<PAGE> 1
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UNITED STATES 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: DECEMBER 31, 1996
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: 0-20735
RESTRAC, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
<TABLE>
<S> <C>
DELAWARE 04-2935271
(STATE OR OTHER JURISDICTION OF (IRS EMPLOYER IDENTIFICATION NO.)
INCORPORATION OR ORGANIZATION)
91 HARTWELL AVENUE
LEXINGTON, MA 02173-3125
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES) (ZIP CODE)
</TABLE>
(617) 869-5000
(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 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:
TITLE OF EACH CLASS
Common stock, $.01 par value, shares outstanding at January 31, 1997: 8,086,522
shares
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<PAGE> 2
RESTRAC, INC.
INDEX
PART I -- FINANCIAL INFORMATION
<TABLE>
<CAPTION>
PAGE
----
<S> <C> <C>
Item 1. Consolidated Financial Statements
3
Consolidated Balance Sheets at December 31, 1996 and September 30, 1996......
4
Consolidated Statements of Operations for the three months ended: December
31, 1996 and December 31, 1995...............................................
5
Consolidated Statements of Cash Flows for the three months ended: December
31, 1996 and December 31, 1995...............................................
6
Notes to Consolidated Financial Statements...................................
Item 2. Management's Discussion and Analysis of Financial Condition and Results of 8
Operations...................................................................
PART II -- OTHER INFORMATION
Item 1. Legal Proceedings............................................................ 11
Item 2. Changes in Securities........................................................ 11
Item 3. Defaults upon Senior Securities.............................................. 11
Item 4. Submission of Matters to a Vote of Security Holders.......................... 11
Item 5. Other Information............................................................ 11
Item 6. Exhibits and Reports on Form 8-K............................................. 11
PART III -- SIGNATURES................................................................. 12
Exhibit # 11........................................................................... 13
</TABLE>
2
<PAGE> 3
RESTRAC, INC.
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1996 1996
------------ -------------
(UNAUDITED)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents................................... $11,337,793 $20,367,641
Short-term investments...................................... 6,290,132 --
Accounts receivable, less allowance for doubtful accounts of
$350,000 at December 31, 1996 and September 30, 1996..... 3,280,607 3,387,010
Other current assets........................................ 527,639 229,577
Deferred income taxes....................................... 770,965 770,965
----------- ----------
Total Current Assets................................ 22,207,136 24,755,193
PROPERTY AND EQUIPMENT, NET................................... 2,181,531 1,520,893
OTHER ASSETS.................................................. 966,780 33,898
----------- ----------
Total Assets........................................ $25,355,447 $26,309,984
=========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Current portion of long-term debt........................... $ 2,951 $ 5,060
Accounts payable............................................ 910,201 570,603
Accrued expenses............................................ 2,102,172 3,339,895
Deferred revenue............................................ 3,429,665 3,140,801
Accrued income taxes........................................ -- 280,917
----------- ----------
Total Current Liabilities........................... 6,444,989 7,337,276
----------- ----------
STOCKHOLDERS' EQUITY
Preferred stock, $.01 par value -- Authorized -- 5,000,000
shares, Issued and outstanding -- none................... --
Common stock, $.01 par value -- Authorized -- 30,000,000
shares, Issued -- 8,582,186 shares at December 31, 1996
and 8,569,711 shares at September 30, 1996............... 85,820 85,697
Additional paid-in-capital.................................. 18,468,068 18,222,648
Treasury stock, at cost..................................... (830,764) (830,764)
Retained earnings........................................... 1,187,334 1,495,127
----------- ----------
Total Stockholders' Equity.......................... 18,910,458 18,972,708
----------- ----------
Total Liabilities and Stockholders' Equity.......... $25,355,447 $26,309,984
=========== ==========
</TABLE>
The accompanying Notes are an integral part of these consolidated financial
statements
3
<PAGE> 4
RESTRAC, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
DECEMBER 31,
-------------------------
1996 1995
---------- ----------
<S> <C> <C>
REVENUE:
Product revenue................................................. $ 2,133 $ 3,154
Services revenue................................................ 2,648 1,674
---------- ----------
Total revenue........................................... 4,781 4,828
---------- ----------
COST OF REVENUE:
Product revenue................................................. 222 484
Services revenue................................................ 1,414 1,061
---------- ----------
Total cost of revenue................................... 1,636 1,545
---------- ----------
