FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 1995
OR
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR
15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________ to __________
Commission File Number 1-11057
_______________________
COLONIAL DATA TECHNOLOGIES CORP.
________________________________
(Exact name of registrant as specified in its charter)
Delaware 04-2763229
_____________ __________
(State or other (I.R.S. Employer
jurisdiction of Identification No.)
incorporation or
organization)
80 Pickett District Road
New Milford, Connecticut 06776
_______________________________
(Address of principal executive offices)
(Zip Code)
(203) 355-3178
______________
(Registrant's telephone
number, including area code)
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.
X Yes No
______ _____
The number of shares outstanding of the issuer's common stock,
as of June 30, 1995 was 13,591,786.
COLONIAL DATA TECHNOLOGIES CORP.
I N D E X
Page
PART I. Financial Information
Item 1. Financial Statements
Consolidated Condensed Balance Sheets,
June 30, 1995 and December 31, 1994 . . . . . . . . . 3
Consolidated Condensed Statements of Earnings for
the three months ended June 30, 1995 and 1994 . . . . 4
Consolidated Condensed Statements of Earnings for
the six months ended June 30, 1995 and 1994 . . . . . 5
Consolidated Condensed Statement of Stockholders'
Equity for the six months ended June 30, 1995 . . . . 6
Consolidated Condensed Statements of Cash Flows for
the six months ended June 30, 1995 and 1994 . . . . . 7
Notes to Consolidated Condensed Financial Statements 8
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations . . . 10
PART II. Other Information
Item 4. Submission of Matters to a Vote of
Security Holders . . . . . . . . . . . . . . . . . 13
Item 5. Other Information . . . . . . . . . . . . . . . . . 13
Item 6. Exhibits and Reports on Form 8-K . . . . . . . . . . 14
Signature . . . . . . . . . . . . . . . . . . . . . 15
PART I.
Item 1. Financial Statements
COLONIAL DATA TECHNOLOGIES CORP.
CONSOLIDATED CONDENSED BALANCE SHEETS
JUNE 30, 1995 AND DECEMBER 31, 1994
(In Thousands, Except Share and Per Share Amounts)
ASSETS 1995 1994
(Unaudited)
CURRENT ASSETS:
Cash and cash equivalents $ 2,820 $14,013
Accounts receivable (net of allowance
of $103 in 1995 and $56 in 1994) 12,759 5,102
Income taxes receivable 114 863
Inventories 8,752 6,473
Prepaid expenses 494 128
Deferred income taxes 145 131
_______ _______
Total current assets 25,084 26,710
PROPERTY, PLANT and EQUIPMENT, NET:
Leased product 5,340 5,001
Other property, plant & equipment 2,553 754
_______ _______
Total property, plant and equipment 7,893 5,755
DEFERRED INCOME TAXES 953 668
SECURITY HELD FOR SALE 6,086
INVESTMENTS 3,651
_______ _______
TOTAL ASSETS $43,667 $33,133
_______ _______
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Accounts payable $ 2,439 $1,497
Accrued liabilities 1,988 1,020
Income taxes payable 892 263
Short-term debt 1,030
_______ _______
Total current liabilities 6,349 2,780
LONG TERM DEBT 2,000
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common stock, par value $.01 per share,
authorized 20,000,000 shares, issued and
outstanding 13,591,786 shares in 1995
and 13,299,241 shares in 1994 136 133
Additional paid-in-capital 25,803 22,142
Retained earnings 11,317 6,078
Unrealized appreciation of
security held for sale 84
Cumulative translation loss (22)
_______ _______
Total stockholders' equity 37,318 28,353
_______ _______
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $43,667 $33,133
_______ _______
See notes to consolidated condensed financial statements.
COLONIAL DATA TECHNOLOGIES CORP.
