-----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, ClTgZR7ZzDhyYT0GcCB1X2KWqyygfgAfGoub629FW89FThn0lJsWxEOBa+pyYCXE v874uhgcuWWCXiJAU1fbBw== 0001029869-97-001310.txt : 19971113 0001029869-97-001310.hdr.sgml : 19971113 ACCESSION NUMBER: 0001029869-97-001310 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19970930 FILED AS OF DATE: 19971113 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: EIS INTERNATIONAL INC /DE/ CENTRAL INDEX KEY: 0000032251 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE & TELEGRAPH APPARATUS [3661] IRS NUMBER: 061017599 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-20329 FILM NUMBER: 97715106 BUSINESS ADDRESS: STREET 1: 555 HERNDON PARKWAY CITY: HERNDON STATE: VA ZIP: 22070 BUSINESS PHONE: 2033514800 FORMER COMPANY: FORMER CONFORMED NAME: ELECTRONIC INFORMATION SYSTEMS INC DATE OF NAME CHANGE: 19940218 10-Q 1 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q [Mark One] [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended September 30, 1997 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 number 0-20329 EIS INTERNATIONAL, INC. (Exact name of registrant as specified in its charter) Delaware No. 06-1017599 (State or other jurisdiction (I.R.S. Employer of incorporation) Identification Number) 555 Herndon Parkway Herndon, VA 20170 (703) 478-9808 (Registrant's telephone number, including area code) ------------------------- 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 the number of shares outstanding of each of the issuer's classes of common stock: Common Stock, par value $.01 per share, outstanding as of October 23, 1997: 11,640,834 shares. EIS INTERNATIONAL, INC. and SUBSIDIARIES INDEX to Financial Statements Filed with Quarterly Report of Registrant on Form 10-Q for the Quarter Ended September 30, 1997 (Unaudited) PART I. FINANCIAL INFORMATION Item 1. Financial Statements: Page ---- Unaudited Consolidated Balance Sheets as of September 30, 1997 and December 31, 1996 3 Unaudited Consolidated Statements of Operations for the three and nine months ended September 30, 1997 and 1996 4 Unaudited Consolidated Statements of Cash Flows for the nine months ended September 30, 1997 and 1996 5 Notes to Consolidated Financial Statements (unaudited) 6-7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8-11 PART II. OTHER INFORMATION Item 1. Legal Proceedings 12 Item 2. Changes in Securities Not Applicable Item 3. Defaults Upon Senior Securities Not Applicable Item 4. Submission of Matters to a Vote of Security Holders Not Applicable Item 5. Other Information Not Applicable Item 6. Exhibits and Reports on Form 8-K 13 Signatures 14 2 EIS INTERNATIONAL, INC. AND SUBSIDIARIES Consolidated Balance Sheets (Dollars in Thousands)
September 30, December 31, 1997 1996 ------------ ----------- Assets (Unaudited) Current assets: Cash and cash equivalents $ 16,297 $ 11,099 Short-term investments 2,359 3,660 Accounts receivable, trade, less allowances for doubtful accounts and sales returns of $5,468 in 1997 and $6,117 in 1996 14,825 21,335 Current portion of installment and lease receivables 1,658 2,007 Inventories (note 4) 5,496 7,732 Deferred income taxes 9,148 8,638 Refundable income taxes 2,359 2,450 Prepaids and other current assets 931 576 -------- -------- Total current assets 53,073 57,497 Capitalized software development costs, net 4,523 4,617 Property and equipment, net 7,615 8,181 Installment and lease receivables, less current portion 1,517 2,470 Other assets 1,733 1,925 -------- -------- Total assets $ 68,461 $ 74,690 ======== ======== Liabilities and Stockholders' Equity Current liabilities: Accounts payable and accrued liabilities $ 13,738 $ 18,894 Deferred revenue 6,011 5,683 Net liability of discontinued operations 762 2,738 -------- -------- Total current liabilities 20,511 27,315 Deferred income taxes 1,829 1,829 Other liabilities 266 304 -------- -------- Total liabilities 22,606 29,448 Commitments and Contingencies Stockholders' equity: Common Stock, $.01 par value, 15,000,000 shares authorized, issued 11,639,584 shares in 1997 and 11,173,252 shares in 1996 116 112 Additional paid-in capital 59,714 58,268 Accumulated translation adjustments (418) (196) Retained deficit (12,652) (12,037) Treasury stock, at cost - 101,225 shares in 1997 and 1996 (905) (905) -------- -------- Total stockholders' equity 45,855 45,242 -------- -------- Total liabilities and stockholders' equity $ 68,461 $ 74,690 ======== ========
See accompanying notes to consolidated financial statements. 3 EIS INTERNATIONAL, INC. AND SUBSIDIARIES Consolidated Statements of Operations (In Thousands, Except Per Share Amounts) (Unaudited)
Three Months Nine Months Ended September 30, Ended September 30, --------------------- ---------------------- 1997 1996 1997 1996 --------- --------- --------- ---------- Net revenues: Product and software sales $ 14,117 $ 12,763 $ 44,415 $ 59,331 Service and other 6,884 5,443 19,922 15,256 -------- -------- -------- -------- 21,001 18,206 64,337 74,587 Cost of revenues: Cost of product and software sold 4,563 8,667 16,057 24,168 Cost of services and other 3,505 3,969 11,657 9,939 -------- -------- -------- -------- 8,068 12,636 27,714 34,107 -------- -------- -------- -------- Gross margin 12,933 5,570 36,623 40,480 -------- -------- -------- -------- Operating cost and expense: Research and development cost 2,769 3,499 9,171 9,553 Selling, general, and administrative 8,045 8,944 26,486 28,827 Restructuring costs - - 2,877 - Acquired technology in process - 1,345 - 18,245 -------- -------- -------- -------- 10,814 13,788 38,534 56,625 -------- -------- -------- -------- Operating income (loss) 2,119 (8,218) (1,911) (16,145) Interest and other income, net 363 292 895 986 -------- -------- -------- -------- Income (loss) before income taxes 2,482 (7,926) (1,016) (15,159) Income tax benefit (expense) (934) 2,435 401 (1,623) -------- -------- -------- -------- Income (loss) from continuing operations 1,548 (5,491) (615) (16,782) -------- -------- -------- -------- Discontinued operations: Loss on discontinued operations, net of tax - (1,395) - (2,776) -------- -------- -------- -------- Net income (loss) $ 1,548 $ (6,886) $ (615) $(19,558) ======== ======== ======== ======== Primary and fully diluted income (loss) per share: Continuing operations $ 0.13 $ (0.50) $ (0.05) $ (1.59) Discontinued operations - (0.13) - (0.26) -------- -------- -------- -------- Primary and fully diluted income (loss) per share $ 0.13 $ (0.63) $ (0.05) $ (1.85) ======== ======== ======== ======== Weighted average common and common equivalent shares: Primary and fully diluted 11,887 10,971 11,289 10,560
