CIK: 0000313867
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
X Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended June 30, 1995
OR
___ Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934.
Commission File Number 0-9505
Triad Systems Corporation
-------------------------
(Exact name of registrant as specified in its charter)
Delaware 94-2160013
-------- ----------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
3055 Triad Drive, Livermore, CA 94550
--------------------------------------
(Address of principal executive offices)
Registrant's telephone number, including area code: (510) 449-0606
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
--- ---
As of June 30,1995, the registrant had outstanding 17,184,000 shares of
common stock with $.001 par value.
Triad Systems Corporation
QUARTERLY REPORT FORM 10-Q
Index
Page #
Part I. Financial Information
Item 1. Financial Statements
Consolidated Balance Sheets at June 30, 1995 and
September 30, 1994 1
Consolidated Statements of Income for the Three and
Nine Month Periods Ended June 30, 1995 and 1994 2
Consolidated Statements of Cash Flows for the
Nine Month Periods Ended June 30, 1995 and 1994 3
Notes to Consolidated Financial Statements 4-5
Item 2. Management's Discussion and Analysis of Results
of Operations and Financial Condition 6-9
Part II. Other Information
Item 6. Exhibits and Reports on Form 8-K 10-12
Signatures 13
Exhibit 11.1 Computation of Earnings Per Share 14
Exhibit 27 Financial Data Schedule 15
PART I FINANCIAL INFORMATION
Triad Systems Corporation
CONSOLIDATED BALANCE SHEETS
At June 30, 1995 and September 30, 1994
June 30, September 30,
(Amounts in thousands except share data) 1995 1994
---------- -------------
(Unaudited)
Assets
Current assets
Cash and equivalents $8,170 $7,963
Trade receivables 14,099 14,090
Investment in leases 1,747 4,152
Inventories 7,185 6,113
Prepaid expenses and other current assets 6,712 6,068
-------- --------
Total current assets 37,913 38,386
Service parts 3,383 2,434
Property, plant and equipment, net of
accumulated depreciation and amortization of
$30,202 at June 30, 1995 and $27,486 at
September 30, 1994 27,310 27,033
Long-term investment in leases 12,344 21,836
Land for resale 25,160 25,063
Capitalized software and intangible assets 15,390 13,870
Other assets 9,587 7,741
-------- --------
Total assets $131,087 $136,363
======== ========
Liabilities
Current liabilities
Notes payable and current portion of
long-term debt $6,699 $6,773
Accounts payable 9,856 8,940
Accrued employee compensation 7,176 8,090
Deferred income taxes 4,338 4,310
Other current liabilities and accrued expenses 9,124 10,189
-------- --------
Total current liabilities 37,193 38,302
Long-term debt 52,756 56,633
Deferred income taxes 26,168 23,855
Other liabilities 5,997 5,432
-------- --------
Total liabilities 122,114 124,222
-------- --------
Stockholders' Equity
Cumulative convertible preferred stock
$.01 par value; authorized 1,000,000 shares;
no shares issued and outstanding at
June 30,1995 and 1,000,000 shares issued
and outstanding at September 30, 1994;
liquidation value $20 million --- 10
Common stock
$.001 par value; authorized 50,000,000 shares;
issued 17,714,000 shares at June 30, 1995 and
13,896,000 shares at September 30, 1994 18 14
Treasury Stock
530,000 shares at June 30, 1995 and 270,000
shares at September 30, 1994 (2,795) (1,326)
Capital in excess of par 25,410 31,680
Accumulated deficit (13,660) (18,237)
-------- --------
Total stockholders' equity 8,973 12,141
-------- --------
Total liabilities and stockholders' equity $131,087 $136,363
======== ========
The accompanying notes are an integral part of these financial statements.
