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 first quarter ended June 30, 1996
[ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE
EXCHANGE ACT
For the transition period form to
Commission File Number 0-12196
PREMIS CORPORATION
(Exact name of registrant as specified in its charter)
Minnesota 411424202
(State of Incorporation) (I.R.S. Employer Identification Number)
15301 Highway 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 June 30, 1996:
Common Stock, Par Value: $.01 Shares: $2,701,527
Transitional small business disclosure format (check one).
Yes No X
PART I - FINANCIAL INFORMATION
CONDENSED STATEMENTS OF
OPERATIONS
(unaudited)
For the 3 months
Ended June 30,
Revenue: 1996 1995
Systems Sales $ 1,584,186 $ 982,449
Maintenance Fees and Other Income 329,993 207,305
Total Revenue $ 1,914,179 $ 1,189,754
Cost of Sales:
Systems 749,375 502,465
Royalty Expense 76,891 47,979
Support Other 141,473 91,216
Total Cost of Sales $ 967,739 $ 641,660
Gross Profit $ 946,440 $ 548,094
Selling, General Administrative Expenses 401,743 308,114
Net Income (Before Taxes) $ 544,697 $ 239,980
Income Tax Expense $ 212,461 $ 95,992
Net Income $ 332,236 $ 143,988
Net Income (Loss) per Share $ .11 $ .05
Weighted Average Shares Outstanding 2,979,683 2,912,661
PART I - FINANCIAL INFORMATION
PREMIS CORPORATION
BALANCE SHEET
June. 30, March 31,
1996 1996
ASSETS (Unaudited)
Current Assets:
Cash $ 368,366 $ 968,083
Accounts Receivable (Net of Allowance
for Doubtful Accounts) 2,077,471 1,204,874
Inventory 217,794 282,720
Deferred Taxes 33,000 33,000
Prepaid Expenses 130,636 11,537
Total Current Assets $ 2,827,267 $ 2,500,214
Other Assets:
Furniture and Equipment 225,437 225,437
Leased Equipment 31,773 31,773
Less Accumulated Depreciation and Amortization (179,460)
Capitalized Building Lease 950,000 (173,685)
Software distribution rights net of accumulated
depreciation and amortization of $121,050 and
$88,159 respectively. 236,421 249,301
Total Other Assets 1,264,171 332,826
TOTAL ASSETS $ 4,091,438 $ 2,833,040
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Trade Accounts Payable $ 361,853 $ 137,964
Other Accrued Liabilities 172,069 228,524
Accrued income tax 131,211 510,000
Unearned Income 139,098 187,211
Capital Lease Obligations - Current Portion 226,115
Customer Deposits 94,603 41,861
Notes Payable 78,255 102,928
Total Current Liabilities $ 1,203,204 $ 1,208,488
Long-Term Liabilities:
Notes Payable 112,097 112,097
Capitalized Lease Obligations - Long Term 723,885
Total Long-Term Liabilities $ 835,982 $ 112,097
TOTAL LIABILITIES $ 2,039,186 $ 1,320,585
Stockholders' Equity:
Common stock, 5,000,000 shares authorized
2,701,527 and 2,609,444 outstanding,
respectively, $.01 par value 27,015 26,094
Additional paid-in capital 937,821 731,181
Retained Earnings 1,087,416 755,180
Total Stockholders' Equity $ 2,052,252 $ 1,512,455
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 4,091,438 $ 2,833,040
PART I - FINANCIAL INFORMATION
PREMIS CORPORATION
Statements of Cash Flows
For the Three Months
Ended June 30,
1996 1995
(Unaudited) (Unaudited)
Cash Flows From Operating Activities:
Net Income $ 332,236 $ 143,988
Adjustments to reconcile net income
to net cash provided (used) by operation
activities:
Depreciation and amortization 26,655 24,748
Changes in assets and liabilities:
Current Assets (845,520) (24,099)
Current Liabilities (206,726) (7,960)
Net Cash Provided (Used) by Operating Activities $ (693,355) $ 136,677
Cash Flows From Investing Activities:
Purchase of property and equipment (8,000) (28,505)
Net Cash (Used) by Investing Activities $ (8,000) $ (28,505)
Cash Flows From Financing Activities:
Repayment of Debt $ (24,673) (18,958)
Exercised stock options 126,311 0
Net Cash Provided (Used) by Financing Activities $ 101,638 $ (18,958)
Net Increase (Decrease) in Cash $ (599,717) $ 89,214
Cash at Beginning of Year $ 968,083 $ 426,959
Cash at End of Period $ 368,366 $ 516,173
PREMIS CORPORATION
NOTES TO CONDENSED FINANCIAL STATEMENTS
June 30, 1996
Note 1: Basis of Presentation
The accompanying condensed balance sheet as of June 30, 1996,
and the condensed income statements and statements of changes in
financial position for the three-month period ended June 30,
1996, 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, 1996 as included in its 10K filing on June 29, 1996.
The balance sheet as of March 31, 1996 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), NCR
Corporation 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 ADVANTAGE, RETAIN, and
IRIS Systems.
The ADVANTAGE 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 ADVANTAGE 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 RETAIN 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 RETAIN System includes an optional handheld
data entry unit which is used to record product price,
distribution, and related information at a retail store. The
RETAIN System may also be purchased as an option to the
ADVANTAGE System.
The PREMIS IRIS 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 reduced in December when
retailers experience their busiest time of the year.
Note 3: Building Lease
On June 28, 1996 the Company entered into a long term lease
for its executive offices with a limited liability partnership
controlled by two of its officers. The new lease provides
approximately 21,956 square feet of space at a minumum monthly
rental of $13,477. The lease has a term of ten years and has
been entered as a capitalized building lease on the balance sheet.
PREMIS CORPORATION
Management's Discussion and Analysis of
Financial Condition and Results of Operation
The fiscal year ending March 31, 1996, was a successful year for
the Company with net income of $827,632 compared to net income
of $474,687 for the prior year. The Company has followed
that year with continued growth in the first quarter of fiscal
1997. The new products for both the Advantage and IRIS product
lines, introduced in fiscal 1993, 1994 and 1995 are showing
continued growth. Installations of the IRIS product in the
United States Postal Service concept Postal Store have also
continued to grow during this quarter.
On July 10, 1996 the Company announced it had entered into an
agreement to purchase the shares of REF Retail Systems
Corporation of Toronto, Canada. REF is a supplier of systems
for multi-store retail chains. The Company announce REF's
systems are complementary to those offered by PREMIS Corporation
and the acquisition will expand the markets for both companies.
Three Months ending June 30, 1996, Compared to
Three Months Ending June 30, 1995
For the three months ending June 30, 1996 sales were 61% greater
than the comparable period ending June 30, 1995, at $1,914,179
versus $1,189,754. Gross margin dollars were up 73%, at
$946,440 versus $548,094. Selling general and admistrative
expense has risen by only 30% from the comparable period in
fiscal 1996, to $401,743 versus $308,114, reflecting improved
productivity in spite of the cost increases required to support
a higher level of sales. Pretax income was up 128%, at 544,697
versus 239,980. Net income was up 132% at $332,236 versus
$143,988. 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.
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
On July 17, 1996 the Company announced it intends to register
for a secondary offering of its common stock, the proceeds of
which will be used for working capital and to the acquire the
outstanding shares of REF Retail Corporation.
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 June 30, 1996.
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
August 9, 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 August 9, 1996
Mary Ann Calhoun Date
Vice President, Secretary
/s/ Gerald F. Schmidt August 9, 1996
Gerald F. Schmidt Date
Director
WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
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