<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
----------------
FORM 10-Q
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
(X) Quarterly Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
OR
( ) Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
---------------------------------------------
FOR THE QUARTER ENDED OCTOBER 31, 1996 COMMISSION FILE NUMBER 0-25016
T-NETIX, INC.
------------------------------------------------------
(Exact Name of registrant as Specified in Its Charter)
COLORADO 84-1037352
----------------------------------------------- -------------------
(State of Other Jurisdiction of Incorporation) (I.R.S.Employer
Identification No.)
67 INVERNESS DRIVE EAST
ENGLEWOOD, COLORADO 80112
- --------------------------------------------------------------------------------
(Address of principal executive offices) (Zip Code)
REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE: (303) 790-9111
--------------------------------------------------------------------
Indicate by check whether the registrant (1) has filed
all reports required to filed by Section 13 or 15 (d) of the
Securities and 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 practical date.
Class Outstanding at December 12, 1996
- -------------------------------------- --------------------------------
Common Stock, $.01 stated value 8,179,993
<PAGE> 2
T-NETIX, INC.
FORM 10-Q
INDEX
<TABLE>
<CAPTION>
PART ITEM PAGE
- ---- ---- ----
<S> <C>
I. FINANCIAL INFORMATION
1. Financial Statements:
Consolidated Balance Sheets, October 31, 1996
and July 31, 1996 (Unaudited)............................................... 2
Consolidated Statements of Operations, Three Months Ended
October 31, 1996 and 1995 (Unaudited) ...................................... 3
Consolidated Statements of Shareholders' Equity, Three Months Ended
October 31, 1996 and Year Ended July 31, 1996 (Unaudited) .................. 4
Consolidated Statements of Cash Flows, Three Months Ended
October 31, 1996 and 1995 (Unaudited) ...................................... 5
Notes to Consolidated Financial Statements (Unaudited)............................... 6
2. Management's Discussion and Analysis of Financial Condition and Results of
Operations ......................................................................... 8
II. OTHER INFORMATION - Items 1 through 6 ........................................................ 12
</TABLE>
1
<PAGE> 3
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
T-NETIX, INC. AND SUBSIDIARIES
Consolidated Balance Sheets
(Unaudited)
<TABLE>
<CAPTION>
October 31, July 31,
1996 1996
-------- --------
(amounts in thousands)
<S> <C> <C>
ASSETS
Cash and cash equivalents $ 122 $ 145
Trade accounts receivable, net of allowance 8,928 8,222
Other receivables 73 73
Prepaid expenses 198 296
Property and equipment, at cost:
Telecommunications equipment 33,017 31,463
Construction in progress 5,634 5,012
Office equipment 3,267 2,771
-------- --------
Property and equipment 41,918 39,246
Less accumulated depreciation and amortization (12,194) (10,516)
-------- --------
Property and equipment, net 29,724 28,730
Patent license rights 2,693 2,788
Other assets, net 2,999 2,273
-------- --------
$ 44,737 $ 42,527
======== ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Accounts payable $ 7,849 $ 7,968
Accrued liabilities 1,726 2,191
Debt 9,593 6,324
Capital lease obligations 367 485
-------- --------
Total liabilities 19,535 16,968
Shareholders' equity:
Preferred stock, $0.01 stated value, 10,000,000 shares
authorized; no shares issued -- --
Common stock, $0.01 stated value, 70,000,000 shares
authorized; issued and outstanding 8,177,868 and 8,150,493 82 81
shares, respectively
Additional paid-in capital 26,247 26,208
Accumulated deficit (1,127) (730)
-------- --------
Total shareholders' equity 25,202 25,559
Commitments and contingencies
-------- --------
$ 44,737 $ 42,527
======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
2
<PAGE> 4
T-NETIX, INC. AND SUBSIDIARIES
Consolidated Statements of Operations
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
----------------------------
October 31, October 31,
1996 1995
------------ ------------
(amounts in thousands, except
per share amounts)
<S> <C> <C>
Revenue:
Telecommunication services $ 8,059 $ 7,475
Direct call provisioning 429 815
Other revenue 18 --
------------ ------------
Total revenue 8,506 8,290
Expenses:
Operating costs and expenses
Telecommunications services 3,910 3,400
Direct call provisioning 437 815
------------ ------------
Total operating costs and expenses 4,347 4,215
Selling, general, and administrative 1,864 1,618
Research and development 711 318
Depreciation and amortization 1,826 1,283
------------ ------------
Total expenses 8,748 7,434
Operating income (loss) (242) 856
Interest expense (155) (163)
------------ ------------
Earnings (loss) before income taxes (397) 693
Income taxes -- (36)
------------ ------------
Net earnings (loss) $ (397) $ 657
============ ============
Net earnings (loss) per common share $ (0.04) $ 0.07
============ ============
Weighted average common shares
outstanding 8,825 9,031
============ ============
</TABLE>
See accompanying notes to consolidated financial statements.
