<PAGE>
U. S. SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
X Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the quarterly period ended June 30, 1997.
Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
For the Transition period from to .
Commission File No. 0-18809
______________________________________________________________________________
CE SOFTWARE HOLDINGS, INC.
(Exact name of registrant as specified in its charter)
Delaware 41-1614808
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
1801 Industrial Circle, P.O. Box 65580, West Des Moines, Iowa 50265
(Address of principal executive offices) (Zip code)
(515) 221-1801
(Registrant's telephone number, including area code)
Former name, former address and former fiscal year, if changed since last
report: No changes.
______________________________________________________________________________
Indicate by mark (X) 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
Indicate the number of shares outstanding of each of the issuer's classes of
common stock as of the latest practicable date.
July 31, 1997 Common Stock 1,075,400
Class B Common Stock 0
<PAGE>
CE SOFTWARE HOLDINGS, INC. AND SUBSIDIARIES
Contents
Part I FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated Balance Sheets
June 30, 1997 and September 30,1996.......................... 3
Consolidated Statements of Operations
Three and Nine Months Ended June 30, 1997 and 1996....... 4
Consolidated Statements of Cash Flows
Nine Months Ended June 30, 1997 and 1996......................5
Notes to Consolidated Financial Statements..................... 6
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations........................... 7
Part II OTHER INFORMATION
Item 1. Legal Proceedings..................................... 12
Item 4. Submission of Matters to a Vote of Security Holders... 12
Item 6. Exhibits and Reports on Form 8-K...................... 12
SIGNATURES...................................................... 13
<PAGE>
CE SOFTWARE HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
June 30, 1997 and September 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
ASSET
June 30 September 30
<S> <C> <C>
Current assets:
Cash and cash equivalents $1,687,566 1,862,703
Short-term investments 287,143 -
Trade accounts receivable, net 1,073,379 1,454,887
Recoverable income taxes 24,153 208,185
Note receivable - 942,444
Inventories 632,234 471,597
Deferred income taxes 108,000 119,000
Other current assets 267,417 321,971
Total current assets 4,079,892 5,380,787
Property, fixtures, and equipment:
Land 316,796 316,796
Building 1,312,016 1,311,104
Fixtures and equipment 2,998,465 3,025,500
4,627,277 4,653,400
Less accumulated depreciation 2,308,938 1,970,580
Net property, fixtures, and equipment 2,318,339 2,682,820
Deferred income taxes 75,000 64,000
Purchased computer software technology, net 177,780 384,098
Other intangible assets, net (note 2) 204,545 411,439
Other assets 63,172 47,220
$6,918,728 8,970,364
LIABILITIES AND STOCKHOLDERS' EQUITY:
Current liabilities:
Current portion of long-term debt $42,938 41,133
Trade accounts payable 253,087 526,030
Accrued payroll and benefits 333,583 329,091
Other accrued expenses 136,544 217,625
Deferred revenue 178,024 526,792
Total current liabilities 944,176 1,640,671
Long-term debt, net of current portion 845,466 878,292
Total liabilities 1,789,642 2,518,963
Stockholders' equity (note 3):
Common stock, $.10 par value.
Authorized 2,000,000 shares; issued and
outstanding 1,075,400 and 1,123,426 107,540 112,343
Additional paid-in-capital (note 2) 5,893,710 6,038,758
(Accumulated deficit) retained earnings (872,164) 300,300
Total stockholders' equity 5,129,086 6,451,401
$6,918,728 8,970,364
</TABLE>
See accompanying notes to condensed consolidated financial statements.
page 3
<PAGE>
CE SOFTWARE HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
For the three and nine months ended June 30, 1997 and 1996
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended June 30, Nine Months Ended June 30,
1997 1996 1997 1996
<S> <C> <C> <C> <C>
Net revenues $1,654,630 2,259,718 5,328,995 7,949,824
Cost of revenues 278,109 433,557 882,770 1,376,840
Gross profit 1,376,521 1,826,161 4,446,225 6,572,984
Sales and marketing 776,219 1,091,809 2,685,210 3,222,043
General and administrative 511,564 954,048 1,870,139 2,976,297
Research and development 336,303 535,999 1,103,278 1,558,429
Write-off of intangible
assets and restructuring
expenses (note 4) - 800,746 - 800,746
Operating expenses 1,624,086 3,382,602 5,658,627 8,557,515
Operating loss (247,565) (1,556,441) (1,212,402) (1,984,531)
Other income (expense):
Equity in earnings of
joint venture - 8,416 - 53,651
Interest expense (20,693) (22,947) (62,790) (67,481)
Interest income 25,935 42,848 102,728 129,617
Loss before income taxes (242,323) (1,528,124) (1,172,464) (1,868,744)
Income tax benefit - - - 86,000
Net loss $(242,323) (1,528,124) (1,172,464) (1,782,744)
Average common shares
outstanding (note 3) 1,075,406 1,148,691 1,108,423 1,148,517
Net loss per share (note 3) $(.23) (1.33) (1.06) (1.55)
</TABLE>
See accompanying notes to condensed consolidated financial statements.
