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 April 30, 1995
OR
[ ] Transition Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Commission file number 1-9115
COMPUTRAC, INC.
(Exact name of registrant as specified in its charter)
TEXAS 75-1540265
(State or other (I.R.S. Employer
jurisdiction of Identification No.)
incorporation or
organization)
222 Municipal Drive
Richardson, Texas 75080
(Address of principal executive offices)
Telephone No. (214) 234-4241
(Former name, former address and former fiscal year,
if changed since last report.)
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 May 31, 1995 there were 6,098,584 shares of the registrant's
$.01 par value common stock outstanding.<PAGE>
<PAGE>
CompuTrac, Inc.
INDEX
PART I. FINANCIAL INFORMATION
Page No.
Item 1. Financial Statements:
Consolidated Balance Sheets-
April 30, 1995 (unaudited)
and January 31, 1995 3-4
Consolidated Statements of Operations-
Three-month period ended April 30, 1995
and 1994 (unaudited) 5
Consolidated Statements of Cash Flows-
Three-month period ended April 30, 1995
and 1994 (unaudited) 6-7
Notes to Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of
Operations 9-10
Item 3. Exhibit I - Annual Report to Shareholders
for the fiscal year ended January 31, 1995
PART II. OTHER INFORMATION
Item 6(a.) Exhibits 11
Item 6(b.) Reports on Form 8-K 11
Signatures 12
______
Note: Items 1 through 5 of Part II are omitted because they are not
applicable.
<PAGE>
<TABLE>
CompuTrac, Inc.
CONSOLIDATED BALANCE SHEETS
ASSETS
<CAPTION>
April 30, January 31,
1995 1995
(unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 1,356,590 $ 1,499,733
Short-term investments 3,132,891 2,881,030
Accounts receivable, net of allowance of
$226,000 and $286,000 at April 30 and
January 31, 1995, respectively 1,097,938 1,160,516
Unbilled revenue 1,014,854 966,102
Other current assets 454,713 482,608
Total current assets 7,056,986 6,989,989
Property, furniture and equipment, and
capitalized software, at cost, net of
accumulated depreciation and amortization
of $8,364,083 and $8,129,094 at April 30
and January 31, 1995, respectively 3,246,798 3,248,916
Other assets 354,300 338,120
Total assets $ 10,658,084 $ 10,577,025
<FN>
See accompanying Notes to Financial Statements (unaudited) and Management's
Discussion and Analysis of Financial Condition and Results of Operations.
</TABLE>
<PAGE>
<TABLE>
CompuTrac, Inc.
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' EQUITY
<CAPTION>
April 30, January
1995 199
(unaudited)
<S> <C> <C>
Current liabilities:
Accounts payable $ 308,110 $ 39
Accrued expenses 339,951 26
Accrued contract completion costs 341,955 38
Accrued contract settlement liabilities 268,714 31
Deferred systems revenues 157,951 13
Short-term mortgage note payable 64,930 6
Total current liabilities 1,481,611 1,56
Long-term mortgage note payable 326,924 34
Total liabilities 1,808,535 1,90
Shareholders' equity:
Preferred stock, $1.00 par value, 2,000,000 shares
authorized, no shares issued and outstanding
Common stock, $.01 par value, 13,000,000 shares
authorized, 6,932,242 and 6,910,692 shares issued,
respectively 69,322 6
Additional paid-in capital 9,971,758 9,94
Retained earnings 1,660,987 1,50
Less:
Treasury stock 839,256 shares, at cost 2,852,518 2,85
Total shareholders' equity 8,849,549 8,67
Total liabilities and shareholders' equity $ 10,658,084 $ 10,57
<FN>
See accompanying Notes to Financial Statements (unaudited) and Management's
Discussion and Analysis of Financial Condition and Results of Operations.
</TABLE>
<PAGE>
<TABLE>
CompuTrac, Inc.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<CAPTION>
Three-month period
ended April 30,
1995 1994
<S> <C> <C>
Operating revenues from continuing operations:
System sales $ 140,109 $ 500,
Services and support 1,160,325 1,524,
1,300,434 2,024,
Costs and expenses:
Cost of systems hardware 90,554 313,
Operating expenses 555,120 524,
Selling, general and administrative expenses 517,941 758,
Software development 48,100 154,
1,211,715 1,750,
Operating income from continuing operations 88,719 273,
Non-operating income (loss) 64,925 (13,3
Income from continuing operations before income taxes 153,644 260,
Provision (benefit) for income taxes
Income from continuing operations $ 153,644 $ 260,<PAGE>
Discontinued operations, net of related income taxes
Loss from discontinued operations of MediaMagic (161,9
Loss on disposal of MediaMagic
Net income $ 153,644 $ 98,
Income from continuing operations per
common share $ .03 $
Loss from discontinued operations per
common share $ (.
