<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 1O-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended MARCH 31, 1996
Commission File Number 0-17977
SUNRIVER CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE
(State or other Jurisdiction of Incorporation or Organization)
13-3469637
(I.R.S. Employer Identification No.)
9430 RESEARCH BLVD., BLDG. IV, SUITE 200, AUSTIN, TX
(Address of principal executive offices)
78759-6543
(Zip Code)
(512) 349-5800
(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, 1996, the Registrant had 45,888,969 shares of Common Stock, $.01
par value per share outstanding.
<PAGE>
PART 1 - FINANCIAL INFORMATION
ITEM 1 - FINANCIAL STATEMENTS
INDEX TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Consolidated Balance Sheets as of March 31, 1996 (unaudited) and
December 31, 1995..................................................... 3
Consolidated Statements of Operations (unaudited) for the three
months ended March 31, 1996 and 1995.................................. 4
Consolidated Statements of Cash Flows (unaudited) for the three
months ended March 31, 1996 and 1995.................................. 5
Notes to Consolidated Financial Statements (unaudited).................. 6
Page 2 of 17
<PAGE>
SUNRIVER CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
------------ ------------
(unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents.......................................................... $ 2,100,902 $ 448,237
Trade accounts receivable (including $2,438,000 and $6,206,007 from related
parties at March 31, 1996 and December 31, 1995, respectively), net............. 21,421,302 18,768,338
Inventories........................................................................ 25,875,190 25,758,040
Deferred income taxes.............................................................. 3,359,628 3,102,152
Prepaid expenses and other current assets.......................................... 401,773 1,571,617
------------ ------------
Total current assets....................................................... 53,158,795 49,648,384
Property and equipment, net........................................................... 12,263,304 12,114,000
Goodwill, net......................................................................... 10,299,229 10,607,714
Other assets.......................................................................... 4,189,431 3,910,235
------------ ------------
$ 79,910,759 $ 76,280,333
============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Notes payable...................................................................... $ 11,000,000 $ 8,000,000
Current portion of long-term debt (including $168,559 due to a related party)...... 7,101,725 6,630,531
Accounts payable................................................................... 15,177,859 14,506,202
Accrued expenses................................................................... 4,765,428 4,255,508
Deferred revenue................................................................... 393,684 826,844
------------ ------------
Total current liabilities.................................................. 38,438,696 34,219,085
Long-term liabilities:
Long-term debt, less current maturities (including $8,000,000 of
debt to a related party at March 31, 1996 and December 31, 1995)................ 20,483,864 22,624,625
Deferred income taxes.............................................................. 2,652,850 2,213,198
Other ............................................................................. 748,420 831,775
------------ ------------
Total long-term liabilities................................................ 23,885,134 25,669,598
------------ ------------
Total liabilities..................................................... 62,323,830 59,888,683
Commitments and contingencies
Mandatorily redeemable preferred stock of subsidiary.................................. 3,554,692 3,554,692
Stockholders' equity:
Preferred stock, $0.01 par value, 1,000,000 shares authorized, none issued......... - -
Common stock, $0.01 par value, 60,000,000 shares authorized, 45,888,969 and
45,550,214 shares issued at March 31, 1996 and December 31, 1995, respectively.. 458,890 455,502
Additional paid-in capital......................................................... 24,724,545 23,769,379
Accumulated deficit................................................................ (11,151,198) (11,387,923)
------------ ------------
Total stockholders' equity................................................. 14,032,237 12,836,958
------------ ------------
$ 79,910,759 $ 76,280,333
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
Page 3 of 17
<PAGE>
SUNRIVER CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months Ended March 31,
<TABLE>
<CAPTION>
1996 1995
------------ ------------
(unaudited) (unaudited)
<S> <C> <C>
Sales (including sales to a related party of $7,205,000
and $8,482,000 in 1996 and 1995, respectively)....................... $ 38,407,167 $ 19,166,497
Cost of sales.............................................................. 29,666,386 13,615,278
------------ ------------
Gross margin.................................................... 8,740,781 5,551,219
Operating expenses:
Sales and marketing..................................................... 2,525,447 1,758,375
