<PAGE> 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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, 1997
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
FOUNTAIN VALLEY, CALIFORNIA 92708
(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, 1997 there were 1,993,700 shares of common stock outstanding.
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1
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CAM DATA SYSTEMS, INC.
INDEX
<TABLE>
<CAPTION>
Page Number
-----------
<S> <C>
PART I Financial Information
Item 1 Condensed Consolidated Financial Statements:
o Condensed Consolidated Balance Sheet at June 30, 1997 and 3
September 30, 1996
o Condensed Consolidated Statement of Operations for three
months ended June 30, 1997 and 1996 4
o Condensed Consolidated Statement of Income for nine
months ended June 30, 1997 and 1996 5
o Condensed Consolidated Statement of Cash Flows for
nine months ended June 30, 1997 and 1996 6
o Notes to Condensed Consolidated Financial Statements 7
Item 2 Management's Discussion and Analysis of Financial Condition and 8-9
Results of Operations
PART II Other Information 10
o Signature Page 11
o Computation of Net Income Per Share 12-13
</TABLE>
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PART I. FINANCIAL INFORMATION
CAM DATA SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
JUNE 30 SEPTEMBER 30
1997 1996
----------- ------------
(UNAUDITED)
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $3,026,300 $3,338,200
Accounts receivable, net 2,253,100 2,024,600
Inventories 411,100 438,500
Prepaid expenses 245,500 95,400
Deferred income taxes 150,000 150,000
---------- ----------
Total current assets 6,086,000 6,046,700
Property and equipment, net 719,800 571,900
Intangible assets, net 396,300 500,100
Note receivable from officer 13,300 14,300
Other assets 36,900 24,800
---------- ----------
Total assets $7,252,300 $7,157,800
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 871,300 $ 650,400
Accrued compensation and related expenses 413,000 640,000
Income taxes payable -- 136,200
Customer deposits and deferred service revenue 464,000 295,600
Accrued installation costs 110,000 111,000
Other accrued liabilities 172,400 327,600
---------- ----------
Total current liabilities 2,030,700 2,160,800
Stockholders' equity:
Common stock, $.001 par value, 5,000,000
shares authorized, 1,993,700 shares issued
and outstanding (1,964,200 at Sept. 30, 1996) 2,000 2,000
Paid-in capital in excess of par 3,912,900 3,844,800
Less notes receivable for purchase of common
stock (32,900) (40,900)
Retained earnings 1,339,600 1,191,100
---------- ----------
Total stockholders' equity 5,221,600 4,997,000
---------- ----------
Total liabilities and stockholders' equity $7,252,300 $7,157,800
========== ==========
</TABLE>
See notes to financial statements
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CAM DATA SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENT OF INCOME
<TABLE>
<CAPTION>
THREE MONTHS ENDED
---------------------------
JUNE 30 JUNE 30
1997 1996
---------- ----------
(UNAUDITED)
<S> <C> <C>
REVENUES
Net system revenues $3,500,300 $3,916,200
Net service revenues 918,300 797,600
---------- ----------
Total net revenues 4,418,600 4,713,800
COSTS AND EXPENSES
Costs of system revenues 2,003,500 1,965,200
Costs of service revenues 473,700 385,800
---------- ----------
Total costs of revenues 2,477,200 2,351,000
Selling, general and administrative expenses 1,562,500 1,577,500
Research and development expense 391,200 343,000
Interest income (25,800) (30,200)
---------- ----------
Total costs and expenses 4,405,100 4,241,300
---------- ----------
Income before provision for income taxes 13,500 472,500
Provision for income taxes 4,000 184,700
---------- ----------
NET INCOME $ 9,500 $ 287,800
---------- ----------
Primary net income per share $ -- $ .13
---------- ----------
Fully-diluted net income per share $ -- $ .13
---------- ----------
Shares used in computing primary
net income per share 2,125,200 2,165,900
Shares used in computing fully
diluted net income per share 2,125,200 2,168,700
</TABLE>
See notes to financial statements
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<PAGE> 5
CAM DATA SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENT OF INCOME
<TABLE>
<CAPTION>
NINE MONTHS ENDED
----------------------------
JUNE 30 JUNE 30
1997 1996
----------- ------------
(UNAUDITED)
<S> <C> <C>
REVENUES
Net system revenues $10,052,700 $ 9,312,700
Net service revenues 2,742,200 2,141,800
----------- -----------
Total net revenues 12,794,900 11,454,500
COSTS AND EXPENSES
Costs of system revenues 5,534,700 4,529,600
Costs of service revenues 1,404,100 1,092,900
----------- -----------
Total costs of revenues 6,938,800 5,622,500
