<PAGE> 1
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 September 30, 1997
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 0-23239
UBICS, INC.
(Exact name of registrant as specified in its charter)
PENNSYLVANIA 34-1744587
(State or other Jurisdiction of (I.R.S. Employer Identification No.)
Incorporation or Organization
100 SAINTE CLAIRE PLAZA, 1121 BOYCE ROAD, PITTSBURGH, PENNSYLVANIA 15241
(Address of Principal Executive Offices) (Zip Code)
(412) 941-1800
(Registrant's Telephone Number, Including Area Code)
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 [ ] No [ x ]
Indicate the number of shares outstanding of each of the issuer's classes
of Common Stock as of the latest practicable date:
Class Outstanding at November 30, 1997
----- --------------------------------
Common Stock, $.01 par value 6,500,000
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UBICS, INC.
Form 10-Q
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PART I - - FINANCIAL INFORMATION
<S> <C>
Item 1. Financial Statements
Balance Sheets as of December 31, 1996 and September 30, 1997
Statements of Operations for the three months ended September 30, 1996
and 1997 and for the nine months ended September 30, 1996 and 1997
Statements of Cash Flows for the nine months ended September 30, 1996 and 1997
Notes to Unaudited Financial Statements
Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition
PART II - - OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities and Use of Proceeds
Item 3. Defaults upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
</TABLE>
2
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UBICS, INC.
BALANCE SHEETS
(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
DECEMBER 31, SEPTEMBER 30,
1996 1997
------------ -------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current Assets:
Cash And Cash Equivalents $ 94 $ 89
Accounts Receivable, Net Of Allowance For
Doubtful Accounts Of $50
And $155, Respectively 1,343 2,938
Unbilled Receivables 944 2,056
Employee Advances 96 137
Due From Principal Stockholder -- 443
Prepaids And Other 17 108
Deferred Tax Asset 57 68
------- -------
Total Current Assets 2,551 5,839
------- -------
Property And Equipment:
Computer Equipment 44 98
Furniture And Fixtures 15 33
Office And Other Equipment 4 5
------- -------
Total Property And Equipment 63 136
Accumulated Depreciation (13) (25)
------- -------
Net Property And Equipment 50 111
------- -------
Total Assets $ 2,601 $ 5,950
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LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Credit Facility Borrowings $ 300 $ 775
Accounts Payable 518 1,105
Payroll Liabilities 690 1,053
Due To Affiliates, Net 483 314
Accrued Taxes 294 903
Other Current Liabilities 87 287
------- -------
Total Current Liabilities 2,372 4,437
Long-term Liabilities -- --
Total Liabilities 2,372 4,437
------- -------
Stockholders' Equity:
Preferred Stock, $.01 Par Value, 2,000,000
Shares Authorized, No Shares Issued And
Outstanding -- --
Common Stock, No Par Value, 20,000,000
Shares Authorized, 5,000,000 Shares
Issued And Outstanding 3 3
Retained Earnings 226 1,510
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Total Stockholders' Equity 229 1,513
------- -------
Total Liabilities And Stockholders' Equity $ 2,601 $ 5,950
======= =======
</TABLE>
The accompanying notes are an integral part of these financial statements
3
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UBICS, INC.
STATEMENTS OF OPERATIONS
(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
---------------------------- ---------------------------
1996 1997 1996 1997
(unaudited) (unaudited) (unaudited) (unaudited)
------------- -------------
<S> <C> <C> <C> <C>
Revenues $ 2,738 $ 5,828 $ 6,149 $ 14,513
Cost of revenues 1,863 3,887 4,318 9,870
---------- ---------- ---------- ----------
Gross profit 875 1,941 1,831 4,643
Selling, general and
administrative expense 673 915 1,544 2,452
---------- ---------- ---------- ----------
Income from operations 202 1,026 287 2,191
Interest expense 7 17 16 38
---------- ---------- ---------- ----------
Income before income 195 1,009 271 2,153
taxes
Provision for income 100 403 139 869
---------- ---------- ---------- ----------
taxes
Net income $ 95 $ 606 $ 132 $ 1,284
========== ========== ========== ==========
Net income per share $ 0.02 $ 0.12 $ 0.03 $ 0.26
========== ========== ========== ==========
Weighted average shares
outstanding 5,000,000 5,000,000 5,000,000 5,000,000
</TABLE>
The accompanying notes are an integral part of these financial statements
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UBICS, INC.