Triad Systems Corporation
CONSOLIDATED STATEMENTS OF INCOME
For the Three and Nine Month Periods Ended June 30, 1995 and 1994
(Unaudited)
Three Months Ended Nine Months Ended
June 30, June 30,
(Amounts in thousands except
per share data) 1995 1994 1995 1994
------- ------- ------- -------
Revenues
Systems $15,381 $17,264 $50,869 $48,912
Customer support services 15,698 14,826 46,888 44,531
Information services 7,111 6,239 20,741 18,061
Finance 2,993 3,062 8,772 7,924
------- ------- ------- -------
Total revenues 41,183 41,391 127,270 119,428
------- ------- ------- -------
Costs and expenses
Systems 7,703 7,718 24,693 22,437
Services and Finance 13,345 12,518 39,786 37,583
Marketing 11,068 11,141 33,930 31,749
Product development 1,998 1,937 6,164 6,125
General & administrative and
other expenses 2,660 2,690 8,622 8,373
------- ------- ------- -------
Total costs and expenses 36,774 36,004 113,195 106,267
------- ------- ------- -------
Operating income 4,409 5,387 14,075 13,161
Interest and other expense 1,838 1,836 5,256 5,675
------- ------- ------- -------
Income before income taxes and
extraordinary charge 2,571 3,551 8,819 7,486
Provision for income taxes 977 1,350 3,351 2,845
------- ------- ------- -------
Income before extraordinary charge 1,594 2,201 5,468 4,641
Extraordinary charge on repurchase
of debt, net of taxes ---- 143 153 143
------- ------- ------- -------
Net income $1,594 $2,058 $5,315 $4,498
======= ======= ======= =======
Earnings per share
Primary
Income before extraordinary charge $0.09 $0.13 $0.31 $0.27
Net income $0.09 $0.12 $0.30 $0.26
Weighted average shares 17,842 17,422 17,943 17,423
Fully diluted
Income before extraordinary charge $0.09 $0.13 $0.31 $0.27
Net income $0.09 $0.12 $0.30 $0.26
Weighted average shares 17,914 17,422 18,028 17,423
======= ======= ======= =======
The accompanying notes are an integral part of these financial statements.
Triad Systems Corporation
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Nine Month Periods Ended June 30, 1995 and 1994
(Unaudited)
Nine Months Ended June 30,
(Amounts in thousands) 1995 1994*
Cash flows from operating activities
Income before extraordinary charge $5,468 $4,641
Adjustments to reconcile income before
extraordinary charge to net cash provided
by operating activities
Extraordinary charge on repurchase of debt,
net of taxes (153) (143)
Depreciation and amortization 6,240 6,173
Receivable and inventory loss provisions 5,732 5,717
Gains from lease discounting (5,761) (4,544)
Other (1,064) 723
Changes in assets and liabilities
Trade accounts receivable (2,140) (4,542)
Leases (purchased) discounted 16,729 9,871
Inventories (1,704) (1,703)
Deferred income taxes 2,341 1,496
Prepaid expenses and other current assets (644) (2,299)
Accounts payable 916 (622)
Accrued employee compensation (914) 231
Other current liabilities and accrued
expenses (1,065) (406)
-------- --------
Net cash provided by operating
activities 23,981 14,593
Cash flows from investing activities
Investment in property, plant and equipment (2,091) (2,256)
Capitalized software (2,115) (2,479)
Other (5,820) (3,654)
-------- --------
Net cash used in investing activities (10,026) (8,389)
Cash flows from financing activities
Issuance of debt 34,424 30,410
Repayment of debt (39,420) (39,774)
Redemption of preferred stock (10,000) ---
Proceeds from sale of common stock 3,439 2,037
Dividends paid (400) (600)
Purchase of treasury stock (1,469) (615)
Other (322) ---
-------- --------
Net cash used in financing activities (13,748) (8,542)
Net decrease in cash and equivalents 207 (2,338)
Beginning cash and equivalents 7,963 8,250
-------- --------
Ending cash and equivalents $8,170 $5,912
======== ========
Supplemental disclosures of cash flow information
Cash paid during the period for
Interest $4,407 $4,750
Income Taxes 461 770
Noncash investing and financing activity
Redemption of preferred stock 11,195 ---
Capital leases 913 294
======== ========
* Certain fiscal year 1994 amounts have been restated due to correction of
an error.
