INDEX
PART I - FINANCIAL INFORMATION
Item 1 - FINANCIAL STATEMENTS:
UNAUDITED CONSOLIDATED CONDENSED
BALANCE SHEETS as of August 31, 1995
and May 31, 1995
UNAUDITED CONSOLIDATED CONDENSED
STATEMENTS OF OPERATIONS for the three
months ended August 31, 1995 and
August 31, 1994
UNAUDITED CONSOLIDATED CONDENSED
STATEMENTS OF CASH FLOWS for the three
months ended August 31, 1995 and
August 31, 1994
NOTES TO CONSOLIDATED CONDENSED
FINANCIAL STATEMENTS
Item 2 - MANAGEMENT'S DISCUSSION AND
ANALYSIS OR PLAN OF OPERATION
PART II - OTHER INFORMATION
Item 1 - LEGAL PROCEEDINGS
Item 2 - CHANGES IN SECURITIES
Item 3 - DEFAULTS UPON SENIOR SECURITIES
Item 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Item 5 - OTHER INFORMATION
Item 6 - EXHIBITS AND REPORTS ON FORM 8-K
<TABLE>
PART I - FINANCIAL INFORMATION
Item 1. FINANCIAL STATEMENTS
SANDATA, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
<CAPTION>
UNAUDITED AUDITED
August 31, May 31,
1995 1995
---------- ---------
<S> <C> <C>
ASSETS:
CURRENT ASSETS
Cash and cash equivalents $ 149,837 $ 102,613
Accounts receivable - net of allowance for
doubtful accounts of $288,000 and
$304,000, respectively 852,320 784,808
Receivables from affiliates 769,566 1,058,757
Receivable from former affiliate 62,200 77,459
Note receivable from former affiliate 210,394 240,000
Note receivable - officer (Note 2) 21,000 150,000
Note receivable 62,469 -
Inventories 69,379 26,222
Income taxes receivable - 66,000
Prepaid expenses and other current assets 173,500 88,153
---------- ----------
TOTAL CURRENT ASSETS 2,370,665 2,594,012
FIXED ASSETS, NET 8,531,273 3,564,208
OTHER ASSETS
Note receivable from former affiliate -
net allowance for doubtful accounts of
$119,000 and $119,000, respectively 27,287 58,199
Advances to affiliates 61,000 61,000
Notes receivable - officers 102,867 102,867
Cash surrender value of officer's life
insurance, security deposits and other 328,432 327,766
---------- ----------
TOTAL ASSETS $11,421,524 $ 6,708,052
=========== ===========
See notes to consolidated condensed financial statements
</TABLE>
<TABLE>
SANDATA, INC. AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
<CAPTION>
UNAUDITED AUDITED
August 31, May 31,
1995 1995
----------- ---------
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS' EQUITY:
CURRENT LIABILITIES
Accounts payable and accrued expenses $ 577,559 $ 601,106
Current portion of long-term debt 728,690 250,000
Deferred/unearned revenue 148,866 34,751
Due to affiliate 13,000 -
Deferred income 189,549 143,821
---------- ----------
TOTAL CURRENT LIABILITIES 1,657,664 1,029,678
LONG-TERM DEBT 5,732,759 1,679,166
DEFERRED INCOME 228,505 205,642
DEFERRED INCOME TAXES 107,608 140,444
---------- ---------
TOTAL LIABILITIES 7,726,536 3,054,930
---------- ---------
SHAREHOLDERS' EQUITY
Common stock 816 816
Additional paid in capital 1,279,710 1,279,710
Retained earnings 2,551,348 2,509,482
Treasury stock (136,886) (136,886)
---------- ----------
TOTAL SHAREHOLDER'S EQUITY 3,694,988 3,653,122
---------- ----------
TOTAL LIABILITIES AND SHAREHOLDER'S
EQUITY $11,421,524 $6,708,052
=========== ==========
See notes to consolidate financial statements
</TABLE>
<TABLE>
SANDATA, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF OPERATIONS
THREE MONTHS ENDED AUGUST 31,
<CAPTION>
1995 1994
---------- ----------
<S> <C> <C>
REVENUES:
Service fees $2,109,994 $1,620,130
Other Income 52,987 16,078
Interest income from officer (Note 2) 842 9,836
Interest 13,348 -
---------- ----------
2,177,171 1,646,044
COSTS AND EXPENSES:
Operating (Note 2) 1,258,666 1,043,805
Selling, general and administrative (Note 2) 529,919 431,240
Depreciation and amortization 234,880 115,105
Interest expense 83,927 31,590
---------- ---------
2,107,392 1,621,740
---------- ---------
Earnings from continued operations
before income taxes 69,779 24,304
Income tax expense 27,912 9,000
---------- ---------
NET EARNINGS $ 41,867 $ 15,304
