<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington D.C. 20549
FORM 10-Q
/X/ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarter ended SEPTEMBER 30, 1995
/ / TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________________________ to __________________
Commission File No 0-15949
INTERNATIONAL MICROCOMPUTER SOFTWARE, INC.
(Exact name of registrant as specified in its charter)
CALIFORNIA 94-2862863
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) identification No.)
1895 EAST FRANCISCO BLVD., SAN RAFAEL, CA 94901
(Address of principal executive offices) (Zip code)
(415) 257-3000
(Registrant's telephone number including area code)
Indicate by check mark whether 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, and (2) has been subject to such filing requirements
for the past 90 days.
YES X NO
--- ---
As of November 10, 1995, 3,190,000 shares of Registrant's Common Stock, no par
value, were outstanding.
<PAGE> 2
INTERNATIONAL MICROCOMPUTER SOFTWARE, INC.
AND SUBSIDIARIES
INDEX
<TABLE>
<CAPTION>
Page
----
<S> <C>
PART I - FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Information
Consolidated Balance Sheets at September 30, 1995 and 1994 3
Consolidated Statements of Operations for the three months ended 4
September 30, 1995 and 1994
Consolidated Statements of Cash Flows for the three months ended 5
September 30, 1995 and 1994
Notes to Consolidated Financial Statements 6-9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 10-13
PART II - OTHER INFORMATION
Item 1. Legal Proceedings 14
Item 6. Exhibits and Reports on Form 8-K 14
SIGNATURES 15
</TABLE>
2
<PAGE> 3
INTERNATIONAL MICROCOMPUTER SOFTWARE, INC.
AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(Unaudited)
<TABLE>
<CAPTION>
SEPTEMBER 30, 1995 JUNE 30, 1995
------------------ -------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 312,560 $ 523,235
Receivables, less allowances for doubtful
accounts and returns of $1,016,691 and $777,718 3,615,170 2,590,322
Inventories 1,675,726 1,625,631
Prepaid royalties and licenses 462,303 336,053
Deferred direct marketing costs 407,331 358,398
Deferred tax assets, net 333,362 321,362
Other current assets 290,552 182,637
----------- -----------
Total current assets 7,097,004 5,937,638
Furniture and equipment, net 796,463 836,610
Deferred tax assets, net 418,721 411,721
Capitalized software development costs, net 478,657 244,839
Other assets, net 377,281 39,583
----------- -----------
Total assets $ 9,168,126 $ 7,470,391
=========== ===========
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Credit line payable $ 350,000 $ 400,000
Short term debt and other obligations 374,183 186,529
Accounts payable and accrued expenses 4,090,655 3,139,059
Income taxes payable 289,135 245,008
----------- -----------
Total current liabilities 5,103,973 3,970,596
Long term debt and other obligations 587,125 102,570
----------- -----------
Total liabilities 5,691,098 4,073,166
Shareholders' equity:
Preferred stock, no par value; 20,000,000 shares
authorized; none issued or outstanding
Common stock, no par value; authorized 300,000,000
issued and outstanding - 3,188,529 shares at
September 30, 1995 and 3,173,304 shares at June 30, 1995 5,871,557 5,863,776
Accumulated deficit (2,105,723) (2,177,369)
Cumulative translation adjustment (23,348) (23,724)
Notes receivable from shareholders (265,458) (265,458)
----------- -----------
Total shareholders' equity 3,477,028 3,397,225
----------- -----------
Total liabilities and shareholders' equity $ 9,168,126 $ 7,470,391
=========== ===========
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
3
<PAGE> 4
INTERNATIONAL MICROCOMPUTER SOFTWARE, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30,
--------------------------------
1995 1994
----------- ----------
<S> <C> <C> <C> <C>
Net revenues $5,107,078 100.0% $4,760,573 100.0%
Product costs 1,673,599 32.8% 1,540,863 32.4%
---------- ----- ---------- -----
Gross margin 3,433,479 67.2% 3,219,710 67.6%
Costs and expenses:
Sales and marketing 1,907,687 37.4% 2,167,572 45.5%
General and administrative 720,831 14.1% 562,304 11.8%
Research and development 650,395 12.7% 332,058 7.0%
---------- ----- ---------- -----
3,278,913 64.2% 3,061,934 64.3%
Operating income 154,566 3.0% 157,776 3.3%
Other income (expense), net (31,039) (0.6%) 13,616 0.3%
---------- ----- ---------- -----
Income before taxes 123,527 2.4% 171,392 3.6%
Provision for income taxes 51,881 1.0% 70,271 1.5%
---------- ----- ---------- -----
Net income 71,646 1.4% 101,121 2.1%
========= ===== ========= =====
Net income per common and common
equivalent share: $0.02 $0.03
===== =====
Average common and common
equivalent shares used to compute
earnings per share 3,435,396 3,209,084
========= =========
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
4
<PAGE> 5
INTERNATIONAL MICROCOMPUTER SOFTWARE, INC.
AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30,
--------------------------------
1995 1994
----------- ---------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 71,646 $ 101,121
Adjustments to reconcile net income to net
cash (used) by operating activities
Cumulative effect of accounting change
Depreciation 97,278 71,328
Amortization 115,074 139,002
Deferred income taxes (19,000) 73,509
(Increase)/Decrease in accounts receivable (1,024,848) (457,156)
(Increase)/Decrease in inventories (50,095) (301,673)
(Increase)/Decrease in prepaid royalties and licenses (126,250) (30,189)
(Increase)/Decrease in direct mail costs (48,933) 94,356
(Increase)/Decrease in other current assets (107,915) (54,522)
Increase/(Decrease) in accounts payable
and accrued expenses 951,596 (328,520)
Increase/(Decrease) in income taxes payable 44,127 (2,339)
Currency translation adjustment 376 (6,463)
----------- ---------
Net cash (used) by operating activities (96,944) (701,546)
----------- ---------
Cash flows from investing activities:
Purchases of equipment (24,635) (80,663)
Capitalized software development costs (342,841) (85,473)
(Increase)/Decrease in other assets (343,749) (40,000)
----------- ---------
Net cash (used) by investing activities (711,225) (206,136)
----------- ---------
Cash flows from financing activities:
Credit line borrowings 375,000 850,000
Credit line repayments (425,000) (250,000)
Term loan borrowing 675,000 --
Capital lease and other obligations repayment (35,287) (26,982)
Proceeds from issuance of common stock 7,781 25,135
----------- ---------
Net cash provided by financing activities 597,494 598,153
----------- ---------
Net increase (decrease ) in cash and cash
equivalents (201,675) (309,529)
Cash and cash equivalents at beginning of
period 523,235 521,347
----------- ---------
Cash and cash equivalents at end of the period $ 312,560 $ 211,818
=========== =========
</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
5
<PAGE> 6
INTERNATIONAL MICROCOMPUTER SOFTWARE, INC.
AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 1. BASIS OF PREPARATION.
The accompanying condensed consolidated financial statements have been prepared
from the records of International Microcomputer Software, Inc. and Subsidiaries
(the "Company") without audit. In the opinion of management, all adjustments,
which consist only of normal recurring adjustments, necessary to present fairly
the financial position, results of operations and cash flows at September 30,
1995, and for all periods presented, have been made. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been condensed or
omitted. Accounting policies followed by the Company are described in the notes
to the financial statements in its Annual Report on Form 10-K for the year ended
June 30, 1995. The condensed financial statements should be read in conjunction
with the financial statements and notes thereto contained in the Company's
Annual Report on Form 10-K, for the fiscal year ended June 30, 1995.
The results of operations for the three month periods ended September 30, 1995
and 1994 are not necessarily indicative of the results to be expected for the
full year. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations".
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of IMSI and its
wholly owned subsidiaries, IMSI (UK) Limited, IMSI Australia (PTY) Ltd., IMSI
Germany (GmbH), IMSI (SA) Pty Ltd. and IMSI (France). All significant
intercompany balances and transactions have been eliminated in consolidation.
REVENUE RECOGNITION
The Company recognizes revenue, net of estimated returns and allowances, upon
shipment of a product and only when no significant obligations remain and
collectability is probable. Certain of the Company's sales are made to customers
under agreements permitting rights of return for stock balancing.
CONCENTRATIONS OF CREDIT RISK
The Company sells its product principally through a network of distributors and
on a direct customer basis. The Company performs ongoing credit evaluations of
its customers' financial condition and generally requires no collateral.