STATEMENTS OF CASH FLOWS
(DOLLARS IN THOUSANDS)
<TABLE>
<CAPTION>
Nine Months
Ended September 30,
---------------------------
1996 1997
(Unaudited) (Unaudited)
------------- -------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 132 $ 1,284
Adjustments to reconcile net
income to net cash provided by
operating activities--
Depreciation 8 12
Changes in operating assets and
liabilities--
Accounts receivable, net (925) (1,595)
Unbilled receivables (600) (1,112)
Employee advances (84) (41)
Due from principal
Stockholder -- (443)
Due to affiliates, net 320 (169)
Deferred tax asset -- (11)
Prepaids and other (7) (91)
Bank overdraft (78) --
Accounts payable 434 587
Payroll liabilities 351 363
Accrued taxes and other
current liabilities 263 809
----- -------
Net cash used by
operating activities (186) (407)
----- -------
Cash flows from investing activities:
Purchases of property and
Equipment (20) (73)
----- -------
Net cash used by investing
activities (20) (73)
----- -------
Cash flows from financing activities:
Proceeds from borrowings 300 475
----- -------
Net cash provided by financing
activities 300 475
----- -------
Net increase (decrease) in cash
and cash equivalents 94 (5)
Cash and cash equivalents, at
beginning of period -- 94
Cash and cash equivalents, at
end of year $ 94 $ 89
===== =======
Supplemental data:
Cash payments for interest $ 16 $ 38
Cash payments for income taxes $ -- $ 270
</TABLE>
The accompanying notes are an integral part of these financial statements.
5
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UBICS, INC.
NOTES TO UNAUDITED FINANCIAL STATEMENTS
(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
1. BASIS OF PRESENTATION
The financial statements of UBICS, Inc. ("UBICS" or "the Company")
presented herein are unaudited. Certain information and footnote disclosures
normally prepared in accordance with generally accepted accounting principles
have been either condensed or omitted pursuant to the rules and regulations of
the Securities and Exchange Commission. Although the Company believes that all
adjustments, consisting of only normal recurring adjustments, necessary for a
fair presentation have been made, interim periods are not necessarily indicative
of the financial results of operations for a full year. As such, these financial
statements should be read in conjunction with the financial statements and notes
thereto included or incorporated by reference in Post-Effective Amendment No. 1
to the Company's registration statement on Form S-1, No. 333-35171, filed
October 29, 1997.
2. OPERATIONS:
UBICS, a Delaware corporation, is a provider of information technology
services to large and mid-sized organizations. The Company provides its clients
with a wide range of professional services in such areas as client/server design
and development, enterprise resource planning package implementation and
customization, applications maintenance programming and database administration.
3. REVOLVING CREDIT FACILITY:
The Company has available borrowings under a revolving credit facility with
PNC Bank, National Association ("PNC"). Borrowings under this arrangement are
limited to $1,000, bear interest at prime (8.25% and 8.50% at December 31, 1996
and September 30, 1997, respectively) as defined plus 0.5% and are payable upon
demand. The revolving credit facility is secured by the assets of the Company
and personally guaranteed by the Company's chairman.
Borrowings of $300 and $775 were outstanding as of December 31, 1996 and
September 30, 1997, respectively.
4. RELATED PARTY TRANSACTIONS:
As of December 31, 1996 and September 30, 1996 and 1997, the Company had a
net payable to the UB Group, including UB Information and Consultancy Services
Ltd. ("UB Services"), totaling $483 and $314, respectively, resulting from the
Company's collection of receivables on behalf of UB Services and advances to or
from the UB Group. The Company ceased collection of receivables on behalf of UB
Services and ceased all other transactions with UB Services during the year
ended December 31, 1996.
As of September 30, 1997 the Company has amounts due from the principal
stockholder totaling $443 resulting from expenses incurred by the Company on
behalf of the UB Group.
Certain expenses were incurred by the Company on behalf of the UB Group, of
which $257 and $0 are included in selling, general and administrative expenses
in the accompanying statements of operations for the year ended December 31,
1996 and the nine months ended September 30, 1997, respectively.
