-----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, HE9w0131zn9LkVTA3WsKna3qnDyMdG0BCcduSjsbk1WlL+qkBzByOhIxAAb4vykm h/dynmNK2v6BoTXxq50aKg== 0000914317-96-000390.txt : 19961108 0000914317-96-000390.hdr.sgml : 19961108 ACCESSION NUMBER: 0000914317-96-000390 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960927 FILED AS OF DATE: 19961107 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: COMPUTER HORIZONS CORP CENTRAL INDEX KEY: 0000023019 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER INTEGRATED SYSTEMS DESIGN [7373] IRS NUMBER: 132638902 STATE OF INCORPORATION: NY FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-07282 FILM NUMBER: 96655816 BUSINESS ADDRESS: STREET 1: 49 OLD BLOOMFIELD AVENUE CITY: MOUNTAIN LAKES STATE: NJ ZIP: 07046-1495 BUSINESS PHONE: 2014027400 MAIL ADDRESS: STREET 1: 49 0LD BLOOMFIELD AVE CITY: MOUNTAIN LAKES STATE: NJ ZIP: 07046-1495 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 -------------------------------------------- F O R M 10-Q Quarterly Report Under Section 13 or 15(d) of the Securities Exchange Act of 1934 ------------------------------------------- For Quarter Ended September 27, 1996 Commission File Number 0-7282 ------------------ ------ COMPUTER HORIZONS CORP. ------------------------------------------------------ (Exact name of registrant as specified in its charter) New York 13-2638902 - ------------------------------- ---------------------- (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 49 Old Bloomfield Avenue, Mountain Lakes, New Jersey 07046-1495 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code (201) 402-7400 -------------- Not Applicable ------------------------------------------------------- (Former name, former address and former fiscal year, if changed since last report) 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 twelve 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. X --- -- Yes No As of November 5, 1996, the issuer had 16,087,153 shares of common stock outstanding. COMPUTER HORIZONS CORP. Index Part I Financial Information Consolidated Balance Sheets September 27, 1996 and December 31, 1995 Consolidated Statements of Income Three Months and Nine Months Ended September 27, 1996 and 1995 Condensed Consolidated Statements of Cash Flows - Nine Months Ended September 27, 1996 and 1995 Notes to Consolidated Financial Statements Management's Discussion and Analysis of Financial Condition and Results of Operations Part II Other Information Signatures
COMPUTER HORIZONS CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited) September 27, December 31, 1996 1995 ------- ------- (in thousands) ASSETS CURRENT ASSETS: Cash and cash equivalents .................................................... $ 6,342 $ 9,166 Accounts receivable, net of allowance for doubtful accounts of $1,264,000 and $840,000 at Sept. 27, 1996 and December 31, 1995, respectively ........................................ 53,431 44,729 Deferred income tax benefit .................................................. 1,292 1,245 Other ........................................................................ 1,035 1,618 ------- ------- TOTAL CURRENT ASSETS ................................................. 62,100 56,758 ------- ------- PROPERTY AND EQUIPMENT ......................................................... 9,325 7,454 Less accumulated depreciation ................................................ 4,953 4,031 ------- ------- 4,372 3,423 ------- ------- OTHER ASSETS - NET: Goodwill ..................................................................... 13,368 13,526 Other ........................................................................ 2,581 2,330 ------- ------- TOTAL OTHER ASSETS ................................................... 15,949 15,856 ------- ------- TOTAL ASSETS ................................................................... $82,421 $76,037 ======= ======= LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Current portion of long-term debt ............................................ $ 1,824 $ 2,385 Accrued payroll, payroll taxes and benefits .................................. 11,442 10,812 Accounts payable ............................................................. 1,203 1,746 Income taxes payable ......................................................... 1,263 1,535 Other accrued expenses ....................................................... 597 1,386 ------- ------- TOTAL CURRENT LIABILITIES ............................................ 16,329 17,864 ------- ------- LONG-TERM DEBT ................................................................. 1,432 3,299 ------- ------- OTHER LIABILITIES .............................................................. 657 607 ------- ------- COMPUTER HORIZONS CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited) (continued) September 27, December 31, 1996 1995 ------- ------- (in thousands) SHAREHOLDERS' EQUITY: Preferred stock, $.10 par; authorized and unissued 200,000 shares, including 50,000 Series A Common stock, $.10 par, authorized 30,000,000 shares; issued 17,851,161 shares and 17,407,514 shares at Sept. 27, 1996 and December 31, 1995, respectively ........................................ 1,786 1,741 Additional paid-in capital ................................................... 29,035 27,416 Retained earnings ............................................................ 47,830 39,758 ------- ------- 78,651 68,915 Less 1,786,883 shares held in treasury, at cost .............................. 14,648 14,648 ------- ------- TOTAL SHAREHOLDERS' EQUITY ........................................... 64,003 54,267 ------- ------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY ..................................... $82,421 $76,037 ======= ======= See notes to consolidated financial statements.
