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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For Quarterly Period Ended Commission File Number:
March 31, 1999 0-22065
RADIANT SYSTEMS, INC.
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(Exact name of registrant as specified in its charter)
Georgia 11-2749765
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3925 Brookside Parkway, Alpharetta, Georgia 30022
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(Address of principal executive offices) (Zip Code)
Issuer's telephone number, including area code: (770) 576-6000
N/A
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(Former name, former address and former fiscal year, if changed since last
report)
Check whether the issuer (1) filed all reports required to be filed by Section
13 or 15(d) of the Securities Exchange Act of 1934 during the past 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
---- ----
The number of the registrant's shares outstanding as of May 10, 1999 was
16,316,014.
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RADIANT SYSTEMS, INC. AND SUBSIDIARIES
FORM 10-Q
TABLE OF CONTENTS
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<TABLE>
<CAPTION>
PART I: FINANCIAL INFORMATION PAGE NO.
Item 1: Financial Statements
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Condensed Consolidated Balance Sheets as of March 31, 1999 and December 31, 1998 3
Condensed Consolidated Statements of Operations for the Three Months Ended March 31, 1999 and 1998 4
Condensed Consolidated Statements of Cash Flows for the Three Months Ended March 31, 1999 and 1998 5
Notes to Condensed Consolidated Financial Statements 6-8
Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations 9-13
Item 3: Quantitative and Qualitative Disclosures About Market Risks 13
PART II: OTHER INFORMATION
Item 6: Exhibits and Reports on Form 8-K 14
Signature 14
</TABLE>
2
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
- -----------------------------
RADIANT SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share data)
<TABLE>
<CAPTION>
March 31, 1999 December 31, 1998
-------------- -----------------
(unaudited) (audited)
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents................................................... $31,169 $25,537
Accounts receivable, net of allowance for doubtful accounts of
$800 and $750............................................................. 18,404 17,645
Inventories................................................................... 10,968 11,965
Other short-term assets....................................................... 2,738 2,997
------- -------
Total current assets..................................... 63,279 58,144
Property and equipment, net................................................... 8,110 8,341
Software development costs, net............................................... 4,393 3,718
Intangibles, net.............................................................. 5,958 6,271
Other long-termassets......................................................... 7,465 7,692
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$89,205 $84,166
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities
Accounts payable............................................................ $ 6,152 $ 4,844
Accrued liabilities......................................................... 4,134 3,210
Client deposits and unearned revenue........................................ 4,392 2,600
Current portion of long-term debt........................................... 160 161
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Total current liabilities................................ 14,838 10,815
Long-term debt, less current portion.......................................... 4,147 4,106
-------- --------
Total liabilities........................................ 18,985 14,921
Shareholders' equity
Common stock, no par value; 30,000,000 shares authorized;
16,144,400 and 15,505,565 shares issued and outstanding................. - -
Additional paid-in
capital................................................................. 92,970 92,144
Deferred compensation...................................................... (328) (353)
Accumulated deficit........................................................ (22,422) (22,546)
-------- --------
Total shareholders' equity............................. 70,220 69,245
-------- --------
$ 89,205 $ 84,166
======== ========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements
3
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RADIANT SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
Unaudited
<TABLE>
<CAPTION>
For the three months ended
March 31,
----------------------------
1999 1998
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Revenues:
System sales............................................. $17,235 $16,647
Client support, maintenance and other services........... 7,039 4,897
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Total revenues........................................ 24,274 21,544
Cost of Revenues:
System sales............................................. 8,484 7,996
Client support, maintenance and other services........... 5,886 4,154
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Total cost of revenues................................. 14,370 12,150
Gross Profit............................................... 9,904 9,394
Operating expenses:
Product development...................................... 2,575 2,793
Sales and marketing...................................... 2,927 2,823
Depreciation and amortization............................ 1,379 987
General and administrative............................... 3,159 3,051
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Loss from operations....................................... (136) (260)
Interest income, net..................................... (343) (539)
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Income before income tax provision......................... 207 279
Income tax provision..................................... 83 111
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Net income................................................. $ 124 $ 168
============ ===========
Basic and diluted earnings per share....................... $ 0.01 $ 0.01
============ ===========
Weighted average shares outstanding
Basic 16,078 15,926
============ ===========
Diluted 17,491 18,624
============ ===========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements
4
