<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934 FOR THE QUARTERLY PERIOD ENDED MARCH 31, 1997
Commission file number 0-28092
Medical Information Technology, Inc.
(Exact Name of Registrant as Specified in Its Charter)
Massachusetts
(State or Other Jurisdiction of Incorporation or Organization)
04-2455639
(I.R.S. Employer Identification No.)
Meditech Circle, Westwood, MA
(Address of Principal Executive Offices)
02090
(Zip Code)
617-821-3000
(Registrant's Telephone Number)
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 [ ]
The number of shares of Common Stock, $.25 par value, outstanding at March 31,
1997 was 16,047,212
<PAGE> 2
Index to Form 10-Q
Part I - Financial Information
Item 1 - Financial Statements
Balance Sheet - December 31, 1996 and March 31, 1997 Page 3
Statement of Income for the Three Months
ended March 31, 1996 and 1997 Page 4
Statement of Shareholders' Investment for the Three Months
ended March 31, 1996 and 1997 Page 4
Statement of Cash Flow for the Three Months
ended March 31, 1996 and 1997 Page 5
Notes To Financial Statements (Unaudited) Page 6
Item 2 - Management's Discussion and Analysis of Financial
Condition and Operating Results Page 7
Part II - Other Information
Item 6 - Exhibits and Reports on Form 8-K Page 9
Signatures Page 9
<PAGE> 3
Part I - Financial Information
Item 1 - Financial Statements
<TABLE>
Balance Sheet (000 omitted)
<CAPTION>
Dec 31, 1996 Mar 31, 1997
<S> <C> <C>
Current Assets:
Cash and equivalents 18,063 23,454
Marketable securities 61,142 58,797
Accounts receivable less reserve 21,906 22,715
Total current 101,111 104,966
Property, Plant And Equipment:
Land and improvements 20,404 20,404
Building and improvements 99,655 100,015
Computer equipment 10,927 11,968
Office furniture and equipment 12,779 13,569
Accumulated depreciation (28,648) (30,904)
Net property, plant and equipment 115,117 115,052
Investments 2,111 2,091
Total 218,339 222,109
Current Liabilities:
Current maturities of note payable 12,000 12,000
Accounts payable 838 2,029
Accrued taxes 2,455 7,187
Accrued expenses 13,609 6,192
Customer deposits 11,837 11,792
Total current 40,739 39,200
Note Payable To A Bank 14,000 11,000
Deferred Federal And State Income Taxes 1,132 1,321
Shareholders' Investment:
Common stock, $.25 par value,
Authorized 17,000,000 shares,
Issued and outstanding 15,938,365
in 1996 and 16,047,212 in 1997 3,985 4,012
Additional paid-in capital 7,680 10,265
Retained earnings 150,803 156,311
Total shareholders' investment 162,468 170,588
Total 218,339 222,109
</TABLE>
<PAGE> 4
<TABLE>
Statement Of Income (000 omitted)
<CAPTION>
3 Months Ended 3 Months Ended
Mar 31, 1996 Mar 31, 1997
<S> <C> <C>
Revenue:
Software products 25,474 31,095
Software services 12,346 14,693
Other Revenue 1,023 917
Total Revenues 38,843 46,705
Expenses:
Operating,development 14,557 17,457
Selling, G & A 8,711 9,938
Total Expenses 23,268 27,395
Income From Operations 15,575 19,310
Other Income 1,803 2,438
Other Expense 1,224 1,048
Income Before Taxes 16,154 20,700
Provision For Taxes:
State 1,466 1,815
Federal 4,943 6,684
Net Income 9,745 12,201
Earnings/share $0.61 $0.76
</TABLE>
<TABLE>
Statement Of Shareholders' Investment (000 omitted)
<CAPTION>
3 Months Ended 3 Months Ended
Mar 31, 1996 Mar 31, 1997
<S> <C> <C>
Shareholders' Investment at beginning 137,828 162,468
Net Income 9,745 12,201
Sale of Common Stock 2,139 2,613
Dividends Paid (5,541) (6,694)
Shareholders' Investment at end 144,171 170,588
</TABLE>
<PAGE> 5
<TABLE>
Statement Of Cash Flow (000 omitted)
<CAPTION>
3 Months Ended 3 Months Ended
Mar 31, 1996 Mar 31, 1997
<S> <C> <C>
Cash Flow from Operations:
Net income 9,745 12,201
Depreciation 1,529 2,256
(Gain) on marketable securities (12) (40)
Change in accounts receivable 518 (809)
Change in accounts payable 1,151 1,192
Change in accrued expenses (1,674) (2,684)
Change in customer deposits (637) (45)
Change in deferred taxes 188
Net cash from operations 10,620 12,259
Cash Flow from Investing:
Purchase of property, plant
and equipment (1,194) (2,191)
Purchase of marketable securities (1,638) (502)
Proceeds from investment liquidation 2,875 2,907
Net cash from investing 43 214
Cash Flow from Financing:
Payment of bank note (3,000) (3,000)
Proceeds from sale of common stock 2,139 2,612
Dividends paid (5,541) (6,694)
Net cash used in financing (6,402) (7,082)
Net Increase in Cash and Equivalents 4,261 5,391
Cash and Equivalents at beginning
of period 6,512 18,063
Cash and Equivalents at end of period 10,773 23,454
</TABLE>
<PAGE> 6
Notes To Financial Statements (Unaudited)
1. The unaudited financial statements presented herein have been prepared in
accordance with the instructions to Form 10-Q and do not include all of the
information and note disclosures required by generally accepted accounting
principles. These statements should be read in conjunction with the financial
statements and notes thereto for the year ended December 31, 1996 included in
the Company's Form 10K filed in April 1997. The accompanying financial
statements have not been examined by independent accountants in accordance with
generally accepted auditing standards, but in the opinion of management such
financial statements include all adjustments necessary to summarize fairly the
Company's financial position and results of operation.