Net income per common share $ .03 $
Weighted average shares outstanding: 6,098,603 6,032,
<FN>
See accompanying Notes to Financial Statements (unaudited) and Management's
Discussion and Analysis of Financial Condition and Results of Operations.
</TABLE>
<PAGE>
<TABLE>
CompuTrac, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<CAPTION>
Three-month period
ended April 30,
1995 1994
<S> <C> <C>
Cash flows from operating activities:
Net income $ 153,644 $ 98,362
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 234,989 252,159
Changes in current assets and liabilities:
Accounts receivable 62,578 24,987
Unbilled revenues (48,752) 728,263
Other current assets 27,895 (24,917)
Accounts payable and accrued expenses (90,375) (433,201)
Accrued expenses (18,472) (334,815)
Deferred systems revenue 26,953 (279,700)
Net cash provided by operating activities 348,460 31,138<PAGE>
<FN>
See accompanying Notes to Financial Statements (unaudited) and Management's
Discussion and Analysis of Financial Condition and Results of Operation.
</TABLE>
<PAGE>
<TABLE>
CompuTrac, Inc.
CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)
(Unaudited)
<CAPTION>
Three-month period
ended April 30,
1995 1994
<S> <C> <C>
Cash flows from investing activities:
Additions to property, furniture and
equipment and capitalized software costs $(232,871) $ (130,13
(Purchase) sale of short-term investment (251,861) 196,0
Additions to other assets (16,180) (14,22
Net cash (used in) provided by investing activities (500,912) 51,6
Cash flows from financing activities:
Issuance of common stock 24,604 23,5
Payments of mortgage note payable (15,295) (14,55
Net cash used in financing activities 9,309 8,9
Net (decrease) increase in cash (143,143) 91,7
Cash and cash equivalents at beginning of period 1,499,733 2,668,0
Cash and cash equivalents at end of period $1,356,590 $ 2,759,8
Supplemental disclosures of cash flow information:
Interest expense paid $ 9,549 $ 35,0
<FN>
See accompanying Notes to Financial Statements (unaudited) and Management's
Discussion and Analysis of Financial Condition and Results of Operation.
</TABLE>
<PAGE>
CompuTrac, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(1) The unaudited financial information furnished herein reflects all
adjustments which in the opinion of management are necessary to
fairly state the Company's financial position, the changes in its
financial position and the results of its operations for the
periods presented. This report on Form 10-Q should be read in
conjunction with the Company's financial statements and notes
thereto included on pages 8 through 23 of the Company's Annual
Report to Shareholders for the fiscal year ended January 31,
1995. The Company presumes that users of the interim financial
information herein have read or have access to the audited
financial statements for the preceding fiscal year and that the
adequacy of additional disclosure needed for a fair presentation
may be determined in that context. Accordingly, footnote
disclosure which would substantially duplicate the disclosure
contained in the Company's Annual Report to Shareholders for the
fiscal year ended January 31, 1995 has been omitted. The results
of operations for the three-month period ended April 30, 1995 are
not necessarily indicative of results for the entire year ending
January 31, 1996.
(2) The consolidated financial statements for activity reported in
the quarter ended April 30, 1994, include the accounts of the
Company's MediaMagic subsidiary. The operations of MediaMagic
were discontinued in July 1994 and accordingly, the Company has
reflected the results from discontinued operations as a separate
component in the Consolidated Statements of Operations.
(3) The Company capitalizes the costs of developing and testing new
or significantly enhanced software products in accordance with
the provisions of Statement of Financial Accounting Standards No.
86, ``Accounting for the Costs of Computer Software to be Sold,
Leased or Otherwise Marketed''.
<PAGE>
CompuTrac, Inc.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Consolidated Operations
Operating revenues from continuing operations decreased $724,130
or 36% from $2,024,564 at April 30, 1994, to $1,300,434 at April 30,
1995. System sales revenues decreased $360,012 or 72% from $500,121
in the comparable prior period to $140,109. System sales revenues for
the current quarter were primarily comprised of peripheral add-on
sales, as opposed to a mix of new system sales, upgrade sales and
peripheral sales activity recognized in the comparable prior quarter.
The Company's new system sales efforts have been, and will be,
minimal until the Company releases its next generation, Windows-based,
relational database.
Services and support revenues decreased $364,118 or 24% from
$1,524,443 at April 30, 1994 to $1,160,325. This decrease was
primarily attributable to decreased training, support, and conversion
service revenue due to the Company not recognizing any new system
sales for the quarter.
Costs of systems hardwa re as a percentage of system sales
increased a nominal two percent from 63% to 65% between periods.
Combined operating, selling, general and administrative expenses, and
software development costs decreased $316,140 or 22% from $1,437,301
at April 30, 1994, to $1,121,161 in the current quarter. Contributing
to this decrease is the Company's continued efforts at managing its
overhead costs and related discretionary spending.
