-----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, Fw61BbDTmm661cOayrwazEbNzx8edU70wT0XrxssZmRVwUOjMlWUsSIA6DZq+pRF OuARcpcR5MunQBOBECrj1g== 0001012287-98-000012.txt : 19980309 0001012287-98-000012.hdr.sgml : 19980309 ACCESSION NUMBER: 0001012287-98-000012 CONFORMED SUBMISSION TYPE: 10-K PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19971130 FILED AS OF DATE: 19980306 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: CANTERBURY INFORMATION TECHNOLOGY INC CENTRAL INDEX KEY: 0000794927 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-EDUCATIONAL SERVICES [8200] IRS NUMBER: 232170505 STATE OF INCORPORATION: PA FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: 10-K SEC ACT: SEC FILE NUMBER: 000-15588 FILM NUMBER: 98558862 BUSINESS ADDRESS: STREET 1: 1600 MEDFORD PLZ STREET 2: RTE 70 & HARTFORD RD CITY: MEDFORD STATE: NJ ZIP: 08055 BUSINESS PHONE: 6099530044 MAIL ADDRESS: STREET 1: 1600 MEDFORD PLZ CITY: MEDFORD STATE: NJ ZIP: 08055 FORMER COMPANY: FORMER CONFORMED NAME: CANTERBURY CORPORATE SERVICES INC DATE OF NAME CHANGE: 19940323 FORMER COMPANY: FORMER CONFORMED NAME: CANTERBURY EDUCATIONAL SERVICES INC /PA/ DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: CANTERBURY PRESS INC DATE OF NAME CHANGE: 19870615 10-K 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------------------------- FORM 10-K ANNUAL REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934: For the fiscal year ended: November 30, 1997 Commission File Number: 0-15588 CANTERBURY INFORMATION TECHNOLOGY, INC. --------------------------------------- Pennsylvania 23-2170505 - -------------------------------- ---------------------------- (State or other jurisdiction (IRS Employer incorporation or organization) Identification Number) 1600 Medford Plaza, Rt. 70 & Hartford Road Medford, New Jersey 08055 ------------------------------------------------------- (Address of principal executive offices) (Zip Code) Issuer's telephone number: (609) 953-0044 -------------- Securities registered under Section 12(b) of the Exchange Act: None Securities registered pursuant to Section 12(g) of the Exchange Act: Common Stock, $.001 par value ----------------------------- (Title of Class) Indicate by check mark whether the issuer (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the past 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 by check mark if there is no disclosure of delinquent filers in response to Item 405 of Regulation S-B contained in this form, and no disclosure will be contained, to the best of Registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this 10-K. X --- Revenues for the most recent fiscal year were $12,423,452. The aggregate market value of the voting stock held by non-affiliates computed by reference to the closing price of such stock on National Market NASDAQ for February 24, 1998 was $11,448,068. The number of shares outstanding of the issuer's class of common equity, as of February 24, 1998 was 18,093,202. Documents Incorporated by Reference - Various exhibits from the Company's Form S-3 Registration Statements and such other documents contained in Item 14. PART I ITEM 1. DESCRIPTION OF BUSINESS INTRODUCTION - ------------ Canterbury Information Technology, Inc. (hereinafter referred to as "the Registrant" or "the Company") is engaged in the business of providing information technology services which includes operating computer software training companies, a management training company and developing and selling software to individuals and corporations. The Company is seeking acquisitions of computer software consulting, Internet and other information technology companies. The Company was incorporated in the Commonwealth of Pennsylvania on March 19, 1981 and later qualified to do business in the State of New Jersey in April, 1985. The Company became a Registrant by filing and registering with the Securities and Exchange Commission under Form S-18 which became effective on August 20, 1986. Prior to 1988 the Company was comprised of two segments: the vocational school segment and the seminar segment. In November, 1988 the Company sold its seminar segment, which represented less than 2% of the Company's revenues. The Company was then solely a vocational school company. In November, 1992 the Company acquired Star Label Products, Inc., a specialty printing company. In September, 1993 the Company purchased Motivational Systems, Inc., a management training company. In November of 1993, the Company acquired Landscape Maintenance Services, Inc., a landscape maintenance and construction company. In June of 1994, the Company acquired Computer Applications Learning Center (CALC), a computer software training company. In July, 1996, the Company acquired ProSoft Training, LLC., a computer software training company. In November, 1995, the Company sold Star Label Products, Inc. In November, 1996, the Company sold Landscape Maintenance Services, Inc. In May, 1997, the Company purchased ATM Technologies, Inc., a software development company. In November, 1997, the Company closed its last two vocational schools. In conjunction with the Board's resolution to concentrate future growth within the information technology sector, the Board and Shareholders voted to change the Company's name to Canterbury Information Technology, Inc. effective June 12, 1997. Canterbury's stock symbol remained XCEL. NARRATIVE DESCRIPTION OF BUSINESS - COMPUTER SOFTWARE TRAINING/SERVICES - ----------------------------------------------------------------------- In June, 1994, the Company acquired Computer Applications Learning Center (CALC), a New Jersey based computer software training company. Since 1983 CALC has trained corporate workers and managers at its six training centers in New York and New Jersey and on site at Fortune 1000 corporations. CALC is an authorized training center for the following major software providers: Microsoft, Lotus, Borland, WordPerfect, Aldus and Apple. CALC teaches on DOS, Windows and Macintosh platforms. CALC is authorized to provide continuing education units (CEU's) and is an approved sponsor of Continuing Professional Education (CPE) for CPA's in New York, New Jersey and Pennsylvania. During 1995, the Company changed the name of CALC to CALC/Canterbury Corp. to more appropriately reflect Canterbury's role in the corporate training industry. In July, 1996 Canterbury purchased ProSoft Training, LLC., a Charlotte, North Carolina based computer software training company. ProSoft is also a Microsoft Solution Provider and is an Authorized Training Center for WordPerfect and Lotus, as well as Microsoft. After the purchase of ProSoft Training, LLC., the company became known as ProSoft/Canterbury. Future Plans ------------ Canterbury expects to expand this line of the business by: making acquisitions in the information technology market of companies that provide complementary products and services to the significant customer base established over the past fifteen years of operations; and by entering into strategic business partnerships to allow the existing sales force to offer multiple information technology related services and products. Over time, as the Company's market penetration increases, the services that were subcontracted in the past, will be developed and expanded internally. Late in 1997, ProSoft/Canterbury hired an experienced technical recruiter and formed the company's new technical staffing division in response to the ever growing demand for experienced contract labor in the information technology field. This service, coupled with the training capabilities of the company, has provided its customers in the Charlotte area and surrounding states with a wider range of quality services. Most recently, a programmer has been added to its in-house consulting staff, and additional instructors are being hired to replace the long-term, high-level instructors which are moving into programming and Web development positions as part of the company's in-house consulting staff. To a large extent CALC/Canterbury and ProSoft/Canterbury are running parallel courses in their efforts to provide full service information technology training and related services. NARRATIVE DESCRIPTION OF BUSINESS - MANAGEMENT TRAINING - ------------------------------------------------------- In September of 1993, the Company acquired Motivational Systems, Inc., a New Jersey-based management and sales training company. Motivational Systems, since 1970, has trained managers and sales professionals from many Fortune 1000 companies, on a national and international basis. Motivational Systems conducts a wide variety of seminars in management and team development, selling and negotiating, interpersonal communication, executive development and organizational problem solving. During 1995, the Company changed the name of Motivational Systems, Inc. to MSI/Canterbury Corp. to more appropriately reflect Canterbury's presence and role in the corporate training industry. Future Plans ------------ This division's planned expansion is projected to occur by offering MSI/Canterbury products through its various national training affiliations and by offering interactive, multimedia-based training to its current customer base by accessing technologies such as CD ROM and C.D.I. This will permit the company to grow by utilizing various distance learning technologies and a national distribution channel. Management's plans are subject to ongoing review and revision based on their assessment of market conditions. NARRATIVE DESCRIPTION OF BUSINESS - SOFTWARE DEVELOPMENT - -------------------------------------------------------- In May of 1997, the Company acquired ATM Technologies, Inc. ("ATM"), a Texas-based software consulting and development company, serving clients in national and international markets. ATM has been in business since 1984, specializing in PC-based tracking systems. The Company changed the name of ATM Technologies, Inc. to ATM/Canterbury Corp. to more appropriately reflect Canterbury's presence and role in the information technology industry. Future Plans ------------ ATM/Canterbury plans to expand by introducing a newly developed document imaging and PC-based retrieval program integrated into its MasterTrak document tracking program using barcoding. The total program has just recently been packaged with a streamlined touch-screen PC. This major product enhancement of imaging and PC-based retrieval will allow clients with large file rooms to utilize this hardware/software solution to reduce labor costs and increase efficiencies. ATM/Canterbury is also working to expand its base of national and international dealers and to facilitate increased awareness of the tracking system's new imaging software developed by the company. Current clients have begun using the MasterTrak software for asset tracking. Based upon current client requests, the company may move toward the development of a software programming enhancement to enable clients to scan and link asset descriptions within the existing tracking system. DISCONTINUED OPERATION - VOCATIONAL TRAINING - -------------------------------------------- In November, 1997 the Company closed its two remaining vocational schools. The historical financial information relating to the vocational training business is included in discontinued operations in this report (see the notes to the consolidated financial statements). DISCONTINUED OPERATION - SPECIALTY PRINTING SEGMENT - --------------------------------------------------- In November, 1995 the Company sold Star Label Products, Inc. for $4,000,000 in cash and a note. The historical financial information relating to Star is included in discontinued operations in this report (see the notes to the consolidated financial statements). DISCONTINUED OPERATION - BUSINESS MAINTENANCE SERVICES SEGMENT - -------------------------------------------------------------- In November, 1996 the Company sold Landscape Maintenance Services, Inc. for $4,500,000 in cash and a note. The historical financial information relating to Landscape Maintenance Services, Inc. is included in discontinued operations in this report (see the notes to the consolidated financial statements). MERGER/ACQUISITION PROGRAM - -------------------------- The Company is seeking the acquisition of profitable companies in the information technology industry to complement and expand the major core subsidiaries, CALC/Canterbury and MSI/Canterbury. This will allow the Company to offer a wide range of products and services on a national basis. Since corporations accessing computer applications training also need computer and software consulting, network and systems development, systems integration, Internet development and application as well as Intranet conversions, the Company will be able to provide a fully integrated, comprehensive approach to information technology.
