<PAGE> 1
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(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 0-26194
SEER TECHNOLOGIES, INC.
(Exact name of registrant as specified in its charter)
Delaware 13-3556562
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
8000 Regency Parkway
Cary, North Carolina
27511
(Address of principal executive offices)
(Zip Code)
(919) 380-5000
(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 reports), and (2) has been subject to
such filing requirements for the past 90 days.
Yes ....X.... No ........
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding at May 9,1996
Common Stock, $0.01 par value 11,438,294 shares
- - ------------------------------------------------------------------------------
1
<PAGE> 2
SEER TECHNOLOGIES, INC.
Index
Page
PART I. Financial Information Number
Item 1. Consolidated Financial Statements:
Consolidated balance sheets as of March 31, 1996
(unaudited)and September 30, 1995 3
Consolidated statements of operations (unaudited)
for the three month periods and six month periods
ended March 31, 1996 and 1995 4
Consolidated statements of cash flows (unaudited)
for the six month periods ended March 31, 1996 and 1995 5
Notes to consolidated financial statements (unaudited) 6
Item 2. Management's Discussion and Analysis of Financial Condition
and Results of Operations 7
PART II. Other Information 11
SIGNATURES 13
2
<PAGE> 3
PART I. Financial Information
Item 1. Financial Statements
SEER TECHNOLOGIES, INC.
CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amount)
<TABLE>
<CAPTION>
March 31, September 30,
1996 1995
( unaudited )
------------- -------------
<S> <C> <C>
ASSETS
Cash and cash equivalents $1,263 $13,650
Trade accounts receivable,less allowance for
doubtful accounts 48,546 42,949
Prepaid expenses and other current assets 4,319 4,071
Deferred income taxes 4,635 964
----------- -----------
Total current assets 58,763 61,634
Trade accounts receivable, net 4,998 5,004
Property and equipment, net 7,214 6,828
Capitalized software costs, net 2,452 2,425
Other assets 516 502
Deferred income taxes, net 3,591 991
----------- -----------
Total assets $77,534 $77,384
=========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
Notes payable, due on demand $10,500 $
Accounts payable 2,913 2,976
Accrued expenses:
Compensation 190 5,553
Commissions 5,299 5,312
Other 4,896 4,179
Deferred revenue 12,200 7,134
Income taxes payable 2,141 2,393
---------- ----------
Total current liabilities 38,139 27,547
Deferred income taxes 940 940
Deferred revenue 459
Stockholders' equity:
Common stock, $0.01 par value 114 114
Additional paid-in-capital 56,784 56,541
Cumulative translation adjustments (271) (395)
Accumulated deficit (18,172) (7,822)
---------- -----------
Total stockholders' equity 38,455 48,438
---------- -----------
Total liabilities and stockholders' equity $77,534 $77,384
========== ===========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
3
<PAGE> 4
SEER TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
March 31 March 31
1996 1995 1996 1995
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenue:
Software license $8,507 $11,135 $15,546 $24,360
Maintenance 3,204 2,855 6,032 5,240
Services 14,480 12,704 26,388 23,593
-------- -------- -------- --------
Total revenue 26,191 26,694 47,966 53,193
Cost of revenue:
Software products 271 131 531 296
Maintenance 2,047 2,280 3,819 3,677
Services 12,928 9,385 22,707 18,341
-------- -------- -------- --------
Cost of revenue 15,246 11,796 27,057 22,314
Gross profit 10,945 14,898 20,909 30,879
Operating expenses:
Sales and marketing 11,770 8,454 23,014 16,504
Research and product
development 4,427 3,152 8,592 6,482
General and administrative 2,508 1,786 5,267 4,051
-------- -------- -------- --------
Total operating expenses 18,705 13,392 36,873 27,037
-------- -------- -------- --------
Income (loss) from operations (7,760) 1,506 (15,964) 3,842
Other Income (expense):
Interest income 188 9 416 22
Interest expense (131) (245) (134) (346)
-------- -------- -------- --------
Other income (expense), net 57 (236) 282 (324)
-------- -------- -------- --------
Income (loss) before
provision for income taxes (7,703) 1,270 (15,682) 3,518
Income tax provision (benefit) (2,774) 601 (5,332) 1,994
-------- -------- -------- --------
Net income (loss) $(4,929) $669 $(10,350) $1,524
======== ======== ======== ========
Earnings (loss) per common and common
equivalent share (Note 2) $(0.39) $0.06 $(0.81) $0.14
======== ======== ======== ========
Weighted average common and
common equivalent shares
outstanding 12,641 11,021 12,816 11,021
======== ======== ======== ========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
4
<PAGE> 5
