SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------
FORM 10-QSB
(Mark One)
_X_ QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For the quarterly period ended June 30, 1998
___ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OR THE EXCHANGE ACT
For the transition period from to
Commission File No.: 000-21557
ACI TELECENTRICS, INC.
(Name of Small Business Issuer as specified in its charter)
MINNESOTA 41-1572571
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification Number)
3100 WEST LAKE STREET, SUITE 300, MINNEAPOLIS, MINNESOTA, 55416
(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (612) 928-4700
Check whether the Issuer (1) has filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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 Company had 5,731,471 shares of common stock, no par value per share,
outstanding as of July 31, 1998.
Transitional Small Business Disclosure Format (Check One): YES [ ] NO [X]
<PAGE>
ACI TELECENTRICS, INCORPORATED
FORM 10-QSB
TABLE OF CONTENTS
PAGE #
------
PART I FINANCIAL INFORMATION
Item 1 Consolidated Financial Statements (unaudited)
Statements of Operations 3
Balance Sheets 4
Statements of Cash Flows 5
Notes to Financial Statements 6
Item 2 Management's Discussion and Analysis of
Financial Condition and Results of Operations 8
PART II OTHER INFORMATION
Item 4 Submission of Matters to a Vote of Security Holders 12
Item 6 Exhibits and Reports on Form 8-K 12
Signature Page 13
2
<PAGE>
PART 1 FINANCIAL INFORMATION
ITEM 1 FINANCIAL STATEMENTS
ACI TELECENTRICS, INCORPORATED AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
--------------------------- ---------------------------
1998 1997 1998 1997
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>
TELEMARKETING REVENUES $ 4,329,991 $ 4,079,976 $ 7,858,902 $ 7,252,667
COST OF SERVICES 2,492,710 2,091,611 4,493,433 3,642,914
SELLING, GENERAL AND
ADMINISTRATIVE EXPENSES 2,330,344 1,534,586 4,252,498 2,870,009
----------- ----------- ----------- -----------
OPERATING (LOSS) INCOME (493,063) 453,779 (887,029) 739,744
OTHER INCOME (EXPENSE)
Interest income 9,148 51,829 23,731 111,130
Interest expense (17,494) (3,151) (26,014) (7,506)
Other, net 10,328 14,746 10,133 21,630
----------- ----------- ----------- -----------
Total other income (expense) 1,982 63,424 7,850 125,254
----------- ----------- ----------- -----------
(LOSS) INCOME BEFORE TAXES (491,081) 517,203 (879,179) 864,998
INCOME TAX (BENEFIT) EXPENSE (191,000) 185,100 (335,000) 328,700
----------- ----------- ----------- -----------
NET (LOSS) INCOME $ (300,081) $ 332,103 $ (544,179) $ 536,298
=========== =========== =========== ===========
Basic and diluted net (loss) income
per share $ (.05) $ .06 $ (.09) $ .09
=========== =========== =========== ===========
Basic shares used in computing net
(loss) income per share 5,714,800 5,706,500 5,714,800 5,706,500
=========== =========== =========== ===========
Diluted shares used in computing net
(loss) income per share 5,714,800 5,773,800 5,714,800 5,775,200
=========== =========== =========== ===========
</TABLE>
See notes to financial statements
3
<PAGE>
ACI TELECENTRICS, INCORPORATED AND SUBSIDIARY
CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
(Unaudited)
June 30, December 31,
1998 1997
----------- -----------
<S> <C> <C>
ASSETS
CURRENT ASSETS:
Cash and cash equivalents $ 434,360 $ 659,042
Restricted investment 377,601 493,345
Trade receivables, less allowance for
doubtful accounts of $182,000 and $195,000,
respectively 2,715,936 2,369,323
Income tax receivable 558,081 586,498
Other current assets 159,314 89,152
----------- -----------
Total Current Assets 4,245,292 4,197,360
PROPERTY AND EQUIPMENT, NET 3,245,221 3,243,205
OTHER ASSETS:
Goodwill, less accumulated amortization of
$64,000 and $29,000, respectively 981,867 1,016,726
Other assets 97,469 38,993
----------- -----------
$ 8,569,849 $ 8,496,284
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
CURRENT LIABILITIES:
Revolving line of credit $ 350,000 $ --
Trade accounts payable 733,662 811,568
Accrued expenses 651,016 764,463
Current portion of long-term debt and
capital lease obligations 291,187 138,481
----------- -----------
Total current liabilities 2,025,865 1,714,512
LONG TERM LIABILITIES:
Long-term debt and capital lease obligations,
less current portion 331,195 64,650
