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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 8-K
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CURRENT REPORT
Pursuant to section 13 of 15(d) of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): May 5, 1998
Network Six, Inc.
(Exact name of registrant as specified in its charter)
Commission File No. 0-21038
Rhode Island 05-036-6090
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
475 Kilvert Street, Warwick, Rhode Island 02886
(Address of principal executive offices,
including zip code)
(401) 732-9000
(Registrant's telephone number, including area code)
Item 5. Other Events
The May 5, 1998 Press Release of the Registrant attached hereto as
EXHIBIT 99 is incorporated herein by reference.
Item 7 (c). Exhibits
99 Press Release, dated May 5, 1998, of Network Six, 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.
Network Six, Inc.
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(Registrant)
Date: May 5, 1998 By: /s/ Dorothy M. Cipolla
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Dorothy M. Cipolla
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Chief Financial Officer
Network Six, Inc.
Current Report on Form 8-K
Dated May 5, 1998
Exhibit Index
<TABLE>
<CAPTION>
Exhibit
No. Exhibits
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<S> <C>
99 Press Release dated May 5, 1998
</TABLE>
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EXHIBIT 99
NETWORK SIX REPORTS FIRST
QUARTER RESULTS
Kenneth C. Kirsch, President and CEO
Or
Dorothy M. Cipolla, CFO and Treasurer
May 5, 1998
Network Six, Inc. of Warwick, Rhode Island reported revenues for the first
quarter which ended March 31, 1998 of $2,221,618 and net income of $140,465, or
$.08 per diluted share. Compared to the same period a year ago, revenues were up
$807,433, or 57%, while net income increased $272,652 from a loss of $132,187 a
year ago.
Kenneth C. Kirsch, President and CEO commented, "Our first quarter results were
well within our targets and represent the fourth consecutive quarter that we
have been profitable. As previously reported, we were recently awarded a $2.8
million contract extension from the State of Rhode Island, Department of Human
Services. The State of Maine, Department of Human Services, signed a three-month
support contract with us for the child welfare system known as MACWIS that we
recently developed and implemented."
"During the quarter," Kirsch continued, "we expanded our efforts with MIM
Corporation, a pharmaceuticals benefits management company, to include the
development of additional information systems. We also commenced work with
Johnson and Wales University, a major private university based in Providence
with an international reputation in business, hospitality and culinary arts, on
a strategic information technology plan. This additional new business will be
included in our operating results as the year progresses."
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Except for historical information, all of the statements, expectations and
assumptions contained in this release are forward-looking statements reflecting
management's expectations or beliefs concerning future events, which could
materially affect the performance of Network Six in the future. All
forward-looking statements are subject to the risks and uncertainties inherent
with predictions and forecasts. They are necessarily speculative statements, and
unforeseen factors, such as competitive pressures, litigation results and
regulatory and state funding changes could cause results to differ materially
from any that may be expected. Actual results and events may therefore differ
significantly from those discussed in forward-looking statements. Moreover,
forward-looking statements are made in the context of information available as
of the date stated, and Network Six undertakes no obligation to update or revise
such statements to reflect new circumstances or unanticipated events.
* * * * * * * * * * * * * * * * * * * * * * * * *
Network Six is a systems integrator for state health and human service agencies,
providing information technology that enables states to become more efficient
and effective. Network Six's systems encompass Temporary Assistance to Needy
Families (TANF), Health Care, Child Welfare, Child Support Enforcement, Child
Care, JOBS, and Medicaid Eligibility programs. Network Six also provides network
and information technology services to the public and private sector. Network
Six's stock is traded on the NASDAQ National Market under the symbol NWSS. Its
website is http://www.networksix.com.
The following is a recap of Network Six's operating results and balance sheet.
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Network Six, Inc.
Condensed Balance Sheets
<TABLE>
<CAPTION>
Assets Mar. 31, 1998 Dec. 31, 1997
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Current assets (unaudited)
<S> <C> <C>
Cash $ 466,315 $ 1,291,924
Contract receivables, less allowance for doubtful
accounts of $50,000 at March 31, 1998 and
December 31, 1997 779,956 2,011,379
Costs and estimated earnings in excess of billings
on contracts 1,661,017 1,388,515
Other assets 159,535 244,257
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Total current assets 3,066,823 4,936,075
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Property and equipment
Computers and equipment 512,985 506,484
Furniture and fixtures 156,833 167,558
Leasehold improvements 20,191 20,191
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690,009 694,233
Less: accumulated depreciation and amortization 597,637 627,146
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Net property and equipment 92,372 67,087
Deferred taxes 391,475 391,475
Contract receivables and costs in excess of billings
on Hawaii contract 3,459,382 3,459,382
Other assets 426,136 438,084
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$ 7,436,188 $ 9,292,103
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</TABLE>
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<TABLE>
<CAPTION>
Mar. 31, 1998 Dec. 31, 1997
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(unaudited)
<S> <C> <C>
Liabilities and Stockholders' Equity
Current liabilities:
Notes payable to bank $ - $ 1,160,000
Current installment of obligations under capital leases 85,286 82,690
Accounts payable 156,759 188,377
Accrued salaries and benefits 430,953 449,133
Accrued subcontractor expense 499,141 1,352,393
Note payable - short term 100,000 163,871
Other accrued expenses 342,438 342,465
Billings in excess of costs and estimated earnings on contracts 184,150 155,754
Income taxes payable 88,619 13,338
Deferred taxes 545,869 545,869
Preferred stock dividends payable 543,287 460,068
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Total current liabilities 2,976,502 4,913,958
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Obligations under capital leases, excluding current installments 84,572 104,003
Note payable - long term 742,239 742,239
Hawaii Payable 576,483 576,483
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Total Liabilities 4,379,796 6,336,683
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Stockholders' equity:
Series A convertible preferred stock, $3.50 par value. Authorized
857,142.85 shares; issued and outstanding 714,285.71 shares at March
31, 1998 and December 31, 1997; liquidation of $3.50 per share plus
unpaid and accumulated
dividends 2,235,674 2,235,674
Common stock, $.10 par value. Authorized
4,000,000 shares; issued 749,503 shares at
March 31, 1998 and 734,294 at
December 31, 1997 74,950 73,429
Additional paid-in capital 1,713,144 1,670,939
Retained earnings (accumulated deficit) (967,376) (1,024,622)
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Total stockholders' equity 3,056,392 2,955,420
Total Liabilities & Stockholders' Equity $ 7,436,188 $ 9,292,103
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</TABLE>
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Network Six, Inc.
Condensed Statements of Income
(Unaudited)
<TABLE>
<CAPTION>
Three months Three months
ended 3/31/98 ended 3/31/97
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<S> <C> <C>
Contract revenue earned $ 2,221,618 $ 1,414,185
Cost of revenue earned 1,446,656 973,140
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Gross profit 774,962 441,045
Selling, general & administrative expenses 557,824 526,331
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Income (loss) from operations 217,138 (85,286)
Other deductions (income)
Interest expense 29,187 50,658
Interest earned (50,124) (3,757)
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Income (loss) before income taxes 238,075 (132,187)
Income taxes 97,610 --
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Net income $ 140,465 $ (132,187)
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Net income (loss) per share:
Basic $ 0.08 $ (0.25)
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Diluted $ 0.08 $ (0.25)
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Shares used in computing net income per share:
Basic 749,503 721,192
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Diluted 749,503 721,192
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Preferred dividends declared $ 83,219 $ 46,233
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