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Previous: BRUNOS INC, S-4, 1995-07-17 |
Next: CENCOR INC, 8-K, 1995-07-17 |
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Quarterly Report Under Section 13 Or 15(d)
Of The Securities Exchange Act Of 1934
For Quarter Ended: June 3, 1995 Commission File No: 0-6933
CAMBEX CORPORATION
(Exact name of registrant as specified in its charter)
MASSACHUSETTS 04-244-2959
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
360 Second Avenue, Waltham, Massachusetts
(Address of principal executive offices)
02154
(Zip Code)
Registrant's telephone number, including area code: (617) 890-6000
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period
that the registrant was required to file such reports) and (2) has been
subject to such filing requirements for the past 90 days.
Yes X_ No
<PAGE>
<TABLE>
<S>
CAMBEX CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
JUNE 3, 1995 AND AUGUST 31, 1994
(UNAUDITED)
ASSETS
<C> <C>
JUNE 3, AUGUST 31,
1995 1994
------------- -------------
CURRENT ASSETS:
CASH AND CASH EQUIVALENTS $ 2,432,101 $ 6,126,289
ACCOUNTS RECEIVABLE, LESS RESERVES OF
$141,000 ON JUNE 3, 1995 AND
$138,000 ON AUGUST 31, 1994 9,116,236 6,853,233
CURRENT PORTION OF INVESTMENT IN SALES-TYPE LEASES,
NET OF UNEARNED INTEREST INCOME OF $37,000 ON
JUNE 3, 1995 AND $45,000 ON AUGUST 31, 1994 477,087 404,622
INVENTORIES 17,654,167 14,153,739
PREPAID TAXES 3,825,360 2,946,025
PREPAID EXPENSES 589,222 757,072
-------------- --------------
TOTAL CURRENT ASSETS $ 34,094,173 $ 31,240,980
-------------- --------------
LONG-TERM INVESTMENT IN SALES-TYPE LEASES, NET
OF UNEARNED INTEREST INCOME OF $22,000 ON
JUNE 3, 1995 AND $35,000 ON AUGUST 31, 1994 $ 298,168 $ 475,900
LEASED EQUIPMENT, AT COST, NET OF ACCUMULATED
DEPRECIATION OF $197,000 ON JUNE 3, 1995 AND
$167,000 ON AUGUST 31, 1994 $ 299,906 $ 302,410
PROPERTY AND EQUIPMENT, AT COST:
MACHINERY AND EQUIPMENT $ 8,051,745 $ 7,932,084
FURNITURE AND FIXTURES 278,341 240,239
LEASEHOLD IMPROVEMENTS 598,243 357,796
-------------- --------------
$ 8,928,329 $ 8,530,119
LESS - ACCUMULATED DEPRECIATION AND AMORTIZATION 7,270,496 6,647,467
-------------- --------------
NET PROPERTY AND EQUIPMENT $ 1,657,833 $ 1,882,652
OTHER ASSETS
TECHNOLOGY LICENSE/MARKETING AGREEMENT,
NET OF ACCUMULATED AMORTIZATION OF $5,667,000
ON JUNE 3, 1995 AND $4,392,000 ON AUGUST 31, 1994 $ 2,833,340 $ 4,108,343
OTHER 37,910 37,958
-------------- --------------
TOTAL ASSETS $ 39,221,330 $ 38,048,243
============== ==============
-2-
</TABLE>
<PAGE>
<TABLE>
<S>
CAMBEX CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
JUNE 3, 1995 AND AUGUST 31, 1994
(UNAUDITED)
LIABILITIES AND STOCKHOLDERS' INVESTMENT
<C> <C>
JUNE 3, AUGUST 31,
1995 1994
------------- --------------
CURRENT LIABILITIES:
NOTES PAYABLE $ -- $ 159,152
ACCOUNTS PAYABLE 3,464,583 4,408,747
OBLIGATIONS FOR TRADE-IN MEMORY 2,268,567 662,067
ACCRUED EXPENSES 4,079,518 4,374,102
------------- --------------
TOTAL CURRENT LIABILITIES $ 9,812,668 $ 9,604,068
------------- --------------
REVOLVING CREDIT AGREEMENT $ 3,000,000 $ 3,900,000
DEFERRED REVENUE $ 2,310,925 $ 1,431,311
