<PAGE> 1
================================================================================
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, 1996
COMMISSION FILE NUMBER 1-12312
INTERSCIENCE COMPUTER CORPORATION
(Exact name of small business issuer as specified in its charter)
CALIFORNIA 95-3880130
(State of incorporation) (I.R.S. Employer
Identification No.)
5171 CLARETON DRIVE
AGOURA HILLS, CALIFORNIA 91301
(Address of principal executive offices) (Zip Code)
(818) 707-2000
(Issuer's telephone number, including area code)
Indicate by check mark whether the issuer (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
------- -------
Number of shares outstanding of each of the issuer's classes of common
stock, as of August 10, 1994: 2,541,666 shares of common stock, no par value.
Transitional Small Business Disclosure Format:
YES NO X
-------- --------
===============================================================================
This report contains 12 sequentially numbered pages.
<PAGE> 2
INTERSCIENCE COMPUTER CORPORATION
INDEX
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Condensed Consolidated Balance Sheets as of June 30, 1996
and September 30, 1995 . . . . . . . . . . . . . . . . . . . . . 3
Condensed Consolidated Statement of Operations
for the Three Months Ended June 30, 1996 and 1995 . . . . . . . 5
Condensed Consolidated Statement of Operations
for the Nine Months Ended June 30, 1996 and 1995 . . . . . . . . 6
Condensed Consolidated Statement of Cash Flows
for the Nine Months Ended June 30, 1996 and 1995 . . . . . . . . 7
Notes to the Condensed Consolidated Financial Statements . . . . . . . . 8
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS . . . . . . . . . . . . . . . 9
PART II - OTHER INFORMATION . . . . . . . . . . . . . . . . . . . . . . . 12
</TABLE>
2
<PAGE> 3
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
INTERSCIENCE COMPUTER CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
ASSETS
<TABLE>
<CAPTION>
September 30, June 30,
1995 1996
--------------------- ------------------
(Unaudited)
<S> <C> <C>
CURRENT ASSETS
Cash and cash equivalents . . . . . . . . . . . . . $ 2,046,017 $ 646,398
Accounts receivable, net of allowance . . . . . . . 1,779,788 1,810,048
Inventories . . . . . . . . . . . . . . . . . . . . 2,505,444 4,529,482
Prepaid expenses and other receivables . . . . . . . 145,473 60,525
Current portion of notes receivable . . . . . . . . . 62,500 62,500
Current portion of net investment in equipment
contracts receivables . . . . . . . . . . . . . . . 136,998 55,146
Deferred income taxes . . . . . . . . . . . . . . . 99,000 99,000
----------- -----------
TOTAL CURRENT ASSETS . . . . . . . . . . . . . 6,775,220 7,263,099
REPLACEMENT PARTS INVENTORY . . . . . . . . . . . . . . 3,286,907 4,100,799
PROPERTY AND EQUIPMENT, net . . . . . . . . . . . . . . 756,900 697,340
OTHER ASSETS
Net investment in equipment contracts receivable
less current portion . . . . . . . . . . . . . . 405,438 -
Notes receivable . . . . . . . . . . . . . . . . . 187,500 -
Patent, net of accumulated amortization . . . . . . 366,695 395,352
Goodwill, net of accumulated amortization . . . . . 1,262,975 1,429,935
Deferred income taxes . . . . . . . . . . . . . . . 378,000 378,000
Deposits and other . . . . . . . . . . . . . . . . 187,853 180,575
----------- -----------
TOTAL OTHER ASSETS . . . . . . . . . . . . . . . . 2,788,461 2,383,862
----------- -----------
$13,607,488 $14,445,101
=========== ===========
</TABLE>
See accompanying Notes to Condensed Financial Statements.