SEER TECHNOLOGIES, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands)
(unaudited)
<TABLE>
<CAPTION>
Six Months Ended
March 31,
1996 1995
------ ------
<S> <C> <C>
Cash flows from operating activities:
Net income (loss) $ (10,350) $ 1,524
Adjustments to reconcile net income (loss)
to net cash used in operating activities:
Depreciation and amortization 1,987 1,179
Deferred income taxes (6,271) (39)
Changes in assets and liabilities:
Trade accounts receivable (5,451) (13,803)
Prepaid expenses and other assets (263) 122
Accounts payable and accrued expenses (4,974) (3,581)
Deferred revenue 4,607 503
-------- --------
Net cash used in operating activities (20,715) (14,095)
Cash flows from investing activities:
Purchases of property and equipment (1,933) (1,598)
Capitalization of software development costs (466) (263)
-------- --------
Net cash used in investing activities (2,399) (1,861)
Cash flows from financing activities:
Issuance of common shares 243
Repurchase of common shares (22)
Net borrowings under line of credit 10,500 15,694
-------- --------
Net cash provided by financing activities 10,743 15,672
Effect of exchange rate changes on cash (16) (170)
-------- --------
Net decrease in cash and cash equivalents (12,387) (454)
Cash and cash equivalents:
Beginning of period 13,650 1,278
-------- --------
End of period $ 1,263 $ 824
======== ========
</TABLE>
The accompanying notes are an integral part of the consolidated financial
statements.
5
<PAGE> 6
SEER TECHNOLOGIES, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(unaudited)
Note 1. Interim Financial Statements
The accompanying unaudited financial statements should be read in conjunction
with the audited financial statements and notes thereto contained in the
Company's Annual Report on Form 10-K for the year ended September 30, 1995.
The results of operations for the interim periods shown in this report are not
necessarily indicative of results to be expected for other interim periods or
for the full fiscal year. In the opinion of management, the information
contained herein reflects all adjustments necessary for a fair statement of
the interim results of operations. All such adjustments are of a normal
recurring nature.
Note 2. Earnings (loss) Per Share
Earnings (loss) per share is computed based upon the weighted average number
of common shares outstanding. Common equivalent shares, using the treasury
stock method, are included in the per share calculations only when the effect
of their inclusion would be dilutive, except that common and common equivalent
shares issued during the twelve month period prior to the Company's initial
filing of its registration statement on Form S-1 on June 30, 1995 have been
included in the calculation as if they were outstanding for all periods prior
to the initial public offering. Common equivalent shares consist solely of
stock options.
Note 3. Income Taxes
The Company's effective tax rate differs from the statutory rate primarily due
to income taxes from foreign subsidiaries and foreign withholding taxes.
Note 4. Use of Accounting Estimates
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual amounts could differ from these estimates.
6
<PAGE> 7
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Seer Technologies, Inc. (the "Company") designs, develops, markets and
supports software products and provides related services that enable its
customers to create, distribute and manage large-scale mission critical
information processing applications that utilize client/server technologies.
The Company's application development tools, related software products and
consulting services are designed to reduce the time, cost and risk involved in
developing, deploying and maintaining complex client/server applications and
enable efficient integration of those applications with the customer's
existing systems.
During the quarter ended March 31, 1996, the Company continued to implement
its strategy of leveraging its direct sales force and marketing its products
through alliances with key vendors in the computer industry. On May 2, 1996,
the Company entered into an agreement with Tandem Computer, Inc. ("Tandem")
under which Tandem will resell, market and support original equipment versions
of Seer*HPS for the full range of Tandem platforms.
The Company has three categories of revenue: software products, maintenance
and services. Software products revenue is comprised primarily of fees from
licensing the Company's proprietary software products and, to a lesser extent,
from product development contracts. Maintenance revenue is comprised of fees
for maintaining, supporting and providing periodic upgrades of the Company's
software products. Services revenue is composed primarily of fees for
consulting and training services.