Non-operating income increased substantially from a loss of
$13,319 reported in the comparable prior quarter, to income of $64,925
in the current period. This increase is primarily attributable to
increased yields on certificate of deposit and treasury bill
investments, along with reduced interest expense on the Company's
mortgage note covering its corporate facility.
Losses reported in the prior comparable quarter, relating to the
Company's investment in MediaMagic, were $161,920. The Company
discontinued the operations of MediaMagic in the second quarter of
fiscal 1995. No losses from discontinued operations were reported for
the quarter ended April 30, 1995 and the Company does not anticipate
any future losses with respect to the discontinued operations of
MediaMagic.
<PAGE>
Fluctuations in Interim Period Operating Results
Management of the Company believes that historically, interim
results and period-to-period comparisons have been neither predictable
nor an accurate measure of the annual performance of the Company. The
Company has experienced and expects to continue to experience interim
period-to-period fluctuations in the number of systems sold, revenues
and net income. These fluctuations are primarily a result of the
revenues of the Company being generated principally by the sale of a
small number of relatively expensive systems, the policy of the
Company of recognizing revenue upon delivery of the hardware, delivery
and acceptance of the software, the equipment availability of the
Company's primary hardware supplier, and the desire of the customer to
accelerate or delay the date of delivery. Additionally, sales are not
made or recognized evenly throughout the fiscal year or any interim
period, thus making meaningful interim period comparisons difficult.
These fluctuations may also have a significant impact on profitability
in any interim period as a result of the relatively fixed nature of
operating costs and selling, general and administrative expenses.
Liquidity and Capital Resources
The Company's primary source of liquidity has been cash flow from
operations. Additional liquidity is provided by occasional sales of
the Company's common stock through various employee benefit plans.
Current assets consist almost entirely of cash, short-term
investments, accounts receivables and unbilled revenues from system
sales and services. The Company has no significant past due
receivables at April 30, 1995 which would affect liquidity.
The Company's major capital expenditures have historically been
for computer equipment and capitalized software. For the quarter
ended April 30, 1995, the Company made investments totaling $232,871
in equipment and capitalized software primarily to support the
Company's current software development efforts.
<PAGE>
PART II. OTHER INFORMATION
Items 1 through 5 are not applicable.
Item 6(a): Exhibits
Exhibit 11 (Pg. 13) - Calculation of weighted average number of common
shares outstanding during the three-month period ended April 30, 1995
and 1994.
Item 6(b): Reports on Form 8-K
No reports on Form 8-K have been filed during the quarter ended April
30, 1995.
<PAGE>
CompuTrac, Inc.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
Date: June 12, 1995
/s/ CompuTrac, Inc.
(Registrant)
/s/ Harry W. Margolis
Harry W. Margolis
Chief Executive Officer
(Principal Executive Officer)
/s/ George P. McGraw
George P. McGraw
President - Legal Division
(Principal Operating Officer)
/s/ Cheri L. White
Cheri L. White
Vice President of Finance and
Chief Financial Officer
<PAGE>
<TABLE>
EXHIBIT 11
CompuTrac, Inc.
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
<CAPTION>
1995 1994
<S> <C> <C>
Primary Calculation
Three-month period ended:
April 30,
Shares issued at beginning of period 6,071,436 6,017,934
Issuance of common stock 11,233 14,532
Common stock equivalents 15,934
Primary weighted average number of
shares outstanding 6,098,603 6,032,466
Fully Dilutive Calculation
Three-month period ended:
April 30,
Shares issued at beginning of period 6,071,436 6,017,934
Issuance of common stock 11,233 14,532
Common stock equivalents 15,934
Fully diluted weighted average number
of shares outstanding 6,098,603 6,032,466<PAGE>
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1996
<PERIOD-END> APR-30-1995
<CASH> 1356590
<SECURITIES> 3132891
<RECEIVABLES> 1323938
<ALLOWANCES> 226000
<INVENTORY> 0
<CURRENT-ASSETS> 7056986
<PP&E> 11610881
<DEPRECIATION> 8364083
<TOTAL-ASSETS> 10658084
<CURRENT-LIABILITIES> 1481611
<BONDS> 326924
<COMMON> 69322
0
0
<OTHER-SE> 8780227
<TOTAL-LIABILITY-AND-EQUITY> 10658084
<SALES> 140109
<TOTAL-REVENUES> 1300434
<CGS> 90554
<TOTAL-COSTS> 90554
<OTHER-EXPENSES> 1121161
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 9549
<INCOME-PRETAX> 153644
<INCOME-TAX> 0
<INCOME-CONTINUING> 153644
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<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 153644
<EPS-PRIMARY> .03
<EPS-DILUTED> .03
</TABLE>