The accompanying notes are an integral part of these financial statements.
Triad Systems Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
June 30, 1995 and 1994
(Unaudited)
1. In the opinion of the Registrant, the consolidated financial statements
contain all adjustments (consisting of only normal recurring adjustments)
necessary to present fairly the financial position as of June 30, 1995 and
the results of operations and cash flows for the nine month periods ended
June 30, 1995 and 1994. The results of operations for the three and nine
month periods ended June 30, 1995 and 1994 are not necessarily indicative
of the results to be expected for the full year. The Balance Sheet does
not include all disclosure requirements under GAAP and should be read in
conjunction with the September 30, 1994 audited financial statements and
notes thereto.
2. The consolidated financial statements include the accounts of Triad
Systems Corporation and its wholly-owned subsidiaries, including Triad
Systems Financial Corporation ("Triad Financial"), after elimination of
intercompany accounts and transactions. Financial information relating to
the Company's combined leasing operations is presented in Note 6.
3. Primary and fully diluted earnings per share are based on the average
common shares outstanding, the dilutive effect of the stock options and the
assumed conversion of the preferred stock and exercise of warrants. On
March 31, 1995, Triad Systems Corporation (the "Registrant") effected an
exchange ("Exchange") of all of the outstanding units ("Units") (consisting
of 1,000,000 shares of the Registrant's Senior Cumulative Convertible
Preferred Stock and associated Warrants to purchase 3,500,000 shares of
the Registrant's Common Stock par value $.001 held by entities affiliated
with Richard C. Blum & Associates, L.P. for an aggregate of $10,000,000 and
2,222,222 shares of Registrant's Common Stock. Please refer to the
Liquidity section of the Management Discussion & Analysis for explanation
of the exchange. Dilution from common equivalents have been adjusted under
the treasury stock method in fiscal year 1995 and further adjusted under
the modified treasury stock method in fiscal year 1994.
4. Trade accounts receivable at June 30,1995 and September 30,1994 include
allowances for doubtful accounts of $1,400,000 and $1,166,000,
respectively.
5. Inventories are stated at the lower of cost (first-in, first-out
method) or market and include amounts which ultimately may be capitalized
as equipment or service parts.
(Amounts in thousands) June 30, 1995 September 30, 1994
------------- ------------------
Purchased Parts $2,532 $2,404
Work in process 522 448
Finished Goods 4,131 3,261
------- -------
Inventories $7,185 $6,113
------- -------
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
6. Triad Financial is a wholly-owned subsidiary which purchases Triad
systems and other products and leases those products to third parties under
full-payout, direct financing leases. Summarized financial information of
the Company's combined leasing operations, included in the Consolidated
Financial Statements is as follows:
CONDENSED COMBINED BALANCE SHEETS
At June 30, 1995 and September 30, 1994
June 30, September 30,
(Amounts in thousands) 1995 1994
----------- -------------
(Unaudited)
Assets
Cash $104 $---
Net investment in leases 14,091 25,988
Residual value retained on leases discounted 6,376 5,544
Receivable from parent company 41,330 25,633
Other assets 3,531 2,857
-------- --------
Total Assets $65,432 $60,022
Liabilities and Stockholder's Equity
Other liabilities and accrued expenses $8,174 $8,115
Deferred income 2,290 1,955
Debt 1,506 2,171
Stockholder's equity 53,462 47,781
-------- --------
Total Liabilities and Stockholder's
Equity $65,432 $60,022
CONDENSED COMBINED STATEMENTS OF INCOME
For the Three and Nine Month Periods Ended June 30, 1995 and 1994
(Unaudited)
Three Months Ended Nine Months Ended
June 30, June 30,
(Amounts in thousands) 1995 1994 1995 1994
------- ------- ------- -------
Revenues $2,993 $3,062 $8,772 $7,924
Selling and administrative expenses 492 548 1,473 1,660
Provision for doubtful accounts 750 700 2,052 1,804
------ ------ ------ ------
Operating income 1,751 1,814 5,247 4,460
Intercompany income 1,562 840 4,047 2,107
------ ------ ------ ------
Income before taxes 3,313 2,654 9,294 6,567
Provision for income taxes 1,229 1,084 3,598 2,571
------ ------ ------ ------
Net income $2,084 $1,570 $5,696 $3,996
====== ====== ====== ======
Triad Systems Corporation
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
Summary
Total third quarter revenues were relatively consistent with 1994.
