-----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, QkAdCQ/m4k8eeIa513cBuRTbgEw/TAUfurQPnyO6td9htZq8rkoJGD+wQAqaqZ9P I3FsLiJtTFOpG67a0XfyEw== 0000950128-96-000008.txt : 19960116 0000950128-96-000008.hdr.sgml : 19960116 ACCESSION NUMBER: 0000950128-96-000008 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19951130 FILED AS OF DATE: 19960112 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: COMPUTER RESEARCH INC CENTRAL INDEX KEY: 0000201511 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROCESSING & DATA PREPARATION [7374] IRS NUMBER: 251201499 STATE OF INCORPORATION: PA FISCAL YEAR END: 0831 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-05954 FILM NUMBER: 96503108 BUSINESS ADDRESS: STREET 1: CHERRINGTON CORPORATE CTR BLDG 200 CITY: CORAOPOLIS STATE: PA ZIP: 15108 BUSINESS PHONE: 4122624430 MAIL ADDRESS: STREET 1: CHERRINGTON CORPORATE CENTER BLDG 200 CITY: CORAOPOLIS STATE: PA ZIP: 15108 10QSB 1 COMPUTER RESEARCH 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB [ X ] QUARTERLY REPORT UNDER SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended November 30, 1995 ----------------- [ ] TRANSITION REPORT UNDER SECTION 13 or 15(d) OF THE EXCHANGE ACT For the transition period from ______________ to _______________ Commission File No. 0-5954 ------------------------------ COMPUTER RESEARCH, INC. ----------------------------------------------------------------- (Exact name of small business issuer as specified in its charter) Pennsylvania 25-1201499 ------------ ---------- (State or other jurisdiction of I.R.S. Employer incorporation or organization) Identification No. Cherrington Corporate Center, Building 200, Coraopolis, Pennsylvania 15108 ----------------------------------------------------------------------------- (Address of principal executive offices) (412) 262-4430 --------------------------- (Issuer's telephone number) ________________________________________________________________________________ (Former name, former address and former fiscal year, if changed since last report) Check whether the issuer (1) filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 --- --- APPLICABLE ONLY TO ISSUERS INVOLVED IN BANKRUPTCY PROCEEDINGS DURING THE PRECEDING FIVE YEARS Check whether the registrant filed all documents and reports required to be filed by Section 12, 13 or 15(d) of the Exchange Act after the distribution of securities under a plan confirmed by a court. Yes _____ No _____ APPLICABLE ONLY TO CORPORATE ISSUERS State the number of shares outstanding of each of the issuer's classes of common equity, as of the latest practicable date: 3,887,338 - ---------------------- 2 PART I - FINANCIAL STATEMENTS ----------------------------- ITEM I - ------ A. COMPUTER RESEARCH, INC. CONSOLIDATED BALANCE SHEET -------------------------------------------------- November 30, 1995 and August 31, 1995 ------------------------------------- ASSETS ------
NOVEMBER 30, AUGUST 31, 1995 1995 ---- ---- CURRENT ASSETS Cash and Cash Equivalents $1,099,430 $ 873,508 Accounts Receivable - Trade (net of allowance for doubtful accounts of $35,000 and $30,000 at 11/30/95 and 8/31/95 respectively) 968,316 776,099 Inventories (first-in, first-out) or market 77,746 80,518 Prepaid Expenses 70,432 75,911 Total Current Assets 2,215,924 1,806,036 ---------- ---------- EQUIPMENT and LEASEHOLD IMPROVEMENTS - At Cost Data Processing Equipment 4,260,099 4,255,912 Data Processing Equipment Under Capital Leases 104,339 104,339 Other 802,012 798,889 ---------- ---------- 5,166,450 5,159,140 Less Accumulated Depreciation and Amortization 4,902,772 4,879,610 ---------- ---------- 263,678 279,530 ---------- ---------- OTHER ASSETS 1,341 1,341 ---------- ---------- $2,480,943 $2,086,907 ========== ==========
The accompanying notes are an integral part of these financial statements. 2 3 A. COMPUTER RESEARCH, INC. CONSOLIDATED BALANCE SHEET - CONT'D. ------------------------------------------------------------ November 30, 1995 and August 31, 1995 ------------------------------------- LIABILITIES -----------
NOVEMBER 30, AUGUST 31, 1995 1995 ---- ---- LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Note Payable to Bank $ 5,000 $ 25,000 Current Portion of Long-Term Obligations 45,081 45,852 Accounts Payable 109,959 82,057 Accrued Payroll 166,018 157,036 Accrued Income Taxes 90,870 27,500 Accrued Vacation 288,470 281,720 Customer Deposits 109,179 70,350 Accrued Rent 109,743 103,847 Accrued Lease Obligation 18,644 20,204 Other Current Liabilities 6,046 4,746 ---------- ---------- Total Current Liabilities 949,010 818,312 LONG-TERM OBLIGATIONS 24,805 35,885 ACCRUED LEASE OBLIGATION 14,417 17,909 ---------- ---------- Total Liabilities 988,232 872,106 ---------- ---------- COMMITMENTS STOCKHOLDERS' EQUITY - -------------------- Common Stock - No Par Value; $.0008 Stated Value; 5,000,000 Shares Authorized; 3,887,338 and 3,887,895 Shares Issued and Outstanding at 11/30/95 and 8/31/95, Respectively 3,110 3,110 Additional Paid-In Capital 715,666 715,842 Retained Earnings 773,935 495,849 ---------- ---------- Total Stockholders' Equity 1,492,711 1,214,801 ---------- ---------- $2,480,943 $2,086,907 ========== ==========