STOCKHOLDERS' INVESTMENT:
PREFERRED STOCK, $1.00 PAR VALUE PER SHARE
AUTHORIZED - 3,000,000 SHARES
ISSUED - NONE -- --
COMMON STOCK, $.10 PAR VALUE PER SHARE -
AUTHORIZED - 25,000,000 SHARES
ISSUED - 10,272,973 SHARES ON JUNE 3, 1995 AND
10,157,064 SHARES ON AUGUST 31, 1994 $ 1,027,297 $ 1,015,706
CAPITAL IN EXCESS OF PAR VALUE 14,552,256 14,154,516
CUMULATIVE TRANSLATION ADJUSTMENT 238,923 68,862
RETAINED EARNINGS 9,134,027 8,728,546
LESS - COST OF SHARES HELD IN TREASURY -
1,534,356 ON JUNE 3, 1995
AND 1,534,356 ON AUGUST 31, 1994 (854,766) (854,766)
------------- --------------
TOTAL STOCKHOLDERS' INVESTMENT $ 24,097,737 $ 23,112,864
------------- --------------
TOTAL LIABILITIES AND STOCKHOLDERS' INVESTMENT $ 39,221,330 $ 38,048,243
============= ==============
-3-
</TABLE>
<PAGE>
<TABLE>
<S>
CAMBEX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE NINE MONTHS ENDED JUNE 3, 1995 AND MAY 28, 1994
(UNAUDITED)
QUARTER ENDED NINE MONTHS ENDED
<C> <C> <C> <C>
JUNE 3, MAY 28, JUNE 3, MAY 28,
1995 1994 1995 1994
------------ ------------ ------------ ------------
REVENUES $11,166,910 $ 11,245,386 $ 31,845,260 $ 30,393,812
COST OF SALES 6,296,793 6,051,939 17,606,374 15,692,295
------------ ------------- ------------- -------------
GROSS PROFIT $ 4,870,117 $ 5,193,447 $ 14,238,886 $ 14,701,517
OPERATING EXPENSES:
RESEARCH AND DEVELOPMENT $ 1,345,847 $ 1,388,968 $ 4,506,571 $ 4,523,684
SELLING 2,000,686 $ $2,058,451 6,109,922 5,855,784
GENERAL AND ADMINISTRATIVE $632,889 729,558 1,952,800 2,080,665
------------ ------------- ------------- -------------
$ 3,979,422 $ 4,176,977 $ 12,569,293 $ 12,460,133
------------ ------------- ------------- -------------
OPERATING INCOME $ 890,695 $ 1,016,470 $ 1,669,593 $ 2,241,384
OTHER INCOME (EXPENSE):
INTEREST EXPENSE $ (60,350) $ (62,085) $ (200,071) $ (128,951)
INTEREST INCOME 25,969 30,944 72,302 92,051
OTHER INCOME (EXPENSE) (700,943) (519,878) (866,343) (1,325,872)
------------ ------------- ------------- -------------
INCOME BEFORE INCOME TAXES $ 155,371 $ 465,451 $ 675,481 $ 878,612
PROVISION FOR INCOME TAXES $ 62,000 $ 206,000 $ 270,000 $ 400,000
------------ ------------- ------------- -------------
NET INCOME $ 93,371 $ 259,451 $ 405,481 $ 478,612
============ ============= ============= =============
NET INCOME PER COMMON SHARE $ 0.01 $ 0.03 $ 0.05 $ 0.06
============ ============= ============= =============
WEIGHTED AVERAGE COMMON AND COMMON
EQUIVALENT SHARES OUTSTANDING 8,750,000 8,600,000 8,750,000 8,600,000
-4-
</TABLE>
<PAGE>
<TABLE>
<S>
CAMBEX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED JUNE 3, 1995 AND MAY 28, 1994
<c) <C>
FOR THE NINE MONTHS ENDED
JUNE 3, MAY 28,
1995 1994
------------ -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $ 405,481 $ 478,612
Adjustments to reconcile net income to net
cash provided by (used in) operating activities:
Depreciation and amortization $ 2,004,954 $ 2,069,897
Provision for losses on accounts receivable -- --
Provision for losses on inventory -- --
Amortization of prepaid expenses 23,135 25,934
Common stock issued in lieu of cash 365,148 225,118
