-----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, TneSubTRRzA8gDAAEwFXmSilJgNM5d3yalgowCj5AWY5W+4lXHv65ErF5Jx0bGO0 JuXFAxR7+TZ+Ugh1ph6WXA== 0000724910-96-000020.txt : 19961120 0000724910-96-000020.hdr.sgml : 19961120 ACCESSION NUMBER: 0000724910-96-000020 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961115 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: PREMIS CORP CENTRAL INDEX KEY: 0000724910 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 411424202 STATE OF INCORPORATION: MN FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10QSB SEC ACT: 1934 Act SEC FILE NUMBER: 000-12196 FILM NUMBER: 96668137 BUSINESS ADDRESS: STREET 1: 15301 HIGHWAY 55 WEST CITY: PLYMOUTH STATE: MN ZIP: 55447 BUSINESS PHONE: 6125501999 MAIL ADDRESS: STREET 1: 15301 HIGHWAY 55 WEST CITY: PLYMOUTH STATE: MN ZIP: 55447 10QSB 1 SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 Form 10-QSB (Mark One) [ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the Second quarter ended September 30, 1996 [ ] TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF THE EXCHANGE ACT For the transition period from to Commission File Number 0-12196 PREMIS CORPORATION (Exact name of registrant as specified in its charter) Minnesota 41-1424202 (State of Incorporation) (I.R.S. Employer Identification Number) 13220 County Road #6, Plymouth, MN. 55441 (Address of Principal Executive Offices) (612) 550-1999 (Issuer's Telephone Number) 15301 Hwy 55 West, Plymouth, MN. 55447 (Former Address of Principal Executive Offices, if changed since last report) Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months, and (2) has been subject to such filing requirements for the past 90 days. Yes X No ____ Number of shares outstanding at September 30, 1996: Common Stock, Par Value: $.01 Shares: 2,707,052 Transitional small business disclosure format (check one). Yes No X PART I - FINANCIAL INFORMATION CONDENSED STATEMENTS OF OPERATIONS For the 3 months For the 6 months Ended September 30 Ended September 30 1996 1995 1996 1995 Revenue: System Sales $ 1,628,366 $ 1,129,026 $ 3,212,552 $ 2,111,475 Maintenance Fees & Other Income 320,573 221,399 650,566 428,704 Total Revenue 1,948,939 1,350,425 3,863,118 2,540,179 Cost of Sales: Systems 843,663 513,569 1,593,038 1,016,034 Royalty Expense 77,292 67,593 154,183 122,034 Support/Other 143,370 101,038 284,843 193,053 Total Cost of Sales 1,064,325 682,200 2,032,064 1,331,121 Gross Profit 884,614 668,225 1,831,054 1,209,058 Selling, General and Administrative Expense 363,321 303,652 765,064 604,504 Net Income (Before Taxes) 521,293 364,573 1,065,990 604,554 Income Tax Expense 203,270 143,008 415,731 239,000 Net Income $ 318,023 $ 221,565 $ 650,259 $ 365,554 Net Income per Share 0.11 0.07 0.22 0.12 Weighted Average Shares 3,024,906 3,046,854 3,002,294 2,979,758 Outstanding PART I - FINANCIAL INFORMATION BALANCE SHEET September 30, March 31, 1996 1996 (Unaudited) ASSETS: Current Assets: Cash $ 918,185 $ 968,083 Accounts Receivable (Net of Allowance for Doubtful Accounts) 1,557,377 1,204,874 Inventory 226,610 282,720 Deferred Taxes 33,000 33,000 Prepaid Expenses 238,910 11,537 Total Current Assets 2,974,082 2,500,214 Other Assets: Furniture & Equipment 231,678 225,437 Leased Equipment 31,773 31,773 Less Accumulated Depreciation & Amortization (185,807) (173,685) Capital Lease - Building 950,000 Software Distribution Rights net of accumulated depreciation and amortization of $142,063 and $88,159, respectively 215,408 249,301 Total Other Assets 1,243,052 332,826 TOTAL ASSETS 4,217,134 2,833,040 LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities: Trade Accounts Payable 380,790 137,964 Other Accrued Liabilities 185,347 228,524 Accrued Income Tax 47,181 510,000 Unearned Income 105,604 187,211 Capital Lease Obligation - Current 223,690 Customer Deposits 12,419 41,861 Notes Payable 53,065 102,928 Total Current Liabilities 1,008,096 1,208,488 Long-Term Liabilities: Notes Payable 112,097 112,097 Capital Lease Obligation - Long-Term 723,885 Total Long-Term Liabilities 835,982 112,097 TOTAL LIABILITIES 1,844,078 1,320,585 Stockholders' Equity: Common Stock 10,000,000 shares authorized 2,707,052 and 2,590,694 outstanding, respectively, $.01 par value 27,070 26,094 Additional Paid-in Capital 940,527 731,181 Retained Earnings 1,405,439 755,180 Total Stockholders' Equity 2,373,056 1,512,455 TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 4,217,134 $ 2,833,040 PART I - FINANCIAL INFORMATION Statement of Change in Financial Position For the Six Months Ended September 30, 1996 1995 (Unaudited) (Unaudited) Cash Flows from Operating Activities: Net Income $ 650,259 $ 365,554 Adjustments to reconcile net income to net cash provided (used) by operating activities: Depreciation and amortization 