<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM 10-Q
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 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: 0-20732
COMPUTER INTEGRATION CORP.
--------------------------
(Exact name of registrant as specified in its charter)
Delaware 65-0506623
-------- ----------
(State of Incorporation) (I.R.S. Employer I.D. No.)
7900 Glades Road, Boca Raton, Florida 33434
------------------------------------- -----
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: 407-482-6678
Check 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
----- -----
APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY
PROCEEDINGS DURING THE PRECEDING FIVE YEARS
Indicate by check mark whether the registrant has filed all documents
and reports required to be filed by Sections 12, 13 or 15(d) of the Securities
Exchange Act of 1934 subsequent to the distribution of securities under a plan
confirmed by a court.
Yes No
----- -----
APPLICABLE ONLY TO CORPORATE ISSUERS
State the number of shares outstanding of each of the issuer's classes
of common stock, as of the latest practicable date: 6,915,000 shares of common
stock outstanding as of November 1, 1995.
This report contains a total of 20 pages.
The Exhibit Index appears on page 16.
<PAGE> 2
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
The condensed, consolidated financial statements included herein have
been prepared by the Registrant, without audit, pursuant to the rules and
regulations of the Securities and Exchange Commission. Certain information and
footnote disclosures normally included in financial statements prepared in
accordance with generally accepted accounting principles have been consolidated
or omitted pursuant to such rules and regulations; however, the Registrant
believes that the disclosures are adequate to make the information presented
not misleading. It is suggested that these condensed, consolidated financial
statements be read in conjunction with the financial statements and the notes
thereto included in the Registrant's consolidated financial statements for the
year ended June 30, 1995.
The condensed, consolidated financial statements for the interim
periods included herein, which are unaudited, include, in the opinion of
management, all adjustments (consisting only of normal recurring accruals)
necessary to present fairly the financial position and results of operations of
the Registrant for the periods presented. The results of operations for
interim periods should not be considered indicative of results to be expected
for the full year.
2
<PAGE> 3
Computer Integration Corp.
and Subsidiary
Condensed Consolidated Balance Sheets
<TABLE>
<CAPTION>
SEPTEMBER 30, JUNE 30,
1995 1995
--------------------------
(Unaudited) (Note)
<S> <C> <C>
Assets
Current assets:
Cash $ 3,083,935 $ 797,678
Accounts receivable, net 70,653,577 31,355,179
Inventory 23,073,282 11,547,902
Deferred income taxes 513,272 513,272
Prepaid expenses 346,856 353,688
--------------------------
Total current assets 97,670,922 44,567,719
Property and equipment, net 2,280,802 1,693,723
Other assets:
Goodwill, net 11,718,606 7,705,754
Other 1,095,155 787,449
--------------------------
Total other assets 12,813,761 8,493,203
--------------------------
Total assets $112,765,485 $ 54,754,645
==========================
</TABLE>
Continued on next page.
3
<PAGE> 4
Computer Integration Corp.
and Subsidiary
Condensed Consolidated Balance Sheets (continued)
<TABLE>
<CAPTION>
SEPTEMBER 30, JUNE 30,
1995 1995
----------------------------
(Unaudited) (Note)
<S> <C> <C>
LIABILITIES AND SHAREHOLDERS EQUITY
Current liabilities:
Notes payable $ 16,534,345 $ 9,920,603
Accounts payable 47,166,497 22,829,019
Accrued expenses 4,947,505 1,712,415
Current portion of subordinated notes payable 730,161 -
Current portion of capital lease obligations 23,140 34,655
Other 670,461 849,110
----------------------------
Total current liabilities 70,072,109 35,345,802
Noncurrent liabilities:
Term note payable 27,500,000 12,500,000
Subordinated notes payable, less current portion 3,010,000 -
Capital lease obligations, less current portion 6,935 7,753
Other - 310,260
----------------------------
Total noncurrent liabilities 30,516,935 12,818,013
Shareholders equity:
Preferred stock, $.001 par value, total
authorized 2,000,000 shares, issued and
outstanding as follows:
Series A, 9% cumulative, convertible,
redeemable preferred stock; 40,000
shares authorized, 19,250 issued and
outstanding in both periods 19 19
Series C, 9% cumulative, convertible,
redeemable preferred stock; 250 shares
authorized, 125 issued and outstanding
in both periods - -
Common Stock, $.001 par value, authorized
20,000,000 shares, issued and
outstanding 6,915,000 and 6,400,000
shares at September 30, 1995 and June
30, 1995, respectively 6,915 6,400
Additional paid-in capital 9,780,065 5,534,154
Retained earnings 2,389,442 1,050,257
----------------------------
Total shareholders equity 12,176,441 6,590,830
----------------------------
Total liabilities and shareholders equity $112,765,485 $ 54,754,645
============================
</TABLE>
Note: The balance sheet at June 30, 1995 has been derived from the audited
financial statements at that date, but does not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements.