3
<PAGE> 5
T-NETIX, INC. AND SUBSIDIARIES
Consolidated Statements of Shareholders' Equity (Deficit)
(Unaudited)
<TABLE>
<CAPTION>
Add- Total
Common stock itional Accum share-
------------------- paid-in -ulated holders'
Shares Amounts capital deficit equity
-------- -------- -------- -------- --------
(amounts in thousands)
<S> <C> <C> <C> <C> <C>
Balances at August 1, 1995 7,623 $ 76 $ 22,736 $ (2,357) $ 20,455
Common stock issued upon
exercise of stock options 303 3 195 -- 198
Common stock issued for assets
acquired 30 -- -- -- --
Common stock issued in
business acquisition 195 2 2,269 -- 2,271
Stock option tax benefit -- -- 1,008 -- 1,008
Net earnings -- -- -- 1,627 1,627
-------- -------- -------- -------- --------
Balances at July 31, 1996 8,151 81 26,208 (730) 25,559
Common stock issued upon
exercise of stock options 28 1 39 -- 40
Net Loss -- -- -- (397) (397)
-------- -------- -------- -------- --------
Balances at October 31, 1996 8,179 $ 82 $ 26,247 $ (1,127) $ 25,202
======== ======== ======== ======== ========
</TABLE>
See accompanying notes to consolidated financial statements.
4
<PAGE> 6
T-NETIX, INC. AND SUBSIDIARIES
Consolidated Statements of Cash Flows
Three months ended October 31, 1996 and 1995
(Unaudited)
<TABLE>
<CAPTION>
1996 1995
------- -------
( amounts in thousands)
<S> <C> <C>
Cash flows from operating activities:
Net earnings (loss) $ (397) $ 657
Adjustments to reconcile net earnings to net cash
provided by (used in) operating activities:
Depreciation and amortization 1,826 1,283
Provision for losses on accounts receivable 71 132
Noncash reductions of loans from customer -- (386)
Changes in operating assets and liabilities, net of
acquisition of business:
Change in trade accounts receivable (777) (820)
Change in other receivables -- (17)
Change in prepaid expenses 98 58
Change in other assets (126) (120)
Change in accounts payable (119) (365)
Change in accrued liabilities (465) 230
------- -------
Cash provided by operating activities 111 652
------- -------
Cash flows from investing activities:
Capital expenditures (2,672) (1,784)
Acquisition of business -- (306)
Other investing activities (653) (117)
------- -------
Cash used in investing activities (3,325) (2,207)
------- -------
Cash flows from financing activities:
Proceeds from borrowings 3,275 776
Payments of debt (6) (48)
Payments of capital lease obligations (118) (120)
Common stock issued for cash 40 75
------- -------
Cash provided by financing activities 3,191 683
------- -------
Net decrease in cash and cash equivalents (23) (872)
Cash and cash equivalents at beginning of period 145 872
------- -------
Cash and cash equivalents at end of period $ 122 $ --
======= =======
</TABLE>
See accompanying notes to consolidated financial statements.
5
<PAGE> 7
T-NETIX, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
Unaudited financial statements
The accompanying unaudited consolidated financial statements reflect
all adjustments which, in the opinion of management, are necessary to
reflect a fair presentation of the financial position and results of
operations of T-NETIX, Inc. and subsidiaries (the Company) for the
interim periods presented. All adjustments, in the opinion of
management, are of a normal and recurring nature.
Reclassification
Certain amounts in the 1996 financial statements have been
reclassified to conform with the 1997 presentation.
Capitalized Software Cost
Certain costs of internally developed software to be sold, leased, or
otherwise marketed are capitalized over the economic useful life of
the software product, which is generally estimated to be three years.