---------- ---------
EARNINGS (LOSS) PER COMMON SHARE (Note 3) $ 0.05 $ 0.02
Weighted average common shares outstanding 766,418 766,418
========== =========
See notes to consolidated financial statements
</TABLE>
<TABLE>
SANDATA, INC. AND SUBSIDIARIES
UNAUDITED CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
FOR THE THREE MONTHS ENDED AUGUST 31,
<CAPTION>
1995 1994
--------- ---------
<S> <C> <C>
OPERATING ACTIVITIES:
Net earnings (loss) $ 41,867 $ 15,304
Adjustments to reconcile net earnings
provided by operating activities:
Depreciation and amortization 234,880 115,105
Provision for losses on accounts receivable 1,500 1,500
Recognition of deferred income 114,115 (17,059)
Recognition of deferred revenue 68,591 -
Change in operating assets and liabilities:
(Increase) decrease in operating assets 120,539 (156,652)
Increase (decrease) in operating liabilities (56,383) (266,681)
--------- ---------
Net cash used in operating activities 525,109 (308,483)
--------- ---------
INVESTING ACTIVITIES:
Payments received on note receivable
from officer 129,000 240,000
Purchases of fixed assets (5,201,945) (604,254)
Increases in advances to affiliates (13,000) (54,850)
Collections of note receivable-former
affiliates 75,777 66,609
---------- ---------
Net cash used in investing activities (5,010,168) (352,495)
---------- ---------
FINANCING ACTIVITIES:
Debt assumed from acquisition of leasehold 4,119,785 -
Payments on term loan (62,502) -
Proceeds from line of credit 950,000 625,000
Principal payments on line of credit (475,000) -
---------- ---------
Net cash provided by financing activities 4,532,283 625,000
---------- ---------
(Decrease) increase in cash 47,224 (35,978)
Cash at beginning of period 102,613 271,595
---------- ---------
Cash at end of period $ 149,837 $ 235,617
========== =========
See notes to consolidated condensed financial statements
</TABLE>
NOTES TO CONSOLIDATED CONDENSED FINANCIAL
STATEMENTS (Unaudited)
1. CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
The Consolidated Condensed Balance Sheet as of August 31, 1995, the
Consolidated Condensed Statements of Operations and Cash Flows for
the three-month period ended August 31, 1995 and 1994 have been
prepared by Sandata, Inc. and Subsidiaries (the "Company") without
audit. In the opinion of Management, all adjustments (which include
only normal, recurring adjustments) necessary to present fairly the
financial position as of August 31, 1995 and for all periods
presented have been made.
For information concerning the Company's significant accounting
policies, reference is made to the Company's Annual Report on
Form 10-KSB for the year ended May 31, 1995. Results of Operations
for the period ended August 31, 1995 are not necessarily indicative
of the operating results expected for the full year.
2. RELATED PARTY TRANSACTIONS
(A) On July 1, 1992, the Company loaned $1,000,000 to the
Company's Chairman, bearing interest at the prime rate plus 1-1/4%
and was due July 1, 1995. On September 1, 1993, the Company issued
a new note for the then outstanding balance of $490,000, bearing
interest at prime plus 1-1/4% and was due April 30, 1994. On May 1,
1994, the Company extended the due date of the note to the earlier
of April 30, 1995 or as the Company may demand at any time after
the effective date of the then proposed privatization transaction.
The Chairman paid $340,000 of the outstanding loan to the Company
during the year ended May 31, 1995. On May 1, 1995, the Company
extended the due date of the note to October 31, 1995. On July 31,
1995, the Chairman, as a result of the assignment of the lease with
the Nassau County Industrial Development Agency ("NCIDA") from BFS
Sibling Realty Inc. ("BFS") to Sandata, Inc., repaid $129,000.
Accordingly, the note receivable, in the amount of $21,000 has been
classified as a current asset in the accompanying consolidated
balance sheet as of August 31, 1995.
