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 December 31, 1996.
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 December 31, 1996, the registrant had outstanding 17,845,000
shares of common stock with $.001 par value.
Triad Systems Corporation
QUARTERLY REPORT FORM 10-Q
Index
Page
----
Part I. Financial Information
Item I. Financial Statements
Consolidated Balance Sheets at December 31, 1996 and
September 30, 1996 1
Consolidated Statements of Income for the Three Month
Periods Ended December 31, 1996 and 1995 2
Consolidated Statements of Cash Flows for the Three Month
Periods Ended December 31, 1996 and 1995 3
Notes to Consolidated Financial Statements 4-5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 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
December 31, September 30,
(Amounts in thousands except share data) 1996 1996
(Unaudited)
- -----------------------------------------------------------------------------
Assets
Current assets
Cash and equivalents $ 4,282 $ 7,652
Trade accounts receivable 16,314 17,746
Investment in leases 1,716 1,635
Inventories 7,332 5,799
Prepaid expenses and other current assets 9,040 8,551
- -----------------------------------------------------------------------------
Current assets 38,684 41,383
Service parts 3,360 3,273
Property, plant and equipment 22,361 26,887
Long-term investment in leases 14,138 14,380
Land for resale 27,151 22,850
Capitalized software and intangible assets 21,830 21,312
Other assets 9,776 9,668
- -----------------------------------------------------------------------------
Assets $137,300 $139,753
=============================================================================
Liabilities
Current liabilities
Notes payable and current portion of
long-term debt $36,081 $25,990
Accounts payable 9,881 10,590
Accrued employee compensation 7,350 8,275
Deferred income taxes 2,853 2,701
Other current liabilities and
accrued expenses 9,956 10,968
- -----------------------------------------------------------------------------
Current liabilities 66,121 58,524
Long-term debt 19,059 29,923
Deferred income taxes 28,305 27,656
Other liabilities 5,811 6,863
- -----------------------------------------------------------------------------
Liabilities 119,296 122,966
- -----------------------------------------------------------------------------
Stockholders' equity
Common stock
$.001 par value; authorized 50,000,000
shares; issued 18,490,000 shares at
December 31, 1996 and 18,394,000 shares at
September 30, 1995 18 18
Treasury stock
645,000 shares at December 31, 1996 and
September 30, 1996 (3,478) (3,478)
Capital in excess of par value 30,269 29,954
Accumulated deficit (8,805) (9,707)
- -----------------------------------------------------------------------------
Stockholders' equity 18,004 16,787
- -----------------------------------------------------------------------------
Liabilities and stockholders' equity $137,300 $139,753
=============================================================================
The accompanying notes are an integral part of these financial statements.
Triad Systems Corporation
CONSOLIDATED STATEMENTS OF INCOME
For the Three Month Periods Ended December 31
(Unaudited)
(Amounts in thousands except per share data) 1996 1995
- -----------------------------------------------------------------------------
Revenues
Automotive $22,998 $23,810
Hardlines & lumber 18,045 15,681
Other 630 1,359
- -----------------------------------------------------------------------------
Total revenues 41,673 40,850
- -----------------------------------------------------------------------------
Cost of sales 22,765 21,433
- -----------------------------------------------------------------------------
Gross margin 18,908 19,417
- -----------------------------------------------------------------------------
Marketing 11,223 11,181
Product development 2,358 1,914
General & administrative and other expenses 2,709 2,340
- -----------------------------------------------------------------------------
Operating income 2,618 3,982
- -----------------------------------------------------------------------------
Interest and other expenses 1,260 1,586
- -----------------------------------------------------------------------------
Income before provision for income taxes 1,358 2,396
Provision for income taxes 516 910
- -----------------------------------------------------------------------------
Net income $ 842 $ 1,486
=============================================================================
Earnings per share
Primary
Net income $ 0.05 $ 0.09
Weighted average shares 18,402 17,380
Fully diluted
Net income $ 0.05 $ 0.09
Weighted average shares 18,450 17,380
=============================================================================
The accompanying notes are an integral part of these financial statements.