The Company's revenues vary from quarter to quarter, with the largest portion
of revenue typically recognized in the last month of each fiscal quarter and
the third and fourth quarters of each fiscal year. The Company believes that
these patterns are partly attributable to the Company's sales commission
policies, which compensate sales personnel for meeting or exceeding quarterly
and annual quotas, and to the budgeting and purchasing cycles of customers.
Furthermore, individual sales can be very large; therefore, a single customer
or sale may have a significant impact on a quarter. In addition, the
substantial commitment of a potential customer's financial resources
historically involved in its decision to purchase the Company's products
increases the length of the sales cycle and the likelihood of quarter-to-
quarter fluctuations in the Company's sales and results of operations. In
addition, the Company's services revenue may fluctuate from quarter to quarter
due to the completion or commencement of significant assignments, the number
of working days in a quarter and the utilization rate of services personnel.
The Company typically does not have any material backlog of unfilled software
orders, and product revenue in any quarter is substantially dependent upon
orders received in that quarter. Because the Company's operating expenses are
based on anticipated revenue levels and are relatively fixed over the short
term, variations in the timing of recognition of revenue can cause significant
variations in operating results from quarter to quarter. Fluctuations in
operating results may result in volatility in the price of the Common Stock.
7
<PAGE> 8
Results of Operations
The following table sets forth, for the periods indicated, the Company's
unaudited results of operations expressed as a percentage of revenue:
<TABLE>
<CAPTION>
Three months ended Six months ended
March 31, March 31,
1996 1995 1996 1995
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenue:
Software products 32.5 % 41.7 % 32.4 % 45.8 %
Maintenance 12.2 % 10.7 % 12.6 % 9.8 %
Services 55.3 % 47.6 % 55.0 % 44.4 %
-------- -------- -------- --------
Total 100.0 % 100.0 % 100.0 % 100.0 %
Cost of revenue:
Software products 1.0 % 0.5 % 1.1 % 0.6 %
Maintenance 7.8 % 8.5 % 8.0 % 6.9 %
Services 49.4 % 35.2 % 47.3 % 34.5 %
-------- -------- -------- --------
Total 58.2 % 44.2 % 56.4 % 42.0 %
Gross profit 41.8 % 55.8 % 43.6 % 58.0 %
Operating expenses:
Sales and marketing 44.9 % 31.6 % 48.0 % 31.0 %
Research and product development 16.9 % 11.8 % 17.9 % 12.2 %
General and administrative 9.6 % 6.7 % 11.0 % 7.6 %
-------- -------- -------- --------
Total 71.4 % 50.1 % 76.9 % 50.8 %
Interest income (expense), net 0.2 % (0.9)% 0.6 % (0.6)%
-------- -------- -------- --------
Income (loss) before taxes (29.4)% 4.8 % (32.7)% 6.6 %
Income tax provision (benefit) (10.6)% 2.3 % (11.1)% 3.7 %
-------- -------- -------- --------
Net income (loss) (18.8)% 2.5 % (21.6)% 2.9 %
======== ======== ======== ========
</TABLE>
The following table sets forth unaudited data for total revenue by country of
origin as a percentage of total revenue for the periods indicated:
<TABLE>
<CAPTION>
Three months ended Six months ended
March 31, March 31,
1996 1995 1996 1995
-------- -------- -------- --------
<S> <C> <C> <C> <C>
United States 31% 30% 29% 29%
Mexico 2% - 9% -
Germany 20% 5% 15% 4%
Italy 10% 12% 9% 30%
Denmark 5% 4% 6% 4%
United Kingdom 8% 24% 8% 14%
Australia 7% 1% 5% 1%
South Africa 2% 8% 4% 4%
Other 15% 16% 15% 14%
-------- -------- -------- --------
100% 100% 100% 100%
======== ======== ======== ========
</TABLE>
Revenue. The Company's total revenue decreased 2% and 10% for the second
quarter and year-to-date periods of 1996 compared to the prior year. The
decrease was primarily attributable to a decrease in software products
revenue, which was offset by increases in maintenance and services revenues.
