<PAGE>
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 January 1, 1995
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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 012378
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APERTUS TECHNOLOGIES INCORPORATED
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(Exact name of registrant as specified in its charter)
MINNESOTA 41-1349953
- - ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
7275 FLYING CLOUD DRIVE, EDEN PRAIRIE, MINNESOTA 55344
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (612) 828-0300
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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
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Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Common Stock, $.05 par value 13,345,550
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Class Shares outstanding on January 1, 1995
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<TABLE>
<CAPTION>
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
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<S> <C>
Statements of Operations - Three and Nine
Months Ended January 1, 1995 and
January 2, 1994................................ 1
Balance Sheets - January 1, 1995 and
April 3, 1994.................................. 2-3
Statements of Cash Flows - Nine Months
Ended January 1, 1995 and
January 2, 1994................................ 4
Notes to Financial Statements.................. 5
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<TABLE>
<CAPTION>
Item 2. Management's Discussion and Analysis of
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Financial Condition and Results of Operations
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<S> <C>
Results of Operations.......................... 6
Liquidity and Capital Resources................ 6
</TABLE>
<TABLE>
<CAPTION>
PART II. OTHER INFORMATION
<S> <C>
Item 1. Legal Proceedings..................... 7
Item 2. Changes in Securities................. 7
Item 3. Defaults Upon Senior Securities....... 7
Item 4. Submission of Matters to a Vote of
Security Holders...................... 7
Item 5. Other Information..................... 7
Item 6. Exhibits and Reports on Form 8-K...... 7
</TABLE>
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
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STATEMENTS OF OPERATIONS
(Unaudited)
(Dollars in Thousands, Except Per Share Amounts)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
-------------------- -------------------
Jan. 1 Jan. 2 Jan. 1 Jan. 2
1995 1994 1995 1994
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<S> <C> <C> <C> <C>
REVENUES
Sales.................... $11,469 $ 4,219 $34,622 $ 11,442
Rentals and services..... 2,240 1,318 6,008 3,815
------- -------- ------- --------
TOTAL...................... 13,709 5,537 40,630 15,257
COSTS AND EXPENSES
Cost of revenues......... 3,784 2,701 12,731 7,331
Research, development
and engineering......... 3,144 1,327 7,688 3,729
Selling, general and
administrative.......... 4,299 2,581 13,483 6,170
Restructuring and other
charges................. - 9,029 - 9,029
------- -------- ------- --------
TOTAL...................... 11,227 15,638 33,902 26,259
------- -------- ------- --------
INCOME (LOSS) FROM
OPERATIONS............... 2,482 (10,101) 6,728 (11,002)
INTEREST INCOME............ 206 217 429 646
INCOME TAX................. (75) - (75) -
------- -------- ------- --------
NET INCOME (LOSS).......... $ 2,613 $ (9,884) $ 7,082 $(10,356)
======= ======== ======= ========
EARNINGS PER SHARE:
- - -------------------
Net Income (Loss)......... $ .18 $ (.76) $ .50 $ (.80)
======= ======== ======= ========
WEIGHTED AVERAGE NUMBER
OF COMMON AND COMMON
EQUIVALENT SHARES 14,485,000 12,921,000 14,302,000 12,866,000
========== ========== ========== ==========
</TABLE>
See accompanying Notes to Financial Statements.
1
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CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
ASSETS
<TABLE>
<CAPTION>
(Unaudited)
Jan. 1 April 3
1995 1994
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<S> <C> <C>
Current Assets
Cash and cash equivalents................ $14,072 $ 2,040
Cash in escrow - current portion......... 106 106
Marketable securities at cost which
approximates market.................... 5,990 6,213
Accounts receivable - net................ 13,726 12,159
Current portion of installment
receivables............................. 356 881
Inventories.............................. 3,470 3,092
Other.................................... 679 529
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Total current assets.................... 38,399 25,020
Property and Equipment - Net.............. 3,405 3,023
Capitalized Software - Net................ 3,778 4,894
Cash in escrow - net of current portion... 768 849
Note Receivable........................... 8,700 8,700
Installment Receivables - net of current
portion.................................. 37 196
Other Assets.............................. 824 881
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Total................................... $55,911 $43,563
======= =======
</TABLE>
See accompanying Notes to Financial Statements.