General and administrative.............................................. 2,298,462 1,216,841
Research and development................................................ 1,862,988 1,326,360
------------ ------------
Total operating expenses............................................. 6,686,897 4,301,576
------------ ------------
Operating income................................................ 2,053,884 1,249,643
Other expense:
Interest expense........................................................ 1,072,718 304,080
Other................................................................... 210,268 32,815
------------ ------------
Total other expense.................................................. 1,282,986 336,895
------------ ------------
Income before income taxes and discontinued operations.................... 770,898 912,748
Income tax expense......................................................... 410,000 347,550
------------ ------------
Income before discontinued operations...................................... 360,898 565,198
Income from discontinued operations........................................ - 1,240,283
------------ ------------
Net income................................................................. 360,898 1,805,481
Dividend on preferred stock of subsidiary.................................. 124,173 -
Accretion to preferred stock of subsidiary................................. - 196,016
------------ ------------
Earnings available for common shareholders................................. $ 236,725 $ 1,609,465
============ ============
Weighted average common shares outstanding................................. 49,253,619 40,158,218
============ ============
Earnings per common share before extraordinary items:
Continuing operations................................................... $ 0.00 $ 0.01
Discontinued operations................................................. 0.00 0.03
------------ ------------
Earnings per common share.................................................. $ 0.00 $ 0.04
============ ============
</TABLE>
The accompanying notes are an integral part of these financial statements.
Page 4 of 17
<PAGE>
SUNRIVER CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
For the Three Months Ended March 31,
<TABLE>
<CAPTION>
1996 1995
------------- ------------
(unaudited) (unaudited)
<S> <C> <C>
Cash flows from operating activities:
Net income................................................... $ 360,898 $ 1,805,481
Adjustments to reconcile net income to net cash provided by
(used in) operating activities:
Income from discontinued operations....................... (1,240,283)
Depreciation and amortization............................. 986,218 704,830
Deferred revenues......................................... (433,160)
Provision for doubtful accounts........................... (499,283) 66,631
Provision for excess and obsolete inventory............... 654,264 61,314
Estimated value of compensatory warrants.................. 74,700
Changes in assets and liabilities:
Trade accounts receivable................................. (2,153,681) (5,501,851)
Inventories............................................... (771,414) 1,158,295
Other assets.............................................. 1,163,698 88,880
Accounts payable and accrued expenses..................... 1,614,936 1,265,380
------------- ------------
Net cash provided by (used in) operating activities.. 997,176 (1,591,323)
------------- ------------
Cash flows from investing activities:
Capital expenditures......................................... (545,610) (163,343)
------------- ------------
Net cash used in investing activities................ (545,610) (163,343)
------------- ------------
Cash flows from financing activities:
Proceeds from issuance of common stock....................... 1,066,666 694,094
Decrease in short-term debt, net............................. (30,000)
Proceeds from debt issuance.................................. 1,500,000
Purchase of treasury stock................................... (1,305,000)
Net change in revolving loan payable......................... 1,500,000 952,966
Payment on term loan......................................... (1,500,000)
Payments on capital leases................................... (30,567)
------------- ------------
Net cash provided by financing activities....... 1,201,099 1,647,060
------------- ------------
Net increase (decrease) in cash and cash equivalents............ 1,652,665 (107,606)
Cash and cash equivalents at beginning of period................ 448,237 111,081
------------- ------------
Cash and cash equivalents at end of period...................... $ 2,100,902 $ 3,475
============= ============
Non-cash transactions:
Accretion to preferred stock of subsidiary................... $ 196,016
Dividend on preferred stock of subsidiary.................... $ 124,173
Conversion of notes payable to common stock.................. 109,000
Estimated value of compensatory warrants..................... 490,625
Issuance of common stock for consulting services............. 893,364
Cash paid for:
Interest..................................................... 781,540 304,080
Taxes........................................................ 205,352 347,550
</TABLE>
The accompanying notes are an integral part of these financial statements.