Deferred capital lease liabilities 243,902 214,600
Deferred income taxes 65,324 73,210
----------- -----------
Total long-term liabilities 640,421 352,460
SHAREHOLDERS' EQUITY:
Common stock, no par value 6,611,276 6,592,846
Accumulated deficit (707,713) (163,534)
----------- -----------
Total shareholders' equity 5,903,563 6,429,312
----------- -----------
$ 8,569,849 $ 8,496,284
=========== ===========
</TABLE>
See notes to financial statements
4
<PAGE>
ACI TELECENTRICS, INCORPORATED AND SUBSIDIARY
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
Six Months Ended June 30,
1998 1997
----------- -----------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net (loss) income $ (544,179) $ 536,298
Adjustments to reconcile net (loss) earnings to cash
provided by operating activities:
Depreciation and amortization 455,279 236,945
Amortization of deferred capital leases (40,700) (25,700)
Deferred income taxes (7,886) 16,878
Changes in operating assets and liabilities:
Trade receivables (346,613) (434,041)
Other current assets (22,278) 76,379
Accounts payable and accrued expenses 16,591 133,600
Income Taxes 28,417 (131,278)
----------- -----------
Net cash provided by (used in) operating activities (461,369) 409,081
----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (257,605) (469,775)
Decrease (increase) in other assets (6,360) 39
Decrease in restricted investments 115,744 --
----------- -----------
Net cash used in investing activities (148,221) (469,736)
----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings on revolving line of credit 350,000 --
Net proceeds from issuance of common stock 18,430 4,595
Proceeds from sale and leaseback of equipment 93,922 --
Repayments of long term debt and capital leases (77,444) (26,426)
----------- -----------
Net cash provided by (used in) financing activities 384,908 (21,831)
----------- -----------
NET DECREASE IN CASH AND CASH EQUIVALENTS (224,682) (82,486)
CASH AND CASH EQUIVALENTS AT BEGINNING
OF PERIOD 659,042 5,005,813
----------- -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 434,360 $ 4,923,327
=========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW AND
NON CASH TRANSACTIONS:
Equipment acquired through capital leases $ 372,773 --
Deferred grant $ 100,000 --
Cash paid for interest $ 26,014 $ 7,506
</TABLE>
See notes to financial statements
5
<PAGE>
ACI TELECENTRICS, INCORPORATED AND SUBSIDIARY
NOTES TO FINANCIAL STATEMENTS
THREE AND SIX MONTHS ENDED JUNE 30, 1998 AND 1997
(UNAUDITED)
1. The balance sheet of ACI Telecentrics, Incorporated and subsidiary (the
"Company") as of June 30, 1998 and the related statements of operations
and cash flows for the three and six month periods ended June 30, 1998
and 1997, have been prepared by the Company without being audited. In
the opinion of management, these statements reflect all adjustments
consisting of all normal recurring entries necessary to present fairly
the financial position of the Company as of June 30, 1998 and the
results of operations and cash flows for all periods presented. Certain
information and footnote disclosures normally included in financial
statements prepared in accordance with generally accepted accounting
principles have been condensed or omitted. Therefore, these financial
statements should be read in conjunction with the financial statements
and notes thereto included in the Company's 1997 Form 10-KSB. The
results of operations for interim periods are not necessarily
indicative of results which will be realized for the full fiscal year.
2. Effective December 15, 1997, the Company adopted Statement of Financial
Accounting Standards No. 128, "Earnings Per Share" (SFAS 128). Earnings
per share amounts for the three and six month periods ended June 30,
1997, have been restated to conform with the requirements of SFAS 128,
but there were no changes in previously reported amounts.
3. Effective January 1, 1998, the Company adopted Statement of Financial
Accounting Standards No. 130 "Reporting Comprehensive Income" (SFAS
130), which establishes standards for the reporting of comprehensive
income and its components. Comprehensive income is defined as the
change in equity during the period from transactions and other events
and circumstances from non-owner sources. Implementation of SFAS 130
did not have a material effect on the Company's financial statements.