BUSINESS MODEL - INFORMATION TECHNOLOGY SERVICES Computer Internet and Training Technical Computer and Network and Systems Intranet Companies Training Software Systems Integrators Consultants, ---------- Companies Consultants Developers and ----- Developers, CALC/Canterbury --------- ---------- Installers Help Lines and Providers and Prosoft/ CALC/Canterbury ATM/Canterbury ------------- Canterbury Prosoft/ Canterbury
EMPLOYEES - --------- As of November 30, 1997, the Company, including all subsidiaries, had 177 employees: 120 full-time employees and 57 part-time employees. The Company believes that the relationship with its employees is satisfactory. ITEM 2. DESCRIPTION OF PROPERTIES The Company owns non-operational land and a building in Bedminster, New Jersey which was acquired as part of the Landscape Maintenance acquisition. All other facilities, including its administrative offices, branch locations and sales offices, are leased. The aggregate annual rental payments under leases will approximate $1,382,00 in fiscal year 1998. The following table sets forth the locations of the Company including square footage: Location Square Footage -------- -------------- Canterbury Information Technology, Inc. 1600 Medford Plaza Medford, New Jersey 08055 4,200 ATM/Canterbury Corp. 16350 Park Ten Place, Suite 113 Houston, TX 77084 2,000 Prosoft/Canterbury Corp. 8508 Park Road, #192 2,300 Charlotte, NC 28219 MSI/Canterbury 400 Lanid Drive Parsippany, New Jersey 07054 1,800 CALC/Canterbury 500 Lanid Drive Post Office Box 5667 Parsippany, New Jersey 07054 23,500 CALC/Canterbury 780 Third Avenue, Concourse Level One New York, New York 10017 4,200 CALC/Canterbury 1285 Avenue of the Americas at 51st Street New York, New York 10019 5,500 CALC/Canterbury Woodbridge Place Gill Lane at Route 1 Iselin, New Jersey 08830 6,000 CALC/Canterbury Park 80 West Plaza Saddlebrook, New Jersey 07663 5,926 CALC/Canterbury 55 Broadway New York, New York 10006 7,000 ITEM 3. LEGAL PROCEEDINGS In November, 1996 the Company settled its lawsuit against the previous owners of Landscape Maintenance Companies as reported in last year's Form 10-K. Subsequent to the settlement, in open court, the parties disputed several of the settlement terms. The parties remain in the process of resolving that dispute. In September of 1994, CALC and Canterbury Corporate Services, Inc. received a Complaint from Thomas Arnold, a former employee of CALC, who filed an action alleging a breach of contract for his services as sales director as well as the return of a notebook computer. This aspect of Mr. Arnold's claim is somewhat limited in damages. However, he has also alleged in his Complaint that CALC used his photograph and information concerning the Company in a marketing publication after he was terminated and without his permission. In this claim, Mr. Arnold has requested punitive damages in the specific amount of $8 million. Discovery in this matter is ongoing and it is the intention of litigation counsel for the Company to make a Motion to Strike the punitive damages claim of Mr. Arnold. It is also the opinion of litigation counsel that this aspect of Mr. Arnold's claim is without merit. To the extent that an award for consequential damages would be made relating to any advertising claim against CALC, the insurance carrier would be responsible to pay for same. It should also be noted that the Company filed a separate action, which was consolidated with this litigation, against Mr. Arnold in that he formed a competitive company after leaving CALC and allegedly has solicited clients and/or former clients of CALC. Canterbury Corporate Services, Inc. is seeking an award in damages as well as restitution against Mr. Arnold from interfering with their relationship with their customers. During 1996 the Company and its primary lender, Chase Manhattan Bank, instituted litigation, each claiming that the other party violated the terms of the credit agreement. As a result, the debt was declared in default. In February, 1997, the litigation was settled and all outstandings with Chase were restructured and become due on December 31, 1997. The Company and Chase agreed that all alleged defaults under the previous agreements were permanently waived and the Company would use its best efforts to replace Chase during 1997. A suitable replacement was not found during 1997, and the Company and Chase have agreed to extend their current banking relationship through December 31, 1998. The Company will continue to use its best efforts to replace Chase prior to December, 1998. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF STOCKHOLDERS The Company's Annual Meeting was held on June 12, 1997, at which time three matters were submitted to the Company's stockholders for a vote. The majority of the stockholders voted for the appointment of Ernst & Young, LLP as the Company's independent auditors, approval of the Company name change to Canterbury Information Technology, Inc. and the election of the following Directors: Stanton M. Pikus, Kevin J. McAndrew, Alan Manin, Jean Zwerlein Pikus, Stephen M. Vineberg, Paul L. Shapiro and Frank A. Cappiello. PART II ITEM 5. MARKET FOR EQUITY AND RELATED STOCKHOLDER MATTERS The Company commenced trading in the Over-The-Counter (O-T-C) market subsequent to the closing of its initial public offering on August 29, 1986. Commencing on January 8, 1993, the Company's shares of common stock began trading on NASDAQ's National Market under the stock symbol of SKIL. Effective March 1, 1994, the Company's stock symbol was changed to XCEL. The high and low bid prices of the Company's common stock from December 1, 1994 through February 24, 1998 were as follows: MARKET FOR EQUITY AND RELATED STOCKHOLDER MATTERS 1995 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter High Low High Low High Low High Low -------------------------------------------------------------- Common 2 7/8 2 3 7/8 2 1/2 3 1/2 2 1/2 3 5/16 1 7/8 Stock 1996 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter High Low High Low High Low High Low -------------------------------------------------------------- Common 2 11/16 1 15/16 2 3/8 1 11/16 2 1/8 1 1/8 1 9/16 13/16 Stock 1997 1st Quarter 2nd Quarter 3rd Quarter 4th Quarter High Low High Low High Low High Low --------------------------------------------------------------- Common 1 11/16 11/16 1 15/32 29/32 1 5/8 15/16 1 7/16 1 1/32 Stock 1998 1st Quarter High Low ----------- Common 1 1/8 19/32 Stock The approximate number of record holders of the Company's common stock as of November 30, 1997 as determined from the Company's transfer agent's list of record holders was 320. Such list does not include beneficial owners of securities whose shares are held in the names of various dealers and clearing agencies. The Company believes that there are in excess of 5,000 beneficial holders. The Company has never declared a dividend on its common stock and does not plan to do so in the near future. ITEM 6. SELECTED FINANCIAL DATA
1997(1) 1996(1) 1995(1) 1994(1) 1993 ------- ------- ------- -------- ------- Operating data: Net revenues $12,423,452 $12,717,692 $13,005,642 $ 7,548,392 $ 646,310 Income (loss) from continuing operations before cumulative effect of change in accounting principle (931,870) 423,157 723,184 186,817 157,733 Income (loss) from and gain on sale of discontinued operations (1,536,047) 1,243,411 990,656 (3,473,610) 1,603,030 Primary per share data: Income (loss) from continuing operations $(.075) $.028 $.055 $.018 $.015 Cumulative effect of change in accounting principle - - - - .016 Discontinued operations (.095) .086 .078 (.323) .130 ------- ------ ------ -------- ------- Net income (loss) $(.170) $.114 $.133 $(.305) $.161 ======= ====== ====== ======== ======= Balance sheet data: Total assets $25,787,101 $27,400,539 $25,670,332 $23,883,498 $19,554,204 Long-term debt 3,856,956 4,718,793 6,572,701 9,545,069 2,950,948
(1) Includes CALC/Canterbury which was acquired in June, 1994. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES Working capital at November 30, 1997 was $2,638,000, an increase of $667,000 over the previous year. During 1997 the Company and its primary lender, Chase Manhattan Bank, agreed to formally end the banking relationship between them by December 31, 1997. Throughout the year, the Company attempted to replace the bank with a suitable lender. No acceptable alternative was found. In February, 1998 the Company and Chase agreed to extend their banking relationship until December 31, 1998. The Company has agreed to make scheduled term debt payments totaling $700,000 in fiscal 1998. The Company and Chase agreed that all defaults under the previous agreements were permanently waived and the Company would again use its best efforts to replace Chase during 1998. Management believes that positive cash flow contributions from the Company's operating subsidiaries will be sufficient to cover cash flow requirements for fiscal 1998. There was no material commitment for capital expenditures as of November 30, 1997. Inflation was not a significant factor in the Company's financial statements. Cash flow from continuing operations for the year ended November 30, 1997 was $544,000. This was the third consecutive year of positive cash from continuing operations. During the year, the Company reduced its long term bank debt by $2,439,000. For the past three years, the reduction in long term debt totals $7,663,000. As with most organizations, the Company relies heavily on technology to deliver its goods and services. As the turn of the century approaches, the Company is preparing all of its computer systems to be Year 2000 compliant. A company-wide taskforce has been identified to review all software applications, operating systems and proprietary programs to ensure that they do not malfunction as a result of the Year 2000. In this process, the Company plans to replace and/or upgrade all systems that do not currently meet the required standards. The current cost of this effort is still being evaluated. As part of this upgrade process, the Company expects to benefit from many of the technology advances found in the newest