Triad Systems Corporation
CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Month Periods Ended December 31
(Unaudited)
(Amounts in thousands) 1996 1995
- -----------------------------------------------------------------------------
Cash flows from operating activities
Net income $ 842 $ 1,486
Adjustments to reconcile net income
to net cash provided by operating activities
Depreciation and amortization 2,332 1,874
Receivable and inventory loss provisions 2,234 2,223
Gains from lease discounting (1,311) (1,927)
Gain on sale of land (124) -
Other (920) (1,244)
Changes in assets and liabilities
Trade accounts receivable 579 (1,847)
Investment in leases (485) 4,668
Inventories (1,616) (1,483)
Deferred income taxes 801 676
Prepaid expenses and other current assets (488) (1,023)
Accounts payable (709) 890
Accrued employee compensation (925) (823)
Other current liabilities and accrued
expenses (1,012) (186)
- -----------------------------------------------------------------------------
Net cash provided by (used in)
operating activities (802) 3,284
- -----------------------------------------------------------------------------
Cash flows from investing activities
Capitalized software and databases (1,275) (1,957)
Proceeds from the sale of land 576 -
Investment in property, plant and equipment (668) (600)
Investment in service parts (380) (485)
Other (543) (354)
- -----------------------------------------------------------------------------
Net cash used in investing activities (2,290) (3,396)
- -----------------------------------------------------------------------------
Cash flows from financing activities
Issuance of debt 6,299 14,340
Repayment of debt (6,892) (15,122)
Proceeds from sale of common stock 315 116
- -----------------------------------------------------------------------------
Net cash used in financing activities (278) (666)
- -----------------------------------------------------------------------------
Net decrease in cash and equivalents (3,370) (778)
Beginning cash and equivalents 7,652 7,263
- -----------------------------------------------------------------------------
Ending cash and equivalents $ 4,282 $ 6,485
=============================================================================
Supplemental disclosures of cash flow information
Cash paid during the period for
Interest $ 1,398 $ 675
Income taxes 57 282
=============================================================================
The accompanying notes are an integral part of these financial statements.
Triad Systems Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
December 31, 1996 and 1995
(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 December 31, 1996
and the results of operations and cash flows for the three month periods
ended December 31, 1996 and 1995. The results of operations for the three
month periods ended December 31, 1996 and 1995 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, 1996 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 7.
3. Trade accounts receivable at December 31,1996 and September 30,1996
include allowances for doubtful accounts of $1,940,000 and $1,980,000,
respectively.
4. 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) December 31, 1996 September 30, 1996
- -----------------------------------------------------------------------------
Purchased Parts $4,209 $2,233
Work in process 172 12
Finished Goods 2,951 3,554
- -----------------------------------------------------------------------------
Inventories $7,332 $5,799
- -----------------------------------------------------------------------------
5. Property, plant and equipment at December 31, 1996 and September 30, 1996
includes accumulated depreciation and amortization of $36,327,000 and
$35,198,000, respectively.