Page 5 of 17
<PAGE>
SUNRIVER CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)
1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 1O-Q and Rule 10-01 of
Regulation S-X. Accordingly, they do not include all of the information and
footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of only normal recurring accruals) considered necessary for a fair presentation
have been included. Certain prior period amounts in these financial statements
have been re-classified to conform with current period presentation. Operating
results for the three month period ended March 31, 1996 are not necessarily
indicative of the results that may be expected for the year ending December 31,
1996. For further information refer to the consolidated financial statements
and footnotes thereto in the Company's Annual Report on Form 10-K for the year
ended December 31, 1995, which are incorporated by reference herein.
2. BACKGROUND
SunRiver Corporation (the "Company") has two operating subsidiaries, SunRiver
Data Systems, Inc. ("SunRiver Data") and TradeWave Corporation ("TradeWave").
SunRiver Data develops, manufactures and markets hardware, firmware and
software for corporate computing environments including legacy, UNIX, Windows
and Internet applications. SunRiver Data's strategy is to offer a complete
family of products which include network computers, graphics, text and Internet
terminals. TradeWave develops and markets a suite of secure Web access software
products, TradeVPI. In addition, TradeWave owns and operates the Galaxy, an
Internet search directory and it offers Virtual Private Internet ("VPI") and
electronic commerce consulting services.
Page 6 of 17
<PAGE>
3. INVENTORIES
Inventories are stated at the lower of cost or market. Cost is determined on a
first-in first-out basis. The major components of inventories are as follows:
<TABLE>
<CAPTION>
March 31, December 31,
1996 1995
------------ ------------
<S> <C> <C>
Raw Materials and purchase components........ $ 15,395,066 $ 13,280,390
Finished goods............................... 9,905,869 11,901,819
Demonstration equipment...................... 244,616 222,130
Service parts................................ 329,639 353,701
------------ ------------
$ 25,875,190 $ 25,758,040
============ ============
</TABLE>
4. FINANCINGS
Regulation S Offerings
- - ----------------------
The Company completed several offerings of securities under Regulation S of the
Securities Act of 1933 during the first quarter of 1996 as described below:
. In January 1996, the Company received gross proceeds of $1M by selling
594,243 shares of Common Stock for $1.68 per share. In connection with this
offering, the Company issued warrants to financial advisors to purchase
50,000 shares of Common Stock at an exercise price of $2.69, valued at
$77K and exercisable through January 3, 1999. Approximately $0.5M of
the proceeds of this offering was used by TradeWave for working capital. The
balance of the proceeds of this offering was used by the Company to
repurchase 275,000 restricted shares of its Common Stock at $1.80 per share.
. In January 1996, the Company received gross proceeds of $0.5M by selling
convertible non-interest bearing notes which require the holders to convert
the notes by March 10, 1997 into a maximum of 312,500 shares of Common Stock.
In connection with this offering, the Company issued warrants to financial
advisors to purchase 50,000 shares of Common Stock at an exercise price of
$2.74 per share, valued at $85K, exercisable through January 26, 1999. The
proceeds of this offering were used by the Company to repurchase 273,333
restricted shares of its Common Stock at $1.80 per share.
. In January 1996, the Company received gross proceeds of $1M by selling
convertible non-interest bearing notes which require the holders to convert
the notes by March 10, 1997 into a maximum of 625,000 shares of Common Stock.
In connection with this offering, the Company issued warrants to financial
advisors to purchase 100,000 shares of Common Stock at an exercise price of
$2.69 per share, valued at $0.2M, exercisable through February 7, 1999. A
portion of the proceeds of this offering, $0.3M, was used by the Company
to repurchase 176,667 restricted shares of its Common Stock at $1.80 per
share.