Year 2000 software releases. RESULTS OF OPERATIONS Fiscal 1997 Compared to Fiscal 1996 Revenues -------- Revenues decreased by $295,000 (2%) in fiscal 1997 over fiscal 1996. This slight reduction was due to the re-engineering of the sales department in the software training area of the Company. As previously discussed, new information technology goods and services are being introduced to our customers. This strategy of becoming a more complete provider of information technology services required the restructuring of the existing sales force. This has caused, in the short term, some revenue degradation due to the recruiting, hiring and training process of the sales staff. The Company believes that this current investment will provide long-term benefits to the customers and hence, revenues. Costs and Expenses ------------------ Costs and expenses increased by $1,250,000 (21%) in fiscal 1997 over the previous year. This increase was caused by various factors. Rent expense increased by $423,000 due to the Company establishing lease termination reserves, increasing the number of classrooms for computer training, as well as reserving for the relocation of CALC/Canterbury and MSI/Canterbury into customized office and classroom space in Parsippany, New Jersey. Subcontract labor for CALC/Canterbury increased by $212,000 for two reasons. First, there was a significant increase in technical training classes offered in 1997, which resulted in the need for more consultants to train these high-end courses. Secondly, there was approximately $75,000 spent for programming a new operational accounting system which will allow for both Year 2000 compliance and increased reporting and processing capabilities. Over $300,000 of the increase in 1997 was attributed to the acquisition of ATM/Canterbury in May, 1997, as well as ProSoft/Canterbury operating for a full year in 1997 versus 1996. Selling expense decreased by $117,000 (5%) in fiscal 1997 over fiscal 1996 due to lower commission expense and a reduction in sales personnel through the first nine months of fiscal 1997. General and administrative expense increased by $322,000 (8%) in fiscal 1997 over fiscal 1996. Increased legal fees associated with the settlement and restructuring of the Chase banking relationship as well as higher consulting fees for the corporate office caused this increase. The Company believes that both these expenses are non-recurring. During 1997, the Company allocated $235,000 of corporate expenses to discontinued operations. Interest income for fiscal 1997 increased by $281,000 (86%) over fiscal 1996 due to the payments from the note receivable generated by the sale of Landscape Maintenance Services, Inc. in November, 1996. Interest expense decreased by $192,000 (28%) in fiscal 1997 versus fiscal 1996. The reduction in outstanding borrowings on the term loan is the major cause for this reduction. Other expenses of $518,000 in fiscal 1997 were due primarily to a $450,000 charge representing the difference between the unpaid balance of a note receivable and the estimated current value of the collateral supporting the note. Fiscal 1996 Compared to Fiscal 1995 Revenues -------- Revenues decreased by $288,000 (2%) in fiscal 1996 versus fiscal 1995. This reduction was deemed not material by the Company. Costs and Expenses ------------------ Costs and expenses increased by $160,000 (3%) for the year ended November 30, 1996 as compared to the prior year. This increase was caused by higher instructor and course material costs due to the increase in certified technical training courses presented by CALC/Canterbury. Selling expense increased by $314,000 (17%) in fiscal 1996 over fiscal 1995. This increase was caused by the planned addition of sales and marketing personnel for CALC/Canterbury. General and administrative expense increased by $146,000 (4%) in fiscal 1996 over fiscal 1995. This increase was not deemed material by the Company. During fiscal 1996, the Company allocated $1,298,000 of corporate expenses to discontinued operations. Interest income for fiscal 1996 increased by $258,000 (375%) over fiscal 1995. This increase was the result of the income derived from the Star Label note receivable payments received during the year. Interest expense decreased by $269,000 (28%) in fiscal 1996 over fiscal 1995. The reductions in the outstanding borrowings on the term loan associated with the purchase of CALC/Canterbury is the major reason for the reduction. Other income (expense) increased by $441,000 in fiscal 1996 over fiscal 1995. The Company revised its estimate regarding future lease payments. In November, 1996 the Company sold its business maintenance segment for cash and notes. As a result of this sale, the Company recognized a gain of $2,275,000, which is net of applicable taxes. ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA The financial statements and supplementary data are as set forth in the Index on page 20. ITEM 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURE There were no disagreements with the Company's independent auditors on matters of accounting or financial disclosure. PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CONTROL PERSONS, COMPLIANCE WITH SECTION 16(A) OF EXCHANGE ACT The directors, executive officers and control persons of the Company as of November 30, 1997 were as follows: Name Age Position Held with Company(1) - ---- --- ----------------------------- Stanton M. Pikus 57 President, Chief Executive Officer, Chairman of the Board of Directors Kevin J. McAndrew, CPA 39 Chief Operating Officer, Executive Vice President, Chief Financial Officer, Treasurer, Director Jean Zwerlein Pikus 44 Vice President - Operations, Secretary, Director Alan Manin 60 Director Stephen M. Vineberg 56 Director Paul L. Shapiro 46 Director Frank A. Cappiello 72 Director (1) All directors hold office until the next annual meeting of stockholders of the Company and thereafter until their successors are chosen and qualified. All officers hold office at the selection and choice of the Board of Directors of the Company. STANTON M. PIKUS, President and Chairman of the Board of Directors was a founder of the Company (1981). He graduated from the Wharton School of the University of Pennsylvania (B.S., Economics and Accounting) in 1962. Since 1968 he had been President and majority stockholder of Brown, Bailey and Pikus, Inc., a mergers and acquisitions consulting firm that completed more than twenty transactions. In addition, Mr. Pikus has been retained in the past by various small to medium-sized public companies in the capacity of an independent financial consultant. KEVIN J. McANDREW, CPA, Chief Operating Officer since December, 1993; Executive Vice President since November, 1992; Vice President and Chief Financial Officer of the Company since June, 1987; Treasurer since January, 1988 and Director since August, 1990. He is a graduate of the University of Delaware (B.S. Accounting, 1980) and has been a Certified Public Accountant since 1982. From 1980 to 1983, he was an Auditor with the public accounting firm of Coopers & Lybrand in Philadelphia. From 1984 to 1986, Mr. McAndrew was employed as a Controller for a New Jersey-based division of Allied Signal, Inc. JEAN ZWERLEIN PIKUS, Vice President of Operations since November, 1993; Vice President of Human Resources and School Operations, Secretary and Director since December 1, 1984. She was employed by J. B. Lippincott Company, a publishing company, from 1974 to 1983 as Assistant Personnel Manager, where she established its word processing center and was responsible for the day-to-day control of word processing and graphic services. In 1984, Ms. Pikus graduated from the Wharton School of the University of Pennsylvania (B.S., Accounting and Management, cum laude). Ms. Pikus is the wife of the President, Stanton M. Pikus. ALAN MANIN, Director and Founder of the Company (1981). He is a graduate of Temple University (B.S., 1960, M.Ed., 1966); a former teacher and department chairman in the Philadelphia School System (1960-1966); a former Vice President and Director of Education for Evelyn Wood Reading Dynamics (1966-1972); a former Director of Northeast Preparatory School (1973); President, Chief Operating Officer and founder of Health Careers Academy, a federally accredited (National Association of Trade and Technical Schools) vocational school (1974-1979) and a founder of the Company (1981). STEPHEN M. VINEBERG, a Director since 1988, is currently the President and Chief Executive Officer of CMQ, Inc. Previously, he was a Vice President of Fidelity Bank, Philadelphia, where he was Chief Operating Officer of the Data Processing and Systems and Programming Divisions. Mr. Vineberg also directed a wholly-owned subsidiary of the bank that developed and marketed computer software, operated a service bureau and coordinated all electronic funds transfer activities. PAUL L. SHAPIRO, a Director since December, 1992 has worked for McKesson Drug Company for the past 15 years. From 1973 through 1975 he was Director of the Pennsylvania Security Officers' Training Academy. In 1973 he graduated from York College of Pennsylvania with a B.S. Degree in Police Administration. FRANK A. CAPPIELLO, Director, is President of an investment counseling firm: McCullough, Andrews & Cappiello, Inc., providing management of more than $1 billion of assets. He is Chairman of three no-load mutual funds; Founder and Principal of Closed-End Fund Advisors, Inc.; publisher of Cappiello's Closed-End Fund Digest; author of several books and a regular panelist on "Wall $treet Week with Louis Rukeyser." For more than 12 years Mr. Cappiello was Chief Investment Officer for an insurance holding company with overall responsibility for managing assets of $800 million. Prior to that, he was the Research Director of a major stock brokerage firm. He is a graduate of the University of Notre Dame and Harvard University's Graduate School of Business Administration. ITEM 11. EXECUTIVE COMPENSATION CASH COMPENSATION The Company had 120 full-time employees as of November 30, 1997. There were no cash directors' fees paid during this period.