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
FOR THE THREE MONTHS ENDED JUNE 30, 1995 AND 1994
(In Thousands, Except Share and Per Share Amounts)
1995 1994
(Unaudited)
REVENUES:
Products $12,478 $4,669
Leases 5,395 1,945
Services 435 776
_______ _______
Total revenues 18,308 7,390
COST OF SALES:
Products 8,356 3,392
Leases 2,153 1,119
Services 295 539
_______ _______
Total cost of sales 10,804 5,050
_______ _______
GROSS PROFIT 7,504 2,340
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 2,617 1,223
RESEARCH AND DEVELOPMENT 367 99
_______ _______
INCOME FROM OPERATIONS 4,520 1,018
OTHER INCOME (EXPENSE):
Interest expense (13) (40)
Interest income 202
_______ _______
Total other income (expense) 189 (40)
_______ _______
INCOME BEFORE INCOME TAXES 4,709 978
INCOME TAXES 1,884 410
_______ _______
NET INCOME $ 2,825 $ 568
_______ _______
WEIGHTED AVERAGE SHARES:
Primary 13,756,363 11,236,309
__________ __________
Fully diluted 13,757,353 11,248,555
__________ __________
PRIMARY AND FULLY DILUTED NET
INCOME PER SHARE $ 0.21 $ 0.05
_________ _________
See notes to consolidated condensed financial statements.
COLONIAL DATA TECHNOLOGIES CORP.
CONSOLIDATED CONDENSED STATEMENTS OF EARNINGS
FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND 1994
(In Thousands, Except Share and Per Share Amounts)
1995 1994
(Unaudited)
REVENUES:
Products $22,180 $8,162
Leases 10,188 3,648
Services 1,146 1,623
_______ _______
Total revenues 33,514 13,433
COST OF SALES:
Products 15,055 5,961
Leases 4,074 2,105
Services 776 1,101
_______ _______
Total cost of sales 19,905 9,167
_______ _______
GROSS PROFIT 13,609 4,266
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES 4,606 2,164
RESEARCH AND DEVELOPMENT 645 195
_______ _______
INCOME FROM OPERATIONS 8,358 1,907
OTHER INCOME (EXPENSE):
Interest expense (17) (66)
Interest income 392
_______ _______
Total other income (expense) 375 (66)
_______ _______
INCOME BEFORE INCOME TAXES 8,733 1,841
INCOME TAXES 3,494 778
_______ _______
NET INCOME $5,239 $1,063
_______ _______
WEIGHTED AVERAGE SHARES:
Primary 13,717,204 11,257,273
__________ __________
Fully diluted 13,719,494 11,270,273
__________ __________
PRIMARY AND FULLY DILUTED NET
INCOME PER SHARE $0.38 $0.09
_________ __________
See notes to consolidated condensed financial statements.
COLONIAL DATA TECHNOLOGIES CORP.
CONSOLIDATED CONDENSED STATEMENT OF STOCKHOLDERS' EQUITY
FOR THE SIX MONTHS ENDED JUNE 30, 1995 (UNAUDITED)
(In Thousands, Except Share Data)
UNREALIZED
COMMON STOCK APPRECIATION
_____________ ADDITIONAL OF SECURITY CUMULATIVE
PAR PAID-IN RETAINED HELD FOR TRANSLATION
SHARES VALUE CAPITAL EARNINGS SALE LOSS TOTAL
BALANCE,
DECEMBER 31,
1994 13,299,241 $133 $22,142 $6,078 $28,353
OPTIONS/
WARRANTS
EXERCISED 121,802 1 270 271
ISSUANCE OF
SHARES TO
US ORDER 170,743 2 3,391 3,393
NET INCOME 5,239 5,239
UNREALIZED
APPRECIATION
OF SECURITY
HELD FOR SALE $84 84
CUMULATIVE
TRANSLATION
LOSS $(22) (22)
__________ _____ _______ _______ ___ ______ _______
BALANCE
JUNE 30,
1995 13,591,786 $136 $25,803 $11,317 $84 $(22) $37,318
__________ _____ _______ _______ ___ ____ _______
See notes to consolidated condensed financial statements.
COLONIAL DATA TECHNOLOGIES CORP.
