<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 March 31, 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 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 March 31, 1997 there were 1,993,700 shares of common stock outstanding.
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1
<PAGE> 2
CAM DATA SYSTEMS, INC.
INDEX
PART I Financial Information
<TABLE>
<CAPTION>
Item 1 Condensed Consolidated Financial Statements: Page Number
<S> <C> <C>
o Condensed Consolidated Balance Sheet at March 31, 1997 and 3
September 30, 1996
o Condensed Consolidated Statement of Operations for three
months ended March 31, 1997 and 1996 4
o Condensed Consolidated Statement of Income for six
months ended March 31, 1997 and 1996 5
o Condensed Consolidated Statement of Cash Flows for
six months ended March 31, 1997 and 1996 6
o Notes to Financial Condensed Consolidated Statements 7
Item 2 Management's Discussion and Analysis of Financial Condition and 8-9
PART II Other Information 10
o Signature Page 11
o Computation of Net (Loss) Income Per Share 12
</TABLE>
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2
<PAGE> 3
PART I. FINANCIAL INFORMATION
CAM DATA SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
(Unaudited)
MARCH 31 SEPTEMBER 30
1997 1996
----------- -----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 2,421,700 $ 3,338,200
Accounts receivable, net 1,945,800 2,024,600
Inventories 630,600 438,500
Prepaid expenses 150,700 95,400
Deferred income taxes 150,000 150,000
----------- -----------
Total current assets 5,298,800 6,046,700
Property and equipment, net 1,235,800 571,900
Intangible assets, net 408,600 500,100
Note receivable from officer 14,300 14,300
Other assets 27,900 24,800
----------- -----------
Total assets $ 6,985,400 $ 7,157,800
----------- -----------
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 488,600 $ 650,400
Accrued compensation and related expenses 374,000 640,000
Income taxes payable 52,100 136,200
Customer deposits and deferred
service revenue 528,800 295,600
Accrued installation costs 100,000 111,000
Other accrued liabilities 231,800 327,600
----------- -----------
Total current liabilities 1,775,300 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 (34,900) (40,900)
Retained earnings 1,330,100 1,191,100
----------- -----------
Total stockholders' equity 5,210,100 4,997,000
----------- -----------
Total liabilities and stockholders'
equity $ 6,985,400 $ 7,157,800
----------- -----------
</TABLE>
See notes to financial statements
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CAM DATA SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
<TABLE>
<CAPTION>
(Unaudited)
THREE MONTHS ENDED
------------------
MARCH 31 MARCH 31
1997 1996
---- ----
<S> <C> <C>
REVENUES
Net system revenues $ 2,668,100 $ 2,727,600
Net service revenues 929,400 684,600
----------- -----------
Total net revenues 3,597,500 3,412,200
COSTS AND EXPENSES
Costs of system revenues 1,480,000 1,269,700
Costs of service revenues 472,300 372,300
----------- -----------
Total costs of revenues 1,952,300 1,642,000
Selling, general and
administrative expenses 1,380,800 1,230,600
Research and development
expense 361,400 300,000
Interest income (28,900) (32,700)
----------- -----------
Total costs and expenses 3,665,600 3,139,900
----------- -----------
(Loss) income before (benefit)
provision for income taxes (68,100) 272,300
(Benefit) provision for income
taxes (20,000) 106,000
----------- -----------
Net (loss) income $ (48,100) $ 166,300
----------- -----------
Primary net (loss) income per share $ (.02) $ .08
----------- -----------
Fully-diluted net (loss) income
per share $ (.02) $ .08
----------- -----------
Shares used in computing primary
net (loss) income per share 1,993,700 2,132,800
Shares used in computing fully
diluted net (loss) income per share 1,993,700 2,159,200
</TABLE>
See notes to financial statements
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<PAGE> 5
CAM DATA SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENT OF INCOME
<TABLE>
<CAPTION>
(Unaudited)
SIX MONTHS ENDED
----------------
MARCH 31 MARCH 31
1997 1996
---- ----
<S> <C> <C>
REVENUES
Net system revenues $ 6,552,400 $ 5,396,500
Net service revenues 1,823,900 1,344,200
----------- -----------
Total net revenues 8,376,300 6,740,700
COSTS AND EXPENSES
Costs of system revenues 3,531,300 2,552,800
Costs of service revenues 930,300 707,100
----------- -----------
Total costs of revenues 4,461,600 3,259,900
Selling, general and administrative
expenses 3,059,700 2,455,100
Research and development
expense 720,400 557,000
Interest income (64,400) (68,400)
----------- -----------
Total costs and expenses 8,177,300 6,203,600
----------- -----------
Income before provision for
income taxes 199,000 537,100
Provision for income taxes 60,000 209,300
----------- -----------
Net income $ 139,000 $ 327,800
----------- -----------
Primary net income per share $ .06 $ .16
----------- -----------
Fully-diluted net income per share $ .06 $ .15
----------- -----------
Shares used in computing primary
net income per share 2,151,500 2,114,500
Shares used in computing fully
diluted net income per share 2,193,800 2,159,200
</TABLE>
See notes to financial statements
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CAM DATA SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
(Unaudited)