4. In May 1998 the Company closed its inbound call center operations in
Lombard, IL. As a result, the Company has exited the inbound call
center business. The net losses and closure costs of this call center,
on an after tax basis, accounted for $142,000 ($.02 per share) and
$221,000 ($.04 per share) of the 1998 losses for the three and six
month period, respectively.
5. On August 1, 1997 the Company acquired all of the outstanding common
stock of EBCC. The acquisition was accounted for using the purchase
method of accounting. The purchase price consists of (i) $1,250,000
cash paid at closing; and (ii) four quarterly payments (each an
"Earn-Out Payment," cumulatively the "Total Earn-Out Payment"). The
amount of the Total Earn-Out Payment will depend on the amount of
revenues generated by certain EBCC clients and prospective clients
during the period from January 1, 1998 through December 31, 1998 (the
"Earn-Out Revenues"). Based on revenues generated from January 1, 1998
through June 30, 1998 no quarterly payment were due EBCC. The excess of
Purchase Price over Net Assets Acquired is being amortized over 15
years using the straightline method as of June 30, 1998. The Company
has provided the seller with a $375,000 security interest in an
investment account owned by the Company as a guaranty of payment of the
remaining installments of purchase price, if any. As of June 30, 1998
the Company does not expect to make any payments to EBCC related to the
earn out revenues under this agreement.
6
<PAGE>
The following unaudited pro forma financial information for the Company gives
effect to the EBCC acquisition as if it had occurred at the beginning of periods
reported.
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
June 30, 1997 June 30, 1997
------------- -------------
<S> <C> <C>
Net Revenues $ 5,460,610 $10,072,697
Net Income $ 126,413 $ 273,672
Basic and diluted net income per share $ .02 $ .05
Basic shares used in computing pro forma
net income per share 5,706,500 5,706,500
Diluted shares used in computing pro forma
net income per share 5,773,800 5,775,200
</TABLE>
6. At June 30, 1998 the Company had outstanding borrowings of $350,000
under its $2 million revolving line of credit. The revolving line of
credit is subject to certain financial covenants. At June 30, 1998 the
Company was in violation of two of the financial covenants and has
obtained a waiver from the lender.
7
<PAGE>
PART 1 FINANCIAL INFORMATION
ITEM 2 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
OVERVIEW
ACI provides telephone-based sales and marketing services primarily to
the telecommunications, insurance, publishing and financial services industries.
The Company operates nine outbound call centers in five Midwest states, which,
as of June 30, 1998 had 454 calling stations. During 1998 the Company opened two
new call centers-Valentine, Nebraska (March) and Ogallala, Nebraska (May), and
closed its inbound call center in Lombard, IL during May 1998. The Company had
806 full and part-time employees as of June 30, 1998.
On August 1, 1997 the Company acquired all of the outstanding common
stock of Encyclopaedia Britannica Communications Corporation (EBCC), which had
call centers in Lombard, Ill. and Merrillville, Ind. Operations of EBCC are
included from August 1, 1997 and therefore not included in any reported amounts
for the second quarter and six month period ended June 30, 1997.
Revenue from telemarketing services is recognized as these services are
performed and is generally based on an hourly rate. Certain telemarketing
service revenues are performance-based. Cost of services includes compensation
and commissions for telephone sales representatives, payroll taxes and other
benefits associated with such personnel, telephone expenses and other direct
costs associated with providing services to customers. Selling, general and
administrative expenses include administrative, sales, marketing, occupancy,
depreciation and other indirect costs.
RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1998, COMPARED TO THREE MONTHS ENDED JUNE 30, 1997
Revenues for the three months ended June 30, 1998 were $4,329,991 a
6.1% increase over 1997 second quarter revenues of $4,079,976. Billable hours
increased by 10.6% when compared to the prior year period, however, revenue per
billable hour decreased by approximately 4% when compared to the second quarter
of 1997. The Company derived 13% of its second quarter revenues from outsourcing
compared to 9% during the same period in 1997. Revenues during the second
quarter 1998 were adversely affected by two of the Company's major customers
delaying planned telemarketing initiatives due to pending regulatory reviews
that are not directly related to the Company's performance in any way. During
the second quarter the Company operated an average of 450 call stations compared
to an average of 289 during the 1997 period.