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND 1994
(In Thousands)
1995 1994
(Unaudited)
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 5,239 $ 1,063
Adjustments to reconcile net income to net
cash provided by (used in) operating
activities:
Depreciation 1,910 1,579
Provision for bad debts 39
Gain on sale of property and equipment 10
Decrease in reserve for inventory (22)
Deferred income taxes (299) (400)
Changes in assets and liabilities:
Accounts receivable (7,392) (1,620)
Merchandise sold under contract 351
Inventories (1,220) (2,207)
Prepaid expenses (368) (145)
Accounts payable 944 586
Income taxes receivable and payable 1,323 217
Accrued liabilities 944 (129)
_______ _______
Net cash provided by (used in)
operating activities 1,098 (695)
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures, net of dispositions (3,671) (1,758)
Proceeds from sale of property and equipment 10
Purchase of Security Held-For-Sale (5,945)
Other Investments (1,961)
_______ _______
Net cash used in investing activities (11,577) (1,748)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock, net
of related costs and related tax benefit 271 108
Proceeds from (payments on) borrowings (970) 2,330
_______ _______
Net cash provided by (used in)
financing activities (699) 2,438
EFFECT OF EXCHANGE RATE CHANGES (15)
_______ _______
NET DECREASE IN CASH (11,193) (5)
CASH AND EQUIVALENTS AT BEGINNING OF PERIOD 14,013 11
_______ ________
CASH AND EQUIVALENTS AT END OF PERIOD $ 2,820 $ 6
_______ ________
See notes to consolidated condensed financial statements.
COLONIAL DATA TECHNOLOGIES CORP.
NOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTS
FOR THE SIX MONTHS ENDED JUNE 30, 1995 AND 1994 (UNAUDITED)
1. Basis of Presentation
The accompanying unaudited consolidated condensed financial
statements have been prepared in accordance with generally accepted
accounting principles for interim financial information and with
the instructions to Form 10-Q and Rule 10-01 of Regulation S-X.
They do not include all information and footnotes required by
generally accepted accounting principles for complete financial
statements. However, except as disclosed herein, there has been no
material change in the information disclosed in the notes to
consolidated financial statements included in the Annual Report on
Form 10-K of Colonial Data Technologies Corp. and its subsidiary
(the "Company") for the year ended December 31, 1994. In the
opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation
have been included. Operating results for the six-month period
ended June 30, 1995 are not necessarily indicative of the results
that may be expected for the year ending December 31, 1995.
2. Certain Transactions and Events
US Order Exchange Agreement
In April 1995, the Company entered into a stock exchange agreement
with US Order, Inc. ("US Order") a strategic alliance partner for
analog display services interface protocol capable "smart
telephones." Under the terms of the agreement, on June 9, 1995,
the Company exchanged 170,743 shares of restricted common stock for
230,000 shares of US Order restricted common stock. The value of
this exchange was based on US Order's value at their initial public
offering price and an equal value of the Company's common stock
based on the average closing price for a specified period of time,
as defined in the agreement, preceding the date of the exchange.
On June 2, 1995, US Order's initial public offering was effective
at a price per share of $14.75.
The agreement provides for the Company and US Order to exchange on
April 15, 1996 $3 million of the Company's restricted common stock
for $3 million of US Order's restricted common stock, subject to
certain conditions and not exceeding a maximum of 200,000 shares.
Each company's stock will be valued at the average closing price of
their respective common stock for a specified period of time, as
defined in the agreement, preceding the date of the exchange. Both
companies will have certain "piggyback" registration rights and
rights of first refusal with respect to each others' stock.
CDT Canada Corp.
In May 1995, the Company purchased the Canadian Caller ID business
of TIE/communications, Inc. through an acquisition of certain
assets. The acquisition costs and operations purchased were not
significant to the Company. In connection with the acquisition, a
newly formed subsidiary, CDT Canada Corp. will manage the Company's
Canadian operations, which will include a manufacturing,
engineering and sales facility in Brampton, Ontario, Canada.
Worldwide Telecom Partners, Inc.
In May 1995, the Company acquired a 50% interest in a joint
venture, Worldwide Telecom Partners, Inc. The venture will also be
50% owned by Barry Blau & Partners, Inc. The venture will provide
marketing services to the telecommunications industry. The cost of
this investment and related equity income were not significant.
Stockholders' Equity
In May 1995, the stockholders approved the Company's
reincorporation into Delaware from Massachusetts. As a result of
this reincorporation, the Company's authorized class of preferred
stock, of which no shares were issued and outstanding, was
eliminated.
3. Accounting Policy
Security Held For Sale
The Company reports its investment holdings in conformance with
Financial Accounting Standards Board Statement No. 115, "Accounting
for Certain Investments in Debt and Equity Securities."
Accordingly, a US Treasury Note with a February, 1997 maturity,
which the Company may use to fund working capital, is classified
as a noncurrent asset held for sale and carried at market value.