Summary Compensation Table -------------------------- Restricted Securities Name & Other Annual Stock Underlying LTIP All Other Principal Position Year Salary($) Bonus($) Compensation($) Awards($) Options/SAR(#) Payouts($) Compensation($) - ------------------------------------------------------------------------------------------------------------------ Stanton M. Pikus 1997 $195,000 $- $- $- $- $- $- President, 1996 195,000 - - - - - - 1995 199,148 - - - - - 26,120 Kevin J. McAndrew 1997 $120,000 - - - - - - Chief Operating 1996 120,000 - - - - - - Officer, 1995 127,111 - - - - - 11,307
During fiscal 1997, the Company entered into an amended employment agreement with the President. The term of the agreement is five years and calls for a base salary of $195,000 which began on December 1, 1995 with annual salary increases of $25,000 in the second and third years and to remain at $245,000 for the last two years of the contract. Also included in the agreement are future incentives based on Company performance. There is a bonus opportunity of 5% on the first $500,000 of consolidated income before taxes and bonus and 3% above $500,000. In conjunction with this contract, the President agreed to a covenant not to compete with the Company during his employment and for a period of one year after his employment with the Company has terminated. For the year ended November 30, 1996 the President waived his right to receive any performance bonus earned and in exchange his contract was extended for one year through 2001 at the same terms. The Company also has an amended employment agreement with its Executive Vice President and Chief Operating Officer. The term of the agreement is five years and calls for a base salary of $120,000 for fiscal 1997 and increases of $15,000 per year for the next four years. Also included in the agreement are future incentives based on the Company's profitability. A bonus of $30,000 will be earned if the consolidated income before income taxes and bonus of the Company exceeds $1,000,000. The bonus opportunity applies to each of the five years of the contract. For the year ended November 30, 1996, the Executive Vice President waived his right to receive any performance bonus earned and in exchange the contract was extended to 2001 at the same terms. COMPENSATION PURSUANT TO PLANS The following non-qualified options were granted to executive officers and directors of the Company on the following dates (officers, directors, and more than 5% holders of the Company's common stock received stock options at 100% of the market value on date of grant).
Capacity in Name of Which Date Exercise Individual Served Options Granted Price - ---------- ------ ------- ------- ----- Stanton M. Pikus President, Chairman of 50,000 12/20/93 $3.63 the Board of Directors 50,000 10/29/96 $1.03 100,000 01/13/97 $ .75 Kevin J. McAndrew, Chief Operating Officer, 50,000 12/20/93 $3.63 CPA Executive Vice 100,000 7/26/94 $2.75 President,Chief 50,000 10/29/96 $1.03 Financial Officer, 50,000 01/13/97 $ .75 Treasurer, Director 25,000 10/16/97 $1.19 Jean Zwerlein Pikus Vice President - 30,000 12/20/93 $3.63 Operations, Secretary, 25,000 10/29/96 $1.03 Director 25,000 01/13/97 $ .75 20,000 10/16/97 $1.19 Alan Manin Director 10,000 12/20/93 $3.63 10,000 10/29/96 $1.03 10,000 01/13/97 $ .75 Stephen Vineberg Director 7,500 01/07/94 $3.13 7,500 08/16/94 $2.75 2,500 05/11/95 $2.75 10,000 07/24/95 $2.81 10,000 10/29/96 $1.03 25,000 01/13/97 $ .75 7,500 10/16/97 $1.19 Paul Shapiro Director 7,500 01/07/94 $3.13 7,500 08/16/94 $2.75 2,500 05/11/95 $2.75 10,000 07/24/95 $2.81 10,000 10/29/96 $1.03 25,000 01/13/97 $ .75 7,500 10/16/97 $1.19 Frank A. Cappiello Director 100,000* 01/30/95* $2.00* 10,000 10/29/96 $1.03 100,000 01/13/97 $ .75
* Frank Cappiello's options are not part of the 1987 Employee Stock Option Plan, but also convert to restricted common stock. Mr. Cappiello has five years from the date of grant to exercise these options. Employee stock option holders have five years from the date of grant to exercise any or all of their options, and upon leaving the Company the option holders must exercise within 30 days. These options exercise into restricted shares of Company common stock and absent registration, or any exemption from registration, must be held for the applicable Rule 144 holding period before the restriction can be removed. OTHER COMPENSATION No material other compensation. However, see "Certain Relationships and Related Transactions" for key-man life insurance arrangements. COMPENSATION OF DIRECTORS No additional compensation, other than Company stock options issued at 100% of market value to all Directors who are not otherwise salaried employees. TERMINATION OF EMPLOYMENT AND CHANGE OF CONTROL ARRANGEMENTS Not Applicable. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT (A) (B) The following table sets forth as of February 24, 1998 certain information with regard to the record and beneficial ownership of the Company's common stock by (i) each shareholder, owner of record or beneficial owner of 5% or more of the Company's common stock (ii) each Director individually and (iii) all Officers and Directors of the Company as a group:
Name of Percent Class Beneficial Owner Shares Owned of Class - ------ ---------------- ------------ -------- Common Stanton M. Pikus (2)(3) 1,324,737 7.3% Common Kevin J. McAndrew (1)(3) 178,909 1.0% Common Alan Manin (1)(3) 367,160 2.0% Common Jean Zwerlein Pikus (1)(2)(3) 109,416 .6% Common Stephen M. Vineberg (1)(3) 25,885 .1% Common Paul L. Shapiro (1)(3) 2,000 - Common Frank A. Cappiello (1)(3) 185,000 1.0% --------- ------ All Officers, Directors and 5% Stockholders as a group (7 in number) 2,193,107 12.0% ========= ====== - -----------------------------
(1) All of said individuals have given a Voting Trust and First Right of Refusal to Stanton M. Pikus, President and Board Chairman of the Company. (2) Stanton M. Pikus and Jean Zwerlein Pikus are married to each other and, therefore, are deemed to have beneficial ownership in each other's shares. (3) Does not include option grants as set forth in Item 11. CHANGE IN CONTROL There has been no change in control of the Company. ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS The Company has secured key-person life insurance policies for its Corporate Officers. The amount and beneficiary of the key-person life insurance policies are as follows: Corporate Officers Amount of Policy Beneficiary - ------------------ ---------------- ----------- Stanton M. Pikus $1,000,000 Company Kevin J. McAndrew $1,000,000 Company Jean Z. Pikus $ 500,000 Company PART IV ITEM 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES, AND REPORTS ON FORM 8-K The following are filed as a part of this Form 10-K on the pages indicated. Consolidated Financial Statements Page No. - --------------------------------- -------- Report of Independent Auditors. . . . . . . . . . . . . . . . F- 0 Consolidated Balance Sheets - November 30, 1997 and 1996. . . F- 1 Consolidated Statements of Operations - Years ended November 30, 1997, 1996 and 1995. . . . . . . . . . . . . F- 3 Consolidated Statements of Stockholders' Equity - Years ended November 30, 1997, 1996 and 1995. . . . . . . F- 5 Consolidated Statements of Cash Flows - Years ended November 30, 1997, 1996 and 1995. . . . . . . . . . . . . F- 6 Notes to Consolidated Financial Statements. . . . . . . . . . F- 9 Exhibits - -------- Sequential Page No. ---------- 3(a) Articles of Incorporation of Canterbury Press, Inc. * 3(b) By-Laws of the Registrant * 3(c) Certificate of Amendment to Articles of Incorporation changing the name to Canterbury Education Services, Inc. * 3(d) Certificate of Amendment to Articles of Incorporation changing the name to Canterbury Corporate Services, Inc. ** 3(e) Certificate of Amendment to Articles of Incorporation changing the name to Canterbury Information Technology, Inc. *** 21 Subsidiaries of Registrant 17 22 Annual Report and Proxy Statement for 1996 Annual Shareholders Meeting *** 27 Financial Data Schedule 18 * Incorporated by reference from the like-numbered exhibit to Form S-18 Registration Statement, SEC. File No. 33-6381 filed on July 18, 1986. ** Incorporated by reference from the like-numbered exhibit to Form S-3/A Registration Statement, SEC. File No. 33-77066 filed on March 30, 1994. *** Incorporated by reference from the Annual Report and Definitive Proxy Materials for the 1996 Annual Shareholders Meeting for fiscal year ended November 30, 1996 filed with the SEC on June 12, 1997. Reports on Form 8-K filed during the last quarter of the period covered by this report are as follows: None. SIGNATURES ---------- Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, Canterbury Information Technology, Inc. has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. CANTERBURY INFORMATION TECHNOLOGY, INC. --------------------------------------- Dated: 2/27/98 By: /s/ Stanton M. Pikus ------------------------- Stanton M. Pikus, President; Chief Executive Officer Dated: 2/27/98 By: /s/ Kevin J. McAndrew ------------------------- Kevin J. McAndrew, Chief Operating Officer, Executive Vice President, Chief Financial Officer, Treasurer Pursuant to the requirements of Section 13 or 15 (d) of the Securities Exchange Act of 1934, this report has been signed on behalf of Canterbury Information Technology, Inc. and in the capacities and on the dates indicated. Dated: 2/27/98 By /s/ Stanton M. Pikus ------------------------------------------- Stanton M. Pikus, President; Director; Chairman of the Board of Directors Dated: 2/27/98 By /s/ Kevin J. McAndrew ------------------------------------------- Kevin J. McAndrew, Chief Operating Officer; Executive Vice President; Chief Financial Officer; Director Dated: 2/27/98 By /s/ Jean Zwerlein Pikus ------------------------------------------- Jean Zwerlein Pikus, Vice President - Operations, Secretary; Director