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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1995
Commission File Number 0-4748
Data Dimensions, Inc.
(Exact name of registrant as specified in its charter)
Delaware 06-0852458
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) Identification no.)
777 - 108th Avenue N.E., Suite 2070, Bellevue, WA 98004
(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code (206) 688-1000
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 by check whether the registrant has filed all documents and
reports required to be filed by Section 12, 13 or 15 (d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a
plan confirmed by a court. YES NO
Indicate the number of shares outstanding of each of the issuers classes
of common stock, as of the latest practical date
Common Stock, $.01 Par Value - 6,904,464 shares as of October 27, 1995
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PART I - FINANCIAL INFORMATION
DATA DIMENSIONS, INC.
CONDENSED BALANCE SHEETS
(Unaudited)
<CAPTION>
ASSETS September 30, December 31,
1995 1994
<S> <C> <C>
CURRENT ASSETS:
Cash $15,900 $42,100
Accounts receivable, less
allowance for doubtful accounts
of $2,500 in 1995 and 1994 976,100 683,200
Due from officer 0 123,800
Other assets 75,800 47,800
Total Current Assets 1,067,800 896,900
EQUIPMENT, FURNITURE AND LEASEHOLD
IMPROVEMENTS
Computers and equipment 140,100 120,700
Furniture 15,800 11,500
Leasehold improvements 21,500 7,000
177,400 139,200
Less accumulated depreciation 86,100 63,900
EQUIPMENT AND FURNITURE, NET 91,300 75,300
$1,159,100 $972,200
<FN>
The accompanying notes to the financial statements are an integral part
of these balance sheets
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DATA DIMENSIONS, INC.
CONDENSED BALANCE SHEETS
(Unaudited)
<CAPTION>
LIABILITIES AND STOCKHOLDERS' (DEFICIT) September 30, December 31,
1995 1994
<S> <C> <C>
CURRENT LIABILITIES:
Accounts payable $77,700 $57,600
Accrued compensation 157,900 196,200
Advances from factor 514,400 510,500
Advance billing 802,100 829,100
Dividends payable 35,000 70,000
Accrued and withheld payroll taxes 80,400 169,800
Accrued expenses 8,900 55,400
Notes and other payable to officers 85,400 211,000
Total Current Liabilities 1,761,800 2,099,600
STOCKHOLDERS' (DEFICIT):
Series A Preferred Stock, $.01 par value;
3,000,000 shares authorized;
none and none shares issued 0 0
Common stock, $.01 par value;
20,000,000 shares authorized;
6,904,464 and 6,515,464 shares issued 69,000 65,200
Capital in excess of par value 1,449,000 1,115,800
Accumulated deficit (2,120,800) (2,308,400)
Total Stockholders' (Deficit) (602,700) (1,127,400)
$1,159,100 $972,200
<FN>
The accompanying notes to the financial statements are an integral part
of these balance sheets
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DATA DIMENSIONS, INC.
CONDENSED STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
Three Month Period Nine Month Period
Ended September 30, Ended September 30,
1995 1994 1995 1994
<S> <C> <C>
REVENUE $1,524,000 $850,700 $3,912,000 $2,414,000
DIRECT COSTS 860,000 453,200 2,256,000 1,295,100
Gross Profit 664,000 397,500 1,656,000 1,118,900
GENERAL, ADMINISTRATIVE AND
SELLING EXPENSES 558,000 351,400 1,310,000 925,700
Income from operations 106,000 46,100 346,000 193,200
INTEREST EXPENSE 50,000 36,300 158,000 111,900
NET INCOME $ 56,000 $ 9,800 $188,000 $ 81,300
NET INCOME PER SHARE $0.01 0.00 0.03 0.01
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING 7,464,000 6,515,000 7,424,000 6,515,000
<FN>
The accompanying notes to the financial statements are an integral part of
these statements.
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DATA DIMENSIONS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
Increase (Decrease) in Cash
(Unaudited)
<CAPTION>
Nine Month Period
Ended September 30,
1995 1994
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Income $187,600 $81,300
Adjustments to reconcile net income
to net cash provided by (used in)
operating activities:
Depreciation and amortization 22,200 11,000
Changes in assets and liabilities:
Accounts receivable (292,900) (8,900)
Other assets (28,000) (47,700)
Advance billings (27,000) 341,200
Accounts payable 20,100 7,900
Accrued compensation (38,300) 56,500
Accrued and withheld payroll taxes (89,400) (94,100)
Accrued expenses (46,500) (17,300)
Net Cash Provided by (Used in) Operating
Activities (292,200) 329,900
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of equipment and furniture (23,700) (47,200)
Leasehold improvements (14,500) 0
Due from officer 123,800 0
Net Cash Provided by (Used in) Investing
Activities 85,600 (47,200)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from notes and other payables
to officers (125,600) 0
Payments on notes payable to officer 0 (300,000)
Increase in advances from factor 3,900 (55,600)
Issuance of common stock 337,100 500
Dividend payment (35,000) 0
Net Cash Provided by (Used in)
Financing Activities 180,400 (355,100)
NET CHANGE IN CASH (26,200) (72,400)
CASH, beginning of year 42,100 41,000
CASH, September 30, 1995 and
September 30, 1994 $15,900 ($31,400)
<FN>
The accompanying notes to the financial statements are an integral part
of these statements.