6. The Company is involved in an ongoing merger agreement with Cooperative
Computing, Inc., a Texas corporation. See the subsequent events section for
further discussion.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (continued)
7. 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
December 31, September 30,
(Amounts in thousands) 1996 1996
- -----------------------------------------------------------------------------
(Unaudited)
Assets
Cash $ 314 $ 10
Net investment in leases 15,854 16,015
Residual value retained on leases discounted 6,926 7,012
Receivable from parent company 55,145 55,243
Other assets 4,183 3,880
- -----------------------------------------------------------------------------
Assets $82,422 $82,160
=============================================================================
Liabilities and stockholders' equity
Other liabilities and accrued expenses $ 7,515 $ 8,687
Deferred income 2,497 2,570
Debt 10,154 10,059
Stockholders' equity 62,256 60,844
- -----------------------------------------------------------------------------
Liabilities and stockholders' equity $82,422 $82,160
=============================================================================
CONDENSED COMBINED STATEMENTS OF INCOME
For the Three Month Periods Ended December 31
(Unaudited)
(Amounts in thousands) 1996 1995
- -----------------------------------------------------------------------------
Revenues $ 1,951 $ 2,645
Selling and administrative expenses 325 450
Provision for doubtful accounts 1,092 1,052
- -----------------------------------------------------------------------------
Operating income 534 1,143
Interest expense (191) (255)
Intercompany income 2,016 1,888
- -----------------------------------------------------------------------------
Income before income taxes 2,359 2,776
Provision for income taxes 901 937
- -----------------------------------------------------------------------------
Net Income $ 1,458 $ 1,839
=============================================================================
Triad Systems Corporation
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
First Quarter F/Y 1997 compared to First Quarter F/Y 1996
Results of Operations
Summary
Revenues of $41.7 million for the first quarter of FY 1997 increased 2.0%
from $40.9 million in the first quarter of FY 1996. Operating income was
$2.6 million, or 6.3% of revenues, compared to $4.0 million, or 9.8% of
revenues. Net income was $.8 million for the first quarter of FY 1997
compared to $1.5 million. Earnings per share were 5 cents compared to
9 cents in the same period of 1996.
Automotive Aftermarket Revenues
The Automotive Aftermarket consists of manufacturers, warehouse distributors,
parts stores and independent and chain repair outlets. Revenues are
primarily derived from the sale and financing of systems and related
information and support services. For the first quarter of FY 1997,
Automotive Aftermarket revenues declined 3.4% to $23.0 million from
$23.8 million.
Systems sales decreased to $5.7 million from $6.1 million, reflecting an
earlier consolidation of the Automotive sales force. Automotive Aftermarket
revenues appear to be impacted by the pending merger with Cooperative
Computing, Inc., as a number of customers in the large account segment of the
aftermarket delayed purchasing decisions. (See the subsequent events section
for further discussion). Revenues were also affected by a change in service
dealer systems strategy to provide our customers with the option of
purchasing only the software, excluding hardware, at a lower sales price.
In prior periods, the sales included both hardware and software.
Customer support revenues of $8.5 million were $.3 million below a year ago,
reflecting reduced new automotive systems sales and a reduction of the
customer base due to continuing consolidation within the aftermarket.
Information Services revenues increased 6.4% to $7.6 million from
$7.2 million a year ago, due primarily to a continuing increase in the
customer base and continued growth in the international market.
Triad Systems Financial Corporation ("Triad Financial," a wholly-owned
subsidiary) revenues related to the Automotive Aftermarket declined 33.7% to
$1.1 million in the first quarter of FY 1997 from $1.7 million. In the
first quarter of FY 1997, the amount discounted was nearly $3.6 million less
than a year ago, which caused a decline in the discounting revenues.
Hardlines & Lumber Market Revenues
The Hardlines & Lumber Market consists of manufacturers, hardware stores,
home centers, lumber and building supply outlets and paint and decorating
retailers. Revenues increased 15.1% to $18.0 million from $15.7 million in
the first quarter of FY 1996.
Systems revenues decreased 3.1% to $7.9 million from $8.1 million over the
prior year. Sales of new systems were down from the prior year due primarily
to rebuilding of sales prospects following the record fourth quarter of
FY 1996 and management realignment in the first quarter of FY 1997 due to
the integration of Computer System Dynamics, Inc. ("CSD"). Additionally,
the market may have experienced some delays due in part to a first quarter
announcement of a proposed merger of two of the cooperative wholesalers in
the Hardlines market.
Customer support revenues increased $2.4 million or 40% to $8.5 million in
the first quarter of this year. This increase can be attributed to a higher
support base in the Company's traditional customer base as well as the
acquisition of CSD at the end of the third quarter of FY 1996.