See accompanying notes to consolidated financial statements. 4 EIS INTERNATIONAL, INC. AND SUBSIDIARIES Consolidated Statements of Cash Flows (Dollars in Thousands) (Unaudited) Nine Months Ended September 30, ---------------------- 1997 1996 --------- --------- Cash flows from operating activities: Net loss $ (615) $(19,558) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Provision for doubtful accounts and sales returns 2,518 4,035 Write-off acquired technology in process - 18,245 Depreciation and amortization 5,949 5,054 Deferred income taxes (510) - Changes in assets and liabilities: Accounts receivable, trade 3,992 (1,497) Installment and lease receivables 1,302 (1,777) Inventories 2,236 681 Prepaids and other current assets (355) (80) Accounts payable and accrued expenses (5,152) (5,398) Deferred revenue 328 (790) Other (704) (945) ------- -------- Net cash provided by (used in) continuing operations 8,989 (2,030) Cash used in discontinued operations (1,976) (604) ------- -------- Net cash provided by (used in) operating activities 7,013 (2,634) ------- -------- Cash flows from investing activities: Purchases of property and equipment (3,671) (3,371) Sales of short-term investments 3,371 - Purchases of short-term investments (2,070) - Capitalization of software development costs (944) (2,118) Purchases of businesses, net of cash acquired - (7,340) ------- -------- Net cash used in investing activities (3,314) (12,829) ------- -------- Cash flows from financing activities: Sale of lease portfolio - 5,200 Purchase of treasury stock - (386) Proceeds from exercise of stock options 1,499 5,630 ------- -------- Net cash provided by financing activities 1,499 10,444 ------- -------- Net increase (decrease) in cash and cash equivalents 5,198 (5,019) Cash and cash equivalents at beginning of period 11,099 21,002 ------- -------- Cash and cash equivalents at end of period $16,297 $ 15,983 ======= ======== Supplemental disclosure of cash flow information: Cash paid during the period for: Interest $ 32 $ 99 Income taxes 158 3,267 Non-cash financing activities: Tax benefit from exercise of stock options - 2,125 See accompanying notes to consolidated financial statements. 5 EIS INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) (1) Basis of Presentation The unaudited consolidated financial statements presented herein have been prepared in accordance with the instructions to Form 10-Q and do not include all of the information and note disclosures necessary to conform with annual reporting requirements. The statements should be read in conjunction with the audited consolidated financial statements and notes thereto included in the Company's Annual Report for the year ended December 31, 1996. In the opinion of management, the accompanying consolidated financial statements include all adjustments necessary for a fair presentation of the Company's financial position and results of operations. The results of operations for the three and nine month periods ended September 30, 1997 may not be indicative of the results for the full year. (2) Principles of Consolidation The accompanying financial statements include the accounts of the Company and its wholly-owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. (3) Discontinued Operations and Restructuring On February 28, 1997, at the recommendation of new management, the Board of Directors of the Company resolved to discontinue the operations of Surefind Information, Inc. ("Surefind"). Accordingly, the Consolidated Statements of Operations for the three and nine month periods ended September 30, 1996 have been reclassified to reflect the results of Surefind on a discontinued operations basis. The results of Surefind for the three and nine months ended September 30, 1997 have been charged against the provision for estimated operating losses during the phase out period established at December 31, 1996. On March 3, 1997, the Company announced a restructuring and reorganization program (the "Restructuring"), the purpose of which was to refocus the Company on its core business and to reduce costs. During the first quarter of 1997, in connection with the Restructuring, the Company recorded charges of $2.9 million, including $1.1 million of severance costs, $1.3 million of facilities leases and fixed asset disposal costs, and $0.5 million of other costs. (4) Inventories Inventories primarily consists of finished goods as of September 30, 1997 and December 31, 1996. 6 EIS INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - continued (Unaudited) (5) New Accounting Pronouncements In February 1997, the Financial Accounting Standards Board ("FASB") issued Statement of Financial Accounting Standard ("SFAS") No. 128, "Earnings per Share" which is effective for all interim and annual periods ending after December 15, 1997. SFAS No. 128 replaces primary and fully diluted earnings per share ("EPS") with "basic" and "diluted" EPS on the face of the statement of operations. The Company does not expect the adoption of SFAS No. 128 to have a material effect on its financial position or results of operations. In February 1997, FASB issued SFAS No. 129, "Disclosure of Information about Capital Structure" which is effective for the year ending December 31, 1998. SFAS No. 129 continues the previous requirements to disclose certain information about an entity's capital structure found in Accounting Principles Board ("APB") Opinions No. 10, "Omnibus Opinion-1966," and No. 15, "Earnings per Share," and FASB SFAS No. 47, "Disclosure of Long-Term Obligations." The Company has been subject to the requirements of those standards, and as a result does not expect the adoption of SFAS No. 129 to have a material impact on the Company's financial statements. In June 1997, FASB issued SFAS No. 130, "Reporting Comprehensive Income" which is effective for the year ending December 31, 1998. SFAS No. 130 establishes standards for the reporting and display of comprehensive income and its components in the financial statements. Earlier application of this statement is permitted; however, upon adoption the Company will be required to reclassify previously reported annual and interim financial statements. The Company believes that the disclosure of comprehensive income in accordance with the provisions of SFAS No. 130 will change the manner of presentation of its financial statements as currently and previously reported. In June 1997, FASB issued SFAS No. 131, "Disclosure about Segments of an Enterprise and Related Information," which is effective for the year ending December 31, 1998. SFAS No. 131 requires companies to present certain information about operating segments and related information, including geographic and major customer data, in its annual financial statements and in condensed financial statements for interim periods. The Company does not believe that the adoption of SFAS No. 131 will have a material impact on its financial statements. 