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: April 3, 1999 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)
02451
(Zip Code)
Registrant's telephone number, including area code: (781) 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
<TABLE>
<S> <C>
CAMBEX CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
APRIL 3, 1999 AND DECEMBER 31, 1998
(UNAUDITED)
ASSETS
APRIL 3, DECEMBER 31,
1999 1998
CURRENT ASSETS:
CASH AND CASH EQUIVALENTS $ 173,013 $ 211,452
ACCOUNTS RECEIVABLE, LESS RESERVES OF
$100,000 ON APRIL 3, 1999 AND
$100,000 ON DECEMBER 31, 1998 591,235 514,335
CURRENT PORTION OF INVESTMENT IN SALES TYPE LEASES 10,409 25,820
INVENTORIES 509,681 303,720
PREPAID TAXES - -
PREPAID EXPENSES 60,600 75,852
TOTAL CURRENT ASSETS $1,344,938 $1,128,179
LEASED EQUIPMENT,AT COST, NET OF ACCUMULATED
DEPRECIATION OF $208,000 ON APRIL 3, 1999
AND $208,000 ON DECEMBER 31, 1998 $ - $ -
PROPERTY AND EQUIPMENT, AT COST:
MACHINERY AND EQUIPMENT $3,047,594 $3,044,199
FURNITURE AND FIXTURES 247,173 247,173
LEASEHOLD IMPROVEMENTS 602,092 602,092
$3,896,859 $3,893,464
LESS-ACCUMULATED DEPRECIATION AND AMORTIZATION 3,618,333 3,585,441
NET PROPERTY AND EQUIPMENT $ 278,526 $ 308,023
OTHER ASSETS
TECHNOLOGY LICENSE/MARKETING AGREEMENT,
NET OF ACCUMULATED AMORTIZATION OF $8,500,000
ON APRIL 3, 1999 and DECEMBER 31, 1998 $ - $ -
OTHER 37,830 37,830
TOTAL ASSETS $1,661,294 $1,474,032
</TABLE>
-2-
<TABLE>
<S> <C>
CAMBEX CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
APRIL 3, 1999 AND DECEMBER 31, 1998
(UNAUDITED)
LIABILITIES AND STOCKHOLDERS' INVESTMENT
APRIL 3, DECEMBER 31,
1999 1998
CURRENT LIABILITIES:
REVOLVING LINE OF CREDIT $ 458,869 $ 393,424
ACCOUNTS PAYABLE 465,346 408,841
OBLIGATIONS FOR TRADE-IN MEMORY 360,250 360,250
OTHER LIABILITIES-SHORT TERM 1,554,586 1,146,168
ACCRUED EXPENSES 395,048 394,039
TOTAL CURRENT LIABILITIES 3,234,099 2,702,722
LONG TERM NOTES 1,063,730 1,063,730
OTHER LIABILITIES-LONG TERM 2,726,808 3,173,007
DEFERRED REVENUE 255,366 255,366
STOCKHOLDERS' INVESTMENT:
PREFERRED STOCK, $1.00 PAR VALUE PER SHARE
AUTHORIZED-3,000,000 SHARES
ISSUED-NONE
COMMON STOCK, $0.10 PAR VALUE PER SHARE-
AUTHORIZED-25,000,000 SHARES
ISSUED-11,072,582 SHARES ON APRIL 3, 1999 AND
11,072,582 SHARES ON DECEMBER 31, 1998 $1,107,258 $ 1,107,258
CAPITAL IN EXCESS OF PAR VALUE 15,967,225 15,966,625
ACCUMULATED OTHER COMPREHENSIVE INCOME 88,134 88,134
RETAINED EARNINGS (DEFICIT) (21,926,560) (22,028,044)
LESS-COST OF SHARES HELD IN TREASURY-
1,534,356 ON APRIL 3, 1999 AND
ON DECEMBER 31, 1998 (854,766) (854,766)
TOTAL STOCKHOLDERS' INVESTMENT $(5,618,709) $(5,720,739)
TOTAL LIABILITIES AND STOCKHOLDERS' INVESTMENT $ 1,661,294 $ 1,474,032
</TABLE>
-3-
<TABLE>
<S> <C>
CAMBEX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
FOR THE THREE MONTHS ENDED
APRIL 3, 1999 AND APRIL 4, 1998
(UNAUDITED)
FOR THE THREE MONTHS ENDED
APRIL 3, APRIL 4,
1999 1998
REVENUES $ 1,390,148 $ 909,008
COST OF SALES 624,917 862,510
GROSS PROFIT 765,231 46,498
OPERATING EXPENSES:
RESEARCH AND DEVELOPMENT $ 311,728 $ 435,228
SELLING 182,370 280,122
GENERAL AND ADMINISTRATIVE 148,782 207,734
$ 642,880 $ 923,084
OPERATING INCOME (LOSS) $ 122,351 $ (876,586)
OTHER INCOME(EXPENSE):
INTEREST EXPENSE (35,000) $ 0
INTEREST INCOME 323 1,255
OTHER INCOME(EXPENSE) 13,810 (114,387)
INCOME(LOSS) BEFORE INCOME TAXES $ 101,484 $(989,718)
CREDIT (PROVISION) FOR INCOME TAXES - -
NET INCOME (LOSS) $ 101,484 $(989,718)
OTHER COMPREHENSIVE INCOME, NET OF TAX:
FOREIGN CURRENCY TRANSLATION ADJUSTMENTS - 68,971
TOTAL COMPREHENSIVE INCOME (LOSS) $ 101,484 $(920,747)
TOTAL COMPREHENSIVE INCOME (LOSS)
PER COMMON SHARE $ 0.01 $ (0.10)
WEIGHTED AVERAGE COMMON AND COMMON
EQUIVALENT SHARES OUTSTANDING 9,500,000 9,100,000
</TABLE>
-4-
<TABLE>
<S> <C>
CAMBEX CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED
APRIL 3, 1999 AND APRIL 4, 1998
APRIL 3, APRIL 4,
1999 1998
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income (Loss) $ 101,484 $ (989,718)
Adjustments to reconcile net income(loss) to
net cash provided by (used in) operating activities:
Depreciation and amortization $ 32,892 $ 81,517
Amortization of prepaid expenses 8,422 24,892
Common stock issued in lieu of cash - -
Changes in assets and liabilities:
Decrease(increase) in accounts receivable (76,900) 537,866
Decrease(increase) in inventory (205,961) 305,634
Decrease in investment in sales-type leases 15,411 14,479
Decrease in prepaid taxes - -
Decrease(increase) in prepaid expenses 4,430 (40,979)
Decrease in other assets - -
Increase(decrease) in accounts payable 56,505 (130,321)
Increase in obligations for trade-in memory - -
Increase(decrease) in accrued expenses 1,009 105,859
Increase(decrease) in deferred revenue - -
Increase(decrease) in liabilities subject to compromise - (36,507)
Increase(decrease) in other liabilities (37,781) -
Total adjustments $ (201,973) $ 862,440
Net cash used in operating activities $ (100,489) $ (127,278)
CASH FLOWS FROM INVESTING ACTIVITIES:
Sales (purchases) of Equipment (3,395) 11,000
Net cash provided by (used in) investing activities $ (3,395) $ 11,000
CASH FLOWS FROM FINANCING ACTIVITIES:
Borrowings(payments)under revolving line of credit$ 65,445 -
Proceeds from sale of common stock - 6,464
Net cash provided by (used in) financing activities $ 65,445 $ 6,464
Effect of exchange rate changes on cash $ - $ 68,971
Net increase (decrease) in cash and cash equivalents $ (38,439) $ (40,843)
Cash and cash equivalents at beginning of period $ 211,452 $ 476,246
Cash and cash equivalents at end of period $ 173,013 $ 435,403
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest $ - $ -
Income Taxes - -
</TABLE>
-5-
FORM 10-Q
CAMBEX CORPORATION AND SUBSIDIARIES
For The Quarter Ended: April 3, 1999 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, relating to
reinstallation of IBM memory and maintenance.
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:
April 3, December 31,
1999 1998
Raw materials $ 357,004 $ 228,524
Work-in-process 48,963 51,215
Finished goods 185,268 23,981
$ 509,681 $ 303,720
- 6 -
FORM 10-Q
CAMBEX CORPORATION AND SUBSIDIARIES
For The Quarter Ended: April 3, 1999 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 first quarter ended April 3, 1999 increased
53% from the comparable three months of the prior year due
to increased sales of the Company's disk storage and Fibre Channel
connectivity products.
The gross profit of 55% for the first quarter of 1999 was higher
than the 5% achieved in 1998 due to product mix and to the
relative amount of fixed costs in relation to increased revenues.
Operating expenses for the three months ended April 3, 1999
decreased 30% from the comparable three months of the prior year
due principally to the cost savings achieved from outsourcing
certain activities.
- 7 -
FORM 10-Q
CAMBEX CORPORATION AND SUBSIDIARIES
For The Quarter Ended: April 3, 1999 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/ Peter J. Kruy
Peter J. Kruy
Chief Financial Officer
Dated: May 17, 1999
- 8 -
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1999
<PERIOD-END> APR-03-1999
<CASH> 173
<SECURITIES> 0
<RECEIVABLES> 691
<ALLOWANCES> 100
<INVENTORY> 510
<CURRENT-ASSETS> 1345
<PP&E> 3897
<DEPRECIATION> 3618
<TOTAL-ASSETS> 1661
<CURRENT-LIABILITIES> 3234
<BONDS> 0
0
0
<COMMON> 1107
<OTHER-SE> (6726)
<TOTAL-LIABILITY-AND-EQUITY> 1661
<SALES> 1390
<TOTAL-REVENUES> 1390
<CGS> 625
<TOTAL-COSTS> 625
<OTHER-EXPENSES> (14)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 35
<INCOME-PRETAX> 101
<INCOME-TAX> 0
<INCOME-CONTINUING> 101
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 101
<EPS-PRIMARY> 0.01
<EPS-DILUTED> 0.01
</TABLE>