Change in assets and liabilities:
Increase in accounts receivable (2,263,003) (1,723,546)
Increase in inventory (3,500,428) (5,452,625)
Decrease (increase) in investment in sales-type leases 105,267 (370,579)
Decrease (increase) in prepaid taxes (879,335) 1,549,897
Increase in prepaid expenses 144,715 (44,761)
Decrease in other assets 48 48
Increase (decrease) in accounts payable (944,164) 973,525
Increase (decrease) in obligations for trade-in memory 1,606,500 (2,124,880)
Increase (decrease) in accrued liabilities (294,584) 416,373
Increase (decrease) in deferred revenue 879,614 (157,510)
------------- -------------
Total adjustments $ (2,752,133) $ (4,613,109)
------------- -------------
Net cash used in operating activities $ (2,346,652) $ (4,134,497)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of Equipment (502,628) (528,388)
------------ ------------
Net cash used in investing activities $ (502,628) $ (528,388)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of notes payable $ (159,152) $ (166,718)
Proceeds from sale of common stock 44,183 25,062
Net borrowings (repayments) under revolving credit agreement (900,000) (50,000)
------------- -------------
Net cash used in financing activities $ (1,014,969) $ (191,656)
Effect of exchange rate changes on cash 170,061 319,567
------------ -------------
Net decrease in cash and cash equivalents $ (3,694,188) $ (4,534,974)
Cash and cash equivalents at beginning of period $ 6,126,289 $ 5,827,673
------------- -------------
Cash and cash equivalents at end of period $ 2,432,101 $ 1,292,699
============= =============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ 200,071 $ 116,769
Income Taxes 31,592 38,074
-5-
</TABLE>
<PAGE>
FORM 10-Q
CAMBEX CORPORATION AND SUBSIDIARIES
For Quarter Ended: June 3, 1995 Commission File No. 0-6933
Notes & Comments:
(1)Significant Accounting Policies
The accompanying consolidated financial statements include the accounts
of the Company and its wholly-owned subsidiaries. All material
intercompany transactions and balances have been eliminated in
consolidation.
The Company has deferred revenue associated with the sale of certain
products which have future performance obligations, principally relating
to reinstallation of IBM memory.
The condensed financial statements included herein have been prepared by
the Company, without audit, pursuant to the rules and regulations of the
Securities and Exchange Commission. Certain information and footnote
disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been
condensed or omitted pursuant to such rules and regulations, although
the Company believes that the disclosures are adequate to make the
information presented not misleading. The information furnished
includes all adjustments and accruals consisting only of normal
recurring accrual adjustments which are, in the opinion of management,
necessary for a fair presentation of results for the interim period. It
is suggested that these condensed financial statements be read in
conjunction with the financial statements and the notes thereto included
in the Company's latest annual report on Form 10-K.
