-----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, QfVqBWQaYQunj5YQWgkwjBgI61Luy6sef81x35ucH9t6k+5Aai94nIosBZanRvA5 NxWmhrURCjtvgLirUvO0Nw== 0000313867-94-000009.txt : 19940531 0000313867-94-000009.hdr.sgml : 19940531 ACCESSION NUMBER: 0000313867-94-000009 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940331 FILED AS OF DATE: 19940512 FILER: COMPANY DATA: COMPANY CONFORMED NAME: TRIAD SYSTEMS CORP CENTRAL INDEX KEY: 0000313867 STANDARD INDUSTRIAL CLASSIFICATION: 7373 IRS NUMBER: 942160013 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-10504 FILM NUMBER: 94527330 BUSINESS ADDRESS: STREET 1: 3055 TRIAD DR CITY: LIVERMORE STATE: CA ZIP: 94550 BUSINESS PHONE: 5104490606 MAIL ADDRESS: STREET 1: 3055 TRIAD DRIVE CITY: LIVERMORE STATE: CA ZIP: 94550 10-Q 1 10Q2 1994 CIK: 0000313867 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, 1994 OR ( ) Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Commission File Number 0-9505 TRIAD SYSTEMS CORPORATION (Exact name of registrant as specified in its charter) Delaware 94-2160013 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 3055 Triad Drive, Livermore, California 94550 (Address of principal executive offices) Registrant's telephone number, including area code: (510) 449-0606 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 March 31, 1994, the registrant had issued and outstanding 12,962,000 shares of common stock - $.001 par value, of which 182,000 shares were held in treasury. TRIAD SYSTEMS CORPORATION QUARTERLY REPORT FORM 10-Q INDEX Page No. Part 1. Financial Information Item 1. Financial Statements Condensed Consolidated Balance Sheets at March 31, 1994 and September 30, 1993 1 Condensed Consolidated Statements of Income for the Three and Six Month Periods Ended March 31, 1994 and 1993 2 Condensed Consolidated Statements of Cash Flows for the Six Month Periods Ended March 31, 1994 and 1993 3 Notes to Condensed Consolidated Financial Statements 4-5 Item 2. Management's Discussion and Analysis of Results of Operations and Financial Condition 6-10 Part II. Other Information Item 6. Exhibits and Reports on Form 8-K 11-12 Signatures 13 Exhibit 11.1 14 PART 1 FINANCIAL INFORMATION TRIAD SYSTEMS CORPORATION CONDENSED CONSOLIDATED BALANCE SHEETS At March 31, 1994 and September 30, 1993 March 31, September 30, 1994 1993 ----------- ------------- (Unaudited) (as restated) ----------- ------------- ASSETS (Amounts in thousands) Current assets Cash and equivalents $ 6,729 $ 8,250 Receivables 11,514 10,081 Investment in leases 6,232 5,874 Inventories Purchased parts 2,137 2,607 Work in process 376 617 Finished goods 2,833 3,343 -------- -------- Inventories 5,346 6,567 Prepaid expenses and other current assets 5,829 5,097 -------- -------- Current assets 35,650 35,869 Service parts 2,532 2,104 Property, plant and equipment, net of accumulated depreciation and amortization of $26,985 at March 31, 1994 and $25,331 at September 30, 1993 26,122 26,389 Long-term investment in leases 23,105 24,306 Other assets 19,105 17,344 Land for resale 25,410 25,367 -------- -------- Total assets $131,924 $131,379 ======== ======== LIABILITIES Current liabilities Notes payable and current portion of long-term debt $ 3,896 $ 2,971 Accounts payable 9,313 9,210 Accrued employee compensation 7,140 7,348 Deferred income taxes 3,905 3,872 Other current liabilities and accrued expenses 9,000 10,170 -------- -------- Current liabilities 33,254 33,571 Long-term debt 66,991 69,381 Other liabilities 4,682 4,421 Deferred income taxes 21,505 20,892 -------- -------- Total liabilities 126,432 128,265 -------- -------- STOCKHOLDERS' EQUITY Cumulative convertible preferred stock $.01 par value; authorized 1,000,000 shares; issued and outstanding 1,000,000 shares at March 31, 1994 and September 30, 1993; liquidation value $20 million 10 10 Common stock $.001 par value; authorized 50,000,000 shares; issued and outstanding 12,962,000 at March 31, 1994 and 12,611,000 at September 30, 1993 13 13 Treasury stock 182,000 shares at March 31, 1994 and 127,000 shares at September 30, 1993 (882) (592) Capital in excess of par 28,735 27,626 Accumulated deficit (22,384) (23,943) -------- -------- Stockholders' equity 5,492 3,114 -------- -------- Total liabilities and stockholders' equity $131,924 $131,379 ======== ======== The accompanying notes are an integral part of these financial statements. TRIAD SYSTEMS CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF INCOME For the Three and Six Month Periods Ended March 31, 1994 and 1993 (Unaudited) Three Months Ended Six Months Ended March 31, March 31, ---------------- ---------------- 1994 1993 1994 1993 ------- ------- ------- ------- (Amounts in thousands except per share data) Revenues Services $20,973 $19,881 $41,527 $39,463 Systems 17,250 14,515 31,648 27,206 Finance 2,338 2,577 4,862 4,464 ------- ------- ------- ------- Total revenues 40,561 36,973 78,037 71,133 Costs and expenses Services 13,026 11,937 25,065 23,469 Systems 7,994 6,845 14,719 13,168 Marketing and finance 10,647 9,610 20,608 18,768 Product development 1,976 2,220 4,188 4,035 General and administrative 2,789 2,470 5,367 4,891 Other operating (income) expense (3) 335 316 538 ------- ------- ------- ------- Total costs and expenses 36,429 33,417 70,263 64,869 Operating income 4,132 3,556 7,774 6,264 Interest expense 1,844 1,961 3,768 3,905 Other expense 37 50 71 131 ------- ------- ------- ------- Income before provision for income taxes 2,251 1,545 3,935 2,228 Provision for income taxes 855 618 1,495 891 ------- ------- ------- ------- Net income $ 1,396 $ 927 $ 2,440 $ 1,337 ======= ======= ======= ======= Earnings per share Primary Net income $ .08 $ .06 $ .14 $ .08 Weighted average shares 17,425 16,967 17,424 16,969 Fully diluted Net income $ .08 $ .06 $ .14 $ .08 Weighted average shares 17,425 16,967 17,424 16,986 The accompanying notes are an integral part of these financial statements. TRIAD SYSTEMS CORPORATION CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS For the Three Month Periods Ended March 31, 1994 and 1993 (Unaudited) Six Months Ended March 31, ------------------- 1994 1993 -------- -------- (Amounts in thousands) Cash flows from operating activities Net income $ 2,440 $ 1,337 Adjustments to reconcile net income to net cash provided by operating activities Depreciation and amortization 4,171 4,119 Receivable and inventory loss provisions 3,817 3,148 Gains from lease discounting (2,648) (2,627) Other 684 (328) Changes in assets and liabilities Trade accounts receivable (2,724) (490) Investment in leases (4,101) (2,232) Inventories 474 129 Deferred income taxes 646 70 Prepaid expenses and other current assets (571) (474) Accounts payable 103 (3,793) Accrued employee compensation (208) (648) Other current liabilities and accrued expenses (1,170) 2,168 -------- -------- Net cash provided by operating activities 913 379 Cash flows from investing activities Investment in leases (22,470) (17,860) Investment in property, plant and equipment (1,284) (900) Other (4,883) (3,614) -------- -------- Net cash used in investing activities (28,637) (22,374) Cash flows from financing activities Proceeds from issuance of debt 19,310 23,600 Proceeds from lease discounting 28,114 21,880 Proceeds from sale of common stock 674 758 Purchase of treasury stock (290) (109) Repayment of debt (21,205) (25,198) Dividends paid (400) (327) Other --- (136) -------- -------- Net cash provided by financing activities 26,203 20,468 Net decrease in cash and equivalents (1,521) (1,527) Beginning cash and equivalents 8,250 5,482 -------- -------- Ending cash and equivalents $ 6,729 $ 3,955 ======== ======== Supplemental disclosures of cash flow information Cash paid during the period for Interest $ 3,538 $ 3,765 Income Taxes 402 116 Noncash investing and financing activities Capital lease 180 --- The accompanying notes are an integral part of these financial statements. TRIAD SYSTEMS CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (March 31, 1994 and 1993 - Unaudited) 1. In the opinion of the Registrant, the consolidated financial statements contain all adjustments (consisting of only normal recurring adjustments) necessary to present fairly the financial position as of March 31, 1994, and the results of operations and cash flows, for the three and six month periods ended March 31, 1994 and 1993. The results of operations for the three and six month periods ended March 31, 1994, are not necessarily indicative of the results to be expected for the full year. The September 30, 1993 audited Balance Sheet was restated to reflect the adoption of FAS 109 and the associated change in accounting for income taxes. The current Balance Sheet does not include all disclosed requirements under GAAP and should be read in conjunction with the September 30, 1993 audited financial statements and notes thereto. 