-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, JiIVf8owZbW6nVJNsj5ymaJYfRvY0J1TfUe/yODk06P8ugQRjVYcBU9pxZkDbaEe NhV1Vkl2jQRo+64bvdXBJQ== 0000016590-96-000010.txt : 19961113 0000016590-96-000010.hdr.sgml : 19961113 ACCESSION NUMBER: 0000016590-96-000010 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960928 FILED AS OF DATE: 19961112 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: CAMBEX CORP CENTRAL INDEX KEY: 0000016590 STANDARD INDUSTRIAL CLASSIFICATION: COMPUTER STORAGE DEVICES [3572] IRS NUMBER: 042442959 STATE OF INCORPORATION: MA FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-06933 FILM NUMBER: 96657910 BUSINESS ADDRESS: STREET 1: 360 SECOND AVE CITY: WALTHAM STATE: MA ZIP: 02154 BUSINESS PHONE: 6178906000 MAIL ADDRESS: STREET 2: 360 SECOND AVE CITY: WALTHAM STATE: MA ZIP: 02154 FORMER COMPANY: FORMER CONFORMED NAME: CAMBRIDGE MEMORIES INC DATE OF NAME CHANGE: 19801204 10-Q 1 10Q-Q396/QTR END 9/30/96 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 Quarterly Report Under Section 13 Or 15(d) Of The Securities Exchange Act Of 1934 For the Quarter Ended: September 28, 1996 Commission File No: 0-6933 CAMBEX CORPORATION (Exact name of registrant as specified in its charter) Massachusetts 04-244-2959 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 360 Second Avenue, Waltham, Massachusetts (Address of principal executive offices) 02154 (Zip Code) Registrant's telephone number, including area code: (617)-890-6000 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 CAMBEX CORPORATION AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS SEPTEMBER 28, 1996 AND DECEMBER 31, 1995 (UNAUDITED) ASSETS SEPTEMBER 28, DECEMBER 31, 1996 1995 ------------- ------------- CURRENT ASSETS: CASH AND CASH EQUIVALENTS $ 382,440 $ 588,322 ACCOUNTS RECEIVABLE, LESS RESERVES OF $135,000 ON SEPTEMBER 28, 1996 AND $136,000 ON DECEMBER 31, 1995 4,854,087 2,628,778 CURRENT PORTION OF INVESTMENT IN SALES-TYPE LEASES, NET OF UNEARNED INTEREST INCOME OF $43,000 ON SEPTEMBER 28, 1996 AND $31,000 ON DECEMBER 31, 1995 433,022 393,284 INVENTORIES 11,144,117 12,030,324 PREPAID TAXES 4,130,731 6,388,659 PREPAID EXPENSES 161,130 178,991 -------------- -------------- TOTAL CURRENT ASSETS $ 21,105,527 $ 22,208,358 -------------- -------------- LONG-TERM INVESTMENT IN SALES-TYPE LEASES, NET OF UNEARNED INTEREST INCOME OF $14,000 ON SEPTEMBER 28, 1996 AND $19,000 ON DECEMBER 31, 1995 $ 312,999 $ 362,992 LEASED EQUIPMENT, AT COST, NET OF ACCUMULATED DEPRECIATION OF $218,000 ON SEPTEMBER 28, 1996 AND $245,000 ON DECEMBER 31, 1995 $ 226,040 $ 300,174 PROPERTY AND EQUIPMENT, AT COST: MACHINERY AND EQUIPMENT $ 7,375,588 $ 7,257,673 FURNITURE AND FIXTURES 294,811 303,428 LEASEHOLD IMPROVEMENTS 608,654 606,454 -------------- -------------- $ 8,279,053 $ 8,167,555 LESS - ACCUMULATED DEPRECIATION AND AMORTIZATION 7,187,007 6,706,326 -------------- -------------- NET PROPERTY AND EQUIPMENT $ 1,092,046 $ 1,461,229 OTHER ASSETS TECHNOLOGY LICENSE/MARKETING AGREEMENT, NET OF ACCUMULATED AMORTIZATION OF $7,933,000 ON SEPTEMBER 28, 1996 AND $6,658,000 ON DECEMBER 31, 1995 $ 566,668 $ 1,841,671 OTHER 37,830 37,875 -------------- -------------- TOTAL ASSETS $ 23,341,110 $ 26,212,299 ============== ==============
