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: December 2, 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
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CAMBEX CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 2, 1995 AND AUGUST 31, 1995
(UNAUDITED)
ASSETS
DECEMBER 2, AUGUST 31,
1995 1995
------------- -------------
CURRENT ASSETS:
CASH AND CASH EQUIVALENTS $ 2,620,588 $ 3,246,353
ACCOUNTS RECEIVABLE, LESS RESERVES OF
$135,000 ON DECEMBER 2, 1995 AND
$135,000 ON AUGUST 31, 1995 2,834,916 5,144,976
CURRENT PORTION OF INVESTMENT IN SALES-TYPE LEASES,
NET OF UNEARNED INTEREST INCOME OF $33,000 ON
DECEMBER 2, 1995 AND $38,000 ON AUGUST 31, 1995 405,998 445,214
INVENTORIES 11,175,814 11,568,072
PREPAID TAXES 6,350,147 6,505,029
PREPAID EXPENSES 160,255 242,881
-------------- --------------
TOTAL CURRENT ASSETS $ 23,547,718 $ 27,152,525
-------------- --------------
LONG-TERM INVESTMENT IN SALES-TYPE LEASES, NET
OF UNEARNED INTEREST INCOME OF $21,000 ON
DECEMBER 2, 1995 AND $27,000 ON AUGUST 31, 1995 $ 392,196 $ 477,030
LEASED EQUIPMENT, AT COST, NET OF ACCUMULATED
DEPRECIATION OF $233,000 ON DECEMBER 2, 1995
AND $193,000 ON AUGUST 31, 1995 $ 312,188 $ 351,768
PROPERTY AND EQUIPMENT, AT COST:
MACHINERY AND EQUIPMENT $ 7,255,633 $ 7,221,473
FURNITURE AND FIXTURES 281,706 266,612
LEASEHOLD IMPROVEMENTS 606,454 606,454
-------------- --------------
$ 8,143,793 $ 8,094,539
LESS - ACCUMULATED DEPRECIATION AND AMORTIZATION 6,660,598 6,495,460
-------------- --------------
NET PROPERTY AND EQUIPMENT $ 1,483,195 $ 1,599,079
OTHER ASSETS
TECHNOLOGY LICENSE/MARKETING AGREEMENT,
NET OF ACCUMULATED AMORTIZATION OF $6,517,000
ON DECEMBER 2, 1995 AND $6,092,000 ON AUGUST 31, 1995 $ 1,983,338 $ 2,408,339
OTHER 37,880 37,895
-------------- --------------
TOTAL ASSETS $ 27,756,515 $ 32,026,636
============== ==============
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CAMBEX CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
DECEMBER 2, 1995 AND AUGUST 31, 1995
(UNAUDITED)
LIABILITIES AND STOCKHOLDERS' INVESTMENT
DECEMBER 2, AUGUST 31,
1995 1995
------------- --------------
CURRENT LIABILITIES:
REVOLVING CREDIT AGREEMENT $ 3,000,000 $ 3,850,000
ACCOUNTS PAYABLE 4,597,724 5,633,185
OBLIGATIONS FOR TRADE-IN MEMORY 1,939,657 2,712,317
ACCRUED EXPENSES 3,923,292 4,081,224
------------- --------------
TOTAL CURRENT LIABILITIES $ 13,460,673 $ 16,276,726
------------- --------------
DEFERRED REVENUE $ 906,610 $ 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 - 10,450,287 SHARES ON DECEMBER 2, 1995 AND
10,420,283 SHARES ON AUGUST 31, 1995 $ 1,045,029 $ 1,042,028
CAPITAL IN EXCESS OF PAR VALUE 15,400,195 15,161,980
CUMULATIVE TRANSLATION ADJUSTMENT 320,837 247,614
RETAINED EARNINGS (DEFICIT) (2,522,063) (1,170,363)
LESS - COST OF SHARES HELD IN TREASURY -
1,534,356 ON DECEMBER 2, 1995 AND
1,534,356 ON AUGUST 31, 1995 (854,766) (854,766)
------------- --------------
TOTAL STOCKHOLDERS' INVESTMENT $ 13,389,232 $ 14,426,493
------------- --------------
TOTAL LIABILITIES AND STOCKHOLDERS' INVESTMENT $ 27,756,515 $ 32,026,636
============= ==============
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CAMBEX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED
DECEMBER 2, 1995 AND DECEMBER 3, 1994
(UNAUDITED)
FOR THE THREE MONTHS ENDED
DECEMBER 2, DECEMBER 3,
1995 1994
------------ ------------
REVENUES $ 7,580,672 $ 10,166,732
COST OF SALES 3,987,346 5,417,153
------------ -------------
GROSS PROFIT $ 3,593,326 $ 4,749,579
OPERATING EXPENSES:
RESEARCH AND DEVELOPMENT $ 1,280,306 $ 1,487,665
SELLING 2,372,995 1,972,331
GENERAL AND ADMINISTRATIVE 772,095 615,971
------------ -------------
$ 4,425,396 $ 4,075,967
------------ -------------
OPERATING INCOME (LOSS) $ (832,070) $ 673,612
OTHER INCOME (EXPENSE):
INTEREST EXPENSE $ (69,694) $ (62,867)
INTEREST INCOME 34,365 27,445
OTHER INCOME (EXPENSE) (474,301) (377,124)
------------ -------------
INCOME (LOSS) BEFORE INCOME TAXES $(1,341,700) $ 261,066
PROVISION FOR INCOME TAXES $ 10,000 $ 105,000