3
<PAGE> 4
INTERSCIENCE COMPUTER CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS, CONTINUED
LIABILITIES AND SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
September 30, June 30,
1995 1996
-------------------- ------------------
(Unaudited)
<S> <C> <C>
CURRENT LIABILITIES
Note payable to bank . . . . . . . . . . . . . . . $ 200,000 $ 1,400,000
Current portion of long-term debt . . . . . . . . 1,271,088 473,748
Accounts payable and accrued expenses . . . . . . 1,482,920 937,902
Deferred revenue . . . . . . . . . . . . . . . . . 47,002 83,841
Income taxes payable . . . . . . . . . . . . . . . 852,692 650,464
----------- -----------
TOTAL CURRENT LIABILITIES . . . . . . . . . . 3,853,702 3,545,955
LONG-TERM DEBT AND OBLIGATIONS UNDER CAPITAL
LEASE, net of current portion . . . . . . . . . . . . 479,731 1,317,506
----------- -----------
TOTAL LIABILITIES . . . . . . . . . . . . . . . . 4,333,433 4,863,461
----------- -----------
SHAREHOLDERS' EQUITY
Preferred stock, no par value; 1,000,000
shares; issued and outstanding 36,000 shares
(1995), 40,000 shares (1996) . . . . . . . . . . . 3,200,000 3,600,000
Common stock, no par value; authorized 10,000,000
shares; issued and outstanding 2,541,666 shares . . 4,241,748 4,241,748
Retained earnings . . . . . . . . . . . . . . . . 1,832,307 1,739,892
----------- -----------
TOTAL SHAREHOLDERS' EQUITY . . . . . . . . . 9,274,055 9,581,640
----------- -----------
$13,607,488 $14,445,101
=========== ===========
</TABLE>
See accompanying Notes to Condensed Financial Statements.
4
<PAGE> 5
INTERSCIENCE COMPUTER CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
June 30,
-----------------------------------------------
1995 1996
-------------------- --------------------
<S> <C> <C>
SALES . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,208,112 $2,388,768
COST OF SALES . . . . . . . . . . . . . . . . . . . . . . 1,260,500 1,745,752
---------- ----------
GROSS PROFIT . . . . . . . . . . . . . . . . . . . . . . 947,612 643,016
---------- ----------
OPERATING EXPENSES
Sales and administrative . . . . . . . . . . . . . . . . 472,044 1,277,147
Development . . . . . . . . . . . . . . . . . . . . . . 304,343 (1,221)
Depreciation and amortization . . . . . . . . . . . . . . 35,300 74,846
Interest expense (income) . . . . . . . . . . . . . . . . (14,095) 40,960
---------- ----------
TOTAL OPERATING EXPENSES . . . . . . . . . . . . . 797,592 1,391,732
---------- ----------
INCOME (LOSS) BEFORE TAX . . . . . . . . . . . . . . . . . 150,020 (748,716)
INCOME TAX (BENEFIT) . . . . . . . . . . . . . . . . . . . 25,000 (302,425)
---------- ----------
NET INCOME (LOSS) . . . . . . . . . . . . . . . . . . . $ 125,020 $ (446,292)
========== ==========
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING . . . . . . . . . . . . . . . . . . . 2,541,666 2,541,666
---------- ----------
NET INCOME (LOSS) . . . . . . . . . . . . . . . . . . . . . $ .05 $ (.18)
========== ==========
</TABLE>
See accompanying Notes to Condensed Financial Statements.
5
<PAGE> 6
INTERSCIENCE COMPUTER CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
June 30,
-----------------------------------------------
1995 1996
---------------------- --------------------
<S> <C> <C>
SALES . . . . . . . . . . . . . . . . . . . . . . . . . . . $6,919,111 $8,300,918
COST OF SALES . . . . . . . . . . . . . . . . . . . . . . 3,918,033 5,199,753
---------- ----------
GROSS PROFIT . . . . . . . . . . . . . . . . . . . . . . 3,001,078 3,101,165
---------- ----------
OPERATING EXPENSES
Sales and administrative . . . . . . . . . . . . . . . . 1,370,746 2,726,838
Development . . . . . . . . . . . . . . . . . . . . . . 802,492 65,377
Depreciation and amortization . . . . . . . . . . . . . . 98,865 200,154
Interest expense (income) . . . . . . . . . . . . . . . . (56,086) 9,390
---------- ----------
TOTAL OPERATING EXPENSES . . . . . . . . . . . . . 2,216,017 3,001,759
INCOME BEFORE TAX . . . . . . . . . . . . . . . . . . . . 785,061 99,406
INCOME TAX . . . . . . . . . . . . . . . . . . . . . . . . 279,000 (18,425)
---------- ----------
NET INCOME . . . . . . . . . . . . . . . . . . . . . . . $ 506,061 $ 117,831
========== ==========
WEIGHTED AVERAGE NUMBER OF COMMON
SHARES OUTSTANDING . . . . . . . . . . . . . . . . . 2,541,666 2,541,666
---------- ----------
EARNINGS PER COMMON SHARE
---------- ----------
NET INCOME . . . . . . . . . . . . . . . . . . . $ .20 $ .05
========== ==========
</TABLE>
See accompanying Notes to Condensed Financial Statements.
