0001058809-01-500038.txt : 20011010
0001058809-01-500038.hdr.sgml : 20011010
ACCESSION NUMBER: 0001058809-01-500038
CONFORMED SUBMISSION TYPE: DEF 14A
PUBLIC DOCUMENT COUNT: 3
CONFORMED PERIOD OF REPORT: 20011024
FILED AS OF DATE: 20011004
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: CANTERBURY CONSULTING GROUP 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: DEF 14A
SEC ACT: 1934 Act
SEC FILE NUMBER: 000-15588
FILM NUMBER: 1751968
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 INFORMATION TECHNOLOGY INC
DATE OF NAME CHANGE: 19970620
DEF 14A
1
ccgprxy01e.txt
PROXY/SHAREHOLDERS LETTER FOR OCTOBER 24, 2001 ANNUAL MEETING
Canterbury Consulting Group, Inc.
1600 Medford Plaza, 128 Route 70
Medford, New Jersey 08055
Phone: 609-953-0044 * 800-873-2040
Fax: 609-953-0062
Dear Stockholder:
You are cordially invited to attend the Annual Meeting of Stockholders
of Canterbury Consulting Group, Inc. (formerly Canterbury Information
Technology, Inc.) to be held on October 24, 2001, 2001, at 10:00 a.m.
(EST), at The Mansion on Main Street, Plaza 3000, Voorhees, New Jersey.
At this meeting, you will be asked to consider the following
propositions:
1. To elect seven (7) Directors for the ensuing year;
2. To ratify the appointment of Baratz & Associates, P.A., as the Company's
independent public accountants for the fiscal year ending November 30, 2001;
3. To transact any other business as may properly be brought before the meeting.
Stockholders of record as of the close of business on August 31, 2001
(record date) are eligible to vote at this Annual Meeting of
Stockholders. Stockholders unable to attend the meeting in person are
asked to vote, sign, date and promptly return the enclosed proxy in the
enclosed self-addressed envelope, which does not require any United
States postage. If you attend the meeting, you may revoke your proxy
and vote in person.
By order of the Board of Directors,
By:/s/ Jean Z. Pikus
Jean Z. Pikus
Vice President and Secretary
The Company's annual report to the Securities and Exchange Commission
on Form 10-K and other public filings such as interim financial
statements, Proxy Statements and Annual Reports to Stockholders are
available on the internet directly from the Securities and Exchange
Commission's website (www.sec.gov) or upon written request to The
Canterbury Investor Relations Department at the address listed below.
Canterbury Consulting Group, Inc.
1600 Medford Plaza, 128 Route 70
Medford, New Jersey 08055
P R O X Y S T A T E M E N T
Proxies, enclosed with this Proxy Statement, are requested by the Board of
Directors of Canterbury Consulting Group, Inc. (formerly Canterbury Information
Technology, Inc.) for the Annual Meeting of Stockholders. The meeting is to be
held on October 24, 2001 at 10:00 a.m. at The Mansion on Main Street, Plaza
3000, Voorhees, New Jersey.
Stockholders of record as of the close of business on August 31, 2001 will
be entitled to vote at the meeting and any adjournment of that meeting. As of
that date, 12,418,549 shares of common stock of Canterbury were outstanding and
entitled to one vote each. Execution of a proxy will not in any way affect a
stockholder's right to attend the meeting and vote in person. Any shareholder
submitting a proxy has the right to revoke it at any time before it is
exercised.
Any proxies that are sent in by stockholders may be revoked before October
24, 2001, at 10:00 a.m. by mail or other deliveries in writing, or by voice vote
if the shareholder attends the Annual Meeting in person.
The people named as attorneys in the proxies are either Officers or
Directors of Canterbury. With respect to the election of a Board of Directors,
shares represented by proxies in the enclosed form, which are received, will be
voted as explained below under the heading Election of Directors. Where a
choice has been specified on the proxy with respect to a proposal, the shares
represented by the proxy will be voted in accordance with the choice selected
and will be votes FOR that proposal if no specification is indicated.
Under Pennsylvania law, the presence of stockholders entitled to cast at
least a majority of the votes that all stockholders are entitled to cast on a
particular matter to be acted upon at a meeting, constitutes a quorum for
purposes of consideration and action on a matter. Only stockholders indicating
affirmative or negative decision on a matter are treated as voting.
Abstentions, broker non-votes or mere absence or failure to vote is not
equivalent to a negative decision and will not count toward a quorum, and if a
quorum is otherwise present, effect the outcome of a vote. A broker non-vote
occurs when a broker submits a proxy but does not have authority to vote a
customer's shares on one or more matters. The affirmative vote of the holders
of a majority of shares of common stock entitled to vote at the annual meeting
is required for approval of each of the actions proposed to be taken at the
Annual Meeting. If a stockholders' meeting is called for the election of
Directors and is adjourned for lack of a quorum and another stockholders'
meeting is called, those stockholders entitled to vote who attend the adjourned
meeting, although less than a quorum as fixed under Pennsylvania law or in the
by-laws, shall be a quorum for the purpose of electing Directors. If a meeting
called to vote upon any other matter than the election of Directors has been
adjourned for at least 15 days because of the absence of a quorum, those
stockholders entitled to vote who attend such meeting, although less than a
quorum as fixed under Pennsylvania law or in the by-laws shall still constitute
a quorum for purpose of acting upon any matter set forth in the notice of
meeting. If the notice actually states that those stockholders who attend the
adjourned meeting shall nevertheless constitute a quorum for the purpose upon
acting on the matter, then the vote would be binding.
Canterbury Consulting Group, Inc. -- Proxy Statement
Canterbury is not aware of any other matters to be presented at the
meeting. If any other matters are presented at the meeting upon which it is
proper to take a vote, shares represented by all proxies received will be voted
by and in the judgment of the persons named as proxies.
An Annual Report containing the Form 10-K for the fiscal year ended
November 30, 2000 as filed with the SEC including complete financial statements
audited by Ernst & Young, LLP is enclosed with, but not as a part of, this Proxy
Statement. Canterbury's Form 10-Q report for the period ended May 31, 2001 are
available upon request from the Company's Investor Relations Department or
online at www.sec.gov.
The date that this Proxy Statement and proxy material are being sent to
the stockholders is on or about September 26, 2001.
Proposal No. 1 - ELECTION OF DIRECTORS
--------------------------------------
Seven Directors are to be elected at the meeting, each to serve until the
next Annual Meeting and until his or her successor shall have been elected and
qualified. Each of the nominees named in the following pages is presently a
member of the Board of Directors. If at the time of election any of the
nominees are unable or unwilling to serve, for any reason not presently known or
contemplated, the persons named on the proxy card will have discretionary
authority to vote for the balance of those named and, if they deem it advisable,
for a substitute nominee.
NOMINEES FOR DIRECTORS
----------------------
Director
Name Age Since Principal Occupation
---- --- ----- --------------------
Stanton M. Pikus(1) 61 1981 Chairman of the Board of Directors
Kevin J. McAndrew 43 1990 President, Chief Executive Officer,
Chief Financial Officer, and Treasurer
Jean Zwerlein Pikus 48 1984 Vice President - Operations, Secretary
Alan B. Manin 64 1981 President, Atlantis, Inc.
Stephen M. Vineberg(2)(3) 60 1988 President, CMQ, Inc.
Paul L. Shapiro(2)(3) 50 1992 Manager, McKesson Drug Co.
Frank A. Cappiello(4) 75 1995 President, McCullough, Andrews &
Cappiello, Inc.
(1) President and Chief Executive Officer from 1981 until June 1, 2001.
(2) Member of the Compensation Committee of the Board of Directors.
(3) Member of the Audit Committee of the Board of Directors.
(4) Chairman and Member of the Audit and Compensation Committees.