ROYALTY AGREEMENTS
The Company has entered into agreements whereby it is obligated to pay royalties
on software published. Software royalties are expensed as product costs during
the period in which related revenues are recorded.
6
<PAGE> 7
DEFERRED DIRECT MAIL COSTS
Deferred direct mail advertising costs consist primarily of design, printing,
postage and material costs. Costs are deferred which have been determined to
benefit future product sales based on specific response data from customers.
Deferred costs are being amortized at the earlier to occur of revenues being
recognized (on a ratable basis) or over a period of approximately two months on
the straight line basis.
CASH AND CASH EQUIVALENTS
The Company considers all highly liquid investments purchased with a original
maturity of 90 days or less to be cash equivalents.
CAPITALIZED SOFTWARE DEVELOPMENT COSTS
Costs incurred in the initial design phase of software development are expensed
as incurred. Once the point of technological feasibility is reached, direct
production costs (programming and testing) are capitalized. Costs associated
with acquired software are capitalized. Total capitalized software development
costs at September 30, 1995 were $1,952,979, less accumulated amortization of
$1,474,322. Capitalized costs are being amortized ratably as revenues are
recognized, but not less than on the straight line basis over an eighteen month
period. The Company evaluates the estimated net realizable value of each
software product at each balance sheet date and records writedowns to net
realizable value for any products for which the carrying value is in excess of
the net realizable value.
INVENTORIES
Inventories, consisting primarily of diskettes, manuals, hardware, freight in,
production costs and packing supplies, are valued at the lower of cost or market
and are accounted for on the first-in, first-out basis.
FURNITURE AND EQUIPMENT
Furniture and equipment are stated at cost. Depreciation of furniture and
equipment is computed using accelerated depreciation methods over the estimated
useful lives of the respective assets of 5 to 7 years. Depreciation of software
and computer equipment is computed using the straight line method over an
estimated useful life of 3 years.
INCOME TAXES
Effective July 1, 1993, the Company implemented Statement of Financial
Accounting Standards (SFAS) No. 109 "Accounting for Income Taxes," which
requires an asset and liability approach to financial accounting and reporting
for income taxes. Deferred income tax assets and liabilities are computed
annually for differences between the financial statement and tax basis of assets
and liabilities that will result in taxable or deductible amounts in the future,
based on enacted tax laws and rates applicable to the periods in which the
differences are expected to affect taxable income. Valuation allowances are
established when necessary to reduce deferred tax assets to the amount expected
to be realized. Income tax expense is the tax payable or refundable for the
period plus or minus the change in deferred tax assets and liabilities during
the period.
7
<PAGE> 8
FOREIGN CURRENCY TRANSLATION
The asset and liability accounts of foreign subsidiaries are translated from
their respective functional currencies at the rates in effect at the balance
sheet date, and revenue and expense accounts are translated at weighted average
rates during the periods. Foreign currency translation adjustments are reflected
as a separate component of shareholder's equity. Gains and (losses) resulting
from foreign currency transactions were not material.
NET INCOME PER SHARE
Net income per share is computed based on the weighted average number of common
stock and dilutive common stock equivalents outstanding during the periods.
RECLASSIFICATIONS
Certain fiscal 1995 amounts have been reclassified to conform with the method of
presentation in fiscal 1996. These reclassifications had no impact on previously
recorded net income or shareholders' equity.
NOTE 2. INCOME TAXES
The effective tax rate applicable to pretax income differs from the federal
statutory rate of 34% for 1996 follows:
<TABLE>
<CAPTION>
Three months ended
September 30, 1995
--------------------------
<S> <C> <C>
Federal tax at statutory rate on
net income before taxes $41,995 34.0%
State tax provision, net of
federal benefit 6,649 5.4%
Amortization of intangibles
and other 3,237 2.6%
------- -----
Total $51,881 42.0%
======= =====
</TABLE>
8
<PAGE> 9
NOTE 3. INVENTORIES
Inventories are valued at the lower of cost or market, on a first-in, first-out
basis, and consist of:
<TABLE>
<CAPTION>
September 30, June 30,
1995 1995
------------- ----------
<S> <C> <C>
Raw Materials $ 621,914 $ 617,397
Finished Goods 1,053,812 1,008,234
---------- ----------
$1,675,726 $1,625,631
========== ==========
</TABLE>
NOTE 4. SUBSEQUENT EVENTS
In October 1995, the Company's Board of Directors authorized a 3 for 2 stock
split of the Company's Common Stock in the form of a dividend. The stock split
was payable to shareholders of record on October 20, 1995 and was distributed to
shareholders on November 3, 1995. This stock split has been reflected in the
accompanying financial statements.
