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Previous: ACTRADE INTERNATIONAL LTD, 10QSB, 1996-02-16 |
Next: READ RITE CORP /DE/, SC 13G/A, 1996-02-02 |
<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 DECEMBER 31, 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 (I.R.S. 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 January 31, 1996 there were 1,941,000 shares of common stock outstanding.
1
<PAGE> 2
CAM DATA SYSTEMS, INC.
<TABLE>
<CAPTION>
INDEX
Page
Number
------
<S> <C>
PART I Financial Information
Item 1 Condensed Financial Statements:
Condensed Balance Sheets at December 31,
1995 and September 30, 1995 3
Condensed Statements of Income for three
months ended December 31, 1995 and 1994 4
Condensed Statements of Cash Flows for
three months ended December 31, 1995 and 1994 5
Notes to Condensed Financial Statements 6-7
Item 2 Management's Discussion and Analysis of Financial Condition and
Results of Operations 8-9
PART II Other Information 10
Exhibit 11 Computation of Net Income Per Share 12
</TABLE>
2
<PAGE> 3
PART I. FINANCIAL INFORMATION
CAM DATA SYSTEMS, INC.
CONDENSED BALANCE SHEET
<TABLE>
<CAPTION>
(UNAUDITED)
DECEMBER 31 SEPTEMBER 30
1995 1995
----------- ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $3,081,000 $3,015,700
Accounts receivable, net 1,763,100 1,817,100
Inventories 496,400 433,800
Prepaid expenses 41,600 76,600
Deferred income taxes 50,000 50,000
---------- ----------
Total current assets 5,432,100 5,393,200
Furniture and equipment, net 430,800 442,600
License agreement, capitalized
software costs, net 232,200 268,100
Note receivable from officer 14,600 15,000
Other assets 22,200 22,200
---------- ----------
Total assets $6,131,900 $6,141,100
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 550,500 $ 615,200
Accrued compensation and related expenses 513,700 594,000
Income taxes payable 110,700 201,300
Customer deposits and deferred service revenue 137,700 151,800
Accrued installation costs 108,000 110,000
Other accrued liabilities 436,700 381,000
---------- ----------
Total current liabilities 1,857,300 2,053,300
Stockholders' equity:
Common stock, $.001 par value,
5,000,000 shares authorized,
1,941,000 shares issued and
outstanding (1,931,000 at Sept. 30, 1995) 1,900 1,900
Paid-in capital in excess of par 3,817,000 3,795,700
Less notes receivable for purchase
of common stock (56,900) (60,900)
Retained earnings 512,600 351,100
---------- ----------
Total stockholders' equity 4,274,600 4,087,800
---------- ----------
Total liabilities and stockholder's equity $6,131,900 $6,141,100
========== ==========
</TABLE>
See notes to financial statements
3
<PAGE> 4
CAM DATA SYSTEMS, INC.
CONDENSED STATEMENTS OF INCOME
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
----------------------------------
DECEMBER 31 DECEMBER 31
1995 1994
----------- -----------
<S> <C> <C>
REVENUES:
Net system revenues $2,669,000 $3,089,100
Net service revenues 659,600 653,700
---------- ----------
Total net revenues 3,328,600 3,742,800
COSTS AND EXPENSES:
Costs of system revenues 1,226,100 1,432,700
Costs of service revenues 332,800 482,100
---------- ----------
Total costs of revenues 1,558,900 1,914,800
Selling, general and
administrative expenses 1,283,800 1,483,600
Research and development expense 256,800 219,200
Interest income (35,700) (12,000)
---------- ----------
Total costs and expenses 3,063,800 3,605,600
---------- ----------
Income before taxes 264,800 137,200
Provision for income taxes (103,300) (53,000)
---------- ----------
Net income $ 161,500 $ 84,200
========== ==========
Primary net income per share $ .08 $ .04
========== ==========
Fully-diluted net income per share $ .08 $ .04
========== ==========
Shares used in computing primary
net income per share 2,094,300 1,954,600
========== ==========
Shares used in computing fully
-diluted net income per share 2,095,300 2,027,300
========== ==========
</TABLE>
See notes to financial statements
4
<PAGE> 5
CAM DATA SYSTEMS, INC.