-2- CONSOLIDATED BALANCE SHEETS SEPTEMBER 28, 1996 AND DECEMBER 31, 1995 (UNAUDITED) LIABILITIES AND STOCKHOLDERS' INVESTMENT SEPTEMBER 28, DECEMBER 31, 1996 1995 ------------- -------------- CURRENT LIABILITIES: REVOLVING CREDIT AGREEMENT $ 1,440,000 $ 3,200,000 ACCOUNTS PAYABLE 4,911,758 4,538,852 OBLIGATIONS FOR TRADE-IN MEMORY 1,620,201 1,939,657 ACCRUED EXPENSES 4,137,235 3,717,691 ------------- -------------- TOTAL CURRENT LIABILITIES $ 12,109,194 $ 13,396,200 ------------- -------------- REVOLVING CREDIT AGREEMENT $ 840,000 $ -- DEFERRED REVENUE $ 1,089,626 $ 917,087 STOCKHOLDERS' INVESTMENT: PREFERRED STOCK, $1.00 PAR VALUE PER SHARE AUTHORIZED - 3,000,000 SHARES ISSUED - NONE -- -- COMMON STOCK, $.10 PAR VALUE PER SHARE - AUTHORIZED - 25,000,000 SHARES ISSUED - 10,556,888 SHARES ON SEPTEMBER 28, 1996 AND 10,452,987 SHARES ON DECEMBER 31, 1995 $ 1,055,689 $ 1,045,299 CAPITAL IN EXCESS OF PAR VALUE 15,658,820 15,446,004 CUMULATIVE TRANSLATION ADJUSTMENT 170,482 287,763 RETAINED EARNINGS (DEFICIT) (6,727,935) (4,025,288) LESS - COST OF SHARES HELD IN TREASURY - 1,534,356 ON SEPTEMBER 28, 1996 AND 1,534,356 ON DECEMBER 31, 1995 (854,766) (854,766) ------------- -------------- TOTAL STOCKHOLDERS' INVESTMENT $ 9,302,290 $ 11,899,012 ------------- -------------- TOTAL LIABILITIES AND STOCKHOLDERS' INVESTMENT $ 23,341,110 $ 26,212,299 ============= ==============
-3- CAMBEX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME FOR THE NINE MONTHS ENDED SEPTEMBER 28, 1996 AND AUGUST 31, 1995 (UNAUDITED) QUARTER ENDED NINE MONTHS ENDED SEPTEMBER 28, AUGUST 31, SEPTEMBER 28, AUGUST 31, 1996 1995 1996 1995 ------------ ------------ ------------ ------------ REVENUES $ 4,192,637 $ 3,306,751 $ 19,335,991 $ 24,985,279 COST OF SALES 2,588,188 5,808,302 10,404,423 17,997,523 DECLINE IN VALUE OF IBM TRADE-IN MEMORY - 4,647,499 - 4,647,499 ------------ ------------- ------------- ------------- GROSS PROFIT (LOSS) $ 1,604,449 $ (7,149,050) $ 8,931,568 $ 2,340,257 OPERATING EXPENSES: RESEARCH AND DEVELOPMENT $ 886,381 $ 1,838,594 $ 2,969,174 $ 4,857,500 SELLING 1,679,713 2,133,059 5,483,343 6,270,650 GENERAL AND ADMINISTRATIVE 484,262 653,676 1,713,160 1,990,505 ------------ ------------- ------------- ------------- $ 3,050,356 $ 4,625,329 $ 10,165,677 $ 13,118,655 ------------ ------------- ------------- ------------- OPERATING INCOME (LOSS) $(1,445,907) $(11,774,379) $ (1,234,109) $(10,778,398) OTHER INCOME (EXPENSE): INTEREST EXPENSE $ (61,681) $ (53,676) $ (196,814) $ (190,880) INTEREST INCOME 28,317 35,257 84,889 80,114 OTHER INCOME (EXPENSE) (439,536) (560,592) (1,356,613) (1,049,811) ------------ ------------- ------------- ------------- INCOME (LOSS) BEFORE INCOME TAXES $(1,918,807) $(12,353,390) $ (2,702,647) $(11,938,975) PROVISION (CREDIT) FOR INCOME TAXES $ 0 $ (2,049,000) $ 0 $ (1,884,000) ------------ ------------- ------------- ------------- NET INCOME (LOSS) $(1,918,807) $(10,304,390) $ (2,702,647) $(10,054,975) ============ ============= ============= ============= NET INCOME (LOSS) PER COMMON SHARE $ (0.21) $ (1.18) $ (0.30) $ (1.15) ============ ============= ============= ============= WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING 9,000,000 8,750,000 8,975,000 8,750,000
-4- CAMBEX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE NINE MONTHS ENDED SEPTEMBER 28, 1996 AND AUGUST 31, 1995 FOR THE NINE MONTHS ENDED SEPTEMBER 28, AUGUST 31, 1996 1995 ---------- ---------- CASH FLOWS FROM OPERATING ACTIVITIES: Net Income (Loss) $ (2,702,647) $(10,054,975) Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization $ 1,841,578 $ 1,903,369 Provision for losses on accounts receivable -- -- Provision for losses on inventory -- 1,881,428 Amortization of prepaid expenses 14,074 15,423 Common stock issued in lieu of cash 161,715 206,810 Decline in value of IBM trade-in memory -- 4,647,499 Change in assets and liabilities: Decrease (increase) in accounts