<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.
FORM 10-Q/A
AMENDMENT NO. 1 TO
FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15(D)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarter Ended September 29, 1995
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Commission file number 0-14063
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BARRISTER INFORMATION SYSTEMS CORPORATION
(Exact name of Registrant as specified in its charter)
New York 16-1176561
(State or other jurisdiction of (I.R.S. Employer
incorporation of organization) Identification No.)
465 Main Street, Buffalo, New York 14203
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (716) 845-5010
----------------------------
Not Applicable
- ------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report).
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 (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
----- ----
Class Outstanding at November 3, 1995
- ---------------------- -------------------------------
Common $.24 Par Value 6,189,972 Shares
<PAGE> 2
BARRISTER INFORMATION SYSTEMS CORPORATION
THIS AMENDMENT IS A RESTATEMENT OF FORM 10-Q PREVIOUSLY FILED FOR THIS QUARTER
IN ITS ENTIRETY BASED ON A CHANGE IN THE TREATMENT OF A $282,000 BENEFIT
RECEIVED BY THE COMPANY FROM DEBT FORGIVENESS BY BIS PARTNERS, L.P. FROM AN
EXTRAORDINARY GAIN TO A DIRECT CONTRIBUTION TO CAPITAL.
INDEX
<TABLE>
<CAPTION>
Page
Number
------
PART I. FINANCIAL INFORMATION
<S> <C>
Item 1. Financial Statements
Condensed Balance Sheets at
September 29, 1995 and March 31, 1995 .....................3
Condensed Statements of Operations -
Three and Six Months Ended
September 29, 1995 and September 30, 1994..................4
Statement of Shareholders' Equity -
Six Months Ended September 29, 1995........................5
Condensed Statements of Cash Flows -
Six Months Ended September 29, 1995
and September 29, 1994.....................................6
Notes to Condensed Financial Statements....................7
Item 2. Management's Discussion and Analysis
of Financial Condition and Results
of Operations.....................................8
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K................10
</TABLE>
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<PAGE> 3
PART I. FINANCIAL INFORMATION
BARRISTER INFORMATION SYSTEMS CORPORATION
Condensed Balance Sheets
(In thousands)
<TABLE>
<CAPTION>
September 29 March 31
1995 1995
-------- --------
ASSETS
<S> <C> <C>
Cash $ 49 $ 184
Accounts receivable 1,505 1,565
Inventories:
Service parts 3,551 3,823
Other 195 182
Prepaid expenses 45 43
-------- --------
Total current assets 5,345 5,797
-------- --------
Equipment and leasehold
improvements, at cost 4,093 4,184
Less accumulated depreciation 3,594 3,619
-------- --------
Net equipment and leasehold
improvements 499 565
-------- --------
Software production costs 269 132
Other assets 44 50
-------- --------
$ 6,157 $ 6,544
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Note payable to bank $ 250 $ 250
Current installments of long term debt 470 96
Accounts payable 689 933
Accrued compensation and benefits 383 572
Customer advances and unearned revenue 1,161 956
Other liabilities 159 110
-------- --------
Total current liabilities 3,112 2,917
-------- --------
Long-term debt, excluding current installments
($2,085 in September and $2,392 in March
to a related party) 2,638 3,329
Shareholders' equity:
Preferred stock -- --
Common stock ($.24 par value) 1,486 1,486
Additional paid-in capital 20,070 19,788
Accumulated deficit (21,149) (20,976)
-------- --------
Total shareholders' equity 407 298
-------- --------
$ 6,157 $ 6,544
======== ========
<FN>
See accompanying notes to condensed financial statements.