BIOGRAPHIES OF THE NOMINEES FOR DIRECTORS
STANTON M. PIKUS, Chairman of the Board of Directors, was a founder of
Canterbury (1981). In June 2001 he resigned as President and Chief Executive
Officer of Canterbury Consulting Group, Inc. but remains an employee of the
Company. He graduated from The Wharton School of the University of Pennsylvania
(B.S., Economics and Accounting) in 1962. Mr. Pikus is also a Director of
2
Canterbury Consulting Group, Inc. -- Proxy Statement
e*machinery.net, inc., a public company traded on the OTC Bulletin Board. From
1968 until 1984 he worked full-time as President and majority stockholder of
Brown, Bailey and Pikus, Inc., a mergers and acquisitions consulting firm that
had completed more than twenty transactions. In addition, Mr. Pikus has been
retained in the past by various small to medium-sized public and private
companies in the capacity of an independent financial consultant. Mr. Pikus is
the spouse of Jean Z. Pikus, who is a Director, a Vice President of Operations
and the Secretary of Canterbury Consulting Group, Inc.
KEVIN J. McANDREW, President, Chief Executive Officer, Chief Financial
Officer and Treasurer as of June 1, 2001. He was Chief Operating Officer since
December, 1993; Executive Vice President and Chief Financial Officer of
Canterbury since June 21, 1987; Treasurer since January, 1988; and Director
since 1990. Mr. McAndrew is also a Director, Secretary and Chief Financial
Officer of e*machinery.net, inc., a public company traded on the OTC Bulletin
Board. 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 Human Resources and Operations,
Secretary and Director since December 1, 1984. She was employed by J. B.
Lippincott Company, a publishing company, from 1974 to 1983, where she was
Assistant Personnel Manager and also created 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
spouse of Stanton M. Pikus, who is the Chairman of the Board of Directors and an
employee of Canterbury Consulting Group, Inc.
ALAN B. MANIN, Founder and a Director of Canterbury since its inception in
1981. He is currently the President of Atlantis, Inc., a company which provides
motivational training to employees of Fortune 1000 companies. He is a graduate
of Temple University (B.S., 1960; M.Ed., 1966). He was a 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); and President, Chief Operating
Officer and founder of Health Careers Academy, a federally accredited (National
Association of Trade and Technical Schools) vocational school (1974-1979).
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, 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 16 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.
3
Canterbury Consulting Group, Inc. -- Proxy Statement
FRANK A. CAPPIELLO, a Director since 1995, is President of the investment
advisory firm, McCullough, Andrews & Cappiello, Inc. He is also the author of
several books and a regular panelist on "Wall $treet Week with Louis Rukeyser",
a regular quest on CNN's "Money Line," CNN Financial's "Market Sweep," a
frequent guest on CNBC, and a monthly columnist on the website of CBS's
"MarketWatch." Until their sale, he was the Chairman of three no-load mutual
funds. 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. Before 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. Mr. Cappiello is also
a Director of e*machinery.net, inc., a public company traded on the OTC Bulletin
Board.
MANAGEMENT INDEBTEDNESS AND RELATED TRANSACTIONS
------------------------------------------------
Please be advised that the present Officers and Directors have the
following relationships and related transactions with the Company.
Pursuant to the April 10, 2001 Board of Directors Meeting, the Registrant
sold 575,000 restricted shares of Canterbury common stock to the following
Officers and Directors as an incentive to continue and increase their efforts on
behalf of the Company:
Stanton M. Pikus 200,000 Alan Manin 25,000
Kevin J. McAndrew 150,000 Paul Shapiro 25,000
Jean Z. Pikus 100,000 Stephen Vineberg 25,000
Frank A. Cappiello 50,000
These shares of restricted common stock were purchased at the National
Market Nasdaq closing price at the time of purchase with interest bearing,
recourse notes made payable to the Company. The notes carry an interest rate of
4.0% and are due and payable on or before April, 2006. The notes and accrued
interest are collateralized by the shares being issued. Interest will be
accrued and paid quarterly. Each recipient also has granted the Company a 15-
day right of first refusal, in any sale of these shares.
Pursuant to the May 16, 2001 Board of Directors Meeting, the Registrant
sold 750,000 restricted shares of Canterbury common stock to the following
Officers and Directors for various services:
Stanton M. Pikus 250,000 Stephen Vineberg 50,000
Kevin J. McAndrew 150,000 Paul Shapiro 50,000
Frank A. Cappiello 135,000 Alan Manin 40,000
Jean Z. Pikus 75,000
These shares of restricted common stock were purchased at the National
Market Nasdaq closing price at the time of purchase with interest bearing,
recourse notes made payable to the Company. The notes carry an interest rate of
4.0% and are due and payable on or before May, 2006. The notes and accrued
interest are collateralized by the shares being issued.
4
Canterbury Consulting Group, Inc. -- Proxy Statement
Interest will be accrued and paid quarterly. Each recipient also has
granted the Company a 15-day right of first refusal, in any sale of these
shares.
The principal and interest for both sales may be paid in cash or the
transfer of stock valued at 100% of the then current market price of any
publicly traded company. There is no prepayment penalty on either principal or
interest payments.
For information regarding stock option grants to Directors and Officers
please refer to the sections Option Grants and Directors' Remuneration.
EXECUTIVE CASH COMPENSATION
---------------------------
The following table is a summary of cash compensation paid by Canterbury
for services rendered in fiscal 1998, 1999 and 2000 to the Chief Executive
Officer and each of the other four most highly-compensated Officers of
Canterbury who received at least $100,000 in total annual compensation.
SUMMARY COMPENSATION TABLE
Long-Term Compensation
Annual Compensation Award Payouts
------------------------------ -----------------------------------------------------
Other Annual Restricted Securities LTIP All Other
Name and Salary Bonus Compensation Stock Awards Underlying Payouts Compensation
Principal Position (1) Year ($) ($) ($) ($) Options/SAR(#) ($) ($)
----------------------------------------------------------------------------------------------------------------------
Stanton M. Pikus(1) 2000 $210,000 $- $- $- 100,000 $- $-
1999 195,000 - - - 240,000 - -
1998 202,500 - - - 50,000 - -
Kevin J. McAndrew(2) 2000 $149,000 $- $- $- 70,000 $- $-
President , Chief 1999 135,000 - - - 180,000 - -
Executive, and Chief 1998 127,788 - - - 35,000 - -
Financial Officer
(1) Prior to June 1, 2001 Stanton M. Pikus held the positions of President and
Chief Executive Officer.
(2) Prior to June 1, 2001, Kevin J. McAndrew held the positions of Executive
Vice President, Chief Operating Officer and Chief Financial Officer.
No other Executive Officers received in excess of $100,000 in total annual
compensation for the three-year period.
OPTION GRANTS
-------------
The following Executive Officers were granted five-year stock options
during fiscal 2000 from the 1995 Stock Option Plan.
5
Canterbury Consulting Group, Inc. -- Proxy Statement
Number of Percentage of
Securities Total Options
Underlying Granted to Grant Date
Options Employees in Exercise Expiration Present
Name Granted Fiscal Year Price Date Value
---- ------- ----------- ----- ---- -----
Stanton M. Pikus 25,000 $3.00 08/02/05 34,250(a)
75,000* 39% $2.78* 11/28/05* 95,250(a)
Kevin J. McAndrew 20,000 $3.00 08/02/05 27,400(a)
50,000* 28% $2.78* 11/28/05* 63,500(a)
Jean Z. Pikus 15,000 $3.00 08/02/05 20,550(a)
25,000* 16% $2.78* 11/28/05* 31,750(a)
* These five-year stock option grants are part of the 1995 Stock Option Plan
as Incentive Option Awards.
(a) Option values reflect Black-Scholes model output for options. The
assumptions used in the model were expected volatility of .693, risk free
rate of return of 5.8%, dividend yield of 0%, and time to exercise of 2.5
years.
AGGREGATED OPTION EXERCISES
AND FISCAL YEAR-END 2000 OPTION VALUES
--------------------------------------
The following table provides information on option exercises in fiscal
2000 by the Executive Officers and on the Executive Officers' unexercised
options at November 30, 2000. Included are options granted under the 1995 Stock
Incentive Plan.
