UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
[Mark One]
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1997
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 0-20329
EIS INTERNATIONAL, INC.
(Exact name of registrant as specified in its charter)
Delaware No. 06-1017599
(State or other jurisdiction (I.R.S. Employer
of incorporation) Identification Number)
555 Herndon Parkway
Herndon, VA 20170
(703) 478-9808
(Registrant's telephone number, including area code)
---------------------
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 stock: Common Stock, par value $.01 per share,
outstanding as of July 16, 1997: 11,442,715 shares.
<PAGE>
EIS INTERNATIONAL, INC. and SUBSIDIARIES
INDEX to Financial Statements Filed with Quarterly
Report of Registrant on Form 10-Q for the
Quarter Ended June 30, 1997
(Unaudited)
<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements: Page
----
<S> <C>
Unaudited Consolidated Balance Sheets as of June 30, 1997
and December 31, 1996 3
Unaudited Consolidated Statements of Operations
for the three and six months ended June 30, 1997 and 1996 4
Unaudited Consolidated Statements of Cash Flows
for the six months ended June 30, 1997 and 1996 5
Notes to Consolidated Financial Statements
(unaudited) 6-7
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 8-10
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 11
Item 2. Changes in Securities Not Applicable
Item 3. Defaults Upon Senior Securities Not Applicable
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 5. Other Information Not Applicable
Item 6. Exhibits and Reports on Form 8-K 12
Signatures 13
</TABLE>
2
<PAGE>
EIS INTERNATIONAL, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Dollars in Thousands)
<TABLE>
<CAPTION>
June 30, December 31
1997 1996
----------- -----------
(Unaudited)
<S> <C> <C>
Assets
Current assets:
Cash and cash equivalents $ 9,731 $ 11,099
Short-term investments 3,332 3,660
Accounts receivable, trade, less allowances for doubtful accounts
and sales returns of $5,958 in 1997 and $6,117 in 1996 16,119 21,335
Current portion of installment and lease receivables 1,828 2,007
Inventories (note 4) 7,489 7,732
Deferred income taxes 10,096 8,638
Refundable income taxes 2,359 2,450
Prepaids and other current assets 923 576
--------- --------
Total current assets 51,877 57,497
Capitalized software development costs, net 4,694 4,617
Property and equipment, net 7,271 8,181
Installment and lease receivables, less current portion 2,070 2,470
Other assets 1,801 1,925
--------- --------
Total assets $ 67,713 $ 74,690
========= ========
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable and accrued liabilities $ 13,701 $ 18,894
Deferred revenue 6,936 5,683
Net liability of discontinued operations 1,039 2,738
--------- --------
Total current liabilities 21,676 27,315
Deferred income taxes 1,829 1,829
Other liabilities 283 304
--------- --------
Total liabilities 23,788 29,448
Commitments and Contingencies
Stockholders' equity:
Common Stock, $.01 par value, 15,000,000
shares authorized, issued 11,543,940 shares
in 1997 and 11,173,252 shares in 1996 115 112
Additional paid-in capital 59,094 58,268
Accumulated translation adjustments (179) (196)
Retained deficit (14,200) (12,037)
Treasury stock, at cost - 101,225 shares in 1997
and 1996 (905) (905)
--------- --------
Total stockholders' equity 43,925 45,242
--------- --------
Total liabilities and stockholders' equity $ 67,713 $ 74,690
========= ========
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE>
EIS INTERNATIONAL, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(In Thousands, Except Per Share Amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Six Months
Ended June 30, Ended June 30,
------------------------- -------------------------
1997 1996 1997 1996
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Net revenues:
Product and software sales $ 16,385 $ 24,989 $ 30,298 $ 46,568
Service and other 6,728 5,627 13,038 9,813
-------- -------- -------- ---------
23,113 30,616 43,336 56,381
Cost of revenues:
Cost of product and software sold 5,888 8,109 11,494 15,501
Cost of services and other 3,966 3,375 8,152 5,970
-------- -------- -------- ---------
9,854 11,484 19,646 21,471
-------- -------- -------- ---------
Gross margin 13,259 19,132 23,690 34,910
-------- -------- -------- ---------
Operating cost and expense:
Research and development cost 3,156 3,310 6,402 6,054
Selling, general, and administrative 8,240 9,840 18,441 19,883
Restructuring costs - - 2,877
