-----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, JEXKYy0MRqV/6HS82Q7IBlizMk5sJbsf4uqP9unWR/Sb5LAM21+VQd8J3QUdvu7w r2zAQHpqD/SpXZ8/wv4R+g== 0000026990-95-000003.txt : 19951030 0000026990-95-000003.hdr.sgml : 19951030 ACCESSION NUMBER: 0000026990-95-000003 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950930 FILED AS OF DATE: 19951027 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: DATA DIMENSIONS INC CENTRAL INDEX KEY: 0000026990 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROGRAMMING SERVICES [7371] IRS NUMBER: 060852458 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-04748 FILM NUMBER: 95584799 BUSINESS ADDRESS: STREET 1: 777 108TH AVENUE NE STREET 2: SUITE 2070 CITY: BELLEVUE STATE: WA ZIP: 98004 BUSINESS PHONE: 2066881000 MAIL ADDRESS: STREET 1: 777 108TH AVENUE NE SUITE 2070 CITY: BELLEVUE STATE: WA ZIP: 98004 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1995 Commission File Number 0-4748 Data Dimensions, Inc. (Exact name of registrant as specified in its charter) Delaware 06-0852458 (State or other jurisdiction of (I.R.S. employer incorporation or organization) Identification no.) 777 - 108th Avenue N.E., Suite 2070, Bellevue, WA 98004 (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code (206) 688-1000 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 [ ] Indicate by check whether the registrant has filed all documents and reports required to be filed by Section 12, 13 or 15 (d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court. YES NO Indicate the number of shares outstanding of each of the issuers classes of common stock, as of the latest practical date Common Stock, $.01 Par Value - 6,904,464 shares as of October 27, 1995 PART I - FINANCIAL INFORMATION DATA DIMENSIONS, INC. CONDENSED BALANCE SHEETS (Unaudited)
ASSETS September 30, December 31, 1995 1994 CURRENT ASSETS: Cash $15,900 $42,100 Accounts receivable, less allowance for doubtful accounts of $2,500 in 1995 and 1994 976,100 683,200 Due from officer 0 123,800 Other assets 75,800 47,800 Total Current Assets 1,067,800 896,900 EQUIPMENT, FURNITURE AND LEASEHOLD IMPROVEMENTS Computers and equipment 140,100 120,700 Furniture 15,800 11,500 Leasehold improvements 21,500 7,000 177,400 139,200 Less accumulated depreciation 86,100 63,900 EQUIPMENT AND FURNITURE, NET 91,300 75,300 $1,159,100 $972,200 The accompanying notes to the financial statements are an integral part of these balance sheets
DATA DIMENSIONS, INC. CONDENSED BALANCE SHEETS (Unaudited)
LIABILITIES AND STOCKHOLDERS' (DEFICIT) September 30, December 31, 1995 1994 CURRENT LIABILITIES: Accounts payable $77,700 $57,600 Accrued compensation 157,900 196,200 Advances from factor 514,400 510,500 Advance billing 802,100 829,100 Dividends payable 35,000 70,000 Accrued and withheld payroll taxes 80,400 169,800 Accrued expenses 8,900 55,400 Notes and other payable to officers 85,400 211,000 Total Current Liabilities 1,761,800 2,099,600 STOCKHOLDERS' (DEFICIT): Series A Preferred Stock, $.01 par value; 3,000,000 shares authorized; none and none shares issued 0 0 Common stock, $.01 par value; 20,000,000 shares authorized; 6,904,464 and 6,515,464 shares issued 69,000 65,200 Capital in excess of par value 1,449,000 1,115,800 Accumulated deficit (2,120,800) (2,308,400) Total Stockholders' (Deficit) (602,700) (1,127,400) $1,159,100 $972,200 The accompanying notes to the financial statements are an integral part of these balance sheets
DATA DIMENSIONS, INC. CONDENSED STATEMENTS OF OPERATIONS (Unaudited)
Three Month Period Nine Month Period Ended September 30, Ended September 30, 1995 1994 1995 1994 REVENUE $1,524,000 $850,700 $3,912,000 $2,414,000 DIRECT COSTS 860,000 453,200 2,256,000 1,295,100 Gross Profit 664,000 397,500 1,656,000 1,118,900 GENERAL, ADMINISTRATIVE AND SELLING EXPENSES 558,000 351,400 1,310,000 925,700 Income from operations 106,000 46,100 346,000 193,200 INTEREST EXPENSE 50,000 36,300 158,000 111,900 NET INCOME $ 56,000 $ 9,800 $188,000 $ 81,300 NET INCOME PER SHARE $0.01 0.00 0.03 0.01 WEIGHTED AVERAGE NUMBER OF SHARES OUTSTANDING 7,464,000 6,515,000 7,424,000 6,515,000 The accompanying notes to the financial statements are an integral part of these statements.