2
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CONSOLIDATED BALANCE SHEETS
(Dollars in Thousands)
LIABILITIES AND SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
(Unaudited)
Jan. 1 April 3
1995 1994
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<S> <C> <C>
Current Liabilities
Accounts payable....................... $ 6,283 $ 4,538
Accrued expenses....................... 8,527 4,064
Current portion of long-term debt...... 138 138
-------- --------
Total current liabilities............. 14,948 8,740
Long-term Debt.......................... 9,040 9,142
Notes Payable........................... 2,140 3,740
Shareholders' Equity
Common stock--authorized, 30,000,000
shares at $.05 par value; issued and
outstanding at
January 01, 1995 - 13,345,550 Shares
April 03, 1994 - 12,941,875 Shares.... 667 647
Additional paid-in-capital............. 52,742 52,047
Accumulated deficit.................... (23,504) (30,586)
Deferred compensation.................. (122) (167)
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Total shareholders' equity............ 29,783 21,941
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Total................................. $ 55,911 $ 43,563
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</TABLE>
See accompanying Notes to Financial Statements.
3
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CONSOLIDATED STATEMENTS OF CASH FLOWS
(Dollars in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
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Jan. 1 Jan. 2
1995 1994
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<S> <C> <C>
Operating Activities:
Net income (loss).................................. $ 7,082 $(10,356)
Adjustments to reconcile net income (loss)
to net cash provided by operations net of the
effects from the purchase of the company:
Depreciation and amortization..................... 3,299 371
Non-current portion of restructuring and other
charges.......................................... - 7,458
Accounts receivable............................... (2,711) 2,071
Installment receivables........................... 684 299
Inventories....................................... (378) (263)
Other assets...................................... 10 1
Net assets of discontinued operations............. - 208
Accounts payable, accrued expenses and
income taxes.................................... 6,082 483
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Net cash flows provided by
operating activities............................. 14,068 272
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Investing Activities:
Purchase of company (net of cash acquired)......... - (8,679)
Purchases of property and equipment................ (1,169) (363)
Marketable Securities.............................. 223 11,774
Capitalized software............................... (1,784) (741)
Change in cash held in escrow...................... 81 -
Reduction in carrying value of property held
for sale.......................................... - 638
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Net cash flows provided by (used in)
investing activities.............................. (2,649) 2,629
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Financing Activities:
Debt transactions:
Repayments...................................... (102) (83)
Capital transactions:
Stock options exercised......................... 715 389
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Net cash flows provided by financing activities.... 613 306
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Net increase in cash and cash equivalents........... 12,032 3,207
Beginning cash and cash equivalents................. 2,040 136
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Ending cash and cash equivalents.................... $14,072 $ 3,343
======= ========
Supplemental disclosures of cash flow information:
Cash paid for interest............................. $ - $ 630
Cash paid (received) for income taxes.............. 70 99
</TABLE>
See accompanying Notes to Financial Statements.
4
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NOTES TO FINANCIAL STATEMENTS
(Unaudited)
(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
1. MANAGEMENT REPRESENTATION
The accompanying unaudited interim financial statements have been prepared in
accordance with the instructions to Form 10-Q and do not include all the
information and footnotes required by generally accepted accounting
principles for complete financial statements. In the opinion of management,
all adjustments (consisting of normal recurring accruals) considered
necessary for a fair presentation have been included. The results of
operations for any interim period are not necessarily indicative of results
for the year. These statements should be read in conjunction with the
financial statements and related notes included in the Company's Annual
Report on Form 10-K for the year ended April 3, 1994.
2. INCOME (LOSS) PER SHARE
Income (loss) per common and common equivalent shares for the third quarter
was computed by dividing net income (loss) by the weighted average number of
shares of common stock outstanding during the third quarter and applicable
dilutive common stock equivalents outstanding for the same period. During
the third quarter of fiscal 1995, common stock equivalents had a dilutive
effect which amounted to an additional weighted shares outstanding of
1,201,829 shares. This amount was added to the current weighted average
shares outstanding for the quarter ended January 1, 1995 of 13,283,662 shares
to arrive at a weighted average shares outstanding for the quarter of
14,485,491. The dilutive effect of 1,201,829 shares was added to the
weighted average shares outstanding for the nine month period ended
January 1, 1995 of 13,099,934 shares to arrive at a weighted average shares
outstanding for the nine month period of 14,301,763.