7 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations Cautionary Statement In addition to historical information contained herein, this document contains certain "forward-looking statements" within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and are subject to the safe harbors created thereby. All statements included in this document regarding the Company's financial position, business strategy and plans, objectives for future operations, industry conditions -- other than statements of historical facts -- are forward-looking statements. While these statements reflect the Company's reasonable assumptions, based upon management's beliefs and information currently available to it, the Company can give no assurance that such expectations will prove to be correct. These statements are subject to certain risks, uncertainties, and assumptions related to certain factors including, without limitations, competitive factors, general economic conditions, customer relations, technological change, product introductions and acceptance, distribution networks, changes in industry practices, one-time events and other factors described herein and under the heading "Factors Affecting Future Results" in the Company's Annual Report on Form 10-K for the year ending December 31, 1996. Based upon changing conditions, should any one or more of these risks or uncertainties materialize, or should any underlying assumptions prove incorrect, the Company may experience material fluctuations in its future quarterly and annual operating results that may vary materially from those described herein and that could materially and adversely affect its business, financial condition, operating results and stock price. The Company does not intend to update these forward-looking statements. Results of Operations NET REVENUES Net revenues increased 15% from $18.2 million in the third quarter of 1996 to $21.0 million in the third quarter of 1997. Product and software sales revenue during the third quarter of 1997 increased $1.4 million (11%) while service and other revenues also increased $1.4 million (26%) from the third quarter of 1996. The increase in product and software sales revenue during the third quarter of 1997 compared to the third quarter of 1996, is primarily the result of two factors: first, the Company's allowance for sales returns decreased by $627,000 during the third quarter of 1997 compared to the third quarter of 1996; and second, the Company's decision during the third quarter of 1996 to take back a call processing system as a result of a customer dispute, which reduced revenue by $2.2 million during that period. The increase in service and other revenues during the third quarter of 1997 compared to the third quarter of 1996 was primarily due to expansion of the Company's customer base covered by service contracts and the expansion of its systems integration business. Net revenues of $64.3 million during the first nine months of 1997 decreased $10.3 million (14%) from $74.6 million during the first nine months of 1996. Product and software sales revenue during this period decreased $14.9 million (25%) while service and other revenues increased $4.7 million (31%) from the first nine months of 1996. The decrease in Product and software sales revenue is primarily a result of a decrease in sales of the Company's mature products which were not offset by an increase in sales of its newer products, and a decrease in sales of the Company's wholly owned subsidiary, Cybernetics Systems International Corp. ("Cybernetics"). The increase in service and other revenues during the first nine months of 1997 compared to the first nine months of 1996 was primarily due to expansion of the Company's customer base covered by service contracts and the expansion of its systems integration business. 8 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) COST OF REVENUES Cost of revenues was 38% of net revenues in the third quarter of 1997 compared to 69% of net revenues in the third quarter of 1996. The cost of product and software sold as a percentage of product and software sales revenue decreased to 32% in the third quarter of 1997 from 68% in the third quarter of 1996. The decrease in cost of product and software sold as a percentage of product and software sales revenue during the third quarter of 1997 compared to the third quarter of 1996 is primarily due to four factors. First, the percentage of product and software sold associated with hardware declined by 29% during the third quarter of 1997 as compared to the third quarter of 1996 as a result of customers purchasing the Company's software to be installed on existing hardware. Second, during the third quarter of 1996, the Company recorded an inventory write-down of $1.8 million related to the acceleration of the end-of-life cycle for its OCM and System 7000 products as a result of the Company's growing confidence in its newer, faster Centenium and CPS product lines. Third, the cost of product and software sold as a percentage of product and software sales revenue in the third quarter of 1996 was negatively affected by the lower revenue base used in the calculation as a result of the sales returns and allowance explained above under "Net Revenues". And finally, staffing expenses included in the cost of product and software sold during the third quarter of 1997 decreased from the staffing expenses during the third quarter of 1996. Cost of revenues was 43% of net revenues during the first nine months of 1997 compared to 46% during the same period in 1996. The cost of product and software sold as a percentage of product and software sales revenue decreased to 36% during the first nine months of 1997 as compared to 41% for the same period in 1996. The above explanations for the decrease in cost of product and software sold as a percentage of product and software sales revenue during the third quarter of 1997 as compared to the third quarter of 1996, were also the primary causes for the decrease in cost of product and software sold as a percentage of product and software sales revenue for the 9 month periods. Service and other costs were 51% of service and other revenues in the third quarter of 1997 compared to 73% in the third quarter of 1996. Service and other costs were 59% of service and other revenues during the first nine months of 1997 compared to 65% for the same period in 1996. The decrease in costs of service and other as a percentage of service and other revenues during 1997 is due primarily to expenditures incurred during the 1996 periods for building the infrastructure of the service organizations in advance of generating additional service revenue. The improvement in the 1997 periods also resulted from a decline in the cost of supplying parts under customer maintenance agreements, during the third quarter of 1997, as a result of management's efforts to improve this operation. RESEARCH AND DEVELOPMENT COST Research and development cost decreased $730,000 from $3.5 million in the third quarter of 1996 to $2.8 million during the third quarter of 1997 and also decreased $382,000 from $9.6 million during the first nine months of 1996 to $9.2 million during the first nine months of 1997. These decreases were primarily due to a decline in the use of subcontract software engineers. 