<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 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 0-16569
CAM DATA SYSTEMS, INC.
(EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)
DELAWARE 95-3866450
(State or other jurisdiction (IRS Employer
of incorporation or organization) Identification No.)
17520 NEWHOPE STREET # 100 92708
FOUNTAIN VALLEY, CALIFORNIA
(Address of principal (Zip code)
executive offices)
(714) 241-9241
(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.
Yes X No
----- -----
As of June 30, 1995 there were 1,926,000 shares of common stock outstanding.
1
<PAGE> 2
CAM DATA SYSTEMS, INC.
INDEX
<TABLE>
<CAPTION>
Page
Number
------
<S> <C>
PART I Financial Information
Item 1 Condensed Financial Statements:
Condensed Balance Sheets at June 30,
1995 and September 30, 1994 3
Condensed Statements of Operations for three
months ended June 30, 1995 and 1994 4
Condensed Statements of Operations for nine
months ended June 30, 1995 and 1994 5
Condensed Statements of Cash Flows for
nine months ended June 30, 1995 and 1994 6
Notes to Condensed Financial Statements 7-8
Item 2 Management's Discussion and Analysis of Financial Condition and
Results of Operations 9-10
PART II Other Information 11
Exhibit 11 Computation of Net Income Per Share 12-13
</TABLE>
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
CAM DATA SYSTEMS, INC.
CONDENSED BALANCE SHEET
<TABLE>
<CAPTION>
JUNE 30 SEPTEMBER 30
1995 1994
---------- ------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current Assets:
Cash and cash equivalents $1,946,900 $1,614,900
Accounts receivable, net 2,139,800 1,892,400
Inventory 450,700 310,400
Prepaid expenses 64,200 83,400
---------- ----------
Total Current Assets 4,601,600 3,901,100
Furniture and equipment, net 449,900 514,800
License agreement, capitalized
software costs, and intangible
assets, net 516,800 752,800
Note receivable from officer 17,200 17,600
Other assets 16,100 16,100
---------- ----------
$5,601,600 $5,202,400
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 643,200 $ 791,100
Sales commissions payable 271,000 205,000
Accrued installation costs 114,000 107,000
Customer deposits 198,200 183,000
Other accrued liabilities 517,200 263,500
---------- ----------
Total Current Liabilities 1,743,600 1,549,600
Stockholders' equity:
Common stock, $.001 par value,
5,000,000 shares authorized,
1,926,000 shares issued and
outstanding (1,911,000 shares at
September 30, 1994) 1,900 1,900
Paid-in capital in excess of par 3,793,200 3,785,700
Less notes receivable for purchase
of common stock (64,900) (72,800)
Retained earnings (deficit) 127,800 (62,000)
---------- ----------
Total Stockholders' Equity 3,858,000 3,652,800
---------- ----------
$5,601,600 $5,202,400
========== ==========
</TABLE>
See notes to financial statements
3
<PAGE> 4
CAM DATA SYSTEMS, INC.
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
-------------------------
JUNE 30 JUNE 30
1995 1994
---------- ----------
<S> <C> <C>
REVENUES:
Net system revenues $3,118,700 $2,736,600
Net service revenues 685,200 616,900
---------- ----------
Total net revenues 3,803,900 3,353,500
COSTS AND EXPENSES:
Costs of system revenues 1,455,400 1,280,500
Costs of service revenues 415,500 498,800
---------- ----------
Total costs of revenues 1,870,900 1,779,300
Selling, general and
administrative expenses 1,532,000 1,352,300
Research and development expense 217,500 154,200
Interest income (19,200) (4,200)
---------- ----------
Total costs and expenses 3,601,200 3,281,600
---------- ----------
Income before provision
for income taxes 202,700 71,900
Provision for income taxes 25,000 4,000
---------- ----------
NET INCOME $ 177,700 $ 67,900
========== ==========
Primary net income per share $ .09 $ .03
========== ==========
Fully-diluted net income per share $ .09 $ .03
========== ==========
Shares used in computing primary
net income per share 2,006,700 2,050,500
========== ==========
Shares used in computing fully
-diluted net income per share 2,006,700 2,055,500
========== ==========
</TABLE>
See notes to financial statements
4
<PAGE> 5
CAM DATA SYSTEMS, INC.