54,017 1,728 Changes in assets and liabilities: Current Assets (442,516) (17,062) Current Liabilities (374,220) 140,214 Net Cash Provided (Used) by Operating Activities $ (112,460) $ 490,434 Cash Flows from Investing Activities: Purchase of property and equipment (14,241) (38,267) Net Cash Provided (Used) by Investing Activities (14,241) (38,267) Cash Flows from Financing Activities: Repayment of debt (49,863) 0 Decrease of lease obligation (2,426) 0 Sale of stock 129,092 0 Net Cash Provided (Used) by Financing Activities $ 76,803 $ 0 Net Increase (Decrease) in Cash (49,898) 452,167 Cash at beginning of year $ 968,083 $ 426,959 Cash at end of period $ 918,185 $ 879,126 PREMIS CORPORATION NOTES TO CONDENSED FINANCIAL STATEMENTS September 30, 1996 Note 1: Basis of Presentation The accompanying condensed balance sheet as of September 30, 1996, and the condensed income statements and statements of changes in financial position for the three-month period ended September 30, 1996, are presented without audit. In the opinion of the management, all normally recurring adjustments necessary for a fair presentation of the financial statements in conformity with generally accepted accounting principles have been made. Certain footnote disclosures and other information normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted. These condensed financial statements should be read in conjunction with the financial statements and notes thereto included in the Company's audited financial statements as of March 31, 1996 as included in its 10KSB filing on June 29,1996. The balance sheet as of March 31, 1996 has been taken from the audited financial statements as of that date. Note 2: Business (a) General development of business: PREMIS Corporation was incorporated as a Minnesota corporation in April 1982 to design, develop, market and support integrated turnkey computer systems for business use that are based on the Company's proprietary applications software. The Company's systems are designed for use by food brokers, food processors and manufacturers, and multi store retail chains. (b) Financial information by industry segment: Net sales, operating income and identifiable assets of the Registrant's integrated turnkey systems business constitute 100% of the Company's operations and therefore segment information is not applicable. (c) Narrative description of business: The Company develops, markets and supports a line of industry-specific information management software systems designed to assist businesses with management of their day-to-day operations and long- term strategic planning. The Company's proprietary software products are typically sold in combination with PC workstation equipment and client/server hardware. The Company's turn-key systems provide an enterprise-wide solution to the information needs of multi-store specialty retailing businesses, food brokers and food distributors and include a variety of integrated functions such as: - - point of sale data collection and management transaction review - - "real time" sales analysis reporting by store,product,customer or salesperson - - individual store stock positions and enterprise inventory tracking - - purchasing, order tracking and warehouse control - - accounts receivable management and commission receivable accounting - - sales promotion fund management and advertising budget accounting - - electronic data interface for on-line ordering from vendors - - Intranet communications connections between stores and main corporate offices The Company's strategy is to develop leading-edge, industry-specific software systems to collect business information, analyze the data and provide concise, meaningful reports to individuals within an organization. The Company initially developed software products targeted toward food distribution firms. In 1994, the Company entered the specialty retail market when it acquired the exclusive marketing rights for the IRIS software system which assists with the back office and headquarters management functions of multi-store specialty retail chains. Since that time, the Company has continued to enhance the applications and functionality of its software products and has evolved from a provider of a single application specialty software into a turn-key vendor of enterprise-wide information management systems. The Company's main products are the REF OpenEnterpriseT described in Note 3, and the IRIST, ADVANTAGET, and RETAINT Systems. The ADVANTAGE Computerized Brokerage System is designed to assist food brokers with the day to day management of their business. It controls orders and commissions and reports on sales performance according to salesperson, product line, and customer. The ADVANTAGE System also has Electronic Data Interchange