(B) On June 1, 1994, BFS Sibling Realty Inc. (formerly known
as Brodsky Sibling Realty Inc.) an affiliate substantially owned by
the Company's Chairman, was approved to borrow up to $3,350,000 in
the form of Industrial Development Revenue Bonds ("Bonds") to
finance costs incurred in connection with the acquisition,
renovation and equipping of the Company's new office space located
at 26 Harbor Park Drive, Port Washington, New York (the "Facility")
from the NCIDA. These Bonds were subsequently purchased by a bank
(the "Bank"). The Bonds bear interest at prime plus 3/4 of 1% until
August 11, 1995, at which time the interest rate became fixed at 9%
for a five-year term through September 1, 2000. At that time, the
interest rate will be adjusted (at the Company's option) to a rate
of either prime plus 3/4 of 1%, or the applicable fixed rate, if
offered by the Bank. Commencing October 1, 1995, principal,
together with interest, will be repaid in equal monthly
installments over a 15-year amortization period, with the balance
of unpaid principal due September 1, 2005.
(C) On June 21, 1994 (as of June 1, 1994), the Company and
its Chairman have guaranteed the full and prompt payment of
principal and interest of the Bonds and the Company has granted the
Bank a security interest and lien on all the assets of the Company.
In connection with the issuance and sale of the Bonds, the Company
entered into a lease agreement with BFS, whereby the Company leases
the Facility for the conduct of its business and in consideration
therefor, makes lease payments that at least equal amounts due to
satisfy the underlying Bond obligations.
(D) On August 11, 1995, the Company entered into a $750,000
loan agreement with the Long Island Development Corporation
("LIDC"), under a guarantee by the U.S. Small Business
Administration ("SBA"). The entire $750,000 proceeds will be used
to repay a portion of the Bond indebtedness to the Bank. In
conjunction therewith, in July 1995, to satisfy the lending
requirements of the SBA, BFS assigned to the Company all of BFS'
right, title and interest to its lease with the NCIDA, thereby
making the Company the beneficial owner of the Facility and the
direct tenant of the NCIDA.
The $750,000 debenture, which will have a twenty year
maturity, was sold in September 1995. The debenture bears interest
of 6.95%. This loan is collateralized by a second mortgage on the
Facility. Commencing October 1, 1995, principal together with
interest will be repaid in equal monthly installments over a 20-
year amortization period.
(E) As of July 31, 1995, by an Assignment and Assumption and
First Amendment to Lease between the Company and BFS, the Company
is the beneficial owner of and leases the premises from the NCIDA.
The Company currently pays rent for the Facility to NCIDA in the
amount of $48,600 per month for a term expiring in September, 2005.
The expiration of the lease term coincides with the maturity date
of the existing Bond financing through NCIDA, which Bonds are held
by a Bank at which time the Company currently intends to exercise
its right to become record owner of the Facility. The Company's
facilities are adequate for current purposes.
3. NET EARNINGS PER COMMON SHARE
The effect of outstanding options and warrants was antidilutive for
the three months ended August 31, 1995 and August 31, 1994.
Accordingly, the outstanding options and warrants were not included
in the calculation of earnings per share for the periods presented.
4. SALE/LEASEBACK TRANSACTION
In June 1995, the Company consummated a Sale/Leaseback of certain
fixed assets (principally furniture, fixtures, computer hardware
and software and equipment). The fixed assets, which had a net
book value of approximately $332,000, were sold for $475,000. The
resulting gain of approximately $143,000 was recorded as deferred
income and is being recognized over the life of the lease, which is
thirty-eight (38) months. Approximately $18,800 of deferred gain
was recognized for the three months ended August 31, 1995.
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OR PLAN OF OPERATION
Management's Discussion and Analysis of Financial Condition and
Results of Operations
Overview
On July 1, 1992, the Company loaned $1,000,000 to the Company's
Chairman, bearing interest at the prime rate plus 1-1/4% and was
due July 1, 1995. On September 1, 1993, the Company issued a new
note for the then outstanding balance of $490,000, bearing interest
at prime plus 1-1/4% and was due April 30, 1994. On May 1, 1994,
the Company extended the due date of the note to the earlier of
April 30, 1995 or as the Company may demand at any time after the
effective date of the then proposed privatization transaction. The
Chairman paid $340,000 of the outstanding loan to the Company
during the year ended May 31, 1995. On May 1, 1995, the Company
extended the due date of the note to October 31, 1995. On July 31,
1995, the Chairman, as a result of the assignment of the lease with
the Nassau County Industrial Development Agency ("NCIDA") from BFS
Sibling Realty Inc. ("BFS") to Sandata, Inc., repaid $129,000.
Accordingly, the note receivable, in the amount of $21,000 has been
classified as a current asset in the accompanying consolidated
balance sheet as of August 31, 1995.