+--------------------------------------------------------------------------------------------------------+
| Number of Securities Value of Unexercised |
| Shares Underlying Unexercised In-The-Money Options |
| Acquired on Value Options at Year-End at Fiscal Year-End |
| Exercise Realized 2000(#) 2000(#) |
| Name (#) ($) Exercisable Unexercisable Exercisable Unexercisable |
|---------------------+------------+----------+-------------+--------------+------------+----------------+
| | | | | | | |
| Stanton M. Pikus | 0 | - | 440,001 | 0 | $925,701 | 0 |
|---------------------+------------+----------+-------------+--------------+------------+----------------+
| Kevin J. McAndrew | 0 | - | 326,668 | 0 | $674,193 | 0 |
|---------------------+------------+----------+-------------+--------------+------------+----------------+
| Jean Z. Pikus | 0 | - | 191,335 | 0 | $395,095 | 0 |
+---------------------+------------+----------+-------------+--------------+------------+----------------+
Option holders have five years from the date of grant to exercise any or
all of their options, and upon leaving Canterbury the option holders must
exercise within 30 days or lose the options. These options exercise into
restricted shares of company stock.
EMPLOYMENT CONTRACTS
--------------------
The Company executed new employment agreements dated June 1, 2001 between
the Company and Mr. McAndrew and the Company and Mr. Pikus, reflecting their new
employment arrangements. Each employment agreement is for a period of five
years. Each sets forth various services to be performed. Each employee shall
receive an annual salary of $245,000 with annual cost of living increases tied
6
Canterbury Consulting Group, Inc. -- Proxy Statement
to a nationally recognized index, as set forth by the Board of Directors from
time to time. These employment agreements supercede and replace the current
employment agreements, including the cancellation of bonus opportunities which
were to be payable through December 1, 2003. These agreements also include a
non-competition prohibition for a period of three years after employment has
been terminated.
COMMITTEES OF THE BOARD AND MEETING ATTENDANCE
----------------------------------------------
The Board has established an Audit Committee, a Stock Option Committee and
a Compensation Committee. All three committees are currently composed entirely
of Independent Directors who are not Officers of Canterbury (Frank A. Cappiello,
Paul Shapiro and Stephen Vineberg).
The Company had 16 meetings of the Board of Directors during the last full
fiscal year. There was no incumbent who, during the last full fiscal year,
attended fewer than 100% of said meetings.
The Stock Option Committee, which is part of the Compensation Committee,
met 5 times during the last fiscal year. The Audit Committee met 4 times during
the last fiscal year, their charter is set forth in Appendix A.
Report of the Compensation Committee on Executive Compensation
Overview and Philosophy
The Compensation Committee is responsible for establishing the compensation of,
and the compensation policies with respect to, the Company's executive officers,
including the Company's Chief Executive Officer, and administering certain of
the Company's stock benefit plans. The Compensation Committee is composed of
three Independent Directors - Frank Cappiello (Chairman), Paul Shapiro and
Stephen Vineberg.
The objectives of the Company's executive compensation program are to:
* Attract and retain key executives critical to the long-term success of
the Company;
* Align the interests of executive officers with the interests of
stockholders and the success of the Company; and
* Recognize and reward individual performance and responsibility.
Executive Compensation Program
General. The Company's executive compensation program consists of base salary
and long-term incentive compensation in the form of stock options. In addition,
executive officers participate in benefit programs that are available to the
Company's employees, generally. These benefit programs include medical benefits
and the 401(k) Plan.
Base Compensation. Mr. Pikus, the Company's President and Chief Executive
Officer during fiscal 2000 and Mr. McAndrew, the Company's Executive Vice
President and Chief Financial Officer during fiscal 2000, had multi-year
7
Canterbury Consulting Group, Inc. -- Proxy Statement
employment agreements with the Company. During 2000, compensation for Mr. Pikus
and Mr. McAndrew were set within the range of compensation for chief executives
with comparable qualifications, experience, length of service, and
responsibilities at other companies in the same or similar businesses, based on
the determination of and approved by the Compensation Committee.
During the Year 2000, compensation for other executive officers was set within
the range of compensation for executives with comparable qualifications,
experience and responsibilities at other companies in the same or similar
businesses, based on the determination of management. In addition, base
compensation for each executive officer was determined on a case by case basis
in light of each individual's contribution to the Company as a whole, including
the ability to motivate others, develop the necessary skills to grow as the
Company matures, recognize and pursue new business opportunities and initiate
programs to enhance the Company's growth and success.
Long-Term Incentive Compensation. The Company provides long-term incentives to
its executive officers and key employees in the form of stock options and/or the
opportunity to purchase restricted common stock of the Company by recourse
promissory notes. The objectives of this program are to align executive and
stockholder long-term interests by creating a strong and direct link between
executive compensation and stockholder return, and to enable executives to
develop and maintain a significant, long-term stock ownership position in the
common stock. Stock options are granted at an option exercise price that is
determined by the Board as of the date of grant. However, the option exercise
price nor the stock sale price may not be less than the fair market value of the
common stock at the time the option is granted (or, in the case of incentive
stock options granted to optionees holding more than 10% of the total combined
voting power of all classes of stock of the Company or any parent or subsidiary
corporation, no less than 110% of the fair market value of the common stock at
the time the option is granted). Accordingly, these stock options will only have
value if the Company's stock price increases above the fair market value of the
common stock at the time they were granted. In selecting executives eligible to
receive option grants and determining the amount and frequency of such grants,
the Company evaluates a variety of factors, including (i) the job level of the
executive, (ii) option grants awarded by competitors to executives at comparable
job levels and (iii) past, current and prospective service to the Company
rendered, or to be rendered, by the executive. Please refer to the table
labeled Option Granted to see options granted in fiscal 2000.
Submitted by the Compensation Committee of the Board of Directors of Canterbury
Consulting Group, Inc.
Frank Cappiello, Chairman
Paul Shapiro
Stephen Vineberg
Report of the Audit Committee of the Board of Directors
The Audit Committee reviewed the Company's audited financial statements for the
fiscal year ended November 30, 2000 and discussed these financial statements
with the Company's management. Management is responsible for the Company's
8
Canterbury Consulting Group, Inc. -- Proxy Statement
internal controls and the financial reporting process. The Company's independent
accountants are responsible for performing an independent audit of the Company's
financial statements in accordance with generally accepted accounting principles
and to issue a report on those financial statements. The Audit Committee is
responsible for monitoring and overseeing these processes. As appropriate, the
Audit Committee reviews and evaluates, and discusses with the Company's
management, internal accounting, financial and auditing personnel and the
independent accountants, the following:
* the plan for, and the independent accountants' report on, each audit of
the Company's financial statements;
* the Company's financial disclosure documents, including all financial
statements and reports filed with the SEC or sent to stockholders;
* changes in the Company's accounting practices, principles, controls or
methodologies;
* significant developments or changes in accounting rules applicable to
the Company; and
* the adequacy of the Company's internal controls and accounting,
financial and auditing personnel.
The Audit Committee reviewed and discussed the audited financial statements and
the matters required by Statement on Auditing Standards 61 (Communication with
Audit Committees) with Ernst & Young. LLP, the Company's independent auditors at
that time. SAS 61 requires the Company's independent auditors to discuss with
the Company's Audit Committee, among other things, the following:
* methods to account for significant unusual transactions;
* the effect of significant accounting policies in controversial or
emerging areas for which there is a lack of authoritative guidance or
consensus;
* the process used by management in formulating particularly sensitive
accounting estimates and the basis for the accountants' conclusions
regarding the reasonableness of those estimates; and
* disagreements with management over the application of accounting
principles, the basis for management's accounting estimates and the
disclosures in the financial statements.
