UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-QSB
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13
OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from ______________ to _________________
Commission file number Z - 24196
MEDPLUS, INC.
(Exact name of registrant as specified in its charter)
Ohio 48-1094982
(State or other jurisdiction of (I.R.S. Employer
Identification No.)
incorporation or organization)
8805 Governor's Hill Drive, Suite 100
Cincinnati, OH 45249
(Address of principal executive offices)
(513) 583-0500
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the registrant was required to file
such report(s), and (2) has been subject to such filing
requirements for the past 90 days.
Yes ___X___ No ________
As of March 31, 1996, there were 5,818,824 shares of the
Registrant's Common Stock without par value issued and
outstanding.
PART 1. FINANCIAL INFORMATION
Item 1: Financial Statements.
MEDPLUS, INC. and SUBSIDIARY
Consolidated Statements of
Operations
(Unaudited)
Three Months Ended Three Months Ended
March 31, 1996 March 31, 1995
Net revenues $2,324,757 $1,857,128
Cost of revenues 909,650 740,071
_____________ ____________
Gross profit 1,415,107 1,117,057
Operating expenses:
Sales and marketing 738,321 885,034
Research and development 210,066 128,773
General and administrative 913,503 325,246
_____________ _____________
Total operating expenses 1,861,890 1,339,053
_____________ _____________
Operating loss (446,783) (221,996)
Other income, net 101,222 38,770
_____________ _____________
Loss before income tax benefit (345,561) (183,226)
Income tax benefit --- (67,061)
_____________ ______________
Net loss ($345,561) ($116,165)
_____________ ______________
Net loss per share ($0.06) ($0.02)
______________ ______________
Weighted average number of
shares of common stock
outstanding 5,808,392 4,743,750
______________ ______________
See accompanying notes to consolidated financial statements.
MEDPLUS, INC. and SUBSIDIARY
Consolidated Balance Sheets
(Unaudited)
March 31, December 31,
ASSETS 1996 1995
Current assets:
Cash and cash equivalents $ 5,981,337 7,494,094
Investment securities --- 500,020
Accounts receivable, less
allowance for doubtful
accounts of $50,000 in 1996
and 1995 3,250,905 2,799,428
Other receivables 208,270 215,688
Inventories 473,500 538,274
Unbilled service contracts 629,533 708,900
Prepaid expenses and other
current assets 460,889 505,426
11,004,434 12,761,830
Investment securities 295,840 302,730
Unbilled service contracts 1,485,385 1,249,256
Capitalized software
development costs, net of
accumulated amortization
of $548,775 in 1996 and $475,217
in 1995 1,468,612 1,265,906
Equipment, furniture and fixtures,
less accumulated depreciation of
$284,223 in 1996 and $236,203 in
1995 1,001,757 905,365
Excess of cost over fair value of
net assets acquired, net of
accumulated amortization of
$23,670 in 1996 and $6,335 in 1995 919,531 1,040,649
Deferred income taxes 36,019 36,019
Other assets 82,483 130,686
$16,294,061 17,692,441
LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Current installments of obligations
under capital leases $52,622 53,093
Accounts payable 980,819 1,104,214
Note payable to bank 80,860 ---
Payable to selling shareholders
of Universal Document Managment
Systems, Inc. 280,000 1,011,353
Deferred revenue on unbilled
service contracts 629,533 708,900
Accrued expenses 782,301 1,181,263
Deferred revenue 551,008 560,802
Total current liabilities 3,357,143 4,619,625
Deferred revenue on unbilled
service contracts 1,485,385 1,249,256
Deferred revenue 52,661 96,446
Obligations under capital
leases, excluding current
installments 89,342 103,565
Total liabilities 4,984,531 6,068,892
Shareholders' equity:
Common stock, no par value,
authorized 6,000,000 shares;
issued and outstanding5,818,824
in 1996 and 5,808,524 share
in 1995 1,058 1,056
Additional paid-in capital 14,116,923 14,035,728
Accumulated deficit (2,722,949) (2,377,388)
Unrealized gains on investment
securities 2,093 3,258
Deferred compensation under
employee stock award (87,595) (39,105)
Total shareholders'
equity 11,309,530 11,623,549
$16,294,061 17,692,441
See accompanying notes to consolidated financial statements.