SIX MONTHS ENDED
----------------
MARCH 31 MARCH 31
1997 1996
----------- -----------
<S> <C> <C>
Operating activities:
Net income $ 139,000 $ 327,800
Adjustments to reconcile net income
to net cash (used in) provided by
operations:
Depreciation and amortization 218,800 192,800
Provision for doubtful accounts 10,000 10,000
Other 6,000 10,700
Net changes in operating assets and
liabilities (567,200) (340,500)
----------- -----------
Net cash (used in) provided by
operations (193,400) 200,800
----------- -----------
Investing activities:
Purchase of property, plant and
equipment (791,200) (285,300)
----------- -----------
Financing activities:
Proceeds from exercise of stock
options 68,100 21,300
----------- -----------
Net (decrease) in cash and cash
equivalents (916,500) (63,200)
Cash and cash equivalents at
beginning of period 3,338,200 3,015,700
----------- -----------
Cash and cash equivalents at end of
period $ 2,421,700 $ 2,952,500
----------- -----------
</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 March 31, 1997, and the related statements of operations
for the three and six months ended March 31, 1997 and 1996, and the statements
of cash flows for the six months ended March 31, 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>
SIX MONTHS ENDED
----------------
MARCH 31 MARCH 31
1997 1996
---- ----
<S> <C> <C>
(Increase) decrease in:
Accounts receivable $ 68,800 $(170,200)
Inventories (192,100) 48,000
Prepaid expenses and other assets (58,400) (3,600)
Increase (decrease) in:
Accounts payable (161,800) (156,700)
Accrued compensation and related
expenses (266,000) (121,000)
Accrued installation costs (11,000) 15,000
Customer deposits 233,200 154,000
Accrued liabilities (179,900) (106,000)
--------- ---------
Net changes in operating assets and
liabilities $(567,200) $(340,500)
--------- ---------
</TABLE>
Income taxes paid during the six months ended March 31, 1997 and 1996 were
$209,000 and $246,800, respectively. There was no interest expense paid in the
first six months of 1997 or 1996.
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<PAGE> 8
CAM DATA SYSTEMS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THREE MONTHS ENDED MARCH 31, 1997, AS COMPARED TO
THREE MONTHS ENDED MARCH 31, 1996
SIX MONTHS ENDED MARCH 31, 1997, AS COMPARED TO
SIX MONTHS ENDED MARCH 31, 1996
RESULTS OF OPERATIONS
NET REVENUES for the three months ended March 31, 1997, increased 5% to
$3,597,500 consisting of a 2% decrease in system revenues, and a 36% increase in
service revenues compared to the three months ended March 31, 1996. The decrease
in system revenues was a result of sluggish sales activity for the quarter. The
increase in service revenues was attributed to an increase in the installed
customer base for CAM and Profit$ systems and the inclusion of service revenue
from the ICS division which was acquired in April of 1996. Net revenues for the
six months ended March 31, 1997, increased 24% to $8,376,300 consisting of a 21%
increase in system revenues, and a 36% increase in service revenues compared to
the six months ended March 31, 1996. The increase in system revenues for the six
months ended March 31, 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 six months ended March 31, 1997, was 46%
and 47%, compared to 52% for the three and six months ended March 31, 1996.
Gross margin on system revenues decreased to 45% and 46%, for the three months
and six months ended March 31, 1997, compared to 53% for the three and six
months ended March 31, 1996. Gross margin for service revenue was 49% for the
three and six months ended March 31, 1997, compared to 46% and 47% for the three
and six months ended March 31, 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 increase in gross margin for service
revenue is related to the increase in service revenue discussed above.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES expressed as a percentage of net
revenues increased for the three month period ended March 31, 1997, to 38%,
compared to 36% for the three month period ended March 31, 1996. Selling,
general and administrative expenses for the three months ended March 31, 1997,
increased 12% to $1,380,800 from the three months ended March 31, 1996. Selling,
general and administrative expenses expressed as a percentage of net revenues
increased for the six month period ended March 31, 1997, to 37%, compared to 36%
for the six month period ended March 31, 1996. Selling, general and
administrative expenses for the six months ended March 31, 1997, increased 25%
to $3,059,700 from the six months ended March 31, 1996. The increase was mainly
attributed to higher commissions due to a record sales volume for the six months
ended March 31, 1997, combined with increases in marketing and telephone
expenses, and higher payroll expenses related to the inclusion of ICS division,
acquired in April 1996.
RESEARCH AND DEVELOPMENT EXPENSE increased 20% to $361,400 for the three month
period ended March 31, 1997, from $300,000 for the same period in 1996. Research
and development expense increased 29% to $720,400 for the six month period ended
March 31, 1997, from $557,000 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 six months ended
March 31, 1997, compared to 39% for the three and six months ended March 31,
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.