The accompanying notes are an integral part of these financial statements. 3 4 B. COMPUTER RESEARCH, INC. CAPITALIZATION AND STOCKHOLDERS' EQUITY --------------------------------------------------------------- November 30, 1995 -----------------
DEBT AMOUNT ---- ------ Short-Term Loans, Notes $ 5,000 Long-Term Debt (Including $45,081 due within one year) 69,886 ---------- Total Debt $ 74,886 ========== SHAREHOLDERS' EQUITY - -------------------- SHARES ISSUED AMOUNT ------------- ------ Preferred Stock -0- Common Stock 3,887,338 $ 3,110 Capital in Excess of Par Value 715,666 Retained Earnings - Balance at Beginning of Current Fiscal Year 495,849 Net Income for Period 278,086 ---------- 773,935 ---------- Total Stockholders' Equity $1,492,711 ==========
The accompanying notes are an integral part of these financial statements. 4 5 C. COMPUTER RESEARCH, INC. STATEMENT OF CONSOLIDATED INCOME -------------------------------------------------------- For the Three Months Ended November 30, 1995 and 1994 -----------------------------------------------------
1995 1994 ---- ---- REVENUES -------- Sales of Services $1,802,781 $1,333,922 Sales of Equipment, Software and Supplies 530 3,583 Rental Income From Operating Leases 11,565 12,765 Other Income 15,752 7,284 ---------- ---------- 1,830,628 1,357,554 ---------- ---------- COSTS AND EXPENSES ------------------ Operating Expenses 998,487 887,573 Selling and Administrative Expenses 462,184 413,845 Depreciation and Amortization 23,162 20,708 Cost of Equipment, Software and Supplies Sold - 1,402 Interest Expense 3,709 1,856 ---------- ---------- 1,487,542 1,325,384 ---------- ---------- INCOME BEFORE INCOME TAXES 343,086 32,170 LESS: PROVISION FOR INCOME TAXES 65,000 - ---------- ---------- NET INCOME $ 278,086 $ 32,170 ========== ========== Average Number of Shares Outstanding 3,887,338 3,879,895 ---------- ---------- Earnings Per Common Share Before Taxes $ .07 $ .01 ---------- ---------- DIVIDENDS PER COMMON SHARE - - ========== ==========
The results for the period ended November 30, 1995, are not necessarily indicative of the results to be expected for the year. All known adjustments necessary for a fair presentation of the financial information of the Company have been reflected for the three months ended November 30, 1995. The accompanying notes are an integral part of these financial statements. 5 6 D. COMPUTER RESEARCH, INC. CONSOLIDATED STATEMENT OF CASH FLOWS ------------------------------------------------------------ For the Three Months Ended November 30, 1995 and 1994 -----------------------------------------------------
1995 1994 ---- ---- RECONCILIATION OF NET INCOME TO NET CASH PROVIDED (USED) BY OPERATING ACTIVITIES: Net Income $ 278,086 $ 32,170 ---------- ---------- ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES: Depreciation and Amortization 23,162 20,708 Provision for Losses on Doubtful Accounts 5,000 - Change in Assets and Liabilities: Accounts Receivable (197,217) (165,298) Inventories 2,772 (15,009) Prepaid Expenses 5,479 (39,949) Other Assets - 1,427 Accounts Payable, Accrued Expenses and Other Current Liabilities 114,200 (46,402) Customer Deposits 38,829 16,139 Accrued Lease Obligation (5,052) (26,562) ----------- ----------- Total Adjustments (12,827) (254,946) ---------- ---------- Net Cash (Used In) Provided by Operating Activities 265,259 (222,776) ---------- ---------- CASH FLOWS FROM INVESTING ACTIVITIES: Additions to Equipment and Leasehold Improvements (7,310) (6,574) ---------- ---------- CASH FLOWS FROM FINANCING ACTIVITIES: Issuance (Retirement) of Stock (176) 2,852 Proceeds From Line of Credit - 100,000 Payments on Capital Lease Obligations (11,851) (1,536) Payments on Line of Credit (20,000) (53,354) ---------- ---------- Net Cash Provided by (Used In) Financing Activities (32,027) 47,962 ---------- ---------- Net Increase (Decrease) in Cash 225,922 (181,388) Cash and Cash Equivalents at August 31, 1995 873,508 691,881 ---------- ---------- Cash and Cash Equivalents at November 30, 1995 $1,099,430 $ 510,493 ========== ========== CASH PAID DURING THE PERIOD - --------------------------- 11/30/95 11/30/94 -------- -------- Interest $ 3,709 $ 1,856 ========== ========== Income Taxes $ 1,630 $ - ========== ==========