CONDENSED STATEMENTS OF CASH FLOWS (UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
----------------------------------
DECEMBER 31 DECEMBER 31
1995 1994
----------- -----------
<S> <C> <C>
Cash flows from operations:
Net income $ 161,500 $ 84,200
Adjustments to reconcile net income to
net cash provided by (used in) operations:
Depreciation and amortization 113,900 171,600
Provision for doubtful accounts 10,000 20,000
Other 4,400 1,900
Net changes in operating assets
and liabilities (179,600) (313,000)
---------- ----------
Net cash from operations 110,200 (35,300)
---------- ----------
Cash from investing activities:
Purchase of furniture & equipment (66,200) (55,300)
Capitalized software costs -- (5,100)
---------- ----------
Cash from investing activities (66,200) (60,400)
---------- ----------
Cash from financing activities:
Proceeds from exercise of stock options 21,300 --
---------- ----------
Net increase (decrease) in cash 65,300 (95,700)
Cash and cash equivalents at
beginning of period 3,015,700 1,614,900
---------- ----------
Cash and cash equivalents at
end of period $3,081,000 $1,519,200
========== ==========
</TABLE>
See notes to financial statements
5
<PAGE> 6
CAM DATA SYSTEMS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
1. PRESENTATION OF CONDENSED FINANCIAL STATEMENTS
The balance sheet as of December 31, 1995, and the related statements
of income and cash flows for the three month periods ended December 31, 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, 1995.
CASH EQUIVALENTS
Cash equivalents represent highly liquid investments with original
maturities of three months or less.
INVENTORIES
Inventories are 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.
CONCENTRATIONS OF CREDIT RISK
The Company sells its products primarily to small to medium size
retailers. Credit is extended based on an evaluation of the customer's
financial condition and collateral is generally not required. Credit losses
have traditionally been minimal and such losses have been within management's
expectations.
REVENUE RECOGNITION POLICY
In accordance with Statement of Position 91-1 (Software Revenue
Recognition) systems revenue is recognized when the hardware and software are
shipped to the customer. Service revenue for phone, software, and hardware
support is recognized ratably over the period of the service contract.
6
<PAGE> 7
CAM DATA SYSTEMS, INC.
NOTES TO CONDENSED FINANCIAL STATEMENTS
(UNAUDITED)
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>
THREE MONTHS ENDED
-------------------------------
DECEMBER 31 DECEMBER 31
1995 1994
----------- -----------
<S> <C> <C>
(Increase) decrease in:
Accounts receivable $ 44,000 $(206,200)
Inventories (62,600) (95,400)
Prepaid expenses 35,000 25,400
Increase (decrease) in:
Accounts payable (64,700) (198,500)
Accrued compensation and related expenses (80,300) 69,000
Income taxes payable (90,600) 27,300
Customer deposits and deferred service revenue (14,100) (12,000)
Accrued installation costs (2,000) 23,000
Other accrued liabilities 55,700 54,400
--------- ---------
Net changes in operating assets
and liabilities $(179,600) $(313,000)
========= =========
</TABLE>
Income taxes paid for the three months ended December 31, 1995 and 1994 were
$193,900 and $41,000, respectively. There was no interest expense paid in the
first three months of fiscal 1996 and fiscal 1995.
7
<PAGE> 8
CAM DATA SYSTEMS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THREE MONTHS ENDED DECEMBER 31, 1995, AS COMPARED TO
THREE MONTHS ENDED DECEMBER 31, 1994
RESULTS OF OPERATIONS
NET REVENUES for the three months ended December 31, 1995 decreased 11% to
$3,328,600 consisting of a 14% decrease in system revenues, and a 1% increase
in service revenues compared to the three months ended December 31, 1994. The
decrease in system revenues was attributed to the hesitation of some retailers
to take delivery of and install a point of sale system before an uncertain
holiday season. The increase in service revenues was attributed to an increase
in the installed customer base offset by the decrease in service revenue from
the sale of the Silver Plus division.
