SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-QSB
(Mark One)
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the quarterly period ended September 30, 1996
--------------------------------------------
( ) TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT
For the transition period from -------------------------------------------
Commission file number 1-11784
The Netplex Group, Inc. (f/k/a CompLink, Ltd.)
-----------------------------------------------------------------
(Exact name of small business issuer as specified in its charter)
NEW YORK 11-2824578
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
8260 Greensboro Drive, 5th Floor, McLean, Virginia 22102
--------------------------------------------------------
(Address of Principal executive officers)
(703) 356-3001
---------------------------
(Issuer's telephone number)
- -------------------------------------------------------------------------------
(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 Exchange Act 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 . . . .
State the number of shares outstanding of each of the issuer's classes of common
equity, as of the latest practicable date: As of November 12, 1996, there were
6,442,903 shares of common stock outstanding and 1,750,000 shares of class A
convertible preferred stock outstanding.
<PAGE>
THE NETPLEX GROUP, INC. AND SUBSIDIARIES
PART I FINANCIAL INFORMATION
Item 1. Financial Statements
Consolidated Balance Sheets - September 30, 1996 and
December 31, 1995........................................ 3
Consolidated Statements of Operations - Three
and Nine Months ended September 30, 1996
and September 30, 1995.......................................4
Consolidated Statements of Cash Flows - Nine Months ended
September 30, 1996 and September 30, 1995...................5
Notes to Consolidated Financial Statements........................6-8
Item 2. Management's Discussion and Analysis of
Financial Conditions and Results of Operations............... 9
PART II OTHER INFORMATION
Item 1-6 Other Information.........................................14
SIGNATURES....................................................................15
<PAGE>
THE NETPLEX GROUP, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
September 30, 1996 and December 31, 1995
<TABLE>
<CAPTION>
September 30, December 31,
1996 1995
---- ----
ASSETS (unaudited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 2,512,008 $ 840,711
Accounts receivable, less allowance for doubtful accounts
of $141,000 and $46,000 3,652,745 3,326,171
Note receivable 107,408 --
Prepaid expenses and other current assets 226,208 105,244
----------- -----------
Total current assets 6,498,369 4,272,126
Furniture, fixtures and equipment, net 624,779 206,405
Loans receivable from officers 28,850 --
Other assets 263,831 22,334
Excess cost over fair value of net assets acquired, net 379,845 399,838
----------- -----------
Total assets $ 7,795,674 $ 4,900,703
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable and accrued expenses $ 3,641,583 $ 3,533,107
Deferred revenue 120,446 399,437
Notes payable -- 100,000
Deferred income taxes 34,000 34,000
Loan payable 59,870 59,870
Due to affiliates -- 250,000
Obligations under capital leases 27,560 --
----------- -----------
Total current liabilities 3,883,459 4,376,414
----------- -----------
Stockholders' equity:
Class A convertible preferred stock, par value $.01 per share; 2,000,000
shares authorized; 1,750,000 issued and outstanding 17,500 --
Common stock, par value $.001 per share; 20,000,000 shares authorized;
6,442,903 and 3,197,608 shares issued and outstanding 6,443 3,197
Additional paid-in capital 5,758,409 607,903
Accumulated deficit (1,870,137) (86,811)
----------- -----------
Total stockholders' equity 3,912,215 524,289
----------- -----------
Total liabilities and stockholders' equity $ 7,795,674 $ 4,900,703
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
-3-
<PAGE>
THE NETPLEX GROUP, INC. AND SUBSIDIARIES
Consolidated Statement of Operations
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
-------------------------------- --------------------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Revenues $ 9,013,727 $ 1,248,177 $ 24,800,023 $ 5,055,810
Cost of sales 7,753,830 477,201 21,313,775 2,940,898
------------ ------------ ------------ ------------
Gross profit 1,259,897 770,976 3,486,248 2,114,912