</TABLE>
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<PAGE> 4
BARRISTER INFORMATION SYSTEMS CORPORATION
Condensed Statements of Operations
(In thousands, except per share data)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
------------------ ----------------
Sept.29 Sept.30 Sept.29 Sept.30
1995 1994 1995 1994
------- ------ ------- -------
<S> <C> <C> <C> <C>
Revenues:
Product sales $ 340 $ 580 $ 749 $ 1,433
Services 2,992 3,257 6,210 6,369
------- ------ ------- -------
Total revenues 3,332 3,837 6,959 7,802
------- ------ ------- -------
Costs and expenses:
Cost of product sales 197 443 375 1,135
Cost of services 2,538 2,506 5,111 5,081
------- ------ ------- -------
Total cost of revenues 2,735 2,949 5,486 6,216
------- ------ ------- -------
Selling, general and
administrative expenses 622 639 1,320 1,367
Product development and
engineering 94 154 191 336
------- ------ ------- -------
Total costs and expenses 3,451 3,742 6,997 7,919
------- ------ ------- -------
Operating income (loss) (119) 95 (38) (117)
Interest expense:
Related party 43 48 108 89
Other 15 12 27 24
------- ------ ------- -------
Total interest 58 60 135 113
------- ------ ------- -------
Net income (loss) $ (177) $ 35 $ (173) $ (230)
======= ====== ======= =======
Net income (loss)
per common and common
equivalent share $ (0.03) $ 0.01 $ (0.03) $ (0.04)
======= ====== ======= =======
Weighted average number of
common and common
equivalent shares
outstanding 6,190 6,170 6,245 5,155
======= ====== ======= =======
<FN>
See accompanying notes to condensed financial statements.
</TABLE>
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BARRISTER INFORMATION SYSTEMS CORPORATION
Statement of Shareholders' Equity
(In thousands)
<TABLE>
<CAPTION>
Additional
Common paid-in Accumulated
Stock capital deficit Total
------- -------- --------- -------
<S> <C> <C> <C> <C>
Balance at March 31, 1995 $ 1,486 $ 19,788 $ (20,976) $ 298
Net loss - - (173) (173)
Debt forgiven by BIS
Partners L.P. 282 282
------- -------- --------- -------
Balance at September 29, 1995 $ 1,486 $ 20,070 $ (21,149) $ 407
======= ======== ========= =======
</TABLE>
Common stock - 6,189,972 shares issued and outstanding at September
29, 1995 and March 31, 1995.
See accompanying notes to condensed financial statements.
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<PAGE> 6
BARRISTER INFORMATION SYSTEMS CORPORATION
Condensed Statements of Cash Flows
(In thousands)
<TABLE>
<CAPTION>
Six Months Ended
----------------
Sept.29 Sept.30
1995 1994
------ ------
<S> <C> <C>
Cash flows from operating activities:
Net loss $(173) $(230)
Adjustments to reconcile net loss
to net cash provided (used) by
operating activities:
Depreciation and amortization 149 154
Loss on disposal of equipment -- (4)
Changes in current assets and liabilities:
Accounts receivable 60 59
Inventories 259 (253)
Prepaid expenses (2) (2)
Accounts payable (244) (204)
Accrued compensation and benefits (189) (414)
Customer advances and unearned revenues 205 211
Other liabilities 49 20
Net cash provided (used)
by operating activities ----- -----
114 (663)
----- -----
Cash flows from investing activities:
Additions to equipment and leasehold
improvements (65) (60)
Additions to software production costs (155) --
Proceeds on sale of equipment 6
Other 6 14
----- -----
Net cash used in investing activities (214) (40)
----- -----
Cash flows from financing activities:
Net repayment of debt (35) (61)
Net cash used by
financing activities ----- -----
(35) (61)
----- -----
Net decrease in cash (135) (764)
Cash at beginning of period 184 804
----- -----
Cash at end of period $ 49 $ 40
===== =====
Supplemental disclosure of cash flow information:
Interest paid $ 199 $ 113
===== =====
Non-cash financing activities:
Debt forgiven by BIS Partners, L.P. $ 282 $ --
Conversion of long term debt to
preferred stock -- 250
===== =====
<FN>
See accompanying notes to condensed financial statements
</TABLE>
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<PAGE> 7
BARRISTER INFORMATION SYSTEMS CORPORATION
Notes to Condensed Financial Statements
1. In the opinion of Management, the accompanying financial statements present
fairly the financial position, results of operations and cash flows for the
periods shown. The second quarter results for each year represent 13 weeks of
operations ended Friday, September 29, 1995 and September 30, 1994. The
financial data included herein was compiled in accordance with the same
accounting policies applied to the Company's audited annual financial
statements. Any adjustments made were of a normal recurring nature.