Acquired technology in process - - - 16,900
-------- -------- -------- ---------
11,396 13,150 27,720 42,837
-------- -------- -------- ---------
Operating income (loss) 1,863 5,982 (4,030) (7,927)
Other income, net:
Interest and other income, net 324 291 532 694
-------- -------- -------- ---------
Income (loss) before income taxes 2,187 6,273 (3,498) (7,233)
Income tax benefit (expense) (828) (2,322) 1,335 (4,058)
-------- -------- -------- ---------
Income (loss) from continuing operations 1,359 3,951 (2,163) (11,291)
Discontinued operations:
Income (loss) on discontinued operations, net of tax - (808) - (1,381)
-------- -------- -------- ---------
Net income (loss) $1,359 $3,143 $ (2,163) $(12,672)
======== ======== ======== =========
Primary income (loss) per share:
Continuing operations $ 0.12 $ 0.34 $ (0.19) $ (1.09)
Discontinued operations - (0.07) - (0.13)
-------- -------- -------- ---------
Primary income (loss) per share $ 0.12 $ 0.27 $ (0.19) $ (1.22)
======== ======== ======== =========
Fully diluted income (loss) per share:
Continuing operations $ 0.12 $ 0.34 $ (0.19) $ (1.09)
Discontinued operations - (0.07) - (0.13)
-------- -------- -------- ---------
Fully diluted income (loss) per share $ 0.12 $ 0.27 $ (0.19) $ (1.22)
======== ======== ======== =========
Weighted average common and common
equivalent shares:
Primary 11,405 11,609 11,179 10,354
Fully diluted 11,500 11,727 11,179 10,354
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE>
EIS INTERNATIONAL, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(Dollars in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Six Months
Ended June 30,
----------------------------
1997 1996
-------- -------
<S> <C> <C>
Cash flows from operating activities:
Net loss $ (2,163) $ (12,672)
Adjustments to reconcile net loss
to net cash used in operating activities:
Provision for doubtful accounts and
sales returns 1,907 620
Write-off acquired technology in process - 16,900
Depreciation and amortization 4,251 2,796
Deferred income taxes (1,458) -
Changes in assets and liabilities:
Accounts receivable, trade 3,309 (629)
Installment and lease receivables 579 (1,373)
Inventories 243 (867)
Prepaids and other current assets (347) (381)
Accounts payable and accrued expenses (5,123) (938)
Deferred revenue 1,253 (376)
Other (300) (510)
------- --------
Net cash provided by continuing operations 2,151 2,570
Cash used in discontinuing operations (1,699) (1,693)
------- --------
Net cash provided by (used in) operating activities 452 877
------- --------
Cash flows from investing activities:
Purchases of property and equipment (2,208) (2,006)
Sales of short-term investments 2,371 -
Purchases of short-term investments (2,043) -
Capitalization of software development costs (769) (1,518)
Purchases of businesses, net of cash acquired - (6,520)
------- --------
Net cash used in investing activities (2,649) (10,044)
------- --------
Cash flows from financing activities:
Sale of lease portfolio - 5,200
Proceeds from exercise of stock options 829 5,113
------- --------
Net cash provided by financing activities 829 10,313
------- --------
Net increase (decrease) in cash and cash equivalents (1,368) 1,146
Cash and cash equivalents at beginning of period 11,099 21,002
------- --------
Cash and cash equivalents at end of period $ 9,731 $ 22,148
======= ========
Supplemental disclosure of cash flow information:
Cash paid during the period for:
Interest $ 77 $ 86
Income taxes 155 3,138
Non-cash financing activities:
Tax benefit from exercise of stock options - 1,868
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE>
EIS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(1) Basis of Presentation
The unaudited consolidated financial statements presented herein have
been prepared in accordance with the instructions to Form 10-Q and do
not include all of the information and note disclosures necessary to
conform with annual reporting requirements. The statements should be
read in conjunction with the audited consolidated financial statements
and notes thereto included in the Company's Annual Report for the year
ended December 31, 1996. In the opinion of management, the accompanying
consolidated financial statements include all adjustments (consisting
only of normal recurring adjustments) necessary for a fair presentation
of the Company's financial position and results of operations. The
results of operations for the three and six month periods ended June
30, 1997 may not be indicative of the results for the full year.