Revenues for the first nine months were higher than the prior year by
$7.8 million, or 6.6%. Services revenues continued to show improvements,
driven by an increase in recurring revenues from the Company's growing
customer base. The quarterly improvement in Service revenues was partially
offset by a decline of $1.9 million in Systems revenues. Systems revenues
were down from the same quarter a year ago due primarily to a controlled
rollout of the second phase of the Triad Prism(R) ("Prism B") and an overall
softness in the automotive aftermarket.
Lower product margins during the quarter decreased operating income by
2.4%, primarily due to sales price discounting and product mix. Operating
income of 11.0% was similar to the first nine months of 1994.
Quarterly net income (before a 1994 extraordinary charge) declined
$.6 million. Net income for the first nine months (before a 1994 and 1995
extraordinary charge) of $5.5 million improved 17.8%. The 1994 and 1995
extraordinary charges were due to the early retirement of $2.8 million and
$2.9 million, respectively, in senior fixed rate notes.
Third quarter earnings per share were $.09 compared to $.12 in the prior
year. Earnings per share for the first nine months were $.30 compared to
$.26 a year ago.
Percent of Revenues
Three Months Ended Nine Months Ended
June 30, June 30,
1995 1994 1995 1994
------ ------ ------ ------
Revenues 100.0% 100.0% 100.0% 100.0%
Costs and expenses
Cost of systems, services and
finance 51.1 48.9 50.7 50.3
Marketing 26.9 26.9 26.7 26.6
Product development 4.9 4.7 4.8 5.1
General & administrative and other
expense 6.5 6.5 6.8 7.0
Total costs and expenses 89.4 87.0 89.0 89.0
Operating income 10.6 13.0 11.0 11.0
Interest and other expense 4.5 4.4 4.1 4.7
Income before taxes and extraordinary
charge 6.1 8.6 6.9 6.3
Provision for taxes 2.4 3.3 2.6 2.4
Income before extraordinary charge 3.7 5.3 4.3 3.9
Extraordinary charge on repurchase
of debt, net of taxes --- 0.3 0.1 0.1
Net income 3.7% 5.0% 4.2% 3.8%
Systems Revenues
Systems revenues in the Automotive Market declined $2.8 million from the
third quarter of 1994. This was due primarily to the Automotive Jobber
segment, which had revenues of $5.4 million compared to $7.5 million. This
27.6% decrease reflected controlled shipments of the second phase of the
Triad Prism(R) ("Prism B"), due primarily to software problems. During the
third quarter, delivery of the Prism B product was temporarily placed on
hold to correct these problems, followed by a controlled rollout to closely
monitor the product's performance. The controlled rollout is expected to
continue through the fourth quarter. There was also a $1.0 million decline
in revenue in the Automotive Service Dealer segment, due mainly to purchase
deferrals reflecting economic concerns and a temporary reduction in the
sales force. Systems revenues for the Hardlines and Lumber Market increased
by 11.5% due to the addition of new customers.
Systems revenues for the first nine months of $50.9 million improved by
$2.0 million. Hardlines and Lumber Systems revenues increased 4.7% to
$19.6 million, offset by a decrease in Automotive Systems revenues.
Multi-vendor Systems revenues, which represents sales of non-Triad
equipment, increased $1.8 million from $.8 million.
Services Revenues
Third quarter 1995 Services revenues of $22.8 million improved 8.3%.
Customer Support Services revenues of $15.7 million improved $.9 million or
5.9%, with growth of $.3 million each in education revenues and multi-vendor
services revenues, primarily due to the addition of new customers and
third party service activity. Business Products revenues increased
$.4 million due to price increases and continued penetration into existing
markets. Information Services revenues of $7.1 million improved
$.9 million or 14.0% due to continued market penetration.