The results of operations for the six month period ended September 29,
1995 are not necessarily indicative of the results to be expected for the full
year.
2. A summary of long term debt follows:
<TABLE>
<CAPTION>
September 29 March 31
1995 1995
------ ------
(In thousands)
<S> <C> <C>
Working capital note with
BIS Partners, L.P. $ 285 $ 285
Term note with BIS Partners. L.P. 1,800 2,108
Other 1,023 1,032
------ ------
Total long-term debt 3,108 3,425
Less current installment 470 96
------ ------
Long term debt, excluding
excluding current installments $2,638 $3,329
====== ======
</TABLE>
On August 31, 1995, BIS Partners, L.P. (BIS) agreed to cancel $450,000 of
long-term debt and agreed to reduce the interest rate on the remaining debt to
a fixed rate of 8 percent. In addition, the repayment terms were modified to
interest-only through March 31, 1996, with repayment in 36 equal installments
thereafter. In accordance with this agreement, the Company reduced the amount of
debt owed to BIS to equal the total cash to be repaid to BIS for both principal
and interest. This resulted in a debt reduction of $282,000 which due to the
related party nature of the transaction, was reflected as a contribution to
capital. All future payments to BIS will be recorded as a reduction in the debt
balance. In connection with this transaction, the Company issued warrants to BIS
to purchase 450,000 shares of its capital stock at $1.9375 per share,
exercisable through August 31, 2005.
-7-
<PAGE> 8
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations
Financial Condition
- -------------------
The Company experienced a net decrease in cash of $135,000 for the first six
months of fiscal 1996. Cash used for investing activities (additions to
equipment and software production costs) and financing activities exceeded the
cash provided by operating activities of $105,000. The positive cash from
operations was realized from depreciation and amortization, lower levels of
inventories and receivables and increased customer advances and unearned
revenues. These amounts were sufficient to offset the net loss and reductions in
accounts payable and other accrued expenses. This result also compared very
favorably to a decrease of $764,000 in cash for the first six months of the
prior year.
The Company plans to meet its cash requirements for fiscal 1996 by continuing
to generate positive cash flow from operating activities. The Company has earned
a profit in three out of the last five quarters and believes it is properly
positioned to achieve growth in Javelan sales which have high profit margins. In
addition, the Company plans to minimize investments in new assets and debt
repayment during 1996. While the Company plans to incur an increase in
capitalized software, it also expects a further decrease in the net amount of
equipment and leasehold improvements and a reduction in the level of
inventories. BIS Partners, L.P. agreed to cancel $450,000 of its debt in August,
1995, to receive interest-only payments on its debt during fiscal 1996, and to
provide a $500,000 line of credit through June 30, 1996. There have been no
borrowings under this Line of Credit. Finally, the Company believes that
additional financing sources will become available as its operational
performance improves.
Results of Operations
- ---------------------
For the quarter ended September 29, 1995, total revenues decreased 13.2% from
the same quarter in 1994, with a net loss of $177,000 compared to a net profit
of $35,000 in the second quarter of the prior year. For the six month period
ended September 29, 1995, total revenues decreased 10.8% compared with the six
months ended September 30, 1994. The six month net loss was $173,000 compared to
a net loss of $230,000 incurred in the comparable period for the prior year. The
principal reason for the loss incurred in the second quarter was lower services
revenues at the same time an increase in services expenses was incurred.
Product sales decreased 41.4% for the comparable second quarter, and 47.7% for
the comparable first six months. This was primarily due to a de-emphasis of the
sale of low margin commodity products. However, an increase was realized in the
sale of Javelan, the Company's windows-based management software product which
has only a small associated cost of sales. As a result, margins on product sales
improved from 23.6% to 42.1% for the comparable second quarter and from 20.8% to
49.9% for the comparable six month period.
