SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to section 13 of 15(d) of the Securities
Exchange Act of 1934
Date of Report (Date of earliest event reported):
April 27, 1999
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 April 27, 1999 Press Release of the Registrant
attached hereto as EXHIBIT 99 is incorporated herein by reference.
Item 7 (c) Exhibits
99 Press Release, dated April 27,1999, 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.
-----------------------
(Registrant)
Date: April 27, 1999 By: /s/ Dorothy M. Cipolla
Dorothy M. Cipolla
Chief Financial Officer
Network Six, Inc.
Current Report on Form 8-K
Dated April 27, 1999
Exhibit Index
Exhibit
No. Exhibits
99 Press Release dated April 27, 1999
EXHIBIT 99
NETWORK SIX REPORTS RISE IN FIRST QUARTER EARNINGS AND REVENUES
Kenneth C. Kirsch, President and CEO
Or
Dorothy M. Cipolla, CFO and Treasurer
April 27, 1999
Warwick, RI: Network Six, Inc. reported contract revenue earned for the
quarter ending March 31, 1999 of $2,688,400, up 21%, or $466,782, from
$2,221,618 the same period a year ago. Net income was $257,198, or $.23 per
share, up 83%, or $116,733, from the same period a year ago when it reported
net income of $140,465, or $.08 per share.
Kenneth C. Kirsch, President and CEO commented, "We had an excellent first
quarter. Our growth in revenues from the same period a year ago was primarily
due to increased work related to welfare reform for the State of Rhode
Island. We also increased our private sector systems development work and
information technology consulting activities. We are very pleased with the
progress of our marketing and new business development initiatives."
Dorothy Cipolla, CFO and Treasurer commented, "Gross profit, as a percentage of
contract revenue earned, improved to 41%, compared to 35% a year ago. Net
income, as a percentage of contract revenue earned, improved to 9.6 % compared
to 6.3% a year earlier. We continue to operate the Company on cash flows from
operations. This quarter marks our eight consecutive quarter of profitability."
**************************************************************************
Network Six is a full service systems integrator, providing information
technology solutions that enable its customers to become more effective and
efficient. Network Six's services include strategic planning, management
consulting, network design, network and application implementation, training,
outsourcing, maintenance and support. Network Six's stock is traded on the
NASDAQ SmallCap Market under the symbol NWSS. Its website is
http://www.networksix.com.
This report contains forward-looking statements reflecting the Company's
expectations or beliefs concerning future events that could materially affect
Company performance in the future. All forward-looking statements are subject
to the risks and uncertainties inherent with predictions and forecasts. Please
refer to the company's forthcoming 10K for December 31, 1998 or 10Q's for March
31, June 30, 1998 or September 30, 1998 for more discussion and information.
The following is a recap of Network Six's operating results and balance sheet:
<PAGE>
Network Six, Inc.
Condensed Statements of Income
(Unaudited)
<TABLE>
<CAPTION>
Three months Three months
ended 3/31/99 ended 3/31/98
------------- -------------
<S> <C> <C>
Contract revenue earned 2,688,400 2,221,618
Cost of revenue earned 1,574,522 1,446,656
------------ ------------
Gross profit 1,113,878 774,962
Selling, general & administrative expenses 661,920 557,824
------------ ------------
Income from operations 451,958 217,138
Other deductions (income)
Interest expense 29,956 29,187
Interest earned (13,927) (50,124)
------------ ------------
Income before income taxes 435,929 238,075
Income taxes 178,731 97,610
------------ ------------
Net income 257,198 140,465
============= =============
Net income per share:
Basic 0.23 0.08
============= =============
Diluted 0.23 0.08
============= =============
Shares used in computing net income per share:
Basic 774,975 749,503
============= =============
Diluted 774,975 749,503
============= =============
Preferred dividends declared 78,596 83,219
============= =============
</TABLE>
<PAGE>
Network Six, Inc.
Condensed Balance Sheets
<TABLE>
<CAPTION>
Mar. 31, 1999 Dec. 31, 1998
Assets (unaudited)
Current assets: ------------ ------------
<S> <C> <C>
Cash $ 1,331,204 $ 1,442,035
Contract receivables, less allowance for
doubtful accounts of $69,175 at March 31,
1999 and December 31, 1998 1,431,149 1,966,788
Costs and estimated earnings in excess of
billings on contract 1,371,005 1,220,253
Other current assets 130,365 112,433
------------ ------------
Total current assets 4,263,723 4,741,509
Property and equipment
Computers and equipment 599,555 590,527
Furniture and fixtures 162,687 163,532
Leasehold improvements 20,191 20,191
------------ ------------
782,433 774,250
Less: accum. depreciation and amortization 593,446 602,033
------------ ------------
Net property and equipment 188,987 172,217
Deferred taxes 37,097 37,097
Contract receivables and costs in excess
of billings on Hawaii contract 3,459,382 3,459,382
Other assets 277,220 290,577
------------ ------------
$ 8,226,409 $ 8,700,782
=========== ===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Mar. 31, 1999 Dec. 31, 1998
(unaudited)
Liabilities and Stockholders' Equity ------------ ------------
Current liabilities:
<S> <C> <C>
Notes payable to bank - -
Current installment of obligations
under capital leases $ 83,582 $ 89,483
Current portion of long-term debt:
Vendors 200,000 200,000
Others 88,835 91,997
Accounts payable 121,441 58,456
Accrued salaries and benefits 422,535 579,320
Accrued subcontractor expense 27,380 24,950
Other accrued expenses 296,236 320,982
Billings in excess of costs and
estimated earnings on contracts 357,871 341,572
Income taxes payable 126,011 780,066
Deferred taxes 42,491 42,491
Preferred stock dividends payable 874,588 795,992
------------ ------------
Total current liabilities 2,640,970 3,325,309
Obligations under capital leases,
excluding current installments 29,958 38,090
Long-term debt, less current portion:
Vendors 542,239 542,239
Others 390,310 409,778
Hawaii Payable 576,483 576,483
------------ ------------
Total Liabilities 4,179,960 4,891,899
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, 1999 and December 31,
1998; 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 780,156 shares
at March 31, 1999 and 764,663 at
December 31, 1998 78,016 76,466
Additional paid-in capital 1,853,698
1,796,284Retained earnings (accumulated deficit) (120,939) (299,541)
------------ ------------
Total stockholders' equity 4,046,449 3,808,883
------------ ------------
Total Liabilities & Stockholders' Equity $ 8,226,409 $ 8,700,782
=========== ===========
</TABLE>