6
<PAGE> 7
INTERSCIENCE COMPUTER CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended
June 30,
------------------
1995 1996
----------------- -----------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net income . . . . . . . . . . . . . . . . . . . . . . $ 506,061 $ 117,831
Adjustments to reconcile net income to net cash
provided (used) by operating activities:
Depreciation and Amortization . . . . . . . . . . . . . 98,865 213,556
Loss from rescission of asset sale . . . . . . . . . . . 61,927
Changes in operating assets and liabilities:
Accounts receivable . . . . . . . . . . . . . . . . (721,353) 96,646
Inventory . . . . . . . . . . . . . . . . . . . . . (669,499) (1,831,047)
Prepaid expenses . . . . . . . . . . . . . . . . . . (116,011) 22,448
Deposits and other . . . . . . . . . . . . . . . . . 10,600 7,278
Accounts payable and accrued expenses . . . . . 68,248 (685,031)
Deferred revenue . . . . . . . . . . . . . . . . 10,295 36,839
Income taxes payable . . . . . . . . . . . . . . . (436,000) (202,228)
---------- ----------
NET CASH PROVIDED (USED) BY
OPERATING ACTIVITIES . . . . . . . . . . . . . (1,248,794) (2,161,781)
---------- ----------
CASH FLOWS FROM INVESTING ACTIVITIES
Investment in subsidiary . . . . . . . . . . . . . . . (210,091) (238,951)
Rescission of asset sale . . . . . . . . . . . . . . . . . 51,809
Sale of assets . . . . . . . . . . . . . . . . . . . . . . 7,499
Investment in equipment contracts receivable . . . . . 143,362 487,290
Patent acquisition costs . . . . . . . . . . . . . . . (136,356) (72,849)
Purchase of property and equipment . . . . . . . . . . (73,186) (27,616)
---------- ----------
NET CASH PROVIDED (USED) BY
INVESTING ACTIVITIES . . . . . . . . . . . . . (276,271) 207,182
---------- ----------
CASH FLOWS FROM FINANCING ACTIVITIES
Principal reductions of short-term
and long-term obligations . . . . . . . . . . . . . . (18,000) (1,034,774)
Proceeds of bank borrowings . . . . . . . . . . . . . . . - 1,400,000
Proceeds from preferred offering . . . . . . . . . . . . . 400,000
Preferred stock dividends paid . . . . . . . . . . . (202,500) (210,246)
---------- ----------
NET CASH PROVIDED (USED) BY
FINANCING ACTIVITIES . . . . . . . . . . . . . . (220,500) 554,980
---------- ----------
NET INCREASE (DECREASE) IN CASH AND
CASH EQUIVALENTS . . . . . . . . . . . . . . . . . . . . . (1,745,565) (1,399,619)
CASH AND CASH EQUIVALENTS, Beginning of period . . . . . . 3,405,590 2,046,017
---------- ----------
CASH AND CASH EQUIVALENTS, End of period . . . . . . . . . $1,660,025 $ 646,398
---------- ----------
</TABLE>
See accompanying Notes to Condensed Financial Statements.
7
<PAGE> 8
INTERSCIENCE COMPUTER CORPORATION AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED
FINANCIAL STATEMENTS
(Unaudited)
Note 1. Introduction
The accompanying condensed consolidated financial statements of
Interscience Computer Corporation (the "Company") have been prepared without
audit pursuant to the rules and regulations of the Securities and Exchange
Commission. Certain information and footnote disclosures normally included in
the financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted pursuant to such rules and
regulations, although the Company believes that the disclosures made are
adequate to make the information presented not misleading. These financial
statements should be read in conjunction with the consolidated financial
statements and related footnotes included in the Company's latest Annual Report
on Form 10-KSB. In the opinion of management, all adjustments, consisting only
of normal recurring adjustments, necessary to present fairly the financial
position of the Company as of June 30, 1996, and the statements of its
operations and its cash flows for the nine month periods ended June 30, 1996
and 1995 have been included. The results of operations for interim periods are
not necessarily indicative of the results which may be realized for the full
year.