GROSS MARGIN...................................................... 3,145 3,283
---------- ----------
OPERATING EXPENSES:
Research and development........................................ 1,160 385
Sales and marketing............................................. 1,946 1,935
General and administrative...................................... 724 576
---------- ----------
Total operating expenses................................ 3,830 2,896
---------- ----------
INCOME (LOSS) FROM OPERATIONS..................................... (685) 387
Other Income, Net................................................. 204 46
---------- ----------
Income (Loss) before (Benefit) Provision for Income Taxes......... (481) 433
(Benefit) Provision for Income Taxes.............................. (173) 208
---------- ----------
NET INCOME (LOSS)................................................. $ (308) $ 225
========== ==========
NET INCOME (LOSS) PER SHARE....................................... $ (0.04) $ 0.03
========== ==========
Pro Forma Weighted Average Number of Common and Common Equivalent
Shares Outstanding.............................................. 7,895,053 6,912,403
========== ==========
</TABLE>
The accompanying Notes are an integral part of these consolidated financial
statements
4
<PAGE> 5
RESTRAC, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
DECEMBER 31,
------------------------
1996 1995
----------- ----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income (loss).................................................. $ (307,793) $ 225,514
Adjustments to reconcile net income (loss) to net cash provided by
operating activities --
Depreciation and amortization................................... 244,358 164,718
Provision for doubtful accounts................................. -- 50,000
Deferred income taxes, net...................................... -- (117,577)
Compensation expense related to incentive stock options......... 122,969 --
Development expense related to issuance of stock warrants....... 68,500 --
Deferred rent................................................... -- 17,204
Changes in assets and liabilities
Accounts receivable........................................ 106,403 1,092,058
Prepaid expenses/other current assets...................... (298,062) 55,876
Accounts payable........................................... 339,598 376,146
Accrued expenses........................................... (669,197) (672,116)
Accrued taxes.............................................. (280,917) 40,531
Deferred revenue........................................... 288,864 (88,984)
---------- ---------
NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES... (385,277) 1,143,370
---------- ---------
CASH FLOWS FROM INVESTING ACTIVITIES:
Increase in short-term investments.............................. (6,290,132) --
Purchases of property and equipment............................. (904,996) (203,065)
Increase in other assets........................................ (932,882) (11,748)
Increase in other liabilities................................... -- (17,204)
---------- ---------
NET CASH USED IN INVESTING ACTIVITIES................. (8,128,010) (232,017)
---------- ---------
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments on capital lease obligations........................... (2,109) (1,789)
Purchase of treasury stock...................................... -- (25,794)
Proceeds from exercise of stock options......................... 3,818 61,165
Proceeds from employee stock purchase plan...................... 50,256 --
Payment of accumulated dividends, preferred stock............... (568,526) --
---------- ---------
NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES... (516,561) 33,582
---------- ---------
NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS................. (9,029,848) 944,935
CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD....................... 20,367,641 2,966,637
---------- ---------
CASH AND CASH EQUIVALENTS, END OF PERIOD............................. $11,337,793 $3,911,572
========== =========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION
Cash paid during the period for interest........................ $ 181 $ 501
Cash paid during the period for income taxes.................... $ 373,626 $ 115,744
</TABLE>
The accompanying Notes are an integral part of these consolidated financial
statements
5
<PAGE> 6
RESTRAC, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
DECEMBER 31, 1996
(1) BASIS OF PRESENTATION
The accompanying consolidated financial statements include the accounts of
Restrac, Inc. and its wholly-owned subsidiary, Restrac Securities Corporation,
collectively referred to in these Notes to Consolidated Financial Statements as,
"the Company". All intercompany accounts and transactions have been eliminated
in consolidation.
The consolidated financial statements of the Company presented herein,
without audit except for balance sheet information at September 30, 1996, have
been prepared pursuant to the rules of the Securities and Exchange Commission
for quarterly reports on Form 10-Q and do not include all of the information and
footnote disclosures required by generally accepted accounting principles. These
statements should be read in conjunction with the consolidated financial
statements and notes thereto for the year ended September 30, 1996 ("Fiscal
1996") included in the Company's Form 10-K filed with the Securities and
Exchange Commission on December 29, 1996.
