-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, FqOa9HnBYgeApaieq6JlWeLJUzoABVqz342ujsrvKzFby/7g1Jkn4LOEOUW5I66H DNFYT7NEh3LT2ovS01mwkw== 0000928385-95-000132.txt : 19950516 0000928385-95-000132.hdr.sgml : 19950516 ACCESSION NUMBER: 0000928385-95-000132 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19950331 FILED AS OF DATE: 19950515 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: AMERICAN MANAGEMENT SYSTEMS INC CENTRAL INDEX KEY: 0000310624 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROGRAMMING, DATA PROCESSING, ETC. [7370] IRS NUMBER: 540856778 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-09233 FILM NUMBER: 95539022 BUSINESS ADDRESS: STREET 1: 4050 LEGATO RD CITY: FAAIRFAX STATE: VA ZIP: 22033 BUSINESS PHONE: 7032678000 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 _______ FORM 10-Q X QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) --- OF THE SECURITIES EXCHANGE ACT OF 1934 For the Quarterly Period Ended March 31, 1995 OR ___ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to _________ Commission File No. 0-9233 American Management Systems, Incorporated (Exact name of registrant as specified in its charter) State or other Jurisdiction of I.R.S. Employer Incorporation or Organization: Delaware Identification No.: 54-0856778 4050 Legato Road Fairfax, Virginia 22033 (Address of principal executive office) Registrant's Telephone No., Including Area Code: (703) 267-8000 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 ____ --- As of May 10, 1995, 26,468,603 shares of common stock were outstanding. CONTENTS
Page ---- Part 1 Financial Information --------------------- Item 1. Financial Statements ..................................... 1 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations....................... 7 Part II Other Information Required in Report ------------------------------------ Item 1. Legal Proceedings...................................... 10 Item 2. Changes in Securities.................................. 10 Item 3. Defaults Upon Senior Securities........................ 10 Item 4. Submission of Matters to a Vote of Security Holders.... 10 Item 5. Other Information...................................... 10 Item 6. Exhibits and Reports on Form 8-K....................... 10
PART 1 FINANCIAL INFORMATION --------------------- Item 1. Financial Statements -------------------- The information furnished in the accompanying Consolidated Statements of Operations, Consolidated Revenues by Market, Consolidated Balance Sheets, and Consolidated Statements of Cash Flows reflects all adjustments which are, in the opinion of management, necessary for a fair statement of the results of operations and financial condition for the interim periods. The accompanying financial statements and notes thereto should be read in conjunction with the financial statements and notes for the year ended December 31, 1994, included in the American Management Systems, Incorporated (the "Company") Annual Report on Form 10-K (File No. 0-9233) filed with the Securities and Exchange Commission on March 30, 1995. 1 American Management Systems, Incorporated CONSOLIDATED STATEMENTS OF OPERATIONS Unaudited (In thousands except per share data)
For the Quarter Ending March 31, 1995 1994 --------- --------- REVENUES Services and Products .................................. $121,776 $ 87,559 Reimbursed Expenses .................................. 13,978 12,708 -------- -------- 135,754 100,267 EXPENSES Client Project Expenses................................. 75,778 56,054 Other Operating Expenses................................ 42,883 28,832 Corporate Expenses...................................... 8,990 7,428 -------- -------- 127,651 92,314 INCOME FROM OPERATIONS.................................... 8,103 7,953 OTHER (INCOME) EXPENSE Interest Expense........................................ 352 277 Other Income............................................ (502) (189) -------- -------- (150) 88 INCOME BEFORE INCOME TAXES................................ 8,253 7,865 INCOME TAXES.............................................. 3,383 3,225 -------- -------- NET INCOME................................................ 4,870 4,640 DIVIDENDS AND ACCRETION ON SERIES B PREFERRED STOCK....... - 162 -------- -------- NET INCOME TO COMMON SHAREHOLDERS......................... $ 4,870 $ 4,478 ======== ======== WEIGHTED AVERAGE SHARES AND EQUIVALENTS................... 26,938 24,765 ======== ======== NET INCOME PER COMMON SHARE $0.18 $0.18 ======== ========
2 American Management Systems, Incorporated CONSOLIDATED REVENUES BY MARKET Unaudited (In thousands)
For the Quarter Ending March 31, 1995 1994 ------- ------- Financial Services Institutions................. $ 27,742 $ 18,485 Federal Government Agencies..................... 23,025 21,281 State and Local Governments and Education....... 20,093 18,710 Telecommunications Firms........................ 42,254 21,662 Other Corporate Clients......................... 8,662 7,421 -------- -------- Total Services and Products Revenues......... 121,776 87,559 Reimbursed Expenses Revenues.................... 13,978 12,708 -------- -------- Total Revenues.................................. $135,754 $100,267 ======== ========