9
<PAGE> 10
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
OF OPERATIONS
SUMMARY
The Company reported net income of $71,646 for the quarter ended September 30,
1995 compared to $101,121 for the comparable quarter of 1994, representing a
decrease of $29,475 or 29%. Operating income for the quarter ended September 30,
1995 remained relatively level at $154,566 or 3.0% of net revenues, compared to
$157,776 or 3.3% of net revenues for the comparable period last year. Net income
decreased primarily due to additional interest expense in the first quarter of
fiscal 1996, which resulted in other expense, net of $31,039, compared to other
income, net of $13,616 in the first quarter of fiscal 1995, primarily comprised
of foreign currency gains.
RESULTS OF OPERATIONS
NET REVENUES
Net revenues for the quarter ended September 30, 1995 were $5,107,078
representing an increase of $346,505 or 7% compared to $4,760,573 for the same
period in the previous year. Increased net revenues are attributable to an
increase in retail channel sales of 43%, partially offset by decrease in direct
sales of 34%. The increase in net revenues from retail sales and the decrease in
net revenues from direct sales is consistent with the Company's strategy to
transition towards an operating model focused increasingly upon retail sales.
Net revenues from channel sales accounted for $3,628,063 or 71%, and $2,531,673
or 53% of net revenues for the quarterly periods ended September 30, 1995 and
1994, respectively. Channel sales increased $1,096,390 or 43% in the first
quarter of fiscal 1996 compared with the first quarter of fiscal 1995. Net
revenues from direct mail sales accounted for $1,479,015 or 29%, and $2,228,900
or 47% of total net revenues for the quarters ended September 30, 1995 and 1994,
respectively. Net direct mail revenues decreased $749,885 or 34% in the first
quarter of fiscal 1996 compared with the first quarter of fiscal 1995.
International net revenues accounted for $1,489,400 of total net revenues in the
first quarter of fiscal 1996 compared to $1,385,800 in the comparable quarter of
fiscal 1995, representing an increase of $103,600 or 7%. As a percent of total
net revenues, international net revenues remained level at 29% in the first
quarter of fiscal 1996 and 1995.
PRODUCT COSTS
Product costs include the direct costs of production (manuals, diskettes,
compact disks, duplication, packaging materials and assembly), shipping,
royalties, inventory spoilage, reserves for obsolete inventory, and amortization
of capitalized software development costs. Product costs were $1,673,599 and
$1,540,863 for the quarters ended September 30, 1995 and 1994. Product costs as
a percentage of net revenues has remained relatively level, representing 32.8%
and 32.4% for the quarters ended September 30, 1995 and 1994, respectively.
Amortization of capitalized software development costs and acquired software
costs included in product costs were $109,023 and $129,894 for the quarters
ended September 30, 1995 and 1994, respectively.
10
<PAGE> 11
SALES AND MARKETING
Sales and marketing expenses include salaries and benefits for retail channel,
direct mail and marketing personnel, commissions, advertising, trade show,
design, and direct mail promotional costs (design, postage, printing,
fulfillment and list rentals).
Sales and marketing expenses decreased to $1,907,687 in the period ended
September 30, 1995 from $2,167,572 for the same period in the previous year,
representing a decrease of 12%. This decrease was primarily caused by lower
direct mail promotional activities. As a percentage of revenues, sales and
marketing costs decreased to 37.4% in the period ended September 30, 1995 from
45.5% for the same period in the previous year. The decrease in sales and
marketing costs in both absolute dollars and as a percentage of revenues is
attributable to decreased personnel and less direct mail promotional activities.
Direct mail sales and marketing expenses comprised 46% and 68% of total sales
and marketing expense in the quarter ended September 30, 1995 and 1994,
respectively. The decrease in direct mail expense can be attributed to the
Company's decision to focus its operations more upon retail channel sales and
less upon direct sales. Direct mail costs are relatively variable, as most of
the costs consist of mailing, printing and list rental costs.