communications capability to provide computer-to-computer transmission of sales orders, invoices, pricing and other information with manufacturers and distributors. The RETAIN Retail Analysis and Inventory Notation System, which includes both hardware and software elements, is designed to assist food brokers, manufacturers' representatives and manufacturers in obtaining and analyzing highly valued information concerning the retail distribution of their products. The RETAIN System includes an optional handheld data entry unit which is used to record product price, distribution, and related information at a retail store. The RETAIN System may also be purchased as an option to the ADVANTAGE System. The PREMIS IRIS System was first introduced in the year 1987. This software system is designed to assist multi-store retail merchants with their point of sale and inventory management activities. The system modules are fully integrated and include inventory, purchasing, sales analysis and point of sale and others. A system usually consists of point of sale hardware and software which resides in the retail stores and a host system which resides at the chain headquarters. Note 2: Subsequent Events On October 1, 1996 the Company closed on a secondary offering of 1,750,000 shares of common stock with proceeds to the Company of $7,868,875. On October 8, 1996 the underwriter exercised its option to purchase an additional 262,500 shares to cover over-allotments with proceeds of $1,180,331. The Company stated that planned to use the proceeds from the offering to acquire REF Retail Systems Corporation, a Toronto-based provider of Windows NTR-based specialty retailing management software and systems. On October 1, 1996 the Company completed the acquisition of all the outstanding shares of REF Retail Systems Corporation and it has been merged into PREMIS Systems Canada LTD, a newly formed Canadian Subsidiary of PREMIS Corporation. The financial position and results of operations of the former REF Retail Systems Corporation will be reported as PREMIS Systems Canada consolidated with PREMIS Corporation for the third and fourth fiscal quarters of the current fiscal year ending March 31, 1997. The Registrant's business is not seasonal, however, installations of the Point of Sales systems are greatly reduced in December when retailers experience their busiest time of the year. PREMIS CORPORATION Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operation The information in this discussion, except for the historical information contained herein, contains forward-looking statements within the meaning of Section 21E of the Securities Exchange Act of 1934, as amended, and is subject to the safe harbor created by that statute. Such statements are subject to certain risks and uncertainties. In addition to the factors discussed below, other factors that could cause actual results to differ materially from those described in the forward-looking statements include: volatility in the demand and price for software systems; the risk of push-outs of delivery dates for system orders; the risk of order cancellations; the risk of delays in introducing new software products and the market's acceptance of such products; the successful integration of the personnel, products and operations of REF Retail Systems Corporation with those of PREMIS Corporation; and other risk factors described in the Company's most recently filed SEC documents. Readers are cautioned not to place undue reliance on those forward looking statements which speak as to matters only as of the date hereof. The Company has no obligation to publicly release the results of any revisions to these forward- looking statements which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. The fiscal year ending March 31, 1996, was a successful year for the Company with a net income of $827,632 compared to a net income of $474,687 for the prior year. The Company has followed that year with continued growth in the first six months of fiscal 1996. The sales for new enhancements and releases for both the Advantage and IRIS product lines, introduced in fiscal 1993, 1994 and 1995 and the United States Postal Service concept "Store of the Future" continued to grow during this six month period. In July 1996, the Company agreed to acquire REF Retail Systems Corporation, a Toronto-based provider of Windows NTR-based retail management software and systems which complement the Company's existing retail software products. REF's retail software combines and easy-to-use, point of sale ("POS") transaction processing interface with sophisticated data analysis and information reporting capabilities. The Windows NTR graphical user interface significantly reduces the cost of training cashier personnel