See accompanying notes.
4
<PAGE> 5
Computer Integration Corp.
and Subsidiary
Condensed Consolidated Statements of Income (Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
SEPTEMBER 30
1995 1994
----------------------------
<S> <C> <C>
Net sales $120,910,198 $ 48,004,747
Cost of goods sold 109,736,904 43,008,855
----------------------------
Gross profit 11,173,294 4,995,892
Selling, general and administrative
expenses:
Salaries and benefits 5,942,002 2,809,725
Other selling and administrative 917,005 481,440
Occupancy costs 471,087 201,227
Depreciation and amortization 391,620 238,625
----------------------------
7,721,714 3,731,017
----------------------------
Income from operations 3,451,580 1,264,875
Interest expense 1,142,640 472,203
----------------------------
Income before income taxes 2,308,940 792,672
Income taxes 969,755 320,000
----------------------------
Net income 1,339,185 472,672
Less required payments on convertible
preferred stock (54,562) (39,058)
----------------------------
Income applicable to common stock $ 1,284,623 $ 433,614
============================
</TABLE>
Continued on next page.
5
<PAGE> 6
Computer Integration Corp.
and Subsidiary
Condensed Consolidated Statements of Income (Unaudited) (continued)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
SEPTEMBER 30
1995 1994
------------------------
<S> <C> <C>
Net income per share:
Primary $ .18 $ .07
========================
Fully diluted $ .16 $ .06
========================
Common shares and common share
equivalents outstanding:
Primary 7,133,864 6,415,227
========================
Fully diluted 8,403,864 7,403,923
========================
Pro forma net income per share after
giving effect to four-for-five
reverse stock split:
Primary $ .23 $ .08
========================
Fully diluted $ .20 $ .08
========================
Pro forma common shares and common
share equivalents outstanding after
giving effect to four-for-five
reverse stock split:
Primary 5,707,091 5,132,181
========================
Fully diluted 6,723,091 5,923,138
========================
</TABLE>
See accompanying notes.
6
<PAGE> 7
Computer Integration Corp.
and Subsidiary
Condensed Consolidated Statements of
Cash Flows (Unaudited)
<TABLE>
<CAPTION>
THREE MONTHS ENDED
SEPTEMBER 30
1995 1994
-------------------------------
<S> <C> <C>
OPERATING ACTIVITIES
Net income $ 1,339,185 $ 472,672
Adjustments to reconcile net income to net cash provided
(used) by operating activities:
Depreciation and amortization 391,620 238,760
Changes in operating assets and liabilities, exclusive
of effects from acquisitions:
Accounts receivable 1,474,971 (814,722)
Inventory 4,526,968 (1,017,457)
Prepaid expenses 74,053 (80,028)
Other assets (287,914) (191,935)
Accounts payable (5,160,045) 410,199
Accrued expenses and other current liabilities 1,472,688 (1,431,751)
Other noncurrent liabilities (310,260) 100,581
-------------------------------
Net cash provided (used) by operating activities 3,521,266 (2,313,681)
INVESTING ACTIVITIES
Purchase of net assets of Dataprint, Inc., net of cash
acquired - 185,494
Acquisition of property and equipment (13,221) (189,589)
-------------------------------
Net cash used in investing activities (13,221) (4,095)
FINANCING ACTIVITIES
Proceeds from sale of preferred stock, - 1,898,697
net of offering costs
Net (repayments) advances on line of credit (1,189,616) 1,194,757
Principal payments on subordinated notes payable (19,839) (336,869)
Repayments of capital lease obligations (12,333) (23,542)
------------------------------
Net cash (used) provided by financing activities (1,221,788) 2,733,043
------------------------------
Net increase in cash 2,286,257 415,267
Cash at beginning of period 797,678 909,805
------------------------------
Cash at end of period $ 3,083,935 $ 1,325,072
==============================
SUPPLEMENTAL INFORMATION
Interest paid $ 1,075,892 $ 472,203
==============================
Taxes paid $ 386,694 $ 838,910
==============================
</TABLE>
See accompanying notes.