Changes in the market value of securities held for sale are
included in stockholders' equity, net of applicable taxes.
Investment in US Order
The Company will carry its investment in restricted US Order common
stock at its original cost.
4. Borrowings
On February 22, 1995, the Company elected to amend its loan
agreement and reduce its credit line from $8 million to $4 million.
The loan agreement is subject to renewal on April 30, 1996.
5. Subsequent Event
In July 1995, the Company completed a public offering of 2,645,000
shares of the Company's common stock, of which 1,645,000 shares
were issued by the Company and 1,000,000 shares were sold by
certain selling stockholders. The net proceeds to the Company from
the offering were approximately $35 million.
Item 2.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations - Three Months Ended June 30, 1995
Compared to Three Months Ended June 30, 1994
Revenues
Revenues for the second quarter of 1995 were $18,308,000 compared
to $7,390,000 for the prior year period. Caller ID revenues were
$17,873,000 for the second quarter of 1995 compared to $6,614,000
for the second quarter of 1994, with approximately 69% of the
increase being generated by product sales and 31% from leasing.
The growth in Caller ID revenues was primarily a result of higher
sales volume of Caller ID units and continued expansion of the US
West Communications ("US West") leasing program. This growth
resulted from the addition of new customers, increased availability
and acceptance of Caller ID service, and marketing and promotional
campaigns conducted by telephone operating companies ("telcos") and
the Company. Also contributing to the increase were $779,000 from
sales to the Company's direct response marketing joint venture,
Worldwide Telecom Partners, Inc. Service revenues declined from
$776,000 for the second quarter of 1994 to $435,000 for the second
quarter of 1995 primarily due to the completion of certain repair
contracts.
Cost of Sales
Cost of sales increased from $5,050,000 for the second quarter of
1994 to $10,804,000 for the second quarter of 1995 due to costs
associated with the increases in both product sales and leasing of
Caller ID units, offset in part by decreased service and support
activity. Gross profit margin derived from product sales of Caller
ID products increased from 27% for the second quarter of 1994 to
33% for the second quarter of 1995, primarily as a result of
changes in product mix in connection with promotional activities
undertaken by certain telco customers and the impact of additional
higher margin sales directly to the Caller ID subscribers of
certain telcos. Gross profit margin derived from Caller ID leasing
increased from 42% for the second quarter of 1994 to 60% for the
second quarter of 1995 as a result of an increase in the base of
fully depreciated units under lease, increased leasing of higher
margin units and generally lower relative production costs. Gross
profit margins for services were up slightly to 32% for the second
quarter of 1995 from 31% for the second quarter of 1994. The
combined result of these factors was the improvement in the overall
gross margin from 32% for the second quarter of 1994 to 41% for the
second quarter of 1995. The Company anticipates that gross profit
margins may fluctuate due to changes in product mix, the
introduction of new products and the maturation and expansion of
leasing programs.
Selling, General and Administrative Expenses
Selling, general and administrative expenses increased 114% from
$1,223,000 for the second quarter of 1994 to $2,617,000 for the
same period in 1995, but decreased from 17% to 14% of total
revenues for the respective periods. One significant component of
the expense increase was salaries and employee related expenses
resulting from an increase in personnel to support higher business
volume. The Company anticipates that personnel additions will
continue as revenue levels increase during 1995. Also contributing
to the increase were commission and royalty expenses associated
with higher Caller ID revenues.
Research and Development
Second quarter research and development expenses increased 271%
from 1994 to 1995 primarily due to services performed by the
Company's principal manufacturer on a contract basis, the hiring of
additional personnel to support higher levels of new product
development activity and research and development activities
related to the introduction of the SCWID product and the
development of a "smart telephone".
Other Income (Expense)
Net other income, consisting primarily of interest income in 1995,
was $189,000 for the second quarter of 1995 compared to net other
expense of $40,000 for the second quarter of 1995. In 1995,
interest income was earned on the invested proceeds of the
Company's October 1994 common stock offering. In 1994, interest
expense resulted from borrowings under the Company's revolving line
of credit, which was utilized to fund expansion of the lease base
and working capital.
Income Taxes
Income taxes were $1,884,000 for the second quarter of 1995
compared to $410,000 for the second quarter of 1994. The effective
income tax rates decreased from 42% for the second quarter of 1994
to 40% for the second quarter of 1995 primarily due to a change in
the mix of taxable income by state.