Services revenues for the first nine months of $67.6 million improved
$5.0 million, primarily in Information Services, which increased
$2.7 million. Customer Support revenues increased $2.4 million, including
an increase of $1.1 million in business products.
Finance Revenues
Finance revenues for the third quarter decreased by 2.3%. This was due
primarily to a decrease in the lease portfolio following accelerated lease
discounting during the second quarter to help fund the March 31, 1995
exchange of the outstanding preferred shares and warrants for common stock
(refer to the Liquidity section for further explanation of the equity
exchange). Revenues for the first nine months increased $.8 million,
resulting from the additional discounting.
Costs and Expenses
Gross margin as a percentage of total revenues was 48.9% for the quarter
and 49.3% for the first nine months, a decline of 2.2% and 0.4%,
respectively. The decline was due primarily to sales price discounting and
product mix. Gross margin as a percentage of systems revenues was down 5.2%
and 2.7% for the third quarter and first nine months, respectively. Gross
margin as a percentage of services and finance revenues for the quarter
remained consistent with the prior year and increased 1.2% for the first
nine months.
Marketing expenses of $11.1 million and $33.9 million for the quarter and
first nine months, respectively, were fairly even as a percentage of
revenue. Product Development costs, after capitalization of software
development expense, were $2.0 million for the quarter and $6.2 million for
the first nine months and consistent as a percentage of revenues at 5%.
General and administrative costs, litigation and other expenses were about
even with prior year expenses as a percentage of revenue.
Lower fixed rate debt, offset by the slightly higher floating debt rate,
resulted in interest expense comparable with the prior quarter. Interest
expense for the first nine months decreased $.4 million due primarily to
the reduction of fixed rate debt and bank line of credit.
Future Operating Results
The Company's future operating results will depend upon conditions in its
markets that may affect demand for its products, and upon the Company's
ability to introduce products and enhancements on a timely basis. Results
will also be affected by seasonal changes in product demand, market
acceptance of new products and enhancements, the size and experience of the
sales force and the mix of products sold. All could cause operating
results to fluctuate, especially on a quarterly basis.
Liquidity
Working Capital - management believes that working capital and the
Company's ability to generate working capital is sufficient to meet
foreseeable business needs. The Company utilizes its cash in excess of
operating requirements to fund Triad Financial's lease portfolio and to
reduce the Company's debt level. On March 31, 1995, the Company financed
the exchange of 1 million shares of preferred stock and associated
warrants to purchase 3.5 million shares of common stock for $10 million
cash and approximately 2.2 million shares of Triad common stock. The
exchange eliminated $400,000 in preferred shares dividend payments over
the second half of the current year and up to $2 million annually that
would have been paid in future years. The exchange was accomplished
without incurring new debt.
Cash provided by operating activities was $24.0 million for the first nine
months compared to $14.6 million. Lease discounting, net of purchases,
was up $6.9 million primarily to fund the preferred shares exchange and to
retire debt. Depreciation and amortization were consistent with the prior
year at $6.2 million.
Cash used in investing activities increased to $10.0 million for the first
nine months compared to $8.4 million. Capital expenditures for the first
nine months of $2.1 million were about even with the prior year.
Cash used in financing activities was $13.7 million for the first nine
months, an increase of $5.2 million. Cash of $10.0 million was paid for
the redemption of preferred stock on March 31, 1995. Cash used for
repayment of debt net of issuances was $4.0 million less during the first
nine months.
Business Resources
Management believes available cash resources, primarily generated from
operations, lease discounting and credit lines, will provide adequate funds
to finance foreseeable operating needs. The Company maintains
$16.8 million in bank lines of credit and there were no borrowings at
June 30, 1995.
The Company currently invests its available cash resources in the lease
portfolio of Triad Financial due to the higher yields achieved and the
flexibility to offer customers financing. Triad Financial financed
$24.0 million of Triad's domestic business systems sales and $12.5 million
in non-Triad equipment through client lease programs during the first nine
months of 1995. Additionally, Triad Financial received $17.5 million and
$57.3 million of proceeds from discounting in the third quarter and first
nine months, respectively.