Dated: 2/27/98 By /s/ Alan Manin ------------------------------------------- Alan Manin, Director Dated: 2/27/98 By /s/ Stephen M. Vineberg ------------------------------------------- Stephen M. Vineberg, Director Dated: 2/27/98 By /s/ Paul L. Shapiro ------------------------------------------- Paul L. Shapiro, Director Dated: 2/27/98 By /s/ Frank A. Cappiello ------------------------------------------- Frank A. Cappiello, Director Report of Independent Auditors The Board of Directors and Stockholders Canterbury Information Technology, Inc. We have audited the accompanying consolidated balance sheets of Canterbury Information Technology, Inc. as of November 30, 1997 and 1996, and the related consolidated statements of operations, stockholders' equity, and cash flows for each of the three years in the period ended November 30, 1997. These financial statements and schedule are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements and based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provided a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the consolidated financial position of Canterbury Information Technology, Inc. at November 30, 1997 and 1996, and the consolidated results of its operations and cash flows for each of the three years in the period ended November 30, 1997, in conformity with generally accepted accounting principles. Ernst & Young LLP Philadelphia, Pennsylvania February 27, 1998 F-0 CONSOLIDATED BALANCE SHEETS November 30, 1997 and 1996
ASSETS - ------ 1997 1996 -------------- --------------- Current Assets: Cash $ 295,936 $ 438,762 Accounts receivable, net 1,332,518 1,693,962 Notes receivable - current portion 424,700 978,582 Prepaid expenses and other assets 770,173 641,644 Deferred income tax benefit 2,896,000 1,228,000 Net current assets of discontinued operation - 1,384,996 --------- --------- Total Current Assets 5,719,327 6,365,946 Property and equipment at cost, net of accumulated depreciation of $3,396,000 and $2,754,000 2,503,277 2,728,714 Goodwill, net of accumulated amortization of $1,492,000 and $1,081,000 8,916,221 8,914,086 Notes receivable 8,371,548 9,092,943 Other assets 276,728 267,221 Net other assets of discontinued operation - 31,626 --------- --------- Total Assets $25,787,101 $27,400,536 =========== ===========
Continued See Accompanying Notes F-1 CONSOLIDATED BALANCE SHEETS November 30, 1997 and 1996 Continued
LIABILITIES AND STOCKHOLDERS' EQUITY - ------------------------------------ 1997 1996 ------------- ------------- Current Liabilities: Accounts payable - trade $ 467,855 $ 213,341 Accrued expenses 912,306 354,493 Income taxes payable - 424,845 Unearned tuition income 828,469 1,171,533 Current portion, long-term debt 872,616 2,230,715 --------- --------- Total Current Liabilities 3,081,246 4,394,927 Long-term debt 3,856,956 4,718,793 Deferred income tax liability 3,244,500 2,028,000 Commitments and contingencies Stockholders' Equity: Convertible preferred stock, Series D, no par value, 1,000,000 and 0 shares authorized, issued and oustanding 1,043,841 - Common stock, $.001 par value, 50,000,000 shares authorized; 16,251,000 and 15,054,000 issued and outstanding 16,251 15,054 Additional paid-in capital 15,969,210 14,840,642 Retained earnings (deficit) (1,017,603) 1,728,155 Less treasury shares, at cost (407,300) (325,035) ---------- ---------- Total Stockholders' Equity 15,604,399 16,258,816 ---------- ---------- Total Liabilities and Stockholders' Equity $25,787,101 $27,400,536 =========== ===========
See Accompanying Notes F-2 CONSOLIDATED STATEMENTS OF OPERATIONS Years ended November 30, 1997, 1996 and 1995
1997 1996 1995 ---- ---- ---- Net revenues $12,423,452 $12,717,692 $13,005,642 Costs and expenses 7,104,803 5,854,993 5,694,616 ----------- ----------- ----------- Gross profit 5,318,649 6,862,699 7,311,026 Selling 2,032,510 2,149,563 1,835,896 General and administrative 4,318,455 3,996,020 3,850,345 ----------- ----------- ----------- Total operating expenses 6,350,965 6,145,583 5,686,241 Other income (expenses) Interest income 607,178 326,485 68,820 Interest expense (490,552) (682,251) (951,403) Other (517,956) 374,575 (66,700) ----------- ----------- ----------- Total other income (expense) (401,330) 18,809 (949,283) Income (loss) before income taxes and discontinued operations (1,433,646) 735,925 675,502 Provision/(benefit) for income taxes (501,776) 312,768 (47,682) ----------- ----------- ---------- Income (loss) from continuing operations (931,870) 423,157 723,184 Discontinued operations Loss from discontinued operations less applicable income tax provision/(benefit) of ($298,224),($762,417) and $3,760 (1,536,047) (1,031,761) (502,889) Gain on sale of discontinued operations (less applicable income tax provision of $1,681,649 and $1,309,922) - 2,275,172 1,493,545 ----------- ----------- ----------- Net income (loss) $(2,467,917) $1,666,568 $ 1,713,840 =========== =========== ===========
Continued See Accompanying Notes F-3 CONSOLIDATED STATEMENTS OF OPERATIONS Years ended November 30, 1997, 1996 and 1995 Continued
1997 1996 1995 ---- ---- ---- Income (loss) from continuing operations $ (931,870) $ 423,157 $ 723,184 Preferred stock dividends (277,841) (7,376) (31,716) ----------- ---------- --------- Income (loss) from continuing operations available to common shareholders $(1,209,711) $ 415,781 $ 691,468 =========== ========== ========= Net income (loss) per share and common share equivalents Primary: Income (loss) from continuing operations $ (.075) $ .028 $.055 Discontinued operations (.095) .086 .078 ----------- ---------- --------- Net income (loss) per share $ (.170) $ .114 $ .133 =========== ========== ========= Fully diluted: Income (loss) from continuing operations $ (.075) $ .028 $ .052 Discontinued operations (.095) .086 .075 ----------- ---------- --------- Net income (loss) per share $ (.170) $ .114 $ .127 =========== ========== ========= Weighted average number of common and common equivalent shares - primary 16,035,500 14,447,000 12,547,600 =========== ========== ========== Weighted average number of common and common equivalent shares-fully diluted 16,035,500 14,447,000 13,119,800 =========== ========== ==========
See Accompanying Notes F-4 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY Years Ended November 30, 1997, 1996 and 1995
Class C Class D Total Convertible Convertible Common Common Additional Retained Share- Preferred Preferred Stock Stock Paid-in- Earnings Treasury holders' Stock Stock Shares Amount Capital (Deficit) Stock Equity --------- --------- ------ ------ ------- --------- ----- ------ Balance, November 30, 1994 $298,488 11,585,909 $11,586 $11,285,032 $(1,613,161) $ - $ 9,981,945 Issuance of common stock 51,305 51 37,461 37,512 Private placement of common stock, net of expenses 896,220 897 1,360,346 1,361,243 Preferred stock conversion (40,000) 114,286 114 39,886 - Exercise of stock options 397,500 397 168,227 168,624 Payment of dividends on preferred stock (31,716) (31,716) 401(k) Company match 4,793 5 4,788 4,793 Treasury shares acquired at cost (143,435) (143,435) Exercise of Class C warrants 10,000 10 19,990 20,000 Net income 1,713,840 1,713,840 ---------- ------------ ---------- ------ ----------- ---------- --------- ---------- Balance, November 30, 1995 258,488 - 13,060,013 13,060 12,915,730 68,963 (143,435) 13,112,806 Private placement of common stock, net of expenses 1,233,333 1,233 1,466,920 1,468,153 Preferred stock conversion (258,488) 572,193 572 257,916 - Treasury shares acquired at cost (181,600) (181,600) Exercise of stock options 120,000 120 72,580 72,700 Issuance of common stock for services 2,500 3 4,997 5,000 Issuance of common stock for acquisition 25,000 25 40,600 40,625 401(k) Company match 40,970 41 81,899 81,940 Payment of dividends on preferred stock (7,376) (7,376) Net income 1,666,568 1,666,568 ---------- ------------ ---------- ------ ----------- ---------- --------- ---------- Balance, November 30, 1996 - - 15,054,009 15,054 14,840,642 1,728,155 (325,035) 16,258,816 Private placement of common stock, net of expenses 634,782 635 543,647 544,282 Issuance of preferred stock $766,000 766,000 Treasury shares acquired at cost (82,265) (82,265) Issuance of common stock for acquisition 457,143 457 499,543 500,000 401(k) Company match 105,535 105 85,378 85,483 Accrued dividends on preferred stock 27,838 (27,838) - Imputed dividends on preferred stock payable in common stock upon conversion 250,003 (250,003) - Net loss (2,467,917) (2,467,917) ---------- ----------- ---------- ------ ----------- ---------- --------- ---------- Balance, November 30, 1997 - $ 1,043,841 6,251,469 $16,251 $15,969,210 ($1,017,603)($407,300) $15,604,399 ========== ========== ========== ====== =========== ========== ========= ==========
See Accompanying Notes F-5 CONSOLIDATED STATEMENTS OF CASH FLOWS Years ended November 30, 1997, 1996 and 1995