7
<PAGE> 8
Computer Integration Corp.
and Subsidiary
Notes to Condensed Consolidated
Financial Statements (Unaudited)
September 30, 1995
1. BASIS OF PRESENTATION
The condensed consolidated financial statements include the accounts of
Computer Integration Corp. (the "Company") and its wholly-owned operating
subsidiary, CIC Systems, Inc. ("CICS"). All significant intercompany accounts
and transactions have been eliminated in consolidation.
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information. Certain information and footnote disclosures
required by generally accepted accounting principles for complete financial
statements have been condensed or omitted. In the opinion of management, all
adjustments (consisting of normal recurring accruals) considered necessary to
present fairly the financial position, results of operations and cash flows have
been included. The results of operations for the three months ended September
30, 1995 are not necessarily indicative of the results that may be expected for
fiscal year 1996. It is suggested that these condensed consolidated financial
statements be read in conjunction with the financial statements and notes
thereto included in the Company s consolidated financial statements for the
year ended June 30, 1995.
2. ACQUISITION
Effective July 1, 1995, the Company through CICS acquired substantially
all of the assets and assumed all of the trade payables and certain other
liabilities of Cedar Computer Center, Inc. ("Cedar"), an Iowa corporation, for a
combination of cash, notes and securities of the Company. The purchase price for
the net assets of Cedar and related acquisition costs consisted of approximately
$9,820,327 in cash, $3,760,000 of subordinated promissory notes, $4,246,426
representing the fair value of the guaranteed price for 515,000 shares of the
Company's Common Stock and other liabilities incurred of $1,124. The purchase
price was determined by arms length negotiations between the sellers and the
Company. The cash portion of the purchase price was obtained from a $70 million
revolving credit facility from Congress Financial Corporation (New England).
8
<PAGE> 9
Computer Integration Corp.
and Subsidiary
Notes to Condensed Consolidated
Financial Statements (Unaudited) (continued)
2. ACQUISITION (CONTINUED)
The total purchase price of $17,827,877 was allocated to assets acquired and
liabilities assumed, based on their respective estimated fair values. The
excess of the purchase price over the aggregate amount assigned to the
identifiable net assets acquired was recorded as an intangible asset which will
be amortized using the straight-line method over 20 years. The allocation of the
purchase price is summarized as follows:
<TABLE>
<S> <C>
Accounts receivable $ 40,773,369
Inventories 16,052,348
Furniture and office equipment 764,587
Prepaid expenses 155,598
Accounts payable and accrued expenses (44,063,183)
------------
Fair value of assets acquired, net of liabilities assumed 13,682,719
Cost in excess of net assets acquired 4,145,158
------------
$ 17,827,877
============
</TABLE>
The results of operations of Cedar have been included in the Company's
condensed consolidated statement of income since the effective date of
acquisition, July 1, 1995.
The following summarized unaudited pro forma results of operations for the
period from July 1, 1994 through September 30, 1994 assume that the acquisition
occurred on July 1, 1994.
<TABLE>
<S> <C>
Sales $111,002,749
Net income 987,470
Net income per common share .12
</TABLE>
The pro forma results have been prepared for comparative purposes only and do
not purport to be indicative of the results of operations which would have
resulted had the combination been in effect on the date indicated or which may
result in the future.
3. BORROWINGS
During July 1995, the Company's revolving line of credit was replaced by a
$70,000,000 revolving line with its existing lender under terms and conditions
similar to the existing agreement. Outstanding borrowings as of September 30,
1995 under such facility was $44,034,345. In addition to amounts outstanding,
a $10,000,000 irrevocable letter of credit has been issued against the
revolving line to a major supplier of the Company.