On June 1, 1994, BFS Sibling Realty Inc. (formerly known as Brodsky
Sibling Realty Inc.) an affiliate substantially owned by the
Company's Chairman, was approved to borrow up to $3,350,000 in the
form of Industrial Development Revenue Bonds ("Bonds") to finance
costs incurred in connection with the acquisition, renovation and
equipping of the Company's new office space located at 26 Harbor
Park Drive, Port Washington, New York (the "Facility") from the
NCIDA. These Bonds were subsequently purchased by a bank (the
"Bank"). The Bonds bear interest at prime plus 3/4 of 1% until
August 11, 1995, at which time the interest rate became fixed at 9%
for a five-year term through September 1, 2000. At that time, the
interest rate will be adjusted (at the Company's option) to a rate
of either prime plus 3/4 of 1%, or the applicable fixed rate, if
offered by the Bank. Commencing October 1, 1995, principal,
together with interest, will be repaid in equal monthly
installments over a 15-year amortization period, with the balance
of unpaid principal due September 1, 2005.
On June 21, 1994 (as of June 1, 1994), the Company and its Chairman
have guaranteed the full and prompt payment of principal and
interest of the Bonds and the Company has granted the Bank a
security interest and lien on all the assets of the Company. In
connection with the issuance and sale of the Bonds, the Company
entered into a lease agreement with BFS, whereby the Company leases
the Facility for the conduct of its business and in consideration
therefor, makes lease payments that at least equal amounts due to
satisfy the underlying Bond obligations.
On August 11, 1995, the Company entered into a $750,000 loan
agreement with the Long Island Development Corporation ("LIDC"),
under a guarantee by the U.S. Small Business Administration
("SBA"). The entire $750,000 proceeds will be used to repay a
portion of the Bond indebtedness to the Bank. In conjunction
therewith, in July 1995, to satisfy the lending requirements of the
SBA, BFS assigned to the Company all of BFS' right, title and
interest to its lease with the NCIDA, thereby making the Company
the beneficial owner of the Facility and the direct tenant of the
NCIDA.
The $750,000 debenture, which will have a twenty year maturity, was
sold in September 1995. The debenture bears interest of 6.95%.
This loan is collateralized by a second mortgage on the Facility.
Commencing October 1, 1995, principal together with interest will
be repaid in equal monthly installments over a 20-year amortization
period.
As of July 31, 1995, by an Assignment and Assumption and First
Amendment to Lease between the Company and BFS, the Company is the
beneficial owner of and leases the premises from the NCIDA. The
Company currently pays rent for the Facility to NCIDA in the amount
of $48,600 per month for a term expiring in September, 2005. The
expiration of the lease term coincides with the maturity date of
the existing Bond financing through NCIDA, which Bonds are held by
a Bank at which time the Company currently intends to exercise its
right to become record owner of the Facility. The Company's
facilities are adequate for current purposes.
First Quarter Fiscal 1996 vs. First Quarter Fiscal 1995
Revenues from continued operations for the three months ended August
31, 1995 were $2,177,171 as compared to $1,646,044 for the three
months ended August 31, 1994, an increase of $531,127 or 32%.
Service fee revenue for the three months ended August 31, 1995 was
$2,109,994 as compared to $1,620,130 for the same period of the
prior fiscal year. The increase is partially attributable to a
custom software package being written for an affiliated company and
revenue derived from Sandata TimeTrax.
Operating expenses were $1,258,666 for the quarter ended August 31,
1995 as compared to $1,043,805 for the quarter ended August 31,
1994, an increase of $214,861 or 21%. Programming costs relating to
existing programs and the expenses related to equipment used for
TimeTrax, were the primary causes for the increase in operating
expenses.
Selling, general and administrative expenses were $529,919 for the
three months ended August 31, 1995 an increase of $98,679 or 23% as
compared to $431,240 for the three months ended August 31, 1994. The
increase is partially due to costs of approximately $57,000 related
to Sandata TimeTrax. This increase was partially offset by decreased
selling expenses of approximately $31,000 which was primarily due to
the licensing of its Home Health[star]Pro[Registered] system.
Depreciation and amortization expense increased $119,775 to $234,880
from $115,105 for the three months ended August 31, 1995 which was
primarily caused by fixed asset additions related to Sandata
TimeTrax.
Interest expense was $83,927 for the three month period ended
August 31, 1995 as compared to $31,590 for the three month period
ended August 31, 1994. The increase is attributable to increased
borrowings against the Company's revolving credit agreement and
interest related to the mortgages on the Company's Facility and
interest rate increases.