1997 1996 1995 ---- ---- ---- Operating activities: Net income (loss) $(2,467,917) $1,666,568 $1,713,840 Adjustments to reconcile net income (loss) to net cash provided by operating activities from continuing operations: Depreciation and amortization 1,063,392 939,138 902,253 Provision for losses on accounts receivable 63,139 66,735 32,975 Loss on writedown from notes receivable 447,995 - - Deferred income taxes (451,500) 308,676 18,453 Loss from discontinued operations 1,536,047 1,031,761 502,889 Gain from sale of discontinued operations - (2,275,172) (1,493,545) Other noncash items 180,784 81,940 4,793 Changes in operating assets, net of acquisitions Accounts receivable 361,444 (535,924) (160,244) Prepaid expenses and other assets (233,337) 6,447 (71,947) Income taxes (424,845) 618,845 315,624 Accounts payable 254,514 (53,786) (19,728) Accrued expenses 557,813 (288,040) 354,665 Unearned tuition income (343,064) (15,353) 335,501 ----------- --------- ---------- Net cash provided by operating activities of continuing operations 544,465 1,551,835 2,435,529 ----------- --------- ---------- Investing activities: Capital expenditures, net (130,497) (441,826) (599,530) ----------- --------- --------- Net cash used in investing activities of continuing operations (130,497) (441,826) (599,530) ----------- --------- --------- Financing activities: Principal payments on long term debt (2,439,469) (2,406,748) (2,816,984) Proceeds from notes payable and long term debt - 291,276 388,005 Proceeds from revolving credit facility - 425,000 - Repayment of revolving credit facility - (770,000) (500,000) Proceeds from payments on notes receivable 827,282 519,689 - Proceeds from issuance of common stock, net 544,282 1,489,153 1,361,243 Proceeds from issuance of preferred stock, net 766,000 - - Payment of dividends - (7,376) (31,716) Purchase of treasury shares - (13,000) (83,435) Proceeds from exercise of stock options and warrants - 11,150 188,624 ---------- ---------- ---------- Net cash used in financing activities from continuing operations (301,905) (460,856) (1,494,263) ---------- --------- --------- Cash used in discontinued operations (254,889) (1,662,347) (228,481) ---------- --------- --------- Net increase (decrease) in cash (142,826) (1,013,194) 113,255 Cash, beginning of year 438,762 1,451,956 1,338,701 ---------- --------- ---------- Cash, end of year $ 295,936 $ 38,762 $1,451,956 ========== ========= ==========
Continued See Accompanying Notes F-6 CONSOLIDATED STATEMENTS OF CASH FLOWS Years Ended November 30, 1997, 1996 and 1995 Continued Supplemental schedule of noncash investing and financing activities: In November, 1997 the Company received 50,000 shares of its common stock which was placed in treasury as settlement of a note receivable, including accrued interest, of $146,801. The Company recorded a writedown of $95,301 for the difference between the fair market value of the stock of $1.03 per share and balance of the note. During August, 1997 the Company issued 200,000 warrants to its investment banking firm, exercisable at $.98 which expire in 2002 for services as an advisor to the Company. In July, 1997 the Company received 24,612 shares of its common stock at fair market value which was placed in treasury as full settlement of a note receivable of $30,765. In May, 1997 the Company purchased all of the assets of ATM Technologies, Inc. of Houston, Texas. In conjunction with the acquisition, the Company acquired assets with a fair value of $231,000, less liabilities assumed of $38,000 in exchange for 457,143 shares of Canterbury restricted common stock. During March, 1997 the Company issued 105,535 shares of restricted common stock to its defined contribution plan to fulfill its matching contribution requirement. During March, 1996 the Company issued 40,970 shares of restricted common stock to its defined contribution plan to fulfill its matching contribution requirement. In March, 1996 the Company issued 2,500 shares to an unrelated party for services. Also during March, 1996 the Company allowed a former officer to exercise 30,000 stock options for a note receivable. During July, 1996 the Company issued 25,000 shares of restricted common stock to the former owners of ProSoft, L.L.C. for the purchase of the business. During November, 1996 the Company allowed corporate counsel to exercise 50,000 stock options for a note receivable. At November 30, 1996 the total notes receivable plus accrued interest for corporate officers and certain consultants totaled $494,500. The notes are collateralized by the common stock of the Company. Interest rates range from 6% to 7%. During November, 1996 the Company received 150,000 shares of its common stock from Mr. Koenig as partial settlement of its lawsuit with him. These shares are included in treasury stock at the then current market price. F-7 During February, 1995 the Company allowed its corporate officers and corporate counsel to exercise 397,500 stock options for a note receivable. At November 30, 1995, the total notes receivable plus accrued interest for corporate officers and certain consultants totaled $417,200. In March, 1995 the Company issued 9,000 shares of restricted common stock to a consultant for services. In May, 1995 the Company issued 4,793 shares of restricted common stock to its defined contribution plan to fulfill its matching contribution requirement. Capital lease obligations of $219,533 in 1997, $291,300 in 1996 and $261,400 in 1995 were incurred when the Company entered into leases for equipment. F-8 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS November 30, 1997 1. Operations and Summary of Significant Accounting Policies --------------------------------------------------------- Description of Business ----------------------- Canterbury Information Technology, Inc. ("the Company") is engaged in the business of providing information technology services which includes operating computer software training companies, a management training company and developing and selling software to individuals and corporations in the United States. Principles of Consolidation --------------------------- The consolidated financial statements include the accounts of the Company and all of its subsidiaries. All material intercompany transactions have been eliminated. Use of Estimates ---------------- The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The ultimate outcome and actual results could differ from the estimates and assumptions used. Revenue Recognition ------------------- The Company records revenue at the time services are performed or product is shipped. Statement of Cash Flows ----------------------- For purposes of the Statement of Cash Flows, cash refers solely to demand deposits with banks and cash on hand. In 1997, the Company changed the presentation of its statement of cash flows from the direct to the indirect method. Accordingly, amounts for 1996 and 1995 were changed for comparative purposes. F-9 Depreciation and Amortization ----------------------------- The Company depreciates and amortizes its property and equipment for financial statement purposes using the straight-line method over the estimated useful lives of the property and equipment (useful lives of leases or lives of leasehold improvements and leased property under capital leases, whichever is shorter). For income tax purposes, the Company uses accelerated methods of depreciation. Amortization of Intangible Assets --------------------------------- Goodwill is being amortized over twenty-five years using the straight-line method. Deferred Income Taxes --------------------- The Company utilizes the liability method to account for income taxes. This method gives consideration to the future tax consequences associated with the differences between financial accounting and tax bases of assets and liabilities. Earnings Per Share ------------------ Earnings per share is computed using the weighted average common shares outstanding during the year and includes the dilutive effect of common stock equivalents (options). Fully diluted earnings per share is based on the assumed conversion of preferred stock. Recent Accounting Pronouncements -------------------------------- The Company has adopted the provisions of Statement of Financial Accounting Standards ("SFAS") 123, "Accounting for Stock-Based Compensation." SFAS 123 provides companies with a choice to follow the provisions of SFAS 123 in determining stock based compensation expense or to continue with the provisions of the Accounting Principles Board Opinion ("APB") 25, "Accounting for Stock Issued to Employees" and provide pro-forma disclosures of the effects on net income and earnings per share. The Company has elected to continue to utilize the provisions of APB 25 to account for stock-based compensation. The effect of applying SFAS 123's fair value method to the Company's stock-based awards results in net income and earnings per share that are not materially different from amounts reported. 2. Acquisitions ------------ On May 5, 1997, the Company acquired all of the assets of ATM Technologies, Inc. of Houston, Texas for $500,000 of Canterbury restricted common stock and the opportunity to earn an additional $840,000 in Canterbury restricted common stock after the first year based on achievement of certain pretax earnings levels. Based on the market price of Canterbury stock as of the purchase date, 457,143 shares were issued to the previous owners of ATM. The Company recorded goodwill in the amount of $413,000 related to the acquisition. Pro forma information is not presented since it does not materially change the reported results of operations. F-10 On July 1, 1996, the Company acquired the business of ProSoft, L.L.C. of Charlotte, North Carolina for 25,000 shares of Canterbury restricted common stock and the opportunity to earn additional restricted common shares over the next three years based on various levels of increasing profitability. The 25,000 shares issued at closing are guaranteed by Canterbury to have a market value of at least $100,000 ($4.00 per share) at the two year anniversary of the acquisition. Canterbury will issue additional shares at that time if the closing price is not at least $4.00 per share. The results of operations included from July 1, 1996 are insignificant and pro forma results from December 1, 1995 do not materially change actual historical reported results for the year ended November 30, 1996. 