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RADIANT SYSTEMS, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
Unaudited
<TABLE>
<CAPTION>
For the three months ended
March 31,
--------------------------
1999 1998
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CASH FLOWS FROM OPERATING ACTIVITIES:
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Net income..................................................................... $ 124 $ 168
Adjustments to reconcile net income to net cash provided by
(used in )operating activities:
Amortization of deferred compensation.......................................... 25 45
Depreciation and amortization.................................................. 1,557 987
Imputed interest on shareholder note........................................... 57 57
Changes in assets and liabilities:
Accounts receivable........................................................ (758) (3,207)
Inventories................................................................ 994 (2,891)
Other assets............................................................... 382 (62)
Accounts payable........................................................... 1,307 (511)
Accrued liabilities........................................................ 924 (2,007)
Client deposits and deferred revenue....................................... 1,793 (1,338)
--------- ---------
Net cash provided by (used in) operating activities.................. 6,405 (8,759)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchases of property and equipment............................................ (729) (1,786)
Capitalized software development costs......................................... (853) (643)
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Net cash used in investing activities................................ (1,582) (2,429)
CASH FLOWS FROM FINANCING ACTIVITIES:
Exercise of employee stock options............................................. 1,340 666
Repurchase of common stock..................................................... (514) --
Shareholder loans.............................................................. -- (500)
Principal payments under capital lease obligations............................. (12) (71)
Principal payments under long-term debt........................................ (4) (383)
--------- ---------
Net cash provided by (used in) financing activities.................. 810 (288)
--------- ---------
Increase (decrease) in cash and cash equivalents............................... 5,633 (11,476)
Cash and cash equivalents at beginning of year................................. 25,536 47,567
--------- ---------
Cash and cash equivalents at end of period..................................... $31,169 $36,091
========= =========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the period for:
Interest..................................................................... $ 3 $ 76
--------- ---------
Income taxes................................................................. $ -- $ 1,556
========= =========
</TABLE>
The accompanying notes are an integral part of these condensed consolidated
financial statements
5
<PAGE>
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been
prepared in accordance with generally accepted accounting principles applicable
to interim financial statements. Accordingly, they do not include all of the
information and notes required by generally accepted accounting principles for
complete financial statements. In the opinion of Radiant Systems, Inc. (the
"Company") management, these condensed consolidated financial statements contain
all adjustments (which comprise only normal and recurring accruals) necessary
for fair presentation of the consolidated financial condition and results of
operations for these periods. The interim results for the three months ended
March 31, 1999 are not necessarily indicative of the results to be expected for
the full year. These statements should be read in conjunction with the Company's
consolidated financial statements as filed in its Annual Report on Form 10-K for
the year ended December 31, 1998.
2. Net Income Per Share
Basic net income per common share is computed by dividing net income by the
weighted-average number of shares outstanding. Diluted net income per share
includes the dilutive effect of stock options. The following table represents a
reconciliation of basic and dilutive weighted average shares and earnings per
share.
<TABLE>
<CAPTION>
For the three months
ended March 31,
----------------------------------
000s omitted except per share data 1999 1998
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<S> <C> <C>
Basic weighted average shares outstanding.............. 16,078 15,926
Shares of common stock assumed
issued upon exercise of common
stock equivalents using the "treasury
stock" method as it applies to the
computation of diluted earnings
per share............................................ 1,413 2,698
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Diluted weighted average shares
outstanding......................................... 17,491 18,624
======= =======
Net earnings used in the
computation of basic and diluted
earnings per share.................................. $ 124 $ 168
======= =======
Earnings per share:
Basic........................................... $ 0.01 $ 0.01
======= =======
Diluted......................................... $ 0.01 $ 0.01
======= =======
</TABLE>
For the three months ended March 31, 1999 and March 31, 1998, options to
purchase approximately 83,000 and 10,000 shares of common stock, respectively,
were excluded from the above reconciliation, as the options were anti-dilutive
for the periods then ended.
3. Segment Reporting Data
The Company operates through two primary reportable segments (i) Global
Solutions and (ii) Regional Solutions. Although both groups provide enterprise-
wide technology solutions to the retail industry, the distinguishing factor
between them is primarily the size of the clients served and the nature of the
services
6
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performed. Global Solutions' clients tend to be clients with greater than fifty
owned and operated sites, while Regional Solutions' clients typically have less
than fifty owned and operated sites. Additionally, the purchasing behavior of
the Global Solutions clients is typically characterized by the use of fewer,
larger contracts. These contracts typically involve longer negotiating cycles,
and often require the dedication of substantial amounts of working capital and
other resources.
