-----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, KtfUSCikSgPzngH8/xKy4Fzp+mzbCu/wBTfjF8qIuCnE91SVN0uMvINryPn7PihR W0xls2oOeB2FnHfcnq65KQ== 0000016590-98-000015.txt : 19980807 0000016590-98-000015.hdr.sgml : 19980807 ACCESSION NUMBER: 0000016590-98-000015 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19980404 FILED AS OF DATE: 19980806 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: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-06933 FILM NUMBER: 98678238 BUSINESS ADDRESS: STREET 1: 360 SECOND AVE CITY: WALTHAM STATE: MA ZIP: 02154 BUSINESS PHONE: 6178906000 MAIL ADDRESS: STREET 1: 360 SECOND AVE 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-Q198/QTR END 4/4/98 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: April 4, 1998 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) 02451 (Zip Code) Registrant's telephone number, including area code: (781) 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 APRIL 4, 1998 AND DECEMBER 31, 1997 (UNAUDITED) ASSETS APRIL 4, DECEMBER 31, 1998 1997 ------------- ------------- CURRENT ASSETS: CASH AND CASH EQUIVALENTS $ 435,403 $ 476,246 ACCOUNTS RECEIVABLE, LESS RESERVES OF $131,000 ON APRIL 4, 1998 AND $131,000 ON DECEMBER 31, 1997 662,477 1,200,343 CURRENT PORTION OF INVESTMENT IN SALES-TYPE LEASES, NET OF UNEARNED INTEREST INCOME OF $3,000 ON APRIL 4, 1998 AND $4,000 ON DECEMBER 31, 1997 60,231 59,299 INVENTORIES 1,107,291 1,412,925 PREPAID TAXES - - PREPAID EXPENSES 137,270 121,183 -------------- -------------- TOTAL CURRENT ASSETS $ 2,402,672 $ 3,269,996 -------------- -------------- LONG-TERM INVESTMENT IN SALES-TYPE LEASES, NET OF UNEARNED INTEREST INCOME OF $1,000 ON APRIL 4, 1998 AND $1,000 ON DECEMBER 31, 1997 $ 10,409 $ 25,820 LEASED EQUIPMENT, AT COST, NET OF ACCUMULATED DEPRECIATION OF $205,000 ON APRIL 4, 1998 AND $183,000 ON DECEMBER 31, 1997 $ 15,326 $ 37,886 PROPERTY AND EQUIPMENT, AT COST: MACHINERY AND EQUIPMENT $ 3,036,699 $ 3,036,699 FURNITURE AND FIXTURES 247,173 247,173 LEASEHOLD IMPROVEMENTS 602,092 620,949 -------------- -------------- $ 3,885,964 $ 3,904,821 LESS - ACCUMULATED DEPRECIATION AND AMORTIZATION 3,399,041 3,347,941 -------------- -------------- NET PROPERTY AND EQUIPMENT $ 486,923 $ 556,880 OTHER ASSETS TECHNOLOGY LICENSE/MARKETING AGREEMENT, NET OF ACCUMULATED AMORTIZATION OF $8,500,000 ON APRIL 4, 1998 AND ON DECEMBER 31, 1997 $ - $ - OTHER 37,830 37,830 -------------- -------------- TOTAL ASSETS $ 2,953,160 $ 3,928,412 ============== ==============
-2- CONSOLIDATED BALANCE SHEETS APRIL 4, 1998 AND DECEMBER 31, 1997 (UNAUDITED) LIABILITIES AND STOCKHOLDERS' INVESTMENT APRIL 4, DECEMBER 31, 1998 1997 ------------- -------------- LIABILITIES NOT SUBJECT TO COMPROMISE: CURRENT LIABILITIES: ACCOUNTS PAYABLE $ 166,098 $ 296,419 OBLIGATIONS FOR TRADE-IN MEMORY - - ACCRUED EXPENSES 567,584 461,725 ------------- -------------- TOTAL CURRENT LIABILITIES $ 733,682 $ 758,144 ------------- -------------- DEFERRED REVENUE $ 15,478 $ 15,478 LIABILITIES SUBJECT TO COMPROMISE: ACCOUNTS PAYABLE AND ACCRUED EXPENSES $ 6,288,766 $ 6,325,273 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 - 10,689,970 SHARES ON APRIL 4, 1998 AND 10,636,108 SHARES ON DECEMBER 31, 1997 $ 1,068,997 $ 1,063,611 CAPITAL IN EXCESS OF PAR VALUE 15,815,861 15,814,783 CUMULATIVE TRANSLATION ADJUSTMENT 129,727 60,756 RETAINED EARNINGS (DEFICIT) (20,244,585) (19,254,867) LESS - COST OF SHARES HELD IN TREASURY - 1,534,356 ON APRIL 4, 1998 AND ON DECEMBER 31, 1997 (854,766) (854,766) ------------- -------------- TOTAL STOCKHOLDERS' INVESTMENT $ (4,084,766) $ (3,170,483) ------------- -------------- TOTAL LIABILITIES AND STOCKHOLDERS' INVESTMENT $ 2,953,160 $ 3,928,412 ============= ==============