2. The consolidated financial statements include the accounts of Triad Systems Corporation and its wholly-owned subsidiaries, including Triad System Financial Corporation ("Triad Financial") and its subsidiary after elimination of intercompany accounts and transactions. Financial information relating to Triad Financial is presented in Note 5. 3. Primary and fully diluted earnings per share are based on the average common shares outstanding, the dilutive effect of the stock options and the assumed conversion of the preferred stock and exercise of warrants. Dilution from common equivalents has been further adjusted under the modified treasury stock method. 4. The Company adopted Statement of Financial Accounting Standards No 109 (FAS 109), Accounting for Income Taxes in the quarter ended December 31, 1993, the effects of which were applied retroactively October 1, 1992 (fiscal year 1993). The adoption of FAS 109 changes the Company's method of accounting for income taxes from the deferred method (APB11) to an asset and liability approach. Previously the Company deferred the tax effects of timing differences between financial reporting and taxable income. The asset and liability approach requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of temporary differences between the carrying amounts and the tax bases of other assets and liabilities. The financial statements for fiscal year 1993 have been restated to reflect the change in accounting for income taxes. The cumulative effect of the accounting change on deferred taxes as of the beginning of fiscal year 1993 was not material. The effect on the income tax provision for fiscal year ended September 30, 1993 was an increase of $800,000 ($.04 per share) as a result of the legislated corporate income tax rate change in August 1993. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (continued) 5. Triad Financial is a wholly-owned subsidiary which purchases Triad systems and other products and leases those products to third parties under full-payout, direct financing leases. Summarized financial information of Triad Financial at March 31, 1994 and September 30, 1993, and for the three and six month periods ended March 31, 1994 and 1993, follows: TRIAD SYSTEMS FINANCIAL CORPORATION AND SUBSIDIARY CONDENSED CONSOLIDATED BALANCE SHEETS At March 31, 1994 and September 30, 1993 March 31, September 30, 1994 1993 ----------- ----------- (Unaudited) ----------- (Amounts in thousands) Assets Cash $ 226 $ 171 Net Investment in leases 29,337 30,180 Residual value retained on leases discounted 4,666 4,163 Receivable from parent company 19,389 17,179 Other assets 3,205 2,870 -------- -------- $ 56,823 $ 54,563 ======== ======== Liabilities and Stockholder's Equity Other liabilities and accrued expenses $ 7,721 $ 7,382 Deferred income 1,714 1,554 Term debt 2,567 3,249 Stockholder's equity 44,821 42,378 -------- -------- $ 56,823 $ 54,563 ======== ======== TRIAD SYSTEMS FINANCIAL CORPORATION AND SUBSIDIARY CONDENSED CONSOLIDATED STATEMENTS OF INCOME For the Three and Six Month Periods Ended March 31, 1994 and 1993 (Unaudited) Three Months Ended Six Months Ended March 31, March 31, ---------------- ---------------- 1994 1993 1994 1993 ------- ------- ------- ------- (Amounts in thousands) Revenues $ 2,338 $ 2,577 $ 4,862 $ 4,464 Selling and administrative expenses 567 492 1,112 979 Provision for doubtful accounts and revaluation charges 525 698 1,104 1,225 ------- ------- ------- ------- Operating income 1,246 1,387 2,646 2,260 Intercompany income 650 675 1,267 1,390 ------- ------- ------- ------- Income before taxes 1,896 2,062 3,913 3,650 Provision for income taxes 720 825 1,487 1,460 ------- ------- ------- ------- Net income $ 1,176 $ 1,237 $ 2,426 $ 2,190 ======= ======= ======= ======= TRIAD SYSTEMS CORPORATION MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Summary Earnings per share for the second quarter were $.08 on net income of $1,396,000 compared to earnings per share of $.06 on net income of $927,000 in the second quarter of last year. First half earnings were $.14 on net income of $2,440,000 compared to earnings per share of $.08 on net income of $1,337,000 during the same period of last year. These improvements are a direct result of record revenues for both the second quarter and first half of the year. Increased revenues from the company's growth businesses, lead by Information Services and Service Dealer operations, are primarily responsible for the net income improvement. Percentage of Revenues Three Months Ended Six Months Ended March 31, March 31, --------------- --------------- 1994 1993 1994 1993 Revenues 100.0% 100.0% 100.0% 100.0% Costs and expenses Costs of services and systems 51.8 50.8 51.0 51.5 Marketing and financing 26.2 26.0 26.3 26.4 Product development 4.9 6.0 5.4 5.7 General and administrative 6.9 7.5 7.2 7.5 Other operating (income) expenses 0.0 0.1 0.1 0.1 Total costs and expenses 89.8 90.4 90.0 91.2 Operating income 10.2 9.6 10.0 8.8 Interest and other expense 4.7 5.4 4.9 5.7 Income before provision for income taxes 5.5 4.2 5.1 3.1 Provision for income taxes 2.1 1.7 2.0 1.2 Net income 3.4 2.5 3.1 1.9 Revenues Second quarter revenues increased to $40.6 million, or 10% higher than revenues in the same period last year. Systems revenues showed the largest increase, $2.7 million, or 19%, to $17.3 million compared to $14.5 million in the prior year. Services revenues were up $1.1 million to $21 million compared to the same period last year. Increasing revenues reflect continuing expansion of Triad's customer base, creating opportunities for further gains in recurring services revenues. Finance revenues declined $.3 million to $2.3 million due to the company experiencing higher discounting yields in the prior year created by falling interest rates during that period.First half revenues were a record $78 million, or 10% higher than the same period last year. Revenue improvement was achieved in all three primary areas of the business; services, products and finance. Automotive Jobber and Service Dealer sales showed the largest increase, a 16% movement to $31.6 million for the period. Services Revenues from recurring monthly services, including both Information Services and Customer Services, improved to $20.1 million during the second quarter and to $39.7 million during the first half, both 5% increases compared to the same periods last year. Second quarter Information Services revenues increased to $6.1 million, the sixth consecutive quarter of higher revenues. Increases in Information Services revenues were primarily due to Electronic Catalog product revenues improving 27% in the second quarter and 24% in the first half of the year compared to prior year periods. The Electronic Catalog product revenue improvement was the result of increased sales to new retail Service Dealer accounts and national chain outlets. Telepricing service revenues were $1.3 million in the second quarter and $2.6 million for the first half of the year, at similar levels as in the same periods last year. Customer Services revenues were $13.9 million and $27.9 million for the second quarter and first half of the year, respectively. These revenues have remained relatively stable, compared to the same periods last year, despite increased competition and the company's introduction of alternative programs offering reduced systems support fees. Revenues from the Business Products unit, which provides computer forms and supplies to Triad's customer base, were $.9 million in the second quarter and $1.8 million for the first half of the year. Revenues increased by 23% in the first half of the year due to a greater number of customers and a broader selection of products. Products Retail Hardgoods Division revenues increased 10% during the second quarter to $6.9 million and 6% during the first half of the year to $12.9 million, as a result of increased new systems sales during those periods when compared to the same periods last year. The sales efforts have benefited from Triad's marketing agreements with Distribution America and Pro Hardware, which are part of Triad's Advantage Program. The program encourages joint efforts to automate retail