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Previous: BRUSH WELLMAN INC, 10-Q, 1996-05-08 |
Next: CDI CORP, 10-Q, 1996-05-08 |
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 the Quarter Ended: March 30, 1996 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>
CAMBEX CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
MARCH 30, 1996 AND DECEMBER 31, 1995
(UNAUDITED)
ASSETS
<TABLE>
<S> <C>
MARCH 30, DECEMBER 31,
1996 1995
------------- -------------
CURRENT ASSETS:
CASH AND CASH EQUIVALENTS $ 1,881,512 $ 588,322
ACCOUNTS RECEIVABLE, LESS RESERVES OF
$135,000 ON MARCH 30, 1996 AND
$136,000 ON DECEMBER 31, 1995 3,056,205 2,628,778
CURRENT PORTION OF INVESTMENT IN SALES-TYPE LEASES,
NET OF UNEARNED INTEREST INCOME OF $39,000 ON
MARCH 30, 1996 AND $31,000 ON DECEMBER 31, 1995 296,255 393,284
INVENTORIES 10,583,542 12,030,324
PREPAID TAXES 6,388,377 6,388,659
PREPAID EXPENSES 160,280 178,991
-------------- --------------
TOTAL CURRENT ASSETS $ 22,366,171 $ 22,208,358
-------------- --------------
LONG-TERM INVESTMENT IN SALES-TYPE LEASES, NET
OF UNEARNED INTEREST INCOME OF $16,000 ON
MARCH 30, 1996 AND $19,000 ON DECEMBER 31, 1995 $ 341,275 $ 362,992
LEASED EQUIPMENT, AT COST, NET OF ACCUMULATED
DEPRECIATION OF $166,000 ON MARCH 30, 1996
AND $245,000 ON DECEMBER 31, 1995 $ 278,428 $ 300,174
PROPERTY AND EQUIPMENT, AT COST:
MACHINERY AND EQUIPMENT $ 7,329,510 $ 7,257,673
FURNITURE AND FIXTURES 297,517 303,428
LEASEHOLD IMPROVEMENTS 606,454 606,454
-------------- --------------
$ 8,233,481 $ 8,167,555
LESS - ACCUMULATED DEPRECIATION AND AMORTIZATION 6,869,534 6,706,326
-------------- --------------
NET PROPERTY AND EQUIPMENT $ 1,363,947 $ 1,461,229
OTHER ASSETS
TECHNOLOGY LICENSE/MARKETING AGREEMENT,
NET OF ACCUMULATED AMORTIZATION OF $7,083,000
ON MARCH 30, 1996 AND $6,658,000 ON DECEMBER 31, 1995 $ 1,416,670 $ 1,841,671
OTHER 37,860 37,875
-------------- --------------
TOTAL ASSETS $ 25,804,351 $ 26,212,299
============== ==============
</TABLE>
-2-
<PAGE>
CONSOLIDATED BALANCE SHEETS
MARCH 30, 1996 AND DECEMBER 31, 1995
(UNAUDITED)
LIABILITIES AND STOCKHOLDERS' INVESTMENT
<TABLE>
<S> <C>
MARCH 30, DECEMBER 31,
1996 1995
------------- --------------
CURRENT LIABILITIES:
REVOLVING CREDIT AGREEMENT $ 3,200,000 $ 3,200,000
ACCOUNTS PAYABLE 4,799,057 4,538,852
OBLIGATIONS FOR TRADE-IN MEMORY 2,153,767 1,939,657
ACCRUED EXPENSES 3,628,092 3,717,691
------------- --------------
TOTAL CURRENT LIABILITIES $ 13,780,916 $ 13,396,200
------------- --------------
DEFERRED REVENUE $ 1,036,547 $ 917,087
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 - 10,478,470 SHARES ON MARCH 30, 1996 AND
10,452,987 SHARES ON DECEMBER 31, 1995 $ 1,047,885 $ 1,045,299
CAPITAL IN EXCESS OF PAR VALUE 15,584,063 15,446,004
CUMULATIVE TRANSLATION ADJUSTMENT 223,027 287,763
RETAINED EARNINGS (DEFICIT) (5,013,321) (4,025,288)
LESS - COST OF SHARES HELD IN TREASURY -
1,534,356 ON MARCH 30, 1996 AND
1,534,356 ON DECEMBER 31, 1995 (854,766) (854,766)
------------- --------------
TOTAL STOCKHOLDERS' INVESTMENT $ 10,986,888 $ 11,899,012
------------- --------------
TOTAL LIABILITIES AND STOCKHOLDERS' INVESTMENT $ 25,804,351 $ 26,212,299
============= ==============
</TABLE>
-3-
<PAGE>
<TABLE>
<S> <C>
CAMBEX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
FOR THE THREE MONTHS ENDED
MARCH 30, 1996 AND MARCH 4, 1995
(UNAUDITED)
FOR THE THREE MONTHS ENDED
MARCH 30, MARCH 4,
1996 1995
------------ ------------
REVENUES $ 8,019,681 $ 10,511,618
COST OF SALES 4,481,745 5,892,428
------------ -------------
GROSS PROFIT $ 3,537,936 $ 4,619,190
OPERATING EXPENSES:
RESEARCH AND DEVELOPMENT $ 1,166,448 $ 1,673,059
SELLING 2,042,147 2,136,905
GENERAL AND ADMINISTRATIVE 699,993 703,940
------------ -------------
$ 3,908,588 $ 4,513,904
------------ -------------
OPERATING INCOME (LOSS) $ (370,652) $ 105,286
OTHER INCOME (EXPENSE):
INTEREST EXPENSE $ (70,255) $ (76,854)
INTEREST INCOME 26,464 18,888
OTHER INCOME (EXPENSE) (573,590) 211,724
------------ -------------
INCOME (LOSS) BEFORE INCOME TAXES $ (988,033) $ 259,044
CREDIT (PROVISION) FOR INCOME TAXES $ - $ (103,000)
------------ -------------
NET INCOME (LOSS) $ (988,033) $ 156,044
============ =============
NET INCOME (LOSS) PER COMMON SHARE $ (0.11) $ 0.02
============ =============
WEIGHTED AVERAGE COMMON AND COMMON
EQUIVALENT SHARES OUTSTANDING 8,940,000 8,675,000
</TABLE>
-4-
<PAGE>
<TABLE>
<S> <C>
CAMBEX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED
MARCH 30, 1996 AND MARCH 4, 1995
FOR THE THREE MONTHS ENDED
MARCH 30, MARCH 4,
1996 1995
------------ -------------
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $ (988,033) $ 156,044
Adjustments to reconcile net income (loss) to
net cash provided by operating activities:
Depreciation and amortization $ 614,403 $ 660,342
Amortization of prepaid expenses 7,037 7,712
Common stock issued in lieu of cash 110,938 365,148
Change in assets and liabilities:
Increase in accounts receivable (427,427) (1,281,438)
Decrease in inventory 1,446,782 1,239,058
Decrease in investment in sales-type leases 118,746 102,562
Decrease in prepaid taxes 282 805,407
Decrease (increase) in prepaid expenses 11,674 (107,715)
Decrease in other assets 15 16
Increase in accounts payable 260,205 235,532
Increase in obligations for trade-in memory 214,110 315,000
Decrease in accrued liabilities (89,599) (1,420,771)
Increase in deferred revenue 119,460 659,876
------------- -------------
Total adjustments $ 2,386,626 $ 1,580,729
------------- -------------
Net cash provided by operating activities $ 1,398,593 $ 1,736,773
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of Equipment (70,374) (85,649)
------------ -------------
Net cash used in investing activities $ (70,374) $ (85,649)
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of notes payable $ - - $ (68,200)
Proceeds from sale of common stock 29,707 1,021
Net borrowings (repayments) under revolving credit agreement - - (1,000,000)
------------- -------------
Net cash provided by (used in) financing activities $ 29,707 $ (1,067,179)
Effect of exchange rate changes on cash (64,736) (30,122)
------------ -------------
Net increase in cash and cash equivalents $ 1,293,190 $ 553,823
Cash and cash equivalents at beginning of period $ 588,322 $ 1,584,089
------------- -------------
Cash and cash equivalents at end of period $ 1,881,512 $ 2,137,912
============= =============
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ 70,255 $ 100,346
Income Taxes - - 4,758
</TABLE>
-5-
<PAGE>
FORM 10-Q
CAMBEX CORPORATION AND SUBSIDIARIES
For The Quarter Ended: March 30, 1996 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:
March 30, December 31,
1996 1995
Raw materials $1,985,191 $ 2,600,433
Work-in-process 1,111,712 1,017,749
Finished goods 5,619,139 7,097,086
Trade-in memory 1,867,500 1,315,056
$10,583,542 $12,030,324
- 6 -
<PAGE>
FORM 10-Q
CAMBEX CORPORATION AND SUBSIDIARIES
For The Quarter Ended: March 30, 1996 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 three months ended March 30, 1996 decreased
24% from the comparable three months of the prior year due
principally to decreased sales of the Company's client/server
products.