Selling, general and administrative expenses 4,622,200 4,021,000
Research and development expense 1,111,600 900,000
Interest income (90,200) (98,600)
----------- -----------
Total costs and expenses 12,582,400 10,444,900
----------- -----------
Income before provision for income taxes 212,500 1,009,600
Provision for income taxes 64,000 394,000
----------- -----------
NET INCOME $ 148,500 $ 615,600
----------- -----------
Primary net income per share $ .07 $ .29
----------- -----------
Fully-diluted net income per share $ .07 $ .28
----------- -----------
Shares used in computing primary
net income per share 2,143,100 2,134,800
Shares used in computing fully
diluted net income per share 2,144,300 2,168,700
</TABLE>
See notes to financial statements
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CAM DATA SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
NINE MONTHS ENDED
----------------------------
JUNE 30 JUNE 30
1997 1996
---------- ----------
(UNAUDITED)
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 148,500 $ 615,600
Adjustments to reconcile net income to net cash
(used in) provided by operations:
Depreciation and amortization 347,300 327,900
Provision for doubtful accounts 10,000 10,000
Other 9,000 16,700
Net changes in operating assets and liabilities (503,400) (266,800)
----------- ----------
Net cash provided by operations 11,400 703,400
----------- ----------
Investing activities:
Purchase of property, plant and equipment (1,267,600) (357,100)
Sale of property and building 906,200 --
Capitalized software (30,000) --
Business acquisitions and other investments -- (400,000)
----------- ----------
Cash used in investing activities (391,400) (757,100)
----------- ----------
Financing activities:
Proceeds from exercise of stock options 68,100 40,500
----------- ----------
Net decrease in cash and cash equivalents (311,900) (13,200)
Cash and cash equivalents at beginning of period 3,338,200 3,015,700
----------- ----------
Cash and cash equivalents at end of period $ 3,026,300 $3,002,500
=========== ==========
</TABLE>
See notes to financial statements
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CAM DATA SYSTEMS, INC.
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
1. PRESENTATION OF CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
The balance sheet as of June 30, 1997, and the related statements of operations
for the three and nine months ended June 30, 1997 and 1996, and the statements
of cash flows for the nine months ended June 30, 1997, 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, 1996.
INVENTORIES
Inventories are stated at the lower of cost determined on a first-in, first out
basis, or net realizable value, and are 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
consolidated statement of cash flows are as follows:
<TABLE>
<CAPTION>
NINE MONTHS ENDED
----------------------------
JUNE 30 JUNE 30
1997 1996
--------- ----------
<S> <C> <C>
(Increase) decrease in:
Accounts receivable $(238,500) $(646,400)
Inventories 27,400 (195,600)
Prepaid expenses and other assets (162,200) (33,000)
Increase (decrease) in:
Accounts payable 220,900 364,200
Accrued compensation and related expenses (227,000) 24,000
Accrued installation costs (1,000) 25,000
Customer deposits 168,400 170,200
Accrued liabilities (291,400) 24,800
--------- ---------
Net changes in operating assets and liabilities $(503,400) $(266,800)
========= =========
</TABLE>
Income taxes paid during the nine months ended June 30, 1997 and 1996 were
$329,600 and $240,800, respectively. There was no interest expense paid in the
first nine months of 1997 or 1996.
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CAM DATA SYSTEMS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THREE MONTHS ENDED JUNE 30, 1997, AS COMPARED TO
THREE MONTHS ENDED JUNE 30, 1996
NINE MONTHS ENDED JUNE 30, 1997, AS COMPARED TO
NINE MONTHS ENDED JUNE 30, 1996
RESULTS OF OPERATIONS
NET REVENUES for the three months ended June 30, 1997, decreased 6% to
$4,418,600 consisting of a 11% decrease in system revenues, and a 15% increase
in service revenues compared to the three months ended June 30, 1996. The
decrease in system revenues was a result of lower sales activity for the
quarter. The increase in service revenues was attributed to an increase in the
installed customer base for CAM and Profit$ systems and a price increase in the
service rates. Net revenues for the nine months ended June 30, 1997, increased
12% to $12,794,900 consisting of a 8% increase in system revenues, and a 28%
increase in service revenues compared to the nine months ended June 30, 1996.
The increase in system revenues for the nine months ended June 30, 1997 was
attributed to an increase in the demand for the Company's software product in
the first quarter of 1997.