(2) Principles of Consolidation
The accompanying financial statements include the accounts of the
Company and its wholly-owned subsidiaries. All significant intercompany
balances and transactions have been eliminated in consolidation.
(3) Discontinued Operations and Restructuring
On February 28, 1997, at the recommendation of new management, the
Board of Directors of the Company resolved to discontinue the
operations of Surefind Information, Inc. ("Surefind"). Accordingly, the
Consolidated Statement of Operations for the three and six month
periods ended June 30, 1996 has been reclassified to reflect the
results of Surefind on a discontinued operations basis. The results of
Surefind for the three and six months ended June 30, 1997 has been
charged against the provision for estimated operating losses during the
phase out period established at December 31, 1996.
On March 3, 1997, the Company announced a restructuring and
reorganization program (the "Restructuring"), the purpose of which was
to refocus the Company on its core business and to reduce costs. During
the first quarter of 1997, in connection with the Restructuring, the
Company recorded charges of $2.9 million including $1.1 million of
severance costs, $1.3 million of facilities leases and fixed asset
disposal costs, and $0.5 million of other costs.
(4) Inventories
Inventories primarily consists of finished goods as of June 30, 1997
and December 31, 1996.
6
<PAGE>
EIS INTERNATIONAL, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued
(Unaudited)
(5) New Accounting Pronouncements
In February 1997, the Financial Accounting Standards Board issued
Statement of Financial Accounting Standard ("SFAS") No. 128, "Earnings
per Share" which is effective for all interim and annual periods ending
after December 15, 1997. SFAS No. 128 replaces primary and fully
diluted earnings per share ("EPS") with "basic" and "diluted" EPS on
the face of the statement of operations. The Company does not expect
the adoption of SFAS No. 128 to have a material effect on its financial
position or results of operations.
In February 1997, FASB issued SFAS No. 129, "Disclosure of Information
about Capital Structure" which is effective for the year ending
December 31, 1998. SFAS No. 129 continues the previous requirements to
disclose certain information about an entity's capital structure found
in Accounting Principles Board ("APB") Opinions No. 10, "Omnibus
Opinion-1966," and No. 15, "Earnings per Share," and FASB SFAS No. 47,
"Disclosure of Long-Term Obligations." The Company has been subject to
the requirements of those standards, and as a result does not expect
the adoption of SFAS No. 129 to have a material impact on the Company's
financial statements.
In June 1997, FASB issued SFAS No. 130, "Reporting Comprehensive
Income" which is effective for the year ending December 31, 1998. SFAS
No. 130 establishes standards for the reporting and display of
comprehensive income and its components in the financial statements.
Earlier application of this statement is permitted; however, upon
adoption the Company will be required to reclassify previously reported
annual and interim financial statements. The Company believes that the
disclosure of comprehensive income in accordance with the provisions of
SFAS No. 130 will impact the manner of presentation of its financial
statements as currently and previously reported.
In June 1997, FASB issued SFAS No. 131, "Disclosure about Segments of
an Enterprise and Related Information," which is effective for the year
ending December 31, 1998. SFAS No. 131 requires companies to present
certain information about operating segments and related information,
including geographic and major customer data, in its annual financial
statements and in condensed financial statements for interim periods.
The Company does not believe that the adoption of SFAS No. 131 will
have a material impact on its financial statements.
7
<PAGE>
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations
The Company's quarterly and annual operating results are affected by a wide
variety of factors that could materially and adversely affect revenues and
profitability, including the timing of customer orders; its ability to introduce
new products on a timely basis; introduction of products and technologies by
competitors; and market acceptance of the Company's and its competitors
products. As a result of the foregoing and other factors, the Company may
experience material fluctuations in its future operating results on a quarterly
or annual basis, which could materially and adversely affect its business,
financial condition, operating results and stock price.
This quarterly report contains certain cautionary statements and information
relating to the Company that are based on the beliefs of its management and
assumptions made by and information currently available to that management. When
used in this report, the words "believe," and "expect," and words or phrases of
similar import, as they relate to the Company, its subsidiaries or its
management, are intended to identify cautionary statements.