Limited and full-recourse discounting agreements are maintained with banks
and lending institutions. The discounting agreements contain certain
restrictive covenants which allow Triad Financial to discount only while in
compliance with such covenants. The Company is in compliance with the
restrictive covenants and management believes that it will maintain
compliance with such covenants in the foreseeable future. Under the
discounting agreements, Triad Financial is contingently liable for losses
in the event of lessee nonpayment. The agreements provide for limited
recourse of up to 10% or full recourse at 100% of discounting proceeds,
depending on the credit risk associated with specific leases. At June 30,
1995, the portfolio available for discounting was $14.1 million and
commitments for $43.7 million in discounting lines were available.
PART II OTHER INFORMATION
Item 1. Not applicable
Item 2.(b) Changes in the rights of the Company's security holders.
On March 31, 1995, Triad Systems Corporation (the "Registrant")
effected an exchange ("Exchange") of all of the outstanding
units ("Units") consisting of 1,000,000 shares of the
Registrant's Senior Cumulative convertible Preferred Stock
and associated Warrants to purchase 3.5 million shares of
the Registrant's Common Stock par value $.001 held by entities
affiliated with Richard C. Blum & Associates, L.P. for an
aggregate of $10,000,000 and 2,222,222 shares of Registrant's
Common Stock. For further information concerning the exchange,
please refer to the Management's Discussion and Analysis of
Finanical Condition and Results of Operations - "Liquidity" in
Part I of this report and the Company's Current Report on
Form 8-K filed May 11, 1995.
Item 3. Not applicable
Item 4. Submission of Matters to a vote of Security Holders.
Registrant's Annual Meeting of Stockholders was held on
February 9, 1995. The following director was elected at the
annual meeting, to serve a three year term until the 1998
Annual Meeting of Stockholders and his successor is duly elected
and qualified: Henry M. Gay; the number of shares in favor were
11,419,622; and the number of shares withheld were 134,569.
James R. Porter, George O. Harmon, William W. Stevens and
Richard C. Blum continue to serve as directors. At the Annual
Meeting, the stockholders approved an amendment to the Triad
Systems Corporation 1990 Employee Stock Purchase Plan (the
"Purchase Plan") to increase the number of shares reserved for
issuance under the Purchase Plan from 650,000 shares to 1,150,000
shares. The number of shares voting for such proposal was
10,709,096; the number of shares voting against such proposal was
451,938; the number of shares abstaining from voting on such
proposal was 120,139; and the number of broker non-votes was
273,018.
Item 5. Not applicable.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibit Index for June 30, 1995
Sequentially
Exhibit Numbered
Number Page
-------- ------------
*10.1 Triad Systems Corporation Amended and Restated
1982 Stock Option Plan as amended on
October 22, 1993, incorporated by reference from
Exhibit 10.1 to the Company's Annual Report on
Form 10-K for the fiscal year ended
September 30, 1993.
10.2 Form of Indemnification Agreement, incorporated by
reference from Exhibit 10.4 to the Company's
Registration Statement on Form S-2 (File No.
33-2966) filed July 3, 1989 (the "1989 Form-2
Registration Statement").
*10.3 Nonqualified Stock Option Agreement between the
Company and James R. Porter dated January 13, 1987,
incorporated by reference from Exhibit 10.5 to
the 1987 Form S-2 Registration Statement, (File No.
33-13599) (the "1987 Company's Form S-
2 Registration Statement").
10.4 Development Agreement between the Company and the
City of Livermore dated December 2, 1985,
incorporated by reference from Exhibit 10.5 to the
1987 Form S-2 Registration Statement.
10.5 Subdivision Improvement Agreement between the Company
and the City of Livermore dated December 2, 1985,
incorporated by reference from Exhibit 10.7 to the
1987 Form S-2 Registration Statement.
10.6 Mortgage between Variable Annuity Life Insurance
Company and 3055 Triad Drive dated August 23, 1988,
incorporated by reference from Exhibit 10.6 to the
Company's Annual Report on Form 10-K for the fiscal
year ended September 30, 1988 (the "1988 Form 10-K").