GENERAL AND ADMINISTRATIVE
General and administrative expenses are comprised primarily of the costs of the
Company's administrative, finance and human resources functions. General and
administrative expenses increased to $720,831 in the period ended September 30,
1995 from $562,304 in the period ended September 30, 1994. As a percentage of
revenues, general and administrative expenses increased to 14.1% in the period
ended September 30, 1995 from 11.8% in the same period last year. This increase
is primarily attributable to costs associated with the Company's purchase of the
FloorPlan software product line from Forte/ComputerEasy International, Inc in
September 1995.
RESEARCH AND DEVELOPMENT
Research and development expenses are comprised primarily of personnel costs,
costs required to conduct the Company's development efforts and third-party
software development costs. Research and development expense increased to
$650,395 in the period ended September 30, 1995 from $332,058 in the same period
of the previous year. As a percentage of revenues, research and development
expenses increased to 12.7% in the period ended September 30, 1995 from 7.0% in
the same period last year. The increase can be attributed to increased domestic
headcount, the utilization of additional Russian contractors and other third
party development costs relating to the development and expansion of the
Company's product offerings. In addition, the Company capitalized minimal
internal software development costs in the quarter ended September 30, 1995,
compared with $85,473 in the quarter ended September 30, 1994.
11
<PAGE> 12
OTHER INCOME (EXPENSE), NET
Other income (expense), net was ($31,039), or (0.6)% of net revenues for the
quarter ended September 30, 1995, compared to 13,616 or 0.3% for the same period
last year. Other income (expense), net is comprised primarily of interest
expense on short term and long term borrowings and foreign currency transaction
gains and losses. Other expense, net recorded in the quarter ended September 30,
1995 has resulted primarily from interest expense relating to the Company's
acquisition of greater short term and long term debt. In the first quarter of
fiscal 1995, foreign currency gains exceeded interest expense, resulting in
other income, net.
PROVISION FOR INCOME TAXES
The Company's provision for income taxes was $51,881 and $70,271 for the
quarters ended September 30, 1995 and 1994, respectively. The Company's
effective tax rate for these periods has remained relatively level at 42.0% and
41.0%, respectively. The primary differences between the Company's pre-tax
income for financial reporting purposes and taxable income for income tax
purposes are deferred direct mail costs, software development costs, purchased
intangibles, net operating loss carryforwards, package design costs, capitalized
inventory costs and reserves.
LIQUIDITY AND CAPITAL RESOURCES
The Company has financed its business primarily from operating revenues,
short-term and long term bank borrowings, capital leases and proceeds from the
sale of stock. Working capital increased to $1,993,031 at September 30, 1995
from $1,967,042 at June 30, 1995, resulting primarily from growth in
receivables, partially offset by growth in accounts payable and accrued
expenses.
The Company has used cash generated from its financing activities to fund
its working capital requirements and to acquire software products and capital
equipment. The Company's operating activities used net cash of $96,944 and
$701,546 in the quarters ended September 30, 1995 and 1994, respectively.
The Company's capital expenditures totaled $711,225 and $206,136 in the first
quarter of fiscal 1996 and 1995, respectively. These capital expenditures were
primarily for the acquisition and development of software and the purchase of
additional office equipment. The increase in capital expenditures in the quarter
ended September 30, 1995, compared with the same period last year, can be
attributed to the Company's acquisition of the FloorPlan software product line
in September 1995. At September 30, 1995, the Company had no material
commitments for capital expenditures. Borrowings on the line of credit provided
cash of $375,000 and repayments used cash of $425,000 in the quarter ended
September 30, 1995, compared with borrowings of $850,000 and repayments of
$250,000 during the same period last year. In addition, the Company obtained a
term loan during the quarter ended September 30, 1995 which provided cash of
$675,000. No repayments of this term loan were made during the quarter ended
September 30, 1995.
As of September 30, 1995, the Company had a credit agreement with a bank under
which it can borrow the lesser of $1,500,000 or 25% of eligible inventory up to
a cap of $500,000 and 80% of eligible accounts receivable, at the bank's index
rate plus 3/4%. This line of credit was renewed in October 1995; the terms and
conditions of the credit line remain the same except for a reduction in the
interest rate to 1/2% over the bank's index rate. Under terms of the agreement,
all assets not
12
<PAGE> 13
subject to liens of other financial institutions have been pledged as collateral
against the line of credit. As of September 30, 1995 the Company had $350,000
outstanding under this line of credit.