2. The earnings per share calculation for the Quarter ended March 31, 1996 and
March 31, 1997 is as follows:
<TABLE>
Earnings per Share Calculations (in thousands where applicable)
<CAPTION>
3 Months Ended March 31
1996 1997
<C> <C>
Net Income 9,745 12,201
Average number of common shares 15,867 15,975
Earnings per share $0.61 $0.76
</TABLE>
The average number of common shares outstanding during the period reflects the
new issuance of 106,963 shares on February 29, 1996 and 108,847 shares on
February 25, 1997.
<PAGE> 7
Item 2 - Management's Discussion and Analysis of Financial
Condition and Operating Results
<TABLE>
Comparison of 1st Quarter 1996 to 1st Quarter 1997:
(in thousands where applicable)
<CAPTION>
1996 1997 Change
<S> <C> <C> <C>
Revenues 38,843 46,705 20%
Operating income 15,575 19,310 24%
Net income 9,745 12,201 25%
Earnings per common share $0.61 $0.76 25%
Cash dividends per common share $0.35 $0.42 20%
</TABLE>
Revenues increased by $7.9 million or 20% due to increased orders received from
both existing and new customers.
Expenses increased by $4.1 million or 18% primarily due to a 15% increase in
staff levels and related costs to accommodate increased orders received.
<PAGE> 8
<TABLE>
Liquidity And Capital Resources
<CAPTION>
Dec 31, 1996 Mar 31, 1997
<S> <C> <C>
Cash and cash equivalents 18,063 23,454
Total assets 218,339 222,109
Total liabilities 55,871 51,521
Shareholders' equity 162,468 170,588
Book value per share $10.24 $10.68
Common shares outstanding 15,863 15,975
</TABLE>
As presented in the Statement of Cash Flow, net cash provided by operating
activities was $12.3 million during the first three months of fiscal 1997. Net
cash provided by investing activities was not significant. The payment of $6.7
million in dividends to shareholders and repaid debt of $3 million constituted
the most significant use of cash during the first three months of 1997. The
resultant net increase in cash and cash equivalents was $5.4 million for the
three months ended March 31, 1997.
At March 31, 1997 the Company's total debt was $23 million as compared to $26
million at December 31, 1996.
Working capital requirements as well as projected capital expenditures for the
remainder of fiscal 1997 are expected to be provided by cash generated from
operations.
<PAGE> 9
Part II - Other Information
Item 6 - Exhibits and Reports on Form 8-K
A Financial Data Schedule is appended as an exhibit to this document. There
were no reports filed on Form 8-K during the quarter ended March 31, 1997.
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.
Medical Information Technology, Inc.
(Registrant)
May 12, 1997
(Date)
Barbara A. Manzolillo, Chief Financial Officer and Treasurer
(Signature)
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> MAR-31-1997
<CASH> 23,454
<SECURITIES> 58,797
<RECEIVABLES> 21,270
<ALLOWANCES> 210
<INVENTORY> 0
<CURRENT-ASSETS> 104,966
<PP&E> 145,956
<DEPRECIATION> 30,904
<TOTAL-ASSETS> 222,109
<CURRENT-LIABILITIES> 39,200
<BONDS> 11,000
0
0
<COMMON> 4,012
<OTHER-SE> 166,576
<TOTAL-LIABILITY-AND-EQUITY> 222,109
<SALES> 31,095
<TOTAL-REVENUES> 46,705
<CGS> 0
<TOTAL-COSTS> 23,395
<OTHER-EXPENSES> 531
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 517
<INCOME-PRETAX> 20,700
<INCOME-TAX> 8,499
<INCOME-CONTINUING> 12,201
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 12,201
<EPS-PRIMARY> 0.76
<EPS-DILUTED> 0.76
</TABLE>
