-----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, EEBLePp8GOLWfB9JIrY2OL4Wt7L+to13HHTjlx3JZlDbNMfIl95FHxwIdQPbVF1C iIrXr4EOYVHsShiAwhdY5w== 0000950007-96-000006.txt : 19960216 0000950007-96-000006.hdr.sgml : 19960216 ACCESSION NUMBER: 0000950007-96-000006 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19951231 FILED AS OF DATE: 19960214 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: COMPUTER TELEPHONE CORP CENTRAL INDEX KEY: 0000764841 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-TELEPHONE INTERCONNECT SYSTEMS [7385] IRS NUMBER: 042731202 STATE OF INCORPORATION: MA FISCAL YEAR END: 0331 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-13627 FILM NUMBER: 96518095 BUSINESS ADDRESS: STREET 1: 360 SECOND AVE CITY: WALTHAM STATE: MA ZIP: 02154 BUSINESS PHONE: 6174668080 MAIL ADDRESS: STREET 1: 360 SECOND AVENUE CITY: WALTHAM STATE: MA ZIP: 02154 10-Q 1 QUARTERLY REPORT SECURITIES AND EXCHANGE COMMISSION Washington, DC 20549 -------------------------------------------- FORM 10-Q ------------------------------------------- QUARTERLY REPORT UNDER SECTION 13 OR 15 (D) OF THE SECURITIES EXCHANGE ACT OF 1934 -------------------------------------------- For Quarter ended December 31, 1995. Commission file Number 0-13627. COMPUTER TELEPHONE CORP. (Exact name of registrant as specified in its charter) Massachusetts 04-2731202 - -------------------------------------------------------------------------------- (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 360 Second Avenue, Waltham, Massachusetts 02154 - -------------------------------------------------------------------------------- (Address of principal executive offices) (Zip Code) (617) 466-8080 - -------------------------------------------------------------------------------- (Registrant's telephone number including area code) - -------------------------------------------------------------------------------- (Former name,former address and former fiscal year,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 (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 ---------- ----- APPLICABLE ONLY TO CORPORATE ISSUERS: Indicate the number of shares outstanding of each of the Issuer's classes of Common Stock, as of the latest practicable date: As of January 31, 1996 9,584,464 shares of Class I, $.01 par value, Common Stock were outstanding. COMPUTER TELEPHONE CORP. FORM 10-Q INDEX
Part I FINANCIAL STATEMENTS PAGE NO. Item 1. Financial Statements Condensed Balance Sheets As of December 31 and March 31, 1995 3 Condensed Statements of Income Three Months Ended December 31, 1995 and 1994 4 Condensed Statements of Income Nine Months Ended December 31, 1995 and 1994 5 Condensed Statements of Cash Flows Nine Months Ended December 31, 1995 and 1994 6 Notes to Condensed Financial Statements 7 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8-10 Part II OTHER INFORMATION Item 1. Legal Proceedings Inapplicable Item 2. Changes in Securities Inapplicable Item 3. Default Upon Senior Securities Inapplicable Item 4. Submission of Matters to a Vote of Security Holders Inapplicable Item 5. Other Information Inapplicable Item 6. Exhibits and Reports on 8-K The following exhibit is included herein: (11) Statements Regarding Computation of Per Share Earnings Three and Nine Months Ended December 31, 1995 and 1994 11
The Company did not file any reports on Form 8-K during the nine months ended December 31, 1995. 2 COMPUTER TELEPHONE CORP. CONDENSED BALANCE SHEETS
December 30, March 31, 1995 1995 ------------- --------- ASSETS Current Assets Cash and cash equivalents $ 3,717,906 $ 2,390,546 Accounts receivable, net 6,010,684 3,639,220 Inventories 26,190 36,512 Prepaid expenses and other current assets 514,426 353,381 ----------- ----------- Total Current Assets 10,269,206 6,419,659 Furniture, Fixtures and Equipment 5,665,099 5,287,289 Less accumulated depreciation (4,601,417) (4,162,417) ----------- ----------- Total Equipment 1,063,682 1,124,872 Deferred tax asset 153,000 153,000 Other assets 24,685 28,285 ----------- ----------- Total Assets $11,510,573 $ 7,725,816 =========== =========== LIABILITIES AND STOCKHOLDERS' EQUITY Current Liabilities Accounts payable and accrued expenses $ 891,074 $ 456,094 Accrued salaries and related taxes 2,289,289 1,445,937 Accrued income taxes (90,925) 281,569 Deferred revenue 0 4,209 Customer deposits 12,412 12,412 ----------- ----------- Total Current Liabilities 3,101,850 2,200,221 Stockholders' Equity Common stock 95,668 31,244 Additional paid in capital 4,854,095 4,871,302 Retained-earnings 3,608,645 796,734 8,558,408 5,699,280 Amounts due from stockholders (135,825) (159,825) Less treasury stock, at cost (13,860) (13,860) ----------- ----------- Total Stockholders' Equity 8,408,723 5,525,595 ----------- ----------- Total Liabilities and Stockholders' Equity $11,510,573 $ 7,725,816 ----------- -----------