COMPUTER HORIZONS CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited) THREE MONTHS ENDED ------------------------------------------------------ SEPT. 27, 1996 SEPT. 27, 1995 ------------------------ ----------------------- (in thousands, except per share data) REVENUES $57,275 100.0% $51,467 100.0% ------- ------ ------- ------ COSTS AND EXPENSES: Direct costs 39,756 69.4% 35,696 69.4% Selling, administrative and general 13,177 23.0% 10,922 21.2% ------- ------ ------- ------ 52,933 92.4% 46,618 90.6% ------- ------ ------- ------ INCOME FROM OPERATIONS 4,342 7.6% 4,849 9.4% ------- ------ ------- ------ OTHER INCOME (expense): Interest income 83 0.1% 101 0.2% Interest expense (99) -0.2% (137) -0.3% Equity in Joint Venture net earnings 200 0.3% 124 0.2% ------- ------ ------- ------ 184 0.3% 88 0.2% ------- ------ ------- ------ INCOME BEFORE INCOME TAXES 4,526 7.9% 4,937 9.6% ------- ------ ------- ------ INCOME TAXES: Current 1,358 2.4% 2,240 4.4% Deferred 535 0.9% (107) -0.2% ------- ------ ------- ------ 1,893 3.3% 2,133 4.1% ------- ------ ------- ------ NET INCOME $2,633 4.6% $2,804 5.4% ====== === ====== === EARNINGS PER SHARE: Net income $0.16 $0.17 ===== ===== WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 16,917,000 16,418,000 ========== ========== COMPUTER HORIZONS CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited) NINE MONTHS ENDED -------------------------------------------------- SEPT. 27, 1996 SEPT. 27, 1995 ----------------------- ---------------------- (in thousands, except per share data) REVENUES $170,338 100.0% $143,731 100.0% -------- ------ -------- ------ COSTS AND EXPENSES: Direct costs 119,084 69.9% 101,292 70.5% Selling, administrative and general 37,802 22.2% 30,438 21.2% -------- ------ -------- ------ 156,886 92.1% 131,730 91.7% -------- ------ -------- ------ INCOME FROM OPERATIONS 13,452 7.9% 12,001 8.3% -------- ------ -------- ------ OTHER INCOME (expense): Interest income 248 0.1% 195 0.1% Interest expense (388) -0.2% (571) -0.4% Equity in Joint Venture net earnings 643 0.4% 220 0.2% -------- ------ -------- ------ 503 0.3% (156) -0.1% -------- ------ -------- ------ INCOME BEFORE INCOME TAXES 13,955 8.2% 11,845 8.2% -------- ------ -------- ------ INCOME TAXES: Current 5,929 3.5% 5,286 3.7% Deferred (47) 0.0% (92) -0.1% -------- ------ -------- ------ 5,882 3.5% 5,194 3.6% -------- ------ -------- ------ NET INCOME $8,073 4.7% $6,651 4.6% ====== === ====== === EARNINGS PER SHARE: Net income $0.48 $0.44 ===== ===== WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 16,951,000 15,201,000 ========== ========== See notes to consolidated financial statements.
COMPUTER HORIZONS CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Nine Months Ended Sept. 27, ---------------------- 1996 1995 -------- -------- (in thousands) CASH FLOWS FROM OPERATING ACTIVITIES ................. $ 424 $ 1,873 -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property and equipment ............... (1,871) (1,596) Acquisitions, net ................................. (362) (668) Increase in other assets .......................... (251) (1,461) -------- -------- (2,484) (3,725) -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES Decrease in notes payable - banks, net ............ (3,200) Payments of long-term debt ........................ (2,428) (1,556) Stock options exercised ........................... 1,664 594 Proceeds from issuance of stock ................... 13,280 -------- -------- (764) 9,118 -------- -------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS . (2,824) 7,266 CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR ....... 9,166 2,278 -------- -------- CASH AND CASH EQUIVALENTS AT END OF PERIOD ........... $ 6,342 $ 9,544 ======== ======== See notes to consolidated financial statements.