Information services revenues increased $.3 million to $.8 million in the
first quarter of FY 1997 compared to $.5 million a year ago. Triad's Vista
point of sale (POS) services continue to contribute to this growth as its
base of clients expands.
Triad Systems Financial Corporation revenues declined from $1.0 million to
$.8 million in the first quarter of this year, due primarily to a decline in
the leases discounted.
Cost of Systems and Services
Gross margins for the Automotive Aftermarket of 46.3% reflected a slight
decline of .8% from the first quarter of FY 1996. This slight decline was
primarily due to an increase in installation costs in customer support and
increase in catalog expense in information services due to lower
capitalization. Gross margins for the Hardlines and Lumber Market dropped
to 45.3% in the first quarter of FY 1997 compared to 51.7% in FY 1996. This
decline reflects an increase in lower margin sales to existing customers as
compared to new account activity which has higher margins. Additionally,
there have been investments in the customer services area to sustain a
growing customer base as well as costs related to the acquisition of CSD.
The gross margin decline was partially offset by improved information
services margins.
Consolidated Expenses and Other Income
Marketing expense of $11.2 million remained fairly consistent with the first
quarter of FY 1996 in dollar amount and as a percentage of revenue.
Product development expenses after capitalization of software development
increased $.4 million to $2.4 million in the first quarter of FY 1997. As a
percentage of revenue, product development expense increased only 1% from
the first quarter of the prior year.
General, administrative and other operating expenses were $2.7 million for
the period, an increase of 15.8%. In the first quarter of FY 1996, the
Company benefited from a reduction in accruals needed for future tax
liabilities. In addition, higher expenses from the newly acquired CSD
increased the costs when compared to a year ago.
Interest and other expenses decreased by $.3 million to $1.2 million for the
period. This reduction is primarily attributed to lower cost debt, which
was partially offset by the sale of 4.1 acres to a company which plans to
begin construction of a hotel on the property later this year.
Subsequent Event
On October 17, 1996, the Company signed a definitive merger agreement
with Cooperative Computing, Inc. ("CCI"), a Texas corporation, under which
CCI Acquisition Corporation, ("CAC"), a Delaware corporation jointly owned
by CCI and Hicks, Muse, Tate & Furst Incorporated, a private investment firm
located in Dallas, Texas, would acquire the Company. Pursuant to the terms
of the merger agreement, CAC commenced a cash tender offer for all
outstanding shares of the Company at a price of $9.25 per share on
October 23, 1996. The tender offer, which was to have expired at
12:00 Midnight, Eastern Standard time, November 20, 1996, has been extended
several times and most recently until 10:00 A.M., Eastern Standard time, on
Friday, February 19, 1997. Upon completion, the tender offer period is to
be followed by a merger, in which any shares of the Company's common stock
that remain outstanding after the tender offer will be exchanged for cash
under the same terms as the tender offer. Extension of the tender offer was
made to provide additional time for the Federal Trade Commission to complete
its review of the transaction under the Hart-Scott-Rodino Antitrust
Improvements Act.
In addition to the cash consideration to be received by the Company's
shareholders pursuant to the tender offer or the merger transaction, the
merger agreement provides that the Company's shareholders of record
immediately prior to the consummation of the tender offer will receive a
dividend consisting of their pro rata share of the equity of a newly formed
company whose assets will consist of all the Company's owned real property
located in Livermore, California. This includes its corporate headquarters
buildings and land held for sale in the Triad Park development. The spun-off
real estate entity, which the Company expects to be a public company, will
assume all the indebtedness currently secured by the spun-off real estate
and will lease the corporate headquarters buildings to the Company's
post-merger successor. The real estate entity is expected to liquidate
its real estate portfolio, with proceeds used to pay expenses (including
taxes) and repay secured debt. Remaining proceeds are to be distributed to
the equity holders. The Company's ability to market this property is
dependent upon interest rates, general economic and market conditions, the
prospective purchaser's ability to develop the property and the purchaser's
ability to obtain a variety of governmental approvals, none of which is
assured and all of which are subject to objections from the public. In
anticipation of the pending merger, the Company reclassified $4.9 million to
Land for Resale from Property, Plant and Equipment on its balance sheet at
December 31, 1996.
