<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 DECEMBER 31, 1996
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 (Zip code)
(Address of principal
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 December 31, 1996 there were 1,981,200 shares of common stock
outstanding.
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CAM DATA SYSTEMS, INC.
INDEX
PART I Financial Information
<TABLE>
<CAPTION>
Item 1 Condensed Consolidated Financial Statements: Page Number
<S> <C>
o Condensed Consolidated Balance Sheets at December 31, 1996 and 3
September 30, 1996
o Condensed Consolidated Statements of Income for three
months ended December 31, 1996 and 1995 4
o Condensed Consolidated Statements of Cash Flows for
three months ended December 31, 1996 and 1995 5
o Notes to Financial Consolidated Statements 6
Item 2 Management's Discussion and Analysis of Financial Condition and 7-8
Results of Operations
PART II Other Information 9
o Signature Page 10
o Computation of Net Income Per Share 11
</TABLE>
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PART I. FINANCIAL INFORMATION
CAM DATA SYSTEMS, INC.
CONDENSED CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
(UNAUDITED)
DECEMBER 31 SEPTEMBER 30
1996 1996
---------- ----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $2,976,400 $3,338,200
Accounts receivable, net 2,484,200 2,024,600
Inventories 515,300 438,500
Prepaid expenses 89,800 95,400
Deferred income taxes 150,000 150,000
---------- ----------
Total current assets 6,215,700 6,046,700
Property and equipment, net 793,400 571,900
Intangible assets, net 453,900 500,100
Note receivable from officer 14,300 14,300
Other assets 24,800 24,800
---------- ----------
Total assets $7,502,100 $7,157,800
========== ==========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable $ 736,200 $ 650,400
Accrued compensation and related expenses 544,000 640,000
Income taxes payable 186,500 136,200
Customer deposits and deferred service 347,000 295,600
revenue
Accrued installation costs 118,000 111,000
Other accrued liabilities 348,700 327,600
---------- ----------
Total current liabilities 2,280,400 2,160,800
Stockholders' equity:
Common stock, $.001 par value, 5,000,000
shares authorized, 1,981,200 shares issued
and outstanding (1,964,200 at Sept. 30, 1996) 2,000 2,000
Paid-in capital in excess of par 3,878,400 3,844,800
Less notes receivable for purchase of common
stock (36,900) (40,900)
Retained earnings 1,378,200 1,191,100
---------- ----------
Total stockholders' equity 5,221,700 4,997,000
---------- ----------
Total liabilities and stockholders' equity $7,502,100 $7,157,800
========== ==========
</TABLE>
See notes to financial statements
3
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CAM DATA SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
<TABLE>
<CAPTION>
(UNAUDITED)
THREE MONTHS ENDED
-------------------------------
DECEMBER 31 DECEMBER 31
1996 1995
---------- ----------
<S> <C> <C>
REVENUES
Net system revenues $3,884,300 $2,669,000
Net service revenues 894,500 659,600
---------- ----------
Total net revenues 4,778,800 3,328,600
COSTS AND EXPENSES
Costs of system revenues 2,051,300 1,285,100
Costs of service revenues 458,000 332,800
---------- ----------
Total costs of revenues 2,509,300 1,617,900
Selling, general and
administrative expenses 1,678,900 1,224,800
Research and development expense 359,000 256,800
Interest income (35,500) (35,700)
---------- ----------
Total costs and expenses 4,511,700 3,063,800
---------- ----------
Income before provision for income
taxes 267,100 264,800
Provision for income taxes 80,000 103,300
---------- ----------
NET INCOME $ 187,100 $ 161,500
---------- ----------
Primary net income per share $ .09 $ .08
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Fully-diluted net income per share $ .09 $ .08
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Shares used in computing primary
net income per share 2,133,400 2,094,300
Shares used in computing fully
diluted net income per share 2,146,300 2,095,300
</TABLE>
See notes to financial statements
4
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CAM DATA SYSTEMS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
(UNAUDITED)
THREE MONTHS ENDED
-------------------------------
DECEMBER 31 DECEMBER 31
1996 1995
---------- ----------
<S> <C> <C>
OPERATING ACTIVITIES:
Net income $ 187,100 $ 161,500
Adjustments to reconcile net
income to net cash provided by
operations:
Depreciation and amortization 105,000 113,900
Provision for doubtful accounts 10,000 10,000
Other 4,000 4,400
Net changes in operating assets
and liabilities (421,200) (179,600)
---------- ----------
Net cash (used in) provided by
operations (115,100) 110,200
---------- ----------
Investing activities:
Purchase of property and
equipment (280,300) (66,200)
---------- ----------
Financing activities:
Proceeds from exercise of stock
options 33,600 21,300
---------- ----------
Net increase (decrease) in cash
and cash equivalents (361,800) 65,300
Cash and cash equivalents at
beginning of period 3,338,200 3,015,700
---------- ----------
Cash and cash equivalents at end
of period $2,976,400 $3,081,000
---------- ----------
</TABLE>
See notes to financial statements
5
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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 December 31, 1996, and the related statements of
operations and cash flows for the three month periods ended December 31, 1996
and 1995, 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 statements of cash flows are as follows:
<TABLE>
<CAPTION>
THREE MONTHS ENDED
-------------------------------
DECEMBER 31 DECEMBER 31
1996 1995
--------- ---------
<S> <C> <C>
(Increase) decrease in:
Accounts receivable $(469,600) $ 44,000
Inventories (76,800) (62,600)
Prepaid expenses 5,600 35,000
Increase (decrease) in:
Accounts payable 85,800 (64,700)
Sales commission payable (96,000) (80,300)
Accrued installation costs 7,000 (90,600)
Customer deposits 51,400 (14,100)
Accrued liabilities 71,400 53,700
--------- ---------
Net changes in operating assets
and liabilities $(421,200) $(179,600)
--------- ---------
</TABLE>
Income taxes paid during the three months ended December 31, 1996 and 1995 were
$29,700 and $103,300, respectively. There was no interest expense paid in the
first three months of 1996 or 1995.