5. EARNINGS PER SHARE:
The earnings per share calculated in the accompanying financial statements
is based on a weighted average of 5,000,000 shares. On September 8, 1997, the
following transactions occurred: (i) a 5,000-for-1 stock split effected in the
form of a dividend; (ii) an increase in the authorized capital stock to
20,000,000 shares of common stock and 2,000,000 shares of preferred stock; (iii)
a change in the par value of the common stock from no par to $.01 per share; and
(iv) the change in the
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name of the Company to UBICS, Inc. Accordingly, the Company's stockholders'
equity accounts and the number of shares in the accompanying financial
statements have been retroactively restated to give effect to the stock split
and increase in authorized capital stock.
In February 1997, the Financial Accounting Standards Board ("FASB") issued
Statement on Financial Accounting Standards ("SFAS") No. 128, "Earnings Per
Share." SFAS No. 128 differs from current accounting guidance in that earnings
per share is classified as basic earnings per share and diluted earnings per
share, compared to primary earnings per share and fully diluted earnings per
share under current standards. Basic earnings per share differs from primary
earnings per share in that it includes only the weighted average common shares
outstanding and does not include any dilutive securities in the calculation.
Diluted earnings per share under the new standard differs in certain
calculations compared to fully diluted earnings per share under existing
standards. Adoption of SFAS No. 128 is required for interim and annual periods
ending after December 15, 1997. Had the Company applied the provisions of SFAS
No. 128, there would have been no impact compared to that which has been
reported.
6. SUBSEQUENT EVENTS:
On November 4, 1997 the Company closed the offering of 1,500,000 shares of
common stock at a price of $10.00 per share. Net proceeds to the Company from
the sale of the 1,500,000 shares, after deduction of underwriting discounts and
offering expenses, were approximately $13,500.
7
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ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND
FINANCIAL CONDITION
The following discussion should be read in conjunction with, and is
qualified in its entirety by, the financial statements and notes thereto.
The following Management's Discussion and Analysis of Results of Operations
and Financial Condition contains certain forward looking statements that involve
substantial risks and uncertainties. When used in this section, the words
"anticipate," "believe," "estimate," "expect" and similar expressions as they
relate to the Company or its management are intended to identify such forward
looking statements. The Company's actual results, performance or achievements
could differ materially from the results expressed in, or implied by, these
forward looking statements.
OVERVIEW
UBICS, Inc. ("UBICS" or the "Company"), founded in 1993, is a provider of
IT professional services to large and mid-sized organizations. UBICS provides
its clients with a wide range of professional services in such areas as client/
server design and development, ERP package implementation and customization,
applications maintenance programming and database administration. UBICS'
services are provided on a time-and-materials basis to client-managed projects,
with UBICS IT professionals providing integral support as project team members.
The Company currently has offices in the Pittsburgh, Pennsylvania and San
Francisco, California areas. UBICS is an affiliate of the UB Group, a
multinational group of companies headquartered in India (the "UB Group").
The Company's revenues are based on the hourly billing of its IT
professionals. Revenue is recognized as services are provided. The Company has
increased the average billing rates of its IT professionals as the demand for
skilled and experienced professionals has expanded, in particular for IT
professionals placed on ERP package implementation and customization projects.
As of September 30, 1997, 47 IT professionals, or approximately 24% of the
Company's deployed IT professionals, were placed on such projects.
UBICS effectively minimizes the number of days IT professionals are not
assigned to projects by proactively marketing these professionals to clients.
Resource managers closely monitor the availability of IT professionals and
utilize subcontractors when UBICS IT professionals are unavailable. The Company
maintains strong relationships with nearly 50 subcontractors located worldwide.
Approximately 44% of the Company's revenues were derived from IT professionals
deployed from subcontractors for the nine months ended September 30, 1997. As of
September 30, 1997, IT professionals deployed from subcontractors comprised 83
of the Company's 191 deployed IT professionals. The Company believes that its
network of subcontractors enables it to maintain closer relationships with
clients by fulfilling more of their needs for IT professional services.
Management believes that as the Company increases its investment in recruiting
and retaining qualified IT professionals, the ratio of UBICS IT professionals to
subcontractor IT professionals will increase.
Since inception the Company has developed relationships with 145 clients in
a range of industries and currently has IT professionals deployed at over 80 of
these clients. Although the Company's five largest clients accounted for
approximately 38% of revenues for the first nine months of 1997, this revenue
concentration has been declining since the Company's inception. The Company
believes that the continuing growth in its client base will further reduce the
percentage of revenue attributable to its largest clients. The Company's
strategy is to continue to provide services to clients across the U.S. in a
range of industries, in order to reduce credit risk from conditions or
occurrences within any specific industry or region in which these clients
operate.