The Company believes that cash flow from operations, together with existing
sources of liquidity, will satisfy the Company's working capital and capital
expenditure requirements for at least the next twelve months. The Company
believes that these sources will also be sufficient to satisfy its working
capital and capital expenditure requirements beyond the next 12 months at the
Company's current level of operations. The Company's long term goal, however, is
to grow substantially. Expansion of the Company's current business may involve
significant financial risk and require significant capital investment.
Significant expansion of the Company's operations, future acquisitions of
products or companies, unexpected increases in expenses or other factors might
lead the Company to seek additional debt or equity financing. While the Company
believes it will be able to raise any necessary funds, there can be no
assurances that the Company will be able to do so, and failure to obtain
sufficient capital could have a material adverse effect on the Company or
adversely affect the Company's ability to continue to grow. In order to finance
future growth or for other reasons, the Company may consider an offering of its
equity securities within the next year or thereafter. The decision to undertake
such an offering, and the size of such an offering, would depend upon many
factors, such as the market price of the Common Stock, the working capital and
capital expenditure needs of the Company, the availability of alternative
sources of capital, and general market conditions.
QUARTERLY TRENDS
The Company's consolidated results of operations to date have not been
materially affected by seasonal trends. However, the Company believes that in
the future its results may be impacted by such factors as order deferrals in
anticipation of new product releases, delays in shipments of new products, a
slower growth rate in the software markets in which the Company operates, or
adverse general economic and industry conditions in any of the countries in
which the Company does business. In addition, with significant portions of net
revenues contributed by international operations, fluctuations of the U.S.
dollar against foreign currencies and the seasonality of the European,
Asia/Pacific, and other international markets could impact the Company's results
of operations and financial position in a particular quarter. Rapid
technological change and the Company's ability to develop, manufacture, and
market products that successfully adapt to the change may also impact results of
operations. Further, increased market competition from competitors either known
or unknown to the Company could also negatively impact the Company's results of
operations. Due to these factors, the Company's future earnings and stock price
may by subject to significant volatility, particularly on a quarterly basis. Any
shortfall in revenues or earnings from anticipated levels could have an
immediate and adverse effect on the trading price of the Company's common stock.
13
<PAGE> 14
PART II - OTHER INFORMATION
ITEM 1. Legal Proceedings
None.
ITEM 6. Exhibits and Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended September
30, 1995.
14
<PAGE> 15
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.
DATE: November 13, 1995 INTERNATIONAL MICROCOMPUTER SOFTWARE, INC.
By: /s/ MARTIN SACKS
---------------------------------------
Martin Sacks
President & Chief Executive Officer
(Principal Executive Officer)
By: /s/ MARK H. COSMEZ II
---------------------------------------
Mark H. Cosmez II
V.P. Finance & Chief Financial Officer
(Principal Financial Officer)
15
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-END> SEP-30-1995
<CASH> 312,560
<SECURITIES> 0
<RECEIVABLES> 3,615,170
<ALLOWANCES> 1,016,691
<INVENTORY> 1,675,726
<CURRENT-ASSETS> 7,097,004
<PP&E> 796,463
<DEPRECIATION> 915,793
<TOTAL-ASSETS> 9,168,126
<CURRENT-LIABILITIES> 5,103,973
<BONDS> 0
<COMMON> 5,871,557
0
0
<OTHER-SE> (2,394,529)
<TOTAL-LIABILITY-AND-EQUITY> 9,168,126
<SALES> 5,107,078
<TOTAL-REVENUES> 5,107,078
<CGS> 1,673,599
<TOTAL-COSTS> 1,673,599
<OTHER-EXPENSES> 3,278,913
<LOSS-PROVISION> 21,965
<INTEREST-EXPENSE> 31,039
<INCOME-PRETAX> 123,527
<INCOME-TAX> 51,881
<INCOME-CONTINUING> 71,646
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 71,646
<EPS-PRIMARY> .02
<EPS-DILUTED> .02
</TABLE>