Page 7 of 17
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
RESULTS OF OPERATIONS
First quarter of 1996 compared with first quarter 1995
- - ------------------------------------------------------
Total revenues - Revenue for the three months ended March 31, 1996 was
- - --------------
$38.4M, as compared to $19.2M for the three months ended March 31,
1995.
Revenue from the Company's General Display Terminals increased nearly four-fold
from approximately $7.7M in 1995 to approximately $29.8M in 1996. Offsetting
this increase is a decrease in sales to NCR due to the disruption caused by
the breaking-up of AT&T and the resulting reorganization of NCR.
Page 8 of 17
<PAGE>
Sales of the Company's Network Graphics Displays for the three months ended
March 31, 1996 decreased 16.4% to approximately $4.1M as compared to sales of
approximately $4.9M for the three months ended March 31, 1995. This decline was
anticipated and relates to the completion, during the first quarter of 1996, of
specific projects undertaken by NCR.
TradeWave revenue for the three months ended March 31, 1996 were $0.7M, of
which $0.4M was derived from TradeWave's subcontracting work under a contract
with the U.S. Department of Defense which is scheduled to expire in September
1996. The balance of $0.4M of revenue was derived from licensing and
commercial contract work.
The Company formed the GAI Partnership in May, 1995. The Company believes that,
in the declining Pick market, it is beneficial to create a more significant
market presence by partnering with GAI. As a result, the GAI Partnership is one
of the largest providers in the Pick marketplace. The GAI Partnership has
allowed the Company to reduce its active participation in the Pick systems
business in order to devote more time to its core businesses. The Company
recorded revenues from the GAI Partnership and post sale support of
approximately $1.2M for the first quarter 1996 versus $4.9M for the comparable
period in 1995. The contribution of Pick related revenues to gross margin has
increased approximately 7% from 1995 to 1996.
Page 9 of 17
<PAGE>
NCR was the most significant customer for the Company's products, accounting for
17%, or approximately $6.5M, of revenue for the three months ended March 31,
1996. Digital Equipment Corporation accounted for 10% of the Company's revenue
for the first quarter, 1996.
Gross margin - Gross margin for the three months ended March 31, 1996 was
- - ------------
$8.7M (22.8% of revenue), as compared to gross margin for the three months ended
March 31, 1995 of $5.6M (29% of revenue). The decline in gross margin in 1996,
as compared to gross margin for 1995, stems primarily from a shift in revenue
mix among the Company's higher margin Pick systems and post-sale support
business and the Company's lower margin Network Graphics Displays and General
Display Terminal products.
Gross profit margins in future periods may be affected by several factors such
as sales volume, shifts in product mix, pricing strategies, absorption of
manufacturing costs, etc.
Page 10 of 17
<PAGE>
Sales and marketing expenses - increased approximately 44% ($0.8M) primarily due
- - ----------------------------
to the TradeWave Acquisition, as well as increases in advertising and
public relations activities to develop channel partners and expand market
presence. In addition, the Company opened a sales and marketing office in
Europe.
General and administrative expenses - increased approximately $1.1M, to $2.3M
- - -----------------------------------
(6% of revenue) for the quarter ended March 31, 1996 from $1.2M for the quarter
ended March 31, 1995. The increase stems from expenses associated with TradeWave
as well as amortization of goodwill associated with the Company's acquisition of
the VT and Dorio product lines.
Research and development expenses - for the first quarter of 1996 increased
- - ---------------------------------
$0.5M over 1995. R&D expenses were $1.9M and $1.3M for the three months ended
March 31, 1996 and 1995 respectively. Research and development efforts are being
expended on a line of network and Internet access computers and to provide
Internet products and services based on a secure technology platform that can be
customized and packaged together with specific modules to meet customer
requirements.
