SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
Form 10-QSB
(Mark One)
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the Second quarter ended September 30, 1995
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period form to
Commission File Number 2-85498-C
PREMIS CORPORATION
(Exact name of registrant as specified in its charter)
Minnesota 411424202
(State of Incorporation) (I.R.S. Employer Identification Number)
11610 Wayzata Boulevard Minnetonka, MN. 55305
(Address of Principal Executive Offices)
(612) 545-0955
(Issuer's Telephone Number)
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, and (2) has been subject to such filing requirements
for the past 90 days.
Yes [ X ] No [ X ]
Number of shares outstanding at September 30, 1995:
Common Stock, Par Value: $.01 Shares: $2,590,694
Transitional small business disclosure format (check one).
Yes [ X ] No [ ]
PART I - FINANCIAL INFORMATION
CONDENSED STATEMENTS OF OPERATIONS
(unaudited) (unaudited)
For the 3 months For the six months
Ended September 30, Ended September 30,
Revenue: 1995 1994 1995 1994
Systems Sales $1,129,026 $540,651 $2,111,475 $1,126,617
Maintenance Fees & Other Income 221,399 153,541 428,704 255,035
Total Revenue $1,350,425 $694,192 $2,540,179 $1,381,652
Cost of Sales:
Systems 513,569 240,086 1,016,034 500,567
Royalty Expense 67,593 38,448 122,034 67,140
Other 35,726 21,733 70,132 50,696
Total Cost of Sales $ 616,888 $ 300,267 $1,208,200 $ 618,403
Gross Profit $ 733,537 $ 393,925 $1,331,979 $ 763,249
Selling, General Admin. Expenses 368,964 281,588 727,425 552,692
Net Income (Before Taxes) $ 364,573 $ 112,337 $ 604,554 $ 210,557
Income Tax Expense $ 143,008 $ 0 $ 239,000 $ 0
Net Income $ 221,565 $ 112,337 $ 365,554 $ 210,557
Net Income (Loss) per Share $ .07 $ .04 $ .12 $ .08
Weighted Average Shares Outstanding 3,046,854 2,590,694 2,979,758 2,590,694
PART I - FINANCIAL INFORMATION
PREMIS CORPORATION
BALANCE SHEET
September 30, March 31,
1995 1995
ASSETS (Unaudited)
Current Assets:
Cash $ 879,126 $ 426,959
Accounts Receivable
(Net of Allowance for Doubtful Accounts) 685,486 541,240
Inventory 114,075 165,555
Deferred Taxes 0 50,000
Prepaid Expenses 10,887 1,200
Total Current Assets $ 1,689,574 $ 1,184,954
Other Assets:
Furniture and Equipment 208,334 189,611
Leased Equipment 39,297 19,753
Less Accumulated Depreciation and Amortization (162,340) (160,613)
Software distribution rights net of accumulated
depreciation and amortization of $121,050 and
$88,159 respectively. 290,525 325,916
Total Other Assets 375,816 374,667
TOTAL ASSETS $2,065,390 $1,559,621
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Trade Accounts Payable 222,980 177,339
Accrued Rent 0 2,249
Deferred income tax liability 14,000 0
Accrued income tax 175,000 0
Other Accrued Liabilities 131,952 139,507
Unearned Income 98,652 170,529
Capital Lease Obligations - Current Portion 1,368 3,272
Customer Deposits 110,862 58,010
Notes Payable 36,927 100,621
Total Current Liabilities $ 791,741 $ 651,527
Long-Term Liabilities:
Notes Payable 226,084 226,084
Total Long-Term Liabilities $ 226,084 $ 226,084
Stockholders' Equity:
Common stock, 5,000,000 shares authorized
2,590,694 and 2,590,694 outstanding,
respectively, $.01 par value 25,907 25,907
Additional paid-in capital 728,555 728,555
Retained Earnings 293,103 (72,452)
Total Stockholders' Equity $ 1,047,565 $ 682,010
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 2,065,390 $ 1,559,621
PART I - FINANCIAL INFORMATION
PREMIS CORPORATION
Statement of Change in Financial Position
For the Six Months
Ended September 30,
1995 1994
(Unaudited) (Unaudited)
Cash Flows From Operating Activities:
Net Income $ 365,554 $ 210,557
Adjustments to reconcile net income to net
cash provided (used) by operation activities:
Depreciation and amortization 1,728 6,989
Changes in assets and liabilities:
Current Assets (17,062) (342,080)
