-----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, MZfFQoaavrt27myVkClIgsqBSP4g+ekKXosP1EO/lWRiV3i8jjF7/njKRjKKS5sK V5eyrJ+OijkCuByKbxsfSg== 0000950128-00-000014.txt : 20000202 0000950128-00-000014.hdr.sgml : 20000202 ACCESSION NUMBER: 0000950128-00-000014 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19991130 FILED AS OF DATE: 20000112 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: SEC FILE NUMBER: 000-05954 FILM NUMBER: 505835 BUSINESS ADDRESS: STREET 1: 400 SOUTHPOINTE BLVD STREET 2: STE 300 CITY: CANONSBURG STATE: PA ZIP: 15317-8539 BUSINESS PHONE: 4122624430 MAIL ADDRESS: STREET 1: SOUTHPOINT PLZ I STREET 2: 400 SOUTHPOINTE BLVD STE 300 CITY: CANONSBURGH STATE: PA ZIP: 15317-8539 10QSB 1 COMPUTER RESEARCH, INC. 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, 1999 [ ] 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. Southpointe Plaza I, Suite 300, 400 Southpointe Boulevard, Canonsburg, PA 15317 - ------------------------------------------------------------------------------- (Address of principal executive offices) (724) 745-0600 - ------------------------------------------------------------------------------- (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: 4,037,255 (As of November 30, 1999) 2 PART I - FINANCIAL STATEMENTS ITEM I A. COMPUTER RESEARCH, INC. BALANCE SHEET November 30, 1999 (Unaudited) and August 31, 1999 (Audited)
ASSETS NOVEMBER 30, AUGUST 31, 1999 1999 ----------- ----------- CURRENT ASSETS Cash and Cash Equivalents $ 655,723 $ 449,698 Short-Term Investments 2,812,921 2,439,882 Accounts Receivable - Trade (net of allowance for doubtful accounts of $37,500) 914,833 1,058,999 Inventories at the Lower of Cost (first-in, first-out) or market 16,675 7,152 Prepaid Expenses 92,660 52,689 Deferred Tax Asset 25,000 25,000 ----------- ----------- Total Current Assets 4,517,812 4,033,420 ----------- ----------- EQUIPMENT and LEASEHOLD IMPROVEMENTS - At Cost Data Processing Equipment 1,820,831 1,765,116 Data Processing Equipment Under Capital Leases 446,471 446,471 Leasehold Improvements 185,008 185,008 Office Equipment 596,367 580,574 ----------- ----------- 3,048,677 2,977,169 Less Accumulated Depreciation and Amortization (2,303,803) (2,249,900) ----------- ----------- 744,874 727,269 OTHER ASSETS 30,030 43,998 ----------- ----------- $ 5,292,716 $ 4,804,687 =========== ===========
The accompanying notes are an integral part of these financial statements. 2 3 A. COMPUTER RESEARCH, INC. BALANCE SHEET - CONT'D. November 30, 1999 (Unaudited) and August 31, 1999 (Audited)
LIABILITIES AND STOCKHOLDERS' EQUITY NOVEMBER 30, AUGUST 31, 1999 1999 ------------ ---------- LIABILITIES CURRENT LIABILITIES Current Portion of Long-Term Obligations 75,644 81,072 Accounts Payable 141,938 125,117 Accrued Payroll and Related Costs 251,587 129,607 Accrued Income Taxes 161,117 42,000 Accrued Vacation 260,593 260,593 Customer Deposits 93,701 93,701 Other Liabilities 466 290 ---------- ---------- Total Current Liabilities 985,046 732,380 LONG-TERM OBLIGATIONS 141,759 161,266 ---------- ---------- Total Liabilities 1,126,805 893,646 ---------- ---------- STOCKHOLDERS' EQUITY Common Stock - No Par Value; $.0008 Stated Value; 10,000,000 Shares Authorized; 4,037,255 Shares Issued and Outstanding 3,230 3,230 Additional Paid-In Capital 744,342 744,342 Retained Earnings 3,418,339 3,163,469 ---------- ---------- Total Stockholders' Equity 4,165,911 3,911,041 ---------- ---------- $5,292,716 $4,804,687 ========== ==========
The accompanying notes are an integral part of these financial statements. 3 4 B. COMPUTER RESEARCH, INC. CAPITALIZATION AND STOCKHOLDERS' EQUITY November 30, 1999 (Unaudited)
DEBT AMOUNT ---- ------ Short-Term Line of Credit $ -0- Long-Term Debt (Including $75,644 due within one year) 217,403 -------- Total Debt $217,403 ========
