___________________________________________________________________
___________________________________________________________________
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 October 31, 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 November 30, 1995 there were 6,196,060 shares of the
registrant's $.01 par value common stock outstanding.
_________________________________________________________________
_________________________________________________________________
<P>
CompuTrac, Inc.
INDEX
PART I. FINANCIAL INFORMATION
Page No.
Item 1. Financial Statements:
Consolidated Balance Sheets -
October 31, 1995 (unaudited) and
January 31, 1995 3-4
Consolidated Statements of Operations -
Three-month and nine-month periods ended
October 31, 1995 and 1994 (unaudited) 5
Consolidated Statements of Cash Flows -
Nine-month period ended October 31, 1995
and 1994 (unaudited) 6-7
Notes to Consolidated Financial Statements
(unaudited) 8
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.
<P>
<TABLE>
CompuTrac, Inc.
CONSOLIDATED BALANCE SHEETS
ASSETS
<CAPTION>
October 31, January 31,
1995 1995
(unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 1,575,360 $ 1,499,733
Short-term investments 3,990,704 2,881,030
Accounts receivable, net of allowance of
$19,000 and $286,000 at October 31, and
January 31, 1995, respectively 779,868 1,160,516
Unbilled revenue 341,438 966,102
Other current assets 350,746 482,608
Total current assets 7,038,116 6,989,989
Property, furniture and equipment, and
capitalized software, at cost, net of
accumulated depreciation and amortization
of $8,768,174 and $8,129,094 at October 31,
and January 31, 1995, respectively 3,251,171 3,248,916
Other assets 380,396 338,120
Total assets $ 10,669,683 $ 10,577,025
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>
October 31, January 31,
1995 1995
(unaudited)
<S> <C> <C>
Current liabilities:
Accounts payable $ 266,842 $ 398,485
Accrued expenses 370,882 268,366
Accrued contract completion costs 214,100 388,155
Accrued contract settlement liabilities 312,571
Deferred systems revenues 78,379 130,998
Short-term portion of mortgage note payable 68,076 63,412
Total current liabilities 998,279 1,561,987
Long-term portion of mortgage note payable 292,081 343,737
Total liabilities 1,290,360 1,905,724
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, 6,534,317 and
6,910,692 shares issued, respectively 65,343 69,107
Additional paid-in capital 8,408,556 9,947,369
Retained earnings 2,067,211 1,507,343
10,541,110 11,523,819
Less:
Treasury stock, 342,106 and 839,256 shares,
at cost, respectively 1,161,787 2,852,518
Total shareholders' equity 9,379,323 8,671,301
Total liabilities and shareholders' equity $ 10,669,683 $ 10,577,025
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 Nine-month per
ended October 31, ended October
1995 1994 1995 1
<S> <C> <C> <C> <C>
Operating revenues:
System sales $ 131,078 $ 248,148 $ 555,745 $1,12
Services and support 1,137,533 1,266,809 3,442,212 4,14
1,268,611 1,514,957 3,997,957 5,27
Costs and expenses:
Cost of systems hardware 81,245 149,594 355,351 61
Operating expenses 482,932 322,939 1,576,783 1,36
Selling, general and
administrative expenses 489,756 748,508 1,548,124 2,22
Software development costs 48,200 192,000 151,400 50
1,102,133 1,413,041 3,631,658 4,70
Operating income from
continuing operations 166,478 101,916 366,299 56
Other income 57,506 4,211 193,569 1
Income from continuing
operations before taxes 223,984 106,127 559,868 58
Provision for income taxes 0 0 0
Income from continuing
operations $ 223,984 $ 106,127 $ 559,868 $ 58
Discontinued operations, net
of related income taxes:
Loss from discontinued
operations of MediaMagic $ 0 $ 0 $ 0 $(236
Loss on disposal of
MediaMagic 0 0 0 (259
Income (loss) from
discontinued operations 0 0 0 (495
Net income $ 223,984 $ 106,127 $ 559,868 $ 8
Income from continuing
operations per common
share $ .04 $ .02 $ .09 $
Income (loss) from
discontinued operations
per common share .00 .00 .00
------- -------- ------- --
Net income .04 .02 .09
==== ===== ====
Weighted average shares
outstanding: 6,323,371 6,051,369 6,270,140 6,04
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>
Nine-month period
ended October 31,
1995 1994
<S> <C> <C>
Cash flows from operating activities:
Net income $ 559,868 $ 88,38
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 665,888 728,94
Write-off of fixed assets from
discontinued operations 123,79
Cost, net of depreciation, of computer
equipment included in cost of sales 37,922
Changes in current assets and liabilities:
Accounts receivable 380,648 185,95
Unbilled revenues 624,664 1,714,78
Partial shipments 53,38
Current deferred taxes 388,52
Other current assets 131,862 993,95
Accounts payable (131,643) (657,823
Accrued expenses (384,110) (1,108,352
Deferred systems revenue (52,619) (493,529
Net cash provided by operating activities 1,832,480 2,018,01
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 (CONTINUED)
(Unaudited)
<CAPTION>
Nine-month period
ended October 31,
1995 1994
<S> <C> <C>
Cash flows from investing activities:
Additions to property, furniture and
equipment and capitalized software costs $ (706,064) $ (322,544)
(Purchase) of short-term investment (1,109,674) (1,917,954)
(Increase) in other assets (42,276) (326,259)
Net cash used in investing activities (1,858,014) (2,566,757)
Cash flows from financing activities:
Issuance of common stock 154,923 33,289
Additions to treasury shares (6,770)
Payments of mortgage note payable (46,992) (615,808)
Net cash provided by (used in) financing
activities 101,161 (582,519)
Net increase (decrease) in cash 75,627 (1,131,261)
Cash and cash equivalents at beginning of
period 1,499,733 2,668,076
Cash and cash equivalents at end of period $ 1,575,360 $ 1,536,815
Supplemental disclosures of cash flow
information:
Interest expense paid $ 19,827 $ 108,160
See accompanying Notes to Financial Statements (unaudited) and Management's
Discussion and Analysis of Financial Condition and Results of Operations.