CONDENSED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
--------------------------
JUNE 30 JUNE 30
1995 1994
----------- ----------
<S> <C> <C>
REVENUES:
Net system revenues $ 8,702,500 $7,922,900
Net service revenues 2,025,800 1,823,600
----------- ----------
Total net revenues 10,728,300 9,746,500
COSTS AND EXPENSES:
Costs of system revenues 4,106,400 3,764,500
Costs of service revenues 1,363,500 1,445,100
----------- ----------
Total costs of revenues 5,469,900 5,209,600
Selling, general and
administrative expenses 4,404,700 3,831,700
Research and development expense 652,600 462,700
Interest income (50,700) (10,700)
----------- ----------
Total costs and expenses 10,476,500 9,493,300
----------- ----------
Income before provision
for income taxes 251,800 253,200
Provision for income taxes 62,000 30,000
----------- ----------
NET INCOME $ 189,800 $ 223,200
=========== ==========
Primary net income per share $ .10 $ .11
=========== ==========
Fully-diluted net income per share $ .09 $ .11
=========== ==========
Shares used in computing primary
net income per share 1,990,200 1,994,900
=========== ==========
Shares used in computing fully
-diluted net income per share 2,006,700 2,055,500
=========== ==========
</TABLE>
See notes to financial statements
5
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CAM DATA SYSTEMS, INC.
CONDENSED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED
-------------------------
JUNE 30 JUNE 30
1995 1994
---------- -----------
<S> <C> <C>
Cash provided by operations:
Net income $ 189,800 $ 223,200
Adjustments to reconcile net
income to net cash provided
by operations:
Depreciation and amortization 442,700 434,900
Provision for doubtful accounts 10,000 20,000
Other 8,300 37,200
Net change in operating assets
and liabilities (184,700) (362,600)
---------- ----------
Net cash provided by operations 466,100 352,700
---------- ----------
Cash used in investing activities:
Purchase of furniture & equipment (136,500) (308,000)
Capitalized software costs (5,100) (27,700)
---------- ----------
Cash used in investing activities (141,600) (335,700)
---------- ----------
Cash provided by financing activities:
Proceeds from exercise of stock options 7,500 40,500
---------- ----------
Cash provided by financing activities 7,500 40,500
---------- ----------
Net increase in cash 332,000 57,500
Cash and cash equivalents at
beginning of period 1,614,900 1,003,600
---------- ----------
Cash and cash equivalents at
end of period $1,946,900 $1,061,100
========== ==========
</TABLE>
See notes to financial statements
6
<PAGE> 7
CAM DATA SYSTEMS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
1. PRESENTATION OF CONDENSED FINANCIAL STATEMENTS
The balance sheet as of June 30, 1995, and the related statements of
operations for the three and nine month periods ended June 30, 1995 and 1994,
and statements of cash flows for the nine month periods ended June 30, 1995 and
1994 are unaudited; in the opinion of management, all adjustments necessary for
a fair presentation of such financial statements have been included. Such
adjustments consisted only of normal recurring items. Interim results are not
necessarily indicative of results for a full year. The condensed financial
statements and notes are presented as permitted by Form 10-Q, and therefore
should be read in the conjunction with the Company's annual report on Form 10-K
for the year ended September 30, 1994.
INVENTORY
Inventory is stated at the lower of cost determined on a first-in,
first-out basis, or net realizable value, and is composed of electronic point
of sale hardware and computer equipment used in the sale and service of the
Company's products.
STATEMENTS OF CASH FLOWS
Net changes in operating assets and liabilities as shown in the
condensed statements of cash flows are as follows:
<TABLE>
<CAPTION>
NINE MONTHS ENDED
-----------------------
JUNE 30 JUNE 30
1995 1994
--------- ---------
<S> <C> <C>
(Increase) decrease in:
Accounts receivable $(257,400) $(331,700)
Inventory (140,300) (142,600)
Prepaid expenses 19,200 (28,800)
Other assets -- (8,300)
Increase (decrease) in:
Accounts payable (147,900) 132,800
Sales commission payable 66,000 (10,000)
Accrued installation costs 7,000 (10,000)
Customer deposits 15,000 102,800
Accrued liabilities 253,700 (66,800)
--------- ---------
Net change in operating assets
and liabilities $(184,700) $(362,600)
========= =========
</TABLE>
Income taxes paid for the nine months ended June 30, 1995 and 1994 were $14,900
and $4,600, respectively. There was no interest expense paid in the first nine
months of 1995 or 1994.
7
<PAGE> 8
CAM DATA SYSTEMS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
2. LICENSE AGREEMENT, CAPITALIZED SOFTWARE COSTS, AND INTANGIBLE ASSETS
The Company capitalizes costs incurred to develop new marketable software
and enhance the acquired systems software. Costs incurred in creating the
Company's software are charged to expense when incurred as research and
development until technological feasibility has been established through the
development of a detailed program design. Once technological feasibility has
been established, software production costs are capitalized and reported at the
lower of amortized cost or net realizable value.