The Company's independent auditors also provided the Audit Committee with the
written disclosures and the letter required by Independence Standards Board
Standard No. 1 (Independence Discussions with Audit Committees). Independence
Standards Board Standard No. 1 requires auditors annually to disclose in writing
all relationships that in the auditors' professional opinion may reasonably be
thought to bear on independence, confirm their perceived independence and engage
in a discussion of independence. In addition, the Audit Committee discussed with
the independent auditors their independence from the Company. The Audit
Committee also considered whether the independent auditors' provision of certain
other, non-audit related services to the Company was compatible with maintaining
such auditors' independence.
Based on its discussions with management and the independent auditors, and its
review of the representations and information provided by management and the
independent auditors, the Audit Committee recommended to the Board that the
audited financial statements be included in the Company's Annual Report on Form
10-K for the year ended November 30, 2000.
9
Canterbury Consulting Group, Inc. -- Proxy Statement
Submitted by the Audit Committee of the Board of Directors of Canterbury
Consulting Group, Inc.
Frank Cappiello, Chairman
Paul Shapiro
Stephen Vineberg
DIRECTORS' REMUNERATION
-----------------------
Directors receive no cash compensation for services as Directors. The
following Directors received five-year stock options at market value during the
2000 fiscal year.
Name Stock Option Amount Stock Option Price
---- ------------------- ------------------
Stanton M. Pikus* 25,000 $3.00
75,000** $2.78**
Kevin J. McAndrew* 20,000 $3.00
50,000** $2.78**
Jean Z. Pikus* 15,000 $3.00
25,000** $2.78**
Frank A. Cappiello 12,500 $3.00
Alan Manin 5,000 $3.00
Paul Shapiro 5,000 $3.00
Stephen Vineberg 5,000 $3.00
* The Executive Officers of Canterbury Consulting Group, Inc. stock options
have been previously noted in the table Option Grants on page 6.
** As previously noted, these five-year stock option grants are part of the 1995
Stock Option Plan as Incentive Option Awards.
As a subsequent event in fiscal 2001 the following Directors received
five-year stock options at market value.
Name Stock Option Amount Stock Option Price
---- ------------------- ------------------
Stanton M. Pikus 75,000* $1.50
Kevin J. McAndrew 50,000* $1.50
Jean Z. Pikus 25,000* $1.50
* These five-year stock option grants are part of the 1995 Stock Option Plan as
Incentive Option Awards.
The Company had 16 meetings of the Board of Directors during the last full
fiscal year. There was no incumbent who, during the last full fiscal year,
attended fewer than 100% of said meetings.
PERFORMANCE GRAPH
-----------------
The following graph demonstrates a comparison of Canterbury's stockholder
returns at each fiscal year end as of November 30 with shareholder returns on a
10
Canterbury Consulting Group, Inc. -- Proxy Statement
broad market index, the Nasdaq Stock Market (US), and a industry index, Nasdaq
Computer & Data Processing Services Stock. The comparison assumes $100.00 was
invested on November 30, 1995 in the Company's common stock, the Nasdaq Stock
Market (US) and the Nasdaq Computer & Data Processing Services Stocks.
COMPARISON OF CUMULATIVE TOTAL RETURN
500 -| +-------------------------------+
| | N - Nasdaq National (US) |
450 -| | NC - Nasdaq Computer & Data |
| | Processing Services | NC
400 -| | C - Canterbury Consulting |
D | | Group, Inc. |
350 -| +-------------------------------+
O | N
300 -|
L | NC
250 -| N
A | NC
200 -|
R | N
150 -| N,NC
S | N,NC
100 -N,NC,C
|
50 -| C C C C
| C
0 -|-----------|-----------|-----------|-----------|-----------|
1995 1996 1997 1998 1999 2000
Y E A R S
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" THE ENTIRE SLATE OF
NOMINEES IN PROPOSAL NO. 1.
A majority vote of over 50% will be necessary to carry this proposal.
SECURITY OWNERSHIP OF MANAGEMENT AND PRINCIPAL STOCKHOLDERS
-----------------------------------------------------------
The following table sets forth as of August 31, 2001 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 Officer or Director individually and (iii)
all Officers and Directors of the Company as a group:
11
Canterbury Consulting Group, Inc. -- Proxy Statement
Amount and Nature of
Beneficial Ownership
Shares Shares Acquirable % Owned of
Currently Within 60 Days By Company's
Name Owned Option Exercise Shares(*)
---- ----- --------------- ---------
Stanton M. Pikus(a) 1,061,248(1) 515,001(1) 11.03%
Kevin J. McAndrew 509,637(2) 376,668(2) 6.20%
Jean Zwerlein Pikus(b) 311,473(3) 216,335(3) 3.69%
Alan B. Manin(c) 204,054(4) 73,668(4) 1.94%
Stephen M. Vineberg 108,629(5) 71,168(5) 1.26%
Paul L. Shapiro 100,667(6) 71,168(6) 1.20%
Frank A. Cappiello 321,667(7) 153,168(7) 3.32%
Patricia Bednarik(e) 10,000(8) 15,000(8) .17%
Glen Hukins(e) 15,000(9) 31,667(9) .33%
D. Kent Jordan(e) 73,425(10) 5,000(10) .55%
Gregory Lantz(e) 0(11) 31,667(11) .22%
Alan McGaffin(d)(e) 215,524(12) 30,000(12) 1.72%
Mark Vallario(e) 97,425(13) 5,000(13) .72%
----------------------- --------- --------- -----
All Officers, Directors
and 5% Stockholders as
a group (13 in number) 3,028,749 1,595,510 32.35%
========= ========= =====
(*) These percentages are calculated using total outstanding shares and total
options exercisable.
(a) Husband of Jean Z. Pikus, deemed to have beneficial interest in the
527,808 owned and acquirable within 60 days by wife and 30,335 shares of
Canterbury common stock owned in the name of Matthew Zane Pikus Trust,
which are not included in his total.
(b) Wife of Stanton M. Pikus, deemed to have beneficial interest in the
1,576,249 owned and acquirable within 60 days by husband and 30,335 shares
of Canterbury common stock owned in the name of Matthew Zane Pikus Trust,
which are not included in her total.
(c) 73,228 shares owned by Atlantis Family L.C., of which Mr. Manin is the
sole beneficiary, are included in his total.
(d) Mr. McGaffin is deemed to have beneficial interest in 5,000 stock options
exercisable at $.531 owned by wife, which are not included in his total.
(e) Officers of subsidiaries of Registrant.