Such cautionary statements reflect the current risks, uncertainties, and
assumptions related to certain factors including, without limitations,
competitive factors, general economic conditions, customer relations,
technological change, product introductions and acceptance, distribution
networks, changes in industry practices, one-time events and other factors
described herein and under the heading "Factors Affecting Future Results" in the
Company's Annual Report on Form 10-K for the fiscal year ended December 31,
1996. Based upon changing conditions, should any one or more of these risks or
uncertainties materialize, or should any underlying assumptions prove incorrect,
actual results may vary materially from those described herein. Unless otherwise
stated below, the Company does not intend to update those cautionary statements.
Results of Operations
- ---------------------
NET REVENUES
Net revenues of $23.1 million in the second quarter of 1997 decreased 25% from
$30.6 million in the second quarter of 1996. Product and software revenues
during the second quarter of 1997 decreased $8.6 million (34%) while service and
other revenues increased $1.1 million (20%) from the second quarter of 1996. Net
revenues of $43.3 million during the first six months of 1997 decreased $13.0
million (23%) from $56.4 million during the first six months of 1996. Product
and software revenues during this period decreased $16.3 million (35%) while
service and other revenues increased $3.2 million (33%) from the first six
months of 1996. The decrease in product and software sales is primarily a result
of a decrease in sales of the Company's mature products which were not offset by
an increase in sales of its newer products, the timing of shipment and
installation of customer orders, and a decrease in sales of the Company's wholly
owned subsidiary Cybernetics Systems International Corp. ("Cybernetics").
Service and other revenues increased primarily due to expansion of the Company's
customer base covered by service contracts and the expansion of its systems
integration business.
COST OF REVENUES
Cost of revenues was 43% of net revenues in the second quarter of 1997 compared
to 38% of net revenues in the second quarter of 1996. Product costs as a
percentage of product revenues increased to 36% from 32% in the second quarter
of 1997 as compared to the second quarter of 1996. Cost of revenues was 45% of
net revenues during the first six months of 1997 compared to 38% during the same
period in 1996. Product costs as a percentage of product revenues increased to
38% from 33% during the
8
<PAGE>
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations (continued)
first six months of 1997 as compared to the same period in 1996. The increase in
product costs as a percentage of net revenue is primarily due to the fixed cost
of certain operations which do not fluctuate with changes in product revenue.
Service and other costs were 59% of service and other revenues in the second
quarter of 1997 compared to 60% in the second quarter of 1996. Service and other
costs were 63% of service and other revenues during the first six months of 1997
compared to 61% for the same period in 1996. The increase in costs of service
and other as a percentage of service and other revenues during the first six
months of 1997 is due primarily to an increase in the cost of maintenance parts
shipped to customers under the related service agreements during the first
quarter of 1997.
RESEARCH AND DEVELOPMENT COST
Research and development cost decreased $154,000 during the second quarter of
1997 as compared to the second quarter of 1996. This decrease was primarily due
to a decline in the use of subcontractor software engineers offset by a decline
in the capitalization of certain software development costs. In accordance with
Statement of Financial Accounting Standards No. 86, the Company capitalizes
certain software development costs relating to the enhancement of existing
products and to the development of new products. Research and development cost
increased $348,000 during the first six months of 1997 as compared to the first
six months of 1996. The increase was primarily due to a decline in
capitalization of software development costs during the first six months of 1997
as compared to the same period in 1996.
SELLING, GENERAL AND ADMINISTRATIVE
Selling, general and administrative expense declined $1.6 million for the second
quarter of 1997 as compared to the second quarter of 1996, and declined $1.4
million during the first six months of 1997 as compared to the same period in
1996. During the first quarter of 1997, in connection with the Restructuring,
the Company downsized its Cybernetics and Pulse Technologies, Inc. ("Pulse")
subsidiaries and consolidated several of its administrative functions and
facilities.
RESTRUCTURING COSTS
As discussed above, during the first quarter of 1997, the Company downsized its
Cybernetics and Pulse subsidiaries and consolidated several of its
administrative functions and facilities. The Restructuring costs incurred during
the first quarter of 1997 primarily represent severance and lease buyout costs
associated with those actions.
ACQUIRED TECHNOLOGY IN PROCESS
The acquired technology in process costs of $16.9 million incurred in the first
quarter of 1996 reflect the fair value of the software products under
development at Cybernetics that had not achieved technological feasibility at
the date of the Company's acquisition of Cybernetics, and had no alternative
future uses, and were therefore charged against the Company's operations at the
time of the acquisition.