The consolidated balance sheet as of December 31, 1996 and the consolidated
statements of operations and cash flows for the three month periods ended
December 31, 1996, and 1995, are unaudited but, in the opinion of management,
include all adjustments (consisting solely of normal, recurring adjustments)
necessary for a fair presentation of results for these interim periods.
The consolidated results of operations for the three month period ended
December 31, 1996 are not necessarily indicative of the results to be expected
for the fiscal year ending September 30, 1997 ("Fiscal 1997").
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accompanying consolidated financial statements reflect the application
of certain significant accounting policies described below and elsewhere in the
notes to the Fiscal 1996 consolidated financial statements referenced above.
(a) Revenue Recognition
Product revenue includes software license fees and royalty revenue. For the
1996 fiscal period, product revenue also includes revenue from the resale of
third-party hardware. Services revenue includes customer maintenance fees,
training, installation and consulting. The Company recognizes product and
services revenue in accordance with the provisions of Statement of Position No.
91-1, Software Revenue Recognition.
Product revenue from software license fees is recognized upon delivery
provided there are no significant Company obligations remaining and
collectibility of the revenue is probable. If an acceptance period is required,
revenues are recognized upon the earlier of the customer acceptance or the
expiration of the acceptance period, as defined in the applicable software
license agreement.
Services revenue from customer maintenance fees for postcontract support is
recognized ratably over the maintenance term, which is typically 12 months. The
Company includes first year maintenance with the purchase of a system license;
however, for accounting purposes, 15% of the software license fee is treated as
a maintenance fee and is recognized ratably over the 12-month maintenance
period. The amount allocated to customer maintenance fees for the first year is
comparable to customer maintenance fees charged separately by the Company. Other
services revenue from training, installation and consulting is recognized as the
related services are performed.
Deferred revenue represents payments received by the Company in advance of
product delivery or service performance.
6
<PAGE> 7
RESTRAC, INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)
(b) Earnings(Loss) per Share Calculation
For the three month period ended December 31, 1996 net loss per common and
common equivalent share was based on the weighted average number of common
shares outstanding during the period. Common equivalent shares outstanding
during the period, computed in accordance with the treasury stock method, were
not used as their inclusion would have been anti-dilutive. For the three month
period ended December 31, 1995 net income per outstanding and common equivalent
share was based on the weighted average number of common and common equivalent
shares outstanding during the period, computed in accordance with the treasury
stock method, plus the number of shares of common stock issuable upon conversion
of the redeemable preferred stock and the number of shares of common stock
issued pursuant to the initial public offering sufficient to generate proceeds
for the payment of approximately $409,000 of estimated redeemable convertible
preferred stock dividends payable upon the closing of an initial public
offering. The weighted average number of common and common equivalent shares
assumes that common stock options granted and shares issued one year prior to
the initial filing of a registration statement for the Company's initial public
offering were outstanding for the periods presented computed in accordance with
the treasury stock method.
(c) Reclassifications
Certain reclassifications have been made to the fiscal 1996 consolidated
financial statements to conform to the fiscal 1997 presentation. Such
reclassifications have no effect on previously reported income.
(d) Cash and Cash Equivalents
Cash equivalents consist of highly liquid investments with an original
maturity of three months or less. Cash and cash equivalents are stated at cost
plus accrued interest, which approximates market.
(e) Short-Term Investments
Short-term investments consist of U.S. Government securities, municipal
securities and commercial paper with original maturities between three and
twelve months. The Company classifies these short-term investments as
held-to-maturity, and accordingly, they are carried at amortized cost, which
approximates market.
7
<PAGE> 8
RESTRAC, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
FOR THE THREE MONTH PERIOD ENDED DECEMBER 31, 1996
CONSOLIDATED RESULTS OF OPERATIONS
Revenue
Total revenue for the three month period ended December 31, 1996 was
$4,781,000 as compared to $4,828,000 for the three month period ended December
31, 1995.