Unamortized capitalized software cost was $145,000 at October 31,
1996.
Earnings (loss) per common share
Earnings (loss) per common share for the three months ended October
31, 1996 and 1995, are computed based upon the weighted average number
of common and dilutive common equivalent shares outstanding during the
period. For purposes of the calculation of earnings per common share,
common stock equivalents consist of stock options to acquire common
stock (using the treasury stock method).
Income taxes
A valuation allowance is provided when it is more likely than not that
some portion or all of the net deferred tax asset will not be
realized. The Company has historically established valuation
allowances primarily for net operating loss carryforwards and portions
of other deferred tax assets as a result of its history of net losses.
The Company has a net loss for the three months ended October 31, 1996
and has increased the valuation allowance to the extent of the loss.
Debt
In December 1996, the Company increased its Loan Agreement with its
commercial bank to a total of $11,000,000 in committed credit. All
other terms and conditions associated with the Loan Agreement remained
the same.
Contingencies
In July 1996, the Company filed a patent infringement lawsuit against
BellSouth Telecommunications, Inc. ("BellSouth"). The suit seeks an
injunctions against the continued use of infringing product by
BellSouth's current prison and jail customers. The Company alleged
that BellSouth has purchased, installed and continued to use equipment
which infringes on the Company's three-way call detection technology
(the "702 Patent"). The equipment in question was manufactured by
Communications Equipment and Engineering Corp. Also in July 1996,
BellSouth filed an action against the Company requesting a declaratory
judgment of noninfringement and invalidity of the Company's `702
Patent. BellSouth has not claimed any monetary damages in either
action to date and to date there is no basis for any claims which
would result in a material loss to the Company.
6
<PAGE> 8
T-NETIX, INC. AND SUBSIDIARIES
Notes to Consolidated Financial Statements
In August 1995, Independent Telecommunications Network, Inc.("ITN")
filed a demand for arbitration with the American Arbitration
Association, claiming the Company had breached certain query transport
services contracts with ITN by, ITN alleges, terminating those
contracts. ITN seeks damages of approximately $3 million based on its
alleged potential future earnings under the contracts. Given that the
dispute is in the early stages of arbitration, and the speculative
nature of arbitration in general, the Company is unable to predict
with certainty the outcome of this dispute. However, the Company
believes that the ultimate resolution of this matter will not have a
material adverse effect on its financial condition, results of
operations or cash flows.
7
<PAGE> 9
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
For a comprehensive understanding of the Company's financial condition and
performance, this discussion should be considered within the context of the
consolidated financial statements and accompanying notes and other information
contained herein.
The Private Securities Litigation Reform Act of 1995 provides a "safe harbor"
for forward-looking statements. Certain information contained in management's
discussion and analysis of financial condition and results of operations and
elsewhere in this Form 10-Q include forward-looking statements that involve
risks and uncertainties not limited to, the demand for the Company's products
and services and market acceptance risks, the effect of economic conditions,
the impact of competitive products and pricing, the Company's continuing
ability to develop hardware and software products, commercialization and
technological difficulties, manufacturing capacity and product supply
constraints or difficulties, actual purchases by current and prospective
customers under existing and expected agreements, the progress of contract
implementation efforts that allow the Company to recognize revenue under its
accounting policies, and the results of financing efforts, along with the other
risks detailed herein.
OVERVIEW
The Company derives revenue under contracts with its customers,
including AT&T, Bell Atlantic, GTE, NYNEX, Pacific Telesis, Southwestern Bell
and US West, and other telecommunications service providers, primarily from the
provisioning of specialized call processing services for correctional
facilities. This revenue is generated under long-term contracts which provide
for transaction fees paid on a per-call basis. The Company is paid a prescribed
fee for each call completed and additional fees for validating phone numbers
dialed by inmates. The Company also derives revenue as a direct provider of
inmate calls, although this service is provided primarily as an accommodation
to certain customers. The Company expects to derive a declining percentage of
total revenue from its direct call provisioning business. The following table
sets forth certain information concerning the accepted calls processed by the
Company for its customers in the inmate calling market and excludes direct call
provisioning.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
-----------------------------------------
OCTOBER 31, OCTOBER 31,
1996 1995
------------------- -------------------
<S> <C> <C>
Call volumes processed 21,731,000 18,637,000
Average daily transactions 236,000 203,000
</TABLE>
The Company's call volume and revenue growth have resulted primarily
from adding call processing systems for both existing and new customers. The
Company believes it has also benefited, to a lesser extent, from the overall
growth in the inmate calling market. The Company will continue to market its
services to additional call providers; however, it expects growth in call
processing volumes will come predominantly from adding new systems for existing
customers. The Company expects the rate of growth in calls processed will
decrease relative to the historical rates.
