This form has been amended to update the MD&A
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QA
[X] Quarterly Report Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
For Quarterly Period Ended July 31, 1996
OR
[ ] Transition Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the Transition Period From ------------------ to ------------------
Commission File Number 2-33108
ACCESS CORPORATION
(Exact name of registrant as specified in its charter)
Ohio 31-0673364
-------------------------------------- ---------------------------
(State or other jurisdiction of incorporation) (I.R.S.Employer Id Number)
4350 Glendale-Milford Road, Suite 250, Cincinnati, Ohio 45242-3700
- -------------------------------------------------------- -------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number including area code (513)786-8350
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
----- -------
Indicate the number of shares outstanding of each of the
issuer's classes of common shares, as of July 31, 1996.
Common Stock, no par value: 4,865,559 shares.
<PAGE>
PART I. FINANCIAL INFORMATION
ACCESS CORPORATION
BALANCE SHEETS
ASSETS
July 31, April 30,
1996 1996
CURRENT ASSETS:
Cash $ 1,773,715 $ 2,071,772
Accounts Receivable, Less
Allowances for Doubtful Accounts
of $328,612 in July 1996 and
$189,685 in April 1996 1,947,553 1,890,673
Inventories
Raw Materials and Purchase Parts 54,283 64,553
Work - in - Process 97,715 102,900
Finished Goods 18,307 21,057
--------- -----------
170,305 188,510
Prepaid Expenses 133,740 106,283
Deferred Income Tax Benefit 112,000 112,000
TOTAL CURRENT ASSETS ---------- -----------
4,137,313 4,369,238
EQUIPMENT AND LEASEHOLD IMPROVEMENTS
Computer Hardware & Software 1,475,810 1,449,310
Machinery and Equipment 503,337 503,337
Office and Service Equipment 371,195 364,492
Leasehold Improvements 13,405 13,405
Tools, Dies and Fixtures 115,013 115,013
----------- -----------
2,478,760 2,445,557
Less Accumulated Depreciation (2,219,527) (2,187,785)
------------ -----------
259,233 257,772
COMPUTER SOFTWARE COSTS 900,497 1,068,923
DEFERRED INCOME TAX BENEFIT 545,700 545,700
----------- ------------
TOTAL ASSETS $5,842,743 $6,241,633
SEE NOTES TO CONDENSED FINANCIAL STATEMENTS
<PAGE>
ACCESS CORPORATION
BALANCE SHEETS
LIABILITIES AND STOCKHOLDERS' EQUITY
July 31, April 30,
CURRENT LIABILITIES 1996 1996
---------- ----------
Accounts Payable $ 213,509 $ 285,703
Accrued Salaries, Wages and
Commissions 141,829 367,282
Accrued Taxes 24,660 22,400
Accrued Warranty Expense 4,500 -
Capital Leases - Current 11,900 19,599
Other Accrued Liabilities 94,101 49,385
Accrued Royalty 388,720 291,192
Advances from Customers 300,400 408,460
---------- ------------
TOTAL CURRENT LIABILITIES 1,179,619 1,444,021
PREPAID MAINTENANCE CONTRACT REVENUE 614,246 609,078
MANDATORILY REDEEMABLE PREFERRED
STOCK 1,500,000 1,500,000
Accrued Preferred Dividends 102,510 102,510
STOCKHOLDERS' EQUITY
Capital Stock
Common Stock, No Par Value,
Authorized 8,000,000 Shares,
Issued and Outstanding
4,881,829 Shares 488,183 488,183
Additional Paid-In Capital 10,657,652 10,657,652
Deficit from April 1, 1985 (8,684,084) (8,544,428)
16,270 Common Stock Shares In
Treasury, at Cost (15,383) (15,383)
-------------- -------------
TOTAL STOCKHOLDERS' EQUITY 2,446,368 2,586,024
TOTAL LIABILITIES AND
STOCKHOLDERS'EQUITY 5,842,743 6,241,633
SEE NOTES TO CONDENSED FINANCIAL STATEMENTS
<PAGE>
ACCESS CORPORATION
STATEMENT OF OPERATIONS
Three Months Ended
July 31,
1996 1995
REVENUE
System Sales $ 593,969 216,061