9
<PAGE>
ITEM 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations (continued)
INTEREST AND OTHER INCOME, NET
Interest and other income remained consistent during the second quarter of 1997
as compared to the same period in 1996. Interest and other income decreased
during the first six months of 1997 compared to the same period in 1996
primarily due to the sale of a major portion of the Company's lease portfolio
during the first quarter of 1996 and lower cash balances during the first six
months of 1997 as compared to the same period in 1996.
INCOME TAXES
The Company's effective income tax rate was 38% for the second quarter of 1997
as compared to 37% for the same period in 1996. Income taxes decreased during
the first six months of 1997 to a tax benefit of $1.3 million, as compared to a
tax expense of $4.1 million during the same period in 1996. This change was
primarily caused by the non-deductible acquired technology in process and other
costs incurred during the first quarter of 1996 associated with the Company's
acquisitions during that period.
LIQUIDITY AND CAPITAL RESOURCES
The Company's working capital was $30.2 million at June 30, 1997 and December
31, 1996. Cash and cash equivalents and short-term investment balances were
$13.1 million at June 30, 1997 compared to $14.8 million at December 31, 1996.
Operating activities generated $452,000 in cash during the six month period
ended June 30, 1997 compared to $877,000 in cash for the same period in 1996.
This decrease was due to a decrease in cash from continuing operations which was
$2.2 million for the first six months of 1997 as compared to $2.6 million for
the same period in 1996. Cash and cash equivalents used to invest in the
purchase of property and equipment was $2.2 million for the first six months of
1997 and $2.0 million for the first six months of 1996. The capitalization of
software development costs decreased from $1.7 million during the first six
months of 1996 to $769,000 for the same period in 1997. Proceeds from the
exercise of stock options decreased to $829,000 during the first six months of
1997 from $5.1 million during the same period in 1996.
The Company had an unsecured line of credit of $12.5 million with a commercial
bank under a commitment that expired in January 1997 and was not renewed. The
Company has received a letter of intent with a commercial bank to implement a
new $7 million, secured line of credit and is currently in the process of
finalizing that agreement.
The Company expects that its current cash balances and short-term investments,
together with cash anticipated to be provided by operating activities, will be
sufficient to fund its working capital requirements (including research and
development) through the balance of 1997. However, the Company's ability to
achieve that result will be affected by the amount of cash generated from
operations and the pace that its available resources are utilized. Accordingly,
the Company may in the future be required to seek additional sources of
financing, including borrowing and/or the sale of equity. If additional funds
are raised by issuing equity, further dilution to shareholders may result. No
assurance can be given that any such additional sources of financing will be
available on acceptable terms, or at all.
10
<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings.
The Company and certain individuals indicated below are named as defendants in
the following lawsuits, each of which were filed on the date indicated in the
United States District Court for the District of Connecticut, allegedly on
behalf of certain of the Company's shareholders, each of which claim certain
alleged misleading representations regarding the Company's acquisition of
Surefind and Cybernetics and their operations, each of which seek damages in an
unspecified amount.
1. Warburgh v. EIS International, Inc., Joseph J. Porfeli, Edward J.
Sarkesian and Kent M. Klineman, filed April 25, 1997.
-----------------------------------------------------------------
2. Wallace v. EIS International, Inc., Joseph J. Porfeli, Edward J.
Sarkesian, Harry Peisach, and Kent M. Klineman, filed May 21, 1997.
-------------------------------------------------------------------
3. Augenbaum v. EIS International, Inc., Joseph J. Porfeli, Edward J.
Sarkesian, Kent M. Klineman, Robert Jeserum and Herbert Balzuweit, filed
May 23, 1997.
------------------------------------------------------------------------
4. Romano, et. al. v. EIS International, Inc., Joseph J. Porfeli, Edward
J. Sarkesian, and Kent M. Klineman, filed June 4, 1997.
---------------------------------------------------------------------
5. Dechter v. EIS International, Inc., Joseph J. Porfeli, Edward J.
Sarkesian, Kent M. Klineman and Harry Peisach, filed June 4, 1997.
