FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Transition Report Under Section 13 Or 15(d)
Of The Securities Exchange Act Of 1934
For The Transition Period From:
September 1, 1995 to December 31, 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 Secone 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
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CAMBEX CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1995 AND AUGUST 31, 1995
(UNAUDITED)
ASSETS
DECEMBER 31, AUGUST 31,
1995 1995
------------- -------------
CURRENT ASSETS:
CASH AND CASH EQUIVALENTS $ 588,322 $ 3,246,353
ACCOUNTS RECEIVABLE, LESS RESERVES OF
$136,000 ON DECEMBER 31, 1995 AND
$135,000 ON AUGUST 31, 1995 2,628,778 5,144,976
CURRENT PORTION OF INVESTMENT IN SALES-TYPE LEASES,
NET OF UNEARNED INTEREST INCOME OF $31,000 ON
DECEMBER 31, 1995 AND $38,000 ON AUGUST 31, 1995 393,284 445,214
INVENTORIES 12,030,324 11,568,072
PREPAID TAXES 6,388,659 6,505,029
PREPAID EXPENSES 178,991 242,881
-------------- --------------
TOTAL CURRENT ASSETS $ 22,208,358 $ 27,152,525
-------------- --------------
LONG-TERM INVESTMENT IN SALES-TYPE LEASES, NET
OF UNEARNED INTEREST INCOME OF $19,000 ON
DECEMBER 31, 1995 AND $27,000 ON AUGUST 31, 1995 $ 362,992 $ 477,030
LEASED EQUIPMENT, AT COST, NET OF ACCUMULATED
DEPRECIATION OF $245,000 ON DECEMBER 31, 1995
AND $193,000 ON AUGUST 31, 1995 $ 300,174 $ 351,768
PROPERTY AND EQUIPMENT, AT COST:
MACHINERY AND EQUIPMENT $ 7,257,673 $ 7,221,473
FURNITURE AND FIXTURES 303,428 266,612
LEASEHOLD IMPROVEMENTS 606,454 606,454
-------------- --------------
$ 8,167,555 $ 8,094,539
LESS - ACCUMULATED DEPRECIATION AND AMORTIZATION 6,706,326 6,495,460
-------------- --------------
NET PROPERTY AND EQUIPMENT $ 1,461,229 $ 1,599,079
OTHER ASSETS
TECHNOLOGY LICENSE/MARKETING AGREEMENT,
NET OF ACCUMULATED AMORTIZATION OF $6,658,000
ON DECEMBER 31, 1995 AND $6,092,000 ON AUGUST 31, 1995 $ 1,841,671 $ 2,408,339
OTHER 37,875 37,895
-------------- --------------
TOTAL ASSETS $ 26,212,299 $ 32,026,636
============== ==============
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CAMBEX CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 31, 1995 AND AUGUST 31, 1995
(UNAUDITED)
LIABILITIES AND STOCKHOLDERS' INVESTMENT
DECEMBER 31, AUGUST 31,
1995 1995
------------- --------------
CURRENT LIABILITIES:
REVOLVING CREDIT AGREEMENT $ 3,200,000 $ 3,850,000
ACCOUNTS PAYABLE 4,538,852 5,633,185
OBLIGATIONS FOR TRADE-IN MEMORY 1,939,657 2,712,317
ACCRUED EXPENSES 3,717,691 4,081,224
------------- --------------
TOTAL CURRENT LIABILITIES $ 13,396,200 $ 16,276,726
------------- --------------
DEFERRED REVENUE $ 917,087 $ 1,323,417
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 - 10,452,987 SHARES ON DECEMBER 31, 1995 AND
10,420,283 SHARES ON AUGUST 31, 1995 $ 1,045,299 $ 1,042,028
CAPITAL IN EXCESS OF PAR VALUE 15,446,004 15,161,980
CUMULATIVE TRANSLATION ADJUSTMENT 287,763 247,614
RETAINED EARNINGS (DEFICIT) (4,025,288) (1,170,363)
LESS - COST OF SHARES HELD IN TREASURY -
1,534,356 ON DECEMBER 31, 1995 AND
1,534,356 ON AUGUST 31, 1995 (854,766) (854,766)
------------- --------------
TOTAL STOCKHOLDERS' INVESTMENT $ 11,899,012 $ 14,426,493
------------- --------------
TOTAL LIABILITIES AND STOCKHOLDERS' INVESTMENT $ 26,212,299 $ 32,026,636
============= ==============
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CAMBEX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE FOUR MONTHS ENDED
DECEMBER 31, 1995 AND DECEMBER 31, 1994
(UNAUDITED)
FOR THE FOUR MONTHS ENDED
DECEMBER 31, DECEMBER 31,
1995 1994
------------ ------------
REVENUES $ 8,509,026 $ 11,549,005
COST OF SALES 5,029,670 6,388,332
------------ -------------
GROSS PROFIT $ 3,479,356 $ 5,160,673
OPERATING EXPENSES:
RESEARCH AND DEVELOPMENT $ 1,659,480 $ 1,878,439
SELLING 3,156,471 2,658,919
GENERAL AND ADMINISTRATIVE 916,718 849,779
------------ -------------
$ 5,732,669 $ 5,387,137
------------ -------------
OPERATING INCOME (LOSS) $(2,253,313) $ (226,464)
OTHER INCOME (EXPENSE):
INTEREST EXPENSE $ (92,726) $ (91,312)
INTEREST INCOME 43,217 32,537
OTHER INCOME (EXPENSE) (549,103) (484,415)
------------ -------------
INCOME (LOSS) BEFORE INCOME TAXES $(2,851,925) $ (769,654)
CREDIT (PROVISION) FOR INCOME TAXES $ (3,000) $ 300,000
------------ -------------
NET INCOME (LOSS) $(2,854,925) $ (469,654)
============ =============
NET INCOME (LOSS) PER COMMON SHARE $ (0.32) $ (0.05)
============ =============
WEIGHTED AVERAGE COMMON AND COMMON