Software products. Software products revenue decreased 24% for the second
quarter and 36% for the year-to-date period from the comparable periods of
1995. The decrease in software products revenue is a result of fewer
contracts closing during the 1996 periods combined with the average value of
those contracts that did close decreasing from $505,000 to $292,000. In
addition, the Company has begun a gradual transition from selling large
contracts to mainframe-based IBM accounts to selling a balanced array of
products. As the Company reorients its sales and marketing efforts to
address this transition, the Company may face increased revenue volatility
in the near term.
8
<PAGE> 9
Maintenance. Maintenance revenue increased by 12% and 15% compared to the
prior year for the second quarter and year-to-date periods, respectively.
Because substantially all of the Company's existing customers have
historically renewed their maintenance contracts, the increase for 1996 is a
result primarily of new customers added during the fiscal year ended September
30, 1995.
Services. Services revenue for the second quarter increased by 14% compared
to the second quarter of 1995. For the year-to-date period, services revenue
increased by 12% from the comparable period of 1995. The increase in services
revenue is due primarily to services related to license sales made in the
third and fourth quarters of 1995 as well as the expanded use of the Seer*HPS
family of products by existing customers for more numerous and complex
applications.
Gross Profit. Total gross profit for the second quarter decreased 27% from
the second quarter of 1995. For the year to date period, total gross profit
decreased 32% from the comparable period in 1995. Total gross margin
decreased to 42% for the second quarter as compared to 56% for the comparable
period in 1995 and decreased to 44% for the year-to-date period as compared to
58% in 1995. These decreases are due primarily to the decrease in software
revenue as a percentage of total revenue in the 1996 periods. Software gross
margin decreased to 97% for the second quarter and year-to-date periods as
compared to 99% for the comparable periods in 1995. The decline is a result
primarily of higher software amortization during the three months ended March
31, 1996. The higher amortization resulted from costs associated with
Seer*HPS 5.3 which began to be amortized when it became generally available in
the quarter ended December 31, 1995. Maintenance gross margins increased
during the second quarter to 36% compared to 20% for the comparable period of
1995 and increased to 37% for the six months ended March 31, 1996 as compared
to 30% in 1995. The improvement in maintenance gross margins was due to an
increase in revenue from first year and renewal contracts while associated
headcount and other expenses remained relatively constant. Services margins
for the second quarter decreased to 11% as compared to 26% for the comparable
period of 1995 and decreased to 14% for the year-to-date period as compared to
22% for 1995. The decline in services margin is a result of the costs
associated with headcount, outside contractors and other consulting
obligations increasing approximately 51% during the quarter while revenue
increased by only 14%.
Sales and Marketing Expense. Sales and marketing expense increased 39%
compared to the prior year for the second quarter and year-to-date periods.
The increase is the result of the expansion of the Company's sales force
worldwide, as well as an increase in certain commissions. Average sales and
marketing headcount has increased 22% compared to the same quarter and year-
to-date periods of 1995. Additionally, marketing expenses of $0.9 million
were recorded during the second quarter in conjunction with the sale of
software to a large customer in Europe. The 1996 year-to-date amounts were
also impacted by an increase of $1.0 million in commissions paid to IBM for
sales of the Company's software products in South America made by IBM.
Research and Product Development Expense. Research and development expense
increased 40% and 33% compared to the prior year for the second quarter and
year-to-date periods, respectively. The increase is primarily a result of
personnel additions to develop and test new products. Costs associated with
headcount and outside contractors increased 38% and 32% for the quarter and
year-to-date periods, respectively.
General and Administrative Expense. General and administrative expenses
increased 40% and 30% compared to the prior year for the second quarter and
year-to-date periods, respectively. The increases are primarily a result of
personnel additions necessary to manage and support the Company's growth with
average headcount increasing 15% and 18% for the same quarter and year-to-date
periods of 1995. Additionally, a strengthening dollar in the second quarter
and year-to-date periods of 1996 caused foreign currency exchange gains and
losses to be unfavorably impacted as compared to the same periods of 1995 when
the dollar was weaker.
Income Taxes. The income tax benefits recorded for the second quarter and
year-to-date periods of 1996 were $2.8 million and $5.3 million compared to
income tax expense of $0.6 million and $2.0 million for the comparable periods
of 1995. The benefits for the 1996 periods consisted of the expected
realization of the benefit of the operating losses incurred during the periods
at an effective tax rate of 40% less the current period income taxes on
foreign subsidiaries and foreign withholding taxes. Income tax expense for
the 1995 periods consisted primarily of income taxes on foreign subsidiaries
and foreign withholding taxes.