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DATA DIMENSIONS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
NOTE 1: GENERAL
The unaudited condensed financial statements included herein have been
prepared by the Company pursuant to the rules and regulations of the
Securities Exchange Commission. Certain information and footnote
disclosures normally included in financial statements, which are prepared
in accordance with generally accepted accounting principles, have been
condensed or omitted pursuant to such rules and regulations. The Company
believes that the condensed financial statements contain all adjustments
(consisting of normal recurring adjustments) necessary to present fairly
the financial position as of September 30, 1995, the results of operations
for the three and nine month periods ended September 30, 1995 and September
30, 1994 and cash flows for the nine month periods ended September 30, 1995
and September 30, 1994. These condensed financial statements should be read
in conjunction with the financial statements and the notes thereto for the
year ended December 31, 1994.
NOTE 2: ACCOUNTING POLICIES
Reference is made to Note l of Notes to Financial Statements in the
Company's Annual Report on Form 10K for the summary of significant
accounting policies.
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Management's Discussion and Analysis
of Financial Condition and Results of Operations
September 30, 1995
Liquidity and Capital Commitments
The Company's ability to generate cash adequate for its needs is dependent
upon revenue derived from its software and Millennium services business,
a bank line of credit and other debt or equity financing. Working capital
on September 30, 1995 was ($694,000) compared with ($1,202,700) on December
31, 1994.
The Company had borrowings of $514,400 on a Factoring Agreement with a bank
at September 30, 1995. On June 13, 1995, the Company entered into a more
favorable factoring agreement with its current factor. Borrowings are
limited to 90% of receivable purchased by the bank. A 10% reserve is
established upon the purchase of the receivable. The agreement is secured
by all Company assets. Borrowings under the line bear interest equal to 2%
per month of the average daily account balance outstanding during the
applicable reconciliation period (month end). There are no other fees. The
financing fee is deducted at the end of the month from the established 10%
reserve.
During the month of August 1995, the Company raised $300,000 from a private
placement of 300,000 shares of Common Stock. Proceeds from the issuance of
the shares were used for the Company's general working capital needs.
The Company has no material commitments for capital expenditures nor does
it anticipate entering into any such commitments in 1995. Management
believes the Company's present banking and financing arrangements are
adequate for its anticipated level of operations. However, management is
also continuing to explore alternatives in borrowing arrangements in order
to reduce cost of borrowing.
At September 30, 1995, the Company's backlog of services to be performed
amounted to $5,650,000. The stated backlog is not necessarily indicative of
the Company's sales for future periods nor is a backlog any insurance that
the Company will realize a profit from fulfilling client contracts. The
Company expects to render the services on it's backlog by increasing
consultant personnel. Management anticipates that with increased revenue
over 1994 and by increasing operating efficiency the Company's working
capital deficit will be reduced during the balance of 1995.
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Results of Operations
Revenue for the three months ended September 30, 1995 was $1,524,000 up 79%
when compared with $850,700 for the three months ended September 30, 1994.
Gross profit increased by $266,500 or 67% to $664,000 for the three months
ended September 30, 1995 from $397,500 for the same period in 1994. Revenue
for the nine months ended September 30, 1995 was $3,912,000 up 62% when
compared with $2,414,000 for the nine months ended September 30, 1994. Gross
profit increased by $537,100 or 48% to $1,656,000 for the nine months ended
September 30, 1995 from $1,118,900 for the same period in 1994. The net
increase in gross profit for the three and nine month periods ended September
30, 1995 was due to an increase in demand for the Company's millennium
services.
General, administrative and sales expenses increased by $206,000 or 58% to
$558,000 during the three months ended September 30, 1995 when compared to
the same period in 1994 and increased by $384,300 or 42% to $1,310,000 during
the nine months ended September 30, 1995 when compared to the same period in
1994. Because of increased business, administrative expenses were higher in
the three months and nine months ended September 30, 1995, due to the hiring
of employees needed to further strengthen financial controls, sales and
operations management. During the quarter ended September 30, 1995, the
Company reorganized the operations into three regions and added three
Regional Vice Presidents in order to manage the current and continued growth.
Interest expense increased during the three and nine months ended September
30, 1995 by $13,700 and $46,400, respectively, due to higher borrowings to
support the Company's growth.
The Company reported a net income of $56,000 for the three months ended
September 30, 1995 compared with a net income of $9,800 for the same period
in 1994 and a net income of $188,000 for the nine months ended September 30,
1995 compared with a net income of $81,300 for the same period in 1994.
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PART II - OTHER INFORMATION
ITEM 5 - OTHER INFORMATION
During August 1995, the Company closed financing on $300,000 raised pursuant
to a Private Placement of 300,000 shares of Common Stock.
ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K
There were no reports on Form 8-K filed during the quarter ended September
30, 1995. The exhibits filed as a part of this report are listed below.
Exhibit No.
11. - Calculations of Net Income Per Share.
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DATA DIMENSIONS, INC.
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.
Data Dimensions, Inc.
(Registrant)
October 27, 1995 /s/ Larry W. Martin
Date by: Larry W. Martin, President
Chief Executive Officer
October 27, 1995 /s/ William H. Parsons
Date by: William H. Parsons, CFO
Principal Financial and
Accounting Officer
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[MULTIPLIER] 1,000
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<S> <C>
[PERIOD-TYPE] 9-MOS
[FISCAL-YEAR-END] Dec-31-1995
[PERIOD-START] Jan-01-1995
[PERIOD-END] Sept-30-1995
<AVERAGE-SHARES-OUTSTANDING> 6904
<DILUTIVE-COMMON-STOCK> 520
<TOTAL-SHARES-USED> 7424
[NET-INCOME] 188
[EPS-PRIMARY] .03
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