The Company considers all highly liquid investments with a maturity of
three months or less when purchased to be cash equivalents.
8
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Results of Operations:
Overview: The revenues of Interscience Computer Corporation (the
"Company") are primarily derived from the following three interrelated
activities: 1) Providing maintenance services for data centers that contain
mainframe computer systems and/or related peripheral equipment, particularly
high speed production printers; 2) The distribution of proprietary consumable
products, such as fusing agents and toners, that are used by the high speed
production printers that are maintained by the Company; 3) The sale of computer
equipment maintained by the Company, primarily through third party leases.
Most of the Company's consumable sales, and a major portion of the Company's
revenues are derived from the sale of the Company's patented fusing agent (the
"Fusing Agent").
The Company has attempted to increase its geographic and equipment
maintenance base through various acquisitions, including the January 1994
acquisition of J.C. Alltime Computer Service, Inc., a regional third-party
maintenance company; the July 1995 acquisition of Laser Support & Engineering,
Inc. ("LSE"), a regional third-party Xerox maintenance company; the acquisition
in October 1995 of the Page Printing Division ("PPD") of Miltope Business
Products, Inc., a third-party maintenance business for Delphax and Olympus page
printers; and the June 1996 acquisition of certain Xerox maintenance contracts
and equipment from Banctec, Inc. (the "BancTec Transaction").
The Company also established a subsidiary in 1993 in the United Kingdom
to market the Fusing Agent. Although a patent was issued on the Fusing Agent in
the U.S. in July 1994, no patents on the Fusing Agent were issued in Europe
until January 1996. Due to the lack of patent protection in Europe, the
operations of the Company's United Kingdom subsidiary, Interscience PLC, did not
live up to the Company's expectations, and the Company in 1995 elected to sell
the operations of Interscience PLC to an affiliate of one of the Company's
directors. However, after the sale of Interscience PLC, the Company received a
patent for the Fusing Agent in England. Accordingly, the Company and the
purchaser agreed to unwind the sale of Interscience PLC and to reinstate the
operations of Interscience PLC. The Company incurred a loss of approximately
$60,000 due to the reversal of the sale. For the nine-month period ending June
30, 1996, Interscience PLC has generated $1,040,000 of gross revenues and
$145,000 of net income.
Comparison of the Three Months Ended June 30, 1996 and June 30, 1995:
Revenues of the Company for the three-month period ended June 30, 1996 (the
"Current Quarter") increased by $181,000, or 9%, over revenues for the
three-month period ended June 30, 1995 (the "Prior Quarter") to approximately
$2,389,000 from $2,208,000, respectively. The increase in revenue is
attributable to a 112% increase in maintenance revenue, which increase was
partly offset by a 50% decline in the sale of consumable products. The
increase in maintenance revenues is primarily due to the additional revenues
generated by LSE and PPD, which acquisitions were consummated after the close
of the Prior Quarter. In addition, maintenance revenues increased due to the
additional revenues generated under a major maintenance agreement the Company
entered into a March 1996 with Business Mailing Express, Inc. ("BME"). The
BME maintenance agreement provided that the Company would take over the
multi-state maintenance operations in stages. The Company anticipates that its
maintenance revenues will increase in the future as the revenues from the BME
agreement are fully realized and as maintenance revenues from the BancTec
Transaction are recorded.
The decrease in consumable sales is primarily due to a decrease in
sales of Fusing Agent to Siemens Nixdorf Printing Systems ("Siemens"). The
Company attributes the decrease to the timing of orders by Siemens and to
certain issues regarding the Company's obligations to sell the Fusing Agent to
Siemens, which issues are currently being resolved. The Company anticipates
that orders for Fusing Agent from Siemens will increase in the future.