License agreements, capitalized software costs, and intangible assets are
amortized on the straight-line method over estimated useful lives ranging from
three to five years. The assets are stated at cost and consist of the
following:
<TABLE>
<CAPTION>
JUNE 30 SEPTEMBER 30
1995 1994
--------------------------------------------------------
<S> <C> <C>
License agreement $ 200,000 $ 200,000
Capitalized software costs 1,670,000 1,664,900
Other intangible assets 168,000 168,000
---------- ----------
2,038,000 2,032,900
Less accumulated amortization 1,521,200 1,280,100
---------- ----------
$ 516,800 $ 752,800
--------------------------------------------------------
</TABLE>
8
<PAGE> 9
CAM DATA SYSTEMS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1995, AS COMPARED TO
THREE MONTHS ENDED JUNE 30, 1994
NINE MONTHS ENDED JUNE 30, 1995, AS COMPARED TO
NINE MONTHS ENDED JUNE 30, 1994
RESULTS OF OPERATIONS
NET REVENUES for the three months ended June 30, 1995 increased 13% to
$3,803,900 consisting of a 14% increase in system revenues, and a 11% increase
in service revenues compared to the three months ended June 30, 1994. Net
revenues for the nine months ended June 30, 1995 increased 10% to $10,728,300
consisting of a 10% increase in system revenues, and a 11% increase in service
revenues compared to the nine months ended June 30, 1994. The increase in
system revenues for the three and nine month periods ended June 30, 1995 was
primarily a result of increased demand for the PROFIT$ software product. The
increase in service revenues for the three and nine month periods ended June
30, 1995, was attributed to an increase in the installed customer base.
GROSS MARGIN for the three months ended June 30, 1995 was 51% compared to 47%
for the three months ended June 30, 1994. Gross margin on system sales
remained constant at 53% for the three months ended June 30, 1995, and 1994.
Gross margin for the nine months ended June 30, 1995 was 49% compared to 47%
for the nine months ended June 30, 1994. Gross margin on system sales was 53%
for the nine months ended June 30, 1995, compared to 52% for the nine months
ended June 30, 1994. The increase in gross margin for system revenues was due
to less pricing discounting for both the CAM and PROFIT$ software products.
Gross margin for service revenue was 39% for the three months ended June 30,
1995 compared to 19% for the same period of 1994. Gross margin for service
revenue was 33% for the nine months ended June 30, 1995 compared to 21% for the
nine months ended June 30, 1994. The margin increase in service revenue was
due to the realignment of the labor force resulting in better efficiency,
combined with service revenue increases related to a larger customer base.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES expressed as a percentage of net
revenues remained constant for the three month periods ended June 30, 1995 and
1994, at 40%. Selling, general and administrative expenses for the three
months ended June 30, 1995 increased 13% to $1,532,000, from the three months
ended June 30, 1994. Selling, general and administrative expenses expressed as
a percentage of net revenues increased for the nine month period ended June 30,
1995 to 41%, compared to 39% for the nine month period ended June 30, 1994.
Selling, general and administrative expenses for the nine months ended June 30,
1995 increased 15% to $4,404,700, from the nine months ended June 30, 1994.
The increase was due to an increase in personnel, sales commissions related to
higher sales volume, and an increase in telephone expenses.
RESEARCH AND DEVELOPMENT EXPENSE increased 41% to $217,500 for the three month
period ended June 30, 1995 from $154,200 for the three month period ended June
30, 1994. Research and development expense increased 41% to $652,600 for the
nine month period ended June 30, 1995 from $462,700 for the nine month period
ended June 30, 1994. The increase for both periods was related to the
continued enhancement of the CAM and Profit$ software products.
9
<PAGE> 10
INCOME TAXES The effective tax rate was 25% for the nine months ended
June 30, 1995 compared to 14% for the nine months ended June 30, 1994. The
increase in the effective tax rate is due to the full utilization of net
operating loss carryforwards for federal income tax purposes in fiscal 1994,
offset in part by research and development tax credits utilized in 1995. The
Company still has net operating loss carryforwards available to offset
California state income taxes in fiscal 1995.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash and cash equivalents totaled $1,946,900 on June 30, 1995
compared to $1,614,900 on September 30, 1994. The Company generated $466,100
of cash from operations, and utilized $136,500 for the purchase of fixed assets
for the nine months ended June 30, 1995, compared to the generation of $352,700
from operations, and utilization of $308,000 for the purchase of fixed assets
for the nine months ended June 30, 1994. The decrease in capital spending was
due to a lower replacement rate and upgrade of existing computer equipment
throughout the Company in fiscal 1995.
The Company has no significant commitments for expenditures other than the
existing lease of its corporate and sales offices.
Management believes the Company's existing working capital coupled with funds
generated from the Company's operations, will be sufficient to fund its
presently anticipated working capital requirements for at least the following
twelve months.