*10.7 Nonqualified Stock Option Agreement between the
Company and James R. Porter dated as of
February 17, 1987, incorporated by reference from
Exhibit 10.7 of the 1988 Form 10-K.
*10.8 Nonqualified Stock Option Agreement between the
Company and James R. Porter dated November 12, 1988,
incorporated by reference from Exhibit 10.8 of the
1988 Form 10-K.
*10.9 Triad Systems Corporation 1990 Stock Option Plan
as amended on October 22, 1993, incorporated by
reference from Exhibit 10.9 to the Company's Annual
Report on Form 10-K for the fiscal year ended
September 30, 1993.
*10.10 Triad Systems Corporation Amended and Restated
Outside Directors Stock Option Plan, incorporated
by reference from Exhibit 10.10 to the Company's
Annual Report on Form 10-K for the fiscal year
ended September 30, 1991.
10.11 Revolving Credit Loan Agreement dated as of
June 30, 1992, as amended, between the Company and
Plaza Bank of Commerce, incorporated by reference
from Exhibit 10.3 to the Company's Current Report
on Form 8-K filed August 17, 1992.
10.12 Unit Purchase Agreement dated as of July 2, 1992,
between the Company, Richard C. Blum & Associates,
Inc. and certain purchasers, together with the
First Amendment to Unit Purchase Agreement dated
as of August 3, 1992, and the form of irrevocable
Proxy, incorporated by reference from Exhibit 10.4
to the Company's Current Report on Form 8-K filed
August 17, 1992.
10.13 Unit Certificate evidencing Units to purchase
Preferred Stock and Warrants, together with Form of
Warrant Certificate, attached as Exhibit A thereto,
incorporated by reference from Exhibit 3.2 to the
Company's Current Report on Form 8-K filed
August 17, 1992.
10.14 Registration Rights Agreement between the Company
and certain purchasers under the Unit Purchase
Agreement dated as of August 3, 1992, incorporated
by reference from Exhibit 10.5 to the Company's
Current Report on Form 8-K filed August 17, 1992.
10.15 Grant Agreement between the Industrial Development
Authority and Triad Systems Ireland Limited, Triad
Systems Corporation and Tridex Systems Limited and
related agreements, incorporated by reference from
Exhibit 10.15 to the 1992 Form S-4 Registration
Statement.
10.16 Cancellation of Development Agreement between the
Company and the City of Livermore dated
July 15, 1993, incorporated by reference from
Exhibit 10.16 to the Company's Annual Report on
Form 10-K for the fiscal year ended
September 30, 1993.
10.17 Amended and Restated Subdivision Improvement
Agreement between the Company and the City of
Livermore dated May 12, 1993, incorporated by
reference from Exhibit 10.17 to the Company's
Annual Report on Form 10-K for the fiscal year
ended September 30, 1993.
*10.18 Supplemental Deferred Compensation Plan between
the Company and a select group of Triad Key
Employees and their beneficiaries dated
April 1, 1994, incorporated by reference from
Exhibit 10.18 to the Company's Form 10-Q for the
fiscal quarter ended June 30, 1994.
*10.19 Amendment to the Amended and Restated 1982 Stock
Option Plan dated April 25, 1994, incorporated by
reference from Exhibit 10.19 to the Company's
Form 10-Q for the fiscal quarter ended
June 30, 1994.
10.20 Amendment No. Three to Revolving Credit Loan
Agreement and Consent (to Exchange Agreement)
between Triad Systems Corporation, Triad Systems
Financial Corporation and Comerica Bank-California
dated March 31, 1995, incorporated by reference
from Exhibit 6 to the May 1995 Form 8-K.