9
<PAGE> 10
Computer Integration Corp.
and Subsidiary
Notes to Condensed Consolidated
Financial Statements (Unaudited) (continued)
3. BORROWINGS (CONTINUED)
In connection with the acquisition of Cedar, discussed in Note 2 above,
subordinated promissory notes in the aggregate principal amount of approximately
$3,510,000 and a short-term promissory note in the principal amount of $250,000
were issued to the seller. The subordinated promissory notes are payable in four
annual installments of principal and interest at an interest rate of 7.25% per
annum, commencing July 2, 1996 through July 2, 1999. The short-term promissory
note is payable in six equal monthly installments of principal and interest at
an interest rate of 10% per annum. The notes are subordinate and junior in right
of payment to the prior payment of all indebtedness of CICS to its senior
lenders, secured by a pledge of 15% of the issued and outstanding shares of
common stock of CICS subject to the prior security interest of CICS' senior
lenders and is guaranteed by the Company.
4. EARNINGS PER SHARE
Earnings per share has been restated to reflect a four-for-five reverse stock
split which was approved by stockholders at the October 12, 1995 annual
meeting, which reverse stock split will be effected only upon a subsequent
determination of appropriateness by the Board of Directors.
5. SUBSEQUENT EVENT
At the October 12, 1995 annual stockholders meeting, the stockholders approved
the following additional items:
- - - - An increase in the number of authorized shares of capital stock from
12 million shares to 22 million shares, including an increase in the number
of authorized shares of common stock from 10 million shares to 20 million
shares.
- - - - An amendment to the Company's 1994 Stock Option Plan (the "Plan") to (i)
increase the total number of shares reserved for issuance under the Plan
from 500,000 to 1,050,000 shares and (ii) modify the formula under the Plan
to grant each nonemployee director a nonqualified option to purchase
10,000 shares (compared to the present 5,000) of the Company's common stock
upon election to the Board of Directors or one year anniversary of election
and continued service on the Board.
10
<PAGE> 11
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
GENERAL
Computer Integration Corp. (the "Registrant") is one of the largest
volume resellers of microcomputers, workstations and related products to large
and medium-sized corporations, federal, state and local governmental entities
and colleges and universities in the United States. The Registrant, through
its wholly-owned subsidiary, CIC Systems, Inc. ("CIC"), distributes a broad
range of microcomputer-related products from major hardware manufacturers and
software developers such as Hewlett-Packard Company ("HP"), Compaq Computer
Corporation, Sun Microsystems Computer Corporation, Toshiba America Information
Systems, Inc., International Business Machines, Lexmark International, Epson
America, Inc., NEC Technologies, Inc., 3COM, Inc., Canon Computer Systems, Inc.,
Novell, Inc. and Microsoft Corporation. The Registrant is one of the largest
resellers of computer products manufactured by HP in the United States.
The Registrant began operations in 1992 with the organization of CIC and
acquired Copley Systems Corporation, a Massachusetts corporation in March 1993.
The Registrant acquired all of the outstanding capital stock of Dataprint, Inc.,
a North Carolina corporation, effective July 1, 1994. Effective July 1, 1995,
the Registrant acquired substantially all of the assets of Cedar Computer
Center, Inc., an Iowa corporation ("Cedar"), which, at the time of the
acquisition, was one of the largest dealers of HP computer products in the
midwestern and western United States.
RESULTS OF OPERATIONS
The Registrant's results of operations for the three months ended
September 30, 1995 include the results of operations for Cedar for the entire
period. However, since Cedar was acquired effective July 1, 1995, the results
of operations for the three months ended September 30, 1995 are not, in all
respects, comparable with the results of the similar period in 1994.
Net sales for the three months ended September 30, 1995 (the "1995
Quarter") were $120,910,198 compared to $48,004,747 for the three months ended
September 30, 1994 (the "1994 Quarter"), an increase of $72,905,451 or 152%.
Sales by Cedar accounted for $64,048,256 of the increase in the 1995 Quarter and
the balance of the increase was attributable to sales to new and existing
customers.