3 American Management Systems, Incorporated CONSOLIDATED BALANCE SHEETS (In thousands)
3/31/95 ASSETS (Unaudited) 12/31/94 ----------- ---------- CURRENT ASSETS Cash and Cash Equivalents....................................... $ 20,669 $ 34,238 Accounts and Notes Receivable................................... 149,653 141,089 Prepaid Expenses and Other Current Assets....................... 7,666 6,669 -------- --------- 177,988 181,996 FIXED ASSETS Equipment....................................................... 56,184 52,697 Furniture and Fixtures.......................................... 12,659 12,044 Leasehold Improvements.......................................... 11,727 10,608 -------- -------- 80,570 75,349 Accumulated Depreciation and Amortization....................... (49,039) (46,674) -------- -------- 31,531 28,675 OTHER ASSETS Purchased and Developed Computer Software (Net of Accumulated Amortization of $44,182,000 and $41,094,000)................... 28,222 28,786 Intangibles (Net of Accumulated Amortization of $1,706,000 and $1,581,000).................................................... 7,279 7,365 Other Assets (Net of Accumulated Amortization of $3,513,000 and $3,513,000)................................................ 7,998 5,360 -------- -------- 43,499 41,511 -------- -------- TOTAL ASSETS..................................................... $253,018 $252,182 ======== =========
4 American Management Systems, Incorporated CONSOLIDATED BALANCE SHEETS (In thousands)
3/31/95 LIABILITIES AND STOCKHOLDERS' EQUITY (Unaudited) 12/31/94 --------- -------- CURRENT LIABILITIES Notes Payable and Capitalized Lease Obligations................................. $ 14,826 $ 9,424 Accounts Payable................................................................ 8,190 6,988 Accrued Incentive Compensation.................................................. 5,200 17,134 Other Accrued Compensation and Related Items.................................... 19,403 16,603 Deferred Revenues............................................................... 23,000 25,673 Other Accrued Liabilities....................................................... 3,363 3,896 Income Taxes Payable............................................................ - 1,778 -------- --------- 73,982 81,496 Deferred Income Taxes........................................................... 14,146 11,047 -------- --------- 88,128 92,543 NONCURRENT LIABILITIES Notes Payable and Capitalized Lease Obligations................................. 11,983 12,933 Other Accrued Liabilities....................................................... 735 704 Deferred Income Taxes........................................................... 7,714 7,688 -------- --------- 20,432 21,325 -------- --------- TOTAL LIABILITIES................................................................ 108,560 113,868 OTHER STOCKHOLDERS' EQUITY Preferred Stock ($0.10 Par Value, 1,500,000 Shares Authorized, None Issued or Outstanding).................................................... Common Stock ($0.01 Par Value, 40,000,000 Shares Authorized, 32,334,603 and 32,201,104 Issued and 26,330,019 and 26,196,520 Outstanding, Respectively).......................................... 323 322 Capital in Excess of Par Value.................................................. 61,332 60,341 Retained Earnings............................................................... 117,453 112,583 Currency Translation Adjustment................................................. (1,072) (1,354) Common Stock in Treasury, at Cost (6,004,584 and 6,004,584 Shares)............................................... (33,578) (33,578) -------- --------- 144,458 138,314 -------- --------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY....................................... $253,018 $252,182 ======== ========
5 American Management Systems, Incorporated CONSOLIDATED STATEMENTS OF CASH FLOWS Unaudited (In thousands)
For the Quarter Ending March 31, 1995 1994 ------- --------- CASH FLOWS FROM OPERATING ACTIVITIES: Net Income..................................................... $ 4,870 $ 4,640 Adjustments to Reconcile Net Income to Net Cash Provided (Used) in Operating Activities: Depreciation and Amortization................................ 6,297 4,790 Deferred Income Taxes........................................ 3,125 3,051 Provision for Doubtful Accounts.............................. 400 350 Changes in Assets and Liabilities: Increase in Accounts Receivable.......................... (8,964) (10,390) Increase in Prepaid Expenses and Other Current Assets.......................................... (997) (2,092) (Increase) Decrease in Other Assets...................... (2,784) 90 Decrease in Accrued Incentive Compensation............... (11,934) (12,488) Increase (Decrease) in Accounts Payable and Other Accrued Compensation and Liabilities.................... 3,500 (5,517) (Decrease) Increase in Deferred Revenue.................. (2,673) 420 Decrease in Income Taxes Payable......................... (1,778) (174) -------- -------- Net Cash Used in Operating Activities........................ (10,938) (17,320) -------- -------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of Fixed Assets...................................... (6,054) (2,090) Purchase of Computer Software................................. (749) (383) Investment in Software Products............................... (1,784) (3,155) Other Investments and Intangibles............................. 105 (30) Proceeds from Sale of Furniture, Equipment, and Computer Software............................................ 125 82 -------- -------- Net Cash Used in Investing Activities....................... (8,357) (5,576) -------- -------- CASH FLOWS FROM FINANCING ACTIVITIES: Borrowings.................................................... 5,402 10,237 Payments on Borrowings........................................ (950) (1,017) Proceeds from Common Stock Options Exercised.................. 992 2,696 -------- -------- Net Cash Provided in Financing Activities................... 5,444 11,916 Increase (Decrease) in Currency Translation Adjustment........ 282 (3) -------- -------- NET DECREASE IN CASH AND CASH EQUIVALENTS...................... (13,569) (10,983) CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD............... 34,238 15,600 -------- -------- CASH AND CASH EQUIVALENTS AT END OF PERIOD..................... $ 20,669 $ 4,617 ======== ========
6 Item 2. Management's Discussion and Analysis of Financial Condition and --------------------------------------------------------------- Results of Operations --------------------- Results of Operations - --------------------- The following table sets forth for the periods indicated the percentage of revenues of major items in the Consolidated Statements of Operations and the percentage of change in such items from period to period.
Percentage of Period-to- Total Revenues Period Change -------------- --------------- Quarter Ended Quarter Ended March 31, March 31, 1995 vs. 1995 1994 March 31, 1994 ---------------- ---------------- Revenues Services and Products............................... 89.7% 87.3% 39.1% Reimbursed Expenses................................. 10.3 12.7 10.0 ----- ----- Total............................................... 100.0 100.0 35.4 Expenses Client Project Expenses............................. 55.8 55.9 35.2 Other Operating Expenses............................ 31.6 28.8 48.7 Corporate Expenses.................................. 6.6 7.4 21.0 ----- ----- Total............................................... 94.0 92.1 38.3 Income from Operations................................ 6.0 7.9 1.9 Other (Income) Expense................................ (0.1) 0.1 (270.5) Income Before Income Taxes............................ 6.1 7.8 4.9 Income Taxes.......................................... 2.5 3.2 4.9 Net Income............................................ 3.6 4.6 5.0 Dividends and Accretion on Series B Preferred Stock...................................... - 0.2 (100.0) Net Income to Common Shareholders..................... 3.6 4.4 8.8 Weighted Average Shares and Equivalents/1/............ - - 8.8 Net Income per Common Share/1/........................ - - 0.0
________________________________ /1/ Due primarily to the May 1994 conversion of preferred stock to common stock and the resulting increase in outstanding shares, net income per common share was $0.18, unchanged from the comparable 1994 period. 7 Results of Operations (continued) - --------------------- REVENUES Services and Products revenues ("S&P Revenues") increased 39% in the first quarter of 1995 compared to the first quarter of 1994, and all of the Company's target markets experienced revenue growth. S&P Revenues derived from business with non-US clients increased 139% (to $33.0 million) and accounted for 56% of the period-to-period increase. The Company expects S&P Revenues, for the year, to increase more in line with its historical annual rate of revenue growth. In the Financial Services Institutions target market, S&P Revenues in the first quarter of 1995 increased 50% (to $27.7 million) over the comparable 1994 period, owing principally to build-ups in business with clients who started large projects in the second half of 1994. The Company expects that, for the remainder of 1995, S&P Revenues in this market will continue to increase at a rate greater than the Company's overall revenue growth rate. S&P Revenues in the Federal Government Agencies target market increased 8% when compared to the first quarter of 1994. The Company expects S&P Revenues in this market, for the year, to increase at rates lower than the overall growth in total S&P Revenues. In the State and Local Governments and Education target market, S&P Revenues increased 7% compared to 1994. The Company expects S&P Revenue growth in this market, for the year, to be at a slower growth rate than the overall growth rate for 1995. In the Telecommunications market, S&P Revenues in the first quarter of 1995 increased 95% over the comparable 1994 period. This increase is mainly attributable to international