Page 11 of 17
<PAGE>
Other expense - Interest expense (net of interest income) amounted to $1.1M
- - -------------
for the three months ended March 31, 1996 compared to $0.3M for 1995. The
increase is wholly attributable to the Digital Acquisition, financed by the
Company through the Chase Manhattan Bank N.A.("Chase") (the "Chase Credit
Line"), which financing was composed of both a term and revolving credit line.
See "-Liquidity and Capital Resources."
Income tax expense - Income taxes are provided in accordance with the liability
- - ------------------
method of accounting for income taxes pursuant to the Financial Accounting
Standards Board Statement No. 109. For the three months ended March 31, 1996,
the effective tax rate was 53.2% due to the tax treatment of the amortization
of goodwill associated with the Digital Acquisition. The effective tax rate for
the first quarter, 1995, was 38%.
Net income - For the three months ended March 31, 1996, net income was $0.4M
- - ----------
(1% of revenue), compared to net income of $1.8M for the comparable period,
1995. Operating income increased 64.4% from approximately $1.3M for the quarter
ended March 31, 1995, to approximately $2.1M for the quarter ended March 31,
1996.
Earnings available for common shareholders - Earnings available for common
- - ------------------------------------------
shareholders declined from $1.6M ($0.04 per share) for the three months ended
March 31, 1995, to $0.2M ($0.0048 per share) for the three months ended March
31, 1996. For the quarter ended March 31, 1995, earnings available for common
shareholders included accretion, in the amount of $0.2M on mandatorily
redeemable preferred stock of the Company held by NCR. In connection with the
Digital Acquisition, NCR agreed to refinance the preferred stock whereby the
Company agreed to pay NCR $0.5M per annum; and which is being accounted for as a
dividend on the preferred stock. For the quarter ended March 31, 1996, earnings
available for common shareholders included a dividend on the preferred stock of
$0.1M.
IMPACT OF INFLATION
The Company has not been adversely affected by inflation because technological
advances and competition within the microcomputer industry have generally caused
prices of products sold by the Company to decline. The Company has flexibility
in its pricing and could, if necessary, pass along price changes to most of its
customers.
LIQUIDITY AND CAPITAL RESOURCES
Working capital was $14.7M as of March 31, 1996 and $15.4M as of December 31,
1995. On October 23, 1995, the Company's $14M revolving credit loan arrangement
with Congress Financial Corporation (the "Congress Credit Line") was replaced by
a $40M facility provided by Chase in connection with the Digital Acquisition.
The Chase Credit Line consists of a $20M revolving line of credit ("Revolving
Loan") and a $20M term loan ("Term Loan"). Borrowing under the Revolving Loan is
based on a borrowing base formula of up to 80% of eligible receivables, plus 50%
of delineated eligible inventory, plus 30% of non-delineated eligible inventory.
Up to $7.5M is available under the Revolving Loan for letters of credit. At
December 31, 1995, the Company owed Chase $28M, of which $8M was owed under the
Revolving Loan and $20M was owed under the Term Loan. At March 31, 1996, the
Company owed
Page 12 of 17
<PAGE>
Chase $28M, of which $9.5M was owed under the Revolving Loan and $18.5M was owed
under the Term Loan. At such date, the Company had approximately $6.5M of
availability remaining under the Revolving Loan. As a result of the borrowing-
base formula, the credit available to the Company could be adversely restricted
in the event the Company's sales decline.
Net cash provided by operating activities during the three months ended March
31, 1996 amounted to $1M. This provision was primarily attributable to a
decrease of approximately $2.2M and $0.8M in trade receivables and
inventory respectively; offset by decreases in accounts payable and accrued
expenses of approximately $1.6M. Net cash used in investing activities for
the three months ended March 31, 1996 was $0.5M and related to the
acquisition of capital assets. Net cash provided from financing activities was
$1.2M for the quarter ended March 31, 1996 and was composed of $1.5M
from the Revolving Loan to finance the working capital needs of SunRiver Data,
offset by a decrease of $1.5M in the Term Loan due to scheduled repayment;
$1.1M from the issuance of stock, of which approximately $0.5M was used to
provide working capital for TradeWave and the balance used by the Company to
repurchase 275,000 restricted shares of its Common Stock at $1.80 per share; and
the issuance of convertible debt of $1.5M of which $0.8M was used to purchase
450,000 restricted shares of the Company's Common Stock at $1.80 per share.