page 4
<PAGE>
CE SOFTWARE HOLDINGS, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
For the nine months ended June 30, 1997 and 1996
(Unaudited)
<TABLE>
<CAPTION>
1997 1996
<S> <C> <C>
Cash flows from operating activities:
Net loss $(1,172,464) (1,782,744)
Adjustments to reconcile net
loss to net cash (used in) provided
by operating activities:
Depreciation and amortization:
Property, fixtures, and equipment 390,243 409,207
Purchased software technology 206,318 273,089
Other 66,840 132,201
Write-off of Powercore, Inc.
intangibles assets - 509,551
Undistributed earnings of joint venture - (53,651)
Deferred income taxes - (21,000)
Decrease in trade accounts receivable 381,508 1,033,768
Decrease (increase) in recoverable income taxes 184,032 (67,801)
(Increase) decrease in inventories (160,637) 45,687
Decrease in other receivables and other assets 34,315 438,096
Decrease in accounts payable and accrued expenses (373,541) (245,866)
Decrease in deferred revenue (348,768) (176,323)
Other 35,686 (46,286)
Net cash (used in) provided by
operating activities (756,468) 447,928
Cash flows from investing activities:
Proceeds from sale of property,
fixtures, and equipment 12,841 9,962
Purchase of computer software technology - (400,000)
Purchase of property, fixtures, and equipment (65,865) (426,556)
Purchases of short-term investments (282,856) -
Advances received from joint venture - 150,000
Proceeds from note receivable 934,000 -
Net cash provided by (used in) investing activities 598,120 (666,594)
Cash flows from financing activities:
Proceeds from stock options exercised - 7,010
Proceeds from issuance of common stock 14,232 -
Payment of long-term debt (31,021) (25,152)
Net cash used in financing activities (16,789) (18,142)
Net decrease in cash and cash equivalents (175,137) (236,808)
Cash and cash equivalents at beginning of period 1,862,703 1,334,739
Cash and cash equivalents at end of period $1,687,566 1,097,931
Supplemental disclosures of cash flow information:
Cash paid during the period for:
Interest $61,855 67,724
Income taxes $1,554 4,976
</TABLE>
See accompanying notes to condensed consolidated financial statements.
page 5
<PAGE>
CE SOFTWARE HOLDINGS, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
June 30, 1997
(Unaudited)
1) Results of Operations
During interim periods, CE Software Holdings, Inc. follows the accounting
policies set forth in its Annual Report to Stockholders and its Report on Form
10-KSB filed with the Securities and Exchange Commission. Users of financial
information produced for interim periods are encouraged to refer to the
footnotes contained in the Annual Report to Stockholders when reviewing interim
financial results.
The results of operations for the interim period reported are not necessarily
indicative of results to be expected for the year. The information reflects all
the adjustments (none of which were other than normal recurring items) which
are, in the opinion of management, necessary to present a fair statement of the
results for the interim period.
2) Settlement of Powercore Lawsuit
The Company was plaintiff in a legal proceeding against Powercore, Inc., which
was settled in the third quarter of fiscal 1997. The terms of the settlement
resulted in the return of 250,000 (pre-split) shares of the Company's stock
which had been held in escrow since 1994. The recovery and cancellation of the
stock resulted in a reduction in stockholders' equity and a corresponding gain
on the settlement of approximately $140,000, net of contingent legal fees paid.
The carrying value of the Powercore customer list, an intangible asset, was also
reduced by approximately $140,000. This reduction was based on analysis of
undiscounted future cash flows associated with the Powercore acquired assets.