receivable (2,225,309) 2,082,777 Decrease in inventory 886,207 1,452,233 Decrease (increase) in investment in sales-type leases 10,255 (152,863) Decrease (increase) in prepaid taxes 2,257,928 (3,610,212) Decrease in prepaid expenses 3,787 262,946 Decrease in other assets 45 47 Increase in accounts payable 372,906 570,121 Increase (decrease) in obligations for trade-in memory (319,456) 1,157,000 Increase in accrued liabilities 419,544 354,954 Increase (decrease) in deferred revenue 172,539 (149,916) ------------- ------------ Total adjustments $ 3,595,813 $ 10,621,616 ------------- ------------ Net cash provided by operating activities $ 893,166 $ 566,641 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of Equipment $ (123,258) $ (329,137) ------------ ------------ Net cash used in investing activities $ (123,258) $ (329,137) CASH FLOWS FROM FINANCING ACTIVITIES: Payments of notes payable $ -- $ (92,074) Proceeds from sale of common stock 61,491 825,320 Net borrowings (repayments) under revolving credit agreement (920,000) 550,000 ------------- ------------ Net cash Provided by (used in) financing activities $ (858,509) $ 1,283,246 Effect of exchange rate changes on cash (117,281) 141,514 ------------ ------------ Net increase (decrease) in cash and cash equivalents $ (205,882) $ 1,662,264 Cash and cash equivalents at beginning of period $ 588,322 $ 1,584,089 ------------- ------------ Cash and cash equivalents at end of period $ 382,440 $ 3,246,353 ============= ============ SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during the period for: Interest $ 196,814 $ 178,624 Income Taxes 12,263 25,696
-5- FORM 10-Q CAMBEX CORPORATION AND SUBSIDIARIES For The Quarter Ended: September 28, 1996 Commission File No: 0-6933 Notes & Comments: (1)Significant Accounting Policies The accompanying consolidated financial statements include the accounts of the Company and its wholly-owned subsidiaries. All material intercompany transactions and balances have been eliminated in consolidation. The Company has deferred revenue associated with the sale of certain products which have future performance obligations, principally relating to reinstallation of IBM memory. The condensed financial statements included herein have been prepared by the Company, without audit, pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in 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 are adequate to make the information presented not misleading. The information furnished includes all adjustments and accruals consisting only of normal recurring accrual adjustments which are, in the opinion of management, necessary for a fair presentation of results for the interim period. It is suggested that these condensed financial statements be read in conjunction with the financial statements and the notes thereto included in the Company's latest annual report on Form 10-K. Inventories, which include raw materials, labor and manufacturing overhead are stated at the lower of cost (first-in, first-out) or market and consist of the following: September 28, December 31, 1996 1995 Raw materials $2,454,117 $ 2,600,433 Work-in-process 980,000 1,017,749 Finished goods 6,400,000 7,097,086 Trade-in memory 1,343,000 1,315,056 $11,144,117 $12,030,324 - 6 - FORM 10-Q CAMBEX CORPORATION AND SUBSIDIARIES For The Quarter Ended: September 28, 1996 Commission File: 0-6933 Notes & Comments (Continued): (2) Income and Dividends Per Share Per share amounts are based on the weighted average number of shares outstanding during each year plus applicable common stock equivalents. There were no