8
<PAGE> 10
RESULTS OF OPERATIONS
Three Months Ended October 31, 1996 and 1995
The following table sets forth certain statement of operations data as
a percentage of total revenue for the three months ended October 31, 1996 and
1995.
<TABLE>
<CAPTION>
THREE MONTHS ENDED OCTOBER 31,
------------------------------
1995 1994
---- ----
<S> <C> <C>
Revenue:
Telecommunications services 95% 90%
Direct call provisioning 5 10
Other revenue -- --
---- ----
Total revenue 100 % 100 %
Expenses:
Operating costs and expenses 51 % 51 %
Selling, general and administrative 22 20
Research and development 8 4
Depreciation and amortization 21 15
---- ----
Operating income (loss) (3) 10
Interest expense (2) (2)
---- ----
Earnings (loss) before income taxes (5) 8
Income taxes -- --
---- ----
Net earnings (loss) (5)% 8 %
==== ====
</TABLE>
Total Revenue. Total revenue increased 3% to $8,506,000 for the three
months ended October 31, 1996 from $8,290,000 for the corresponding prior
period. This increase resulted from a 8% increase in telecommunications
services revenue to $8,059,000 for the three months ended October 31, 1996,
from $7,475,000 in the corresponding prior period, due to a 17% increase in
call volume to resulting primarily from an increase in the number of installed
systems and the conversion of direct call provisioning to transaction based fee
contracts with other call providers. Due to the Company's significant market
share, the Company expects that the rate of growth in calls processed will
decrease relative to the historical rate. An offsetting factor to the increase
in revenue dollars is a reduction in fees per call as the Company's customers
reach contractually agreed upon call volume discounts. Specifically, these
discounts accounted for a reduction in revenue of approximately $47,000 during
the quarter ended October 31, 1996. These discounts will continue to have a
similar effect on revenue (by reducing revenue per call) in future periods to
the extent the call volumes continue to increase and as customers reach
contractually agreed upon call volume discounts. Direct call provisioning
revenue decreased as a percentage of total revenue in part due to the increase
in telecommunications services revenue and due to the conversion of direct
sites to telecommunications services revenue. There was also a dollar decrease
in direct call provisioning revenue due to conversion of sites serviced to
transaction based fees. The Company anticipates it will continue to convert
some of its direct call provisioning accounts to telecommunications services
customers for which it receives transaction fee revenue versus direct call
provisioning revenue. Other revenue, although not material, includes amounts
earned on government funding from a Small Business Innovative Research (SBIR)
grant centered around the SpeakEZ Voice Printsm technology.
9
<PAGE> 11
Operating costs and expenses. Total operating costs and expenses
increased to $4,347,000 for the three months ended October 31, 1996, from
$4,215,000 for the three months ended October 31, 1995, and remained constant
as a percentage of total revenue at 51% for the three months ended October 31,
1996 and 1995. Operating costs and expenses of telecommunications services
primarily consist of system administration costs for correctional facilities,
including salaries and related personnel expenses and inmate calling systems
repair and maintenance expense. Operating costs and expenses of
telecommunications services also include costs associated with call
verification procedures, primarily network expenses and database access
charges. The Company invoices these verification procedure costs to its
customers with minimal margins. Operating costs and expenses associated with
direct call provisioning include the costs associated with telephone line
access, commissions paid to correctional facilities, costs associated with
uncollectible accounts and billing charges.
The following table sets forth the operating costs and expenses for
each type of revenue as a percentage of corresponding revenue for the three
months ended October 31, 1996 and 1995.