Gross profit increased to $11,173,294 in the 1995 Quarter from
$4,995,892 in the 1994 Quarter. Of the total gross profit in the 1995 Quarter,
$5,568,852 was attributable to Cedar and the balance of the increase was
attributable to growth of existing operations. Gross profit margin declined to
9.2% in the 1995 Quarter compared to 10.4% in the 1994 Quarter. Approximately
.7% of the total decline in gross profit margin, or 58% of such decrease,
related to Cedar's operations. The balance of the decrease in gross profit
margin primarily resulted from price reductions on hardware products brought
about by competitive market pressures. These price reductions were
proportionately in excess of reductions in product costs.
Selling, general and administrative expenses ("SG&A") were $7,721,714
in the 1995 Quarter, compared to $3,731,017 in the 1994 Quarter, an increase of
$3,990,697. Of this increase, $3,283,208 or 82.3% was directly attributable to
expenses incurred by Cedar. As a percentage of net sales, SG&A decreased 17.9%
to 6.39% primarily due to lower operating costs associated with Cedar.
11
<PAGE> 12
The primary component of the Registrant's SG&A expenses is salaries and
benefits. Salaries and benefits were $5,942,002 in the 1995 Quarter, an
increase of $3,132,277, or 111% over the 1994 Quarter. Approximately $800,000
of the increase in salaries and benefits in the 1995 Quarter, or 25.5%, related
to increased salaries and benefits from existing operations (as a result of
increased sales volume). The balance of the increase in salaries and benefits
during the 1995 Quarter related to salaries and benefits paid to Cedar employees
who were not employed by the Registrant in the 1994 Quarter. As a percentage of
net sales, salaries and benefits decreased 16.9% to 4.9%.
Occupancy costs consist of rent and related occupancy expenses for 37
facilities occupied by the Registrant and its operating divisions throughout the
United States. In the 1995 Quarter, occupancy expense for all 37 facilities was
$471,087 compared to $201,227 for nine facilities operating during the 1994
Quarter.
Depreciation and amortization increased $152,995 to $391,620 for the
1995 Quarter. Depreciation and amortization directly related to Cedar was
$50,257. The balance of the increase is attributable primarily to increased
amortization of goodwill and debt issuance costs related to the acquisition of
Cedar.
Interest expense increased to $1,142,640 for the 1995 Quarter from
$472,203 during the 1994 Quarter primarily as a result of increased outstanding
indebtedness related to the acquisition of Cedar and increased carrying costs
related to the increase in accounts receivable and inventory as a result of
increased sales volume.
As a result of the foregoing, the Registrant had net income of
$1,339,185 in the 1995 Quarter compared to $472,672 in the 1994 Quarter. This
represents an increase of $866,513 or 183% in the 1995 Quarter as compared to
the 1994 Quarter.
FINANCIAL CONDITION
Primarily as a result of the acquisition of Cedar, the Registrant's
total assets increased $58,010,840 to $112,765,485 as of September 30, 1995
compared to $54,754,645 as of June 30, 1995. Of that increase, $40,773,369
represented additional accounts receivable and $16,052,348 represented
additional inventory acquired in the Cedar transaction. Goodwill associated with
the Cedar acquisition increased total other assets by $4,145,158 from June 30,
1995 to September 30, 1995.
Total current liabilities increased $34,726,307 to $70,072,109 as of
September 30, 1995 from $35,345,802 at June 30, 1995, as a result of additional
accounts payable and accrued expenses assumed in the amount of $44,063,183 which
related to the operations of Cedar. Simultaneously with the closing of the
Cedar Acquisition, Cedar's line of credit of approximately $9.4 million was
paid off with proceeds from the long-term portion of the Company's Credit
Facility (defined below).
The Registrant's total noncurrent liabilities increased to $30,516,935 as of
September 30, 1995 from $12,818,013 at June 30, 1995, as a result of
additional long-term debt of $15 million and the issuance of $3,510,000 of
subordinated notes ($500,000 of which is classified in current liabilities)
incurred in connection with the acquisition of Cedar.
Additional paid in capital increased by $4,245,911 from June 30, 1995 to
September 30, 1995, primarily as a result of the issuance of 515,000 shares of
the Registrant's Common Stock in connection with the acquisition of Cedar.
During the 1995 Quarter, retained earnings increased to $2,389,442 from
$1,050,257 as a result of earnings from operations.