The accounting policies of the segments are substantially the same as those
described in the summary of significant accounting polices included in the
Company's Annual Report on Form 10-K for the year ended December 31, 1998. The
Company's management evaluates the performance of the segments based on an
internal measure of contribution margin, or income and loss from operations,
before certain allocated costs of development and corporate overhead.
The Company accounts for intersegment sales and transfers as if the sales or
transfers were to third parties, that is, at current market prices.
The Other nonreportable segment includes miscellaneous businesses, certain
unallocated corporate operating expenses and the elimination of intersegment
sales.
The summary of the Company's operating segments is as follows (in thousands):
<TABLE>
<CAPTION>
For the three months ended March 31, 1999
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Global Regional
Solutions Solutions Other Consolidation
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<S> <C> <C> <C> <C>
Revenues $ 20,531 $ 3,743 -- $ 24,274
Contribution margin 5,811 (252) $ (689) 4,870
Operating income (loss) 1,730 (1,177) (689) (136)
For the three months ended March 31, 1998
---------------------------------------------------------------------------------------
Global Regional
Solutions Solutions Other Consolidation
----------------- ----------------- ----------------- -------------------
Revenues $ 18,013 $ 3,531 -- $ 21,544
Contribution margin 4,077 (331) -- 3,746
Operating income (loss) 575 (835) -- (260)
</TABLE>
Identifiable assets allocated between the segments are comprised primarily of
accounts receivable, inventory and intangible assets. There have been no
material changes in these balances from those reported in the Company's Annual
Report on Form 10-K for the year ended December 31, 1998.
4. Accounting Pronouncements
In the first quarter of 1998, the Company adopted Statement of Financial
Accounting Standards No. 130, "Reporting Comprehensive Income" (SFAS 130). SFAS
130 establishes standards for reporting and disclosing comprehensive income and
its components. Comprehensive income is defined as the change in equity (net
assets) of a business enterprise during a period from transactions and other
events and circumstances from non-owner sources. In addition to net income,
SFAS 130 requires the reporting of other comprehensive income, defined as
revenues, expenses, gains and losses that under generally accepted accounting
principles are not included in net income. As of March 31, 1999, the Company
had no items of other comprehensive income.
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative Instruments
and Hedging Activities," (SFAS 133) which established accounting and reporting
standards requiring that every derivative instrument (including certain
derivative instruments embedded in other contracts) be recorded in the balance
sheet as either an asset or liability measured at its fair value, and changes in
the derivative fair value be recognized currently in earnings unless specific
accounting criteria are met. The Company plans to adopt SFAS 133 in the first
quarter of fiscal 2000.
7
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Management does not believe that adoption of this statement will have a material
effect on the consolidated financial statements of the Company.
In March 1998, the American Institute of Certified Public Accountants issued
Statement of Position ("SOP") 98-1, "Accounting for the Costs of Computer
Software Developed or Obtained for Internal Use." Under SOP 98-1, computer
software costs incurred in the preliminary project state are expensed as
incurred. Additional, specified upgrades and enhancements may be capitalized;
however, external costs related to maintenance, unspecified upgrades, and
enhancements should be recognized as expense over the contract period on a
systematic basis. Internal costs incurred for maintenance should be expensed as
incurred. SOP 98-1 is effective for the Company's fiscal year beginning January
1, 1999. The adoption of SOP 98-1 during the first quarter ended March 31, 1999
did not have a material effect on the consolidated financial statements of the
Company.
8
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Item 2. Management's Discussion and Analysis of Financial Condition and Results
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of Operations
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Overview
The Company provides enterprise-wide technology solutions to the retail
industry. The Company offers fully integrated retail automation solutions
including point of sale systems, consumer-activated ordering systems, back
office management systems and headquarters-based management systems. The
Company's products enable retailers to interact electronically with their
clients, capture detailed data at the point of sale, manage labor and inventory
at their sites and communicate electronically with their sites, vendors and
credit networks. In addition, the Company offers system planning, design and
implementation services to tailor its solutions to each retailer's
specifications.