<TABLE>
<CAPTION>
THREE MONTHS ENDED
-----------------------------
OCTOBER 31, OCTOBER 31,
1996 1995
------------ -----------
<S> <C> <C>
Operating costs and expenses:
Telecommunications services 49 % 45 %
Direct call provisioning 102 100
</TABLE>
Operating costs and expenses associated with providing
telecommunications services increased as a percentage of corresponding revenue
to 49% from 45% in the corresponding prior period. This percentage increase is
primarily attributable to increased personnel costs associated with providing
such services and the costs also including a greater proportion of verification
procedure costs which are billed to customers with minimal margins. Direct call
provisioning costs increased as a percentage of corresponding revenue to 102%
for the three months ended October 31, 1995, from 100% in the corresponding
prior period. This percentage increase is primarily attributable to the
conversion of sites that had an overall lower cost structure due to lower
commission expense than the remaining direct sites.
Selling, General and Administrative Expenses. Selling, general and
administrative expenses increased to $1,864,000 for the three months ended
October 31, 1996, from $1,618,000 in the corresponding prior period, and
increased as a percentage of total revenue to 22% from 20%. The dollar increase
was $246,000. This increase consists primarily of approximately $155,000 for
salaries for administrative personnel and related expenses (including contract
personnel) and $57,000 in property taxes. Total professional expenses including
accounting, legal, public reporting, and other (net) accounted for $42,000 of
the increase. The increase in salaries and contract personnel is due primarily
to pay rate increases and the increase in the number of personnel to support
current inmate call processing operations and the development of SpeakEZ Voice
Printsm technology. Property taxes increased due the increase in installed
systems. The increase in professional services is due to various legal actions
and general cost increases for services. The Company expects the level of
selling general and administrative expenses to remain at current levels over
this fiscal year. The costs will be primarily in marketing expenses and related
general and administrative support services associated with the Company's new
marketing divisions. These divisions have responsibility for marketing SpeakEZ
Voice Printsm products to their respective industries. There can be no
assurance, however, that due to the potential lack of market acceptance, risk
of technological success, or impact of new competition that revenues will grow
at the same rate as the anticipated selling, general and administrative
expenses.
Research and Development Expenses. Research and development expenses
increased to $711,000 for the three months ended October 31, 1996, from
$318,000 in the corresponding prior period, due to the addition of personnel to
develop and commercialize the Company's SpeakEZ Voice Printsm technology and
for support of integration engineering between the Company's core technologies
10
<PAGE> 12
and SpeakEZ Voice Printsm technology. The Company expects the dollar amount of
research and development expense to remain at current levels this fiscal year.
There can be no assurance, however, that due to potential lack of market
acceptance, risk of technological success, or impact of new competition that
revenues will grow at the same rate as the anticipated research and development
expenses.
Depreciation and Amortization Expenses. Depreciation and amortization
expenses increased to $1,826,000 for the three months ended October 31, 1996,
from $1,283,000 in the corresponding prior period. The increase is due to an
increased fixed asset base resulting from increased inmate call processing
systems installed by the Company, and due to the Company's continued investment
in its data network for verification procedures. In addition, infrastructure
additions in research and development and selling, general and administrative
functions also add to an increase in depreciation for office and testing
equipment. The Company expects depreciation and amortization to continue to
increase as the number of inmate call processing systems and potential
installations for SpeakEZ Voice Printsm systems increase and as it purchases
additional telecommunications and office and testing equipment.
Interest Expense. Interest expense decreased to $155,000 for the three
months ended October 31, 1996, from $163,000 in the corresponding prior period.
The decrease was primarily attributable to a change in the balance of
indebtedness and the related reduction in borrowing rates.
LIQUIDITY AND CAPITAL RESOURCES
The Company has historically relied upon shareholder and commercial borrowings,
the sale of equity securities and operating cash flow to fund its operations
and capital needs. Borrowings from a line of credit with a bank supplied the
Company with a majority of its cash from financing activities during the period
ended October 31, 1996. The net cash provided by financing activities in the
period ended October 31, 1996 was $3,191,000 . Cash provided by operations was
$111,000 for the period ended October 31, 1996 as compared to $652,000 for the
prior period. The change in cash provided by operations was primarily
attributable to decreases in net earnings, adjusted for depreciation and
amortization and an increase in the net change in operating assets and
liabilities.