The combined effect of this write-off and the above gain was a reduction in
stockholders' equity and a reduction in intangible assets. There was no net
impact on the results of operations during the current period.
3) The Reverse Stock Split
On June 30, 1997, the Company executed a one for five, reverse stock split,
the effect of which was the conversion of 5,377,028 shares of par $.02 common
stock into 1,075,400 shares of par $.10 common stock. Shareholders owning
fractional shares, as a result of the reverse split, were paid cash in lieu of
issuing any fractional shares. All common share and per share amounts have been
restated retroactively to give effect to the reverse stock split. At June 30,
1997, options to purchase an aggregate of 145,337 (post-split) shares at
exercise prices from $4.38 to $46.25 per share were outstanding.
4) Write-off of Intangible Assets and Restructuring Expenses
In the third quarter of fiscal 1996 the Company reported a one-time charge of
approximately $801,000. Of this charge, $510,000 related to the write-off of
intangible assets. These intangible assets were acquired in fiscal 1994 from
Powercore, Inc. and were determined to be impaired due to continued poor revenue
performance and an assessment of their recoverability through an analysis of
undiscounted estimated future cash flows. An additional expense of $184,000 was
recorded related to the write-off of prepaid developer royalties that were
expensed in the quarter due to current and estimated future decreasing revenues
associated with the products. The remaining charge of $107,000 related to
restructuring expenses associated with workforce reductions and the
consolidation of offices.
page 6
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Results of Operations
The following discussion should be read in conjunction with the consolidated
financial statements and related notes included elsewhere herein. Historical
results and percentage relationships are not necessarily indicative of the
operating results for any future period. Within this discussion and analysis
all dollar amounts (except for per share amounts) have been rounded to the
nearest thousand.
The following table sets forth certain data derived from the consolidated
statements of operations, expressed as a percentage of net revenues for the
quarters and nine month periods ended June 30, 1997 and 1996.
Quarter Ended June 30, Nine Months Ended June 30,
1997 1996 1997 1996
Percentage of net revenues:
Net revenues 100% 100% 100% 100%
Cost of revenues 17 19 17 17
Gross profit 83 81 83 83
Sales and marketing 47 48 50 41
General and administrative 31 42 35 37
Research and development 20 24 21 20
Write-off of intangible
assets and restructuring
expenses 0 36 0 10
Total operating expenses 98 150 106 108
Operating loss (15) (69) (23) (25)
Other income, net 0 1 1 2
Loss before income taxes (15) (68) (22) (23)
Income tax benefit 0 0 0 1
Net loss (15)% (68)% (22)% (22)%
Three Month Analysis
Net Revenues
Net revenues for the third quarter of the current year were $1,655,000 compared
to $2,260,000 for the third quarter of the prior year. The 27% decrease in
revenues was due to a $589,000, or 26% decrease in revenues from the Company's
Messaging products; and a $71,000, or 80% decrease in revenues from the
Company's Calendaring and Scheduling products. These decreases were partially
offset by a $55,000, or 19% increase in revenues from the Company's Personal
Applications products.
Revenues from Messaging products accounted for 78% of total net revenues.
Historically these revenues were primarily derived from QuickMail LAN, the
Company's, Macintosh server based, E-mail solution. In management's opinion,
these revenues have been negatively impacted by a continued weak Macintosh
market. The Company has recently developed and begun marketing QuickMail Pro
page 7
<PAGE>
and QuickMail Office. These crossplatform, open standards, Messaging products
are not tied to the success of the Macintosh market. To date, revenues from
these products have totaled approximately $1 million, with the majority being
recorded in the third quarter. Customer feedback and favorable product reviews
in the press indicate widening acceptance of these new open standards products.
In management's opinion these positive sales trends will continue and should
more than offset decreases in QuickMail LAN to produce top-line growth.
Revenues from Personal Applications products were positively impacted in the
current quarter by continued upgrade revenues from QuicKeys 3.5, the Company's
Macintosh PowerPC Native version of the product. Revenues from Calendaring and
Scheduling products are expected to continue to decline and account for only 1%
and 4% of net revenues during the third quarter of fiscal 1997 and 1996,
respectively.
Net revenues from international channels decreased to $486,000 from $678,000 in
the third quarter of the prior year, representing 29% and 30%, respectively of
total net revenues. In the fourth quarter of fiscal 1997, Management expects to
launch our new open standards Messaging products in France, Germany, Sweden, and
Australia. This launch is anticipated to add momentum to international sales of
QuickMail.