Listed below is a table setting forth the stock options included in the Shares
Acquirable Within 60 Days By Option Exercise column:
12
Canterbury Consulting Group, Inc. -- Proxy Statement
(1) Stanton M. Pikus (5) Stephen Vineberg
Options Date Granted Exercise Price Options Date Granted Exercise Price
------------------------------------- -------------------------------------
16,667 10/29/96 $3.09 3,334 10/29/96 $3.09
33,334 01/13/97 $2.25 8,334 01/13/97 $2.25
50,000 05/18/98 $1.38 2,500 10/16/97 $3.56
100,000 12/04/98 $ .53 10,000 05/18/98 $1.38
40,000 08/27/99 $1.56 17,500 12/04/98 $ .53
100,000 11/04/99 $2.40 7,000 08/27/99 $1.56
25,000 08/02/00 $3.00 17,500 11/04/99 $2.40
75,000* 11/28/00* $2.78* 5,000 08/02/00 $3.00
75,000* 01/09/01* $1.50*
(2) Kevin J. McAndrew (6) Paul Shapiro
Options Date Granted Exercise Price Options Date Granted Exercise Price
------------------------------------- -------------------------------------
16,667 10/29/96 $3.09 3,334 10/29/96 $3.09
16,667 01/13/97 $2.25 8,334 01/13/97 $2.25
8,334 10/16/97 $3.56 2,500 10/16/97 $3.56
35,000 05/18/98 $1.38 10,000 05/18/98 $1.38
75,000 12/04/98 $ .53 17,500 12/04/98 $ .53
30,000 08/27/99 $1.56 7,000 08/27/99 $1.56
75,000 11/04/99 $2.40 17,500 11/04/99 $2.40
20,000 08/02/00 $3.00 5,000 08/02/00 $3.00
50,000* 11/28/00* $2.78*
50,000* 01/09/01* $1.50*
(3) Jean Z. Pikus (7) Frank A. Cappiello
Options Date Granted Exercise Price Options Date Granted Exercise Price
------------------------------------- -------------------------------------
8,334 10/29/96 $3.09 3,334 10/29/96 $3.09
8,334 01/13/97 $2.25 33,334 01/13/97 $2.25
6,667 10/16/97 $3.56 20,000 05/18/98 $1.38
20,000 05/18/98 $1.38 35,000 12/04/98 $ .53
45,000 12/04/98 $ .53 14,000 08/27/99 $1.56
18,000 08/27/99 $1.56 35,000 11/04/99 $2.40
45,000 11/04/99 $2.40 12,500 08/02/00 $3.00
15,000 08/02/00 $3.00
25,000* 11/28/00* $2.78*
25,000* 01/09/01* $1.50*
(4) Alan Manin (8) Patricia Bednarik
Options Date Granted Exercise Price Options Date Granted Exercise Price
------------------------------------- -------------------------------------
3,334 10/29/96 $3.09 15,000 01/09/01 $1.50
3,334 01/13/97 $2.25
10,000 05/18/98 $1.38
17,500 12/04/98 $ .53
7,000 08/27/99 $1.56
17,500 11/04/99 $2.40
10,000 01/11/00 $3.67
5,000 08/02/00 $3.00
13
Canterbury Consulting Group, Inc. -- Proxy Statement
Continuation of table setting forth the stock options included in the Shares
Acquirable Within 60 Days By Option Exercise column:
(9) Glen Hukins (12) Alan McGaffin
Options Date Granted Exercise Price Options Date Granted Exercise Price
------------------------------------- -------------------------------------
1,667 10/29/96 $3.09 20,000 12/04/98 $ .53
10,000 12/04/98 $ .53 10,000 11/04/99 $2.40
10,000 11/04/99 $2.40
10,000 01/09/01 $1.50
(10) D. Kent Jordan (13) Mark Vallario
Options Date Granted Exercise Price Options Date Granted Exercise Price
------------------------------------- -------------------------------------
5,000 01/09/01 $1.50 5,000 01/09/01 $1.50
(11) Gregory Lantz
Options Date Granted Exercise Price
-------------------------------------
1,667 07/24/97 $3.47
10,000 12/04/98 $ .53
10,000 11/04/99 $2.40
10,000 01/09/01 $1.50
* These five- year stock option grants are part of the 1995 Stock Option Plan as
Incentive Option Awards.
Section 16(a) of the Securities Exchange Act of 1934 requires Canterbury's
Executive Officers, Directors, and affiliates file initial reports of ownership
and reports of changes of ownership of Canterbury's common stock with the
Securities and Exchange Commission. These Executive Officers, Directors, and
affiliates are required to furnish Canterbury with copies of all Section 16(a)
forms that they file. Based solely on Canterbury's review of Securities and
Exchange Commission Forms 3, 4, and 5 submitted to Canterbury, and written
representations from these Officers, Directors, and affiliates that no other
reports were required, the Company believes that all required forms were filed
on time except for Form 4's which were required to be filed in August of 2000
by Stanton M. Pikus, Kevin J. McAndrew, Jean Z. Pikus, Frank Cappiello, Alan
Manin, Stephen Vineberg and Paul Shapiro which were filed in December of 2000
along with the corresponding Form 5.
Proposal No. 2 - RATIFICATION OF APPOINTMENT OF INDEPENDENT ACCOUNTANTS
-----------------------------------------------------------------------
The Board of Directors has appointed Baratz & Associates, P.A. (Baratz),
independent auditors, to audit the Company's consolidated financial statements
for the fiscal year ending November 30, 2001. The firm of Ernst & Young LLP
("Ernst & Young") served as independent auditors for the Company for the fiscal
year ended November 30, 2000. Ernst & Young, LLP billed the Company $122,000
in fees for professional services in connection with the audit of the Company's
financial statements, the reviews of the financial statements included in each
of the Company's Quarterly Reports on Form 10-Q and other services rendered to
14
Canterbury Consulting Group, Inc. -- Proxy Statement
the Company and its affiliates during the fiscal year ended November 31, 2000.
The Company did not engage Ernst & Young to provide advice to the Company
regarding financial information systems design and implementation during the
fiscal year ended November 30, 2000. Fees billed to the Company by Ernst &
Young during the Company's 2000 fiscal year for all other non-audit services
rendered to the Company totaled $4,500.
At the Annual Meeting, shareholders are being asked to ratify the
appointment of Baratz as the Company's independent auditors for fiscal year
2000. Representatives of Baratz are expected to be present at the Annual Meeting
and will have the opportunity to respond to appropriate questions.
On July 24, 2001, the Audit Committee of the Company's Board of Directors
recommended to the full Board of Directors that the Company engage the
independent certified public accounting firm of Baratz to audit the consolidated
financial statements of the Company for the year ending November 31, 2001
because of significant financial savings. The Board of Directors adopted the
Committee's recommendation and approved the proposed engagement of Baratz.
Accordingly, the engagement of Ernst & Young as the Company's independent
auditors was discontinued as of August 8, 2001.
During the Company's two most recent fiscal years ended November 30, 2000,
and the subsequent interim period through August 8, 2001, there were no
disagreements between the Company and Ernst & Young LLP on any matter of
accounting principles or practices, financial statement disclosure, or auditing
scope or procedures, which disagreements if not resolved to their satisfaction
would have caused them to make reference in connection with their opinion to the
subject matter of the disagreement, except for the valuation of an investment
for which the auditors believed there was evidence of permanent impairment and
therefore required adjustment in the Statement of Operations. The adjustment
was subsequently recorded.
There were no other "reportable events" described under Item 304(a)(1)(v)
of Regulation S-K occurring within the Company's two most recent fiscal years
and the subsequent interim period through August 8, 2001.
The audit reports of Ernst & Young LLP on the consolidated financial
statements of Canterbury Consulting Group, Inc. and its subsidiaries as of and
for the fiscal years ended November 30, 2000 and 1999, did not contain any
adverse opinion or disclaimer of opinion, nor were they qualified or modified as
to uncertainty, audit scope, or accounting principles.
During the Company's two most recent fiscal years ended November 30, 2000,
and the subsequent interim period through August 8, 2001, the Company did not
consult with Baratz & Associates regarding any of the matters or events set
forth in Item 304 (a)(2)(i) and (ii) of Regulation S-K.
THE BOARD OF DIRECTORS RECOMMENDS THAT YOU VOTE "FOR" PROPOSAL NO. 2.
A majority vote of over 50% will be necessary to carry this proposal.
15
Canterbury Consulting Group, Inc. -- Proxy Statement
EXPENSES OF SOLICITATION
------------------------
The cost of the solicitation of proxies will be borne by Canterbury. In
addition to the use of the mails, proxies may be solicited by regular employees
of Canterbury, either personally or by telephone or telegraph. Canterbury does
not expect to pay any compensation for the solicitation of proxies, but may
reimburse brokers and other persons holding shares in their names or in the
names of nominees for expenses in sending proxy materials to beneficial owners
and obtaining proxies from such owners.
OTHER MATTERS
-------------
This proxy contains forward looking statements. The actual results might
differ materially from those projected in the forward looking statements.
Additional information concerning factors that could cause actual results to
materially differ from those in forward looking statements is contained in
Canterbury Consulting Group, Inc.'s SEC filings, including periodic reports
under the Securities Exchange Act of 1934, as amended, copies of which are
available upon request from Canterbury's Investor Relations Department.
Respectfully submitted,
By:/s/ Jean Zwerlein Pikus
-----------------------
Jean Zwerlein Pikus
Vice President and Secretary
Dated: September 6, 2001
Stockholders who do not expect to be present at the meeting and who wish
to have their shares voted, are requested to make, date and sign the enclosed
proxy and return it in the enclosed envelope. No postage is required if it is
mailed in the United States.