9 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) SELLING, GENERAL AND ADMINISTRATIVE Selling, general and administrative expense decreased $899,000 from $8.9 million in the third quarter of 1996 to $8.0 million during the third quarter of 1997 and also decreased $2.3 million from $28.8 million during the first nine months of 1996 to $26.5 million during the first nine months of 1997. These decreases were primarily due to the fact that during the first quarter of 1997, in connection with the Restructuring, EIS consolidated several of its administrative functions and facilities and downsized its Cybernetics and Pulse Technologies, Inc. ("Pulse") subsidiaries. RESTRUCTURING COSTS As discussed above, during the first quarter of 1997, the Company downsized its Cybernetics and Pulse subsidiaries and consolidated several of its administrative functions and facilities. The Restructuring costs of approximately $2.9 million incurred during the first quarter of 1997 primarily represent severance and lease buyout costs associated with those actions. ACQUIRED TECHNOLOGY IN PROCESS The acquired technology in process costs of $1.3 million during the third quarter of 1996 and $18.2 million incurred during the first nine months of 1996 reflect the fair value of the software products under development at Cybernetics and Pulse that had not achieved technological feasibility at the date of acquisition, had no alternative future uses, and were therefore charged against operations at the time of the acquisitions. INTEREST AND OTHER INCOME, NET Interest and other income increased $71,000 during the third quarter of 1997 as compared to the same period in 1996. This increase was due to higher cash and cash equivalent balances during the third quarter of 1997 as compared to the third quarter of 1996. Interest and other income decreased $91,000 during the first nine months of 1997 compared to the same period in 1996 primarily due to the sale of a major portion of the Company's lease portfolio during the first quarter of 1996, and higher cash and cash equivalent balances during the first six months of 1996. INCOME TAXES The Company's effective income tax rate was 38% for the third quarter of 1997 as compared to 31% for the same period in 1996. The Company had a tax benefit of $401,000 during the first nine months of 1997, as compared to a tax expense of $1.6 million during the same period in 1996. This difference was primarily attributable to the non-deductible acquired technology in process and other costs incurred during the first and third quarters of 1996 associated with the Company's acquisitions during those periods. LIQUIDITY AND CAPITAL RESOURCES The Company's working capital was $32.6 million at September 30, 1997 as compared to 30.2 million at December 31, 1996. Cash and cash equivalents and short-term investment balances were $18.7 million at September 30, 1997 compared to $14.8 million at December 31, 1996. Operating activities generated $7 million in cash during the nine month period ended September 30, 1997 compared to the use of $2.6 million in cash for the same period in 1996. This increase in cash provided by operations was primarily due to improved collections in accounts receivable and lease receivables, along with lower inventory levels as of September 30, 1997. Cash and cash equivalents used to invest in the purchase of property and equipment was $3.7 million for the first nine months of 1997 and $3.4 million during the first nine months 10 ITEM 2. Management's Discussion and Analysis of Financial Condition and Results of Operations (continued) of 1996. The capitalization of software development costs decreased from $2.1 million during the first nine months of 1996 to $944,000 for the same period in 1997. This decline was primarily due to the Company's focus on improving features in software already generally available, in addition to ongoing research and development efforts which do not qualify for capitalization under Statement of Financial Accounting Standards No. 86. Proceeds from the exercise of stock options decreased to $1.5 million during the first nine months of 1997 from $5.6 million during the same period in 1996. On September 3, 1997, the Company entered into a Loan Document Modification Agreement (the "New Loan Agreement") which amended the terms and conditions under the previous line of credit. Under the New Loan Agreement, the Company may borrow up to $7 million, subject to certain borrowing base limitations, and amounts outstanding accrue interest at the bank's prime rate plus .75%. The New Loan Agreement is secured by substantially all assets of the Company and expires on September 2, 1998. There were no amounts outstanding under the New Loan Agreement as of September 30, 1997. Prior to the New Loan Agreement, the Company had an unsecured line of credit of $12.5 million with the same commercial bank under a commitment that expired in January 1997. The Company expects that its current cash balances and short-term investments, together with cash anticipated to be provided by operating activities, and amounts available under the New Loan Agreement, will be sufficient to fund its working capital requirements (including research and development) for the foreseeable future. However, the Company's ability to achieve that result will be affected by the amount of cash generated from operations and the pace that its available resources are utilized. Accordingly, the Company may in the future be required to seek additional sources of financing, including borrowing and/or the sale of equity. If additional funds are raised by issuing equity, further dilution to shareholders may result. No assurance can be given that any such additional sources of financing will be available on acceptable terms, or at all. 11 PART II. OTHER INFORMATION Item 1. Legal Proceedings. The Company and certain individuals indicated below are named as defendants in the following lawsuits, each of which were filed on the date indicated in the United States District Court for the District of Connecticut, allegedly on behalf of certain of the Company's shareholders, each of which claim certain alleged misleading representations regarding the Company's acquisition of Surefind and Cybernetics and their operations, each of which seek damages in an unspecified amount. 