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RESULTS OF OPERATIONS
The following table sets forth, for the periods indicated, selected
statements of operations data as a percentage of revenues:
<TABLE>
<CAPTION>
PERCENTAGE OF REVENUES
-------------------------------------------------
THREE MONTHS NINE MONTHS
ENDED SEPTEMBER 30, ENDED SEPTEMBER 30,
-------------------- --------------------
1996 1997 1996 1997
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues............................. 100.0% 100.0% 100.0% 100.0%
Cost of revenues..................... 68.0 66.7 70.2 68.0
----- ----- ----- -----
Gross profit......................... 32.0 33.3 29.8 32.0
Selling, general and
administrative expense........ 24.6 15.7 25.1 16.9
----- ----- ----- -----
Income from operations............... 7.4 17.6 4.7 15.1
Interest expense..................... 0.3 0.3 0.3 0.3
--- ----- ----- -----
Income before income taxes........... 7.1 17.3 4.4 14.8
Provision for income taxes........... 3.6 6.9 2.3 6.0
----- ----- ----- -----
Net income........................... 3.5% 10.4% 2.1% 8.8%
===== ===== ===== =====
</TABLE>
THREE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO
THREE MONTHS ENDED SEPTEMBER 30, 1996.
Revenues
Revenues for the quarter ended September 30, 1997 were $5.8 million,
compared to $2.7 million for the quarter ended September 30, 1996, an increase
of $3.1 million, or 113%. Approximately 80% of the increase in revenues was
due to an increase in the number of IT professionals deployed to provide
services to new and existing clients and approximately 20% of the increase in
revenues was due to higher average hourly billing rates resulting from a shift
toward higher value-added services including ERP-related services as well as
increased demand for IT professionals.
Gross Profit
Gross profit for the third quarter of 1997 was $1.9 million, compared to
$875,000 for the third quarter of 1996, an increase of $1.1 million, or 122%.
Gross profit as a percentage of revenues increased to 33.3% for the third
quarter of 1997, compared to 32.0% for the third quarter of 1996. The increase
in gross profit as a percentage of revenues resulted primarily from a higher
number of IT professionals deployed in client engagements involving higher
value-added services, including ERP package implementation and customization
services.
Selling, General and Administrative Expense
Selling, general and administrative expense for the quarter ended September
30, 1997 was $915,000, compared to $673,000 for the same quarter of 1996, an
increase of $242,000, or 36%. Selling, general and administrative expense as a
percentage of revenues decreased to 15.7% for the third quarter of 1997 from
24.6% for the third quarter of 1996. The increase in expense was primarily due
to increases in salaries, commissions and other personnel costs to support the
Company's growth. This increase was partially offset by the absence of expenses
incurred on behalf of the UB Group during the third quarter of 1997, which
totaled approximately $63,000 for the third quarter of 1996. The decrease as a
percentage of revenues was primarily due to the Company's ability to support its
revenue growth without a proportionate increase in management or marketing
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personnel and associated costs.
Interest Expense
Interest expense for the third quarter of 1997 was $17,000, compared to
$7,000 for the first nine months of 1996, an increase of $10,000, or 143%. Such
increases were due to increased average borrowings under the Line of Credit.
Provision for Income Taxes
The Company's effective tax rate was 39.9% for the quarter ended September
30, 1997 compared to 51.3% for the quarter ended September 30, 1996. The primary
reason for the higher effective tax rate for the third quarter of 1996 was
related to the delayed filing of tax returns pending a review of the structure
of the UB Group companies in the U.S.
NINE MONTHS ENDED SEPTEMBER 30, 1997 COMPARED TO
NINE MONTHS ENDED SEPTEMBER 30, 1996
Revenues
Revenues for the nine months ended September 30, 1997 were $14.5 million,
compared to $6.1 million for the nine months ended September 30, 1996, an
increase of $8.4 million, or 136%. Approximately 80% of the increase in
revenues was due to an increase in the number of IT professionals deployed to
provide services to new and existing clients and approximately 20% of the
increase in revenues was due to higher average hourly billing rates resulting
from a shift toward higher value-added services including ERP-related services
as well as increased demand for IT professionals. The number of deployed IT
professionals increased to 191 at September 30, 1997 from 94 at September 30,
1996, and the Company broadened its client base to 145 clients in the first nine
months of 1997 from 62 clients in the first nine months of 1996.