business, which increased 190% to $24.0 million in S&P Revenues, while US business increased 35% to $18.2 million. The Company expects revenue growth in this market, for the year, to be ahead of that for the Company as a whole. S&P Revenues from Other Corporate Clients increased 17% during the first quarter of 1995, compared to 1994. This market includes business not covered by the Company's other markets and the Company expects S&P Revenues in this market to grow, during the remainder of 1995, at rates below that of the Company overall. EXPENSES Client Project Expenses increased 35% during the first quarter of 1995, compared to the first quarter of 1994, approximately the same as the increase in S&P Revenues. Other Operating Expenses increased 49%, compared to the 1994 period. This rate of increase is greater than that in S&P Revenues, due primarily to disproportionately greater increases in infrastructure costs, especially outside the US. Other Operating Expenses, for the year, should increase at a rate comparable to that of the S&P Revenue growth. 8 Corporate Expenses increased 21% compared to the first quarter of 1994. The Company expects Corporate Expenses to continue to increase at rates slower than the overall revenue growth rates. OTHER (INCOME) EXPENSE Interest Expense increased 27% during the first quarter of 1995, due to increased borrowing by international subsidiaries under a line of credit agreement. For the remainder of 1995, Interest Expense will likely increase, but at a slower rate. Other Income, primarily interest income, increased 166% in the first quarter of 1995, owing to higher levels of investments in the US. LIQUIDITY AND CAPITAL RESOURCES The Company provides for its operating cash requirements primarily through funds generated from operations, and using bank borrowings primarily for cash management with respect to the short term impact of certain cyclical uses, such as annual payments of incentive compensation. At March 31, 1995, the Company's cash and cash equivalents totaled $20.7 million down from $34.2 million at the end of 1994. Cash used in operating activities was $10.9 million due principally to payments made in the first quarter of the year for incentive compensation and other employee benefits and increases in accounts receivable. Additionally, the Company invested over $8.6 million in fixed assets and software purchases, and computer software development. The Company borrowed $5.4 million during the quarter for short-term borrowings by its European subsidiaries. Additionally the Company made approximately $1.0 million in debt repayments during the quarter and received approximately $1.0 million from employees, related to stock options being exercised. As previously reported, the Company has subcontracts with a prime contractor in the human services business. At March 31, 1995, the accounts receivable balance related to these subcontracts is approximately 11% of total accounts receivable. These amounts span four contracts which the prime contractor has with state/local government clients, in three different states. The Company has two line of credit facilities which it can use to generate working capital, for which the principal need is to finance the growth in accounts receivable. At March 31, 1995, the Company had $10.2 million outstanding under one of the line of credit agreements. At March 31, 1995, the Company's material unused source of liquidity consisted of approximately $28.8 million available under its revolving lines of credit. Also at March 31, 1995, the Company's debt-equity ratio, as measured by total liabilities divided by common stockholders' equity, was 0.75. At December 31, 1994, the debt-equity ratio was 0.82. The Company believes that its liquidity needs can be met from the resources described above. 9 PART II OTHER INFORMATION REQUIRED IN REPORT ------------------------------------ Item 1. Legal Proceedings ----------------- NONE. Item 2. Changes in Securities --------------------- NONE. Item 3. Defaults Upon Senior Securities ------------------------------- NONE. Item 4. Submission of Matters to a Vote of Security Holders --------------------------------------------------- NONE. Item 5. Other Information ----------------- NONE. Item 6. Exhibits and Reports on Form 8-K -------------------------------- (a) Exhibits NONE. 10 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. AMERICAN MANAGEMENT SYSTEMS, INCORPORATED Date: May 15, 1995 /s/ Philip M. Giuntini ------------------ ----------------------------------------- Philip M. Giuntini, President Date: May 15, 1995 /s/ James E. Marshall ------------------ ----------------------------------------- James E. Marshall, Controller 11 EX-27 2 EXHIBIT 27
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE MARCH 31, 1995 FINANCIAL STATEMENTS AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS DEC-31-1995 JAN-1-1995 MAR-31-1995 20,669 0 149,653 3,660 0 177,988 80,570 (49,039) 253,018 88,128 0 323 0 0 144,135 253,018 135,754 135,754 75,778 127,651 (150) 400 352 8,253 3,383 4,870 0 0 0 4,870 0.18 0.18
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