1. Warburgh v. EIS International, Inc., Joseph J. Porfeli, Edward J. Sarkisian --------------------------------------------------------------------------- and Kent M. Klineman, filed April 25, 1997. ------------------------------------------- 2. Wallace v. EIS International, Inc., Joseph J. Porfeli, Edward J. Sarkisian, --------------------------------------------------------------------------- Harry Peisach, and Kent M. Klineman, filed May 21, 1997. -------------------------------------------------------- 3. Augenbaum v. EIS International, Inc., Joseph J. Porfeli, Edward J. ------------------------------------------------------------------ Sarkisian, Kent M. Klineman, Robert Jesurum and Herbert Balzuweit, filed ------------------------------------------------------------------------ May 23, 1997. ------------- 4. Romano, et. al. v. EIS International, Inc., Joseph J. Porfeli, Edward J. ------------------------------------------------------------------------ Sarkisian, and Kent M. Klineman, filed June 4, 1997. ---------------------------------------------------- 5. Dechter v. EIS International, Inc., Joseph J. Porfeli, Edward J. Sarkisian, --------------------------------------------------------------------------- Kent M. Klineman and Harry Peisach, filed June 4, 1997. ------------------------------------------------------- These lawsuits have been consolidated into a single case and the Company expects an amended complaint will be filed by December 1997. The Company and various other defendants have retained counsel, the claims are being reviewed, and the lawsuits will be vigorously defended. The Company is a party to various legal actions and claims arising in the ordinary course of its business. The Company believes that it has adequate legal defenses for each of the actions and claims and believes that their ultimate disposition will not have a material adverse effect on the Company's consolidated financial position or results of operations. Item 2. Changes in Securities. None. Item 3. Defaults Upon Senior Securities. None. 12 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 Exhibit 10.32 - Loan Document Modification Agreement Exhibit 11 - Statement Re Computation of Earnings Per Share Exhibit 27 - Financial Data Schedule (b) Reports on Form 8-K None. 13 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. EIS INTERNATIONAL, INC. Date: November 12, 1997 By: /s/ James E. McGowan ----------------------- ---------------------- James E. McGowan President and Chief Executive Officer Date: November 12, 1997 By: /s/ Frederick C. Foley --------------------- ------------------------ Frederick C. Foley Senior Vice President, Finance, Chief Financial Officer and Treasurer 14 EX-10.32 2 LOAN DOCUMENT MODIFICATION AGREEMENT EXHIBIT 10.32 LOAN DOCUMENT MODIFICATION AGREEMENT (No. 5; dated as of September 3, 1997) LOAN DOCUMENT MODIFICATION AGREEMENT (this "Agreement"), dated as of September 3, 197, by and among EIS INTERNATIONAL, INC., a Delaware corporation with its principal place of business at 555 Herndon Parkway, Herndon, Virginia 20170 ("EIS"), EIS INTERNATIONAL SERVICES CORP., a Virginia corporation with its principal place of business at 555 Herndon Parkway, Herndon, Virginia 20170 ("ISC" and together with EIS, the "Borrowers"), and SILICON VALLEY BANK, a California-chartered bank with its principal place of business at 3003 Tasman Drive, Santa Clara, California 95054 and with a loan production office located at One Central Plaza 11300 Rockville Pike, Suite 1205, Rockville, Maryland 20852, doing business under the name "Silicon Valley East" (the "Bank"). 1. Reference to Existing Loan Documents. ------------------------------------- Reference is hereby made to that certain Amended and Restated Commitment Letter (the "Commitment Letter"), dated as of May 19, 1994, between EIS and the Bank, as amended by a Joinder and Assumption Agreement ("Amendment No. 1"), dated as of October 28, 1994, among EIS, ISC and the Bank, as further amended by a Loan Modification Agreement ("Amendment No. 2"), dated as of October 4, 1995, among EIS, ISC and the Bank, and as further amended by a Loan Document Modification Agreement ("Amendment No. 3"), dated of December 27, 1995, among EIS, ISC and the Bank, and a Loan Document Modification Agreement ("Amendment No. 4"), dated as of April 15, 1996 among EIS, ISC and the Bank. The Commitment Letter, together with the schedules and exhibits attached thereto, as amended by Amendment No. 1, Amendment No. 2, Amendment No. 3 and Amendment No. 4 is herein after referred to as the "Credit Agreement". Reference is also hereby made to the Loan Documents referred to in the Credit Agreement, including without limitation that certain Third Amended and Restated Promissory Note of the Borrowers, dated December 27, 1995, as amended and restated of even date herewith, in the principal amount of $7,000,000 (the "Note") and that certain Amended and Restated Security Agreement, of even date herewith, by and between EIS and the Bank and that certain Amended and Restated Security Agreement, of even date herewith, by and between ISC and the Bank (collectively, the "Security Agreements"). Unless otherwise defined herein, capitalized terms used in this Agreement shall have the same respective meanings herein as are set forth in the Credit Agreement. 2. Effective Date. --------------- This Agreement shall be deemed effective as of September 3, 1997 (the "Effective Date"), provided that the Bank shall have received the following on or before September 12, 1997 and provided further, however, that in no event shall this Agreement become effective until signed by an officer of the Bank in California: a. two copies of this Agreement, duly executed by each of the Borrowers; -2- b. a fourth amended and restated promissory note in the principal amount of $7,000,000 payable to the order of the Bank in the form enclosed herewith (the "Amended Note"), duly executed by each of the Borrowers. c. two copies of each of the Security Agreements, duly executed by each of the Borrowers; d. Perfection Certificates, duly executed by each of the Borrowers; e. financing statements on Form UCC-1 (or, where applicable, amendments thereto on Form UCC-3), duly executed by each of the Borrowers, to be filed in each jurisdiction where such filing is required to perfect the Bank's security interest in the Collateral granted by the Borrowers pursuant to the Security Agreement; f. a certificate of the secretary or assistant secretary of each of the Borrowers, attesting to the continuing validity of the certificate of incorporation and by-laws of each of the Borrowers, the incumbency and signatures of any officers executing this Agreement and the Loan Documents and the approval by the Board of Directors of each of the Borrowers of this Agreement and the Amended Note; and g. a check in the amount of $4,350 in payment of the fees of Sullivan & Worcester LLP, special counsel to the Bank. By the signature of their respective authorized officers below, each Borrower is hereby representing that, except as modified in Schedule A attached hereto, the representations of such Borrower set forth in the Loan Documents (including those contained in the Credit Agreement, as amended by this Agreement) are true and correct as of the Effective Date as if made on and as of such date. The Borrowers jointly and severally agree to pay on or before the Effective Date a nonrefundable facility fee in connection herewith in the aggregate amount of $26,250. In order to effectuate the foregoing, EIS confirms its authorization as to the debiting of its account with the Bank in such amount in order to pay the Bank the facility fee for the period up to and including the extending Expiry Date. Finally, each Borrower agrees, that as of the Effective Date, it has no defenses against its obligations to pay any amounts and perform any of its obligations under the Credit Agreement and the other Loan Documents. 