------------ ------------ ------------ ------------
Operating expenses:
Research and development 63,284 -- 132,451 --
Selling and marketing 713,951 102,430 1,171,220 338,577
General and administrative 1,433,048 589,057 3,983,968 1,625,208
------------ ------------ ------------ ------------
2,210,283 691,487 5,287,639 1,963,785
------------ ------------ ------------ ------------
Operating income(loss) (950,386) 79,489 (1,801,391) 151,127
------------ ------------ ------------ ------------
Other income (expense):
Interest income 26,359 -- 28,660 --
Interest expense (5,547) (3,312) (10,595) (6,916)
Other -- -- -- --
------------ ------------ ------------ ------------
Income(loss) before income taxes (929,574) 76,177 (1,783,326) 144,211
------------ ------------ ------------ ------------
Provision for income taxes -- -- -- --
------------ ------------ ------------ ------------
Net income(loss) $ (929,574) $ 76,177 $ (1,783,326) $ 144,211
============ ============ ============ ============
Net income(loss) per share $ (0.14) $ 0.02 $ (0.39) $ 0.05
============ ============ ============ ============
Weighted average number of common
shares outstanding 6,497,033 3,197,608 4,611,523 3,197,608
============ ============ ============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
-4-
<PAGE>
THE NETPLEX GROUP, INC. AND SUBSIDIARIES
Consolidated Statement of Cash Flows
(unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
-----------------------------
1996 1995
---- ----
Operating activities:
<S> <C> <C>
Net loss $(1,783,326) $ 144,211
Adjustments to reconcile net loss to net cash used in
operating activities:
Depreciation and amortization 232,297 34,244
Provision for doubtful accounts 34,100 34,293
Change in assets and liabilities:
Accounts receivable (192,075) (232,326)
Prepaid expenses and other assets 762,531 (122,077)
Accounts payable and accrued expenses (1,393,671) 229,697
Deferred revenue (416,060) (116,343)
----------- -----------
Net cash used in operating activities (2,756,204) (28,301)
----------- -----------
Investing activities:
Purchases of fixed assets (136,019) (45,622)
Notes receivable from officers (10,000) --
Payments on note receivable 97,663 --
Cash acquired in CompLink acquisition 1,595,077 --
----------- -----------
Net cash provided (used) by investing activities 1,546,721 (45,622)
----------- -----------
Financing activities:
Repayment/proceeds from borrowings under line of credit (100,000) 175,000
Proceeds from private placement 2,984,958 --
Principal payments on capital lease obligations (4,178) --
----------- -----------
Net cash provided by financing activities 2,880,780 175,000
----------- -----------
Increase in cash and cash equivalents 1,671,297 101,077
Cash and cash equivalents at beginning of year 840,711 133,523
----------- -----------
Cash and cash equivalents at end of period $ 2,512,008 $ 234,600
=========== ===========
SUPPLEMENTAL INFORMATION
Cash paid during the period for interest $ 5,048 $-
=========== ===========
Cash paid during the period for income taxes $ 692 $-
=========== ===========
</TABLE>
See accompanying notes to consolidated financial statements.
-5-
<PAGE>
THE NETPLEX GROUP, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
September 30, 1996
(1) BUSINESS AND BASIS OF PRESENTATION
BUSINESS
The Netplex Group, Inc. (the "Company") was incorporated in 1986 to
provide professional technical services specializing in Networked
Information Systems. The Company designs, implements, and manages large
networked-based systems that deliver breakthrough improvements in
operation and service level performance. The depth of the Company's
expertise includes Networked Systems Management, Disaster Recovery
Planning, Information Security, Help Desk Systems, LAN Integration,
Remote and Mobile Workforce Automation, Intranet Deployment, Technical
Staffing Services, Information Technology Outsourcing and Law Firm
Automation.
BASIS OF PRESENTATION
The Company filed a Form 8-K on June 7, 1996 reporting the merger
described in footnote 2 below. The Company recorded the merger under
the purchase method of accounting as a reverse merger. The accompanying
unaudited consolidated financial statements have been prepared in
accordance with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-QSB and Item
310(b) of Regulation S-B. 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 normal recurring accruals)
considered necessary for a fair presentation have been included.