GROSS MARGIN for the three months and nine months ended June 30, 1997, was 44%
and 46%, compared to 50% and 51% for the three and nine months ended June 30,
1996. Gross margin on system revenues decreased to 43% and 45%, for the three
months and nine months ended June 30, 1997, compared to 50% and 51% for the
three and nine months ended June 30, 1996. Gross margin for service revenue was
48% and 49% for the three and nine months ended June 30, 1997, compared to 52%
and 49% for the three and nine months ended June 30, 1996 The margin decrease in
system revenues was a result of a higher mix of hardware sales versus software
sales, which yield a lower gross margin than software sales. The decrease in
gross margin for service revenue is related to the increase in customer service
personnel.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES expressed as a percentage of net
revenues increased for the three month period ended June 30, 1997, to 35%,
compared to 33% for the three month period ended June 30, 1996. Selling, general
and administrative expenses for the three months ended June 30, 1997, decreased
1% to $1,562,500 from the three months ended June 30, 1996. Selling, general and
administrative expenses expressed as a percentage of net revenues increased for
the nine month period ended June 30, 1997, to 36%, compared to 35% for the nine
month period ended June 30, 1996. Selling, general and administrative expenses
for the nine months ended June 30, 1997, increased 15% to $4,622,200 from the
nine months ended June 30, 1996. The increase was mainly attributed to higher
payroll costs for sales and administrative personnel for the nine months ended
June 30, 1997, combined with increases in marketing, travel and telephone
expenses, offset by the revaluation of some accrued liabilities. There was also
higher payroll expenses related to the inclusion of ICS division, acquired in
April 1996.
RESEARCH AND DEVELOPMENT EXPENSE increased 14% to $391,200 for the three month
period ended June 30, 1997, from $343,000 for the same period in 1996. Research
and development expense increased 24% to $1,111,600 for the nine month period
ended June 30, 1997, from $900,000 for the same period in 1996. The increase for
the period was attributed to increases in payroll expenses related to the
addition of R & D personnel.
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<PAGE> 9
INCOME TAXES, the effective tax rate was 30% for the three and nine months ended
June 30, 1997, compared to 39% for the three and nine months ended June 30,
1996. The decrease in tax rate was due to the assumption that the effective tax
rate in fiscal 1997 will approximate the actual rate incurred in fiscal 1996,
which was 30%.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash and cash equivalents totaled $3,026,300 on June 30, 1997,
compared to $3,338,200 on September 30, 1996. The Company generated $11,400 from
operations, and expended $1,267,600 for fixed assets and the construction of a
facility in Nevada, offset by the sale of the building to an officer of the
Company which generated $906,200 in cash during the nine months ended June 30,
1997, compared to the generation of $703,400 from operations, and the
utilization of $757,100 for the purchase of fixed assets and for the acquisition
of the ICS subsidiary for the nine months ended June 30, 1996.
The Company has no significant commitments for expenditures.
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.
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<PAGE> 10
CAM DATA SYSTEMS, INC.
PART II - OTHER INFORMATION
Items 1 - 3 Not Applicable
Items 4 Submission of Matters to a Vote of Security Holders
On May 8, 1997, the Company held its annual meeting of shareholders. The
following items were voted upon at the annual meeting with the results of the
voting:
1. The re-election of five persons to serve on the Company's Board of Directors.
The term shall be until the next meeting of shareholders in 1998.
<TABLE>
<CAPTION>
VOTES
---------------------------------------
For Against Abstain
--------- ------- -------
<S> <C> <C> <C>
Geoffrey D. Knapp 1,821,993 -- --
Walter Straub 1,821,993 -- --
David Frosh 1,821,993 -- --
Corley Phillips 1,821,993 -- --
Fred Haney 1,821,993 -- --
</TABLE>
2. The confirmation of Ernst & Young as the independent auditors of
the Company.
<TABLE>
<CAPTION>
VOTES
----------------------------------------
For Against Abstain
--------- ------- -------
<S> <C> <C>
1,821,292 500 201
</TABLE>
3. The amendment of the Company's 1993 Stock Option Plan to increase from
650,000 to 900,000 the number of shares of the Company's Common Stock for which
options may be granted to directors, officers and employees of, and consultants
to, the Company.
<TABLE>
<CAPTION>
VOTES
-----------------------------------------
For Against Abstain
--------- ------- -------
<S> <C> <C>
1,071,134 149,235 11,401
</TABLE>
4. The amendment of the Company's Certificate of Incorporation to authorize the
Company to provide for the indemnification of directors, officers, employees,
and agents to the fullest extent permissible by applicable law.