Future Operating Results
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 and Capital Resources
Management believes available cash resources, primarily generated from
operations, marketable securities, lease discounting and credit lines, will
provide adequate funds to finance foreseeable operating needs. The Company
maintains $25.8 million in a bank line of credit and there were outstanding
borrowings of $15.8 million at December 31, 1996.
The senior fixed rate notes and the line of credit agreements contain
restrictive covenants regarding payment of dividends, incurrence of
additional debt and maintenance of consolidated tangible net worth and
certain financial ratios. In the event the Company is unable to meet these
covenants, accelerated repayments could be required. At December 31, 1996,
the Company received a waiver on the credit line covenants because of its
failure to meet the equity requirements and the current and quick ratios.
Due to the pending merger, the Company has been unable to renegotiate the
line of credit with the bank. The bank may be a participant in the funding
for the merger and as a result, a waiver was granted. Management
anticipates that if the merger is not successful, it will be able to
renegotiate the line of credit documents so that it meets the covenant
requirements.
Triad Financial financed $6.1 million in Triad equipment during the first
quarter of FY 1997 in addition to $3.2 million in non-Triad equipment
through client lease programs. Triad Financial received $12.8 million of
proceeds from discounting leases during the first quarter compared to
$18.6 million during the same period in 1996.
Limited and full-recourse discounting agreements are maintained with banks
and lending institutions. Discounting agreements contain certain
restrictive covenants that allow Triad Financial to discount only while in
compliance with such covenants. In the event of non-compliance, the banks
and lending institutions could assume administrative control of the
Company's lease portfolio and prohibit further discounting under the
available credit facilities. 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 15% or full recourse at 100% of discounting proceeds,
depending on the credit risk associated with specific leases. At
December 31, 1996, the portfolio available for discounting was $15.8 million
and commitments for $46.1 million in discounting lines were available.
Capital equipment expenditures, excluding capitalized leases, were
$.7 million during the first quarter of FY 1997, an increase of $.1 million
over the prior year.
During fiscal 1994, the Company established a Stock Ownership By Management
policy to further align the executive officers' interests with those of the
Corporation's shareholders. The stock ownership equivalent is based upon
1993 compensation, ranging from 100% of base compensation to 200% of total
compensation, depending upon the position held within the Company. Each
officer must meet their respective stock ownership level within a three to
five year period. All six of the current executive officers required to
meet the stock ownership target by October 1, 1996.
During June 1996, the Financial Accounting Standards Board issued Statement
No. 125 (SFAS No. 125), "Accounting for Transfers and Servicing of Financial
Assets and Extinguishments of Liabilities." This standard establishes
consistent standards for distinguishing transfers of financial assets that
are sales from transfers that are secured borrowings. The Company is
reviewing the requirements of the pronouncement and its effect on lease
discounting including any administrative organizational changes to insure
continued sales accounting treatment for these transactions. SFAS No. 125
will become effective for transactions that the Company enters in the
second quarter of FY 1997.
PART II OTHER INFORMATION
Item 1-5 Not applicable
Item 6 No reports on Form 8-K were filed during the quarter
ended December 31, 1996.
Sequentially
Exhibit numbered
Number pages
- ------- -----------
* 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 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").
* 10.5 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.
* 10.6 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.
* 10.7 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.
* 10.8 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.
10.9 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.
10.10 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.
10.11 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.
10.12 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.
10.13 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.
10.14 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.
* 10.15 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.
* 10.16 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.
10.17 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 11, 1995 Form 8-K.
10.18 Exchange Agreement and Second Amendment to Unit Purchase
Agreement by and among Triad Systems Corporation,
Richard C. Blum & Associates, L.P. and certain holders dated
March 31, 1995, incorporated by reference from Exhibit 1 to
the Company's Current Report on Form 8-K filed May 11, 1995.