Telecommunications clients provided approximately 38% of second quarter 1998
revenues compared to approximately 73% of revenues during the second quarter
1997. During the 1998 period the Company's largest client represented
approximately 19% of total revenue, primarily the result of the Company's effort
to diversify its customer base so that no one client represents more than 20% of
volume. Other industry segments in 1998 included publishing (23%), insurance
(8%) and financial services (28%).
Cost of Services in the second quarter of 1998 was $2,492,710 or 57.6%
of revenues compared to $2,091,611 or 51.3% of revenues in the second quarter of
1997. The 6.3% increase in cost of services as a percentage of 1998 revenue when
compared to the percentage of 1997 revenue was primarily the result of a 11.3%
increase in labor and benefit costs which increased cost of services by 3.6%.
The cost of services as a percentage of revenue was also negatively impacted by
a 4.0% decrease in the average hourly billing rate from 1997 to 1998. The
Company also utilized other telemarketing companies to perform some of its
services. These outsourced calls had a cost of services of approximately 85%
compared to a cost of services of 53% for internally generated telemarketing.
8
<PAGE>
Selling, general and administrative expenses were $2,330,344 in 1998
compared to $1,534,586 in 1997, a 52% increase. As a percentage of revenue,
selling general and administrative expenses increased to 54% in 1998 compared to
38% in 1997. Approximately $423,000 of the $796,000 increase related to call
center expenses, the majority of which was related to call centers opened or
acquired since the second quarter 1997. The balance relates primarily to the
effect of personnel costs added to the client services, operations, information
services and sales departments during the third and fourth quarters of 1997
which have a full quarter effect in 1998.
As a result, the operating loss for the second quarter 1998 was
$493,063 compared to an operating profit of $453,779 in 1997. The Company's
closed inbound call center in Lombard, IL accounted for approximately $230,000
($142,000 on an after tax basis) of the second quarter 1998 operating loss.
Other income was a net of $1,982 in 1998 compared to $63,424 in 1997.
The decrease was the direct result of lower interest income as cash investments
declined from last year's balances.
The pretax loss in 1998 was $491,081 compared to pretax income of
$517,203 in 1997. The net loss in 1998 was $300,081 or $.05 per share compared
to net income of $332,103 or $.06 per share in 1997. In 1998 the Company
recorded a $191,000 income tax benefit for which it expects to utilize in future
periods.
SIX MONTHS ENDED JUNE 30, 1998, COMPARED TO SIX MONTHS ENDED JUNE 30, 1997
Revenues for the six months ended June 30, 1998 were $7,858,902 an 8.4%
increase over the six months ended June 30, 1997 of $7,252,667. Billable
telemarketing service representative hours increased by 9.3% when compared to
the 1997 period while revenue per billable telemarketing service representative
hour decreased by 0.9% during the same period. The Company derived 12% of its
1998 revenues from outsourcing compared to 7% in 1997. The Company operated an
average of 419 call stations during the six months ending June 30, 1998 compared
to an average of 289 during the 1997 period.
Telecommunications clients provided approximately 44% of the 1998 six month
revenues compared to approximately 72.5% of the 1997 six month revenues as a
result of the Company diversifying its client base. During 1997 the Company's
largest client represented 68% of the six month revenues. During the 1998 period
the Company's largest client represented only 23% of total revenue, primarily
the result of the Company's effort to diversify its customer base so that no one
client represents more than 20% of volume. Other industry segments in 1998
included publishing (23%), insurance (10%) and financial services (20%).
Cost of services for the six months ended June 30, 1998 were $4,493,433
or 57.2% of revenues compared to $3,642,914 or 50.2% of revenues for the six
months ended June 30, 1997. The 7% increase in cost of services as a percentage
of 1998 revenue when compared to the percentage of 1997 revenue was primarily
the result of a 13.2% increase in labor and benefit costs which increased cost
of services by 3.9%. The Company also utilized other telemarketing companies
during the period to perform some of its services. These outsourced calls had a
cost of services of approximately 83% compared to a cost of services of 53% for
internally generated telemarketing.
Selling, general and administrative expenses were $4,252,498 for the
six months ending June 30, 1998 compared to $2,870,009 in 1997, a 48% increase.