</TABLE>
<PAGE>
CompuTrac, Inc.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
(1) The unaudited consolidated 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 and
nine-month periods ended October 31, 1995 are not necessarily
indicative of results for the entire year ending January 31,
1996.
(2) The Company's tax return for the fiscal year ended January 31,
1993 is currently under examination by the Internal Revenue
Service. As of the date of this Form 10Q, the Company has not
been advised of any tax deficiencies by the Internal Revenue
Service, and does not believe any material deficiencies will
be noted during the review.
(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 Operations
Quarterly revenues from continuing operations decreased
$246,346 or 16% from $1,514,957 at October 31, 1994 to $1,268,611
at October 31, 1995. For the nine month period, operating revenues
from continuing operations decreased $1,272,199 or 24%. Quarterly
system sales revenues from continuing operations decreased $117,070
or 47% from $248,148 to $131,078 at October 31, 1995. The
Company's new system sales efforts have been, and will be, minimal
until the Company releases its next generation, Windows-based,
relational database in its next fiscal year. Quarterly services
and support revenues from continuing operations decreased $129,276
or 10% from $1,266,809 to $1,137,533 at October 31, 1995. For the
nine month period, service and support revenues decreased $703,526
or 17%.
Costs of systems hardware as a percentage of system sales was
62% for the quarter ended October 31, 1995, a nominal 2% increase
over the prior comparable quarterly period. For the nine month
period, costs of systems hardware as a percentage of system sales
was 64%, compared with 54% in the prior comparable nine month
period.
Combined quarterly operating, selling, general and
administrative expenses and software development costs from
continued operations decreased $242,559 or 19% from $1,263,447 at
October 31, 1994 to $1,020,888 at October 31, 1995. For the nine
month period, expenses from continued operations decreased $814,110
or 20% from $4,090,417 to $3,276,307.
Non-operating income increased $53,295 for the quarter and
increased $178,559 for the nine month period. Non-operating income
is primarily comprised of interest earnings from certificates of
deposit and United States treasury bills.
Losses from discontinued operations for the nine month period
ended October 31, 1994, relate to the Company's investment in
MediaMagic. The Company discontinued the operations of MediaMagic
in the second quarter ended July 31, 1994. The Company does not
anticipate any further losses with respect to its discontinued
operations.
<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 October 31, 1995 which would affect
liquidity. Long term liabilities consist only of the Company's
mortgage note payable of $292,081 at October 31, 1995.
The Company's major capital expenditures have historically
been for computer equipment and capitalized software. For the
quarter ended October 31, 1995, the Company made investments
totaling approximately $235,000 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 (Page 13-14) - Calculation of weighted average
number of common shares outstanding during the three-month and
nine-month periods ended October 31, 1995 and 1994.
Item 6(b): Reports on Form 8-K
No reports on form 8-K have been filed during the quarter
ended October 31, 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: December 13, 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 - Finance and
Chief Financial Officer
<PAGE>
<TABLE>
EXHIBIT 11.1
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
July 31,
Shares issued at beginning of period 6,092,986 6,037,702
Issuance of common stock 9,275 4,230
Common stock equivalents 21,473
Primary weighted average number of
shares outstanding 6,123,734 6,041,932
October 31,
Shares issued at beginning of period 6,109,398 6,043,882
Issuance of common stock 63,031 2,796
Treasury share purchases (2,416)
Common stock equivalents 121,650 255
Primary weighted average number of
shares outstanding 6,291,663 6,046,933
Nine-month period ended:
October 31,
Primary weighted average number of
shares outstanding 6,306,959 6,041,658
</TABLE>
<PAGE>
<TABLE>
EXHIBIT 11.2
CompuTrac, Inc.
WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING
<CAPTION>
1995 1994
<S> <C> <C>
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
July 31,
Shares issued at beginning of period 6,092,986 6,037,702
Issuance of common stock 9,275 4,230
Common stock equivalents 40,374
Fully diluted weighted average number
of shares outstanding 6,142,635 6,041,932
October 31,
Shares issued at beginning of period 6,109,398 6,043,882
Issuance of common stock 63,031 2,796
Treasury share re-purchases (2,416)
Common stock equivalents 153,358 4,691
Fully diluted weighted average number
of shares outstanding 6,323,371 6,051,369
Nine-month period ended:
October 31,
Fully diluted weighted average number
of shares outstanding 6,270,140 6,045,157
</TABLE>
<TABLE> <S> <C>
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<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JAN-31-1996
<PERIOD-END> OCT-31-1995
<CASH> 1575360
<SECURITIES> 3990704
<RECEIVABLES> 798868
<ALLOWANCES> 19000
<INVENTORY> 0
<CURRENT-ASSETS> 350746
<PP&E> 12019345
<DEPRECIATION> 8768174
<TOTAL-ASSETS> 10669683
<CURRENT-LIABILITIES> 998279
<BONDS> 292081
<COMMON> 65343
0
0
<OTHER-SE> 10475767
<TOTAL-LIABILITY-AND-EQUITY> 10669683
<SALES> 131078
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<OTHER-EXPENSES> 1102133
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</TABLE>