Operating results for the three month period ended September 30, 1996
and the nine month period ended September 30, 1996 are not necessarily
indicative of the results that may be expected for the fiscal year
ended December 31, 1996.
EARNINGS PER SHARE
Earnings (loss) per share is computed on the basis of the weighted
average number of common shares outstanding plus the effect of
outstanding options and warrants, using the treasury stock method.
(2) MERGER
On June 7, 1996 the Company (formerly known as CompLink, Ltd. or
"CompLink") acquired and merged with The Netplex Group, Inc. and
America's Work Exchange, Inc. (combined referred to as "Netplex") by
issuing approximately 3,250,000 shares of common stock, or 50.4% of the
Company's outstanding stock after giving effect to the mergers. The
agreement also provided for CompLink to assume 1,691,000 outstanding
common stock options of the acquirees. Netplex is comprised of two
divisions: a computer systems integrator division and another division
that provides contract computer professionals to businesses and
organizations in need of project specific staffing and provides
business services and other benefits to contract computer
professionals. The mergers have been accounted for under the purchase
method of accounting as a reverse merger, since the shareholders of the
acquirees, which have common control, received the larger percentage of
the voting rights of the combined entity. The mergers resulted in a
recapitalization of the accounting acquirors so that the resulting
capitalization after the mergers will be that of CompLink's giving
effect to the new share issuance and the elimination of CompLink's
accumulated deficit. The acquisition of the assets and liabilities of
CompLink have been accounted for at book value, which approximates fair
value. The statements of operations for the three and nine months ended
September 30, 1996 reflect those of Netplex and those of CompLink
commencing June 1, 1996. Prior periods statements of operations reflect
only the results of Netplex. Coincident with the mergers, the Company's
name was changed from CompLink, Ltd. to The Netplex Group, Inc. and The
Netplex Group, Inc. changed its name to The Netplex Systems Integration
Group, Inc. ("Netplex Virginia").
The following unaudited pro forma results of operations present, on the
purchase basis of accounting, the consolidated results of operations of
the Company for the nine months ended September 30, 1996 and for the
year ended December 31, 1995 as if the mergers had taken place on
January 1, 1995 and reflect the historical results of operations of the
purchased businesses adjusted for goodwill amortization and increased
common shares outstanding from the mergers.
Unaudited
---------
Nine Months
Ended Year Ended
September 39, December 31,
1996 1995
---- ----
(In thousands except for per share data)
Total revenues $25,616 $27,318
Net loss $(3,104) $(3,407)
Net loss per share $ (0.48) $ (0.52)
======= =======
Weighted average common
shares outstanding 6,497 6,496
======= =======
-6-
<PAGE>
The pro forma results of operations are not necessarily indicative of
the actual results of operations that would have occurred had the
purchase been made at the beginning of the period, or the results which
may occur in the future.
(3) PRIVATE PLACEMENT
0n September 19, 1996, the Company raised approximately $3,000,000
through the completion of a private placement offering of units of
equity securities. Each unit of equity securities consists of one share
of $.01 par value class A convertible preferred stock (the "preferred
stock") and one common stock warrant to purchase one share of the
Company's $0.001 par value common stock at an exercise price of $2.50.
Each share of preferred stock is convertible into one share of common
at any time, at the discretion of the holder. The preferred stock earns
cumulative dividends at 10% per annum, payable in either cash or
additional shares of preferred stock at the Company's option. Subject
to the conversion rights, the Company may redeem the preferred stock at
its stated value plus all accrued and unpaid dividends upon: (1)
registration of the shares underlying the preferred stock, and (2) 30
days written notice given at any time upon attaining certain per share
trading prices and sustaining such prices for a specified period. The
preferred stock has a per share liquidation preference of the greater
of: (i) two times the par value plus any accrued and unpaid dividends,
or (ii) the amount that would have been received if such shares were
converted to common stock on the business day immediately prior to
liquidation.