Operating expenses for the three months ended March 30, 1996
decreased 13% from the comparable three months of the prior
year due principally to the cost savings achieved through a
work force reduction and other expense controls put in place.
Research and development expenses decreased 30% due to
completion of major projects in fiscal 1995.
Other expense for the three months ended March 30, 1996
included approximately $425,000 in amortization expenses
relating to the Company's technology license/marketing
agreement. Other income (expense) in the three months ended
March 4, 1995, included a reversal of an overaccrual of the
Company match on the Company's 401(k) profit sharing retirement
plan of $400,000, favorable European exchange rates of $150,000
and sale of excess inventory of $75,000, partially offset by
$425,000 in amortization expenses relating to the Company's
technology license/marketing agreement.
The Company's present operating plans indicate that cash flow
generated from operations will be adequate to meet its
obligations.
- 7 -
<PAGE>
FORM 10-Q
CAMBEX CORPORATION AND SUBSIDIARIES
For The Quarter Ended: March 30, 1996 Commission File: 0-6933
Notes & Comments (Continued):
Subsequent to the end of the first quarter, the Company agreed
with its Bank to extend and modify its Revolving Credit
Agreement dated April 15, 1993, as amended as of August 31,
1994. Under the terms of the Modification Agreement, the
current loan, which was $3,200,000 as of the end of the first
quarter, is termed out as follows: After an initial payment of
$320,000, the Company will pay $120,000 monthly for a period of
twenty-four months. When the Company receives its anticipated
tax refund from the Internal Revenue Service for the fiscal
years 1991 to 1994, the Company will apply such refund against
the loan principal, thereby reducing the term out period.
Interest on the indebtedness will be paid monthly at the
aggregate of the Bank's Base Rate, approximately the "Prime
Rate", plus one percent, currently aggregating to 9.25%.
The Company granted to its Bank a security interest in the
Company's accounts receivable, inventory and general
intangibles.
- 8 -
<PAGE>
FORM 10-Q
CAMBEX CORPORATION AND SUBSIDIARIES
For The Quarter Ended: March 30, 1996 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: May 8, 1996
- 9 -
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-30-1996
<CASH> 1882
<SECURITIES> 0
<RECEIVABLES> 3191
<ALLOWANCES> 135
<INVENTORY> 10584
<CURRENT-ASSETS> 22366
<PP&E> 8233
<DEPRECIATION> 6870
<TOTAL-ASSETS> 25804
<CURRENT-LIABILITIES> 13781
<BONDS> 0
0
0
<COMMON> 1048
<OTHER-SE> 9939
<TOTAL-LIABILITY-AND-EQUITY> 25804
<SALES> 8020
<TOTAL-REVENUES> 8020
<CGS> 4482
<TOTAL-COSTS> 4482
<OTHER-EXPENSES> 4456
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 70
<INCOME-PRETAX> (988)
<INCOME-TAX> 0
<INCOME-CONTINUING> (988)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (988)
<EPS-PRIMARY> (0.11)
<EPS-DILUTED> (0.11)
</TABLE>
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