hardgoods stores and, since inception, has added several industry leaders as participants. The company continues to market systems to members of the national hardware wholesale operations, including Cotter & Co. (True Value), ACE, Servistar and HWI. Automotive Division revenues in the second quarter were $10.3 million, a 27% improvement over last year. Revenues for the first half were $18.7 million, or 25% above prior year levels. These increases are primarily the result of increased new system sales and the company's core automotive jobber business upgrading to the PRISM platform. The company anticipates the increases in revenue generated from PRISM upgrades to continue as the PRISM platform gains further market acceptance. Additionally, Service Dealer revenues for the second quarter were a record $2 million. Service Dealer revenue growth continues to remain strong as the company has doubled its dedicated Service Dealer sales force since last year. Finance Finance revenues generated by Triad Systems Financial Corporation ("Triad Financial") were $2.3 million in the second quarter and $4.9 million in the first half of the year. When compared to the same periods in the prior year, these revenues were down 9% for the second quarter, yet they were up 9% for the first half of the year. The decrease in the second quarter is the result of a return to normal discounting yields compared to the exceptional gains in the prior year caused by the decline in interest rates during that period. Overall, the increase in revenues for the first half of the year was primarily the result of a larger lease portfolio during the first six months when compared to last year. Costs and Expenses Services gross margins were 37.9% and 39.6% for the second quarter and first half of the year, respectively. The margins are down slightly from comparable periods in the prior year due to competitive pressures within the customer support market and the company's investment in developing its new Point of Sale (P.O.S.) movement information business. Product gross margins as a percent of system sales improved to 53.7% during the second quarter and to 53.5% in the first half compared to the same periods last year. This improvement is attributed to higher systems revenue levels in Automotive, Hardgoods, and Service Dealer operations. Marketing and finance expenses increased $1.0 million to $10.6 million during the second quarter and $1.8 million to $20.6 million during the first half. As expected, these expenses remained consistent at 26% of revenues as the company continues to manage costs. Product development expenditures before capitalization were $2.9 million during the second quarter and $5.8 million for the first half. These expenditures were nearly equal to expenditures in the same periods last year and are anticipated to remain at these levels in the future. Product development expense of $2.0 million in the second quarter was 11% lower than last year due to increased software capitalization related to the PRISM B project. General and administrative expenses, including other income and expenses, were $2.8 million during the second quarter and $5.7 for the first half of the year. These expenses were relatively flat for the second quarter but showed a 5% increase for the first half of the year. The 5% increase is primarily the result of litigation expense incurred as a result of the ongoing effort to protect the company's intellectual property rights, net of the company's insurance company absorbing some litigation costs during the second quarter. Increased recruiting expenditures related to employee turnover in the Hardgoods Division and a general expansion of the company's sales force also contributed to the increase. Interest expense during both quarters of fiscal 1994 has remained relatively flat at $1.9 million as compared to the same periods in the prior year. Financial Condition Cash used in operations during the first half of the year was $.9 million compared to $.4 million in the same period in the prior year. Triad Financial financed 65% of domestic Triad systems sales during the first half of the year compared to 62% in the prior year due to enhanced marketing efforts. Limited and full-recourse discounting agreements are maintained