Each warrant issued in connection with the private placement becomes
exercisable on March 19, 1997 and expire on September 19, 2001. The
Company has the right to call the warrants at a redemption price of
$.01 per share upon: (1) registration of the shares underlying the
warrant (2) 30 days written notice given at any time upon attaining
certain per share trading prices and sustaining such prices for a
specified period.
(4) SUBSEQUENT EVENTS
APPLICATION FOR RE-LISTING OF SHARES ON THE NASDAQ SMALL CAP MARKET
On October 21, 1996, the Company filed an application for the
re-listing of its shares of common stock on the Nasdaq Small Cap Market
("Nasdaq"). While the Company believes that it meets the requirements
for listing its common stock on Nasdaq, there can be no assurance that
such listing will be approved.
The Company's common stock is currently traded on the OTC Electronic
Bulletin Board and on the Boston Stock Exchange.
-7-
<PAGE>
AGREEMENT FOR SALE OF WORLDLINKTM TECHNOLOGY
On November 5, 1996, the Company reached an agreement for the sale of
its WorldLinkTM Remote and Mobile Workforce automation software (the
"Product") developed and distributed by its wholly-owned subsidiary
Technology Development Systems, Inc. ("TDS"). The sale price is $3.5
million payable in cash at closing, originally expected to be November
15, 1996. On November 19, 1996, the Company completed a portion of the
sale with the buyer for a purchase price of $2.0 million in cash. The
Company and the buyer agreed to continue negotiations for the remaining
portion of the transaction. Finalization of the sale of the Product is
expected by year end, but, there can be no assurances that the
remaining portion of this transaction will be completed.
The Company will continue to support WorldLink'sTM existing customers
and has formed a practice unit to provide Remote and Mobile Workforce
Automation services.
-8-
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
OVERVIEW
The Netplex Group, Inc. (the "Company"), headquartered in McLean, Virginia, is
an information technology solutions provider.
The Company's core business is based on offering a range of professional
technical services to large organizations who require assistance integrating
information technology into their operations. The Company employs approximately
300 full-time technical employees and has access to a database of an additional
fifteen thousand technical consultants who may be contracted for hire on an
as-needed basis. The Company's services focus on the design, implementation, and
management of large network-based systems. Occasionally, the Company must resell
technology products in order to deliver customers fully integrated
system-solutions.
The Company has several Specialized Practice Groups focused on certain
industries and advanced technologies. Currently, the Company has Specialized
Practice Groups for Network and Systems Management, Help Desk Automation,
Disaster Recovery Planning, Information Systems Security, Intranet Deployment,
Remote and Mobile Workforce Automation, and Law Firm Office Automation.
In addition to providing information technology services, the Company's wholly
owned subsidiary, Technology Development Systems, Inc. ("TDS"), develops and
markets an award-winning communications software product under the trademarked
name of WorldLinkTM. WorldLinkTM is a message-oriented middleware product suited
for integrating a remote workforce (e.g. sales force), electronic supply chain
integration (e.g. manufacturer to distributor data interchange), and remote
on-line transaction processing (either over the World Wide Web or by direct
dial-up). WorldLinkTM is a single-point communications solution facilitating
unattended access to most computing platforms.
On November 5, 1996, the Company reached an agreement to sell its WorldLinkTM
technology for $3.5 million (see Note 4 - "Subsequent Events").
The Company has offices in the New York City, Central New Jersey, Chicago, and
Washington, D.C. metropolitan markets.
As described in Note 2 to Notes to Consolidated Financial Statements for the
nine months ended September 30, 1996, the unaudited pro forma results of
operations are presented as if the mergers occurred on January 1, 1995.