Income tax expense for the three months ended August 31, 1995 was
$27,912 as compared to $9,000 for the three months ended August 31,
1994. The increased profitability is partially the result of the
licensing of its Home Health[star]Pro system.
Earnings from continued operations was adversely affected by the
Company's efforts to improve and promote its TimeTrax system.
Liquidity and Capital Resources
Working capital as of August 31, 1995 was $713,001 a decrease from
May 31, 1995 of $851,333 or 54%. This is partially attributable to
the Company becoming the direct tenant of its Facility.
On July 31, 1993, the Company received a promissory note from
Compuflight, Inc. ("Compuflight"), a former affiliate (the Company's
Chairman was a principal stockholder and Chairman of Compuflight
through December 1, 1993) to replace the Company's accounts
receivable from Compuflight. The note was payable in increments of
$20,000 per month including interest at the rate of one percent
above prime on the unpaid balance and was due April 1, 1994. On
November 1, 1993, the note was amended. The amended note is payable
in minimum increments of $20,000 per month with interest at ten
percent (10%) per annum and contains provisions for accelerated
payments based upon Compuflight achieving certain results. Payments
commenced on February 28, 1994 and are to continue until such time
as the indebtedness and any accrued interest are paid in full. In
connection with the promissory note, the Company received a security
interest in substantially all the assets of Compuflight, which has
been assigned to the Bank as collateral for the Company's $2,000,000
Credit Agreement with the Bank. At the present time, Compuflight I
indebted to the Company in the amount of $274,881, of which $217,681
represents the balance due on the Note and $57,200 represents
accounts receivable.
The Company believes the results of its continued operations,
together with the available line of credit and term loan, should be
adequate to fund presently foreseeable working capital requirements.
PART II - OTHER INFORMATION
Item 1 - LEGAL PROCEEDINGS:
None
Item 2 - CHANGES IN SECURITIES:
None
Item 3 - DEFAULTS UPON SENIOR SECURITIES:
None
Item 4 - SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS:
None
Item 5 - OTHER INFORMATION:
None
Item 6 - EXHIBITS AND REPORTS ON FORM 8-K:
Exhibit 27: Financial Data Schedule (Electronic Filing Only)
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.
SANDATA, INC.
(Registrant)
Bert E. Brodsky
Date Bert E. Brodsky
Chairman of the Board
President, Chief Executive Officer,
Chief Financial Officer
U.S. SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-QSB
/X/ Quarterly report Under Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended August 31, 1995
/ / Transition report under Section 13 or 15(d) of the Exchange Act
For the transition period from to
Commission file number 0-14401
SANDATA, INC.
(Exact Name of Small Business Issuer as Specified in Its Charter)
Delaware 11-2841799
(State or Other Jurisdiction of (IRS Employer
Incorporation or Organization) Identification No.)
26 Harbor Park Drive, Port Washington, NY 11050
(Address of Principal Executive Offices) (Zip Code)
516-484-9060
(Issuer's Telephone Number, Including Area Code)
Check whether the issuer: (1) filed all reports required to be filed by
Section 13 or 15(d) of the Exchange Act during the past 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
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Check whether the registrant filed all documents and reports required
to be filed by Section 12, 13 or 15(d) of the Exchange Act after the
distribution of securities under a plan confirmed by a court.
Yes No
APPLICABLE ONLY TO CORPORATE ISSUERS
The number of shares outstanding of each of the issuer's classes of
common equity, as of October 11, 1995, was 763,955 shares.
Transitional Small Business Disclosure Format (check one):
Yes No X
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> MAY-31-1996
<PERIOD-END> AUG-31-1995
<CASH> 149,837
<SECURITIES> 0
<RECEIVABLES> 1,977,949
<ALLOWANCES> 407,020
<INVENTORY> 69,379
<CURRENT-ASSETS> 2,370,665
<PP&E> 11,839,165
<DEPRECIATION> 3,307,892
<TOTAL-ASSETS> 11,421,524
<CURRENT-LIABILITIES> 1,657,664
<BONDS> 0
<COMMON> 816
0
0
<OTHER-SE> 3,694,172
<TOTAL-LIABILITY-AND-EQUITY> 11,421,524
<SALES> 2,109,994
<TOTAL-REVENUES> 2,177,171
<CGS> 0
<TOTAL-COSTS> 2,023,465
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 83,927
<INCOME-PRETAX> 69,779
<INCOME-TAX> 27,912
<INCOME-CONTINUING> 41,867
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 41,867
<EPS-PRIMARY> .05
<EPS-DILUTED> .05
</TABLE>