-3- CAMBEX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME FOR THE THREE MONTHS ENDED APRIL 4, 1998 AND MARCH 29, 1997 (UNAUDITED) QUARTER ENDED APRIL 4, MARCH 29, 1998 1997 ------------ ------------ REVENUES $ 909,008 $ 3,026,733 COST OF SALES 862,510 1,847,546 ------------- ------------- GROSS PROFIT $ 46,498 $ 1,179,187 OPERATING EXPENSES: RESEARCH AND DEVELOPMENT $ 435,228 $ 764,888 SELLING 280,122 1,180,346 GENERAL AND ADMINISTRATIVE 207,734 398,110 ------------ ------------- $ 923,084 $ 2,343,344 ------------ ------------- OPERATING INCOME (LOSS) $( 876,586) $ (1,164,157) OTHER INCOME (EXPENSE): INTEREST EXPENSE $ - $ (33,578) INTEREST INCOME 1,255 15,276 OTHER INCOME (EXPENSE) 11,743 (29,629) ------------ ------------- INCOME (LOSS) BEFORE REORGANIZATION ITEMS AND INCOME TAXES $( 863,588) $ (1,212,088) REORGANIZATION PROFESSIONAL FEES ( 126,130) - ------------ ------------- INCOME (LOSS) BEFORE INCOME TAXES $( 989,718) $ (1,212,088) PROVISION FOR INCOME TAXES $ 0 $ 0 ------------ ------------- NET INCOME (LOSS) $( 989,718) $ (1,212,088) ============ ============= NET INCOME (LOSS) PER COMMON SHARE $ (0.11) $ (0.13) ============ ============= WEIGHTED AVERAGE COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING 9,100,000 9,080,000
-4- CAMBEX CORPORATION AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE THREE MONTHS ENDED APRIL 4, 1998 AND MARCH 29, 1997 FOR THE THREE MONTHS ENDED APRIL 4, MARCH 29, 1997 1997 ---------- ---------- CASH FLOWS FROM OPERATING ACTIVITIES: Net Income (Loss) $ ( 989,718) $ (1,212,088) Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization $ 81,517 $ 200,880 Amortization of prepaid expenses 24,892 24,740 Common stock issued in lieu of cash - - Change in assets and liabilities: Decrease (increase) in accounts receivable 537,866 (115,459) Decrease in inventory 305,634 (103,498) Decrease in investment in sales-type leases 14,479 272,690 Decrease in prepaid taxes - 2,335,295 Decrease (increase) in prepaid expenses (40,979) (67,601) Decrease in other assets - - Increase (decrease) in accounts payable (130,321) 246,633 Increase in obligations for trade-in memory - 35,537 Increase (decrease) in accrued liabilities 105,859 197,905 Increase (decrease) in deferred revenue - (167,110) Increase (decrease) in liabilities subject to compromise (36,507) - ------------- ------------ Total adjustments $ 862,440 $ 2,860,012 ------------- ------------ Net cash provided by (used in) operating activities $ (127,278) $ 1,647,924 CASH FLOWS FROM INVESTING ACTIVITIES: Sales (purchases) of Equipment $ 11,000 $ (4,893) ------------ ------------ Net cash provided by (used in) investing activities $ 11,000 $ (4,893) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from sale of common stock $ 6,464 $ 225 Repayments under revolving credit agreement - (1,800,000) ------------- ------------ Net cash provided by (used in) financing activities $ 6,464 $ (1,799,775) Effect of exchange rate changes on cash 68,971 (28,256) ------------ ------------ Net decrease in cash and cash equivalents $ (40,843) $ (185,000) Cash and cash equivalents at beginning of period $ 476,246 $ 615,949 ------------- ------------ Cash and cash equivalents at end of period $ 435,403 $ 430,949 ============= ============ SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during the period for: Interest $ - $ 33,578 Income Taxes - -