16
Canterbury Consulting Group, Inc. -- Proxy Statement
APPENDIX A
Audit Committee Charter
Organization
This charter governs the operations of the Audit Committee for Canterbury
Consulting Group, Inc. Initially, the committee is comprised of the following
outside directors: Frank Cappiello, Steve Vineberg and Paul Shapiro. The
committee shall review and reassess the charter at least annually and obtain the
approval of the Board of Directors. The committee was appointed by the Board of
Directors and comprises at least three directors, each of whom are independent
of Management and the Company. Members of the committee shall be considered
independent if they have no relationship that may interfere with the exercise of
their independence from management and the Company. All committee members shall
be financially literate, [or shall become financially literate within a
reasonable period of time after appointment to the committee,] and at least one
member shall have accounting or related financial management expertise (which is
Mr. Cappiello).
Statement of Policy
The Audit Committee shall provide assistance to the Board of Directors in
fulfilling their oversight responsibility to the shareholders, potential
shareholders, the investment community, and others relating to the Company's
financial statements and the financial reporting process, the systems of
internal accounting and financial controls, the internal audit function, the
annual independent audit of the Company's financial statements, and the legal
compliance and ethics programs as established by Management and the Board. In
so doing, it is the responsibility of the committee to maintain free and open
communication between the committee, independent auditors, the internal auditors
and Management of the Company. In discharging its oversight role, the committee
is empowered to investigate any matter brought to its attention with full access
to all books, records, facilities, and personnel of the Company and the power to
retain outside counsel, or other experts for this purpose.
Responsibilities and Processes
The primary responsibility of the Audit Committee is to oversee the Company's
financial reporting process on behalf of the Board and report the results of
their activities to the Board. Management is responsible for preparing the
Company's financial statements, and the independent auditors are responsible for
auditing those financial statements. The committee in carrying out its
responsibilities believes its policies and procedures should remain flexible, in
order to best react to changing conditions and circumstances. The committee
will take the appropriate actions to set the overall corporate "tone" for
quality financial reporting, sound business risk practices, and ethical
behavior.
The following shall be the principal recurring processes of the Audit Committee
in carrying out its oversight responsibilities. The processes are set forth as
a guide with the understanding that the committee may supplement them as
appropriate.
17
Canterbury Consulting Group, Inc. -- Proxy Statement
* The committee shall have a clear understanding with Management and the
independent auditors that the independent auditors are ultimately accountable
to the Board and the Audit Committee, as representatives of the Company's
shareholders. The committee shall have the ultimate authority and
responsibility to evaluate and, where appropriate, replace the independent
auditors. The committee shall discuss with the auditors their independence
from Management and the Company and the matters included in the written
disclosures required by the Independence Standards Board. Annually, the
committee shall review and recommend to the Board the selection of the
Company's independent auditors, subject to shareholders' approval.
* The committee shall discuss with the independent auditors the overall scope
and plans for their respective audits including the adequacy of staffing and
compensation. Also, the committee shall discuss with Management, the internal
auditors, and the independent auditors the adequacy and effectiveness of the
accounting and financial controls, including the Company's system to monitor
and manage business risk, and legal and ethical compliance programs. Further,
the committee shall meet separately with the independent auditors, with and
without management present, to discuss the results of their examinations.
* The committee shall review the interim financial statements with Management
and the independent auditors prior to the filing of the Company's Quarterly
Report on Form 10-Q. Also, the committee shall discuss the results of the
quarterly review and any other matters required to be communicated to the
committee by the independent auditors under generally accepted auditing
standards. The chair of the committee may represent the entire committee for
the purposes of this review.
* The committee shall review with Management and the independent auditors the
financial statements to be included in the Company's Annual Report on Form 10-
K (or the Annual Report to Shareholders if distributed prior to the filing of
Form 10-K), including their judgment about the quality, not just \
acceptability, of accounting principles, the reasonableness of significant
judgments, and the clarity of the disclosures in the financial statements.
Also, the committee shall discuss the results of the annual audit and any
other matters required to be communicated to the committee by the independent
auditors under generally accepted auditing standards.
18
EX-1
4
ccgprxy01c.txt
PROXY CARD
CANTERBURY CONSULTING GROUP, INC.
PROXY FOR ANNUAL MEETING FISCAL 2000
Please sign and return immediately
KNOW ALL MEN BY THESE PRESENTS that I, the undersigned being a stockholder of
Canterbury Consulting Group, Inc., Medford, New Jersey do hereby constitute
and appoint Kevin J. McAndrew and Stanton M. Pikus, or either one of them
(with full power to act alone), my true and lawful attorney(s) with full power
of substitution to attend the Annual Meeting of Stockholders of said
Corporation to be held at The Mansion on Main Street, Plaza 3000 at Main
Street, Voorhees, New Jersey on October 24, 2001 at 10:00 a.m. or any and all
adjournment thereof, and to vote all stock owned by me or standing in my name,
place and stead on the proposals specified in the notice of meeting dated
August 31, 2001 or any and all adjournments thereof, with all the power I
possess if I were personally present, hereby ratifying and confirming all that
my said proxy or proxies may be in my name, place and stead as follows:
IMPORTANT: SIGNATURE REQUIRED ON REVERSE SIDE
1. Election of Directors
To elect seven (7) Directors, each for a term of one (1) year or until
the next Annual Meeting:
Stanton M. Pikus, Kevin J. McAndrew, Jean Zwerlein Pikus, Alan B. Manin,
Stephen M. Vineberg, Paul L. Shapiro and Frank A. Cappiello
It is specifically directed that this Proxy be voted:
FOR ALL NOMINEES [ ] WITHHOLD ALL NOMINEES [ ]
INSTRUCTION: To withhold authority to vote for any individual nominee,
write that nominee's name in the space provided below:
2. Proposal to ratify the appointment of Baratz & Associates, P.A. as the
Company's Independent Public Auditors.
IN FAVOR OF [ ] AGAINST [ ] ABSTAIN [ ]
In their discretion, the Proxies are authorized to vote upon such other
business as may properly come before the meeting.
IF NO DESIGNATIONS ARE MADE IN THE SPACES PROVIDED ABOVE, THIS PROXY WILL BE
VOTED "IN FAVOR OF" THE ABOVE PROPOSALS. The shares represented by a properly
executed Proxy will be voted as directed.
THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS; IT MAY BE REVOKED
PRIOR TO ITS EXERCISE.
_________________________________________________(L.S.) DATE: _______, 2001
(Print Name)
_________________________________________________(L.S.) DATE: _______, 2001
(Signature of Stockholder)
NOTE: ALL JOINT OWNERS MUST SIGN INDIVIDUALLY. WHEN SIGNING AS ATTORNEY,
EXECUTOR, ADMINISTRATOR, TRUSTEE, GUARDIAN OR CUSTODIAN, PLEASE GIVE
FULL TITLE. IF MORE THAN ONE TRUSTEE, ALL SHOULD SIGN.
Please date, sign and mail your
proxy card back as soon as possible!
Annual Meeting of Stockholders
Canterbury Consulting Group, Inc.
October 24, 2001
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
October 24, 2001
--------------------------------------------------------------------------------
To the Stockholders
Canterbury Consulting Group, Inc. September 6, 2001
The Fiscal 2000 Annual Meeting of Stockholders of Canterbury Consulting Group,
Inc. (the "Company") will be held at The Mansion on Main Street, Voorhees, New
Jersey on October 24, 2001 at 10:00 a.m. (Eastern Standard Time) for the
following purposes:
1. To elect seven (7) Directors for the ensuing year, and until their successors
are duly elected and qualified (Proposal No.1);
2. To ratify the appointment of Baratz & Associates, P.A. as the Company's
independent public accountants for the fiscal year ending November 30, 2001
(Proposal No. 2); and
3. To transact any other business as may properly be brought before the meeting,
or any adjournment thereof.
