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.
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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
(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.
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<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
See accompanying Notes to Financial Statements (unaudited) and Management's
Discussion and Analysis of Financial Condition and Results of Operations.
</TABLE>
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<TABLE>
CompuTrac, Inc.
CONSOLIDATED BALANCE SHEETS
LIABILITIES AND SHAREHOLDERS' EQUITY
<CAPTION>
April 30, January 31,
1995 1995
(unaudited)
<S> <C> <C>
Current liabilities:
Accounts payable $ 308,110 $ 398,485
Accrued expenses 339,951 268,366
Accrued contract completion costs 341,955 388,155
Accrued contract settlement liabilities 268,714 312,571
Deferred systems revenues 157,951 130,998
Short-term mortgage note payable 64,930 63,412
Total current liabilities 1,481,611 1,561,987
Long-term mortgage note payable 326,924 343,737
Total liabilities 1,808,535 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,
13,000,000shares authorized, 6,932,242 and
6,910,692 shares issued,respectively 69,322 69,107
Additional paid-in capital 9,971,758 9,947,369
Retained earnings 1,660,987 1,507,343
Less:
Treasury stock 839,256 shares, at cost 2,852,518 2,852,518
Total shareholders' equity 8,849,549 8,671,301
Total liabilities and shareholders' equity $ 10,658,084 $ 10,577,025
See accompanying Notes to Financial Statements (unaudited) and
Management's Discussion and Analysis of Financial Condition and Results
of Operations.
</TABLE>
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<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 $ 500,121
Services and support 1,160,325 1,524,443
1,300,434 2,024,564
Costs and expenses:
Cost of systems hardware 90,554 313,662
Operating expenses 555,120 524,555
Selling, general and administrative expenses 517,941 758,746
Software development 48,100 154,000
1,211,715 1,750,963
Operating income from continuing operations 88,719 273,601
Non-operating income (loss) 64,925 (13,319)
Income from continuing operations before income
taxes 153,644 260,282
Provision (benefit) for income taxes
Income from continuing operations $ 153,644 $ 260,282
Discontinued operations, net of related income
taxes
Loss from discontinued operations of MediaMagic (161,920)
Loss on disposal of MediaMagic
Net income $ 153,644 $ 98,362
Income from continuing operations per
common share $ .03 $ .04
Loss from discontinued operations per
common share $ (.02)
Net income per common share $ .03 $ .02
Weighted average shares outstanding: 6,098,603 6,032,466
See accompanying Notes to Financial Statements (unaudited) and Management's
Discussion and Analysis of Financial Condition and Results of Operations.
</TABLE>
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<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
See accompanying Notes to Financial Statements (unaudited) and Management's
Discussion and Analysis of Financial Condition and Results of Operation.
</TABLE>
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<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) $ (130,138)
(Purchase) sale of short-term investment (251,861) 196,000
Additions to other assets (16,180) (14,223)
Net cash (used in) provided by investing
activities (500,912) 51,639
Cash flows from financing activities:
Issuance of common stock 24,604 23,527
Payments of mortgage note payable (15,295) (14,559)
Net cash used in financing activities 9,309 8,968
Net (decrease) increase in cash (143,143) 91,745
Cash and cash equivalents at beginning of
period 1,499,733 2,668,076
Cash and cash equivalents at end of period $ 1,356,590 $ 2,759,821
Supplemental disclosures of cash flow
information:
Interest expense paid $ 9,549 $ 35,044
See accompanying Notes to Financial Statements (unaudited) and Management's
Discussion and Analysis of Financial Condition and Results of Operation.
</TABLE>
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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 hardware 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
</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
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 153644
<EPS-PRIMARY> .03
<EPS-DILUTED> .03
</TABLE>