The Company derives its revenues primarily from the sale of integrated systems,
including software, hardware and related support and consulting services. The
Company plans to increase licensing of certain of its software products on a
stand-alone basis. In addition, the Company offers implementation and
integration services which are billed on a per diem basis. The Company's
revenues from its various technology solutions are, for the most part, dependent
on the number of installed sites a client has. Accordingly, while the typical
sale is the result of a long, complex process, the Company's clients usually
continue installing additional sites over an extended period of time. Revenues
from software and systems sales are recognized as products are shipped, provided
that collection is probable and no significant post shipment vendor obligations
remain. Revenues from client support, maintenance and other services are
generally recognized as the service is performed.
Throughout the course of 1997 and 1998, the Company entered additional retail
markets facilitated primarily through the acquisition of several companies and
product offerings. Combined with its existing products, the Company began
developing, marketing, deploying and supporting a variety of products. As a
result, during 1998 the Company's management determined that significant
internal cost efficiencies and increased market appeal could be obtained through
the consolidation of its legacy products into a single family of products,
Lighthouse(TM). This consolidation effort integrated the best business and
technical knowledge from multiple markets.
During 1998, the Company began developing Lighthouse, its next generation
software technology. Management believes its Lighthouse generation of software
products, which leverages both Microsoft Windows(R) CE and NT operating systems,
represents an innovative platform based on open, modular software and hardware
architecture and offers increased functionality and stability compared to other
open systems in the marketplace. Additionally, management believes the
Lighthouse family of products will uniquely position the Company to serve the
needs of retailers who cross business segments (i.e., a convenience store or
cinema with a fast food operation), further differentiating the Company's
systems from those of its competitors and allowing the Company to significantly
reduce future development and support costs. Additionally, the Company continues
to review products and solutions utilizing the Internet.
In 1998, a number of factors impacted the Company's revenue growth and operating
results. Most notable was the fact that a number of the Company's larger
clients were involved in mergers and acquisitions which, for a variety of
reasons, interrupted or delayed roll outs of the Company's products. In
addition, the purchasing behavior of the Company's largest clients became
increasingly characterized by the use of fewer, larger contracts. These
contracts typically involve longer negotiating cycles, require the dedication of
substantial amounts of working capital and other resources, and in general
require costs that may substantially precede recognition of associated revenues.
Moreover, in return for larger, longer-term purchase commitments, clients often
demand more stringent acceptance criteria, which can also cause revenue
recognition delays. The above, coupled with investments by the Company in
product development and other areas of business negatively impacted operating
results and contributed to losses during 1998.
9
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Results of Operations
Three months ended March 31, 1999 compared to three months ended March 31, 1998
System Sales. The Company derives the majority of its revenues from sales and
licensing fees for its headquarters, back office management and point of sale
solutions. Systems sales increased 3.5% to $17.2 million for the quarter ended
March 31, 1999 (the "first quarter 1999"), compared to $16.6 million for the
quarter ended March 31, 1998 (the "first quarter 1998"). The increase related to
sales and license fees from new and existing clients.
Client Support, Maintenance and Other Services. The Company also derives
revenues from client support, maintenance and other services, which increased
43.7% to $7.0 million for the first quarter 1999, compared to $4.9 million for
the first quarter 1998. The increase was due to increased support, maintenance
and services revenues within its existing markets resulting from increased
system sales. Additionally, increased client demand for professional services
contributed to this increase.
Cost of Systems Sales. Cost of systems sales consists primarily of hardware and
peripherals for site-based systems and labor. These costs are expensed as
products are shipped. Cost of system sales increased 6.1% to $8.5 million for
the first quarter 1999, compared to $8.0 million for the first quarter 1998. The
increase was attributable to the increase in systems sales. Cost of systems
sales as a percentage of systems revenues increased to 49.2% from 48.0%. This
increase was due primarily to changes in product mix between site-based
manufactured systems and back office and headquarters-based management systems
between the two periods. The back office and headquarters systems typically
have higher gross margins than the site-based systems sold by the Company.
Cost of Client Support, Maintenance and Other Services. Cost of client support,
maintenance and other services consists primarily of personnel and other costs
associated with the Company's services operations. Cost of client support,
maintenance and other services increased 41.7% to $5.9 million for the first
quarter 1999 from $4.2 million for the first quarter 1998. The increase was due
primarily to the Company's expansion its professional service offerings and the
related increase in wages associated with this effort. Cost of client support,
maintenance and other services as a percentage of client support, maintenance
and other services revenues decreased to 83.6% from 84.8%, due to increased
efficiencies and staff utilization.