Product revenue decreased to $2,133,000 for the 1997 first fiscal quarter
from $3,154,000 for the comparable 1996 period. Hardware resales contributed
$358,000 to the first fiscal 1996 quarter. (The Company no longer serves as a
reseller of hardware). The remaining reduction resulted from proportionately
smaller sales transactions, i.e., a lower average sales price, in the first
fiscal 1997 quarter. Because the Company's product revenue consists of a
relatively small number of large dollar transactions the average sales price can
fluctuate widely from period to period. Such fluctuations are not necessarily
indicative of future results.
Services revenue increased 58% to $2,648,000 for the three months ended
December 31, 1996 from $1,674,000 for the three months ended December 31, 1995.
Maintenance revenue accounted for approximately 65% of this total increase, due
to the continued growth in the Restrac Hire and Resume Reader for PeopleSoft
installed base. Higher productivity in the client services organization
contributed the remaining increase in installation, training and consulting
services.
Cost of Revenue
Cost of product revenue decreased as a percentage of product revenue for
the three months ended December 31, 1996 to 10% as compared to 15% for the same
period in Fiscal 1996. This decrease was primarily attributable to the Company's
exiting the business of reselling low margin scanning hardware. This decrease
was partially offset by increased sales of Resume Reader for PeopleSoft and
consequently increased royalty payments to PeopleSoft during the three months
ended December 31, 1996.
Cost of services revenue decreased as a percentage of services revenue for
the three months ended December 31, 1996 to 53% as compared to 63% for the same
period in Fiscal 1996. There was an absolute dollar increase in the cost of
services revenue, primarily attributable to increased personnel and associated
costs in the client services organization to support a larger client base and
increased service requirements. This increase in dollar costs was offset by a
larger increase in services revenue in the three months ended December 31, 1996.
The change in mix from predominantly product revenue to predominantly
services revenue, which has a substantially lower profit margin, is reflected in
the slight decrease in gross margin during the first quarter of Fiscal 1997 to
approximately 66% from 68% for the same period in Fiscal 1996.
Operating Expenses
Research and development expenses were approximately $1,160,000 or 24% of
total revenue during the first quarter of Fiscal 1997 as compared to
approximately $385,000 or 8% of total revenue during the first quarter of Fiscal
1996. This significant increase in both absolute dollars and as a percentage of
total revenue is primarily due to increases in both personnel and consulting
expenses in support of the Company's new and existing product development
initiatives and its quality assurance programs. The Company had 35 employees
dedicated to research and development efforts at December 31, 1996 as compared
to 17 employees at December 31, 1995. The Company considers investment in
research and development to be integral to its future success. Research and
development spending may vary from quarter to quarter as a percentage of total
revenue. All of the Company's research and development costs have been expensed
as incurred.
8
<PAGE> 9
RESTRAC, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
FOR THE THREE MONTH PERIOD ENDED DECEMBER 31, 1996 -- (CONTINUED)
Sales and marketing expenses were approximately $1,946,000 or 41% of total
revenue for the first quarter of Fiscal 1997 as compared to $1,935,000 or 40% of
total revenue during the first quarter of Fiscal 1996. The Company made
significant investments in its sales organization in the first fiscal quarter of
1997, adding an Area Director and expanding the number of direct sales personnel
by 50% as compared to Fiscal 1996. The increases related to these investments
were offset, however, by lower marketing expenses as compared to the first
quarter of Fiscal 1996. The Company expects that sales and marketing expenses
will continue to increase in absolute dollars; however, such expenses may vary
from quarter to quarter as a percentage of total revenue.
General and administrative expenses were approximately $724,000 or 15% of
total revenue during the first quarter of Fiscal 1997 as compared to $576,000 or
12% of total revenue during the first quarter of Fiscal 1996. These costs
increased both in absolute dollars and as a percentage of total revenue
primarily as a result of personnel increases in support of the Company's growth
and infrastructure. The Company expects that general and administrative expenses
will continue to increase in absolute dollars; however, such expenses may vary
from quarter to quarter as a percentage of total revenue.
The Company leases office space in several locations. The annual rental
payments under these leases are approximately $1.5 million per year and expire
at various dates through December 31, 2003. These lease payments will result in
an approximate $1,000,000 increase in facilities costs in Fiscal 1997 as
compared to Fiscal 1996. Facilities costs are allocated among expense categories
based principally on functional headcount.