GROSS MARGIN for the three months ended December 31, 1995 was 53% compared to
49% for the three months ended December 31, 1994. Gross margin on system sales
remained constant at 54% for the three months ended December 31, 1995, and
1994. The gross margin for system sales remained constant due to costs
remaining relatively stable. Gross margin for service revenue was 50% for the
three months ended December 31, 1995 compared to 26% for the same period of
1994. The margin increase in service revenue was due to operating efficiencies
realized through the reengineering of the customer support department.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES expressed as a percentage of net
revenues was 39% for the three month period ended December 31, 1995 compared to
40% for the three month period ended December 31, 1994. Selling, general and
administrative expenses for the three months ended December 31, 1995 decreased
13% to $1,283,800, from the three months ended December 31, 1994. The decrease
was due to a decrease in sales commissions related to lower sales volume, and
decreases in telephone expenses related to a vendor promotional program.
RESEARCH AND DEVELOPMENT EXPENSE, increased 17% to $256,800 for the three month
period ended December 31, 1995 from $219,200 for the three month period ended
December 31, 1994. The increase was attributed to the continued enhancement of
the CAM and Profit$ software products.
INCOME TAXES, the effective tax rate was 39% for the three months ended
December 31, 1995 and for the three months ended December 31, 1994.
8
<PAGE> 9
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash and cash equivalents totaled $3,081,000 on December 31, 1995
compared to $3,015,700 on September 30, 1995. The Company generated $110,200
of cash from operations, and expended $66,200 for the purchase of fixed assets
for the three months ended December 31, 1995, compared to the use of $35,300
for operations, and the expenditure of $55,300 for the purchase of fixed assets
for the three months ended December 31, 1994.
The Company has no significant commitments for expenditures other than the
lease of its corporate and sales offices. However, the Company plans to build
a facility in Nevada to house the research and development group.
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 the foreseeable future.
Inflation has had no significant impact on the Company's operations.
9
<PAGE> 10
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
10
<PAGE> 11
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
CAM DATA SYSTEMS, INC. (Registrant)
Date: February 9, 1996 By /S/ Paul Caceres Jr.
-------------------------------
Paul Caceres Jr.
Chief Financial and
Accounting Officer
11
<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
----------------------------------
DECEMBER 31 DECEMBER 31
1995 1994
----------- -----------
<S> <C> <C>
Net income applicable to
common and common equivalent shares $ 161,500 $ 84,200
========== ==========
Average number of common shares
outstanding during the period 1,941,000 1,911,000
Net shares assumed issued using
treasury stock method for stock
options outstanding during the period 153,300 43,600
---------- ----------
Common and common equivalent shares 2,094,300 1,954,600
========== ==========
Net income per share $ .08 $ .04
========== ==========
</TABLE>
<TABLE>
<CAPTION>
FULLY DILUTED NET INCOME PER SHARE
THREE MONTHS ENDED
----------------------------------
DECEMBER 31 DECEMBER 31
1995 1994
----------- -----------
<S> <C> <C>
Net income applicable to
common and common equivalent shares $ 161,500 $ 84,200
========== ==========
Average number of common shares
outstanding during the period 1,941,000 1,911,000
Net shares assumed issued using
treasury stock method for stock
options outstanding during the period 154,300 116,300
---------- ----------
Common and common equivalent shares 2,095,300 2,027,300
========== ==========
Net income per share $ .08 $ .04
========== ==========
</TABLE>
12
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> DEC-31-1995
<CASH> 3,081,000
<SECURITIES> 0
<RECEIVABLES> 1,913,100
<ALLOWANCES> 150,000
<INVENTORY> 496,400
<CURRENT-ASSETS> 5,432,100
<PP&E> 1,516,200
<DEPRECIATION> 1,085,400
<TOTAL-ASSETS> 6,131,900
<CURRENT-LIABILITIES> 1,857,300
<BONDS> 0
<COMMON> 1,900
0
0
<OTHER-SE> 4,274,600
<TOTAL-LIABILITY-AND-EQUITY> 6,131,900
<SALES> 3,328,600
<TOTAL-REVENUES> 3,328,600
<CGS> 1,558,900
<TOTAL-COSTS> 1,558,900
<OTHER-EXPENSES> 1,504,900
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 264,800
<INCOME-TAX> 103,300
<INCOME-CONTINUING> 161,500
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 161,500
<EPS-PRIMARY> .08
<EPS-DILUTED> .08
</TABLE>
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