with banks and lending institutions. At March 31, 1994 the portfolio available for discounting was $29.3 million and commitments for $59.5 million in discounting lines were available. Triad Financial received $28.1 million from discounting leases during the first half of the year. Under the discounting agreements, Triad Financial is contingently liable for losses in the event of lessee nonpayment. The discounting agreements contain certain restrictive covenants which allow Triad Financial to discount only while in compliance with such covenants. The Company is in compliance with the restrictive covenants and management believes that it will maintain compliance with such covenants in the foreseeable future. The Company adopted Statement of Financial Accounting Standards No. 109 (FAS 109), Accounting for Income Taxes, during the first quarter with the effects being applied retroactively to October 1, 1992 (fiscal year 1993). This adoption resulted in significant balance sheet reclasses; however, applicable restrictive covenants contained in the discounting agreements automatically adjust to offset the impact of accounting changes. Therefore, the Company's ability to comply with these debt covenants has not been affected. The adoption of FAS 109 changes the Company's method of accounting for income taxes from the deferred method (APB 11) to an asset and liability method. Previously the Company deferred the tax effects of timing differences between financial reporting and taxable income. The asset and liability approach requires the recognition of deferred tax liabilities and assets for the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of other assets and liabilities. Capital equipment expenditures were $1.3 million during the first half of the year. There were no material capital commitments at March 31, 1994. Management believes that available cash resources, as well as the Company's borrowing capacity, are adequate to provide funds to finance foreseeable needs. Future Operating Results The company's future results will depend upon economic conditions in its markets that may effect demand for its products, as well as the company's ability to introduce new products and enhancements. As a result, the company's operating results may fluctuate, especially when measured on a quarterly basis. Results will also be affected by the seasonal changes in demand for its products, the size and experience of the sales force and the mix of products sold during a given period. PART II OTHER INFORMATION Items 1-5. Not applicable Item 6. Exhibits and Reports on Form 8-K (a) Exhibit Index for March 31, 1994 Exhibit Sequentially Number Numbered Page 10.1 Triad Systems Corporation Amended and Restated 1982 Stock Option Plan as amended on October 22, 1993, incorporated by reference from Exhibit 10.1 to the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 1993. 10.2 Form of Indemnification Agreement, incorporated by reference from Exhibit 10.4 to the Company's Registration Statement on Form S-2 (File No. 33-2966) filed July 3, 1989 (the "1989 Form-2 Registration Statement"). 10.3 Nonqualified Stock Option Agreement between the Company and James R. Porter dated January 13, 1987, incorporated by reference from Exhibit 10.5 to the 1987 Form S-2 Registration Statement, (File No. 33-13599) (the "1987 Company's Form S-2 Registration Statement"). 10.4 Development Agreement between the Company and the City of Livermore dated December 2, 1985, incorporated by reference from Exhibit 10.5 to the 1987 Form S-2 Registration Statement. 10.5 Subdivision Improvement Agreement between the Company and the City of Livermore dated December 2, 1985, incorporated by reference from Exhibit 10.7 to the 1987 Form S-2 Registration Statement. 10.6 Mortgage between Variable Annuity Life Insurance Company and 3055 Triad Drive dated August 23, 1988, incorporated by reference from Exhibit 10.6 to the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 1988 (the "1988 Form 10-K"). 