STOCKHOLDERS' EQUITY - -------------------- SHARES ISSUED AMOUNT ------------- ------ Common Stock 4,037,255 $ 3,230 Capital in Excess of Par Value 744,342 Retained Earnings - Balance at Beginning of Current Fiscal Year 3,163,469 Net Income for Period 254,870 ---------- 3,418,339 ---------- Total Stockholders' Equity $4,165,911 ==========
The accompanying notes are an integral part of these financial statements. 4 5 C. COMPUTER RESEARCH, INC. STATEMENT OF INCOME For the Three Months Ended November 30, 1999 and 1998 (Unaudited)
1999 1998 ---- ---- REVENUES Sales of Services $2,145,558 $1,643,708 Sales of Equipment, Software and Supplies 3,000 27,500 Other Income 34,787 30,946 ---------- ---------- 2,183,345 1,702,154 ---------- ---------- COSTS AND EXPENSES Operating Expenses 1,079,805 1,034,359 Selling and Administrative Expenses 623,537 604,858 Depreciation and Amortization 61,490 37,729 Cost of Equipment, Software and Supplies Sold 2,477 21,111 Interest Expense 5,166 2,552 ---------- ---------- 1,772,475 1,700,609 ---------- ---------- INCOME BEFORE INCOME TAXES 410,870 1,545 LESS: PROVISION FOR INCOME TAXES 156,000 500 ---------- ---------- NET INCOME $ 254,870 $ 1,045 ========== ========== Average Number of Shares Outstanding 4,037,255 4,037,255 ---------- ---------- EARNINGS PER COMMON SHARE $ .06 $ .00 ========== ========== (Basic and Diluted) DIVIDENDS PER COMMON SHARE $ -- $ -- ========== ==========
The results for the periods ended November 30, 1999 and 1998 are unaudited and 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, 1999 and 1998. The accompanying notes are an integral part of these financial statements. 5 6 D. COMPUTER RESEARCH, INC. STATEMENT OF CASH FLOWS FOR THE THREE MONTHS ENDED NOVEMBER 30, 1999 AND 1998 (UNAUDITED)
1999 1998 ---- ---- RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES: Net Income $ 254,870 $ 1,045 ------------ ------------ ADJUSTMENTS TO RECONCILE NET INCOME TO NET CASH PROVIDED BY OPERATING ACTIVITIES: Depreciation and Amortization 61,490 37,729 Change in Assets and Liabilities: Accounts Receivable 144,166 (396,463) Inventories (9,523) 11,027 Prepaid Expenses (39,971) (30,316) Accounts Payable, Accrued Expenses and Other Current Liabilities 258,094 99,504 Customer Deposits -0- (7,250) Other Assets 6,381 (12,479) ------------ ------------ Total Adjustments 420,637 (298,248) ------------ ------------ Net Cash Provided by (Used by) Operating Activities 675,507 (297,203) ------------ ------------ CASH FLOWS FROM INVESTING ACTIVITIES: Additions to Equipment and Leasehold Improvements (71,508) (61,154) Short-Term Investment Maturities 1,775,000 1,225,000 Additions to Short-Term Investments (2,148,039) (1,421,875) ------------ ------------ Net Cash Provided by (Used by)Investing Activities (444,547) (258,029) ------------ ------------ CASH FLOWS FROM FINANCING ACTIVITIES: Payments on Capital Lease Obligations (24,935) (14,275) ------------ ------------ Net Cash (Used by) Financing Activities (24,935) (14,275) ------------ ------------ Net Increase (Decrease) in Cash 206,025 (569,507) Cash and Cash Equivalents at August 31, 1999 and 1998 449,698 766,823 ------------ ------------ Cash and Cash Equivalents at November 30, 1999 and 1998 $ 655,723 $ 197,316 ============ ============ CASH PAID DURING THE PERIOD Interest $ 5,166 $ 2,552 ============ ============ Income Taxes $ 36,883 $ -0- ============ ============