3. Discontinued Operations ----------------------- In November, 1997 the Company decided to discontinue its vocational training segment and closed its last two vocational schools in New Jersey and Nevada. On November 30, 1996 the Company sold Landscape Maintenance Services, Inc. which comprised its business maintenance services segment. The proceeds of the sale consisted of both cash and a note receivable totaling $4,500,000. The note is payable in monthly installments of $38,962 (including interest at 8%) through November, 2006 with a final installment of $1,960,503 due December 31, 2006. The note is secured by substantially all assets and business of the buyer. At November 30, 1997, the principal outstanding on the note was $3,981,000 and is included as a component of notes receivable on the accompanying balance sheet. On November 30, 1995 the Company sold Star Label Products, Inc. and its wholly-owned subsidiary, Smartwork Graphics, which comprised the specialty printing segment. Star Label was sold to its former owner. The proceeds of the sale consisted of both cash and a note receivable totaling $4,000,000. The note is payable in montly installments of $33,976 (including interest at 7.79%) through November, 2005 with a final installment of $1,717,945 due December 1, 2005. The note is secured by substantially all assets and business of the buyer. At November 30, 1997, the principal outstanding on the note was $3,339,000 and is included as a component of notes receivable on the accompanying balance sheet. Also the Company issued to the buyer an aggregate of 350,000 options to purchase the common stock of Canterbury at an exercise price of $2.00 per share (bid price at date of grant). The options expire on November 9, 2000. In the opinion of management, the value assigned to these options, is not significant. The results of operations and the gain on the sale of these segments has been reported as discontinued operations and prior years financial statements have been restated to reflect the discontinuation of the segments. F-11 The following is a summary of the results of operations of the Company's discontinued vocational schools, specialty printing and business maintenance services operations: Year ended November 30, 1997 1996 1995 ---- ---- ---- Revenue $ 831,048 $15,083,515 $18,570,805 Loss from operations net of tax provision/(benefit): 1997, ($298,224); 1996, ($762,417); 1995, $3,760 (1,536,047) (1,031,761) (502,889) Gain on sale, net of tax provision of $1,681,649 and $1,309,922 - 2,275,172 1,493,545 ----------- ----------- ---------- Net income (loss) $(1,536,047) $1,243,411 $990,656 =========== =========== ========== Costs and expenses for these discontinued operations include $235,000, $1,298,000 and $1,598,000 representing allocated costs from corporate for 1997, 1996 and 1995, respectively. 4. Property and Equipment --------------------- Property and equipment, which is recorded at cost, consists of the following: 1997 1996 ---- ---- Land, buildings and improvements $ 725,910 $ 725,910 Equipment 2,961,376 2,784,475 Furniture and fixtures 1,107,993 1,087,783 Leased property under capital leases and leasehold improvements 1,104,289 884,756 ----------- ----------- 5,899,568 5,482,924 Less: Accumulated depreciation (3,396,291) (2,754,210) ----------- ----------- Net property and equipment $ 2,503,277 $ 2,728,714 =========== =========== Accumulated depreciation of leased property under capital leases totaled $446,000 in 1997. Depreciation expense for 1997, 1996 and 1995 was $568,000, $524,000 and $500,000, respectively. 5. Income Taxes ------------ The provision/(benefit) for income taxes for the years ended November 30, 1997, 1996 and 1995 is as follows: 1997 1996 1995 Current: Federal $ - $ - $ (326,000) State - 65,000 132,000 ---------- ---------- ----------- - 65,000 (194,000) Deferred: (800,000) 1,167,000 1,460,000 ---------- ---------- ----------- $(800,000 $1,232,000 $1,266,000 ========== ========== =========== F-12 The reconciliation of the expected provision/(benefit) for the years ended November 30, 1997, 1996 and 1995 is as follows: 1997 1996 1995 Expected tax (benefit) at statutory rates $(1,115,000) $ 985,000 $ 1,007,000 Effect of state taxes (net) (117,000) 229,000 351,000 Other - 6,000 (110,000) Permanent differences 12,000 12,000 19,000 Increase in valuation allowance 420,000 - - ----------- ----------- ----------- Total (800,000) $1,232,000 $1,266,000 =========== =========== =========== Deferred income taxes reflect the net tax effects of temporary differences between the carrying amounts of the assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Significant components of the Company's tax liabilities and assets as of November 30, 1997 and 1996 are as follows: November 30, Deferred tax liabilities: 1997 1996 ---- ---- Gain recognized in financial statements deferred for income tax purposes $2,234,000 $2,290,000 Tax depreciation in excess of book depreciation 272,000 261,000 Tax amortization in excess of book amortization 389,000 282,000 Other 349,500 - Expenses deductible for tax purposes but deferred for financial reporting purposes - 8,000 ---------- ---------- Total deferred tax liabilities $3,244,500 $2,841,000 ========== ========== November 30, Deferred tax assets: 1997 1996 ---- ---- Allowance for doubtful accounts $1,443,000 $ 891,000 Expenses deductible for financial reporting purposes but deferred for tax reporting purposes 275,000 15,000 Net operating loss carryover 1,741,000 1,913,000 ---------- ---------- Total deferred tax assets 3,265,000 2,819,000 Valuation allowance (563,000) (778,000) ---------- ---------- Net deferred tax assets $2,896,000 $2,041,000 ========== ========== At November 30, 1997, the Company had a loss for federal income tax reporting purposes of $3,238,000 and $9,345,000 for state income tax purposes. Net operating losses for federal tax purposes will begin to expire in 2010. Net operating losses for state tax purposes will expire at various dates through 2002. F-13 6. Long-Term Debt -------------- November 30 Long-term obligations consist of: 1997 1996 ---- ---- Term loan $1,576,000 $3,631,250 Revolving credit line 2,774,620 2,774,620 7% unsecured notes payable, other 5,057 - Capital lease obligations 373,895 543,638 ---------- ---------- 4,729,572 6,949,508 Less: Current maturities (872,616) (2,230,715) ---------- ---------- $3,856,956 $4,718,793 ========== ========== During 1996 the Company and its primary lender, Chase Manhattan Bank, instituted litigation, each claiming that the other party violated the terms of the credit agreement. As a result, the debt was declared in default. In February, 1997, the litigation was settled and all outstanding borrowings with Chase were restructured and become due on December 31, 1997. The Company and Chase agreed that all alleged defaults under the previous agreements were permanently waived and the Company would use its best efforts to replace Chase during 1997. A suitable replacement was not found during 1997, and the Company and Chase have agreed to extend their current banking relationship through December 31, 1998 subject to satisfactory documentation of the terms and conditions as agreed. The Company will continue to use its best efforts to replace Chase prior to December, 1998. The Company agreed to make principal payments against the term loan throughout 1998. The payments, which total $700,000, will be made monthly during the year. As of February 27, 1998, $50,000 had already been paid to Chase. The revolving credit facility remained at $2,774,600 at December 31,1997, with no additional borrowings or repayments scheduled during fiscal 1998. The capital leases are in the process of being refinanced through another lender. Interest rates on all outstanding debt will remain at the same rate as before the restructuring. The term loan interest rate is LIBOR plus 3% or the Bank's prime rate plus 1/2%. The revolving credit facility carries an interest rate of LIBOR plus 2 1/2% or the Bank's prime rate of interest. The Company has the right to choose which rate is to be utilized on a periodic basis. The 30 day LIBOR rate at November 30, 1997 was 5.6875%. As of November 30, 1997, the Company was in compliance with or has received a waiver on all of the debt covenants relating to both the term loan and the revolving credit facility. The long-term debt is secured by substantially all of the assets of the Company. The Company is restricted by its primary lender from paying dividends on its common stock. Aggregate maturities on long-term debt for the next five years, exclusive of obligations under capital leases, are approximately $705,057, $3,650,620, $0, $0 and $0 respectively. The carrying value of the long-term debt approximates its fair value. F-14 7. Capital Leases -------------- Capital lease obligations are certain equipment leases which expire in October, 2000. Future payments under capitalized leases together with the present value, calculated at the respective leases' implicit interest rate of approximately 10.5% to 14.3% at their inception, as of May 1, 1995 and May 1, 1997 are as follows: Year ending November 30, 1998 $201,089 Year ending November 30, 1999 182,015 Year ending November 30, 2000 39,729 -------- Total minimum lease payments 422,833 Less amount representing interest (48,938) -------- Present value of long-term obligations under capital leases $373,895 ======== 8. Leases ------ The Company leases office space for training center locations and administration purposes under various noncancelable operating leases at two different locations. All of the leases have options to renew. Future minimum rental payments under the leases are $1,382,000 in 1998; $1,106,000 in 1999; $913,000 in 2000; $638,000 in 2001; $588,000 in 2002 and $2,808,000 thereafter. Rent expense for the years ended November 30, 1997, 1996 and 1995 was $1,527,000, $1,263,000 and $1,394,000, respectively. 