DATA DIMENSIONS, INC. CONDENSED STATEMENTS OF CASH FLOWS Increase (Decrease) in Cash (Unaudited)
Nine Month Period Ended September 30, 1995 1994 CASH FLOWS FROM OPERATING ACTIVITIES: Net Income $187,600 $81,300 Adjustments to reconcile net income to net cash provided by (used in) operating activities: Depreciation and amortization 22,200 11,000 Changes in assets and liabilities: Accounts receivable (292,900) (8,900) Other assets (28,000) (47,700) Advance billings (27,000) 341,200 Accounts payable 20,100 7,900 Accrued compensation (38,300) 56,500 Accrued and withheld payroll taxes (89,400) (94,100) Accrued expenses (46,500) (17,300) Net Cash Provided by (Used in) Operating Activities (292,200) 329,900 CASH FLOWS FROM INVESTING ACTIVITIES: Purchases of equipment and furniture (23,700) (47,200) Leasehold improvements (14,500) 0 Due from officer 123,800 0 Net Cash Provided by (Used in) Investing Activities 85,600 (47,200) CASH FLOWS FROM FINANCING ACTIVITIES: Proceeds from notes and other payables to officers (125,600) 0 Payments on notes payable to officer 0 (300,000) Increase in advances from factor 3,900 (55,600) Issuance of common stock 337,100 500 Dividend payment (35,000) 0 Net Cash Provided by (Used in) Financing Activities 180,400 (355,100) NET CHANGE IN CASH (26,200) (72,400) CASH, beginning of year 42,100 41,000 CASH, September 30, 1995 and September 30, 1994 $15,900 ($31,400) The accompanying notes to the financial statements are an integral part of these statements.
DATA DIMENSIONS, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS NOTE 1: GENERAL The unaudited condensed financial statements included herein have been prepared by the Company pursuant to the rules and regulations of the Securities Exchange Commission. Certain information and footnote disclosures normally included in financial statements, which are prepared in accordance with generally accepted accounting principles, have been condensed or omitted pursuant to such rules and regulations. The Company believes that the condensed financial statements contain all adjustments (consisting of normal recurring adjustments) necessary to present fairly the financial position as of September 30, 1995, the results of operations for the three and nine month periods ended September 30, 1995 and September 30, 1994 and cash flows for the nine month periods ended September 30, 1995 and September 30, 1994. These condensed financial statements should be read in conjunction with the financial statements and the notes thereto for the year ended December 31, 1994. NOTE 2: ACCOUNTING POLICIES Reference is made to Note l of Notes to Financial Statements in the Company's Annual Report on Form 10K for the summary of significant accounting policies. Management's Discussion and Analysis of Financial Condition and Results of Operations September 30, 1995 Liquidity and Capital Commitments The Company's ability to generate cash adequate for its needs is dependent upon revenue derived from its software and Millennium services business, a bank line of credit and other debt or equity financing. Working capital on September 30, 1995 was ($694,000) compared with ($1,202,700) on December 31, 1994. The Company had borrowings of $514,400 on a Factoring Agreement with a bank at September 30, 1995. On June 13, 1995, the Company entered into a more favorable factoring agreement with its current factor. Borrowings are limited to 90% of receivable purchased by the bank. A 10% reserve is established upon the purchase of the receivable. The agreement is secured by all Company assets. Borrowings under the line bear interest equal to 2% per month of the average daily account balance outstanding during the applicable reconciliation period (month end). There are no other fees. The financing fee is deducted at the end of the month from the established 10% reserve. During the month of August 1995, the Company raised $300,000 from a private placement of 300,000 shares of Common Stock. Proceeds from the issuance of the shares were used for the