6
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CAM DATA SYSTEMS, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THREE MONTHS ENDED DECEMBER 31, 1996, AS COMPARED TO
THREE MONTHS ENDED DECEMBER 31, 1995
RESULTS OF OPERATIONS
NET REVENUES for the three months ended December 31, 1996, increased 44% to
$4,778,800 consisting of a 46% increase in system revenues, and a 36% increase
in service revenues compared to the three months ended December 31, 1995. The
increase in system revenues was a result of the Company's achieving record
sales volume for the quarter related to the demand for the CAM software network
product, and the Profit$ software product. The increase in service revenues was
attributed to an increase in the installed customer base for CAM and Profit$
systems and the inclusion of ICS revenue.
GROSS MARGIN for the three months ended December 31, 1996, was 47% compared to
51% for the three months ended December 31, 1995. Gross margin on system sales
decreased to 47% for the three months ended December 31, 1996, compared to 52%
for the three months ended December 31, 1995. 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. Gross margin for service
revenue was 49% for the three months ended December 31, 1996, compared to 50%
for the same period in 1995. The margin decrease in service revenue was due to
an increase in labor costs.
SELLING, GENERAL AND ADMINISTRATIVE EXPENSES expressed as a percentage of net
revenues decreased for the three-month period ended December 31, 1996, to 35%,
compared to 37% for the three-month period ended December 31, 1995. Selling,
general and administrative expenses for the three months ended December 31,
1996, increased 37% to $1,678,900 from the three months ended December 31, 1995.
The increase was mainly attributed to higher commissions due to a record sales
volume, combined with increases in advertising and telephone expenses, and
higher payroll expenses related to the inclusion of ICS, a subsidiary acquired
in April 1996.
RESEARCH AND DEVELOPMENT EXPENSE increased 40% to $359,000 for the three-month
period ended December 31, 1996, from $256,800 for the same period in 1995. The
increase for the period was attributed to increases in payroll expenses related
to the addition of R & D personnel.
INCOME TAXES, the effective tax rate was 30% for the three months ended December
31, 1996, compared to 39% for the three months ended December 31, 1995. 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 $2,976,400 on December 31,
1996, compared to $3,338,200 on September 30, 1996. The Company used $115,100
for operations, and expended $280,300 for fixed assets and the construction of
a facility in Nevada during the three months ended December 31, 1996, compared
to the generation of $110,200 from operations, and utilization of $66,200 for
the purchase of fixed assets for the three months ended December 31, 1995.
7
<PAGE> 8
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.
8
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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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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 11, 1997 By /s/ Paul Caceres Jr.
--------------------------------
Paul Caceres Jr.
Chief Financial and
Accounting Officer
10
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EXHIBIT 11
CAM DATA SYSTEMS, INC.
COMPUTATION OF NET INCOME PER SHARE
(UNAUDITED)
PRIMARY NET INCOME PER SHARE
<TABLE>
<CAPTION>
THREE MONTHS ENDED
------------------------------
DECEMBER 31 DECEMBER 31
1996 1995
--------- ---------
<S> <C> <C>
Net income applicable to common
and common equivalent shares
$ 187,100 $ 161,500
--------- ---------
Average number of common shares
outstanding during the period
1,981,200 1,941,000
Net shares assumed issued using
treasury stock method for stock
options outstanding during the
period 152,200 153,300
--------- ---------
Common and common equivalent
shares 2,133,400 2,094,300
--------- ---------
Net income per share $ .09 $ .08
----- -----
</TABLE>
FULLY DILUTED NET INCOME PER SHARE
<TABLE>
<CAPTION>
THREE MONTHS ENDED
------------------------------
DECEMBER 31 DECEMBER 31
1996 1995
--------- ---------
<S> <C> <C>
Net income applicable to
common and common equivalent
shares $ 187,100 $ 161,500
--------- ---------
Average number of common shares
outstanding during the period
1,981,200 1,941,000
Net shares assumed issued using
treasury stock method for stock
options outstanding during the
period 165,100 154,300
--------- ---------
Common and common equivalent
shares 2,146,300 2,095,300
--------- ---------
Net income per share $ .09 $ .08
------ -----
</TABLE>
11
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-START> OCT-01-1996
<PERIOD-END> DEC-31-1996
<CASH> 2,976,400
<SECURITIES> 0
<RECEIVABLES> 2,634,200
<ALLOWANCES> 160,00
<INVENTORY> 515,300
<CURRENT-ASSETS> 6,215,700
<PP&E> 1,816,500
<DEPRECIATION> 1,023,100
<TOTAL-ASSETS> 7,502,100
<CURRENT-LIABILITIES> 2,280,400
<BONDS> 0
0
0
<COMMON> 2,000
<OTHER-SE> 5,219,700
<TOTAL-LIABILITY-AND-EQUITY> 7,502,100
<SALES> 4,778,800
<TOTAL-REVENUES> 4,778,800
<CGS> 2,509,300
<TOTAL-COSTS> 2,509,300
<OTHER-EXPENSES> 2,002,400
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 267,100
<INCOME-TAX> 80,000
<INCOME-CONTINUING> 187,100
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 187,100
<EPS-PRIMARY> .09
<EPS-DILUTED> .09
</TABLE>