MEDPLUS, INC. and SUBSIDIARY
Consolidated Statements of Cash Flows
(Unaudited)
Three Months Three Months
Ended Ended
March 31, March 31,
1996 1995
_____________ _____________
Cash flows from
operating activities:
Net loss ($345,561) ($116,165)
Adjustments to reconcile
net loss to net cash
provided by (used in)
operating activities:
Amortization of capitalized
software development costs 91,596 34,500
Amortization of deferred
compensation 21,207 ---
Depreciation and
amortization 65,355 28,471
Loss on sale of investment
securities and equipment,
furniture and fixtures --- (3,676)
Deferred income taxes --- (71,806)
Changes in assets and
liabilities:
Accounts receivable (451,477) 312,019
Income tax refund
receivable, net --- (5,400)
Other receivables 7,418 10,128
Inventories 64,774 52,580
Prepaid expenses and other
assets 196,523 113,193
Accounts payable and
accrued expenses (522,357) 105,816
Deferred revenue (53,579) (33,539)
___________ __________
Net cash provided by
(used in) operating
activities (926,101) 426,121
___________ __________
Cash flows from investing activities:
Capitalization of software
development costs (294,302) (131,697)
Purchase of equipment,
furniture and fixtures (144,412) (154,848)
Purchases of investment
securities --- (236,256)
Proceeds from sales of
investment securities 505,745 595,316
Payments to selling
shareholders in business
acquistions (731,353) ---
___________ _________
Net cash provided by
(used in) investing
activities (664,322) 72,515
___________ __________
Cash flows from financing activities:
Proceeds from issuance
of common stock, net of
issusance costs 11,500 ---
Proceeds from borrowing
on line of credit 431,602 ---
Repayments on line of credit (350,742) ---
Principal payments on
capital lease obligations (14,694) (7,012)
_____________ ________
Net cash provided by
(used in) financing
activities 77,666 (7,012)
_____________ ________
Net increase (decrease)
in cash (1,512,757) 491,624
_____________ ________
Cash and cash equivalents at
beginning of period 7,494,094 546,998
_____________ ________
Cash and cash equivalents at
end of period $5,981,337 $1,038,622
_____________ ________
Interest paid $ 6,143 $ 3,283
Income taxes paid --- 15,161
See accompanying notes to consolidated financial statements.
MedPlus, Inc. and Subsidiary
Notes to Consolidated Financial Statements
(Unaudited)
(1) Description of the Business
MedPlus, Inc. (the "Company") provides state-of-the-art
information management technology and products to customers in the
healthcare industry. The Company's products presently consist of
the IntelliCode Intelligent Bar Code System ("IntelliCode"), the
OptiMaxx Optical Information Management System ("OptiMaxx") and
Step 2000 Document Management and Workflow Solutions (Step 2000).
IntelliCode is an intelligent bar coding system for hospitals and
other healthcare organizations. OptiMaxx is an optical disk-based
patient/clinical document management system. Step 2000 is
workflow and document management software that enhances the
utilization of information on an enterprise-wide basis, regardless
of platforms or operating systems. The Company has recently
introduced a new product, the ChartMaxx Electronic Patient Record
System ("ChartMaxx"), which is an enterprise-wide centralized,
electronic patient data repository.
All of the Company's products utilize open architecture and
modular design software allowing them to be easily adapted to a
client's current information system. The Company's products allow
healthcare providers to more efficiently collect, store and
retrieve medical information. In addition, the Company's
technologies and products are designed to allow healthcare
providers to easily and quickly achieve quality and productivity
enhancements, physician office integration and cost containment
goals.