Gross Profit
Gross profit consists of revenues less cost of revenues. Cost of revenues
is comprised principally of IT professional salaries and benefits, including
subcontractor professional costs and relocation expenses. Gross profit for the
first nine months of 1997 was $4.6 million, compared to $1.8 million for the
first nine months of 1996, an increase of $2.8 million, or 154%. Gross profit as
a percentage of revenues increased to 32.0% for the first nine months of 1997,
compared to 29.8% for the first nine months of 1996. The increase in gross
profit as a percentage of revenues resulted primarily from a higher number of IT
professionals deployed in client engagements involving higher value-added
services, including ERP package implementation and customization services.
Selling, General and Administrative Expense
Selling, general and administrative expense consists of costs associated
with the Company's sales and marketing efforts, executive, finance and human
resource functions, facilities, telecommunications and other general overhead
expenses. Selling, general and administrative expense for the first nine months
of 1997 was $2.4 million, compared to $1.5 million for the first nine months of
1996, an increase of $908,000, or 59%. Selling, general and administrative
expense as a percentage of revenues decreased to 16.9% for the first nine months
of 1997 from 25.1% for the first nine months of 1996. The increase in expense
was primarily due to increases in salaries, commissions and other personnel
costs to support the Company's growth. This increase was partially offset by the
absence of expenses incurred on behalf of the UB Group for the first nine months
of 1997, which totaled approximately $188,000 for the first nine months of 1996.
The decrease as a percentage of revenues was primarily due to the Company's
ability to support its revenue growth without a proportionate
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increase in management or marketing personnel and associated costs.
Interest Expense
Interest expense for the first nine months of 1997 was $38,000, compared to
$16,000 for the first nine months of 1996, an increase of $22,000, or 138%. Such
increases were due to increased average borrowings under the Line of Credit (as
defined below).
Provision for Income Taxes
The Company's effective tax rate was 40.4% for the first nine months of
1997 compared to 51.3% for the first nine months of 1996. The primary reason for
the higher effective tax rate for the first nine months of 1996 was related to
the delayed filing of tax returns pending a review of the structure of the UB
Group companies in the U.S.
LIQUIDITY AND CAPITAL RESOURCES
In November 1997, the Company generated net proceeds of approximately $13.5
million from its underwritten initial public offering of 1,500,000 shares of
Common Stock (the "Offering"). Since that time the Company has used
approximately $775,000 of the net proceeds of the Offering to repay its
outstanding indebtedness under a $1,000,000 Committed Line of Credit from PNC
Bank, National Association (the "Line of Credit"). The Company also has used a
portion of the net proceeds of the Offering for general corporate purposes and
intends to use a portion of such net proceeds for the capital expenditures
described below.
The Company's principal uses of cash have been to fund receivables and
other working capital, reflecting the Company's rapid growth. Prior to
completion of the Offering, the Company has financed its working capital
requirements through internally generated funds, borrowings under the Line of
Credit and loans and advances from certain UB Group affiliates. Amounts
outstanding under the Line of Credit bear interest at a variable annual rate
equal to 0.5% in excess of PNC's prime rate. As of September 30, 1997, the
annual interest rate under the Line of Credit was 9.0%. The indebtedness under
the Line of Credit was incurred by the Company for working capital and other
corporate purposes. Net cash used by operating activities was $407,000 for the
first nine months of 1997 compared to $186,000 for the same period in 1996.
Capital expenditures for the first nine months of 1997 and 1996 were
$73,000 and $20,000, respectively. The Company intends to use approximately $3.5
million of the net proceeds of the Offering to expand its existing operations,
including approximately $3.2 million for the establishment of a recruiting and
training center in India by June 1998 (including the purchase of hardware and
software with respect thereto) and approximately $300,000 for the establishment
of four offshore recruiting offices over the next two years. Except as set forth
above, the Company currently has no material commitments for capital
expenditures.
The Company currently anticipates that the proceeds from the Offering,
together with the existing sources of liquidity and cash generated from
operations, will be sufficient to satisfy its cash needs at least through the
next 24 months.