As a percentage of revenue, selling general and administrative expenses
increased to 54% in 1998 compared to 40% in 1997. Approximately $795,000 of the
$1,382,000 increase related to call center expenses, the majority of which was
related to call
9
<PAGE>
centers opened or acquired since the first six months of 1997. The balance
relates primarily to the effect of personnel costs added to the client services,
operations, information services and sales departments during the third and
fourth quarters of 1997 which have a full six month effect in 1998.
As a result, the operating loss for the six months ending June 30, 1998
was $887,029 compared to an operating profit of $739,744 in 1997. The Company's
closed inbound call center in Lombard, IL accounted for approximately $356,000
($221,000 on an after tax basis) of the six month 1998 operating loss.
Other income was a net of $7,850 in 1998 compared to $125,254 in 1997.
The decrease was the direct result of lower interest income as cash investments
declined from last year's balances.
The pretax loss for the six months ending June 30, 1998 was $879,179
compared to pretax income of $864,998 in 1997. The net loss in 1998 was $544,179
or $.09 per share compared to net income of $536,298 or $.09 per share in 1997.
In 1998 the Company recorded a $335,000 income tax benefit for which it expects
to utilize in future periods.
LIQUIDITY AND CAPITAL RESOURCES
In 1997, the Company financed much of its activities with the proceeds
from the October 1996 IPO, of which $5,005,813 in cash and cash equivalents
remained at December 31, 1996. The Company has historically used operating
activities, bank borrowings, capital leases and public and private sector
financing in connection with the opening of call centers as its primary sources
of liquidity. The public and private sector (grants/financings) included low
interest rate loans, forgivable loan arrangements and reimbursement for certain
expenses and leasehold improvements. In November 1997, the Company's Board of
Directors authorized a $2 million revolving line of credit which became
effective in January 1998. At June 30, 1998 the Company had outstanding
borrowings of $350,000 under the line of credit.
At June 30, 1998, the Company had cash and cash equivalents of $811,961
compared to $1,152,387 at December 31, 1997. For the six month period ending
June 30, 1998 cash used in operating activities was $461,369 compared to cash of
$409,081 being provided by operations in the 1997 period. The net loss accounted
for $544,179 of this amount while changes in working capital components was
$323,883. This was offset by depreciation, amortization and non cash items of
$406,693.
In the six months ended June 30, 1998, cash used in investing
activities, which are primarily expenditures for property and equipment, was
$148,221 compared to $469,736 in the 1997 period. Net purchases of property and
equipment was $257,605. The release of restricted investments in the amount of
$125,000 partially offset property and equipment purchases.
Cash flows from financing activities in the six months ended June 30,
1998 was $384,908 compared to cash used in financing activities of $21,831 in
the prior year period. Cash provided by financing activities was primarily the
result of the Company borrowing $350,000 against its line of credit.
Approximately $94,000 was provided by proceeds of a capital lease for equipment
the Company purchased in 1997 and sold back to a financing company in 1998. No
gain or loss was recognized in this transaction. In addition, the Company issued
stock from its Employee Stock Purchase Plan for $18,430 and repaid long term
debt and capital leases of $77,444. In the 1997 period the Company received
$4,595 from the issuance of stock in the Employee Stock Purchase Plan and repaid
long term debt and capital leases of $26,426.
During the six month period ending June 30, 1998 the Company also
financed $372,773 of asset purchases through capital leases. During the
comparable 1997 period the Company did not acquire any assets through capital
lease transactions.
10
<PAGE>
As a result, the Company had a decrease in cash during the six month
period in 1998 of $224,682 compared to a decrease of $82,486 during the prior
year period. The Company believes that funds available at June 30, 1998 together
with funds which should be generated from future operations, equipment and
financing leases and revolving line of credit arrangements will be sufficient to
finance its current operations and planned capital expenditures at least for
twelve months.
In January 1998 the Company received $150,000 of a $300,000 grant related to the
opening of a call center in Chadron, Nebraska. The remaining $150,000 was paid
in the following manner; during the second quarter of 1998 the Company received
a 8 1/2%, two year $100,000, note receivable requiring monthly payments from the
City of Chadron and during July 1998 the Company received the remaining $50,000.