3. Description of Change in Terms. ------------------------------- As of the Effective Date, the Credit Agreement is modified in the following respects: a. Section 2 of the Credit Agreement is hereby amended by deleting the date "December 26, 1996" form the first line thereof and replacing it with the date "September 2, 1998". b. The first sentence of Section 3 of the Credit Agreement is hereby deleted in its entirety and replaced with the following sentence: -3- "Advances under the Commitment shall bear interest at a fluctuating rate per annum equal to the Bank's Prime Rate (as defined below) plus three-quarters of one percent (0.75%)." c. The first sentence of the Section 4 of the Credit Agreement is hereby deleted in its entirety and replaced with the following: "The Borrowers jointly and severally agree to pay to the Bank a facility fee for the period from December 27, 1996 through the Expiry Date in the amount of Twenty Six Thousand Two Hundred Fifty Dollars ($26,250):" d. Section 10 of the Credit Agreement is hereby amended by deleting the last phrase of the first paragraph thereof (immediately following subparagraph (A)) and replacing it with the following: "to exceed at any time an amount equal to the lesser of (A) 70% of all Eligible Accounts Receivable (as defined in Schedule III attached hereto) at such time (the "Borrowing Base") and (B) Seven Million Dollars ($7,000,000) (the "Commitment" or the "Commitment Amount"). e. Section 10 of the Credit Agreement is hereby further amended by deleting the second paragraph thereof in its entirety and replacing it with the following: "If the Credit Amount shall at any time exceed the Borrowing Base, the Borrowers shall, on the next Business Day, (1) prepay or repay (together with accrued interest thereon) such principal amount of the advances, and any unreimbursed drawings under such letters of credit, or (2) if any advances, drawings or obligations remain unpaid or unreimbursed, pledge to the Bank, pursuant to a cash collateral pledge agreement duly executed by the Borrowers in form and substance satisfactory to the Bank, an amount in cash ("Cash Collateral"), such that, giving effect to such prepayment or repayment, or such pledge of Cash Collateral, the Credit Amount shall be less than the sum of the Borrowing Base plus all Cash Collateral pledged to the Bank as provided in (2) above." f. Section 19 of the Credit Agreement is hereby amended by deleting the address of EIS International listed therein and inserting in lieu thereof the following address: "EIS INTERNATIONAL, INC. EIS INTERNATIONAL SERVICES CORP. 555 Herndon Parkway Herndon, VA 20170 Attn: Chief Financial Officer Telecopy: (703) 787-6720 g. Schedule I to the Credit Agreement is hereby amended by inserting the following new Section 14 at the end thereof: -4- "14. Borrowing Base. Giving effect to any advances to be made, letters of credit to be issued and/or FX Contracts entered into as of the date hereof under the Commitment Letter, as amended, the aggregate Credit Amount does not exceed the lesser of the Borrowing Base or the Commitment on such date." h. Subsections 4(a) through 4(c) of Schedule II to the Credit Agreement are hereby deleted in their entirety and replaced with the following: "(a) within twenty-five (25) days after the end of each month (including the last month of the year), the unaudited consolidated balance sheet and income statement of the Borrowers and their Subsidiaries on a consolidated basis as at the end of, and for, such month, accompanied by a certificate of the vice president of finance or chief financial officer of each of the Borrowers, which certificate shall state that said consolidated financial statements fairly present the consolidated financial condition and results of operations of the Borrowers and their Subsidiaries in accordance with GAAP (except for the absence of footnotes) consistently applied, as at the end of, and for, such month (subject to normal year-end audit adjustments); (b) within ninety (90) days after the last day of each fiscal year of the Borrowers, the audited consolidated balance sheet and income statement and statement of cash flows of the Borrowers and their Subsidiaries as at and for the fiscal year then ended, certified by the Accountants (the substance of such report to be satisfactory to the Bank), together with a certificate of the chief financial officer of each of the Borrowers to the effect that such financial statements fairly present the consolidated financial condition of the Borrowers and their Subsidiaries as of the end of such fiscal year and the consolidated results of operations for such fiscal year, in each case in accordance with GAAP. The Borrowers shall indicate on said financial statements all guarantees or unusual forward or long-term commitments made by the Borrowers or any Subsidiary thereof; (c) at the time of the delivery of the monthly and yearly financial statements required by Paragraphs 4(a) and 4(b), a Compliance Certificate of the chief financial officer of each of the Borrowers in the form attached to this Schedule II as Exhibit A;" i. Subsection 4(g) of Schedule II to the Credit Agreement is hereby deleted in its entirety and replaced with the following: "(g) within fifteen (15) days after the end of each fiscal month of the Borrowers, (i) a list of the accounts receivable aging for the Borrowers and their Subsidiaries on a consolidated basis as of the end of such month in such form as is reasonably acceptable to the Bank, all in reasonable detail and (ii) a Borrowing Base Certificate signed by the chief financial officer of each of the Borrowers in the form attached to this Schedule II as Exhibit B. The Bank will require audits no more than once during each fiscal year of the Borrowers; provided, however, that the Borrowers shall not receive any further advances under the Commitment unless and until an agent of the Bank -5- has conducted and the Bank has received an audit of the Borrowers' accounts receivable, with the costs thereof to be borne by the Borrowers;" j. Section 22 through 24 of Schedule II to the Credit Agreement are hereby deleted in their entirety and replaced with the following: "22. Leverage. The Borrowers will not permit the ratio of Total Senior Liabilities (net of Deferred Revenues) to Tangible Net Worth to exceed 0.75 to 1 at the end of any fiscal quarter. 23. Quick Ratio. The Borrowers will not permit the Quick Ratio to be less than 1.25 to 1 at the end of any fiscal quarter. 