3. INVENTORIES
<TABLE>
<CAPTION>
Inventories consisted of:
Jan. 1 April 3
1995 1994
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<S> <C> <C>
Raw material $ 516 $ 479
Work-in-process 1,159 1,060
Finished goods 1,795 1,553
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$3,470 $3,092
====== ======
</TABLE>
5
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
-----------------------------------
(DOLLARS IN THOUSANDS EXCEPT PER SHARE AMOUNTS)
RESULTS OF OPERATIONS
Net revenues for the three and nine months ended January 1, 1995 increased
$8,172 (148%) and $25,373 (166%) respectively, over the comparable periods in
the prior year. These increases reflect the revenues associated with the
acquisition of Systems Strategies, Inc. as well as continued gains in pre-
acquisition business units.
The cost of revenues, as a percentage of revenues, was 28% and 31% for the three
and nine months ended January 1, 1995 as compared to 49% and 48% in the prior
year. These decreases are due, in part, to increased software sales which enjoy
favorable margins as well as to a shift in the mix of hardware products sold
toward higher margin products.
Research, development and engineering costs as a percentage of revenues were 23%
and 19% during the three and nine month periods ending January 1, 1995,
respectively, as compared to 24% in each of the comparable periods of fiscal
1994. These decreases reflect the increased sales experienced in the three
quarters of fiscal 1995. Selling, general and administrative costs were 31% and
33% of revenues for the three and nine months ended January 1, 1995,
respectively, as compared to 47% and 40% in the prior year. These decreases also
reflect the increased sales noted in the first three quarters of fiscal 1995.
Interest income for the three month period ended January 1, 1995 was at the same
level as interest income for the comparable period in the prior year due to
equivalent average cash balances during the two periods. Although the average
cash balances were equivalent, cash was reduced by $10 million, related to the
S.S.I. acquisition, at the end of the third quarter in fiscal year 1994.
Interest income for the nine month period ended January 1, 1995, was lower than
that for the comparable period in the prior year due to lower average cash
balances.
LIQUIDITY AND CAPITAL RESOURCES
Cash, cash equivalents and marketable securities were $20,936 and $9,208 at
January 1, 1995 and April 3, 1994, respectively. The Company currently
anticipates making capital expenditures of $250 during the rest of fiscal year
1995. These capital expenditures will relate to research and development, data
processing and software. The Company made a payment of approximately $2.0
million in January 1995 in settlement of a promissory note related to the
December 1993 purchase of Systems Strategies, Inc. The Company believes that
cash, cash equivalents and marketable securities will be adequate to meet its
anticipated cash needs for working capital and capital expenditures for the rest
of fiscal year 1995.
6
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
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None
ITEM 2. CHANGES IN SECURITIES
- - ------------------------------
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
- - ----------------------------------------
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
- - ------------------------------------------------------------
None
ITEM 5. OTHER INFORMATION
- - --------------------------
None
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
- - -----------------------------------------
None
7
<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 hereunto duly authorized.
APERTUS TECHNOLOGIES INCORPORATED
/s/ Sue Hogue
Date: February 15, 1995 By_______________________________
Sue Hogue
Chief Financial Officer
8
<TABLE> <S> <C>
<PAGE>
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<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> APR-02-1995
<PERIOD-START> OCT-03-1994
<PERIOD-END> JAN-01-1995
<EXCHANGE-RATE> 1
<CASH> 14,946
<SECURITIES> 5,990
<RECEIVABLES> 13,726
<ALLOWANCES> 0
<INVENTORY> 3,470
<CURRENT-ASSETS> 38,399
<PP&E> 3,405
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<TOTAL-ASSETS> 55,911
<CURRENT-LIABILITIES> 14,948
<BONDS> 9,040
<COMMON> 667
0
0
<OTHER-SE> 29,116
<TOTAL-LIABILITY-AND-EQUITY> 55,911
<SALES> 11,469
<TOTAL-REVENUES> 13,709
<CGS> 2,898
<TOTAL-COSTS> 11,895
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<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 2,688
<INCOME-TAX> 75
<INCOME-CONTINUING> 2,613
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<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,613
<EPS-PRIMARY> .18
<EPS-DILUTED> .18
</TABLE>