Net Income
As a result of the foregoing factors, net income increased 397%
from $568,000 for the second quarter of 1994 to $2,825,000 for the
second quarter of 1995.
Results of Operations - Six Months Ended June 30, 1995
Compared to Six Month Ended June 30, 1994
Revenues for the six months ended June 30, 1995 were $33,514,000
compared to $13,433,000 for the same period in the prior year.
Caller ID revenues were $32,368,000 for the six months ended June
30, 1995 compared to $11,810,000 for the six months ended June 30,
1994 with approximately 68% of the increase being generated by
sales and 32% from leasing. Service revenue decreased 29% to
$1,146,000 for the six months ended June 30, 1995 from $1,623,000
for the six months ended June 30, 1994.
Gross profit increased from $4,266,000 for the six months ended
June 30, 1994 to $13,609,000 for the six months ended June 30, 1995
due to a combination of higher revenues and improved margins.
Gross margins were up from 32% for the six months ended June 30,
1994 to 41% for the six months ended June 30, 1995 due to the
effect on lease margins of fully depreciated units, changes in
product mix and additional sales directly to the Caller ID
subscribers of certain telcos. Selling, general and administrative
expenses for the first six months ended June 30, 1995 were
$4,606,000 compared to $2,164,000 for the same period in 1994.
Higher payroll expense attributable to an increase in staffing
levels, combined with higher commission and royalty expense payable
on Caller ID revenue were the major components of the increase.
Research and development costs increased 231% to $645,000 for the
six months ended June 30, 1995 as the Company focused additional
resources on recent and future product introductions.
Net other income was $375,000 for the six months ended June 30,
1995 compared to net expense of $66,000 for the six months ended
June 30, 1994.
The above factors resulted in pre-tax and net income of $8,733,000
and $5,239,000, respectively, for the six months ended June 30,
1995 compared to pre-tax and net income of $1,841,000 and
$1,063,000, respectively, for the six months ended June 30, 1994.
Liquidity and Capital Resources
The Company's working capital decreased from $23,930,000 at
December 31, 1994 to $18,735,000 at June 30, 1995. To improve the
yield on its cash and equivalent holdings, in February, 1995, the
Company acquired a US Treasury Note with a February 1997 maturity.
This highly liquid holding is reported at market value as a
noncurrent asset held for sale, and, if necessary, will be
liquidated to meet future cash requirements. Working capital
adjusted to include the value of the US Treasury Note was
$24,821,000 at June 30, 1995.
The Company's principal needs for cash are for investments in lease
and other equipment and to fund working capital, primarily related
to inventory and accounts receivable. Investing activities for the
six months ended June 30, 1995 included additions to leased
equipment from the Company's US West lease program of $2,093,000
and other machinery and equipment purchases of $1,528,000 were made
to support the Company's growth. In addition, during the six
months ended June 30, 1995, the Company acquired the Canadian
Caller ID business of TIE/communications, Inc. and funded a joint
venture arrangement entered into with Barry Blau & Partners, Inc.
for a total investment of $1,961,000. The Company utilized cash of
1,220,000 to fund increases in inventory for the six months ended
June 30, 1995 to ensure that units were available for timely
fulfillment of lease and sales orders. In addition, accounts
receivable increased by $7,392,000 for the six month ended June 30,
1995 as a result of higher sales, installment payments for certain
promotions and the timing of certain collections.
The Company's cash requirements were financed primarily by cash
provided by operations of $1,098,000 for the same period and net
proceeds of $16.1 million from a common stock offering completed in
October 1994. In addition, the Company maintains a $4 million line
of credit under a revolving loan agreement with a bank to meet
short term cash requirements. The Company elected to reduce the
credit line from $8 million to $4 million in the first quarter of
1995. At June 30, 1995, approximately $1.8 million of the line of
credit was available to fund draw downs and letters of credit. The
loan agreement is subject to renewal on April 30, 1996.