-5- FORM 10-Q CAMBEX CORPORATION AND SUBSIDIARIES For The Quarter Ended: April 4, 1998 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, relating to reinstallation of IBM memory and maintenance. 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: April 4, December 31, 1998 1997 Raw materials $ 774,220 $ 987,920 Work-in-process 200,135 255,377 Finished goods 132,936 169,628 Trade-in memory - - $1,107,291 $ 1,412,925 - 6 - FORM 10-Q CAMBEX CORPORATION AND SUBSIDIARIES For The Quarter Ended: April 4, 1998 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 Revenues for the three months ended April 4, 1998 decreased 70% from the comparable three months of the prior year due to decreased sales of the Company's mainframe storage and client/server storage products. The gross profit of 5% for the first quarter of 1998 was lower than the 39% achieved in 1997 due primarily to the relative amount of fixed costs in relation to lower revenues. Operating expenses for the three months ended April 4, 1998 decreased 61% from the comparable three months of the prior year due principally to the cost savings achieved through a work force reduction and other expense controls put in place. During the first quarter of 1997, the Company received approximately $2,300,000 in cash from the Internal Revenue Service, which represented the refund due from prior periods. This refund was then used to repay the Company's outstanding debt under its Revolving Credit Agreement. After the final payment to its bank, the Revolving Credit Agreement was terminated and the bank released its security interest in the Company's accounts receivable, inventory and general intangibles. - 7 - FORM 10-Q CAMBEX CORPORATION AND SUBSIDIARIES For The Quarter Ended: April 4, 1998 Commission File: 0-6933 Notes & Comments (Continued): (4) Subsequent Events The Company filed a voluntary petition for relief under Chapter 11 of the bankruptcy code on October 10, 1997 the United States Bankruptcy Court (the "Court") in Boston, Massachusetts. The Company filed a reorganization plan (the "Plan") with the Court on February 9, 1998 and amended the Plan on March 17, 1998. The Company also filed a Disclosure Statement with the Court on March 17, 1998. The Court approved the Disclosure Statement on March 17, 1998 as containing information of a kind and in sufficient detail to enable the holders of claims against the Company to make an informed decision with respect to acceptance or rejection of the Plan. On April 23, 1998, following the unanimous approval of the Plan by the Company's unsecured creditors, the Court confirmed the Company's Plan. Subsequently, the Company emerged from Chapter 11 on April 23, 1998. Under the terms of the Plan, creditors will receive a full payout over the next 36 months either in the form of all cash or a combination of 80% cash and two shares of common stock for each dollar of the remaining 20% of their claims. The maximum number of new shares to be issued under the Plan is approximately 550,000. On June 1, 1998, the Company raised approximately $1,060,000, including approximatley $460,000 from Joseph F. Kruy, Chairman, President and Chief Executive Officer of the Company, in cash from the issuance of 10% Subordinated Convertible Promissory Notes (the "Notes"). Under the terms of the Notes, which are due on April 30, 2003, the holders may convert the notes into shares of common stock at a conversion price of $0.22 per share. In addition to the Note, each holder was issued a Stock Purchase Warrant (the "Warrant"), the exercise of which will allow the warrant holder to purchase one share of common stock, at $0.50 per share, for each dollar invested through issuance of the Notes. Subsequent to confirmation of the Plan, the Company paid approximately $300,000 of pre-petition debt and $400,000 in legal and professional fees. The remaining balance of unsecured debt of approximately $4,300,000 will be paid over a thirty month period commencing in October, 1998. - 8 - FORM 10-Q CAMBEX CORPORATION AND SUBSIDIARIES For The Quarter Ended: April 4, 1998 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: August 6, 1998 - 9 - EX-27 2
5 1000 3-MOS DEC-31-1998 APR-04-1998 435 0 793 131 1107 2403 3886 3399 2953 734 0 0 0 1069 (5154) 2953 909 909 863 863 1036 0 0 (990) 0 (990) 0 0 0 (990) (0.11) (0.11)
-----END PRIVACY-ENHANCED MESSAGE-----