(2) Summary of Significant Accounting Policies
(a) Interim Financial Information
The financial statements and the related notes thereto are
unaudited and have been prepared on the same basis as the audited
financial statements. In the opinion of management, such
unaudited financial statements include all adjustments (consisting
of only normal recurring adjustments) necessary to present fairly
the information set forth therein.
(b) Significant Accounting Policies
A description of the Company's significant accounting
policies can be found in the footnotes to the Company's 1995
annual financial statements included in its registration statement
on Form 10-KSB dated March 29, 1996. These financial statements
should be read in conjunction with those footnotes.
(3) Net Loss Per Share
Net loss per share is based on the weighted average number of
shares of common stock and common stock equivalents outstanding
for each period. During periods of net loss, common stock
equivalents are not included in weighted average shares
outstanding.
Item No. 2 -- Management's Discussion and Analysis of Financial
Conditions and Results of Operations
Net revenues for the first quarter were a record $2,324,757,
an increase of $467,629 or 25%, over the $1,857,128 reported for
the corresponding period in 1995.
The Company successfully completed the installation and
implementation of two beta ChartMaxx core systems during the
second half of 1995 and has initiated the installation of a third
ChartMaxx system in the first quarter of 1996. Net revenues for
ChartMaxx were $246,785 in the first quarter of 1996. Revenues
for the OptiMaxx optical disk-based patient/clinical information
system were $355,805 and $439,037 for the three months ended
March 31, 1996 and 1995, respectively. Net revenues from
IntelliCode systems were $1,475,714 in 1996 and $1,418,091 in
1995. Net revenues for Step 2000 was $246,453 for the first three
months of 1996.
Operating expenses for the three month period were $1,861,890 in
1996 as compared to $1,339,053 in 1995, an increase of 39%. The
significant increase is a result of additional personnel in the
areas of development and general and administration. Substantial
expenditures have been made in the current year to increase market
awareness of the Company's products, especially the commercial
release of the new ChartMaxx system. The Company has also incurred
significant expenses to expand the direct and indirect channels of
distribution and to recruit senior management personnel to direct
and support the Company's anticipated future growth.
The operating loss for the quarter ended March 31, 1996, was
$446,783, as compared to an operating loss of $221,996 for the
corresponding 1995 period. The increased loss of $224,787 was
primarily due to increased operating expenses as previously
discussed. Net results for the three months ended March 31, 1996
were a net loss of $345,561 versus a net loss of $116,165 for the
comparable period of 1995.
The average shares outstanding used to compute earnings per share
increased from 4,743,750 shares in the first quarter of 1995 to
5,808,392 shares in the first quarter of 1996 primarily due to the
issuance of an additional 900,000 shares of stock in the Company's
secondary offering in November, 1995.
PART II. OTHER INFORMATION
None.
SIGNATURE
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.
MedPlus, Inc.
Date:____________________ By: /s/___________________
Daniel A. Silber
Chief Financial Officer
* Pursuant to the last sentence of General Instruction
G to Form 10-QSB, Mr. Daniel A. Silber has
executed this Quarterly report of Form 10-QSB both
on behalf of the registrant and in his capacity as
its principal financial and accounting officer.
<TABLE> <S> <C>
<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> MAR-31-1996
<CASH> 5981337
<SECURITIES> 295840
<RECEIVABLES> 3509175
<ALLOWANCES> (50000)
<INVENTORY> 473500
<CURRENT-ASSETS> 11004434
<PP&E> 1285980
<DEPRECIATION> (284223)
<TOTAL-ASSETS> 16294061
<CURRENT-LIABILITIES> 3357143
<BONDS> 0
0
0
<COMMON> 1058
<OTHER-SE> 2093
<TOTAL-LIABILITY-AND-EQUITY> 16294061
<SALES> 2324757
<TOTAL-REVENUES> 2324757
<CGS> 909650
<TOTAL-COSTS> 1861890
<OTHER-EXPENSES> 101222
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> (345561)
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (345561)
<EPS-PRIMARY> (0.06)
<EPS-DILUTED> 0
</TABLE>