Other Income
Other income increased to approximately $204,000 during the first quarter
of Fiscal 1997 from approximately $46,000 during the first quarter of Fiscal
1996. This significant increase is due to higher cash and cash equivalents and
short-term investment balances during the first quarter of Fiscal 1997,
representing the proceeds raised from the Company's initial public offering in
July 1996. The Company expects to continue to yield investment income on its
average balance of combined cash and cash equivalents and short-term investments
at an average rate comparable to that experienced for the first quarter of
Fiscal 1997.
(Benefit) Provision for Income Taxes
The Company's effective tax rate for the three months ended December 31,
1996 was 36% as compared to 48% for the three months ended December 31, 1995.
The effective tax rate represents the Company's best estimate of the rate
expected to be applicable for the full fiscal year. The reduction in rate
anticipated for Fiscal 1997 as compared to Fiscal 1996 is principally due to
favorable state tax ramifications expected for Restrac Securities Corporation
and to projected tax-exempt investment income at the Federal tax level.
LIQUIDITY AND CAPITAL RESOURCES
At December 31, 1996, the Company had cash and cash equivalents and
short-term investments of approximately $17,628,000, a decrease of approximately
$2,740,000 from $20,368,000 at September 30, 1996. Working capital was
$15,762,000 at December 31, 1996 as compared to $17,418,000 at September 30,
1996, a decrease of $1,656,000.
Cash used in operating activities was approximately $385,000 during the
first three months of Fiscal 1997. Use of cash in operating activities consisted
mainly of the net loss for the quarter, prepayment of certain expenses and
reductions in certain liabilities.
The Company used approximately $8,128,000 in investing activities during
the first three months of Fiscal 1997. Investing activities consisted
principally of transfers from cash and cash equivalents to short-term
investments of $6,290,000; the purchase of property and equipment (primarily
computer equipment and
9
<PAGE> 10
RESTRAC, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITIONS AND RESULTS OF OPERATIONS
FOR THE THREE MONTH PERIOD ENDED DECEMBER 31, 1996 -- (CONTINUED)
peripherals) which approximated $905,000, to support the growing employee base
and corporate infrastructure; a cash deposit of $200,000 (included in Other
Assets) against future long term royalty payments; and a cash deposit of
$720,000 for the Company's new lease for its corporate headquarters. This lease
deposit (included in Other Assets) is interest-bearing and its investment can be
directed by the Company.
Net cash used in financing activities was approximately $517,000. The most
notable financing activity was the payment of accumulated dividends of
approximately $569,000 related to redeemable convertible preferred stock which
was converted to common stock as a result of the initial public offering.
To date the Company has not invested in derivative securities or any other
financial instruments that involve a high level of complexity or risk. Cash has
been, and the Company contemplates that it will continue to be, invested in
interest-bearing, investment grade securities.
From time to time, the Company evaluates potential acquisitions of
products, businesses and technologies that may complement or expand the
Company's business. The Company currently does not have any understandings,
commitments or agreements with respect to any such acquisitions. Any such
transactions consummated may use a portion of the Company's working capital or
require the issuance of equity or debt.
The Company believes that its current cash balances and cash provided by
future operations will be sufficient to meet its working capital expenditure
requirements for the next twelve months. Although operating activities may
provide cash in certain periods, to the extent the Company experiences growth in
the future, its operating and investing activities may use cash. Consequently,
any future growth may require the Company to obtain additional equity or debt
financing.
CERTAIN FACTORS THAT MAY AFFECT FUTURE OPERATING RESULTS
Statements made or incorporated in this Form 10-Q include a number of
forward-looking statements within the meaning of Section 27A of the Securities
Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Forward
looking statements include without limitation, statements containing the words
"anticipates", "believes", "expects", "intends", "future", and words of similar
import which express management's belief, expectations or intentions regarding
the Company's future performance. The Company's actual results could differ
materially from its historical operating results and from those set forth in the
forward-looking statements and may fluctuate between operating periods. Factors
that might cause such differences and fluctuations include the following: risks
related to the management of growth, the Company's ability to attract, train and
retain qualified personnel, product development risks, new product announcements
and introductions, development and promotional expenses relating to the
introduction of new products, changes in technology and industry standards,
dependence on certain strategic partnerships, increased competition, changes in
pricing policies by the Company and its competitors, the timing of the receipt
of orders from major customers, the size and rate of growth of the market for
human resources staffing software, market acceptance of the Company's products
and those of its competitors, and general economic conditions. In addition, a
significant portion of product revenue within a quarter is typically not
realized until late in the quarter. As a result, it may be difficult for the
Company to predict its total revenue for the quarter or adapt its spending
levels within a quarter to reflect changes in demand for its products. The
market price of the Company's common stock has been, and in the future will
likely be, subject to significant fluctuations in response to variations in
quarterly operating results and other factors, such as announcements of
technological innovations or new products by the Company or its competitors, or
other events.