-8-
<PAGE> 9
Services revenues decreased 8.1% for the comparable second quarter and 2.5% for
the comparable six month periods. These decreases were princi pally the result
of decreased revenues from hardware time and material billings and software
maintenance contracts. In addition, two large hardware maintenance contracts did
not renew effective August 1, 1995 based on customer decisions to do self
maintenance. This was the pri mary reason for the drop in services revenues from
the first to the sec ond quarter of this fiscal year. The Company is actively
pursuing new contracts to replace those that did not renew. Margins on services
rev enues decreased for the comparable second quarters and six month periods as
the cost of providing services increased by 1.0% and 0.6%, respec tively.
Savings in labor costs have been offset by increased costs for parts utilized to
maintain equipment.
The Company experienced a small decrease in the amount of selling, gen eral and
administrative expenses it incurred in the comparable second quarters and first
six month periods. However, due to lower levels of revenues, these expenses
increased from 16.7% to 18.7% of total revenue for the comparable quarters and
from 17.5% to 19.0% for the comparable six month periods. Expenditures for
product development and engineer ing, before taking into account amounts
capitalized and amortized for software production costs, were approximately the
same for the compara ble periods.
Interest expense increased from 1.6% to 1.7% of total revenues for the
comparable second quarters and from 1.4% to 1.9% for the comparable six month
periods. These increases were the result of lower levels of reve nues and higher
interest rates.
The $282,000 contribution to capital recorded in the second quarter resulted
from an agreement with BIS Partners, L.P. (BIS) to cancel $450,000 of its debt
with the Company. The contribution to capital was computed by reducing the
amount of debt recorded on the Company's books to an amount equal to the total
cash to be repaid to BIS for both principal and interest. As a result, all
future payments on the current notes outstanding to BIS will be recorded as a
reduction in the debt balance with no interest expense being recognized. This
had a favorable impact on interest expense in the second quarter and will
continue to have a favorable impact in future quarters.
A loss of $.03 per share was incurred in the first six months of this year
compared to a loss of $.04 per share in the first six months of last year. The
increase in the weighted average number of common shares outstanding for the
comparable periods resulted primarily from the issuance of 2,030,000 common
shares upon the conversion of the Company's Series D preferred stock which was
not included in the number of shares until the second quarter of last year.
-9-
<PAGE> 10
PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits: None
(b) Reports on Form 8-K: None
-10-
<PAGE> 11
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.
BARRISTER INFORMATION SYSTEMS CORPORATION
Date: July 23, 1996 By: /s/ Henry P. Semmelhack
-----------------------
Henry P. Semmelhack
President and
Chief Executive Officer
Date: July 23, 1996 By: /s/ Richard P. Beyer
--------------------
Richard P. Beyer
Vice President, Finance
(Principal Financial Officer)
-11-
<TABLE> <S> <C>
<ARTICLE> 5
<RESTATED>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> MAR-31-1996
<PERIOD-START> APR-01-1995
<PERIOD-END> SEP-29-1995
<CASH> 49
<SECURITIES> 0
<RECEIVABLES> 1,505
<ALLOWANCES> 0
<INVENTORY> 3,746
<CURRENT-ASSETS> 5,345
<PP&E> 4,093
<DEPRECIATION> 3,594
<TOTAL-ASSETS> 6,157
<CURRENT-LIABILITIES> 3,112
<BONDS> 2,638
<COMMON> 1,486
0
0
<OTHER-SE> (1,079)
<TOTAL-LIABILITY-AND-EQUITY> 6,157
<SALES> 749
<TOTAL-REVENUES> 6,959
<CGS> 375
<TOTAL-COSTS> 5,486
<OTHER-EXPENSES> 1,511
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 135
<INCOME-PRETAX> (173)
<INCOME-TAX> 0
<INCOME-CONTINUING> (173)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (173)
<EPS-PRIMARY> (.03)
<EPS-DILUTED> (.03)
</TABLE>