9. Commitments and Contingencies ----------------------------- The Company is a defendant to several other lawsuits arising out of its normal business activities. In the opinion of management, after consulting with counsel, the Company believes any adverse effect resulting from such actions will not be material to its results of operations or financial position. In November, 1996 the Company settled its lawsuit against the previous owners of Landscape Maintenance Companies as reported in last year's Form 10-K. Subsequent to the settlement, in open court, the parties disputed several of the settlement terms. The parties remain in the process of resolving that dispute. During fiscal 1995, the Company entered into an amended employment agreement with the President. The term of the agreement is five years and calls for a base salary of $195,000 which began on December 1, 1995 with annual salary increases of $25,000 in the second and third years and to remain at $245,000 for the last two years of the contract. Also included in the agreement are future incentives based on Company performance. There is a bonus opportunity of 5% on the first $500,000 of consolidated income before taxes and bonus and 3% above $500,000. In conjunction with this contract, the President agreed to a covenant not to compete with the Company during his employment and for a period of one year after his employment with the Company has terminated. For the year ended November 30, 1996 the President waived his right to receive any performance bonus earned and in exchange the contract was extended to 2001 at the same terms. The Company also has an amended employment agreement with its Executive Vice President and Chief Operating Officer. The term of the agreement is five years and calls for a base salary of $120,000 for fiscal 1996 and increases F-15 of $15,000 per year for the next four years. Also included in the agreement are future incentives based on the Company's profitability. A bonus of $30,000 will be earned if the consolidated income before income taxes and bonus of the Company exceeds $1,000,000. The bonus opportunity applies to each of the five years of the contract. For the year ended November 30, 1996 the Executive Vice President waived his right to receive any performance bonus earned and in exchange the contract was extended to 2001 at the same terms. 10. Defined Contribution Plan -------------------------- In 1993, the Company established a 401(k) Plan for its participating employees to supplement their retirement income. Participation in the plan is open to all employees who have completed one year of service (twelve consecutive months). One thousand hours of service is required during the first year of service. By payroll deduction, employees can contribute to the Plan from 1% to 15% of their total gross compensation. The Company matches 50% of the first 8% of employee salary deferrals. This match is made in restricted Company common stock based upon the value of the stock each December 31st. The employee match is completely discretionary and can be changed by the employer in subsequent years to be higher or lower. The value of the employee match expensed in 1997, 1996 and 1995 was $85,483, $81,940 and $4,793, respectively. 11. Stock Options and Awards ------------------------- In 1995, the Company established its 1995 Non-Qualified Stock Option Plan. Under the terms of the plan, 1,750,000 options to purchase shares of the Company's common stock may be granted. During fiscal 1997, fiscal 1996 and fiscal 1995, the Company issued 551,500, 428,500 and 146,000 stock options under this plan to employees and consultants. The options were issued at fair market value on the dates of grant and vest immediately. Options issued under this plan totaling 20,000, 0 and 0 were forfeited during fiscal 1997, 1996 and 1995, respectively. Through November 30, 1997, 1996 and 1995 no shares have been exercised or expired. Total optioned shares under the plan at November 30, 1997, 1996 and 1995 were 1,106,000, 574,500 and 146,000, respectively. The options outstanding at November 30, 1997 have exercise prices ranging from $.75 to $3.00. Upon establishing the 1995 Non-Qualified Stock Option Plan, the Company ceased issuing options under its 1987 Non-Qualified Stock Option Plan. During 1995, the Company issued a total of 49,026 stock options under this plan to employees and consultants. The options were issued at fair market value on the dates of grant. Options totaling 91,700, 757,324 and 0 expired or were forfeited during fiscal 1997, 1996 and 1995, respectively. Options exercised during fiscal 1997, fiscal 1996 and fiscal 1995 totaled 0, 120,000 and 397,000, respectively. Total optioned shares under the 1987 Non-Qualified Stock Option Plan at November 30, 1997, 1996 and 1995 were 496,726, 588,726 and 1,406,050, respectively. The options outstanding at November 30, 1997 have exercise prices ranging from $2.00 to $5.75 per share. All of these options were available for exercise at November 30, 1997; however, none were exercised. There were no charges against results of operations for stock options issued to non-employees for 1997 and 1996 since, in the opinion of management, the value of these options was insignificant. F-16 12. Stockholders' Equity --------------------- In August, 1997, the Company completed a private placement of 1,000,000 shares of Class D, 8% Convertible Preferred Stock at a price of $1.00 per share. The Preferred Stock is convertible into Common Stock of the Company at a 20% discount from the market price. Imputed dividends have been accrued in the amount of $250,000 for the year ended November 30, 1997. The preferred shares were available for conversion in November, 1997. An investment banking firm that arranged this private placement received 300,000 warrants as partial consideration. The warrants are exercisable at $.98 and expire in 2002. None of the warrants have been exercised. The Preferred Shares pay a dividend of 8% per annum, payable in its entirety upon conversion, either in cash or common stock at the Company's option. Subsequent to November 30, 1997 all preferred stock and accrued dividends, were converted into 1,842,000 shares of Canterbury common stock. During 1997, the Company received net proceeds of $634,782 from private placements of its common stock sold to investors at prices ranging from $.47 of $1.00 per share. During 1996, the Company received net proceeds of $1,468,153 from a private placement of its common stock sold to investors at prices ranging from $1.41 to $1.50 per share. Also during the year, all outstanding Class C Convertible preferred stock was converted into 572,000 shares of Company common stock. Also during 1995, the Company received net proceeds of $1,361,000 from a private placement of its common stock sold to investors at prices ranging from $.80 to $2.06 per share. 13. Related Party Transactions -------------------------- In 1993, the Company sold previously charged off accounts receivable to an unaffiliated third party for $62,000 in cash and a secured, non-recourse, interest bearing note of $560,000. In 1997, the third party maker of the note defaulted and the collateral was not available to satisfy the unpaid balance. The Company, in its collection effort, has thus far received as replacement collateral, common stock in a public company. Certain officers and directors of Canterbury have a significant ownership interest in this public company. These officers and directors became affiliated with the maker of the note in 1997 as a result of their ownership in the public company that the note maker has recently offered as collateral. Management of the Company has estimated the current value of the collateral received to be $110,000 and has charged $450,000 as other expenses in continuing operations in fiscal 1997 representing the difference between the approximate current value of the collateral and the unpaid balance of the note receivable. The Company is attempting to obtain additional collateral or payments to reduce the collateral shortfall. During fiscal 1997, the Company received shares representing approximately a 5% interest in the public company for services rendered. In 1996, the Company paid $120,000 and issued 150,000 stock options with an option price of $1.03 per share to a related party for legal and consulting fees provided. During November, 1996 the Company allowed corporate counsel to exercise 50,000 stock options for a note receivable. At November 30, 1997 and 1996, the total notes receivable plus accrued interest for corporate officers, corporate counsel and certain consultants totaled $342,000 and $494,000, respectively. The notes are collateralized by the common stock. Interest rates range from 6% to 7%. During 1997 the Company paid corporate counsel a $100,000 facilitation fee in connection with the private placement of the Class D, 8% convertible preferred stock. F-17 15. Advertising ------------ The Company expenses advertising as incurred. Total advertising expenses included in the results of operations were $373,000, $425,000 and $432,000 for 1997, 1996 and 1995, respectively. F-18 EX-21.1 2 SUBSIDIARIES OF THE REGISTRANT CANTERBURY INFORMATION TECHNOLOGY, INC. -- 10K 1997 EXHIBIT LIST OF SUBSIDIARIES OF CANTERBURY INFORMATION TECHNOLOGY, INC. Canterbury Career Schools, Inc. (inactive) Canterbury Career Schools of Sacramento, Inc. (inactive) Canterbury Career Schools of Pittsburgh, Inc. (inactive) Canterbury Management Group, Inc. Scholastic Partners, Inc. (inactive) Star Label Products, Inc. (shell) Clark Training Corp. (inactive) MSI/Canterbury Corp. Empire Career Center, Inc. (inactive) Canterbury Career Schools of Lauderdale (inactive) CALC/Canterbury Corp. Prosoft/Canterbury Corp. Nevada Training Corp. (inactive) Vocational Education Corp. d/b/a American Trucking Academy (inactive) ATM/Canterbury Corp. EX-27 3 FINANCIAL DATA SCHEDULE
5 0000794927 CANTERBURY INFORMATION TECHNOLOGY, INC. 1 NOV-30-1997 DEC-01-1996 NOV-30-1997 12-MOS 295,936 0 0 0 0 5,719,327 5,899,277 3,396,000 25,787,101 3,081,246 0 0 1,043,841 16,251 14,544,307 25,787,101 12,423,452 12,423,452 7,104,803 6,350,965 (89,222) 0 490,552 (1,433,646) (501,776) (931,870) (1,536,047) 0 0 (2,467,917) (0.17) (0.17)
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