Product Development Expenses. Product development expenses consist primarily of
wages and materials expended on product development efforts. Product
development expenses decreased 7.8% to $2.6 million for the first quarter 1999,
compared to $2.8 million for the first quarter 1998. The increase was due
primarily to higher capitalization of software costs associated with the
Company's development of its Lighthouse generation of products. In the first
quarter 1999, software development costs of $853,000, or 24.9% of its total
product development costs were capitalized by the Company as compared to
$643,000, or 18.7% of its total product development costs for the first quarter
1998. Product development expenses as a percentage of total revenues decreased
to 10.6% from 13.0%, as total revenues increased while product development
expenses decreased.
Sales and Marketing Expenses. Sales and marketing expenses increased 3.7% to
$2.9 million during the first quarter 1999, compared to $2.8 million in the
first quarter 1998. The increase was associated with the continued expansion of
the Company's sales activities and increased commission expense attributable to
higher sales. Sales and marketing expenses as a percentage of total revenues
decreased to 12.1% from 13.1%.
10
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Depreciation and Amortization. Depreciation and amortization expenses increased
39.7% to $1.4 million for the first quarter 1999, compared to $987,000 for the
first quarter 1998. The increase resulted from an increase in computer equipment
and other assets required to support an increased number of employees and
locations. Depreciation and amortization as a percentage of total revenues
increased to 5.7% from 4.6% during the period, primarily because associated
personnel support costs increased at a pace higher than associated revenues.
General and Administrative Expenses. General and administrative expenses
increased 3.5% to $3.2 million for the first quarter 1999, compared to $3.1
million for the first quarter 1998. The increase was due primarily to personnel
increases needed to support additional revenues. General and administrative
expenses as a percentage of total revenues decreased to 13.0% from 14.2% as
personnel and related expenses grew at a slower rate than revenues.
Interest Income, Net. Interest income, net decreased 36.4% to $343,000 for the
first quarter 1999, compared to $539,000 for the first quarter 1998. The
Company's interest income is derived from the investment of its cash and cash
equivalents. The decrease in net interest income resulted primarily as a
result of a decline in cash and cash equivalents from an average cash balance of
$41.8 million during the first quarter 1998 to an average cash balance of $28.4
million during the first quarter of 1999. See--"Liquidity and Capital
Resources".
Income Tax Provision. The Company recorded a tax provision of 40.0% in both
the first quarter 1998 and the first quarter 1999.
Net Income. Net income for the first quarter ended March 31, 1999, was $124,000,
or $0.01 per share, a decrease of $44,000 over net income of $168,000, or $0.01
per share for the same period in 1998 due to the reasons noted above.
Liquidity and Capital Resources
In July 1997, the Company completed a public offering of 2.6 million shares of
common stock and received net proceeds of approximately $58.4 million after
deducting estimated underwriting discounts and offering expenses. A portion of
the offering proceeds was used to repay $3.3 million of debt incurred in
connection with the acquisition of ReMACS. The remaining proceeds will be used
for general corporate purposes, including research and development, sales and
marketing, possible strategic acquisitions and the increased working capital
requirements of the Company generated by its growth. As of March 31, 1999, the
Company had $31.2 million in cash and cash equivalents.
The Company provided cash from operating activities in the first quarter 1999 of
$6.4 million compared to a use of cash of $8.8 million in the first quarter
1998. In the first quarter 1999, the Company provided cash from operating
activities primary due to decreased accounts receivables and inventories along
with increased accounts payable and accrued liabilities due to timing of certain
vendor payments. Additionally, client deposits and unearned revenues increased
during the first quarter 1999 as the Company delivered products and/or services
previously paid by clients. In the first quarter 1998, the Company's uses of
cash were the primary result of increased accounts receivable and inventory due
to increased sales, and a decrease in client deposits and unearned revenues as
the Company delivered products and/or services previously paid by clients.
Cash used in investing activities in the first quarter 1999 and the first
quarter 1998 was $1.6 million and $2.4 million, respectively. The uses of cash
in investing activities for the first quarter 1999 consisted primarily of the
purchases of property and equipment for approximately $729,000 and capitalized
software costs of $853,000. The uses of cash in investing activities for the
first quarter 1998 consisted primarily of the
11
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purchases of property and equipment of approximately $1.8 million and
capitalized software costs of $643,000.