Cost of Revenues
The Company's cost of revenues is composed primarily of the costs of manuals,
diskettes, packaging, manufacturing expenses, royalties paid to outside
developers for the use of certain software included with some of the Company's
products, and amortization of capitalized purchased software.
Gross profit as a percentage of net revenues was 83% and 81% in the third
quarter of fiscal 1997 and 1996, respectively. The improvement in the third
quarter of fiscal 1997 is mainly due to a somewhat lower royalty expense paid to
outside developers.
Sales and Marketing
Sales and marketing expenses decreased $316,000 during the third quarter of
fiscal 1997 compared to the third quarter of fiscal 1996. This decrease was
primarily in salaries and benefits, $148,000; marketing/advertising expense,
$100,000; travel and entertainment, $33,000; relocation, $11,000; and contract
labor, $11,000. The decrease in salaries and benefits was due to both fewer
sales and marketing staff, as well as lower sales commissions. The decrease in
marketing/advertising expense was primarily due to reduced attendance of
industry trade shows.
General and Administrative
General and administrative expenses are composed principally of salaries and
benefits of administrative and technical support personnel, fees for
professional services, amortization of intangible assets and facilities
expenses. These expenses for the third quarter decreased 46% or $442,000 from
the third quarter of the prior year. Virtually all expense categories were
reduced, the largest of which included salaries and benefits, $207,000; contract
labor and other outside services, $80,000; facility overhead expenses, $28,000;
rent, $24,000; shipping expenses, $23,000; amortization expense, $22,000; loss
on sale of fixed assets, $15,000; offices supplies, $14,000; and travel $10,000.
The decreases are primarily due to smaller staff levels, fewer consultants, and
less executive salaries.
page 8
<PAGE>
Research and Development
Research and development expenses decreased to $336,000 in the third quarter of
the current year from $536,000 in the third quarter of the prior year,
representing 20% and 24% of net revenues, respectively. The primary areas that
decreased in the third quarter of fiscal 1997 were salaries and benefits,
$117,000; contract labor, $43,000; facility overhead expenses, $10,000; travel
and entertainment, $8,000; and training, $7,000. These decreases were
predominantly associated with a somewhat smaller staff. Staff reductions were
the result of a more focused development effort and the departure of two
engineers, who left the Company to be part of the spin-off of a joint venture.
Income Tax Benefit
The Company recorded no income tax benefit for the third quarter of fiscal 1997.
The Company has utilized all available net operating loss carrybacks and has
recorded a valuation allowance for its net operating loss carryforward until
future taxable earnings are recorded.
Nine Month Analysis
Net Revenues
Net revenues for the first nine months of the current year were $5,329,000
compared to $7,950,000 for the same period last year. The 33% decrease in net
revenues was due to a $2,125,000, or 34% decrease in revenues from the Company's
Messaging products; a $312,000, or 22% decrease in revenues from the Company's
Personal Applications products; and a $184,000, or 72% decrease in revenues from
the Company's Calendaring and Scheduling products.
Revenues from Messaging products accounted for 78% of total net revenues.
Historically, these revenues were primarily derived from QuickMail LAN, the
Company's, Macintosh server based, E-mail solution. In management's opinion,
these revenues have been negatively impacted by a continued weak Macintosh
market. The Company has recently developed and begun marketing QuickMail Pro
and QuickMail Office. These crossplatform, open standards, Messaging products
are not tied to the success of the Macintosh market. To date, revenues from
these products have totalled approximately $1 million, with the majority being
recorded in the third quarter. Customer feedback and favorable product reviews
in the press indicate widening acceptance of these new open standards products.
In management's opinion these positive sales trends will continue and should
more than offset decreases in QuickMail LAN to produce top-line growth.
Revenues from Personal Applications products were negatively impacted by reduced
sales of WebArranger. This decrease was partially offset by improved revenues
from QuicKeys 3.5, the Company's Macintosh PowerPC Native version of the
product. Revenues from Calendaring and Scheduling products are expected to
continue to decline and account for only 1% and 3% of net revenues during the
first nine months of fiscal 1997 and 1996, respectively.