24. Minimum Tangible Net Worth. The Borrowers will not permit Tangible Net Worth at the end of the fiscal quarter ending September 30, 1997 to be less than Thirty Seven Million Dollars ($37,000,000); will not permit Tangible Net Worth at the end of the fiscal quarter ending December 31, 1997 to be less than an amount equal to Thirty Seven Million Dollars ($37,000,000) plus 75% of Net Income (and not taking into account any Net Loss) for the previous quarter; and will not permit Tangible Net Worth at the end of each subsequent fiscal quarter to be less than an amount equal to the minimum Tangible Net Worth for the previous fiscal quarter, as determined in accordance with the terms hereof, plus 75% of Net Income (and not taking into account any Net Loss) for the previous quarter." k. Section 25 of Schedule II to the Credit Agreement is hereby deleted in its entirety. l. Schedule II to the Credit Agreement is hereby further amended by restating in its entirety Exhibit A thereto in the form of Exhibit A hereto. l. Schedule II to the Credit Agreement is hereby further amended by restating in its entirety Exhibit B thereto in the form of Exhibit B hereto. m. Schedule III to the Credit Agreement is hereby amended to add the following new definitions in alphabetical order: "'Borrowing Base' shall have the meaning given to such term in Section 10 of the Commitment Letter." "'Eligible Accounts Receivable' means those accounts that arise in the ordinary course of the Borrowers' business; provided, that standards of eligibility may be fixed and revised from time to tome by Bank in Bank's reasonable judgment and upon notification thereof to the Borrowers in accordance with the provisions hereof. Unless otherwise agreed to by Bank, Eligible Accounts Receivable shall meet the following specifications at the time they come into existence and continue to meet the same through the date of determination: -6- (a) The account (if not a lease or time receivable) is not more than 90 days from the date of the invoice thereof, and the account, regardless of its stated maturity date, does not remain unpaid more than 90 days after such invoice date. (b) The account arose from the performance of services or an outright sale or license of goods by one of the Borrowers, such goods have been shipped to the account debtor, and such Borrower has possession of shipping and delivery receipts evidencing such shipment. (c) The account is owned solely by a Borrower and is not subject to any assignment, claim, lien, or security interest, other than a security interest in favor of the Bank. (d) The account is not subject to set-off, credit, allowance or adjustment by the account debtor, except discount allowed for prompt payment, and the account debtor has not complained in writing as to his liability thereon and has not returned any of the goods from the sale from which the account arose. (e) The account arose in the ordinary course of a Borrower's business, and did not arise from the performance of services or a sale of goods to a supplier or employee of such Borrower. (f) No event of the type described in clause (f) of the definition of "Event of Default" contained in this Schedule III has occurred with respect to the account debtor. (g) The Borrower in question has pledged any instrument or chattel paper evidencing the account to the Bank pursuant to the provisions of the Security Agreement. (h) Not more than 50% of the aggregate accounts, of the account debtor, excluding lease and time receivables, are over ninety (90) days from invoice on the date of determination. (i) The aggregate accounts from the account debtor do not exceed 25% of the total Eligible Accounts Receivable of the Borrower in question on the date of determination; that portion of the accounts over the 25% level will be disqualified. (j) The account does not result from goods placed on consignment, guaranteed sale, sale or return, sale on approval, bill and hold, or other terms by reason of which payment by the account debtor may be conditional. (k) The account is not a result of an inter-company transfer by the Borrowers. (l) Neither Borrower owns any amounts to the account debtor on the date of determination; to the extent that any amounts are so owed, the accounts of -7- such account debtor in an amount equal to the amounts owed by the Borrowers to the account debtor, shall be disqualified. (m) The Bank has not notified the Borrowers that the Bank has determined (which determination shall not be made unreasonably) that the account or account debtor is unsatisfactory. (n) If the account debtor is a Governmental Authority, the Borrower in questions has assigned the account to the Bank in compliance with the Federal Assignment of Claims Act (or similar state law, if the Governmental Authority is a state or a political subdivision thereof), and has furnished to the Bank all documents and filings evidencing such compliance. (o) The account debtor is a Person located in the United States, and the account arose out of services rendered or goods delivered in the United States. (p) That portion of a lease or time receivable which is due within 90 days and which lease or time account debtor is current in its payments to the Borrower. n. Schedule III to the Credit Agreement is hereby further amended by deleting the definition of "Net Income" and restating in their entirety the definitions of "Net Income" or "Net Loss" as follows: "'Net Income' or 'Net Loss' for any period in respect of which the amount thereof is to be determined, shall mean the aggregate of the consolidated net income (or net loss) after taxes for such period (taken as a cumulative whole) of the Borrowers and their Subsidiaries, determined in accordance with GAAP, exclusive of the write-up of any asset, less the amount of any increase to the Borrowers' capitalized software account under GAAP during the period in question, plus the aggregate amount of capitalized software amortized during such period." 4. Continuing Validity. Upon the effectiveness hereof, each reference in each Loan Document to "the Credit Agreement", "thereunder", "thereof", "therein", or words of like import referring to the Credit Agreement, shall mean and be a reference to the Credit Agreement, as amended hereby. Except as specifically set forth above, the Credit Agreement shall remain in full force and effect and is hereby ratified and confirmed. Except as set forth in Section 3 above and in the fourth amended and restated Note, each of the other Loan Documents is in full force and effect and is hereby ratified and confirmed. The amendments set forth above (i) do not constitute a waiver or modification of any term, condition or covenant of the Credit Agreement or any other Loan Document, other than as expressly set forth herein, and (ii) shall not prejudice any rights which the Bank may now or hereafter have under or in connection with the Credit Agreement, as modified hereby, or the other Loan Documents and shall not obligate the Bank to assent to any further modifications. -8- 5. Miscellaneous. a. This Agreement may be signed in one or more counterparts each of which taken together shall constitute one and the same document. b. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE COMMONWEALTH OF MASSACHUSETTS. c. EACH OF THE BORROWERS ACCEPTS FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, UNCONDITIONALLY, THE NON-EXCLUSIVE JURISDICTION OF ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION IN THE COMMONWEALTH OF MASSACHUSETTS IN ANY ACTION, SUIT, OR PROCEEDING OF ANY KIND AGAINST IT WHICH ARISES OUT OF OR BY REASON OF THIS LOAN MODIFICATION AGREEMENT; PROVIDED, HOWEVER, THAT IF FOR ANY REASON THE BANK CANNOT AVAIL ITSELF OF THE COURTS OF THE COMMONWEALTH OF MASSACHUSETTS, THEN VENUE SHALL LIE IN SANTA CLARA COUNTY, CALIFORNIA. d. The Borrowers jointly and severally agree to promptly pay on demand all costs and expenses of the Bank in connection with the preparation, reproduction, execution and delivery of this letter amendment and the other instruments and documents to be delivered hereunder, including the reasonable fees and out-of-pocket expenses of Sullivan & Worcester LLP, special counsel for the Bank with respect thereto. [Remainder of page intentionally left blank.] -9- IN WITNESS WHEREOF, the Bank and the Borrowers have caused this Agreement to be signed under seal by their respective duly authorized officers as of the date set forth above. SILICON VALLEY EAST, a Division of Silicon Valley Bank, as the Bank By: /s/ Peter McDonald ------------------------------- Name: Peter McDonald Title: Assistant Vice President SILICON VALLEY BANK, as the Bank By: /s/ Heidi Fetty -------------------------------- Name: Heidi Fetty Title: Document Officer (signed in Santa Clara, CA) EIS INTERNATIONAL, INC. By: /s/ Frederick C. Foley --------------------------------- Name: Frederick C. Foley Title: Senior Vice President - Finance and Treasurer EIS INTERNATIONAL SERVICES CORP. By: /s/ Frederick C. Foley ----------------------------------- Name: Frederick C. Foley Title: Senior Vice President-Finance and Treasurer EXHIBIT A COMPLIANCE CERTIFICATE TO: SILICON VALLEY BANK FROM: EIS INTERNATIONAL, INC. and EIS INTERNATIONAL SERVICES CORP. The undersigned authorized officers of EIS International, Inc. and EIS International Services Corp. hereby certifies that in accordance with the terms and conditions of the Credit Agreement, as amended, between Borrower and Bank (the "Agreement"), (i) each Borrower is in complete compliance for the period ending ______________ with all required covenants except as noted below and (ii) all representations and warranties of each Borrower stated in the Agreement are true and correct in all material respects as of the date hereof. Attached herewith are the required documents supporting the above certification. Each Officer further certifies that these are prepared in accordance with Generally Accepted Accounting Principles (GAAP) and are consistently applied from one period to the next except as explained in an accompanying letter or footnotes. The Officer expressly acknowledges that no borrowings may be requested by a Borrower at any time or date of determination that such Borrower is not in compliance with any of the terms of the Agreement, and that such compliance is determined not just at the date this certificate is delivered. Please indicate compliance status by circling Yes/No under "Complies" column. Reporting Covenant Required ------------------ -------- Complies -------- Monthly financial statements Monthly within 25 days Yes No Annual (CPA Audited) FYE within 90 days Yes No A/R Agings Monthly within 15 days Yes No A/R Audit Initial and Annual Yes No Financial Covenant Required Actual Complies ------------------ -------- ------ -------- Maintain on a Quarterly Basis: Minimum Quick Ratio 1.25:1.0 ___:1.0 Yes No Minimum Tangible Net Worth $37,000,000* $______ Yes No Maximum Debt/Tangible Net Worth 0.75:1.0 ___:1.0 Yes No *increasing by 75% of Net Income the previous quarter. Comments Regarding Exceptions: See Attached. Sincerely, EIS INTERNATIONAL, INC. EIS INTERNATIONAL SERVICES CORP. - ------------------------------------ ---------------------------------- SIGNATURE SIGNATURE TITLE TITLE DATE DATE EXHIBIT B BORROWING BASE CERTIFICATE Borrowers: EIS International, Inc. and EIS International Services Corp. Bank: Silicon Valley Bank Commitment Amount: $7,000,000 - -------------------------------------------------------------------------------- ACCOUNTS RECEIVABLE 1. Accounts Receivable Book Value as of ________ $_________ 2. Lease Receivables $_________ 3. TOTAL ACCOUNTS RECEIVABLE $_________ ACCOUNTS RECEIVABLE DEDUCTIONS (without duplication) 4. Amounts over 90 days due $_________ 5. Balance of 50% over 90 day accounts $_________ 6. Concentration Limits $_________ 7. Foreign Accounts $_________ 8. Contra Accounts $_________ 9. Promotion or Demo Accounts $_________ 10. Intercompany/Employee Accounts $_________ 11. Other (please explain on reverse) $_________ 12. TOTAL ACCOUNTS RECEIVABLE DEDUCTIONS $_________ 13. Eligible Accounts (#3 minus #12) $_________ 14. LOAN VALUE OF ACCOUNTS (70% of #13) $_________ BALANCES 15. Maximum Loan Amount $7,000,000 16. Total Borrowing Base (#14) $_________ 17. Total Funds Available (Lesser of #15 or #16) $_________ 18. Present balance owing on Commitment $_________ 19. RESERVE POSITION (#17 minus #18) $_________ The undersigned represents and warrants that the foregoing is true, complete and correct, and that the information reflected in this Borrowing Base Certificate complies with the representations and warranties set forth in the amended and restated Commitment Letter, as amended, between the Borrowers and Silicon Valley Bank. COMMENTS: By: _____________________________ Authorized Signer EX-11 3 STATEMENT RE: COMPUTATION OF PER SHARE EARNINGS EIS International, Inc. and Subsidiaries Exhibit 11 Statement Re Computation of Per Share Earnings (in thousands, except for per share amounts)
Three Months Ended Nine Months Ended September 30, September 30, 1997 1996 1997 1996 -------- -------- -------- -------- Income (loss) from continuing operations $ 1,548 $(5,491) $ (615) $(16,782) Discontinued operations - (1,395) - (2,776) ------- ------- -------- -------- Net income (loss) $ 1,548 $(6,886) $ (615) $(19,558) ======= ======= ======== ======== Weighted average number of common and common equivalent shares: Common shares outstanding 11,505 10,971 11,289 10,560 Dilutive effect of stock options and warrants, - primary computation 382 - - ------- ------- -------- -------- Weighted average number of common and common equivalent shares utilized in the primary income (loss) per share computation: 11,887 10,971 11,289 10,560 Additional dilutive effect of stock options and warrants, fully diluted computation - - - - ------- ------- -------- -------- Weighted average number of common and common equivalent shares utilized in the fully diluted loss per share computation 11,887 10,971 11,289 10,560 ======= ======= ======== ======== Primary and fully diluted income (loss) per share: Continuing operations $ 0.13 $ (0.50)$ (0.05) $ (1.59) Discontinued operations - (0.13) - (0.26) ------- ------- -------- -------- Primary and fully diluted income (loss) per share $ 0.13 $ (0.63)$ (0.05) $ (1.85) ======= ======= ======== ========
EX-27 4 EIS INTERNATIONAL FINANCIAL DATA SCHEDULE
5 1,000 U.S. DOLLARS 9-MOS DEC-31-1997 JAN-1-1997 SEP-30-1997 1 16,297 0 14,825 5,468 5,496 53,073 7,615 13,707 68,461 20,511 0 0 0 116 0 68,461 64,337 64,337 27,714 63,371 2,877 0 0 (1,016) 401 (615) 0 0 0 (615) (.05) (.05)
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