10.19 Warehousing Credit Agreement between Triad Systems Financial
Corporation and the First National Bank of Boston dated
August 29, 1995, incorporated by reference from Exhibit 10.19
to the Company's Annual Report on Form 10-K for the fiscal
year ended September 30, 1995.
10.20 Amendment No. Four to Revolving Credit Loan Agreement and
Consent (to Exchange Agreement) between Triad Systems
Corporation, Triad Financial Corporation and Comerica
Bank-California dated May 23, 1996, incorporated by reference
from Exhibit 10.20 to the Company's Form 10-Q for the fiscal
quarter ended June 30, 1996.
10.21 Amendment No. Five to Revolving Credit Loan Agreement and
Consent (to Exchange Agreement) between Triad Systems
Corporation, Triad Systems Financial Corporation and Comerica
Bank-California dated June 28, 1996, incorporated by
reference from Exhibit 10.21 to the Company's Form 10-Q for
the fiscal quarter ended June 30, 1996.
* 10.22 Triad Systems Corporation Amendment to the Amended and
Restated 1982 Stock Option Plan dated February 8, 1996,
incorporated by reference from Exhibit 10.22 to the Company's
Form 10-Q for the fiscal quarter ended June 30, 1996.
* 10.23 Triad Systems Corporation Amended and Restated Outside
Directors Stock Option Plan dated April 30, 1996,
incorporated by reference from Exhibit 10.23 to the
Company's Form 10-Q for the fiscal quarter ended
June 30, 1996.
10.24 Agreement and Plan of Merger among Cooperative Computing,
Inc., CCI Acquisition Corporation and Triad Systems
Corporation dated October 17, 1996, incorporated by reference
from Exhibit 5 to the Company's Schedule 14D-9 filed
October 23, 1996.
11.1 Computation of Earnings per share.
27 Financial Data Schedules.
* Compensation 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: February 12, 1997 /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 Month Periods Ended December 31
(Amounts in thousands except per share data) 1996 1995
- -----------------------------------------------------------------------------
Calculation of number of shares entering into
computations
Weighted average shares outstanding 17,808 17,380
Assumed conversion of preferred stock and exercise
of warrants - -
- -----------------------------------------------------------------------------
17,808 17,380
Net effect of dilutive stock options and warrants
based on the average stock price 594 -
- -----------------------------------------------------------------------------
Average primary shares outstanding 18,402 17,380
Net effect of dilutive stock options and warrants
based on the ending stock price 48 -
- -----------------------------------------------------------------------------
Average fully diluted shares outstanding 18,450 17,380
Net income $ 842 $ 1,486
=============================================================================
Earnings per share
Primary
Net income $ 0.05 $ 0.09
Fully diluted
Net income $ 0.05 $ 0.09
=============================================================================
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Consolidated Baance Sheets at December 31, 1996 and Consolidated Statement of
Income and Statement of Cash Flow for the three months ended December 31, 1996,
and is qualified in its entirety by reference to such financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> DEC-31-1996
<CASH> 4282
<SECURITIES> 0
<RECEIVABLES> 18254
<ALLOWANCES> 1940
<INVENTORY> 7332
<CURRENT-ASSETS> 38684
<PP&E> 58688
<DEPRECIATION> 36327
<TOTAL-ASSETS> 137300
<CURRENT-LIABILITIES> 66121
<BONDS> 47364
<COMMON> 18
0
0
<OTHER-SE> 17986
<TOTAL-LIABILITY-AND-EQUITY> 18004
<SALES> 13726
<TOTAL-REVENUES> 41673
<CGS> 7253
<TOTAL-COSTS> 16290
<OTHER-EXPENSES> 1260
<LOSS-PROVISION> 1940
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 1358
<INCOME-TAX> 516
<INCOME-CONTINUING> 842
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 842
<EPS-PRIMARY> .05
<EPS-DILUTED> .05
</TABLE>