------------ -------------
NET INCOME (LOSS) $(1,351,700) $ 156,066
============ =============
NET INCOME (LOSS) PER COMMON SHARE $ (0.15) $ 0.02
============ =============
WEIGHTED AVERAGE COMMON AND COMMON
EQUIVALENT SHARES OUTSTANDING 8,915,000 8,625,000
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CAMBEX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED
DECEMBER 2, 1995 AND DECEMBER 3, 1994
FOR THE THREE MONTHS ENDED
DECEMBER 2, DECEMBER 3,
1995 1994
------------ -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $ (1,351,700) $ 156,066
Adjustments to reconcile net income to net
cash used in operating activities:
Depreciation and amortization $ 629,719 $ 676,294
Amortization of prepaid expenses 7,407 7,712
Common stock issued in lieu of cash 22,610 --
Change in assets and liabilities:
Decrease (increase) in accounts receivable 2,310,060 (374,520)
Decrease (increase) in inventory 392,258 (5,395,493)
Decrease in investment in sales-type leases 124,050 111,141
Decrease in prepaid taxes 154,882 51,208
Decrease (increase) in prepaid expenses 75,219 228,110
Decrease in other assets 15 16
Increase (decrease) in accounts payable (1,035,461) 654,317
Increase (decrease) in obligations for trade-in memory (772,660) 893,250
Decrease in accrued liabilities (157,932) (647,832)
Increase (decrease) in deferred revenue (416,807) 42,022
------------- -------------
Total adjustments $ 1,333,360 $ (3,753,775)
------------- -------------
Net cash used in operating activities $ (18,340) $ (3,597,709)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of Equipment (49,254) (316,307)
------------ -------------
Net cash used in investing activities $ (49,254) $ (316,307)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of notes payable $ -- $ (67,078)
Proceeds from sale of common stock 218,606 1,656
Net borrowings (repayments) under revolving credit agreement (850,000) (600,000)
------------- -------------
Net cash used in financing activities $ (631,394) $ (665,422)
Effect of exchange rate changes on cash 73,223 37,238
------------ -------------
Net decrease in cash and cash equivalents $ (625,765) $ (4,542,200)
Cash and cash equivalents at beginning of period $ 3,246,353 $ 6,126,289
------------- -------------
Cash and cash equivalents at end of period $ 2,620,588 $ 1,584,089
============= =============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ 69,694 $ 62,867
Income Taxes 17,697 9,245
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FORM 10-Q
CAMBEX CORPORATION AND SUBSIDIARIES
For Quarter Ended: December 2, 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 2, August 31,
1995 1995
Raw materials $ 2,708,854 $ 2,402,345
Work-in-process 1,237,569 760,399
Finished goods 5,914,335 4,573,200
Trade-in memory 1,315,056 3,832,128
$11,175,814 $11,568,072
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FORM 10-Q
CAMBEX CORPORATION AND SUBSIDIARIES
For Quarter Ended: December 2, 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 first quarter of fiscal 1996 decreased 25%
from the first quarter of fiscal 1995 due principally to
decreased sales of the Company's STOR/9000 memory products
for the IBM ES/9000 computers.
Operating expenses for the first quarter of fiscal 1996
increased 9% from the first quarter of fiscal 1995. Selling
and general and administrative expenses increased 22% due to
expansion in Europe. Research and development expenses
decreased 14% due to completion of major projects in fiscal
1995.
Other expense in the first quarter of fiscal 1996 and fiscal
1995 included approximately $425,000 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 2, 1995.
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FORM 10-Q
CAMBEX CORPORATION AND SUBSIDIARIES
For Quarter Ended: December 2, 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: January 16, 1996
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<TOTAL-LIABILITY-AND-EQUITY> 27757
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