Inflation has had no significant impact on the Company's operations.
10
<PAGE> 11
CAM DATA SYSTEMS, INC.
PART II - OTHER INFORMATION
Items 1 - 5 Not Applicable
Item 6 Exhibits and Reports on Form 8-K
(A) Exhibits:
Exhibit 11 Computation of Net Income Per Share
Exhibit 27 Financial Data Schedule
(B) Reports on Form 8-K None
11
<PAGE> 12
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.
CAM DATA SYSTEMS, INC. (Registrant)
Date: August 10, 1995 By /S/ Paul Caceres Jr.
---------------------
Paul Caceres Jr.
Chief Financial and
Accounting Officer
12
<PAGE> 1
EXHIBIT 11
CAM DATA SYSTEMS, INC.
COMPUTATION OF NET INCOME PER SHARE
(UNAUDITED)
<TABLE>
<CAPTION>
PRIMARY NET INCOME PER SHARE
THREE MONTHS ENDED
----------------------------
JUNE 30 JUNE 30
1995 1994
---------- -------------
<S> <C> <C>
Net income applicable to
common and common equivalent shares $ 177,700 $ 67,900
========== ==========
Average number of common shares
outstanding during the period 1,926,000 1,901,000
Net shares assumed issued using
treasury stock method for stock
options outstanding during the period 80,700 149,500
---------- ----------
Common and common equivalent shares 2,006,700 2,050,500
========== ==========
Net income per share $ .09 $ .03
========== ==========
</TABLE>
<TABLE>
<CAPTION>
FULLY DILUTED NET INCOME PER SHARE
THREE MONTHS ENDED
----------------------------------
JUNE 30 JUNE 30
1995 1994
----------------- -------------
<S> <C> <C>
Net income applicable to
common and common equivalent shares $ 177,700 $ 67,900
========== ==========
Average number of common shares
outstanding during the period 1,926,000 1,901,000
Net shares assumed issued using
treasury stock method for stock
options outstanding during the period 80,700 154,500
---------- ----------
Common and common equivalent shares 2,006,700 2,055,500
========== ==========
Net income per share $ .09 $ .03
========== ==========
</TABLE>
<PAGE> 2
EXHIBIT 11
CAM DATA SYSTEMS, INC.
COMPUTATION OF NET INCOME PER SHARE
(UNAUDITED)
<TABLE>
<CAPTION>
PRIMARY NET INCOME PER SHARE
NINE MONTHS ENDED
----------------------------
JUNE 30 JUNE 30
1995 1994
------------ -------------
<S> <C> <C>
Net income applicable to
common and common equivalent shares $ 189,800 $ 223,200
========== ==========
Average number of common shares
outstanding during the period 1,926,000 1,901,000
Net shares assumed issued using
treasury stock method for stock
options outstanding during the period 64,200 93,900
---------- ----------
Common and common equivalent shares 1,990,200 1,994,900
========== ==========
Net income per share $ .10 $ .11
========== ==========
</TABLE>
<TABLE>
<CAPTION>
FULLY DILUTED NET INCOME PER SHARE
NINE MONTHS ENDED
----------------------------------
JUNE 30 JUNE 30
1995 1994
---------------- ---------------
<S> <C> <C>
Net income applicable to
common and common equivalent shares $ 189,800 $ 223,200
========== ==========
Average number of common shares
outstanding during the period 1,926,000 1,901,000
Net shares assumed issued using
treasury stock method for stock
options outstanding during the period 80,700 154,500
---------- ----------
Common and common equivalent shares 2,006,700 2,055,500
========== ==========
Net income per share $ .09 $ .11
========== ==========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1995
<PERIOD-START> OCT-01-1994
<PERIOD-END> JUN-30-1995
<CASH> 1,946,900
<SECURITIES> 0
<RECEIVABLES> 2,269,800
<ALLOWANCES> 130,000
<INVENTORY> 450,700
<CURRENT-ASSETS> 4,601,600
<PP&E> 1,557,800
<DEPRECIATION> 1,107,900
<TOTAL-ASSETS> 5,601,600
<CURRENT-LIABILITIES> 1,743,600
<BONDS> 0
<COMMON> 1,900
0
0
<OTHER-SE> 3,856,100
<TOTAL-LIABILITY-AND-EQUITY> 5,601,600
<SALES> 10,728,300
<TOTAL-REVENUES> 10,728,300
<CGS> 5,469,900
<TOTAL-COSTS> 5,469,900
<OTHER-EXPENSES> 5,006,600
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 251,800
<INCOME-TAX> 62,000
<INCOME-CONTINUING> 189,800
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 189,800
<EPS-PRIMARY> .10
<EPS-DILUTED> .09
</TABLE>