-9-
<PAGE>
MERGER
On June 7, 1996 the Company (formerly known as CompLink, Ltd. ["CompLink"])
acquired and merged with The Netplex Group, Inc. and America's Work Exchange,
Inc. (combined referred to as "Netplex") by issuing approximately 3,250,000
shares of Common Stock, or 50.4% of the Company's outstanding stock after giving
effect to the mergers. The agreement also provided for CompLink to assume
1,691,000 outstanding common stock options of the acquirees. Netplex is
comprised of two divisions: a computer systems integrator division and another
division that provides contract computer professionals to businesses and
organizations in need of project specific staffing and provides business
services and other benefits to contract computer professionals. The mergers have
been accounted for under the purchase method of accounting as a reverse merger,
since the shareholders of the acquirees, which have common control, received the
larger percentage of the voting rights of the combined entity. The mergers
resulted in a re capitalization of the accounting acquirors so that the
resulting capitalization after the mergers will be that of CompLink giving
effect to the new share issuance and the elimination of CompLink accumulated
deficit. The acquisition of the assets and liabilities of CompLink have been
accounted for at book value, which approximates fair value. The statements of
operations for the three and nine months ended September 30, 1996 reflect those
of Netplex and those of CompLink commencing June 1, 1996. Prior periods
statements of operations reflect only the results of Netplex. Coincident with
the mergers the Company's name was changed from CompLink, Ltd. to The Netplex
Group, Inc.
RESULTS OF OPERATIONS
THREE MONTHS ENDED SEPTEMBER 30, 1996 AND SEPTEMBER 30, 1995
Revenues for the three months ended September 30, 1996 were $9,013,727 compared
to $1,248,177 for the same period in 1995, an increase of $7,765,550. The
increase was primarily due to the additional consulting revenue added to the
Company's systems integration and software revenue as a result of a merger
between America's Work Exchange, Inc. ("AWE") and another entity.
Gross profit increased to $1,259,897 for the quarter ended September 30, 1996
compared to $770,976 for the same period in the prior year, an increase of
$488,921. This increase was a result of the additional consulting revenue,
improved profit margins on the systems integration revenue, and due to the
additional revenues from the WorldLinkTM software product. Gross profit margins
decreased to 14.0% for the quarter ended September 30, 1996 compared to 61.7%
for the same period in 1995. The decrease was due to the increased consulting
revenues which produce gross profit margins lower than systems integration
revenue.
-10-
<PAGE>
Selling and marketing expenses increased from $102,430 for the quarter ended
September 30, 1995 to $713,951 for the quarter ended September 30, 1996 due to
the inclusion of such expenses from the entities that merged with Netplex.
General and administrative expenses increased from $589,057 for the quarter
ended September 30, 1995 to $1,433,048 for the quarter ended September 30, 1996
due to the inclusion of such expenses from the entities that merged with
Netplex.
Operating losses were $950,386 for the quarter ended September 30, 1996,
compared to an operating profit of $79,489 for the same period prior year, a
decrease of $1,029,875. The components of this decrease are discussed above.
No provision for income taxes was required for the three months ended September
30, 1996, due to the net loss for the period then ended. No provision for income
taxes was required in the comparable 1995 period due to utilization of net
operating loss carry forwards.
NINE MONTHS ENDED SEPTEMBER 30, 1996 AND SEPTEMBER 30, 1995
Revenues for the nine months ended September 30, 1996 were $24,800,023 compared
to $5,055,810 for the same period in 1995, an increase of $19,744,213. The
increase was primarily due to the additional consulting revenue added to the
Company's systems integration and software revenue as a result of the merger
involving AWE.
Gross profit increased to $3,486,248 for the nine months ended September 30,
1996 compared to $2,114,912 for the same period the prior year, an increase of
$1,371,336. This increase was a result of the additional consulting revenue,
improved profit margins on the systems integration revenue, and due to the
additional revenues from the WorldLinkTM software product. Gross profit margins
decreased to 14.1% for the nine months ended September 30, 1996 compared to
41.8% for the same period in 1995. The decrease was due to the increased
consulting revenues which produce gross profit margins lower than systems
integration revenue.