EQUIVALENT SHARES OUTSTANDING 8,920,000 8,625,000
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CAMBEX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE FOUR MONTHS ENDED
DECEMBER 31, 1995 AND DECEMBER 31, 1994
FOR THE FOUR MONTHS ENDED
DECEMBER 31, DECEMBER 31,
1995 1994
------------ -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $ (2,854,925) $ (469,654)
Adjustments to reconcile net income (loss) to
net cash used in operating activities:
Depreciation and amortization $ 829,128 $ 896,760
Amortization of prepaid expenses 9,383 10,284
Common stock issued in lieu of cash 22,610 --
Change in assets and liabilities:
Decrease in accounts receivable 2,516,198 1,124,999
Decrease (increase) in inventory (462,252) (6,405,522)
Decrease in investment in sales-type leases 165,968 145,113
Decrease (increase) in prepaid taxes 116,370 (480,637)
Decrease in prepaid expenses 54,507 226,838
Decrease in other assets 20 16
Increase (decrease) in accounts payable (1,094,333) 1,290,492
Increase (decrease) in obligations for trade-in memory (772,660) 863,250
Decrease in accrued liabilities (363,533) (371,519)
Increase (decrease) in deferred revenue (406,330) 42,022
------------- -------------
Total adjustments $ 615,076 $ (2,657,904)
------------- -------------
Net cash used in operating activities $ (2,239,849) $ (3,127,558)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of Equipment (73,016) (382,611)
------------ -------------
Net cash used in investing activities $ (73,016) $ (382,611)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of notes payable $ -- $ (112,356)
Proceeds from sale of common stock 264,685 2,676
Net borrowings (repayments) under revolving credit agreement (650,000) (600,000)
------------- -------------
Net cash used in financing activities $ (385,315) $ (709,680)
Effect of exchange rate changes on cash 40,149 37,238
------------ -------------
Net decrease in cash and cash equivalents $ (2,658,031) $ (4,182,611)
Cash and cash equivalents at beginning of period $ 3,246,353 $ 6,126,289
------------- -------------
Cash and cash equivalents at end of period $ 588,322 $ 1,943,678
============= =============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ 92,096 $ 91,312
Income Taxes 19,947 11,895
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FORM 10-Q
CAMBEX CORPORATION AND SUBSIDIARIES
For The Transition Period From:
September 1, 1995 to December 31, 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:
December 31, August 31,
1995 1995
Raw materials $ 2,600,433 $ 2,402,345
Work-in-process 1,017,749 760,399
Finished goods 7,097,086 4,573,200
Trade-in memory 1,315,056 3,832,128
$12,030,324 $11,568,072
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FORM 10-Q
CAMBEX CORPORATION AND SUBSIDIARIES
For The Transition Period From:
September 1, 1995 to December 31, 1995 Commission File: 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 four months ended December 31, 1995 decreased
26% from the comparable four months of the prior year due
principally to decreased sales of the Company's STOR/9000
memory products for the IBM ES/9000 computers.
Operating expenses for the four months ended December 31, 1995
increased 6% from the comparable four months of the prior year.
Selling and general and administrative expenses increased 16%
due to expansion in Europe. Research and development expenses
decreased 12% due to completion of major projects in fiscal
1995.
Other expense in the four months ended December 31, 1995 and
December 31, 1994 included approximately $567,000 in
amortization expenses relating to the Company's technology
license/marketing agreement.
Accounts receivable decreased due to a lower volume of sales.
The Company's present operating plans indicate that cash flow
generated from operations will be adequate to meet its
obligations.
As reported in the Company's latest annual report on Form 10-K
for the fiscal year ended August 31, 1995, the Company is
continuing to negotiate with the bank to receive a waiver for
certain provisions of the Revolving Credit Agreement with which
the Company was not in compliance as of August 31, 1995 and
December 31, 1995.
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FORM 10-Q
CAMBEX CORPORATION AND SUBSIDIARIES
For The Transition Period From:
September 1, 1995 to December 31, 1995 Commission File: 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: February 14, 1996
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