Inventories, which include raw materials, labor and manufacturing
overhead are stated at the lower of cost (first-in, first-out) or market
and consist of the following:
June 3, August 31,
1995 1994
Raw materials $ 2,984,172 $ 2,192,939
Work-in-process 810,346 790,892
Finished goods 4,303,124 3,593,472
Trade-in memory 9,556,525 7,576,436
$17,654,167 $14,153,739
- 6 -
<PAGE>
FORM 10-Q
CAMBEX CORPORATION AND SUBSIDIARIES
For Quarter Ended: June 3, 1995 Commission File No. 0-6933
Notes & Comments (Continued):
(2) Income and Dividends Per Share
Per share amounts are based on the weighted average number of
shares outstanding during each year plus applicable common stock
equivalents. There were no material differences for per share
amounts assuming full dilution in either year.
(3) Management's Discussion and Analysis of Financial Condition and
Results of Operations
Revenues for the third quarter of fiscal 1995 decreased by
approximately $78,000 or 1% from the third quarter of fiscal
1994.
Gross profit as a percentage of revenues was 44% for the third
quarter of fiscal 1995 as compared to 46% in the third quarter of
fiscal 1994, with the decrease primarily due to lower gross
margins on the Company's mainframe memory products.
Operating expenses for the third quarter of fiscal 1995 decreased
5% from the third quarter of fiscal 1994. Selling expenses
decreased 3%, from $2,058,000 to $2,000,686, due primarily to
decreased staffing.
Other income (expense) in the third quarter of fiscal 1995
included $425,000 in amortization expenses relating to the
Company's technology license/marketing agreement and a $200,000
unfavorable exchange rate adjustment. Other expense in the third
quarter of fiscal 1994 included approximately $425,000 in
amortization expenses relating to the Company's technology
license/marketing agreement.
- 7 -
<PAGE>
FORM 10-Q
CAMBEX CORPORATION AND SUBSIDIARIES
For Quarter Ended: June 3, 1995 Commission File No. 0-6933
Notes & Comments (Continued):
(3) Management's Discussion and Analysis of Financial Condition and
Results of Operations (Continued)
The Company's cash position decreased by $3,694,000 from the end
of fiscal 1994. A significant portion of the Company's business
during the first nine months of fiscal 1995 involved the
acceptance of IBM trade-in memory as payment for the Company's
newest mainframe central storage memory. Consequently, the
Company's inventory of IBM memory accounted for $1,980,000 of the
total $3,500,000 increase in inventories. The Company believes
that the trade-in memory is fairly stated at its net realizable
value and will be liquidated for cash. In addition, the Company
has accepted longer term receivables for certain memory
transactions resulting in an increase in accounts receivable of
$2,263,000.
The Company's prepaid tax asset is realizable through carry-backs
against taxes paid in prior periods or future profitability.
The Company's present operating plans indicate that cash flow
generated from operations will be adequate to meet its
obligations.
- 8 -
<PAGE>
FORM 10-Q
CAMBEX CORPORATION AND SUBSIDIARIES
For Quarter Ended: June 3, 1995 Commission File No. 0-6933
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.
CAMBEX CORPORATION
By: /s/ Joseph F. Kruy
Joseph F. Kruy
President
By: /s/ Sheldon M. Schenkler
Sheldon M. Schenkler
Chief Financial Officer
Dated: July 17, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> AUG-31-1995
<PERIOD-END> JUN-03-1995
<CASH> 2432
<SECURITIES> 0
<RECEIVABLES> 9116
<ALLOWANCES> 141
<INVENTORY> 17654
<CURRENT-ASSETS> 34094
<PP&E> 8928
<DEPRECIATION> 7270
<TOTAL-ASSETS> 39221
<CURRENT-LIABILITIES> 9813
<BONDS> 0
<COMMON> 1027
0
0
<OTHER-SE> 23070
<TOTAL-LIABILITY-AND-EQUITY> 39221
<SALES> 31845
<TOTAL-REVENUES> 31845
<CGS> 17606
<TOTAL-COSTS> 17606
<OTHER-EXPENSES> 13363
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 200
<INCOME-PRETAX> 675
<INCOME-TAX> 270
<INCOME-CONTINUING> 405
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 405
<EPS-PRIMARY> .05
<EPS-DILUTED> .05
</TABLE>
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