-----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, O6hvS79+o9NKfQEhrsTmMS7lunLx3O0q9lADLGGUhdNCtv9ymhBpLpEToOl1mJsT NdVtAhtXS+NMa5Em52Aczw== 0000914317-97-000201.txt : 19970502 0000914317-97-000201.hdr.sgml : 19970502 ACCESSION NUMBER: 0000914317-97-000201 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19970331 FILED AS OF DATE: 19970501 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: 97592867 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 March 31, 1997 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 April 29, 1997, the issuer had 16,266,205 shares of common stock outstanding. COMPUTER HORIZONS CORP. Index Part I Financial Information Consolidated Balance Sheets March 31, 1997 and December 31, 1996 Consolidated Statements of Income Three Months Ended March 31, 1997 and March 29, 1996 Condensed Consolidated Statements of Cash Flows - Three Months Ended March 31, 1997 and March 29, 1996 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) March 31, December 31, 1997 1996 ------- ------- (in thousands) ASSETS CURRENT ASSETS: Cash and cash equivalents .................................. $ 6,450 $10,937 Accounts receivable, net of allowance for doubtful accounts of $1,465,000 and $1,203,000 at March 31, 1997 and December 31, 1996, respectively ...................... 64,606 54,280 Deferred income tax benefit ................................ 830 1,024 Other ...................................................... 397 962 ------- ------- TOTAL CURRENT ASSETS ............................... 72,283 67,203 ------- ------- PROPERTY AND EQUIPMENT ....................................... 9,832 9,449 Less accumulated depreciation .............................. 5,639 5,228 ------- ------- 4,193 4,221 ------- ------- OTHER ASSETS - NET: Goodwill ................................................... 13,173 13,322 Deferred income tax benefit ................................ 726 583 Other ...................................................... 2,659 3,083 ------- ------- TOTAL OTHER ASSETS ................................. 16,558 16,988 ------- ------- TOTAL ASSETS ................................................. $93,034 $88,412 ======= ======= LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Current portion of long-term debt .......................... $ 1,867 $ 1,867 Accrued payroll, payroll taxes and benefits ................ 9,415 11,963 Accounts payable ........................................... 778 1,122 Income taxes payable ....................................... 3,296 940 Other accrued expenses ..................................... 868 749 ------- ------- TOTAL CURRENT LIABILITIES .......................... 16,224 16,641 ------- ------- LONG-TERM DEBT ............................................... 1,432 1,432 ------- ------- OTHER LIABILITIES ............................................ 1,596 1,525 ------- ------- COMPUTER HORIZONS CORP. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Unaudited) (CONTINUED) March 31, December 31, 1997 1996 ------- ------- (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 18,020,586 shares and 17,874,536 shares at March 31, 1997 and December 31, 1996, respectively ...................... 1,802 1,787 Additional paid-in capital ................................. 31,556 30,685 Retained earnings .......................................... 55,072 50,990 ------- ------- 88,430 83,462 Less 1,786,883 shares held in treasury, at cost ............ 14,648 14,648 ------- ------- TOTAL SHAREHOLDERS' EQUITY ......................... 73,782 68,814 ------- ------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY ................... $93,034 $88,412 ======= ======= See notes to consolidated financial statements.
COMPUTER HORIZONS CORP. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF INCOME (Unaudited) THREE MONTHS ENDED ---------------------------------------------------- MARCH 31, 1997 MARCH 29, 1996 ---------------------- ---------------------- (in thousands, except per share data) REVENUES ................................ $ 69,749 100.0% $ 57,031 100.0% -------- ----- -------- ----- COSTS AND EXPENSES: Direct costs ....................... 47,899 68.7% 39,368 69.0% Selling, general and administrative .............. 14,955 21.4% 12,120 21.3% -------- ----- -------- ----- 62,854 90.1% 51,488 90.3% -------- ----- -------- ----- INCOME FROM OPERATIONS .................. 6,895 9.9% 5,543 9.7% -------- ----- -------- ----- OTHER INCOME (expense): Interest income .................... 112 0.2% 103 0.2% Interest expense ................... (77) -0.1% (144) -0.3% Equity in Joint Venture net earnings 150 0.2% 213 0.4% -------- ----- -------- ----- 185 0.3% 172 0.3% -------- ----- -------- ----- INCOME BEFORE INCOME TAXES .............. 7,080 10.2% 5,715 10.0% -------- ----- -------- ----- INCOME TAXES: Current ............................ 2,947 4.2% 2,437 4.3% Deferred ........................... 51 0.1% (24) 0.0% -------- ----- -------- ----- 2,998 4.3% 2,413 4.2% -------- ----- -------- ----- NET INCOME .............................. $ 4,082 5.9% $ 3,302 5.8% ======== ===== ======== ===== EARNINGS PER SHARE: Net income $0.24 $0.20 ======== ======== WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 17,071,000 16,880,000 ========== ========== See notes to consolidated financial statements.