Net revenues from international channels decreased to $1,502,000 in the first
nine months of the current year from $2,080,000 in the first nine months of the
prior year, representing 28% and 26%, respectively of total net revenues. In
the fourth quarter of fiscal 1997, management expects to launch our new open
standards Messaging products in France, Germany, Sweden, and Australia. This
launch is anticipated to add momentum to international sales of QuickMail.
page 9
<PAGE>
Cost of Revenues
The Company's cost of revenues is composed primarily of the costs of manuals,
diskettes, packaging, manufacturing expenses, royalties paid to outside
developers from the use of certain software included with some of the Company's
products, and amortization of capitalized purchased software.
Gross profit as a percentage of net revenues was 83% in both the first nine
months of fiscal 1997 and 1996.
Sales and Marketing
Sales and marketing expenses decreased $537,000 during the first nine months of
fiscal 1997 compared to the first nine months of fiscal 1996. This decrease was
primarily in marketing/advertising expense, $287,000; salaries and benefits,
$181,000; and travel and entertainment, $41,000. The decrease in
marketing/advertising expense was primarily due to significantly less direct
mail campaigns. The decrease in salaries and benefits was due to both fewer
sales and marketing staff, as well as lower sales commissions.
General and Administrative
General and administrative expenses are composed principally of salaries and
benefits of administrative and technical support personnel, fees for
professional services, amortization of intangible assets and facilities
expenses. These expenses for the first nine months decreased 37% or $1,106,000
from the same period last year. Virtually all expense categories were reduced,
the largest of which included salaries and benefits, $532,000; contract labor
and other outside services, $229,000; rent, $91,000; amortization expense,
$65,000; facility overhead expenses, $60,000; shipping expenses, $39,000; office
supplies, $32,000; travel and entertainment, $19,000; and training, $15,000.
These decreases are primarily due to smaller staff levels, fewer consultants,
and less executive salaries.
Research and Development
Research and development expenses decreased to approximately $1,103,000 for the
first nine months of the current year from $1,558,000 in the same period last
year, representing 21% and 20% of net revenues, respectively. The primary areas
that decreased in the first nine months of fiscal 1997 were salaries and
benefits, $347,000; contract labor, $30,000;facility overhead expenses, $19,000;
travel and entertainment, $18,000; and offices supplies, $17,000 These decrease
were predominantly associated with a somewhat smaller staff. Staff reductions
were the result of a more focused development effort adn the departure of two
engineers, who left the Company to be part of the spin-off of a joint venture.
Income Tax Benefit
The Company recorded no income tax benefit for the first nine months of fiscal
1997. The Company has utilized all available net operating loss carrybacks and
has recorded a valuation allowance for its net operating loss carryforward until
future taxable earnings are recorded.
page 10
<PAGE>
Liquidity and Capital Resources
Cash and cash equivalents decreased $175,000 during the first nine months of
fiscal 1997 to a balance of $1,688,000. The primary source of cash was $934,000
provided from payments made on the 4-Sight note receivable. Of the cash
received, $283,000 was placed in a short-term investment. This investment
consists of a U.S. Treasury bill which we intend to hold until maturity. The
net loss for the year was the primary reason for the $756,000 of cash being used
in operating activities. The Company believes it can fund its working capital
needs from operations, available cash, available instruments, and its $2,000,000
line of credit, against which the Company has no borrowings as of June 30, 1997.
Risk and Uncertainty
The preceding statements under "Management's Discussion and Analysis of
Financial Condition and Results of Operations" in this Form 10-QSB which are not
historical facts are forward looking statements. These forward looking
statements involve risks and uncertainties that could render them materially
different, including, but not limited to, the risk that new products and product
upgrades may not be effected on a timely basis, the risk that such products may
not achieve market acceptance within the Windows or Macintosh markets, and the
risk that the Company would not be able to fund its working capital needs from
cash flow, or be able to borrow under its line of credit.
page 11
<PAGE>
CE SOFTWARE HOLDINGS, INC. AND SUBSIDIARIES
PART II: OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company and its subsidiary, CE Software, Inc. were plaintiffs in a legal
proceeding against Powercore, Inc., and its principal owners. The complaint
alleged a breach of contract and fraud in connection with the sale of
Powercore's assets. The complaint was filed February 22, 1996, in the United
States District Court for the Northern District of Illinois, Eastern Division.
This proceeding was terminated on May 27, 1997, in an out of court settlement.