The accompanying notes are an integral part of these financial statements. 6 7 COMPUTER RESEARCH, INC. & CONSOLIDATED SUBSIDIARIES --------------------------------------------------- NOTES TO CONSOLIDATED FINANCIAL STATEMENTS ------------------------------------------ THREE MONTHS ENDED NOVEMBER 30, 1995 ------------------------------------ NOTE A - COMPANY'S ANNUAL REPORT UNDER FORM 10-KSB - -------------------------------------------------- The accompanying financial information should be read in conjunction with the Company's 1995 Annual Report on Form 10-KSB. NOTE B - ADJUSTMENTS - -------------------- In the opinion of management, all adjustments that were made, which are necessary to a fair statement of the results for the interim periods, were of a normal and recurring nature. 7 8 ITEM 2 - ------ MANAGEMENT'S DISCUSSION AND ANALYSIS ------------------------------------ 1. CAPITAL RESOURCES AND LIQUIDITY ------------------------------- Due to the relatively stable operating costs of the data processing service business, the working capital requirements of the Company are normally predictable. Net income of approximately $278,000 during the first quarter of the current year added to cash available in support of operations. In the opinion of management, the Company's existing cash on hand, combined with revenues generated by clients of the service business, will satisfy the capital needs of the Company for the foreseeable future. In addition, the Company has an approximate $500,000 line of credit available, if needed. The Company will install an additional Honeywell Bull mainframe computer system in January 1996 on a 24 month lease with a total commitment of approximately $60,000. During the 1997 fiscal year, the Company intends to have the software of its product line operational on IBM computer equipment. At that time, the Company will have the option to purchase computer processing time from an outside supplier or, if cost justified, to install IBM computer equipment of its own for its service business. 2. RESULTS OF OPERATIONS --------------------- REVENUES -------- The Company's principal source of revenue is derived from providing computerized accounting and support services to securities brokerage firms, banks and other financial institutions. The Company's revenues are directly affected by securities trading volume and the number of transactions processed for its clients. Due to the volatile nature of the industry served, the results of operations for the period represented are not necessarily indicative of the results of operations to be expected for the full year or any specific period. The total revenues for the first quarter of the current year exceeded the revenues for the comparable period of the previous year by approximately 35%. This is attributable to an approximate 30% monthly increase in transactions processed for the banking and brokerage clients, plus an increase in systems development revenues. The total revenues for the first three months ending November 30, 1994, increased by approximately 5% over the previous year as a result of increased billings for data processing service. 8 9 COSTS AND EXPENSES ------------------ The total costs and expenses for the first quarter of the current year increased by approximately 12% over the comparable period of the previous year. An increase in data communications costs, as well as costs associated with systems development, were partly responsible for this increase. The total costs and expenses increased approximately 4% for the first three months of the previous year. NET INCOME ---------- Net income for the first three months of the current year was $278,086 or $.07 per share. The net income for the first three months of the previous year was $32,170 or $.01 per share. 9 10 PART II - OTHER INFORMATION --------------------------- Not applicable. SIGNATURES In accordance with the requirements of the Exchange Act, the Registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. COMPUTER RESEARCH, INC. ----------------------- (Registrant) Date January 12, 1996 /s/ JAMES L. SCHULTZ ------------------ -------------------------------- James L. Schultz, President & Treasurer 10 EX-27 2 COMPUTER RESEARCH
5 0000201511 COMPUTER RESEARCH, INC. 1 U.S. DOLLARS 3-MOS AUG-31-1996 SEP-01-1995 NOV-30-1995 1 1,099,430 0 1,003,316 35,000 77,746 2,215,924 5,166,450 4,902,772 2,480,943 949,010 5,000 3,110 0 0 1,489,601 2,480,943 530 1,830,628 0 1,483,833 0 5,000 3,709 343,086 65,000 278,086 0 0 0 278,086 .07 .07
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