Cash used in investing activities was $3,325,000 . This included capital
expenditures of $2,672,000 for the period ended October 31, 1996 as compared to
$1,784,000 in the prior period. The capital expenditures for the period ended
October 31, 1996 were mainly for telecommunications equipment and office
equipment. The increase in capital expenditures was due primarily to the
increase in the number of systems installed for the comparative periods.
Additional investing activities included expenditures for patent defense costs
and capitalized software development costs. The Company anticipates that
capital expenditures for telecommunications equipment will primarily follow the
installation of new systems.
Management believes that cash from operations and available borrowings under a
$11,000,000 line of credit arrangement should be sufficient to fund the
Company's operations and anticipated new inmate call processing systems and
potential installations for SpeakEZ Voice Printsm for the foreseeable future.
If the borrowing facilities and cash from operations are insufficient to
satisfy the Company's requirements, the Company may be required to sell
additional equity securities or extend its borrowing facilities. There can be
no assurance that such financing will be available or, if available, will be
obtainable on satisfactory terms.
11
<PAGE> 13
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
On October 21, 1996, the Company reached a settlement with Gateway
Technologies, Inc. of Carrollton, Texas ("Gateway") regarding the patent
infringement litigation between them.
As previously reported in 1995, the Company filed a civil action
against Gateway Technologies, Inc. ("Gateway") alleging infringement of the
Company's U.S. Patent 5,319,702 on three-way call detection (the "`702
Patent"), in Tele-Matic Corporation v. Gateway Technologies, Inc., Civil Action
No. 95-S-880, pending in the United States District Court for the District of
Colorado. On May 5, 1995, Gateway and Intellicall, Inc. ("Intellicall") filed
an action against the Company alleging infringement of U.S. Patents No.
4,935,956, 4,908,852, 4,920,558, 5,920,562, 4,933,966 and 5,093,858
(collectively, the "Gateway Patents") in Gateway Technologies, Inc. et. al. v.
Tele-Matic Corporation, Civil Action No. 395-CV-0855R, pending in the U.S.
District Court for the Northern District of Texas, Dallas Division. On October
21, 1996, the parties resolved the matters involved in both lawsuits.
Pursuant to the settlement agreement, the parties have filed and the
courts have entered stipulated final judgments and orders dismissing the claims
in litigation. As part of the settlement, the Company and Gateway have agreed
to cross-license certain patents involved in the litigation. Each party will
pay royalties to the other for the use of such patents.
ITEM 2. CHANGES IN SECURITIES
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM 5. OTHER INFORMATION
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
A. Exhibits
27 Financial Data Schedule
B. No reports on Form 8-K were filed during the three month
period ended October 31, 1996.
12
<PAGE> 14
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.
T-NETIX, Inc.
----------------
(Registrant)
Date December 16, 1996 By: /s/ Alvyn A. Schopp
----------------- -------------------
(Signature)
Alvyn A. Schopp, Executive Vice President
and Chief Financial Officer
(Principal Accounting Officer)
13
<PAGE> 15
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
<S> <C>
27 - Financial Data Schedule
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM FINANCIAL
STATEMENTS INCLUDED IN T-NETIX, INC.'S QUARTERLY REPORT ON FORM 10-Q FOR THE
THREE MONTHS ENDED OCTOBER 31, 1996 AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH FINANCIAL STATEMENTS
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> JUL-31-1996
<PERIOD-START> AUG-01-1996
<PERIOD-END> OCT-31-1996
<CASH> 122
<SECURITIES> 0
<RECEIVABLES> 9,001
<ALLOWANCES> 73
<INVENTORY> 0
<CURRENT-ASSETS> 0
<PP&E> 41,918
<DEPRECIATION> 12,194
<TOTAL-ASSETS> 44,737
<CURRENT-LIABILITIES> 0
<BONDS> 367
0
0
<COMMON> 82
<OTHER-SE> 25,120
<TOTAL-LIABILITY-AND-EQUITY> 44,737
<SALES> 0
<TOTAL-REVENUES> 8,506
<CGS> 0
<TOTAL-COSTS> 4,347
<OTHER-EXPENSES> 4,401
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 155
<INCOME-PRETAX> (397)
<INCOME-TAX> 0
<INCOME-CONTINUING> (397)
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> (397)
<EPS-PRIMARY> (0.04)
<EPS-DILUTED> (0.04)
</TABLE>