Service & Service Depot 1,081,382 1,141,210
----------- ----------
Total 1,675,351 1,357,271
COST OF REVENUE
System Sales, exclusive of amortization
shown seperatly below 323,411 151,598
Service & Service Depot 670,838 607,853
---------- ---------
Total 994,249 759,451
GROSS PROFIT BEFORE AMORTIZATION 681,102 597,820
AMORTIZATION OF COMPUTER SOFTWARE COST 168,426 168,426
GROSS PROFIT 512,676 429,394
Sales and Administrative 612,725 337,758
Engineering, Research and Development 60,315 109,289
--------- ---------
Total Costs and Expenses 673,040 447,047
LOSS FROM OPERATIONS (160,364) (17,653)
OTHER INCOME (EXPENSE)
Interest Income 21,835 12,414
Other Income (31) 66
Interest Expense (1,032) (2,176)
Other (65) (7,723)
---------- ---------
NET LOSS BEFORE INCOME TAXES (139,657) (15,072)
INCOME TAXES - -
NET LOSS (139,657) (15,072)
PREFERRED DIVIDEND - -
LOSS APPLICABLE TO COMMON SHARES $(139,657) $(15,072)
PER COMMON SHARE AND COMMON SHARE
EQUIVALENTS
Net loss $ (0.03) $ (0.00)
SEE NOTES TO CONDENSED FINANCIAL
STATEMENTS
<PAGE>
ACCESS CORPORATION
STATEMENTS OF CASH FLOW
Three Months Ended
July 31,
1996 1995
CASH FLOW FROM:
OPERATING ACTIVITIES
Net (Loss) $(139,657) $(15,072)
Adjustments to Reconcile Net Earnings
To Net Cash Used in Operations:
Depreciation 31,742 33,760
Amortization 168,426 168,426
Deferred Income Tax - -
(Gain) Loss on Sale of Fixed
Asset - 7,377
Changes in Assets and Liabilities
Accounts Receivable (56,880) 291,313
Inventories 18,205 (33,846)
Prepaid Expenses (27,457) (83,210)
Accounts Payable (72,194) 132,895
Accrued Liabilities (173,977) (65,516)
Accrued Royalties 97,528 (749)
Advances From Customers (108,060) 8,223
Prepaid Maintenance Contract
Revenue 5,169 63,715
------------ -----------
NET CASH PROVIDED BY OPERATING ACTIVITIES (257,155) 507,316
INVESTING ACTIVITIES:
Capital Additions (33,203) (12,045)
Acquisition of business, net of cash
received - (148,629)
----------- ------------
NET CASH (USED IN) INVESTING
ACTIVITIES (33,203) (160,674)
FINANCING ACTIVITIES-Payments on Capital
Leases
Payments on Capital Leases (7,699) (13,508)
------------- -----------
(7,699) (13,508)
NET CHANGE IN CASH (298,057) 333,134
CASH, Beginning of the Year 2,071,772 883,487
------------- -------------
CASH, July 31, 1996 and 1995 $1,773,715 $1,216,621
SEE NOTES TO CONDENSED FINANCIAL STATEMENTS
<PAGE>
ACCESS CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS
JULY 31, 1996
NOTE A - Condensed Financial Statements
The condensed balance sheet as of July 31, 1996, the
condensed statement of earnings for the three month
periods ended July 31, 1996 and 1995, and the condensed
statements of cash flows for the three month periods ended
July 31, 1996 and 1995, have been prepared by the Company
without audit. These financial statements reflect all
adjustments which are, in the opinion of management,
necessary to a fair statement of the results for the interim
periods presented. All adjustments made during the quarter
ended July 31, 1996 are of a normal recurring nature.
Certain information and footnote disclosures normally
included in financial statements prepared in accordance with
generally accepted accounting principles have been omitted.
It is suggested that these condensed financial statements be
read in conjunction with the financial statements and notes
thereto included in the Company's annual report on Form 10-K
for the year ended April 30, 1996. The results of
operations for the period, ended July 31, 1996 are not
necessarily indicative of the operating results for the full
year.