<TABLE>
<CAPTION>
VOTES
-----------------------------------------
For Against Abstain
--------- ------- -------
<S> <C> <C>
1,814,758 2,435 4,800
</TABLE>
Items 5 Not Applicable
Item 6 Exhibits and Reports on Form 8-K
(A) Exhibits:
Exhibit 11 Computation of Net Income (loss) Per Share
Exhibit 27 Financial Data Schedule
(B) Reports on Form 8-K None
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<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: August 12, 1997 By /s/ PAUL CACERES JR.
--------------- ----------------------------
Paul Caceres Jr.
Chief Financial and
Accounting Officer
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11
<PAGE> 1
EXHIBIT 11
CAM DATA SYSTEMS, INC.
COMPUTATION OF NET INCOME PER SHARE
(UNAUDITED)
PRIMARY NET INCOME PER SHARE
<TABLE>
<CAPTION>
THREE MONTHS ENDED
----------------------------
JUNE 30 JUNE 30
1997 1996
---------- ----------
<S> <C> <C>
Net income applicable to common and common
equivalent shares $ 9,500 $ 287,800
---------- ----------
Average number of common shares outstanding
during the period 1,993,700 1,942,400
Net shares assumed issued using treasury stock
method for stock options outstanding during
the period 131,500 223,500
---------- ----------
Common and common equivalent shares 2,125,200 2,165,900
---------- ----------
Net income per share $ -- $ .13
========== ==========
</TABLE>
FULLY DILUTED NET INCOME PER SHARE
<TABLE>
<CAPTION>
THREE MONTHS ENDED
--------------------------
JUNE 30 JUNE 30
1997 1996
---------- ----------
<S> <C> <C>
Net income applicable to common and common
equivalent shares $ 9,500 $ 287,800
---------- ----------
Average number of common shares outstanding
during the period 1,993,700 1,954,200
Net shares assumed issued using treasury stock
method for stock options outstanding during
the period 131,500 214,500
---------- ----------
Common and common equivalent shares 2,125,200 2,168,700
---------- ----------
Net income per share $ -- $ .13
========== ==========
</TABLE>
<PAGE> 2
EXHIBIT 11
CAM DATA SYSTEMS, INC.
COMPUTATION OF NET INCOME PER SHARE
(UNAUDITED)
PRIMARY NET INCOME PER SHARE
<TABLE>
<CAPTION>
NINE MONTHS ENDED
---------------------------
JUNE 30 JUNE 30
1997 1996
---------- ----------
<S> <C> <C>
Net income applicable to common and common
equivalent shares $ 148,500 $ 615,600
---------- ----------
Average number of common shares outstanding
during the period 1,988,600 1,941,500
Net shares assumed issued using treasury stock
method for stock options outstanding during
the period 154,500 193,300
---------- ----------
Common and common equivalent shares 2,143,100 2,134,800
---------- ----------
Net income per share $ .07 $ .29
========== ==========
</TABLE>
FULLY DILUTED NET INCOME PER SHARE
<TABLE>
<CAPTION>
NINE MONTHS ENDED
----------------------------
JUNE 30 JUNE 30
1997 1996
---------- ----------
<S> <C> <C>
Net income applicable to common and common
equivalent shares $ 148,500 $ 615,600
---------- ----------
Average number of common shares outstanding
during the period 1,988,600 1,954,200
Net shares assumed issued using treasury stock
method for stock options outstanding during
the period 155,700 214,500
---------- ----------
Common and common equivalent shares 2,144,300 2,168,700
---------- ----------
Net income per share $ .07 $ .28
========== ==========
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> JUN-30-1997
<CASH> 3,026,300
<SECURITIES> 0
<RECEIVABLES> 2,413,100
<ALLOWANCES> 160,000
<INVENTORY> 411,100
<CURRENT-ASSETS> 6,086,000
<PP&E> 1,897,600
<DEPRECIATION> 1,177,800
<TOTAL-ASSETS> 7,252,300
<CURRENT-LIABILITIES> 2,030,700
<BONDS> 0
0
0
<COMMON> 2,000
<OTHER-SE> 5,219,600
<TOTAL-LIABILITY-AND-EQUITY> 7,252,300
<SALES> 12,794,900
<TOTAL-REVENUES> 12,794,900
<CGS> 6,938,800
<TOTAL-COSTS> 6,938,800
<OTHER-EXPENSES> 5,643,600
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 212,500
<INCOME-TAX> 64,000
<INCOME-CONTINUING> 148,500
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 148,500
<EPS-PRIMARY> .07
<EPS-DILUTED> .07
</TABLE>