COMPUTER HORIZONS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the Quarters Ended September 27, 1996 and 1995 The information furnished reflects all adjustments which, in the opinion of the Company, are necessary to present fairly its consolidated financial position and the results of its operations and changes in financial position for the periods indicated. Reference is made to the Company's annual financial statements for the year ended December 31, 1995, for a description of the accounting policies, which have been continued without change. Also refer to the footnotes with those annual statements for additional details of the Company's financial condition, results of operations and changes in cash flows. The details in those notes have not changed except as a result of normal transactions in the interim. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS For the Quarters Ended September 27, 1996 and 1995 For the third quarter and nine months ended September 27, 1996, revenues increased to $57 million and $170 million, respectively, an 11% and 19% increase over last year's comparable periods. These increases reflect continued growth in the core staffing business, which is up over 26% compared to last year's third quarter. Year 2000 services revenues, which were virtually nil in 1995, reached $2.8 million in the third quarter of 1996. The Company's solutions revenues, impacted by the unexpected termination of certain contracts in the second quarter of this year, did not grow year-over-year. Direct costs, as a percentage of revenues, was 69.4% in the third quarter of this year, unchanged from a year ago. For the nine months, direct costs decreased to 69.9% from 70.5%. The Company is committed to maintaining and improving gross margins through cost control and providing more value added services. Selling, administrative and general expenses increased, as a percentage of revenues, from 21.2% in 1995's third quarter and first nine months, to 23.0% and 22.2% in this year's third quarter and first nine months, respectively. The increase is primarily attributable to the investments associated with the Company's Year 2000 strategy, investments in engagement and technical managers necessary to pursue this new business, as well as marketing expenses incurred to raise the Company's visibility through public relations, trade shows and conferences. Other income/expense improved in the third quarter and the first nine months of 1996, primarily due to the Company's equity in the operating results of its Birla Horizons joint venture, which was formed in 1995, as well as to additional interest income received and interest expense saved relating to the funds provided by the 1995 secondary public offering. Income before income taxes was down in the third quarter of this year as compared to last year's third quarter, $4.5 million vs. $4.9 million, but increased for the first nine months of this year, $14.0 million vs. $11.8 million. Income before income taxes was adversely affected in the second quarter and early third quarter of 1996, by the unexpected termination of certain contracts. The substantial expenditures made by the Company to build the infrastructure necessary and capable of handling the major Year 2000 conversion projects being pursued has also affected the pre-tax numbers. The effective tax rate for Federal, state and local income taxes was 42% for the three months and nine months ended September 27, 1996, compared to 43% and 44% for the comparable 1995 periods. Net income was $2.6 million for the third quarter of 1996 vs. $2.8 million for the third quarter of 1995. Earnings per share were $.16 as compared to $.17, on 16.9 million shares in 1996's third quarter vs. 16.4 million shares a year ago. The increased shares were principally the result of the accounting impact of a higher common stock price on existing stock options. Net income increased by 21% for 1996's first nine months to $8.1 million vs. $6.7 million or $.48 per share vs. $.44 per share as compared to 1995's first nine months. 1995's earnings per share have been restated to reflect the 50% stock distribution declared by the Company on December 12, 1995. As of September 27, 1996, the Company had a current ratio position of 3.8 to 1, a cash position of $6.3 million and available bank lines of credit of $25.0 million. The Company continuously reviews its future cash requirements, together with its available bank lines of credit and internally generated funds. The Company believes it will meet all working capital obligations and fund further development of its business for at least the next 12 months. PART II Other Information Item 6. (b) No reports on Form 8-K have been filed during the quarter for which this report is filed. Signatures Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized. COMPUTER HORIZONS CORP. (Registrant) DATE: November 6, 1996 /s/John J. Cassese ------------------ John J. Cassese Chairman of the Board and President DATE: November 6, 1996 /s/Bernhard Hubert ------------------ Bernhard Hubert Executive Vice President and Chief Financial Officer (Principal Financial Officer) DATE: November 6, 1996 /s/Michael J. Shea, CPA ----------------------- Michael J. Shea, CPA Vice President and Controller (Principal Accounting Officer) EX-27 2
5 1,000 9-MOS DEC-31-1996 SEP-27-1996 6,342 0 54,695 1,264 0 62,100 9,325 4,953 82,421 16,329 1,432 0 0 1,786 62,217 82,421 0 170,338 0 119,084 37,159 0 140 13,955 5,882 8,073 0 0 0 8,073 0.48 0.48
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