material differences for per share amounts assuming full dilution in either year. (3) Management's Discussion and Analysis of Financial Condition and Results of Operations As a result of changing the fiscal year-end to December 31 from August 31, the financial comparison presented is between the current third quarter ended September 28, 1996, and the fourth quarter of the prior fiscal year, ended August 31, 1995. Revenues for the third quarter ended September 28, 1996 increased 27% from the comparable quarter of the prior year (from $3,307,000 to $4,193,000). The fourth quarter of the prior year was impacted by an unprecedented slowdown and price erosion in the ES/9000 mainframe computer market. Although the market has stabilized, the Company is still unable to predict whether or when the market will return to its former position. The gross profit for the quarter ended September 28, 1996 was $1,604,000 compared to a negative gross profit of $7,149,000 for the comparable quarter of the prior year. The prior year's amounts include a $4,647,000 decline in the value of its IBM trade-in memory and a $1,900,000 inventory valuation reduction. Operating expenses for the quarter ended September 28, 1996, decreased 34% from the comparable quarter of the prior year due principally to the cost savings achieved through several expense control actions. Research and development expenses decreased 52% due to completion of major projects in fiscal 1995 in addition to the expense control actions. Other expense for the third quarter ended September 28, 1996 and the fourth quarter of the prior year included approximately $425,000 in amortization expenses relating to the Company's technology license/marketing agreement. - 7 - FORM 10-Q CAMBEX CORPORATION AND SUBSIDIARIES For The Quarter Ended: September 28, 1996 Commission File: 0-6933 Notes & Comments (Continued): The Company's present operating plans indicate that cash flow generated from operations will be adequate to meet its obligations. During the second quarter, the Company agreed with its Bank to extend and modify its Revolving Credit Agreement dated April 15, 1993, as amended as of August 31, 1994. Under the terms of the Modification Agreement, the current loan, which was $3,200,000 as of the end of the first quarter, is termed out as follows: After an initial payment of $320,000, the Company will pay $120,000 monthly for a period of twenty-four months. The balance as of the end of the third quarter was $2,280,000. When the Company receives its anticipated tax refund from the Internal Revenue Service for the fiscal years 1991 to 1994, the Company will apply such refund against the loan principal, thereby reducing the term out period. Interest on the indebtedness will be paid monthly at the aggregate of the Bank's Base Rate, approximately the "Prime Rate", plus one percent, currently aggregating to 9.25%. The Company granted to its Bank a security interest in the Company's accounts receivable, inventory and general intangibles. - 8 - FORM 10-Q CAMBEX CORPORATION AND SUBSIDIARIES For The Quarter Ended: September 28, 1996 Commission File: 0-6933 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. CAMBEX CORPORATION By: /s/ Joseph F. Kruy Joseph F. Kruy President By: /s/ Sheldon M. Schenkler Sheldon M. Schenkler Chief Financial Officer Dated: November 12, 1996 - 9 - EX-27 2
5 1,000 9-MOS DEC-31-1996 SEP-28-1996 382 0 4989 135 11144 21106 8279 7187 23341 12109 0 0 0 1056 8246 23341 19336 19336 10404 10404 11438 0 197 (2703) 0 (2703) 0 0 0 (2703) (0.30) (0.30)
-----END PRIVACY-ENHANCED MESSAGE-----