The accompanying notes are an integral part of these financial statements. 3 COMPUTER TELEPHONE CORP. CONDENSED STATEMENTS OF INCOME
Three Months Ended December 31, December 31, 1995 1994 ------------- -------------- Revenue Network service commission income $ 6,826,572 $ 4,801,263 Long distance usage income 1,323,601 834,728 ------------- -------------- 8,150,173 5,635,991 Costs and expenses Cost of long distance network 1,021,660 670,026 Selling, general & administrative expenses 5,186,249 4,258,190 ------------- -------------- 6,207,909 4,928,216 ------------- -------------- Income from operations 1,942,264 707,775 Other Interest income 49,727 10,019 Interest expense (34) (2,629) Other 43 310 ------------- -------------- 49,736 7,700 ------------- -------------- Income before income taxes 1,992,000 715,475 Provision for income taxes 817,000 248,900 ------------- -------------- Net income $ 1,175,000 $ 466,575 ============= ============== Net income per common share Primary $ 0.11 $ 0.05 ============= ============== Fully diluted $ 0.11 $ 0.05 ============= ============== Weighted average number of common shares Primary 10,672,928 9,621,064 ============= ============== Fully diluted 10,672,928 9,950,708 ============= ==============
The accompanying notes are an integral part of these financial statements. 4 COMPUTER TELEPHONE CORP. CONDENSED STATEMENTS OF INCOME
Nine Months Ended December 31, December 31, 1995 1994 ------------- -------------- Revenue Network service ommission income $ 19,268,327 $ 13,323,429 Long distance usage income 3,668,316 2,128,744 ------------- -------------- 22,936,643 15,452,173 Costs and expenses Cost of long distance network 2,837,851 1,691,874 Selling, general & administrative expenses 15,486,049 12,357,007 ------------- -------------- 18,323,900 14,048,881 ------------- -------------- Income from operations 4,612,743 1,403,292 Other Interest income 117,299 33,280 Interest expense (604) (6,046) Other 9,162 6,017 ------------- -------------- 125,857 33,251 ------------- -------------- Income before income taxes 4,738,600 1,436,543 Provision for income taxes 1,925,850 500,400 ------------- -------------- Net income $ 2,812,750 $ 936,143 ============= ============== Net income per common share Primary $ 0.27 $ 0.11 ============= ============== Fully diluted $ 0.27 $ 0.10 ============= ============== Weighted average number of common shares Primary 10,487,978 8,776,429 ============= ============== Fully diluted 10,529,669 8,939,164 ============= ==============
The accompanying notes are an integral part of these financial statements. 5 COMPUTER TELEPHONE CORP. CONDENSED STATEMENTS OF CASH FLOWS
Nine Months Ended December 31, December 31, 1995 1994 ------------- -------------- OPERATING ACTIVITIES Net Income $ 2,812,750 $ 936,142 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 439,000 486,000 Changes in noncash working capital items: Accounts receivable (2,375,672) (1,133,269) Inventories 10,322 (3,158) Other current assets (161,045) 21,874 Income tax receivable 0 50,000 Other assets 3,600 3,210 Accounts payable 434,980 (230,089) Accrued liabilities 843,352 517,858 Deferred revenue 0 190,251 Customer deposits 0 145,000 Accrued taxes (372,494) 99,140 ------------- -------------- Net cash provided by operating activities 1,634,793 1,082,959 INVESTING ACTIVITIES Additions to equipment (377,810) (496,715) ------------- -------------- Net cash used in investing activities (377,810) (496,715) FINANCING ACTIVITIES Proceeds from the issuance of common stock 71,217 13,992 Dividends Paid (840) 0 Repayment of capital lease obligations 0 (9,621) ------------- -------------- Net cash used by financing activities 70,377 4,371 Increase (decrease) in cash 1,327,360 590,615 Cash at beginning of year 2,390,546 1,238,811 ------------- -------------- Cash and cash equivalents at end of period $ 3,717,906 $ 1,829,426 ============= ==============
The accompanying notes are an integral part of these financial statements. 