------------------------------------------------------------------
The Company expects that these lawsuits will be consolidated and that a single
amended complaint will be filed. The Company and various other defendants have
retained counsel, the claims are being reviewed, and the lawsuits will be
vigorously defended.
The Company is a party to various legal actions and claims arising in the
ordinary course of its business. The Company believes that it has adequate legal
defenses for each of the actions and claims and believes that their ultimate
disposition will not have a material adverse effect on the Company's
consolidated financial position or results of operations.
Item 2. Changes in Securities.
None.
Item 3. Defaults Upon Senior Securities.
None.
11
<PAGE>
Item 4. Submission of Matters to a Vote of Security Holders.
The Company's Annual Meeting of Stockholders was held on July 24, 1997. The
results of voting at this meeting are provided below:
Broker
Election of Directors For Withheld Non-Votes
- --------------------- --------- -------- ---------
Kent M. Klineman 7,836,307 172,959 -
James E. McGowan 7,841,475 167,791 -
Broker
Ratification of Auditors For Against Abstain Non-Votes
- ------------------------ ---------- ------- ------- ---------
KPMG Peat Marwick 7,963,162 22,932 23,172 -
The following directors continue to serve their respective terms: Robert J.
Cresci, Robert M. Jesurum, and Charles W. McCall.
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K.
(a) Exhibits
Exhibit 11 - Statement Re Computation of Earnings Per Share
Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K
On May 28, 1997, the Company filed Form 8-K to report the
adoption of a Shareholder Rights Plan effective May 16, 1997.
This plan provides for distribution to shareholders of certain
rights to acquire shares of the Company's equity securities.
Under certain circumstances, the rights are exerciseable in the
event that a person or group acquires, or has the right to
acquire, 20% or more of the Company's outstanding common stock,
or has commenced a tender offer or exchange offer that would
result in a person or group beneficially owning 20% or more of
the Company's common stock.
12
<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.
EIS INTERNATIONAL, INC.
Date: August 13, 1997 By: /s/ James E. McGowan
--------------------------- ----------------------
James E. McGowan
President and Chief Executive Officer
Date: August 13, 1997 By: /s/ Frederick C. Foley
--------------------------- ------------------------
Frederick C. Foley
Senior Vice President, Finance,
Chief Financial Officer and Treasurer
13
EIS International, Inc. and Subsidiaries Exhibit 11
Statement Re Computation of Per Share Earnings
(in thousands, except for per share amounts)
<TABLE>
<CAPTION>
Three Months Ended June 30, Six Months Ended June 30,
1997 1996 1997 1996
------- ------- -------- --------
<S> <C> <C> <C> <C>
Income (loss) from continuing operations $ 1,359 $ 3,951 $ (2,163) $ (11,291)
Discontinued operations - (808) (1,381)
------- ------- -------- ---------
Net income (loss) $ 1,359 $ 3,143 $ (2,163) $ (12,672)
======= ======= ======== =========
Weighted average nunber of common and
common equivalent shares:
Common shares outstanding 11,224 10,668 11,179 10,354
Dilutive effect of stock options and warrants,
primary computation 181 941 - -
------- ------- -------- ---------
Weighted average number of common and
common equivalent shares utilized in the primary
income (loss) per share computation: 11,405 11,609 11,179 10,354
Additional dilutive effect of stock options and
warrants, fully diluted computation 95 118 - -
------- ------- -------- ---------
Weighted average number of common and
common equivalent shares utilized in the fully
diluted loss per share computation 11,500 11,727 11,179 10,354
======= ======= ======== =========
Priory income (loss) per share:
Continuing operations $ 0.12 $ 0.34 $ (0.19) $ (1.09)
Discontinued operations - (0.07) - (0.13)
------- ------- -------- ---------
Pimary income (loss) per share $ 0.12 $ 0.27 $ (0.19) $ (1.22)
======= ======= ======== =========
Fully diluted income (loss) per share:
Continuing operations $ 0.12 $ 0.34 $ (0.19) $ (1.09)
Discontinued operations - (0.07) - (0.13)
------- ------- -------- ---------
Fully diluted income (loss) per share $ 0.12 $ 0.27 $ (0.19) $ (1.22)
======= ======= ======== =========
</TABLE>
14
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JAN-01-1997
<PERIOD-END> JUN-30-1997
<EXCHANGE-RATE> 1
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0
0
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