The terms of the settlement resulted in the return of 250,000 (pre-split) shares
of the Company's stock which had been held in escrow since 1994. Recovery of
the stock resulted in a reduction in stockholders' equity, and a reduction in
the value of intangible assets. There was no net impact on the results of
operations during the current period. See footnote 2 in "Notes to Consolidated
Financials Statements" for further explanation of the accounting treatment.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Holders of a majority of the outstanding shares of the voting common stock of
the Company consented, in lieu of a meeting, to the adoption of an Amendment to
the Restated Certificate of Incorporation of the Company. At the time of the
action a total of 5,627,028 shares were outstanding.
The Amendment was approved by the consent of holders of 52.37% of the shares of
voting common stock. The following responses were received from shareholders
whose consent was sought by the Company:
Abstained or
For Against Broker non-vote
2,947,021 11,900 N/A
Adoption of the Amendment of the Restated Certificate of Incorporation of the
Company had the effect of converting all outstanding shares of par $.02 voting
common stock of the Company ("par $.02 Common Stock") into shares of par $.10
voting common stock of the Company ("par $.10 Common Stock") at a conversion
ratio of five shares of par $.02 Common Stock for one share of par $.10 Common
Stock (the "Reverse Split"). The Reverse Split was proposed by the Board of
Directors in response to notification by the Nasdaq National Market ("Nasdaq")
that the Company was subject to being delisted from Nasdaq because the per share
price of its $.02 Common Stock had fallen below $1.00.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits - Index on page 14
11 Computation of Earnings per Common Share
27 Financial Data Schedule - for SEC filing only
(b) Reports on Form 8-K
There were no reports on Form 8-K filed during the quarter ended June 30,
1997.
page 12
<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.
CE SOFTWARE HOLDINGS, INC.
(Registrant)
Signature Title Date
/s/ Richard A. Skeie August 5, 1997
_________________________ President, Chief Executive ______________
(Richard A. Skeie) Officer and Director
/s/ John S. Kirk August 5, 1997
_________________________ Secretary and Treasurer, ______________
(John S. Kirk) Chief Financial Officer,
and Chief Accounting
Officer
page 13
EXHIBIT INDEX
Exhibit
Number Description
11 Computation of Earnings per Common Share Page 15
27 Financial Data Schedule - for SEC filing only
page 14
<PAGE>
<PAGE>
EXHIBIT 11
CE SOFTWARE HOLDINGS, INC. AND SUBSIDIARIES
STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
(given effect, pro forma, to the Reverse Stock Split)
<TABLE>
<CAPTION>
Three months ended Nine months ended
June 30, June 30,
1997 1996 1997 1996
<S <C> <C> <C> <C>
Primary Earnings
per Share Information:
Weighted average number of
shares outstanding during
the period 1,075,406 1,148,426 1,108,423 1,148,236
Annualized additional shares
due to stock options - 265 - 281
1,075,406 1,148,691 1,108,423 1,148,517
Net loss $(242,323) $(1,528,124) $(1,172,464)$(1,782,744)
Primary loss per share $ (.23) $(1.33) $(1.06) $(1.55)
Fully Diluted Earnings
per Share Information:
Weighted average number of
shares outstanding during
the period 1,075,406 1,148,426 1,108,423 1,148,236
Annualized additional shares
due to stock options - 265 62 493
1,075,406 1,148,691 1,108,485 1,148,729
Net loss $(242,323) $(1,528,124) $(1,172,464)$(1,782,744)
Fully diluted loss per share $ (.23) $(1.33) $(1.06) $(1.55)
</TABLE>
page 15
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> JUN-30-1997
<CASH> 1,974,709
<SECURITIES> 0
<RECEIVABLES> 1,073,379
<ALLOWANCES> 0
<INVENTORY> 632,234
<CURRENT-ASSETS> 4,079,892
<PP&E> 4,627,277
<DEPRECIATION> 2,308,938
<TOTAL-ASSETS> 6,918,728
<CURRENT-LIABILITIES> 944,176
<BONDS> 845,466
0
0
<COMMON> 107,540
<OTHER-SE> 5,021,546
<TOTAL-LIABILITY-AND-EQUITY> 6,918,728
<SALES> 1,654,630
<TOTAL-REVENUES> 1,654,630
<CGS> 278,109
<TOTAL-COSTS> 278,109
<OTHER-EXPENSES> 1,624,086
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (20,693)
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