LIQUIDITY AND CAPITAL RESOURCES
The Company's cash and cash equivalents totaled $2,421,700 on March 31, 1997,
compared to $3,338,200 on September 30, 1996. The Company used $193,400 for
operations, and expended $791,200 for fixed assets and the construction of a
facility in Nevada during the six months ended March 31, 1997, compared to the
generation of $200,800 from operations, and the utilization of $285,300 for the
purchase of fixed assets for the six months ended March 31, 1996.
The Company has no significant commitments for expenditures. However, the
Company is building 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.
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<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
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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: May 12, 1997 By /S/ Paul Caceres Jr.
------------ --------------------
Paul Caceres Jr.
Chief Financial and
Accounting Officer
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<PAGE> 1
EXHIBIT 11
CAM DATA SYSTEMS, INC.
COMPUTATION OF NET (LOSS) INCOME PER SHARE
(UNAUDITED)
PRIMARY NET (LOSS) INCOME PER SHARE
<TABLE>
<CAPTION>
THREE MONTHS ENDED
------------------
MARCH 31 MARCH 31
1997 1996
----------- -----------
<S> <C> <C>
Net (loss) income applicable to common
and common equivalent shares $ (48,100) $ 166,300
----------- -----------
Average number of common shares
outstanding during the period 1,993,700 1,941,000
Net shares assumed issued using
treasury stock method for stock options
outstanding during the period -- 191,800
----------- -----------
Common and common equivalent
shares 1,993,700 2,132,800
----------- -----------
Net (loss) income per share $ (.02) $ .08
----------- -----------
</TABLE>
FULLY DILUTED NET (LOSS) INCOME PER SHARE
<TABLE>
<CAPTION>
THREE MONTHS ENDED
------------------
MARCH 31 MARCH 31
1997 1996
----------- -----------
<S> <C> <C>
Net (loss) income applicable to
common and common equivalent
shares $ (48,100) $ 166,300
----------- -----------
Average number of common shares
outstanding during the period 1,993,700 1,941,000
Net shares assumed issued using
treasury stock method for stock options
outstanding during the period -- 218,200
----------- -----------
Common and common equivalent
shares 1,993,700 2,159,200
----------- -----------
Net (loss) income per share $ (.02) $ .08
----------- -----------
</TABLE>
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12
<PAGE> 2
EXHIBIT 11
CAM DATA SYSTEMS, INC.
COMPUTATION OF NET INCOME PER SHARE
(UNAUDITED)
PRIMARY NET INCOME PER SHARE
<TABLE>
<CAPTION>
SIX MONTHS ENDED
----------------
MARCH 31 MARCH 31
1997 1996
---------- ----------
<S> <C> <C>
Net income applicable to common and
common equivalent shares $ 139,000 $ 327,800
---------- ----------
Average number of common shares
outstanding during the period 1,986,000 1,941,000
Net shares assumed issued using
treasury stock method for stock options
outstanding during the period 165,500 173,500
---------- ----------
Common and common equivalent
shares 2,151,500 2,114,500
---------- ----------
Net income per share $ .06 $ .16
---------- ----------
</TABLE>
FULLY DILUTED NET INCOME PER SHARE
<TABLE>
<CAPTION>
SIX MONTHS ENDED
----------------
MARCH 31 MARCH 31
1997 1996
---- ----
<S> <C> <C>
Net income applicable to
common and common equivalent
shares $ 139,000 $ 327,800
---------- ----------
Average number of common shares
outstanding during the period 1,986,000 1,941,000
Net shares assumed issued using
treasury stock method for stock options
outstanding during the period 207,800 218,200
---------- ----------
Common and common equivalent
shares 2,193,800 2,159,200
---------- ----------
Net income per share $ .06 $ .15
---------- ----------
</TABLE>
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13
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> MAR-31-1997
<CASH> 2,421,700
<SECURITIES> 0
<RECEIVABLES> 2,105,800
<ALLOWANCES> 160,000
<INVENTORY> 630,600
<CURRENT-ASSETS> 5,298,800
<PP&E> 2,327,400
<DEPRECIATION> 1,091,600
<TOTAL-ASSETS> 6,985,400
<CURRENT-LIABILITIES> 1,775,300
<BONDS> 0
0
0
<COMMON> 2,000
<OTHER-SE> 5,208,100
<TOTAL-LIABILITY-AND-EQUITY> 6,985,400
<SALES> 8,376,300
<TOTAL-REVENUES> 8,376,300
<CGS> 4,461,600
<TOTAL-COSTS> 4,461,600
<OTHER-EXPENSES> 3,715,700
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 199,000
<INCOME-TAX> 60,000
<INCOME-CONTINUING> 139,000
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 139,000
<EPS-PRIMARY> .06
<EPS-DILUTED> .06
</TABLE>
