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 third quarter ended December 31, 1995
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period from 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)
15301 Hwy. 55 West Plymouth, MN. 55447
(Address of Principal Executive Offices)
(612) 550-1999
(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 ____
Number of shares outstanding at December 31, 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)
Three months Six months
Ended December 31, Ended December 31,
Revenue: 1995 1994 1995 1994
Systems Sales $1,465,753 $514,969 $3,577,228 $1,641,586
Maintenance Fees & Other Income 239,849 141,087 668,553 396,122
Total Revenue $1,705,602 $656,056 $4,245,781 $2,037,708
Cost of Sales:
Systems $ 742,592 $173,700 $1,758,626 $ 674,267
Royalty Expense 82,799 43,205 204,833 110,345
Other 37,164 9,295 107,296 59,991
Total Cost of Sales $ 862,555 $ 226,200 $2,070,755 $ 844,603
Gross Profit $ 843,047 $ 429,856 $2,175,026 $1,193,105
Selling, General Administrative
Expenses $ 451,687 $ 313,659 $1,179,112 $ 866,351
Net Income (Before Taxes) $ 391,360 $ 116,197 $ 601,688 $ 326,754
Income Tax Expense $ 155,226 $ 0 $ 394,226 $ 0
Net Income $ 236,134 $ 116,197 $ 601,688 $ 326,754
Net Income per Share $ .08 $ .05 $ .20 $ .13
Weighted Average Shares
Outstanding 2,993,582 2,590,694 2,966,608 2,590,694
PART I - FINANCIAL INFORMATION
PREMIS CORPORATION
BALANCE SHEET
December 31, March 31,
1995 1995
ASSETS (Unaudited)
Current Assets:
Cash $ 660,295 $ 426,959
Accounts Receivable (Net of Allowance
for Doubtful Accounts) 1,065,691 541,240
Inventory 392,381 165,555
Deferred Taxes 0 50,000
Prepaid Expenses 10,637 1,200
Total Current Assets $2,129,004 $1,184,954
Other Assets:
Furniture and Equipment 210,252 189,611
Leased Equipment 39,297 19,753
Less Accumulated Depreciation and Amortization (167,570) (160,613)
Software distribution rights net of accumulated
depreciation and amortization of $137,495 and
$88,159 respectively. 269,913 325,916
Total Other Assets 351,892 374,667
TOTAL ASSETS $2,480,896 $1,559,621
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Trade Accounts Payable 235,942 177,339
Accrued Rent 0 2,249
Deferred income tax liability 14,000 0
Accrued income tax 327,500 0
Other Accrued Liabilities 170,073 139,507
Unearned Income 112,121 170,529
Capital Lease Obligations - Current Portion 684 3,272
Customer Deposits 97,352 58,010
Notes Payable 13,442 100,621
Total Current Liabilities $ 971,114 $ 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 529,236 (72,452)
Total Stockholders' Equity $1,283,698 $ 682,010
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $2,480,896 $1,559,621
PART I - FINANCIAL INFORMATION
PREMIS CORPORATION
Statement of Change in Financial Position
For the Six Months
Ended December 31,
1995 1994
(Unaudited) (Unaudited)
Cash Flows From Operating Activities:
Net Income $601,688 $326,754
Adjustments to reconcile net income to net
cash provided (used) by operation activities:
Depreciation and amortization 6,957 9,926
Changes in assets and liabilities:
Current Assets (654,711) (368,231)
Current Liabilities 319,586 122,999
Net Cash Provided (Used) by Operating Activities $273,520 $ 91,448
Cash Flows From Investing Activities:
Purchase of property and equipment 40,184 (2,153)
Net Cash (Used) by Investing Activities $ 40,184 $ (2,153)
Cash Flows From Financing Activities:
Acquisition of Debt $ 0 $ 47,222
Retirement of Capital Lease Obligations 0 (2,441)
Net Cash Provided (Used) by Financing Activities $ 0 $ 44,791
Net Increase (Decrease) in Cash $233,336 $138,382
Cash at Beginning of Year $426,959 $119,137
Cash at End of Period $660,295 $257,539
PREMIS CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS
December 31, 1995
Note 1: Basis of Presentation
The accompanying condensed balance sheet as of December 31,
1995, and the condensed income statements and statements of
changes in financial position for the three-month period ended
December 31, 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, 1994, 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 some 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.
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 traditionally 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 nine months of
fiscal 1996. 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. Several installations of
a new concept store called "Postal Express" were made in
supermarkets in New Mexico and Nevada during the quarter.
Three Months ending December 31, 1995, Compared to
Three Months Ending December 31, 1994
For the three months ending December 31, 1995 sales were 184%
greater than the comparable period of 1994, at $1,465,753 verses
$514,969. Gross margins on sales were up 97%, at $843,047
verses $429,856. Selling general and admistrative expense has
risen by 44% from the comparable period in fiscal 1995, to
$451,687 versus $313,659, reflecting improved productivity in
addition to the cost increases required to support a higher
level of sales. Pretax income was up 237%, at 391,360 verses
116,197. Net income was up 103% at $391,360 verses $116,197 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. The quarters installations for the
Postal Service were stronger than expected because of large
number of installs in Atlanta in preparation for the 1996
Olympics.
Six Months ending December 31, 1995, Compared to
Six Months Ending December 31, 1994
For the six months ending December 31, 1995, sales were 218%
greater than the comparable period for 1994, at $3,577,228
verses $1,641,586. Gross margins on sales were up 82%, at
$2,175,026 verses $1,193,105 for the same period in fiscal 1995.
Selling and general adminstrative expenses was up 36%
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 income of $601,688 verses
$326,754 in fiscal 1995, 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 December 31, 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
January 31, 1996 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 January 31, 1996
Mary Ann Calhoun Date
Vice President, Secretary
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