Cash of $810,000 was provided by financing activities during the first quarter
1999 due primarily to cash received from the exercise of employee stock options
of $1.3 million offset by the Company's purchase of common stock from
shareholders for approximately $514,000. Cash of $288,000 was used in financing
activities during the first quarter 1998 due primarily to an advance made by the
Company to the former sole shareholder of RapidFire under its agreement to loan
up to $1.5 million, which debt matures October 31, 2005 and bears interest at
5.0% per annum.
In September 1998, the Board of Directors of the Company authorized a stock
repurchase program pursuant to which management is authorized to repurchase up
to 3,000,000 shares of common stock of the Company. As of May 6, 1999, the
Company had repurchased in the open market an aggregate of 680,154 shares of its
common stock for a total of $4.5 million. These purchases were, and any future
purchase will be, financed from the Company's cash reserves.
Year 2000 Issue
The Year 2000 Issue is the result of computer programs being written using two
digits rather than four to define the applicable year. Any of the Company's
computer programs that have time-sensitive software may recognize a date using
"00" as the year 1900 rather than the year 2000. This could result in a system
failure or miscalculations causing disruptions of operations, including, among
other things, a temporary inability to process transactions or invoices sent, or
engage in similar normal business activities.
The Company is in the process of conducting an inventory and business risk
assessment of its non-information technology systems. The Company will develop
remediation plans for such non-information technology systems if its business
risk assessment indicates such is warranted. All costs associated with
analyzing the Year 2000 Issue or making conversions to existing systems are
being expensed as incurred. Management presently believes that the costs to
modify its information technology infrastructure to be Year 2000 compliant will
not have a material adverse impact to its financial condition or results of
operations during any quarterly or annual reporting period. However, the Company
is currently identifying and considering various contingency options to minimize
the risk of any Year 2000 problems.
The Company is conducting communications with all of its significant suppliers
of goods and services to determine the extent to which the Company's operations
and systems are vulnerable to those third parties' failure to remediate their
own Year 2000 Issues. There can be no guarantee that the systems of other
companies on which the Company's operations and systems rely will be timely
converted and would not have an adverse effect on the Company's systems or
result of operations.
The Company will utilize predominantly internal resources to reprogram, or
replace, and test the software for Year 2000 modifications. The Company
anticipates completing the Year 2000 project by September 30, 1999, which is
prior to any anticipated impact on its operating systems.
The costs of the project and the date on which the Company believes it will
complete the Year 2000 modifications are based on management's best estimates,
which were derived utilizing numerous assumptions of future events, including
the continued availability of certain resources, third party modification plans
and other factors. However, there can be no guarantee that these estimates will
be achieved and actual results could differ materially from those anticipated.
Specific factors that might cause such material difference include, but are not
limited to, the availability and cost of personnel trained in this area, the
ability to locate and correct all relevant computer codes, and similar
uncertainties.
12
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Forward-Looking Statements
Certain statements contained in this filing are "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995, such
as statements relating to financial results and plans for the future business
development activities, and are thus prospective. Such forward-looking
statements are subject to risks, uncertainties and other factors, which could
cause actual results to differ materially from future results expressed or
implied by such forward-looking statements. Potential risks and uncertainties
include, but are not limited to, economic conditions, competition and other
uncertainties detailed from time to time in the Company's Securities and
Exchange Commission filings.
Item 3. Quantitative and Qualitative Disclosures About Market Risks
- --------------------------------------------------------------------
The Company's financial instruments that are subject to market risks are its
cash and cash equivalents. During the first quarter 1999, the weighted average
interest rate on its cash balances was approximately 4.65%. A 10.0% decrease in
this rate would impact interest income by approximately $34,000.
13
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PART II. OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
- -----------------------------------------
(a) Exhibits.
The following exhibit is filed with this Report:
27.1 Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed during the quarter ended
March 31, 1999
RADIANT SYSTEMS, INC
Dated: May 14, 1999 By: /s/ John H. Heyman
---------------------------- -----------------------------
John H. Heyman, Executive
Vice President and Chief
Financial Officer
14
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EXHIBIT INDEX
Exhibit Number Description of Exhibit
- -------------- ----------------------
27.1 Financial Data Schedule
15
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<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM MARCH 31,
1999 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 3-MOS
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