6 COMPUTER TELEPHONE CORP. NOTES TO FINANCIAL STATEMENTS Note 1: BASIS OF PRESENTATION The accompanying condensed financial statements have been prepared in accordance with the instructions to Form 10-Q and do not include all the information and footnote disclosures required by generally accepted accounting principles for complete financial statements. In the opinion of management all adjustments (consisting of normal recurring accruals) necessary for a fair presentation have been included. Operating results for the three and nine months ended December 31, 1995 are not necessarily indicative of the results that may be expected for the year ending March 31, 1996. These statements should be read in conjunction with the financial statements and related notes included in the Company's Annual Report to Shareholders on Form 10-K for the year ended March 31, 1995. NOTE 2: CASH DIVIDENDS The Company has not paid cash dividends during the period presented. NOTE 3: COMMITMENTS AND CONTINGENCIES The Company is party to suits arising in the normal course of business which either individually or in the aggregate are not material. NOTE 4: COMMON STOCK TRANSACTIONS SUBSEQUENT TO SEPTEMBER 30, 1995 On January 29, 1996, the Computer Telephone Corp. Employees Stock Purchase Plan purchased 2,345 shares of Class 1 Common Stock from the Company at $11.05 per share for the purchase period ended December 31, 1995. On October 10, 1995, the Company declared a two for one stock split to all shareholders of record at the close of business on October 23, 1995. The payable date of this transaction was on November 6, 1995. NOTE 5: NET INCOME PER SHARE Net Income per share is computer based on the weighted average number of common stock and, if dilutive, common stock equivalent shares outstanding during the period. Common stock shares result from the assumed exercise of common stock options using the treasury stock method. 7 Part I Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations The following discussion should be read in conjunction with the Financial Statements and Notes set forth elsewhere in this Report. Results of Operations - Three months and nine months ended December 31, 1995 as compared to the three months and nine months ended December 31, 1994. Total revenues for the third quarter of Fiscal 1996 increased 45% to approximately $8,150,000 as compared to approximately $5,636,000 for the same period of the preceding year (Fiscal 1995). Network service commission income, which represents fees earned by the Company in it's capacity as an agent for various telephone companies, increased 42% to approximately $6,827,000 for the three months ended December 31, 1995, as compared to approximately $4,801,000 for the third quarter of Fiscal 1995. Long distance usage income, which represents the gross billings to mid-sized commercial accounts on the Company's long distance network, increased 59% to approximately $1,324,000 as compared to approximately $835,000 for the same period of the preceding fiscal year. Total revenues for the nine month period ended December 31, 1995 increased 48% to approximately $22,937,000 as compared to approximately $15,452,000 for the same period of Fiscal 1995. Network service commission income increased 45% to approximately $19,268,000 as compared to $13,323,000 for the same period of the preceding fiscal year. For the nine month period, the Company recognized long distance usage income of $3,668,000 as compared to $2,129,000 for the same period of Fiscal 1995, an increase of 72%. These increases in revenue are primarily attributable to two factors. First, the growing base of customers in the Northeast, where the Company is paid a residual fee to actively manage a substantial group of accounts on behalf of NYNEX New England, NYNEX- New York, and Southern New England Telephone, is a direct result of additional account executives added during the first six months of calendar 1995. In addition, the Company has further developed its strategy of leveraging these relationships with additional product offerings in order to influence a great amount of each customers communication dollar expenditure. It is the Company 's plan to continue both efforts throughout 1996. 8 Selling, general and administrative expenses for the third quarter totaled $5,186,000, an increase of approximately $928,000 over the same period one year ago. For the nine month period ended December 31, 1995 selling, general and administrative costs totaled $15,486,000, an increase of approximately $3,129,000 over the same period of the preceding fiscal year. These increases are directly attributable to the increases in the variable sales commission and bonus expenses incurred in connection with the substantial increases in revenues. As a percentage of revenues, these selling, general and administrative expenses were approximately 64% and 68% respectively, for the three and nine months periods of Fiscal 1996, as compared to 76% and 80% respectively, for the corresponding periods of Fiscal 1995. These relative reductions reflect the continuing efforts by the Company to control operating expenses, as well as the financial impact of increasing sales opportunities to the same customer base. Operating income for the third quarter of Fiscal 1996 increased to approximately $1,175,000, as compared to approximately $467,000 for the same period of Fiscal 1995. For the nine months ended December 31, 