RECENTLY ISSUED FINANCIAL ACCOUNTING STANDARD
In February 1997, the Financial Accounting Standards Board issued Statement
on Financial Accounting Standards ("SFAS") No. 128, "Earnings Per Share." SFAS
No. 128 differs from current accounting guidance in that earnings per share is
classified as basic earnings per share and diluted earnings per share, compared
to primary earnings per share and fully diluted earnings per share under current
standards. Basic earnings per share differs from primary earnings per share in
that it includes only the weighted average common shares outstanding
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and does not include any dilutive securities in the calculation. Diluted
earnings per share under the new standard differs in certain calculations
compared to fully diluted earnings per share under existing standards. Adoption
of SFAS No. 128 is required for interim and annual periods ending after December
15, 1997. Had the Company applied the provisions of SFAS No. 128, there would
have been no impact compared to that which has been reported.
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PART II -- OTHER INFORMATION
Item 1. Legal Proceedings -- Not Applicable
Item 2. Changes in Securities and Use of Proceeds -- Not applicable
(a) Not applicable.
(b) Not applicable.
(c) Not applicable.
(d) The following information relates to the Company's use of the net
proceeds of the Company's initial public offering (the "Offering"):
On October 27, 1997, the Company's registration statement on
Form S-1, No. 333-35171, became effective. The Company sold a total of
1,500,000 shares of common stock, par value $.01 per share at a price
per share of $10.00 pursuant to the Offering. The Offering, which was
managed by Parker/Hunter Incorporated, as lead underwriter, and Scott &
Stringfellow, Inc., as co-manager, closed on November 4, 1997.
The following table summarizes the estimated expenses incurred
for the Company's account in connection with the Offering:
Underwriting discounts $1,050,000
Finder's fees --
Expenses paid to or for underwriters --
Other expenses 470,000*
----------
TOTAL $1,520,000
- --------
* Estimated.
The following table summarized the amount of net offering
proceeds to the Company ($13,480,000) used for the purposes
listed below:
Construction of plant, building $0
and facilities
Purchase and installation of machinery 0
and equipment
Acquisition of other business(es) 0
Repayment of indebtedness 775,000
Working capital 205,000
Temporary investments** 12,500,000
Other Purposes 0
-----------
Total $13,480,000
- --------
** Such amount is currently invested in a nine-month ready access certificate of
deposit with PNC Bank.
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Item 3. Defaults Upon Senior Securities -- Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders -- Not Applicable
Item 5. Other Information -- Not Applicable
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
<TABLE>
<CAPTION>
<S> <C>
10.1 UBICS, Inc. 1997 Stock Option Plan(1)
10.2 Noncompetition Agreement dated October 27, 1997 among the Company,
Vijay Mallya and UB Information Consultancy Services Ltd.(2)
10.3 Employment Agreement between the Registrant and Vijay Mallya(2)
10.4 Employment Agreement between the Registrant and Manohar B. Hira(2)
10.5 Employment Agreement between the Registrant and O'Neil Nalavadi(2)
10.6 Employment Agreement between the Registrant and Babu Srinivas(2)
10.7 Lease Agreement dated July 2, 1997 between the Company and BR
Associates(1)
10.8 Lease dated May 28, 1996 between the Company and Marin Executive
Park, as amended(1)
10.9 Services Agreement dated October 27, 1997 among the Company,
Vijay Mallya and United Breweries Limited(2)
10.10 Letter Agreement dated July 26, 1996 between PNC Bank, National
Association and the Registrant, and Amendment to Note and
Letter Agreement dated November 1, 1996, Second Amendment to
Note and Letter Agreement dated April 1, 1997, Third Amendment
to Note and Letter Agreement dated August 29, 1997 and Fourth
Amendment to Note and Letter Agreement dated September 5, 1997(1)
10.11 Form of Director Indemnification Agreement(2) 10.12 Form of
Sublease and Consent among the Company, Marin Executive Park and
United Breweries of America, Inc.(2)
10.13 Noncompetition Agreement dated October 27, 1997 among the
Company, Vijay Mallya and United Breweries Limited(2)
10.14 Noncompetition Agreement dated October 27, 1997 among the Company,
Vijay Mallya and UB International Limited(2)
10.15 Services Agreement dated October 27, 1997 among the Company,
Vijay Mallya and UB International Limited(2)
27 Financial Data Schedule
</TABLE>
- --------
(1) Incorporated by reference to the registrant's Registration
Statement on Form S-1, No. 333-35171, filed September 8, 1997.