Cost of sales for the Current Quarter exceeded the cost of sales of
the Prior Quarter by $485,000, or a 39% increase. The principal reasons for
the increase in the cost of sales are (i) a material increase
9
<PAGE> 10
in parts acquired and consumed during the Current Quarter by LSE and other
expenses incurred by LSE, and (ii) the additional expenses related to opening
and maintaining additional offices to service the assets acquired in the
BancTec Transaction and, to a lesser extent, to service the BME agreement.
Revenues attributable to the additional costs related to the BancTec
Transaction and BME agreement did not match the costs incurred because of the
staged phase-in of the BME agreement and BancTec Transaction. Revenues from
these transactions are, however, expected to increase in the future. In
addition, cost of sales for LSE during the Current Quarter were $447,000 on
sales of $465,000. The Company believes that this imbalance in costs can be
corrected. In order to control LSE's costs and to properly manage LSE's
operations, the Company recently replaced the President of LSE and is
currently considering merging the operations of LSE with the Company's
other operations.
Operating expenses for the Current Quarter increased by $594,000, or
75% over the Prior Quarter. The increase is attributable to the following
one-time adjustments and on-going matters.
- As mentioned above, the Company reacquired Interscience PLC
after the Company's patent application for its Fusing Agent
was approved in England. As a result of the reacquisition,
the Company recognized a one-time $60,000 charge, which
charge is reflected in the Current Quarter.
- In March 1996 the Company sold equipment to one of its
maintenance clients for $150,000, which sale was reflected in
the Company's sales for the fiscal quarter ended March 31,
1996. During the Current Quarter, the buyer of the equipment
notified the Company that it would not be able to consummate
the equipment purchase this year, if ever. Accordingly, the
Company has reversed the equipment sale, which reversal is
reflected in the Current Quarter.
- The Company has also incurred significant costs related to the
BancTec Transaction. In order to service the new maintenance
contracts acquired in the BancTec Transaction, the Company has
established six additional field maintenance offices.
Furthermore, due to the PPD acquisition and the additional
Xerox maintenance contracts the Company has recently obtained,
the Company undertook a significant training program for its
field engineers. The travel, lodging and training expenses
related to the training program were incurred primarily in the
Current Quarter.
The extraordinary expenses described above were partially offset by
the decrease in development expenses. During the Prior Quarter, the Company
expended significant amounts in developing some of the toner products it now
has in pre-production negotiations with potential manufacturers. The initial
development of the new products has been terminated, resulting in the
decrease in development expenses.
As a result of the decrease in Fusing Agent sales and of the
adjustments made to reflect the Interscience PLC reacquisition, the reversal of
the $150,000 equipment sale, the extraordinary expenses incurred by the Company
in completing and supporting the recent BME agreement and BancTec Transaction,
and the significant losses by LSE, the Company had a loss of $749,000 before
tax during the Current Quarter compared to income of $150,000 for the Prior
Quarter. Due to the loss in the Current Quarter, the Company had a $302,000
tax benefit that reduced the net loss to $446,000 for the Current Quarter.
Comparison of the Nine Months Ended June 30, 1996 and 1995:
Revenues of the Company for the nine month-period ended June 30, 1996
(the "Current Period"), increased by $1,381,807 over revenues for the nine
month-period ended June 30, 1995 (the "Prior Period"), to approximately
$8,301,000, from $6,919,000, respectively. Revenue from annual maintenance
contracts increased by approximately 74%, or $1,410,000, to $3,321,000 from
$1,911,000. The increase in revenue from maintenance contracts is a result of
the addition of PPD and LSE during the Current Period. Consumable products
revenue decreased by 28% or $1,035,000, due to a reduction in sales of
10
<PAGE> 11
Fusing Agent to Siemens of $1,234,760 in the Current Period compared to the
Prior Period. However, sales of consumables to other distributors and the
Company's end user maintenance base has increased by $200,000, or 10%, for the
Current Period. During the Current Period, the Company also recognized
revenues of $1,100,000 primarily from non-recurring sales of parts. Equipment
sales decreased by about $120,000 or 21%, to $457,000 from $579,000 for the
comparable nine month periods ended June 30, 1996 and 1995, respectively.
Since equipment sales are typically individually structured, revenues from
equipment sales can fluctuate from period to period.