1995, operating income increased to approximately $2,813,000, as compared to approximately $936,000 for the same nine month period of Fiscal 1995. The Company estimates that it will utilize an effective tax rate of approximately 40% for the balance of Fiscal 1996. On October 10, 1995, the Company announced a 2-for-1 stock split, effective October 23, 1995. On July 13, 1995, the Company announced a 3-for-2 stock split, effective as of July 25, 1995. On January 18, 1995, the Company declared a twenty five percent stock dividend, effective as of March 1, 1995. All income per share and weighted average share information included in the accompanying financial statements have been restated to reflect these changes. The period ended December 31, 1995 marks the tenth consecutive quarter of profits for the Company. Management believes that its strategy of building long term relationships and offering additional products to these same customers, when combined with continuing efforts to control costs, should results in a continuation of this trend throughout the balance of Fiscal 1996. 9 Liquidity and Capital Resources Working capital at December 31, 1995 amounted to approximately $7,167,000 as compared to $4,219,000 at March 31, 1995, an increase of 70%. Cash balances at December 31, 1995 totaled approximately $3,718,000 an increase of approximately $397,000 over the September 30, 1995 balance. On April 28, 1995, the Company amended its revolving line of credit agreement with Fleet Bank, which is available under certain conditions, to provide for an increase in the credit line to $3,000,000 from $1,000,000 and to reduce the interest rate to the prime rate from prime plus one-half percent. In addition, the Company entered into an agreement with Fleet Bank which provides up the $500,000 of term financing for capital expenditures at the prime rate of interest plus one percent. The Company presently has no bank debt and expects that the revolving credit line, together with cash flows from operations, will be sufficient to meet the cash requirements of the Company for the foreseeable future. 10 EX-11. 2 STATEMENTS COMPUTER TELEPHONE CORP. STATEMENTS REGARDING COMPUTATION OF PER SHARE EARNINGS (IN THOUSANDS EXCEPT FOR PER SHARE DATA)
THREE MONTHS ENDED NINE MONTHS ENDED December 31, December 31, December 31, December 30, 1995 1994 1995 1994 ------------- ------------- ------------- ------------- PRIMARY Average shares outstanding 1,191 2,100 1,088 1,267 Net effect of stock options, if dilutive, based on the treasury stock method using the average market price 9,482 7,521 9,400 7,509 ----------- ----------- ----------- ----------- Total 10,673 9,621 10,488 8,776 Net income $ 1,175 $ 467 $ 2,813 $ 936 ----------- ----------- ----------- ----------- Net income per share $ 0.11 $ 0.05 $ 0.27 $ 0.11 ----------- ----------- ----------- ----------- FULLY DILUTED Average shares outstanding 1,187 2,430 1,130 1,430 Net effect of stock options, if dilutive based on the treasury stock method using the period-end market price 9,482 7,521 9,400 7,509 ----------- ----------- ----------- ----------- Total 10,669 9,951 10,530 8,939 Net income $ 1,175 $ 467 $ 2,813 $ 936 ----------- ----------- ----------- ----------- Net income per share $ 0.11 $ 0.05 $ 0.27 $ 0.10 ----------- ----------- ----------- -----------
11 SIGNATURES Pursuant to the requirements of the Securities and Exchange Act of 1934, the registrant has duly caused this report to be signed on behalf by the undersigned thereunto duly authorized. COMPUTER TELEPHONE CORP. DATE: February 7, 1996 /S/ Robert J. Fabbricatore ----------------- -------------------------- Robert J. Fabbricatore Chairman and Chief Executive Officer DATE: February 7, 1996 /S/ John D. Pittenger ----------------- --------------------------- John D. Pittenger Treasurer EX-27 3 FINANCIAL DATA SCHEDULE 3RD QUARTER
5 Financial Data Schedule for 1st Quarter 10-Q 0000764841 COMPUTER TELEPHONE CORP. 1,000 3-MOS Mar-31-1996 Jun-30-1995 2,336 0 4,739 128 32 7,390 5,387 4,300 8,657 2,442 0 0 0 0 6,184 8,657 6,716 6,748 828 5,595 0 0 0 1,152 463 689 0 0 0 689 0.13 0.13
EX-27 4 FINANCIAL DATA SCHEDULE 3RD QUARTER
5 Financial Data Schedule for 2nd Quarter 10-Q 0000764841 COMPUTER TELEPHONE CORP. 1,000 6-MOS Mar-31-1996 Sep-30-1995 3,321 0 5,168 128 26 8,933 5,603 4,448 10,267 3,048 0 0 0 0 7,171 10,267 8,070 8,114 994 6,521 0 0 0 1,594 645 949 0 0 0 949 0.18 0.18
EX-27 5 FINANCIAL DATA SCHEDULE 3RD QUARTER
5 Financial Data Schedule for 3rd Quarter 10-Q 0000764841 COMPUTER TELEPHONE CORP. 1,000 9-MOS Mar-31-1996 Dec-31-1995 3,718 0 6,011 128 26 10,269 5,665 4,601 11,511 3,102 0 0 0 0 8,313 11,511 8,150 8,200 1,022 6,208 0 0 0 1,992 817 1,175 0 0 0 1,175 0.11 0.11
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