Current Liabilities 140,214 198,605
Net Cash Provided (Used)
by Operating Activities $ 490,434 $ 74,071
Cash Flows From Investing Activities:
Purchase of property and equipment 38,267 (4,346)
Net Cash (Used) by Investing Activities $ 38,267 $ (4,346)
Cash Flows From Financing Activities:
Acquisition of Debt $ 0 $ 50,000
Retirement of Capital Lease Obligations 0 (1,591)
Net Cash Provided (Used) by Financing Activities $ 0 $ 48,409
Net Increase (Decrease) in Cash $ 452,167 $ 126,826
Cash at Beginning of Year $ 426,959 $ 119,137
Cash at End of Period $ 879,126 $ 245,984
PREMIS CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS
September 30, 1995
Note 1: Basis of Presentation
The accompanying condensed balance sheet as of September 30,
1995, and the condensed income statements and statements of
changes in financial position for the three-month period ended
September 30, 1995, are presented without audit. In the opinion
of the management, all normally recurring adjustments necessary
for a fair presentation of the financial statements in
conformity with generally accepted accounting principles have
been made.
Certain footnote disclosures and other information normally
included in financial statements prepared in accordance with
generally accepted accounting principles have been omitted.
These condensed financial statements should be read in
conjunction with the financial statements and notes thereto
included in the Company's audited financial statements as of
March 31, 1995 as included in its 10K filing on June 29,1995.
The balance sheet as of March 31, 1995 has been taken from the
audited financial statements as of that date.
Note 2: Business
(a) General development of business: PREMIS Corporation was
incorporated as a Minnesota Corporation in April 1982 to design,
develop, market and support integrated turnkey computer systems
for business use that are based on the Company's proprietary
applications software. The Company's systems are designed for
use by food brokers, food processors and manufacturers, and
multi store retail chains
(b) Financial information by industry segment: Net sales,
operating income and identifiable assets of the Registrant's
integrated turnkey systems business constitute 100% of the
Company's Operations and therefore segment information is not
applicable.
(c) Narrative description of business: Since inception in April
of 1982 until March 31, 1995, more than 95% of the registrant's
sales were to food brokers, and food distributors in the United
States. In April 1994 The Company purchased the rights to
market the IRIS Multi-Store retail management system. Sales
since April 1994 have been a combination of these two product
lines. The Company's Systems consist of standardized and
optional applications software developed by the Company and
computer hardware. The Computer Hardware is manufactured by
International Business Machines Corporation (IBM), AT&T
Information System's NCR division and other companies supplying
compatible hardware. In som instances the Company sells the
customer only the software elements of the systems. When
supplied, the Company purchases the hardware elements from
manufacturers and distributors at prices that allow the Company
to profit from the sale.
<PAGE>
Notes to Condensed Financial Statements (continued)
The Company's main products are its ADVANTAGEtm, RETAINtm, and
IRIStm Systems. The ADVANTAGEtm Computerized Brokerage System
is designed to assist food brokers with the day to day
management of their business. It controls orders and
commissions and reports on sales performance according to
salesperson, product line, and customer. The ADVANTAGEtm System
also has Electronic Data Interchange communications capability
to provide computer-to-computer transmission of sales orders,
invoices, pricing and other information with manufacturers and
distributors.