COMPUTER HORIZONS CORP. AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Three Months Ended ---------------------- March 31, March 29, 1997 1996 -------- -------- (in thousands) CASH FLOWS FROM OPERATING ACTIVITIES ................. ($ 5,414) ($ 614) -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES Purchases of property and equipment ............... (383) (314) (Increase) / decrease in other assets ............. 424 (278) -------- -------- 41 (592) -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES Stock options exercised ........................... 886 803 -------- -------- 886 803 -------- -------- NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS . (4,487) (403) CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR ....... 10,937 9,166 -------- -------- CASH AND CASH EQUIVALENTS AT END OF PERIOD ........... $ 6,450 $ 8,763 ======== ======== See notes to consolidated financial statements.
COMPUTER HORIZONS CORP. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS For the Quarters Ended March 31, 1997 and March 29, 1996 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, 1996, 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. Impact of Accounting Pronouncement, Not Yet Adopted In February, 1997, the Financial Accounting Standards Board issued SFAS No. 128, "Earnings per Share", which requires public companies to present basic earnings per share (EPS) and, if applicable, diluted earnings per share, instead of primary and fully diluted EPS. Basic EPS is calculated by dividing the net income by the weighted average number of shares outstanding for the period, without consideration for common stock equivalents. Diluted EPS is computed similarly to fully diluted EPS under the provisions of APB Opinion No. 15. Revision of the EPS standard had two objectives -- to simplify the earnings per share calculation and to make the EPS standard applicable to US entities comparable to the standards of most other countries and to the international standard, which was also recently revised. Although presentation of this new format is required for periods ending after December 15, 1997, early application is not permitted. Staff Accounting Bulletin No. 74, however, requires public companies to discuss the expected impact of adopting the new accounting pronouncement. Had EPS been calculated under SFAS No. 128, the Company's Pro-Forma Basic EPS and Diluted EPS would have been as follows:
March 31, 1997 March 29, 1996 -------------- -------------- Pro-forma earnings per share: Basic ............................... $ 0.25 $ 0.21 Diluted ............................. 0.24 0.20 Pro-forma weighted average number of shares outstanding: Basic ............................... 16,188,000 15,716,000 Diluted ............................. 17,071,000 16,880,000
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS For the Quarters Ended March 31, 1997 and March 29, 1996 For the first quarter ended March 31, 1997, revenues were $69.7 million, a 22% increase over the first quarter of 1996. Year 2000 services revenues, which were less than $1 million in the first quarter of 1996, exceeded $11 million for this year's first quarter. Staffing business continues strong, with revenue for the first quarter totaling $49 million, up well over 30% compared to last year's first quarter. Solutions revenues, excluding Year 2000 services, were $9.5 million, down significantly ($9.3 million) when compared to last year's first quarter. Direct cost, as a percentage of revenues, was 68.7% in the first quarter, 300 basis points lower than a year ago. In general, gross margins are firm in staffing and superior for the Year 2000 business. Year 2000 business accounted for 16% of total revenues in the first quarter of 1997 versus 2% in the first quarter of 1996. Selling, general and administrative spending levels are at a percentage of revenue substantially equal to the first quarter of 1996. With gross profit margins improving and relatively stable SG&A expenses as a percentage of revenue, 1997's operating margin improved to 9.9% from 9.7% last year. Total other income in the first quarter was $185,000 versus $172,000 in the prior year first quarter. The net increase was impacted by two factors. During the 1997 first quarter there was reduced interest expense and increased interest income. However, this was offset by a decrease in earnings from the Birla Horizons Indian joint venture. The decline in Birla income in 1997 reflects significant investments the joint venture is making in the Year 2000 and solutions side of the business. These investments and reduced income levels are expected to continue into the second half of 1997. Income before income taxes increased by 24% in the first quarter of this year as compared to last year's first quarter, $7.1 million vs. $5.7 million. As a percentage of revenues, income before income taxes improved to 10.2% from 10.0% last year. Net income totaled $4.1 million and 5.9% of revenues, up by 24% from last year's $3.3 million. Earnings per share were $0.24 versus $0.20 last year, an increase of 20%. Shares outstanding were slightly higher at 17.1 million in the first quarter of 1997 versus 16.9 million a year ago. As of March 31, 1997, the Company had a current ratio position of 4.5 to 1, including cash and cash equivalents of $6.5 million, and had available bank lines of credit of $25.0 million. The Company's long-term debt, inclusive of current maturities, is only $3.3 million, or less than 5% of shareholders' equity. The Company believes that its cash, lines of credit and internally generated funds will be sufficient to meet its working capital needs for at least the next 12 months. In the twelve month period ending March 31, 1997, the Company acquired $1.4 million of capital assets. Although there are no material, firm commitments for capital spending over the next twelve months, the Company anticipates a spending level in line with that of the previous twelve 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: May 1, 1997 /s/John J. Cassese ------------------ John J. Cassese Chairman of the Board and President DATE: May 1, 1997 /s/William J. Murphy -------------------- William J. Murphy Executive Vice President and Chief Financial Officer (Principal Financial Officer) DATE: May 1, 1997 /s/Michael J. Shea ----------------------- Michael J. Shea Vice President and Controller (Principal Accounting Officer) EX-27 2
5 1,000 3-MOS DEC-31-1997 MAR-31-1997 6,450 0 66,071 1,465 0 72,283 9,832 5,639 93,034 16,224 1,432 0 0 1,802 71,980 93,034 0 69,749 0 47,899 14,805 0 (35) 7,080 2,998 4,082 0 0 0 4,082 0.24 0.24
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