In an attempt to secure the working capital required for TradeWave, the Company
is discussing various avenues of financing, including commercial lending and
equity investment. There can be no assurance that such efforts will be
successful or on terms beneficial to TradeWave or the Company.
Page 13 of 17
<PAGE>
At March 31, 1996, the Company's total long-term debt was approximately $27.6M,
and the current portion of the long-term debt was approximately $7.1M. The
acquisitions made by the Company in 1994 and 1995, along with the implementation
of management's strategy, have positioned the Company as the world's second
largest provider of General Display Terminals (based on 1994 published industry
data) and as a participant in the emerging market known as the Internet. The
Company believes that cash generated by SunRiver Data's operations will be
sufficient to pay the Company's current and long-term debts, when due.
Page 14 of 17
<PAGE>
FORWARD-LOOKING INFORMATION MAY PROVE INACCURATE
This report contains forward-looking statements and information that are based
on management's beliefs as well as assumptions made by and information currently
available to management. When used in this document, the words "anticipate,"
believe," "estimate," and "expect," and similar expressions are intended to
identify forward-looking statements. Such statements reflect the Company's
current views with respect to future events and are subject to certain risks,
uncertainties and assumptions. Should one or more of these risks or
uncertainties materialize, or should underlying assumptions prove incorrect,
actual results may vary materially from those anticipated, believed, estimated
or expected. The Company does not intend to update these forward-looking
statements and information.
NEW ACCOUNTING STANDARDS
In October 1995, the FASB issued Statement 123, "Accounting for Stock-Based
Compensation" ("Statement 123"), which establishes fair value-based accounting
and reporting standards for all transactions in which a company acquires goods
or services by issuing its equity securities, including all arrangements under
which employees receive stock based compensation. Statement 123 encourages, but
does not require, employers to adopt fair value accounting to recognize
compensation expense for grants under stock-based compensation plans. However,
companies must comply with the disclosure requirements set forth in statement
123 which is effective for fiscal years beginning after December 31, 1995. The
Company expects to adopt only the reporting standards of Statement 123.
In March 1995, the FASB issued Statement 121, "Accounting for the Impairment of
Long-Lived Assets and for Long-lived Assets to be Disposed Of" ("Statement
121"), which addresses the accounting for the impairment of long-lived assets,
certain identifiable intangibles and goodwill related to those assets to be held
and used. It also addresses the accounting for long-lived
Page 15 of 17
<PAGE>
assets and certain identifiable intangibles to be disposed of. Statement 121 has
an effective date of January 1, 1996. The Company does not expect application of
Statement 121 to have a significant impact upon the Company's financial
statements.
PART II - OTHER INFORMATION
ITEM 5. OTHER INFORMATION
The Company is in the process of registering approximately 13.5 million shares
of its Common Stock under the Securities Act of 1933, as amended, consisting of
approximately 11.2 million shares, already outstanding and owned by selling
stockholders, which may be offered from time to time by such stockholders,
approximately 600,000 shares which may be issued upon exercise of certain
warrants and approximately 1.7 million shares which may be issued and offered
from time to time by the Company. It is currently contemplated that officers and
directors of the Company will offer and sell the shares being registered for the
Company without using the services of an underwriter. Neither an underwriter nor
a coordinating broker will be acting in connection with offers and sales of the
shares being registered for the selling stockholders. The Company expects the
registration of such shares to become effective in the second quarter of 1996.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
--------
Exhibit 11 - Computation of Per Share Earnings
Exhibit 27 - Financial Data Schedule
(b) Reports on Form 8-K
-------------------
The Registrant delivered for filing with the Commission on January 8, 1996 an
amended Current Report on Form 8-K/A, dated October 23, 1995 (the date of the
earliest event reported), relating to the Digital Acquisition under the
following item:
Item 7. Financial Statements and Exhibits.