9
<PAGE> 10
Liquidity and Capital Resources
Cash flow used in operations increased 47% in comparison to the prior year
period. The increase was primarily attributable to the net loss for 1996.
Accounts receivable increased by $5.5 million during the year-to-date period
for 1996; however, the impact on cash flow from operations was offset by an
increase of $5.0 million in deferred revenue.
Cash used by investing activities increased 29% for the year-to-date period of
1996 compared to the same period of 1995. This increase is a result of
increases in capital expenditures, primarily for purchases of computer
equipment for software development and support associated with the Company's
new product development, and capitalization of software development costs.
Subsequent to March 31, 1996, the Company entered into an operating lease for
certain computer equipment. Payments under the lease agreement will
approximate $550,000 per year for each of the next three years. As of March
31, 1996, the Company did not have any other material commitments for capital
expenditures.
The 31% decrease in cash provided by financing activities for the year-to-date
period of 1996 compared to the same period of 1995 resulted primarily from a
decrease in net borrowings under the Company's line of credit.
As of March 31, 1996, the Company maintained a bank line of credit providing
for borrowings of up to $25 million based upon the Company's accounts
receivable. Borrowings under the line of credit bore interest at the London
Interbank Offered Rate ("LIBOR") plus 2.0% with a maximum rate not to exceed
the Prime rate minus 1/4% and were collateralized by the Company's accounts
receivable. The line of credit requires the Company's compliance with various
covenants, which among other things, require the Company to maintain various
financial ratios and limits the amount of dividends and other payments by the
Company. As of March 31, 1996, the Company was in violation of certain
financial ratio covenants. The bank has waived the covenant violations as of
March 31, 1996 and subsequent to March 31, 1996 has revised certain terms of
the line of credit. Under the revised agreement, the interest rate has been
increased to LIBOR plus 3.0%, and the line of credit is now collateralized by
the Company's accounts receivable and other assets of the Company. At March
31, 1996, the Company had outstanding borrowings of $10.5 million under this
line of credit. In addition, the Company had a line of credit as of March 31,
1996 of up to $5 million available to enter into foreign exchange contracts.
As part of the revised loan agreement, this line was reduced to $3 million
subsequent to March 31, 1996. The aggregate notional amount of foreign
exchange contracts outstanding under this facility cannot exceed $23.3
million. At March 31, 1996 the aggregate notional amount of foreign exchange
contracts outstanding was $10.2 million. These lines of credit expire on
December 31, 1996.
During the fourth quarter of 1995, the Company signed a software contract with
a certain customer for approximately $5.6 million. Due to the payment terms
of the contract, the related receivable was classified as a non-current asset.
As of March 31, 1996, the Company has evaluated the collectibility of the non-
current receivable based upon the customer's prior payment history and
determined that the receivable is collectible.
During the year-to-date period for 1996, the Company has recorded a deferred
tax asset of approximately $6.3 million for the future realization of the
operating loss incurred during the current period. Approximately $2.7 million
of the deferred tax asset has been classified as noncurrent based upon the
estimated realization period.
The Company believes that existing cash on hand and available credit under its
lines of credit will be sufficient to finance its operations and expected
working capital and capital expenditure requirements for at least the next
twelve months. Thereafter, the Company's liquidity will depend upon the
results of future operations as well as available sources of financing. There
can be no assurance that the Company will be able to meet its loan covenants,
achieve its operating plan or obtain additional financing on acceptable terms,
and the failure to do so may have an adverse impact on the Company's business
and operations.
10
<PAGE> 11
PART II. Other Information
Item 1. Legal Proceedings
None
Item 2. Changes in Securities
None
Item 3. Defaults Upon Senior Securities
None
Item 4. Submission of Matters to a Vote of Security Holders
The Annual Meeting of Stockholders of the Company was held on
February 23, 1996. The following is a brief description of each
matter voted upon at the meeting and the number of affirmative
votes and the number of negative votes cast with respect to each
matter.