10.7 Nonqualified Stock Option Agreement between the Company and James R. Porter dated as of February 17, 1987, incorporated by reference from Exhibit 10.7 of the 1988 Form 10-K. 10.8 Nonqualified Stock Option Agreement between the Company and James R. Porter dated November 12, 1988, incorporated by reference from Exhibit 10.8 of the 1988 Form 10-K. 10.9 Triad Systems Corporation 1990 Stock Option Plan as amended on October 22, 1993, incorporated by reference from Exhibit 10.9 to the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 1993. 10.10 Triad Systems Corporation Amended and Restated Outside Directors Stock Option Plan, incorporated by reference from Exhibit 10.10 to the Company's Annual Report on Form 10-K for the fiscal year ended September 10, 1991. 10.11 Revolving Credit Loan Agreement dated as of June 30, 1992, as amended, between the Company and Plaza Bank of Commerce, incorporated by reference from Exhibit 10.3 to the Company's Current Report on Form 8-K filed August 17, 1992. 10.12 Unit Purchase Agreement dated as of July 2, 1992, between the Company, Richard C. Blum & Associaties, Inc. and certain purchasers, together with the First Amendment to Unit Purchase Agreement dated as of August 3, 1992, and the form of irrevocable Proxy, incorporated by reference from Exhibit 10.4 to the Company's Current Report on Form 8-K filed August 17, 1992. 10.13 Unit Certificate evidencing Units to purchase Preferred Stock and Warrants, together with Form of Warrant Certificate, attached as Exhibit A thereto, incorporated by reference from Exhibit 3.2 to the Company's Current Report on Form 8-K filed August 17, 1992. 10.14 Registration Rights Agreement between the Company and certain purchasers under the Unit Purchase Agreement dated as of August 3, 1992, incorporated by reference from Exhibit 10.5 to the Company's Current Report on Form 8-K filed August 17, 1992. 10.15 Grant Agreement between the Industrial Development Authority and Triad Systems Ireland Limited, Triad Systems Corporation and Tridex Systems Limited and related agreements, incorporated by reference from Exhibit 10.15 to the 1992 Form S-4 Registration Statement. 10.16 Cancellation of Development Agreement between the Company and the City of Livermore dated July 15, 1993, incorporated by reference from Exhibit 10.16 to the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 1993. 10.17 Amended and Restated Subdivision Improvement Agreement between the Company and the City of Livermore dated May 12, 1993, incorporated by reference from Exhibit 10.17 to the Company's Annual Report on Form 10-K for the fiscal year ended September 30, 1993. 11.1 Computation of Earnings Per Share. 14 (b) Reports on Form 8-K No report on Form 8-K was filed during the quarter ended, March 31, 1994. 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, a duly authorized officer of the Registrant. TRIAD SYSTEMS CORPORATION ------------------------- (Registrant) Date , 1994 /s/ Jerome W. Carlson ------------------- ---------------------------- Jerome W. Carlson, Vice President, Finance (Principal Financial Officer) EXHIBIT 11.1 TRIAD SYSTEMS CORPORATION COMPUTATION OF EARNINGS PER SHARE For the Three and Six Month Periods Ended March 31, 1994 and 1993 Three Months Ended Six Months Ended March 31, March 31, ------------- ------------- 1994 1993 1994 1993 ------- ------- ------- ------- (Amounts in thousands except per share data) Calculation of number of shares entering into computation Weighted average shares outstanding 12,743 12,031 12,673 11,942 Assumed conversion of the preferred stock and exercise of warrants 3,137 3,137 3,137 3,137 ------- ------- ------- ------- 15,880 15,168 15,810 15,079 Net effect of dilutive stock options based on the average stock prices 1,545 1,799 1,614 1,890 ------- ------- ------- ------- Average primary shares outstanding 17,425 16,967 17,424 16,969 Net effect of dilutive stock options and rights based on the ending stock price -- -- -- 17 ------- ------- ------- ------- Average fully diluted shares outstanding 17,425 16,967 17,424 16,986 ======= ======= ======= ======= Net income $ 1,396 $ 927 $ 2,440 $ 1,337 Adjustment for full dilution Interest on debt and amortization of debt costs, net of income taxes 21 39 56 71 ------- ------- ------- ------- Net income available for primary and fully diluted shares $ 1,417 $ 966 $ 2,496 $ 1,408 ======= ======= ======= ======= Earnings per share Primary $ .08 $ .06 $ .14 $ .08 Fully diluted $ .08 $ .06 $ .14 $ .08 -----END PRIVACY-ENHANCED MESSAGE-----