The RETAINtm Retail Analysis and Inventory Notation System,
which includes both hardware and software elements, is designed
to assist food brokers, manufacturers' representatives and
manufacturers in obtaining and analyzing highly valued
information concerning the retail distribution of their
products. The RETAINtm System includes an optional handheld
data entry unit which is used to record product price,
distribution, and related information at a retail store. The
RETAINtm System may also be purchased as an option to the
ADVANTAGEtm System.
The PREMIS IRIStm System was introduced in the year 1987. This
software system is designed to assist multi-store retail
merchants with their point of sale and inventory management
activities. The system modules are fully integrated and include
inventory, purchasing, sales analysis and point of sale and
others. A system usually consists of point of sale hardware and
software which resides in the retail stores and a host system
which resides at the chain headquarters.
The Registrant's business is not seasonal, however,
installations of the IRIS system are greatly reduced in December
when retailers experience their busiest time of the year.
PREMIS CORPORATION
Management's Discussion and Analysis of
Financial Condition and Results of Operation
The fiscal year ending March 31, 1995, was a successful year for
the Company with a net profit of $474,687 compared to a net
profit of $148,931 for the prior year. The Company has followed
that year with continued growth in the first six months of
fiscal 1995. The new products for both the Advantage and IRIS
product lines, introduced in fiscal 1993, 1994 and 1995 are
showing substantial growth. Installations of the IRIS product
in the United States Postal Service concept Postal Store have
continued to grow during this quarter.
Three Months ending September 30, 1995, Compared to
Three Months Ending September 30, 1994
For the three months ending September 30, 1995 sales were 101%
greater than the comparable period of 1994, at $1,305,425 verses
$649,192. Gross margin on sales were up 87%, at $733,537 verses
$393,925. Selling general and admistrative expense has risen by
only 31% from the comparable period in fiscal 1995, to $368,964
versus $281,588, reflecting improved productivity in addition
to the cost increases required to support a higher level of
sales. Pretax income was up 228%, at 364,573 verses 112,337.
Net income was up 97% at $221,565 verses $112,337 as the company
became fully taxable after exhausting its tax loss carryforward
in fiscal 1995. The improvements for the quarter represent
growth in all products offered in the marketplace, with
particularly strong growth in products sold to the United States
Postal Service.
Six Months ending September 30, 1995, Compared to
Six Months Ending September 30, 1994
For the six months ending September 30, 1995, sales were 191%
greater than the comparable period for 1994, at $2,540,179
verses $1,381,652. Gross margin was up 75%, at $1,331,979
verses $763,249 for the same period in fiscal 1995. Selling and
general adminstrative expenses was up only 32% reflecting
improved productivity per employee in addition to cost increases
required to support a higher level of sales. The six month
period provided a net profit of $365,554 verses $210,557 in
fiscal 1994, as the company became fully taxable after
exhausting its tax loss carryforward in fiscal 1995. We expect
to see continual improvements in sales and earnings for the
remainder of fiscal year ending March 31, 1996 verses fiscal
1995.
Directors and Executive Officers of the Registrant
The executive officers are elected annually by the Board of
Directors. There are no arrangements or understandings among
the officers and any other person pursuant to which he/she was
selected as an officer.
Liquidity and Capital Resources
The Company feels proceeds from sales and current resources will
provide adequate liquidity and capital to execute its business
plan.
Income Tax
Effective April 1, 1993, the Company adopted the provisions of
Statement of Financial Accounting Standards No. 109,
"Accounting for Income Taxes".
Part II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits: None
(b) The Company did not file any reports on Form 8-K
during the three-month period ended September 30, 1995.
Pursuant to the requirements of the Securities and Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
PREMIS CORPORATION
November 13, 1995 By: /s/ F. T. Biermeier
(Date) F. T. Biermeier
Chairman, Chief Executive Officer
and President
Pursuant to the requirements of the Securities Exchange Act of
1934, this report signed below by the following persons on
behalf of the registrant and in the capacities and on the dates
indicated.
DIRECTORS
/s/ Mary Ann Calhoun November 13, 1995
Mary Ann Calhoun (Date)
Vice President, Secretary
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