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS:
The Company has two primary lines of business. Over the
years the Company has built a substantial, continuing field
maintenance service business. This business services, on a
nationwide basis, hardware and, on a national and
international basis, software for the Company's installed
base of customers and third parties. The Company is also a
leader in the sale of Electronic Document Management Systems
(EDMS) software systems. In this line of business, the
Company develops and markets software solutions for its
customers' technical processes. EDMS has the potential for
substantial growth in revenue and profits in that it serves
a potentially large, worldwide market opportunity.
Fiscal year 1997 first quarter revenue of $1.7 million was
up $318,100 (23%) compared with the first quarter of fiscal
1996. Service revenue of $1.1 million decreased $59,800
(5%) compared with the first quarter of fiscal 1996. This
decrease in revenue occurred in Hardware Service as the
result of the loss of micrographic product lines being
replaced with current technology. EDMS revenue of $594,000
increased $377,900 (175%) compared with the first quarter of
fiscal 1996. The major contributor of this increase was due
to the acquisition of CimSoft Incorporated on July 31, 1995.
The Company's current backlog of orders is $2.05 million
compared to $2.07 million at the end of the three months
ended July 31, 1995. Current EDMS backlog of $497,000 is
53% lower than that at the same date last year. This
decrease in backlog is the result of the Company delivering
a majority of its UNIX orders and cancellation of a large
AS/400 systems order over the past year. Service backlog
of $1.6 million was 54% higher at July 31, 1996 compared
with July 31, 1995. This increase in backlog was due to the
increase in orders for Cimage software support, which the
company began selling with the acquisition of CimSoft Inc.
on July 31, 1995. This Service backlog is expected to be
delivered within the next twelve months.
Gross Margin for the first quarter ended July 31, 1996 of
31% was the same as that of that for the comparable
period in fiscal 1996. EDMS gross margin before amortization
for the first quarter of fiscal 1997 was 46%, which was an
increase from the first quarter of fiscal 1996 level of 29%.
EDMS gross margin after amortization was 17% , compared to
(49%) for the same period last year. In the first quarter of
fiscal 1996 the Company sold a substantial amount of low
margin hardware as well as an increase in third party
hardware support. Service gross margin of 38% for the period
ended July 31, 1996 decreased from 47% for the period ended
July 31, 1995. This decrease in gross margin is the result
of the CimSoft acquisition. The Cimage software maintenance
requires the Company to pay a royalty to the proprietor of
the Cimage software.
Selling and administrative expenses of $351,200 for the
first quarter of fiscal 1997 were $243,500 (226%) higher
than the first quarter of fiscal 1996. Selling expenses
increased due to the additional sales personnel and the
acquisition of a sales office in California which Access acquired
with the purchase of CimSoft. The Company will continue to grow
the sales operation to take advantage of the sales
opportunities resulting from acquiring the exclusive distribution rights in
North America for the Cimage product line. Administrative expenses of
$261,500 have increased $35,400 due to the spending for Business
Development. This expense funds outside activity in the search for
attractive acquisition candidates.
Engineering, research and development expenses are incurred
for maintaining, upgrading and developing new products. The
first quarter expense for engineering, research and
development of $60,300 decreased $46,400 (43%) from the
first quarter of last fiscal year. This decrease is
primarily due to the fact that more time is being spent on
inventory projects versus development projects, as well as
decreases in expenses for depreciation and occupancy
charges. In fiscal 1996, the Company reported the over/under
absorption for Installations Management/ Professional
Services as a cost to Research and Development. In fiscal 1997
the over/under absorption of this department will be charge to
cost of sales.
Interest income for the first quarter ended July 31, 1996
was $20,803 compared with $10,238 for the first quarter
ended July 31, 1995. Interest income for fiscal 1997 and
1996 was primarily the interest received on cash being
invested in short term investments.
LIQUIDITY AND CAPITAL RESOURCES
During the first three months of fiscal 1997, the Company
decreased its cash balance by $298,100 leaving $1,773,700 in cash.
The Company incurred a loss of $140,000 which was offset by non-cash charges
for amortization and depreciation of $168,400 and $31,700, respectively.