Company's general working capital needs. The Company has no material commitments for capital expenditures nor does it anticipate entering into any such commitments in 1995. Management believes the Company's present banking and financing arrangements are adequate for its anticipated level of operations. However, management is also continuing to explore alternatives in borrowing arrangements in order to reduce cost of borrowing. At September 30, 1995, the Company's backlog of services to be performed amounted to $5,650,000. The stated backlog is not necessarily indicative of the Company's sales for future periods nor is a backlog any insurance that the Company will realize a profit from fulfilling client contracts. The Company expects to render the services on it's backlog by increasing consultant personnel. Management anticipates that with increased revenue over 1994 and by increasing operating efficiency the Company's working capital deficit will be reduced during the balance of 1995. Results of Operations Revenue for the three months ended September 30, 1995 was $1,524,000 up 79% when compared with $850,700 for the three months ended September 30, 1994. Gross profit increased by $266,500 or 67% to $664,000 for the three months ended September 30, 1995 from $397,500 for the same period in 1994. Revenue for the nine months ended September 30, 1995 was $3,912,000 up 62% when compared with $2,414,000 for the nine months ended September 30, 1994. Gross profit increased by $537,100 or 48% to $1,656,000 for the nine months ended September 30, 1995 from $1,118,900 for the same period in 1994. The net increase in gross profit for the three and nine month periods ended September 30, 1995 was due to an increase in demand for the Company's millennium services. General, administrative and sales expenses increased by $206,000 or 58% to $558,000 during the three months ended September 30, 1995 when compared to the same period in 1994 and increased by $384,300 or 42% to $1,310,000 during the nine months ended September 30, 1995 when compared to the same period in 1994. Because of increased business, administrative expenses were higher in the three months and nine months ended September 30, 1995, due to the hiring of employees needed to further strengthen financial controls, sales and operations management. During the quarter ended September 30, 1995, the Company reorganized the operations into three regions and added three Regional Vice Presidents in order to manage the current and continued growth. Interest expense increased during the three and nine months ended September 30, 1995 by $13,700 and $46,400, respectively, due to higher borrowings to support the Company's growth. The Company reported a net income of $56,000 for the three months ended September 30, 1995 compared with a net income of $9,800 for the same period in 1994 and a net income of $188,000 for the nine months ended September 30, 1995 compared with a net income of $81,300 for the same period in 1994. PART II - OTHER INFORMATION ITEM 5 - OTHER INFORMATION During August 1995, the Company closed financing on $300,000 raised pursuant to a Private Placement of 300,000 shares of Common Stock. ITEM 6 - EXHIBITS AND REPORTS ON FORM 8-K There were no reports on Form 8-K filed during the quarter ended September 30, 1995. The exhibits filed as a part of this report are listed below. Exhibit No. 11. - Calculations of Net Income Per Share. DATA DIMENSIONS, INC. 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. Data Dimensions, Inc. (Registrant) October 27, 1995 /s/ Larry W. Martin Date by: Larry W. Martin, President Chief Executive Officer October 27, 1995 /s/ William H. Parsons Date by: William H. Parsons, CFO Principal Financial and Accounting Officer EX-11 2 CALCULATIONS OF NET INCOME PER SHARE [MULTIPLIER] 1,000 [PERIOD-TYPE] 9-MOS [FISCAL-YEAR-END] Dec-31-1995 [PERIOD-START] Jan-01-1995 [PERIOD-END] Sept-30-1995 6904 520 7424 [NET-INCOME] 188 [EPS-PRIMARY] .03
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