The strengthening of the Company's financial condition continued
into 1995. Retained 1995 earnings of $5,239,000 and the value of
170,743 shares exchanged with US Order of $3,393,000 primarily
resulted in an increase in stockholders' equity to $37,318,000 from
$28,353,000 at December 31, 1994. In addition, on July 18, 1995,
the Company completed the public offering of 2,645,000 shares
(inclusive of 345,000 shares issued in connection with the
underwriters' overallotment option) of the Company's common stock,
of which 1,645,000 shares were issued by the Company and 1,000,000
shares were sold by selling stockholders. Net proceeds of
approximately $35 million were received by the Company upon
completion of the offering.
In order to meet the Company's anticipated needs for cash during
the foreseeable future, including cash required to fund inventory
purchases, accounts receivable, research and development
activities, new product introductions, expansion of customer
service, sales and marketing operations, and the acquisition of
leased Caller ID units, the Company will utilize existing cash,
line of credit availability and cash provided by operations.
PART II
Item 2. Change in Securities
On May 19, 1995, the Company changed its state of incorporation
from the Commonwealth of Massachusetts to the State of Delaware by
merging with a Delaware corporation organized for this purpose. In
response to this Item 2, the discussion of the reincorporation of
the Company in Delaware contained on pages 18-29 of the Company's
previously filed proxy statement for the annual meeting of its
shareholders held on May 18, 1995 is incorporated by reference
herein.
Item 4. Submission of Matters to a Vote of Security Holders
The annual meeting of stockholders of the Company was held on May
18, 1995.
Proxies for that annual meeting were solicited pursuant to
Regulation 14 under the Securities and Exchange Act of 1934, there
was no solicitation in opposition to the management's nominees as
listed in the Proxy Statement and all of such nominees were
elected.
The following persons were duly elected to serve, subject to the
Company's Bylaws, as Directors of the Company until the next annual
meeting or until election and qualification of their successor.
NAME VOTES IN FAVOR VOTES WITHHELD
Robert J. Schock 13,035,121 43,539
Walter M. Fiederowicz 13,035,121 43,539
Constantine S. Macricostas 13,035,121 43,539
Frederick P. Masotta, Jr. 13,035,121 43,539
In addition, the Company's stockholders voted as follows with
respect to the proposals presented at the meeting (i) a proposal to
approve the Company's 1994 Long-Term Incentive Plan was approved
with 12,491,358 votes cast in favor of the proposal, 504,348 votes
against the proposal and 55,439 abstentions, and (ii) a proposal to
reincorporate the Company in Delaware was approved with 9,212,223
votes cast in favor of the proposal, 136,778 votes against the
proposal and 36,260 abstentions.
Item 5. Other Information
US Order Exchange Agreement
In April 1995, the Company entered into a stock exchange agreement
with US Order, Inc. ("US Order") a strategic alliance partner for
analog display services interface protocol capable "smart
telephones." Under the terms of the agreement, on June 9, 1995,
the Company exchanged 170,743 shares of restricted common stock for
230,000 shares of US Order restricted common stock. The value of
this exchange was based on US Order's value at their initial public
offering price and an equal value of the Company's common stock
based on the average closing price for a specified period of time,
as defined in the agreement, preceding the date of the exchange.
On June 2, 1995, US Order's initial public offering of common stock
was effective at a price per share of $14.75.
The agreement provides for the Company and US Order to exchange on
April 15, 1996 $3 million of the Company's restricted common stock
for $3 million of US Order's restricted common stock subject to
certain conditions and not exceeding a maximum of 200,000 shares.
Each company's stock will be valued at the average closing price of
their respective common stock for a specified period of time, as
defined in the agreement, preceding the date of the exchange. Both
companies will have certain "piggyback" registration rights and
rights of first refusal with respect to each others' stock.
Worldwide Telecom Partners, Inc.
In May 1995, the Company acquired a 50% interest in a joint
venture, Worldwide Telecom Partners, Inc. The venture is 50% owned
by Barry Blau & Partners, Inc. The venture will provide marketing
services to the telecommunications industry. The cost of this
investment was not significant.
Item 6. Exhibits and Reports on Form 8-K
(a) Financial Data Schedule
(b) The Company was not required to file a report on
Form 8-K during the quarter ended June 30, 1995.
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.
COLONIAL DATA TECHNOLOGIES CORP.
Date: August 3, 1995 By /s/ John N. Giamalis
_______________________________
JOHN N. GIAMALIS
Vice President
and Chief Financial Officer
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0
0
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<EPS-PRIMARY> .38
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</TABLE>