and shortens the time required to process a sale. The REF software is designed to accelerate information access and provide a wide variety of management reports on a "real time" basis to various levels of an organization. The sophisticated data acquisition and processing features of the REF product position these systems toward the high end of the specialty retail market, which broadens the range of product offerings for the Company's specialty retail systems. Management believes the REF acquisition will provide the Company with an improved sales capability and contribute a higher level of technology and functionality for its products. The Company completed the acquisition of REF on October 1, 1996 and it has been merged into PREMIS Systems Canada LTD, a newly formed Canadian Subsidiary of PREMIS Corporation. The financial position and results of operations of the former REF Retail Systems Corporation will be consolidated with PREMIS Corporation for the third and fourth fiscal quarters of the current fiscal year ending March 31, 1997. Three Months Ended September 30, 1996, Compared to Three Months Ended September 30, 1995 For the three months ended September 30, 1996 sales were 44% greater than the comparable period of 1995, at $1,948,939 versus $1,350,425. Gross margin on sales were up 32%, at $884,614 versus $668,225 reflecting an unusually large hardware content in a few customer system upgrades. Selling, general and administrative expense was up only 20% over the comparable period in fiscal 1996, at $363,321 versus $303,652, reflecting improved productivity to offset the cost increases required to support a higher level of sales. Net income before taxes was up 43%, at $521,293 versus $364,573. Net income was up 44% at $318,023 versus $221,565. Net income per share was up 57% to $.11 versus $.07 for the prior year. The improvements for the quarter represent growth in products offered in the marketplace, with continued growth in products sold to the United States Postal Service. Six Months ended September 30, 1996, Compared to Six Months Ended September 30, 1995 For the six months ended September 30, 1996, sales were 52% greater than the comparable period for 1995, at $3,863,118 versus $2,540,179. Gross margin was up 51%, at $1,831,054 versus $1,209,058 for the same period in fiscal 1996. Selling, general and administrative expenses was up 27% at $765,064 versus $604,504, reflecting improved productivity per employee to offset cost increases required to support a higher level of sales. Net profit before taxes was up 76% at $1,065,990 verses $604,554 in fiscal 1995. Net income was up 78% at $650,259 versus $365,554. Net income per share was up 83% to $.22 versus $.12 for the prior year. The improvements for the six month period also represent growth in products offered in the marketplace, with continued growth in products sold to the United States Postal Service. Liquidity and Capital Resources The Company feels that proceeds from its recent secondary stock offering closed on October 1, 1996 and cash flow from operations will provide adequate liquidity and capital to execute its business plan. Part II - OTHER INFORMATION Item 4. Submission of Matters to a Vote of Security Holders The Company's annual meeting of shareholders was held on July 17, 1996. The following proposals were voted upon, with the following results: FOR AGAINST ABSTAINED Election of Directors F. T. Biermeier 1,717,472 0 0 G. Mary Ann Calhoun 1,717,472 0 0 H. Gerald Schmidt 1,717,472 0 0 Amendment of Articles of 1,609,393 107,079 1000 Incorporation to Increase the Authorized Stock to 10,000,000 Ratification of Appointment 1,731,431 0 0 of Price Waterhouse LLP as Auditors for the Year Ending March 31, 1997 Item 6. Exhibits and Reports on Form 8-K (a) Exhibits: * 2.1 Stock Purchase Agreement for Acquisition of REF Retail Systems Corporation * 3.1 Amendment to Articles of Incorporation, effective August 2, 1996 27 Financial Data Schedule * Incorporated by reference to exhibit filed as a part of Registration Statement in Form S-2 (Commission File No. 333-10917) (b) The following Reports on Form 8-K were filed during the quarter ended September 30,1996: 8K 07/19/96 Agreement to purchase outstanding shares of REF Retail Systems, Inc. Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. PREMIS CORPORATION November 15, 1996 By: /s/ F. T. Biermeier Date F. T. Biermeier Chairman, Chief Executive Officer, President and Chief Financial Officer EX-27 2 ART. 5 FDS FOR 2ND QUARTER 10-QSB WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
5 1,000 3-MOS MAR-31-1997 SEP-30-1996 718 200 1881 52 226 2974 1428 185 4217 1008 835 27 0 0 2345 4217 1948 1948 1064 1064 363 0 0 521 203 318 0 0 0 318 .11
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