10
<PAGE> 11
RESTRAC, INC.
FORM 10-Q
DECEMBER 31, 1996
PART II -- OTHER INFORMATION:
ITEM 1. LEGAL PROCEEDINGS
The Company is not involved in any pending legal proceedings other than
those arising in the ordinary course of the Company's business. Management
believes that the resolution of these matters will not materially affect the
Company's business or the financial condition of the Company.
ITEM 2. CHANGES IN SECURITIES
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits furnished as Exhibits hereto:
Exhibit 11 -- Statement Regarding: Computation of earnings per Share
Exhibit 27 -- Financial Data Schedule Pursuant to Regulation S-X Article
5
(b) No reports on Form 8-K were filed by the Company during the quarter
ended December 31, 1996.
11
<PAGE> 12
RESTRAC, INC.
FORM 10-Q
DECEMBER 31, 1996
PART III -- 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.
RESTRAC, INC.
Date: February 13, 1997 /s/ LARS D. PERKINS
--------------------------------------
LARS D. PERKINS
Chief Executive Officer
/s/ CYNTHIA G. EADES
--------------------------------------
CYNTHIA G. EADES
Chief Financial Officer
12
<PAGE> 1
RESTRAC, INC.
EXHIBIT 11
STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE
(DOLLARS IN THOUSANDS EXCEPT PER SHARE AND SHARE AMOUNTS)
<TABLE>
<CAPTION>
THREE MONTHS ENDED THREE MONTHS ENDED
DECEMBER 31, 1996 DECEMBER 31, 1995
------------------ ------------------
<S> <C> <C>
PRIMARY AND FULLY-DILUTED:
Net Income (Loss).......................... $ (308) $ 225
========= =========
Weighted Average Shares of Common Stock
Outstanding............................. 7,895,053 3,870,000
Conversion of Preferred Stock.............. -- 2,502,696
Dilutive Effect of Options Issued prior to
5/10/95................................. -- 351,383
Effect of Cheap Stock Options.............. -- 151,163
Shares issuable in IPO to fund Cumulative
Dividends............................... -- 37,161
--------- ---------
Fully weighted average number of common and
common equivalent shares oustanding..... 7,895,053 6,912,403
========= =========
PRIMARY AND FULLY-DILUTED NET (LOSS)
INCOME PER SHARE........................... $ (0.04) $ 0.03
========= =========
</TABLE>
13
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<CURRENCY> US
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> DEC-31-1996
<EXCHANGE-RATE> 1
<CASH> 17,627,925
<SECURITIES> 0
<RECEIVABLES> 3,630,607
<ALLOWANCES> 350,000
<INVENTORY> 0
<CURRENT-ASSETS> 22,307,136
<PP&E> 4,251,131
<DEPRECIATION> 2,069,600
<TOTAL-ASSETS> 25,185,216
<CURRENT-LIABILITIES> 6,274,748
<BONDS> 0
0
0
<COMMON> 85,820
<OTHER-SE> 18,824,638
<TOTAL-LIABILITY-AND-EQUITY> 25,355,447
<SALES> 4,780,858
<TOTAL-REVENUES> 4,780,858
<CGS> 1,635,646
<TOTAL-COSTS> 5,465,879
<OTHER-EXPENSES> (204,047)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 181
<INCOME-PRETAX> (685,021)
<INCOME-TAX> (173,000)
<INCOME-CONTINUING> (307,793)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (307,793)
<EPS-PRIMARY> (0.04)
<EPS-DILUTED> (0.04)
</TABLE>