Only stockholders of record as of the close of business on August 31, 2001
(record date) are eligible to vote at this Annual Meeting of Stockholders or any
adjournment thereof. However, so that we may be sure your vote will be counted,
we invite you to sign and date this proxy card and return it as soon as possible
in the envelope provided. If you attend the meeting, you may revoke your proxy
and vote in person.
STOCKHOLDERS UNABLE TO ATTEND THE MEETING IN PERSON ARE ASKED TO VOTE, SIGN,
DATE AND PROMPTLY RETURN THIS PROXY CARD IN THE ENCLOSED SELF-ADDRESSED
ENVELOPE, WHICH DOES NOT REQUIRE ANY UNITED STATES POSTAGE.
By order of the Board of Directors,
By:/s/Jean Zwerlein Pikus
----------------------
Jean Zwerlein Pikus
Vice President and Secretary
September 6, 2001, Medford, NJ
An Annual Report containing the Form 10-K for the fiscal year ended November 30,
2000 as filed with the Securities and Exchange Commission including complete
financial statements audited by Ernst & Young, LLP is enclosed herewith. The
Company's 10-Q Report for the three months ended May 31, 2000 is available free
of charge upon written request to: Canterbury Consulting Group, Inc. 1600
Medford Plaza, Medford, NJ 08055, and are available on the Internet directly
from the Securities and Exchange Commission's web site: www.sec.gov.
EX-99.B2 ANRPT/SHLDR
5
ccgprxy01d.txt
ANNUAL REPORT
ANNUAL REPORT 2000
Canterbury Consulting Group
Information Technology
Services, Products, Staffing & Training
www.canterburyciti.com
Canterbury Consulting Group
MESSAGE FROM MANAGEMENT
Dear Fellow Shareholders:
Canterbury Consulting Group, Inc. (Nasdaq National Market: CITI) is very
pleased to report that revenues increased to $29,735,000 in fiscal 2000 from
$14,210,000 in 1999. Net income increased to $1,058,000 from $621,000. Basic
and fully diluted earnings per share in fiscal 2000 increased to $.11 from $.08
even though our common shares outstanding increased by 1,177,000 during the
year. In addition, net worth increased to $22,080,000 from $18,873,000; and
total assets increased to $31,184,000 from $27,812,000.
* The Canterbury acquisition of U.S. Communications, Inc. (renamed
USC/Canterbury Corp.) in the fourth fiscal quarter of 1999 not only added
additional information technology capabilities to the Canterbury family of
companies, but also increased our market to include state and local government
agencies as well as other businesses in the Mid-Atlantic states.
* Canterbury has, and continues to assist e*machinery.net, inc. (OTCBB: EMAC)
in the development of an industry specific portal for the construction,
mining, pipeline and farm machinery industry worldwide. EMAC's website
intends to provide a "state of the art" electronic exchange for the purchase
and sale of new and used construction, mining, pipeline and other machinery and
equipment. It also plans to provide access to financing, underwriting,
shipping, inspections, appraisals, training and other associated services.
Canterbury will also provide EMAC with various business overlays so that EMAC's
management can focus on the marketing, sale and daily support necessary to
provide a full service, worldwide, vertically integrated portal to its customer
base. Canterbury is currently a significant minority shareholder in EMAC and
our equity may grow as we offer on-going technical and business related
services.
We are continuing the aggressive acquisition search that led to the acquisition
of USC/Canterbury. We will still consider only profitable, well-managed
companies whose market penetration, products, and services fit within our
mandate, which is to offer the highest quality vendor support to all of the
current and future customers of every Canterbury company. We believe that we
have the internal management and administrative systems to support a
$100,000,000 company with only moderate increases to our structure. We also
believe that the information technology marketplace is the correct place to
focus our future growth plans. Therefore our objective, as your management, is
to reach our goal, not only by aggressive internal growth but also by the
strategic acquisition of substantial, larger companies.
We look forward to a successful Year 2001 and beyond. We shall keep you
informed of our progress.
Respectfully submitted,
/s/Kevin J. McAndrew /s/Stanton M. Pikus
-------------------- -------------------
Kevin J. McAndrew Stanton M. Pikus
President and Chief Executive Officer Chairman
Canterbury Consulting Group
MESSAGE FROM MANAGEMENT (continued)
Subsequent Events:
March 29, 2001 Small Business Administration Chooses ATM/Canterbury Corp.
- The Small Business Administration awarded ATM/Canterbury Corp.,
Canterbury's wholly owned subsidiary, a contract to purchase Master Trak Plus
and modify it to use Sybase, the SBA's client/server database.
April 30, 2001 Shareholders Approve Name Change - On April 6, 2001 the
stockholders voted to approve the Board of Directors' and Executive
Management's proposal to change the Company's name to Canterbury Consulting
Group, Inc. to better reflect Canterbury's multiple capabilities.
May 7, 2001 Canterbury Establishes Commercial Credit Facility with
Commerce Bank, N.A. - Canterbury entered into a commercial banking
relationship with Commerce Bank, N.A., a wholly owned subsidiary of Commerce
Bancorp, Inc., a multi-bank holding company, operating primarily in the
Philadelphia, New Jersey and Delaware markets.
May 17, 2001 ATM/Canterbury Designs and Launches Breakthrough Product -
ATM/Canterbury Corp., Canterbury's wholly owned subsidiary, has designed and
is now marketing a new product which enables items, such as evidence, tape
media, medical records and parts to be tracked within their containers
without opening the container. This breakthrough product, named RF Bridge,
is capable of reading Radio Frequency (RF) Identification Tags placed on
items to be tracked from distances as far away as five feet. The tags do not
require batteries or other renewable energy sources. They are powered by the
RF Bridge which permits the application to be adapted to multiple
applications.
June 5, 2001 Kevin J. McAndrew Named President of Canterbury - Kevin J.
McAndrew, Canterbury's former Executive Vice President, has been appointed
President and Chief Executive Officer of Canterbury. Stanton M. Pikus,
Canterbury's former President and Chief Executive Officer, will remain an
employee of Canterbury on a full-time basis and will continue on with his
duties as Chairman of the Board.
July 12, 2001 ATM/Canterbury Corp. Signs Distribution Agreement with
Perm-A-Store, Inc. - ATM/Canterbury Corp., a wholly owned subsidiary, signed
a worldwide distribution agreement with Perm-A-Store, Inc. ATM/Canterbury
will supply its RF Trak & RF Bridge products to Perm-A-Store's customers
which are in the tape and media backup storage market. This agreement with
Perm-A-Store significantly expands ATM's access to the global market for
radio frequency (wireless) products.
July 25, 2001 Canterbury signs Letter of Intent to Acquire Usertech -
Canterbury signed a Letter of Intent to acquire 100% of the stock of User
Technology Services, Inc. (Usertech), subject to due diligence and the
execution of definitive agreements. Usertech is a wholly owned subsidiary of
Ceridian Corporation (NYSE: CEN), with revenues in its most recent fiscal year
in excess of $15,000,000.
August 22, 2001 Canterbury Names Baratz & Associates as Independent
Accountants - Canterbury engaged Baratz & Associates, P.A. to replace
Canterbury's former independent accountants, Ernst & Young, LLP. Baratz &
Associates was chosen by Canterbury's Audit Committee because of substantial
cost savings and was subsequently approved by Canterbury's Board of Directors.
Canterbury Consulting Group
About Us
Canterbury is currently comprised of five subsidiaries with offices located
in New Jersey, New York, Maryland, Georgia and Texas. The focus of the
Canterbury companies is to become an integral part of corporate, governmental
and other business related IT solutions, designing and applying the best
products and services to help our clients achieve a competitive advantage and
help their employees succeed. Our strength lies in helping Fortune 1000
corporations and government agencies develop comprehensive end-to-end
technology solutions. These include:
* systems engineering and consulting * web development
* IT contractors and permanent * technical and desktop applications
staffing training
* management training programs * records and asset management systems
* hardware sales and support * distance learning portals
* software development * industry vortals
Our Clients
Canterbury's impressive list of over 6,000 clients has been developed on the
strength of a track record of successful high quality projects delivered
within budget and on schedule. Our network of companies serves the entire
corporate and governmental sectors with a concentration in health care,
financial services, manufacturing, telecommunications and education.