Gross profits for the nine-month period ended June 30, 1996 increased
to $3,101,000 or 38% of total revenue, from $3,001,000, or 43% of total
revenue. The decrease in the Company's gross profit ratio was due to the
Company's lower gross margins on maintenance revenues and from reduced sales of
higher margin consumable products.
Sales and administrative expenses increased in the Current Period by
$1,356,000, or 99%, due primarily to costs associated with expanding sales and
field service capabilities during the Current Period and to the additional
costs of maintaining the PPD and Xerox product lines. The Company has expanded
its service capabilities to the cities of Denver, Sacramento, Chicago,
Charlotte, Tampa and Hartford. In addition, the Company's expenses for the
Current Period also increased due to the extraordinary expenses described in
"Comparison of the Three Months Ended June 30, 1996 and 1995," above.
Development investment for the nine months ended June 30, 1996
decreased by $737,000, to $65,000 from $802,000, or 92%, as a result of
completing the initial development expense for the Company's new product lines
intended to support both high speed color and black and white production
printing.
Income before tax and extraordinary items decreased by $686,000, or
88%, during the nine month period ended June 30, 1996, to $99,000, from
$785,000, from the comparable 1995 period, as a direct result of the Company's
expansion of maintenance capabilities. The large increase in sales and
administrative expenses and a 103% or $101,000 increase in depreciation and
amortization expense were also contributing factors.
Liquidity and Capital Resources:
The Company's cash and cash equivalents, on June 30, 1996, decreased
by approximately $1,400,000 from September 30, 1995. The decline was due to (i)
the $800,000 payment made in January 1996 as part of the purchase price of the
LSE acquisition and (ii) the increased investment in replacement parts
inventory of $2,024,000 that was necessary due to the Company's acquisitions
of BancTec inventory and its increase in maintenance capabilities. These uses
of cash were partially funded from short term bank borrowings in the amount of
$1,400,000 and the sale of 4,000 shares of the Company's Series B Preferred
Stock for $400,000.
On June 30, 1996, the Company's working capital and current ratio were
$3,717,000, and 2:1 compared with $4,395,000, and 3.6:1 on June 30, 1995, and
further compared to working capital of $2,922,000, and a current ratio of
1.76:1 on September 30, 1995.
The Company's principal long-term obligations consist of its dividend
obligations under its outstanding series of preferred stock and its obligation
to pay BancTec a total of $950,000 in installments of $31,666.67 per month for
30 months. The Company believes that its cash flow from operations and its
credit facility of $3,000,000 with Sanwa Bank of California will be sufficient
to fund the Company's anticipated working capital needs for the foreseeable
future.
11
<PAGE> 12
PART II
OTHER INFORMATION
ITEM 6. EXHIBITS REPORTS ON FORM 8-K
(a) 27. Financial Data Schedule.
(b) No reports on Form 8-K were filed during the quarter for which
this report is filed.
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
INTERSCIENCE COMPUTER CORPORATION
Date: August 14, 1996 _________________________
Frank J. LaChapelle,
Chief Executive Officer
12
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
COMPANY'S CONSOLIDATED STATEMENTS OF EARNINGS AND CONSOLIDATED BALANCE SHEETS
AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> APR-1-1996
<PERIOD-END> JUN-30-1996
<CASH> 646,398
<SECURITIES> 0
<RECEIVABLES> 1,810,063
<ALLOWANCES> 15,000
<INVENTORY> 4,529,482
<CURRENT-ASSETS> 7,263,099
<PP&E> 800,190
<DEPRECIATION> 102,850
<TOTAL-ASSETS> 14,445,101
<CURRENT-LIABILITIES> 3,545,955
<BONDS> 0
3,600,000
0
<COMMON> 4,241,748
<OTHER-SE> 1,739,892
<TOTAL-LIABILITY-AND-EQUITY> 14,445,101
<SALES> 1,185,064
<TOTAL-REVENUES> 2,388,768
<CGS> 549,932
<TOTAL-COSTS> 1,745,752
<OTHER-EXPENSES> 1,350,772
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 40,960
<INCOME-PRETAX> (748,716)
<INCOME-TAX> (302,425)
<INCOME-CONTINUING> (446,292)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (446,292)
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