This resulted in a positive operating cash of $60,100. The Company
invested $40,900 for capital and capital leases which resulted in a net
cash flow from operations of $19,200. The Company reduced accrued wages
and customer advances $170,500 and $108,100, respectively.
Accrued Royalties increased $97,500 since April 30, 1996.
The major contributor for this increase was the accrual of
royalties to Cimage Enterprise Systems for software sold in
Fiscal 1997.
On large customer orders there are provisions for progress
payments to be made by customers based on predetermined
events. These advances decreased approximately $108,100
since April 30, 1996.
Working capital on July 31, 1996 was approximately
$2,957,700, which is $327,500 higher than the April 30, 1996
level. This primarily was the result of reductions in
accruals for wages, royalties and prepaid expenses.
The Company's operations are structured so that revenues
from its ongoing service business, in combination with the
sale of new Cimage , AS/400 and UNIX products are expected
to provide the cash flow required in excess of that required
to maintain the Company's operations.
<PAGE>
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.
ACCESS CORPORATION
Date: August 30, 1996 /s/ Newton D. Baker
-------------------------
Newton D. Baker
Executive Vice President
Date: August 30, 1996 /s/ Barbara A. Sommer
-------------------------
Barbara A. Sommer
Assistant Treasurer & Chief Accounting Officer
<PAGE>
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.
ACCESS CORPORATION
Date: August 30, 1996 NEWTON D. BAKER
-----------------------------
Newton D. Baker
Executive Vice President
Date: August 30, 1996 BARBARA A. SOMMER
------------------------------
Barbara A. Sommer
Assistant Treasurer & Chief Accounting Officer
<PAGE>
EXHIBIT INDEX
(11) Statement re-computation of per share earnings
(a) The calculation of net earnings per common
share and common share equivalent for three month periods
ended July 31, 1996 and 1995 is attached as Exhibit 11(a).
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> APR-30-1997
<PERIOD-END> JUL-31-1996
<CASH> 1,773,715
<SECURITIES> 0
<RECEIVABLES> 1,947,553
<ALLOWANCES> 328,612
<INVENTORY> 170,305
<CURRENT-ASSETS> 4,137,313
<PP&E> 2,478,760
<DEPRECIATION> (2,219,527)
<TOTAL-ASSETS> 5,842,743
<CURRENT-LIABILITIES> 1,179,619
<BONDS> 0
1,500,000
0
<COMMON> 488,183
<OTHER-SE> 0
<TOTAL-LIABILITY-AND-EQUITY> 5,842,743
<SALES> 1,675,351
<TOTAL-REVENUES> 1,675,351
<CGS> 994,249
<TOTAL-COSTS> 1,162,675
<OTHER-EXPENSES> 20,707
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,032
<INCOME-PRETAX> (139,657)
<INCOME-TAX> 0
<INCOME-CONTINUING> (139,657)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (139,657)
<EPS-PRIMARY> (0.03)
<EPS-DILUTED> (0.03)
</TABLE>
Exhibit 11(a)
ACCESS CORPORATION
CALCULATION OF NET EARNINGS PER COMMON SHARE
AND COMMON SHARE EQUIVALENT
Three Months Ended
July 31,
1996 1995
NET EARNINGS APPLICABLE TO COMMON SHARES
AND COMMON SHARE EQUIVALENTS:
Net Earnings $(139,657) $(15,072)
Preferred Dividend - -
Net Earnings Applicable to Common
Shares and Common Share
Equivalents $(139,657) $(15,072)
CALCULATION OF PRIMARY NET EARNINGS PER
COMMON SHARE AND COMMON SHARE
EQUIVALENTS:
Average Number of Common Shares
and Common Share Equivalents
Outstanding 4,865,559 4,865,559
PRIMARY NET EARNINGS PER COMMON SHARE AND
COMMON SHARE EQUIVALENT:
Net Earnings per Common Share and
Common Share Equivalents after
Discontinued Operations $ (0.03) $ (0.00)
a) Common Share Equivalents have not been included as their inclusion
would be anti-dilutive or dilution is less than 3%