12
<PAGE> 13
with the acquisition of Cedar. During the 1995 Quarter, retained earnings
increased to $2,389,442 from $1,050,257 as a result of earnings from operations.
LIQUIDITY AND CAPITAL RESOURCES
The Registrant has funded its operations to date primarily through cash
flow from operations, the private sale of equity securities and borrowings under
a revolving line of credit. As of September 30, 1995, the Registrant had cash
of $3,083,935, net accounts receivable of $70,653,577, working capital of
$27,598,813 and available funds under its Credit Facility of approximately
$13,000,000.
Cash provided by operating activities during the 1995 Quarter was
$3,521,266. This source of cash was a direct result of increased net income and
reductions in accounts receivable and inventory at a greater rate than
corresponding reductions in accounts payable.
Net cash used in investing activities for the 1995 Quarter was $13,221,
which was related to the acquisition of office equipment. Financing activities
for the 1995 Quarter used $1,221,788, primarily as a result of net repayments
under the revolving line of credit.
In connection with the July 1995 acquisition of substantially all of the
net assets of Cedar, CIC and Congress Financial Corporation (New England)
("Congress") amended CIC's then existing revolving credit facility with Congress
to provide increased available borrowings of up to $70 million (the "Credit
Facility"). The Credit Facility is collateralized by CIC's accounts receivable
and inventory and consists of a $27.5 million, 3-year term note and a $42.5
million revolving line of credit. Interest on the Credit Facility will accrue
at 1% over the prime rate of interest (8.75% at September 30, 1995) of
CoreStates Bank, N.A. The Credit Facility, which is used for inventory
financing and working capital, will expire in July 1998, and will be
automatically renewable for one year, at the option of Congress upon certain
terms and conditions. The Credit Facility requires that CIC maintain, at all
times, certain net worth and working capital levels and restricts acquisitions
or dispositions of property and the payment of dividends by the Registrant and
CIC. The Credit Facility is guaranteed by the Registrant.
The Registrant believes that cash flow from the operations of CIC, and
borrowings under the Credit Facility will provide sufficient cash to fund its
operations and meet current obligations for the short term and the remainder of
the fiscal year ending June 30, 1996. Should the Registrant expand its
operations or make acquisitions that would require funds in addition to its
existing liquid assets, cash flows or borrowings under its Credit Facility, it
may have to seek additional debt or equity financing. There can be no assurance
that the Registrant could obtain such financing or that such financing would be
available on terms acceptable to the Registrant.
SUBSEQUENT EVENT
At the Registrant's Annual Meeting of Stockholders held on October 12,
1995, the stockholders approved the following:
- - - - An increase in the number of authorized shares of capital stock from
12 million shares to 22 million shares, including an increase in the
number of authorized shares of Common Stock from 10 million to
20 million.
13
<PAGE> 14
- - - - Subject to determination by the Board of Directors that a reverse stock
split is in the best interest of the Registrant and its stockholders,
the stockholders approved a four-for-five reverse split of the
Registrant's issued and outstanding shares of Common Stock.
- - - - An amendment to the Registrant's 1994 Stock Option Plan (the "Plan") to
(i) increase the total number of shares reserved for issuance under the
Plan from 500,000 to 1,050,000 shares, and (ii) modify the formula
under the Plan to grant each non-employee director a nonqualified
option to purchase 10,000 shares (compared to the present 5,000
shares) of the Registrant's Common Stock upon election to the Board of
Directors or one year anniversary of election and continued service on
the Board.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
Exhibit 11 - Statement Re: Computation of Per Share Earnings
Exhibit 27 - Financial Data Schedule (for SEC use only)
(b) Reports on Form 8-K
During the period covered by this report, the Registrant filed one
Current Report on Form 8-K, on July 11, 1995, to report Items 2, 5 and 7 with
respect to events of July 1, 1995. No financial statements were included in
that report.