Selling and marketing expenses increased from $338,577 for the quarter ended
September 30, 1995 to $1,171,220 for the quarter ended September 30, 1996 due to
the inclusion of such expenses from the entities that merged with Netplex.
General and administrative expenses increased from $1,625,208 for the nine
months ended September 30, 1995 to $3,983,968 for the nine months ended
September 30, 1996 due to the inclusion of such expenses from the entities that
merged with Netplex.
Operating losses were $1,801,391 for the nine months ended September 30, 1996,
compared to an operating profit of $151,127 for the same period prior year, a
decrease of $1,952,518. The components of this decrease are discussed above.
-11-
<PAGE>
No provision for income taxes was required for the nine months ended September
30, 1996, due to the net loss for the period then ended. No provision for income
taxes was required in the comparable 1995 period due to utilization of net
operating loss carry forwards.
LIQUIDITY AND CAPITAL RESOURCES
For the nine months ended September 30, 1996, the Company's operating activities
used approximately $2,756,000 of the Company's cash. This cash usage was
primarily the result of the Company's net loss of approximately $1,783,000 for
the period then ended, as well as from decreases in deferred revenues, accounts
payable and accrued expenses and increased accounts receivable.
The Company funded its operations, purchased fixed assets, repaid its borrowings
under its line of credit and other such investing and financing activities
during the period through cash acquired in the merger with CompLink of
approximately $1,595,000 and the net proceeds from the Company's private equity
placement transaction which was completed in September 1996 of approximately
$2,985,000 (see "Note 3 - Private Placement").
At September 30, 1996, the Company has cash and cash equivalents of $2,512,008.
The Company has no long-term debt and has no outstanding balance on its $750,000
line of credit facility with a bank.
The Company is expected to incur operating losses until such time that it
achieves full productivity of its sales force. While it cannot be certain as to
when such levels of productivity can be attained, the Company anticipates that
its sales force will operate at levels below full productivity through at least
the first half of 1997. The Company will continue to make significant
investments in marketing, training and infrastructure to increase productivity,
build its core competency practice units skill base and foster growth of its
operations. Despite this expectation of operating losses, management believes
that its current cash balance and credit facility will be sufficient to meet
operating requirements for the next twelve months.
Management expects its cash position to be supplemented further through the
completion of the sale of the WorldLinkTM product technology (see "Note 4 -
Subsequent Events").
Capital expenditures for the nine months ended September 30, 1996 were
approximately $136,000. Capital expenditures for the balance of 1996 are
anticipated to be approximately $150,000.
The Company maintains a line of credit facility with a bank. Under the terms of
this line of credit facility the Company may borrow up to the lesser of $750,000
or 75% of eligible accounts receivable. The line of credit bears interest at the
bank's prime rate plus 1% and is personally guaranteed by the Company's Chief
Executive Officer.
-12-
<PAGE>
FORWARD-LOOKING STATEMENTS
This Form 10-QSB contains certain forward-looking statements within the meaning
of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the
Securities Exchange Act of 1934, as amended, which are intended to be covered by
the safe harbors created thereby. Investors are cautioned that all
forward-looking statements involve risks and uncertainty, (including without
limitation, the closing of the WorldLinkTM product technology sale, future
financings and expenses, as well as general market conditions) though the
Company believes that the assumptions underlying the forward-looking statements
contained herein are reasonable, any of the assumptions could be inaccurate, and
therefore, there can be no assurance that the forward-looking statements
included in this Form 10-QSB will prove to be accurate. In light of the
significant uncertainties inherent in the forward-looking statements included
herein, the inclusion of such information should not be regarded as a
representation by the Company or any other person that the objectives and plans
of the Company will be achieved.
INFLATION
Inflation has not had and the Company does not expect inflation to have a
significant adverse impact on its operations.