(a) The stockholders elected the following persons as directors
of the Company: Bruce K. Anderson; Eugene F. Bedell; Frank
T. Cary; Anthony J. de Nicola; George L. McTavish;
and Robert A. Minicucci. The votes for and against
(withheld) each nominee were as follows:
Votes Votes Votes
Nominee For Withheld Abstained
Bruce K. Anderson 10,063,999 16,784 1,329,353
Eugene F. Bedell 10,060,274 20,509 1,329,353
Frank T. Cary 10,063,999 16,784 1,329,353
Anthony J. de Nicola 10,063,874 16,909 1,329,353
George L. McTavish 10,063,999 16,784 1,329,353
Robert A. Minicucci 10,063,999 16,784 1,329,353
(b) The stockholders approved the Seer Technologies, Inc.
Employee Stock Purchase Plan (U.S.) with 10,048,675 shares
voting for, 32,108 shares voting against, and 1,329,353
shares abstained.
Item 5. Other Information
None
11
<PAGE> 12
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
11.1 Statement Regarding Computation of Earnings Per Share
27 Financial Data Schedule
(b) Reports on Form 8-K
None
12
<PAGE> 13
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.
SEER TECHNOLOGIES, INC.
EUGENE F. BEDELL
Date: May 15, 1996 ..............................................
Eugene F. Bedell
President and Chief Executive Officer
STEVEN DMISZEWICKI
Date: May 15, 1996 ..............................................
Steven Dmiszewicki
Vice President and Chief Financial Officer
13
Exhibit 11.1
SEER TECHNOLOGIES, INC.
STATEMENT REGARDING COMPUTATION OF EARNINGS PER SHARE
(in thousands, except per share amounts)
(unaudited)
<TABLE>
<CAPTION>
Three Months Ended Six Months Ended
March 31, March 31,
(Pro Forma) (Pro Forma)
1996 1995 1996 1995
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Primary earnings per share:
Average common shares outstanding
(excluding convertible shares) 11,425 1,590 11,394 1,590
Common shares from conversion of
Series B Convertible Preferred - 6,594 - 6,594
Common shares from conversion of
Series C Convertible Preferred - 198 - 198
Shares issued for redemption of
Senior Preferred Stock (2) - 864 - 864
Common stock equivalents 1,216 1,775(3) 1,422 1,775(3)
-------- -------- -------- --------
Total common and common
equivalent shares outstanding 12,641 11,021 12,816 11,021
======== ======== ======== ========
Net income (loss) $(4,929) $669 $(10,350) $1,525
======== ======== ======== ========
Per share amount ($0.39) $0.06 ($0.81) $0.14
======== ======== ======== ========
Fully diluted earnings per share (1):
Average common shares outstanding
(excluding convertible shares) 11,425 1,590 11,394 1,590
Common shares from conversion of
Series B Convertible Preferred - 6,594 - 6,594
Common shares from conversion of
Series C Convertible Preferred - 198 - 198
Shares issued for redemption of
Senior Preferred Stock (2) - 864 - 864
Common stock equivalents 1,215 1,775(3) 1,417 1,775(3)
-------- -------- -------- --------
Total common and common
equivalent shares outstanding 12,640 11,021 12,811 11,021
======== ======== ======== ========
Net income (loss) $(4,929) $669 $(10,350) $1,525
======== ======== ======== ========
Per share amount ($0.39) $0.06 ($0.81) $0.14
======== ======== ======== ========
</TABLE>
(1) This calculation is submitted in accordance with Regulation S-K item 601
(b)(11) although it is contrary to paragraph 40 of APB Opinion 15 since it
produces an anti-dilutive result for all periods presented.
(2) Dividend - Senior Redeemable Preferred Stock 417
Principal - Senior Redeemable Preferred Stock 15,135
--------
Total redemption value 15,552
Divided by IPO price per share 18.00
--------
Number of equivalent shares of common stock 864
========
(3) Common stock equivalents presented assume a market price of $18.00 (the
IPO price).
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE
CONSOLIDATED BALANCE SHEET AND THE CONSOLIDATED STATEMENT OF INCOME FILED AS
PART OF THE QUARTERLY REPORT ON FORM 10-Q AND IS QUALIFIED IN ITS ENTIRETY BY
REFERENCE TO SUCH QUARTERLY REPORT ON FORM 10-Q.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> SEP-30-1996
<PERIOD-START> OCT-01-1995
<PERIOD-END> MAR-31-1996
<CASH> 1,263
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0
0
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</TABLE>