On September 11, 1995 the Company filed a Current Report on Form
8-K/A-1, dated September 8, 1995, amending the above-referenced Form 8-K and
reporting Item 7. Included in the Form 8-K/A-1 were the following financial
statements of Cedar Computer Center, Inc.:
Report of Independent Auditors
Balance Sheets as of June 30, 1995 and October 31, 1994
Statements of Income and Retained Earnings for the
Eight-Month Period ended June 30, 1995, the Year
Ended October 31, 1994, the Fifteen-Month Period
Ended October 31, 1993 and the Year Ended July 31, 1992
Statement of Cash Flows for the Eight-Month Period
Ended June 30, 1995, the Year Ended October 31,
1994, the Fifteen-Month Period Ended October 31,
1993 and the Year Ended July 31, 1992
Notes to Financial Statements
In addition, the Pro Forma Combined Financial Statements (Unaudited) of
the Registrant and Cedar Computer Center, Inc. as required by Article 11 of
Regulation S-X, were included in the Form 8-K/A-1.
14
<PAGE> 15
COMPUTER INTEGRATION CORP.
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.
COMPUTER INTEGRATION CORP.
-------------------------------------
(Registrant)
November 13, 1995
By JOHN CHISTE
----------------------------------
John Chiste
Chief Financial Officer
(Principal Financial and Principal
Accounting Officer)
15
<PAGE> 16
EXHIBIT INDEX
PAGE
----
Exhibit 11 - Statement Re: Computation of Per Share Earnings 18
Exhibit 27 - Financial Data Schedule (for SEC use only) 20
16
<PAGE> 1
EXHIBIT 11
17
<PAGE> 2
Computer Integration Corp.
and Subsidiary
Exhibit 11 - Statement Re: Computation of Per-Share Earnings
<TABLE>
<CAPTION>
THREE MONTHS ENDED
SEPTEMBER 30
1995 1994
----------------------------
<S> <C> <C>
Primary:
Average shares outstanding 6,915,000 6,400,377
Net effect of dilutive stock options and
warrants--based on the treasury stock
method using average market price of
$1.76 and $1.00 per share in 1995 and
1994, respectively 218,864 14,850
---------------------------
Total 7,133,864 6,415,227
===========================
Net income applicable to common stock $1,284,623 $ 433,614
===========================
Per-share amount, net income applicable
to common stock $ .18 $ .07
===========================
Fully diluted:
Average shares outstanding 6,915,000 6,400,377
Net effect of dilutive stock options and
warrants--based on the treasury stock
method using the period end market
price, if higher than average market
price 218,864 14,850
Assumed conversion of 9% Series A and
Series C cumulative, convertible,
redeemable preferred stock 1,270,000 988,696
---------------------------
Total 8,403,864 7,403,923
===========================
Net income applicable to common stock $1,284,623 $ 433,614
Add required dividends on Series A and
Series C cumulative, convertible,
redeemable preferred stock 54,562 39,058
---------------------------
Total $1,339,185 $ 472,672
===========================
Per share amount, net income applicable
to common stock $ .16 $ .06
===========================
</TABLE>
18
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
FINANCIAL STATEMENTS OF COMPUTER INTEGRATION CORP. FOR THE THREE MONTHS ENDED
SEPTEMBER 30, 1995, AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH
FINANCIAL STATEMENTS INCLUDED IN THE COMPANY'S FORM 10-Q FOR THE QUARTERLY
PERIOD ENDED SEPTEMBER 30, 1995.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUN-30-1996
<PERIOD-START> JUL-01-1995
<PERIOD-END> SEP-30-1995
<CASH> 3,083,935
<SECURITIES> 0
<RECEIVABLES> 70,653,577
<ALLOWANCES> 0
<INVENTORY> 23,073,282
<CURRENT-ASSETS> 97,670,922
<PP&E> 2,280,802
<DEPRECIATION> 0
<TOTAL-ASSETS> 112,765,485
<CURRENT-LIABILITIES> 70,072,109
<BONDS> 0
<COMMON> 6,915
0
19
<OTHER-SE> 12,169,507
<TOTAL-LIABILITY-AND-EQUITY> 112,765,485
<SALES> 120,910,198
<TOTAL-REVENUES> 120,910,198
<CGS> 109,736,904
<TOTAL-COSTS> 7,721,714
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,142,640
<INCOME-PRETAX> 2,308,940
<INCOME-TAX> 969,755
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,339,185
<EPS-PRIMARY> .18
<EPS-DILUTED> .16
</TABLE>