11.1 Computation of Earnings Per Share. 14
27.0 Financial Data Schedule 15
(b) Reports on Form 8-K
The Company filed a report on Form 8-K on
May 11, 1995, which described under
Item 5 - Other Events, the Company's
March 31, 1995 exchange of 1,000,000 shares of
preferred stock and associated warrants to purchase
3,500,000 shares of common stock for $10,000,000
cash and 2,222,222 shares of Triad common stock, and
the respective amendments to the Revolving Credit
Loan Agreement and the Indentures governing the
Fixed Rate Notes and Floating Rate Notes.
----------
* Compensatory or employment agreement
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, a duly authorized officer of the Registrant.
Triad Systems Corporation
-------------------------
(Registrant)
Date: August 8, 1995 /s/ STANLEY F. MARQUIS
-------------- -----------------------
Stanley F. Marquis
Vice President, Finance
(Principal Financial Officer)
Exhibit 11.1
Triad Systems Corporation
COMPUTATION OF EARNINGS PER SHARE
For the Three and Nine Month Periods Ended June 30, 1995 and 1994
Three Months Ended Nine Months Ended
June 30, June 30,
(Amounts in thousands except
per share data) 1995 1994 1995 1994
------- ------- ------- -------
Calculation of number of shares
entering into computations
Weighted average shares outstanding 17,079 13,167 17,123 12,838
Assumed conversion of preferred
stock and exercise of warrants ---- 3,137 ---- 3,137
------- ------- ------- -------
17,079 16,304 17,123 15,975
Net effect of dilutive stock options
and warrants based on the average
stock price 763 1,118 820 1,448
------- ------- ------- -------
Average primary shares outstanding 17,842 17,422 17,943 17,423
Net effect of dilutive stock
options and warrants based on the
ending stock price 72 ---- 85 ----
------- ------- ------- -------
Average fully diluted shares
outstanding 17,914 17,422 18,028 17,423
======= ======= ======= =======
Income before extraordinary charge $1,594 $2,201 $5,468 $4,641
Net interest costs associated with
assumed retirement of debt ---- 7 ---- 63
------- ------- ------- -------
Adjusted income before extraordinary
charge 1,594 2,208 5,468 4,704
Extraordinary charge on repurchase
of debt, net of taxes ---- 143 153 143
------- ------- ------- -------
Adjusted net income $1,594 $2,065 $5,315 $4,561
======= ======= ======= =======
Earnings per share
Primary
Income before extraordinary
charge $0.09 $0.13 $0.31 $0.27
Net income $0.09 $0.12 $0.30 $0.26
Fully diluted
Income before extraordinary
charge $0.09 $0.13 $0.31 $0.27
Net income $0.09 $0.12 $0.30 $0.26
======= ======= ======= =======
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND> This schedule contains summary financial information extracted
from the Consolidated Balance Sheets at June 30, 1995 and
the Consolidated Statement of Income and Statement of Cash
Flow for the nine months ended June 30, 1995, and is qualified
in its entirety by reference to such financial statements.
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-END> JUN-30-1995
<CASH> 8,170
<SECURITIES> 0
<RECEIVABLES> 15,499
<ALLOWANCES> 1,400
<INVENTORY> 7,185
<CURRENT-ASSETS> 37,913
<PP&E> 57,512
<DEPRECIATION> 30,202
<TOTAL-ASSETS> 131,087
<CURRENT-LIABILITIES> 37,193
<BONDS> 52,756
<COMMON> 18
0
0
<OTHER-SE> 8,955
<TOTAL-LIABILITY-AND-EQUITY> 131,087
<SALES> 50,869
<TOTAL-REVENUES> 127,270
<CGS> 24,693
<TOTAL-COSTS> 64,479
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 5,732
<INTEREST-EXPENSE> 5,256
<INCOME-PRETAX> 8,819
<INCOME-TAX> 3,351
<INCOME-CONTINUING> 5,468
<DISCONTINUED> 0
<EXTRAORDINARY> 153
<CHANGES> 0
<NET-INCOME> 5,315
<EPS-PRIMARY> 0.30
<EPS-DILUTED> 0.30
</TABLE>