No other reports on Form 8-K were filed by the Registrant during the quarter
ended March 31, 1996.
Page 16 of 17
<PAGE>
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.
Dated: May 12, 1996
SunRiver Corporation
By: /s/ Toni McElroy
--------------------------------
Toni McElroy
Vice President, Finance and Chief Financial Officer
Page 17 of 17
<PAGE>
EXHIBIT 11
COMPUTATION OF PER SHARE EARNINGS
SUNRIVER CORPORATION AND CONSOLIDATED SUBSIDIARY COMPANIES
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended March 31,
-------------------------------
1996 1995
------------- ------------
<S> <C> <C>
Primary earnings per common share:
Income from continuing operations........................ $ 360,898 $ 565,198
Preferred stock dividend................................. (124,173) -
Preferred stock accretion................................ - (196,016)
------------- ------------
Income before discontinued operations.................... 236,725 369,182
Discontinued operations.................................. - 1,240,283
------------- ------------
Earnings available for common shareholders............... $ 236,725 $ 1,609,465
============= ============
Weighted average shares outstanding during the period.... 45,927,101 40,054,600
Common stock equivalents................................. 3,326,518 103,618
------------- ------------
Weighted average common shares outstanding............... 49,253,619 40,158,218
============= ============
Income before discontinued operations.................... $ 0.00 $ 0.01
Discontinued operations.................................. 0.00 0.03
------------- ------------
Primary earnings per common share........................ $ 0.00 $ 0.04
============= ============
Primary earnings per common share:
Income from continuing operations........................ $ 360,898 $ 565,198
Preferred stock dividend................................. (124,173) -
Preferred stock accretion................................ - (196,016)
------------- ------------
Income before discontinued operations.................... 236,725 369,182
Discontinued operations.................................. 1,240,283
------------- ------------
Earnings available for common shareholders............... $ 236,725 $ 1,609,465
============= ============
Weighted average shares outstanding during the period.... 45,927,101 40,054,600
Common stock equivalents................................. 3,326,518 103,618
------------- ------------
Weighted average common shares outstanding............... 49,253,619 40,158,218
============= ============
Income before discontinued operations.................... $ 0.00 $ 0.01
Discontinued operations.................................. 0.00 0.03
------------- ------------
Primary earnings per common share........................ $ 0.00 $ 0.04
============= ============
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
STATEMENTS FOR THE PERIOD ENDED MARCH 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY
BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 2,100,902
<SECURITIES> 0
<RECEIVABLES> 22,201,334
<ALLOWANCES> 780,032
<INVENTORY> 25,875,190
<CURRENT-ASSETS> 53,158,795
<PP&E> 15,026,995
<DEPRECIATION> 2,763,691
<TOTAL-ASSETS> 79,910,759
<CURRENT-LIABILITIES> 38,438,696
<BONDS> 20,483,864
3,554,692
0
<COMMON> 458,890
<OTHER-SE> 13,573,347
<TOTAL-LIABILITY-AND-EQUITY> 79,910,759
<SALES> 38,407,167
<TOTAL-REVENUES> 38,407,167
<CGS> 28,775,285
<TOTAL-COSTS> 29,666,386
<OTHER-EXPENSES> 7,969,883
<LOSS-PROVISION> (499,283)
<INTEREST-EXPENSE> 1,072,718
<INCOME-PRETAX> 770,898
<INCOME-TAX> 410,000
<INCOME-CONTINUING> 360,898
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 360,898
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