The Company also has due $200,000 each in grants from the cities of Valentine
and Ogallala Nebraska related to the opening of call centers. This $400,000 is
not reflected as a receivable on the June 30, 1998 balance sheet.
QUARTERLY RESULTS
The telemarketing industry tends to be slower in the first and third
quarters of the year because client marketing and customer service programs are
typically slower in the post-holiday and summer months. The Company has
experienced, and expects to continue to experience, quarterly fluctuations in
revenues and operating income principally as a result of the timing of clients'
telemarketing campaigns, the commencement of new contracts, changes in the
Company's revenue mix, opening of new call centers, and the additional selling,
general and administrative expenses to acquire and support such new business.
OUTLOOK
Certain of the statements in this section are "forward-looking
statements" within the meaning of the federal securities laws. The following
forward-looking statements are subject to risks and uncertainties that could
cause actual results to differ materially from those expressed or implied by
such statements.
YEAR 2000
The Company recognizes the need to ensure its operations will not be
adversely impacted by Year 2000 software failures. Software failures due to
processing errors potentially arising from calculations using the Year 2000 date
are a known risk. The Company has assessed this risk with respect to its
financial and operational systems and has determined that most systems are Year
2000 compliant. The Company is reviewing its systems as it relates to
interfacing with clients and vendors, but does not anticipate any material costs
associated with systems conversions due to Year 2000 issues.
INFLATION
Inflation has not had a material impact on operating results and the
Company does not expect it to have a significant impact in the future. However,
there can be no assurance that the Company's business will not be affected by
inflation in the future.
11
<PAGE>
PART II OTHER INFORMATION
ITEM 4 SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
At the Annual Meeting of Stockholders held May 12, 1998, in addition to
the election of the directors, the stockholders voted upon the board proposal
contained in the Registrant's Proxy Statement dated April 6, 1998.
The board nominees were elected as directors with the following vote:
Shares Voted
------------
For Withheld
--- --------
Rick N. Diamond 5,600,607 10,436
Gary B. Cohen 5,600,607 10,436
Seymour Levy 5,600,607 10,436
Douglas W. Franchot 5,600,607 10,436
Phillip T. Levin 5,600,478 10,565
James W. Lupient 5,600,307 10,736
Thomas F. Madison 5,600,607 10,436
The board proposal was approved with the following vote:
For Against Abstain
--- ------- -------
Setting the corporate number
of directorships at seven 5,610,414 129 500
No other matters were submitted to a vote of the security holders.
PART II OTHER INFORMATION
ITEM 6 EXHIBITS AND REPORTS ON FORM 8-K
(a) 27. Financial Data Schedule
12
<PAGE>
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.
ACI TELECENTRICS, INCORPORATED
Registrant
Dated August 7, 1998 By: /S/STEVEN A. KAHN
------------------------------
Steven A. Kahn
Vice President and
Chief Financial Officer
(Principal Accounting Officer)
Dated August 7, 1998 By: /S/RICK N. DIAMOND
------------------------------
Rick N. Diamond
Chief Executive Officer and
Director
13
<TABLE> <S> <C>
<ARTICLE> 5
<CIK> 0001020998
<NAME> ACI TELECENTRICS INC
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1998
<PERIOD-START> JAN-01-1998
<PERIOD-END> JUN-30-1998
<CASH> 434,360
<SECURITIES> 0
<RECEIVABLES> 2,897,936
<ALLOWANCES> 182,000
<INVENTORY> 0
<CURRENT-ASSETS> 4,245,292
<PP&E> 5,227,246
<DEPRECIATION> 1,982,025
<TOTAL-ASSETS> 8,569,849
<CURRENT-LIABILITIES> 2,025,865
<BONDS> 0
0
0
<COMMON> 6,611,276
<OTHER-SE> (707,713)
<TOTAL-LIABILITY-AND-EQUITY> 8,569,849
<SALES> 0
<TOTAL-REVENUES> 7,858,902
<CGS> 4,493,433
<TOTAL-COSTS> 8,745,931
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (7,850)
<INCOME-PRETAX> (879,179)
<INCOME-TAX> (335,000)
<INCOME-CONTINUING> (544,179)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (544,179)
<EPS-PRIMARY> (.09)
<EPS-DILUTED> 0
</TABLE>