SUPPLEMENTAL SCHEDULE OF NONCASH INVESTING AND FINANCING ACTIVITIES There were no noncash investing and financing activities during the periods. The accompanying notes are an integral part of these financial statements. 6 7 COMPUTER RESEARCH, INC. NOTES TO FINANCIAL STATEMENTS THREE MONTHS ENDED NOVEMBER 30, 1999 NOTE A - COMPANY'S ANNUAL REPORT UNDER FORM 10-KSB The accompanying financial information should be read in conjunction with the Company's 1999 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. RESULTS OF OPERATIONS The Company's principal source of revenue is derived from providing computerized accounting and support services to securities firms, banks and other financial institutions. Service revenues are directly affected by stock and bond trading market volume which indirectly impacts the number of transactions processed for the clients. In addition, the clients serviced could be involved in mergers and acquisitions or may choose to convert their business from self-clearing to a fully disclosed basis which would eliminate the need for the accounting services provided by the Company. The Company could be positively or negatively impacted by a merger involving one of its clients. As the result of being acquired by a third party, a client that accounted for 11.6% of the 1999 revenues of the Company will be terminating the Company's services at the beginning of the fiscal third quarter of the current year. Also, due to the volatile nature of the industry served, the results of operations for the period represented are not necessarily indicative of results to be expected for the coming year or any specific period. REVENUES The total revenues for the first three months of the 2000 fiscal year increased approximately 28% over the comparable period of the previous year to a total of $2,183,345. This is attributable to increased revenues from new banking and brokerage clients, as well as to increased revenues generated by some existing clients. COSTS AND EXPENSES The costs and expenses for the first three months of the current year increased approximately 4% over the comparable period of the previous year. NET INCOME The net income for the first three months of the 2000 fiscal year was $254,870 or $.06 per share as compared to $1,045 or $.00 per share for the comparable period of the previous year. 8 9 2. CAPITAL RESOURCES AND LIQUIDITY The Company had approximately $3.4 million in cash, cash equivalents and short-term investments at the end of the first quarter of the 2000 fiscal year. In addition, the Company maintains an approximate $750,000 line of credit, if needed. This, along with funds generated by operations, should adequately support the operating needs of the Company in the near term. 3. "SAFE HARBOR" STATEMENT UNDER PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 Statements regarding the Company's expectations as to its future operations and financial condition and certain other information presented in this report constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. Since these statements involve risks and uncertainties and are subject to change at any time, the Company's actual results could differ materially from expected results. The Company's forward-looking statements are based upon operating budgets and many detailed assumptions. While the Company believes that its assumptions are reasonable, it cautions that there are inherent difficulties in predicting certain important factors which could directly affect the business. Some factors, which could cause actual results to differ from expectations, include a general downturn in the economy or the stock markets and related transaction activity, gain or loss of significant clients, unforeseen new competition, changes in government policy or regulation, or costs and other effects related to unanticipated legal proceedings. 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 1/12/00 /s/ JAMES L. SCHULTZ -------------------- --------------------------------------- James L. Schultz, President & Treasurer 10 EX-27 2 FINANCIAL DATA SCHEDULE
5 0000201511 COMPUTER RESEARCH, INC. 1 U.S. DOLLARS 3-MOS AUG-31-2000 SEP-01-1999 NOV-30-1999 1 655,723 2,812,921 952,333 37,500 16,675 4,517,812 3,048,677 2,303,803 5,292,716 985,046 217,403 0 0 3,230 4,162,681 5,292,716 3,000 2,183,345 2,477 1,772,475 0 0 5,166 410,870 156,000 254,870 0 0 0 254,870 .06 .06
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