement (incorporated herein by reference to
Exhibit 2 to the Company's Current Report on Form 8-K dated October 8,
1996). Schedules and other exhibits have been omitted from this filing.
The Company will furnish, as supplementary information, copies of the
omitted materials to the Securities and Exchange Commission (the "SEC")
upon request.
2.2 Asset Purchase Agreement dated February 28, 1997, among the Company,
TMR Acquisition, Inc., Technology Management Resources, Inc., and the
shareholders of the Technology Management Resources, Inc. (incorporated
herein by reference to Exhibit 2.2 to the Company's Registration
Statement on From S-3 (Registration No. 333-22869)). Schedules and
other exhibits have been omitted from this filing. The company will
furnish, as supplementary information, copies of the omitted materials
to the SEC upon request.
2.3 Settlement Agreement and Release dated as of December 30, 1997, among
the Company, Technology Management Resources, Inc. (a wholly owned
subsidiary of the Company), Marino Holdings, Inc. (formerly Technology
Management Resources, Inc.), Thomas R. Marshall and Thomas V. Ruffino
(incorporated herein by reference to Exhibit 2 to the Company's
Quarterly Report on Form 10-Q for the fiscal quarter ended January 31,
1998).
2.4 Stock Purchase Agreement dated as of June 30, 1997, among the Company
and the shareholders of Partners Capital Group, Inc. (incorporated
herein by reference to Exhibit 2.1 to the Company's Current Report on
Form 8-K dated July 24, 1997). Schedules and other exhibits have been
omitted from this filing. The Company will furnish, as supplementary
information, copies of the omitted materials to the SEC upon request.
2.5 Stock Purchase Agreement dated as of June 30, 1997, among the Company
and the shareholders of Partners Resources, Inc. (incorporated herein
by reference to Exhibit 2.1 to the Company's Current Report on Form 8-K
dated July 24, 1997). Schedules and other exhibits have been omitted
from this filing. The Company will furnish, as supplementary
information, copies of the omitted materials to the SEC upon request.
2.6 Asset Purchase Agreement dated as of May 1, 1999, among the Company,
Partners Resources, Inc. Global Services, Inc. and the shareholders of
Global Services, Inc. (incorporated herein by reference to Exhibit 2.6
to the Company's Annual Report on Form 10-K for the fiscal year ended
April 30, 1999).
3.1 Amended and Restated Charter of the Company (incorporated herein by
reference to exhibit 3.1 to the Company's Registration Statement on
Form S-1 (Registration No. 33-80707)).
3.2 Articles of Amendment to the Amended and Restated Charter of the
Company dated November 3, 1998 (incorporated herein by reference to
Exhibit 4.2 to the Company's Registration Statement on Form S-8
(Registration No. 333-68343)).
3.3 Amended and Restated Bylaws of the Company (incorporated herein by
reference to Exhibit 3.2 to the Company's Registration Statement on
Form S-1 (Registration No. 33-80707)).
4.1 Specimen of common stock certificate (incorporated herein by reference
to Exhibit 4.1 to the Company's Registration Statement on Form S-1
(Registration No. 33-80707)).
4.2 Article 7 of the Amended and Restated Charter of the Company, as
amended (included in Exhibits 3.1 and 3.2 hereto).
</TABLE>
12
<PAGE> 13
<TABLE>
<S> <C>
10.1 SCB Computer Technology, Inc. 1995 Stock Incentive Plan (incorporated
herein by reference to Exhibit 10.2 to the Company's Registration
Statement on Form S-1 (Registration No. 33-80707)).
10.2 SCB Computer Technology, Inc. 1997 Stock Incentive Plan (incorporated
herein by reference to Appendix A to the Company's definitive Proxy
Statement dated September 25, 1998).
10.3 Employment Agreement dated as of November 1, 1998, between the Company
and T. Scott Cobb (incorporated herein by reference to Exhibit 10.2 to
the Company's Quarterly Report on Form 10-Q for the fiscal quarter
ended January 31, 1999).
10.4 Employment Agreement dated as of November 1, 1998, between the Company
and Ben C. Bryant, Jr. (incorporated herein by reference to Exhibit
10.1 to the Company's Quarterly Report on Form 10-Q for the fiscal
quarter ended January 31, 1999).
10.5 Second Amended and Restated Loan Agreement dated as of March 12, 1998,
among NationsBank of Tennessee, N.A., the Company, and certain of its
subsidiaries, including the form of promissory note (incorporated
herein by reference to Amendment No. 1 to the Company's Annual Report
on Form 10-K/A for the fiscal year ended April 30, 1998), as amended by
(1) First Modification to Second Amended and Restated Loan Agreement
dated as of September 15, 1998, among the parties thereto, (2) Second
Modification to Second Amended and Restated Loan Agreement dated as of
May 20, 1999, among the parties thereto, and (3) Third Modification to
Second Amended and Restated Loan Agreement dated as of June 21, 1999,
among the parties thereto (in each case incorporated herein by
reference to Exhibit 10.5 to the Company's Annual Report on Form 10-K
for the fiscal year ended April 30, 1999).
11 Computation of Earnings Per Share (included in Note B of the Notes to
Consolidated Financial Statements contained in the Company's Quarterly
Report on Form 10-Q for the fiscal quarter ended July 31, 1999).
27 Financial Data Schedule - Fiscal Quarter Ended July 31, 1999.
</TABLE>
13
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF SCB COMPUTER TECHNOLOGY, INC. FOR THE THREE MONTHS ENDED
JULY 31, 1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL
STATEMENTS.
</LEGEND>
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> APR-30-2000
<PERIOD-START> MAY-01-1999
<PERIOD-END> JUL-31-1999
<EXCHANGE-RATE> 1
<CASH> 5,467,481
<SECURITIES> 0
<RECEIVABLES> 33,975,338
<ALLOWANCES> 0
<INVENTORY> 1,062,594
<CURRENT-ASSETS> 45,953,255
<PP&E> 33,869,783
<DEPRECIATION> 9,010,094
<TOTAL-ASSETS> 149,004,827
<CURRENT-LIABILITIES> 40,709,109
<BONDS> 0
0
0
<COMMON> 247,119
<OTHER-SE> 61,383,210
<TOTAL-LIABILITY-AND-EQUITY> 149,004,827
<SALES> 44,268,292
<TOTAL-REVENUES> 44,268,292
<CGS> 30,695,497
<TOTAL-COSTS> 30,695,497
<OTHER-EXPENSES> 9,057,436
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 861,267
<INCOME-PRETAX> 3,670,570
<INCOME-TAX> 1,471,096
<INCOME-CONTINUING> 2,199,474
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,199,474
<EPS-BASIC> 0.09
<EPS-DILUTED> 0.09
</TABLE>