-13-
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Nothing to Report
Item 2. Changes in Securities
Nothing to Report
Item 3. Defaults Upon Senior Securities
Nothing to Report
Item 4. Submission of Matters to a Vote of Security Holders
Nothing to Report
Item 5. Other Information
Nothing to Report
Item 6. Exhibits and Reports on Form 8-K
(a). Exhibits:
11 - Statement re: Computation of Per Share Earnings
27 - Financial Data Schedule
(b). Reports in Form 8-k:
On August 9, 1996, the Registrant field a Report on Form 8-k/A
amending Items 7 of a Report filed on Form 8-k on June 10, 1996.
-14-
<PAGE>
SIGNATURES
In accordance with the requirements of the Exchange Act, the Registrant caused
this report to be signed on its behalf by the undersigned, thereunto duly
authorized.
THE NETPLEX GROUP, INC.
Date: November 19, 1996 By: /s/ Gene Zaino
-----------------------------
Gene Zaino, President and CEO
(Principal Executive Officer) and Chairman of
the Board
Date: November 19, 1996 By: /s/ Matthew Jones
-----------------------------
Matthew Jones, Chief Financial Officer
(Principal Accounting Officer)
THE NETPLEX GROUP, INC EXHIBIT 11
SCHEDULE RE:COMPUTATION OF PER SHARE EARNINGS
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
1996 1995 1996 1995
------------ ------------ ----------- ----------
<S> <C> <C> <C> <C>
Primary Earnings Per Share:
Weighted average number of common shares outstanding 6,442,903 3,197,608 4,554,107 3,197,608
Common stock equivalents from outstanding stock options 54,130 -- 57,416 --
----------- ----------- ----------- -----------
Average shares outstanding 6,497,033 3,197,608 4,611,523 3,197,608
Net loss (income) ($ 929,574) $ 76,177 ($1,783,326) $ 144,211
----------- ----------- ----------- -----------
Earnings (loss) per share ($ 0.14) $ 0.02 ($ 0.39) $ 0.05
=========== =========== =========== ===========
Fully Diluted Earnings per share:
Weighted average number of common shares outstanding 6,442,903 3,197,608 4,554,107 3,197,608
Preferred stock shares convertible into common shares (1) 190,217 -- 63,869 --
Common stock equivalents from outstanding stock options 126,596 -- 85,639 --
----------- ----------- ----------- -----------
Average shares outstanding 6,759,716 3,197,608 4,703,615 3,197,608
Net loss (income) ($ 929,574) $ 76,177 ($1,783,326) $ 144,211
----------- ----------- ----------- -----------
Earnings (loss) per share (0.14) 0.02 (0.38) 0.05
=========== =========== =========== ===========
</TABLE>
(1) The Company's convertible preferred stock is not a common stock equivalent.
(2) Fully diluted EPS is within 3% of Primary EPS and is, thus, not required to
be disclosed on the Consolidated Statement of Operations.
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Company's Financial Statements contained in the Company's 10-Q for the quarter
ended September 30, 1996 and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 2,512,008
<SECURITIES> 0
<RECEIVABLES> 3,793,745
<ALLOWANCES> (141,000)
<INVENTORY> 0
<CURRENT-ASSETS> 333,616
<PP&E> 624,779
<DEPRECIATION> 0
<TOTAL-ASSETS> 7,795,674
<CURRENT-LIABILITIES> (3,883,459)
<BONDS> 0
0
(17,500)
<COMMON> (6,443)
<OTHER-SE> (3,888,272)
<TOTAL-LIABILITY-AND-EQUITY> (7,795,674)
<SALES> (24,800,023)
<TOTAL-REVENUES> (24,800,023)
<CGS> 21,313,775
<TOTAL-COSTS> 5,287,639
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> (18,065)
<INCOME-PRETAX> 1,783,326
<INCOME-TAX> 0
<INCOME-CONTINUING> 1,783,326
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 1,783,326
<EPS-PRIMARY> ($0.38)
<EPS-DILUTED> ($0.38)
</TABLE>