(2) Incorporated by reference to Post-Effective Amendment No. 1 to the
registrant's Registration Statement on Form S-1, No. 333-35171, filed
October 29, 1997.
(b) Reports on Form 8-K:
No reports on Form 8-K were filed for the three months ended
September 30, 1997.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has caused the report to be signed on its behalf by the undersigned
thereunto duly authorized.
UBICS, Inc.
(Registrant)
Date: December 11, 1997
By: /s/ Manohar B. Hira
-----------------------------------
Manohar B. Hira
President
By: /s/ O'Neil Nalavadi
-----------------------------------
O'Neil Nalavadi
Senior Vice President and Chief
Financial Officer
15
<PAGE> 16
EXHIBIT INDEX
<TABLE>
<CAPTION>
No. Description Page
- --- ----------- ----
<S> <C> <C>
10.1 UBICS, Inc. 1997 Stock Option Plan(1)
10.2 Noncompetition Agreement dated October 27, 1997 among the Company,
Vijay Mallya and UB Information Consultancy Services Ltd.(2)
10.3 Employment Agreement between the Registrant and Vijay Mallya(2)
10.4 Employment Agreement between the Registrant and Manohar B. Hira(2)
10.5 Employment Agreement between the Registrant and O'Neil Nalavadi(2)
10.6 Employment Agreement between the Registrant and Babu Srinivas(2)
10.7 Lease Agreement dated July 2, 1997 between the Company
and BR Associates(1)
10.8 Lease dated May 28, 1996 between the Company and Marin Executive
Park, as amended(1)
10.9 Services Agreement dated October 27, 1997 among the Company,
Vijay Mallya and United Breweries Limited(2)
10.10 Letter Agreement dated July 26, 1996 between PNC Bank, National
Association and the Registrant, and Amendment to Note and Letter
Agreement dated November 1, 1996, Second Amendment to Note and Letter
Agreement dated April 1, 1997, Third Amendment to Note and Letter
Agreement dated August 29, 1997 and Fourth Amendment to Note and Letter
Agreement dated September 5, 1997(1)
10.11 Form of Director Indemnification Agreement(2)
10.12 Form of Sublease and Consent among the Company, Marin Executive Park
and United Breweries of America, Inc.(2)
10.13 Noncompetition Agreement dated October 27, 1997 among the Company,
Vijay Mallya and United Breweries Limited(2)
10.14 Noncompetition Agreement dated October 27, 1997 among the Company,
Vijay Mallya and UB International Limited(2)
10.15 Services Agreement dated October 27, 1997 among the Company,
Vijay Mallya and UB International Limited(2)
27 Financial Data Schedule
</TABLE>
- ---------
(1) Incorporated by reference to the registrant's Registration Statement on
Form S-1, No. 333-35171, filed September 8, 1997.
(2) Incorporated by reference to Post-Effective Amendment No. 1 to the
registrant's Registration Statement on Form S-1, No. 333-35171, filed
October 29, 1997.
16
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE BALANCE
SHEET OF UBICS, INC. AS OF SEPTEMBER 30, 1997 (UNAUDITED) AND STATEMENT OF
OPERATIONS OF UBICS, INC. FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
(UNAUDITED), FILED AS A PART OF THE QUARTERLY REPORT (FORM 10-Q) OF UBICS, INC.
FOR THE FISCAL QUARTER ENDED SEPTEMBER 30, 1997, AND IS QUALIFIED IN ITS
ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 89
<SECURITIES> 0
<RECEIVABLES> 3,093
<ALLOWANCES> (155)
<INVENTORY> 0
<CURRENT-ASSETS> 5,839
<PP&E> 136
<DEPRECIATION> (25)
<TOTAL-ASSETS> 5,950
<CURRENT-LIABILITIES> 4,437
<BONDS> 0
0
0
<COMMON> 3
<OTHER-SE> 1,510
<TOTAL-LIABILITY-AND-EQUITY> 5,950
<SALES> 0
<TOTAL-REVENUES> 14,513
<CGS> 0
<TOTAL-COSTS> 9,870
<OTHER-EXPENSES> 2,452
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 38
<INCOME-PRETAX> 2,153
<INCOME-TAX> 869
<INCOME-CONTINUING> 1,284
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,284
<EPS-PRIMARY> 0.26
<EPS-DILUTED> 0.26
</TABLE>