Developing long-term relationships is an integral part of our business.
Our People
Delivering quality services requires quality people, and ours are among the
best trained and qualified in the industry. At Canterbury Consulting Group we
like to think of ourselves as an extension of our customers' staff and, as
such, we are dedicated to the continued success of their organizations.
Our Strategic Alliances
To expand our expertise Canterbury Consulting Group aggressively seeks
strategic alliances with worldwide industry leaders. Some of our
partnerships in the technology and training sectors include:
Cisco Systems Lotus IBM
TechData Hewlett Packard 3COM
Microsoft Novell Compaq
Oracle Macromedia NEC
Acer Epson
International Association for Continuing Education and Training (IACET)
National Registry of CPE Sponsors (NASBA)
Canterbury Consulting Group
Canterbury's Solutions
Canterbury Consulting Group, Inc. provides a truly integrated approach to
information technology. From the front desk receptionist to the back office
network administrator, our goal is to make technology work seamlessly to give
our clients a competitive advantage and to improve the efficiency and know-
how of their employees. We can procure, install and configure hardware and
software; provide networking services; develop new or maintain existing
websites; e-commerce enable websites; provide or hire and train technical
staff; create an online portal for distance learning; and create secure
systems for document management and asset inventory control. We can provide
the latest in management, staff and sales training and consulting, customized
to create a more effective and successful workforce. We value teamwork, are
committed to designing unique systems and work with our subsidiaries and
strategic partners to provide the best products and services at extremely
attractive prices.
Technical Consulting & Services File and Asset Tracking
Technical Staffing Computer Training
Management Development E-Learning
Hardware Sales & Support Staff and Sales Training
Software & Web Development
ATM/Canterbury CALC/Canterbury
DMI/Canterbury MSI/Canterbury
USC/Canterbury
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, 2000
Commission File Number: 0-15588
CANTERBURY INFORMATION TECHNOLOGY, INC.
---------------------------------------
Pennsylvania 23-2170505
------------------------------- -----------------------
(State or other jurisdiction of (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 $29,734,589.
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 23, 2001 was $15,875,148.
The number of shares outstanding of the issuer's class of common equity,
as of February 23, 2001 was 10,685,954.
Documents Incorporated by Reference - Various exhibits from the
Company's Form S-3 Registration Statements and such other documents
contained in Item 14.
CANTERBURY INFORMATION TECHNOLOGY, INC. - FORM 10-K 2000
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 products and services to both commercial and government
clients. Canterbury is comprised of six operating subsidiaries with offices
located in New Jersey, New York, Maryland, Georgia and Texas. The focus of the
Canterbury companies is to become an integral part of our clients IT solution,
designing and applying the best products and services to help them achieve a
competitive advantage and helping their employees to succeed. Our subsidiaries
offer the following technology solutions:
* systems engineering and consulting * technical and desktop applications
* IT contractors and permanent staffing training
* management training programs * records and asset management
* hardware sales and support systems
* software development * distance learning portals
* web development * specific portals.
The Company is actively seeking acquisitions of consulting, technical
staffing, value added resellers 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 February of 1999, the Company closed Prosoft,
incorporating its technical staffing operations into CALC/Canterbury.
In October, 1999 the Company purchased U.S. Communications, a hardware
CANTERBURY INFORMATION TECHNOLOGY, INC. - FORM 10-K 2000
reseller, training, and technical services company. In August, 2000 the
Company purchased DataMosaic International, Inc., a management and systems
consulting company that provides technical staffing augmentation solutions
and consulting services. At the same time, the Company formed Canterbury
Consulting Group, Inc., a wholly owned subsidiary, to also provide staffing
augmentation solutions and consulting services to Fortune 1000 companies.
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.
Effective April 14, 1998 the Board of Directors declared a one for
three reverse stock split of the Registrant's common stock. In
addition, and as a result of the one for three reverse stock split, the
Board of Directors changed the trading symbol of the Registrant's common
stock from "XCEL" to "CITI". All share and per share information has
been restated for the one for three reverse stock split.
On January 8, 2001 the Board of Directors voted to change the
Company name to Canterbury Consulting Group, Inc. The Company believes that
changing its name to Canterbury Consulting Group, Inc. will better describe
the Company's current and future business activities and allow for a more
synergistic approach to marketing all of its subsidiaries under one umbrella.
Since the name change requires an amendment to the Company's Certificate of
Incorporation it is necessary to have approval by the shareholders. A
Special Meeting of Stockholders is scheduled for April 6, 2000 in order to
gain shareholder approval.
NARRATIVE DESCRIPTION OF BUSINESS - TRAINING & CONSULTING
---------------------------------------------------------
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 five training
centers in New York and New Jersey and on site at Fortune 1000 corporations.
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. CALC/Canterbury is a Microsoft Certified Technical Education
Center, Lotus Authorized Education Center and an authorized center for CISCO
certified training as well as CAT and VUE testing. CALC/Canterbury 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. CALC/Canterbury's technical services division offers
technology project management, software development, hardware and software
installations, web and industry specific vortal development. Through CALC Web
University, CALC/Canterbury offers e-commerce enabled, Internet-based training
as well as custom designed web delivered courses and instruction.
CANTERBURY INFORMATION TECHNOLOGY, INC. - FORM 10-K 2000
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 (such as technical
recruiting, technical services and Web -based training) to its
significant customer base established over the past sixteen 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. At the same time, the Company
is focused on introducing and promoting all of Canterbury's subsidiaries'
products and services to the existing client base of CALC/Canterbury.
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, organizational
problem solving and project management. 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
extending its current sales effort into contiguous markets around its
corporate headquarters in Northern New Jersey.
The other major expansionary plan is to develop, internally, new
product offerings, both consulting and on-line, for existing and
potential customers, based on their specific needs. With several
consultants who are exceptional course developers on staff, this process
has already resulted in additional product revenue streams. It also intended
to introduce MSI/Canterbury services into other operating subsidiaries.
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.
CANTERBURY INFORMATION TECHNOLOGY, INC. - FORM 10-K 2000
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.
NARRATIVE DESCRIPTION OF BUSINESS - VALUE ADDED HARDWARE RESELLER
-----------------------------------------------------------------
In October, 1999, the Company acquired U.S. Communications, Inc, an
Annapolis, Maryland based reseller of desktop and server computer
systems to state and local governments as well as commercial private
sector companies in the mid-Atlantic market. USC provides a broad range
of information technology services other than hardware procurement and
installation. Other products and services include training, software,
consulting and network design and management. After the acquisition,
the Company changed the name of U.S. Communications to USC/Canterbury
Corp. (USC).
The Company predominately resells Hewlett-Packard personal
computers and servers as stand alone desktops, workstations and complete
networks. Virtually no inventory is maintained as most equipment is
drop shipped to the customer location. The consulting and network
design services are becoming a more important value added product to the
customer base, as they look for a complete solution to their information
technology needs.
Future Plans
------------
This division's expansion forecast includes additional penetration
into existing governmental installations. The Company is also pursuing
possible acquisition candidates in this market as well as introducing other
subsidiary products and services into their existing client base.
NARRATIVE DESCRIPTION OF BUSINESS - TECHNICAL STAFFING
------------------------------------------------------
In August, 2000, the Company acquired DataMosaic International, Inc.,
an Atlanta, Georgia based management and systems consulting company, which
provides staffing augmentation solutions and consulting services to the
information technology industry.
CANTERBURY INFORMATION TECHNOLOGY, INC. - FORM 10-K 2000
Short term and long term contracting along with permanent placement and
project management of IT professionals is provided to mid-sized and Fortune
1000 corporations for: technical leaders and specialists, senior programming
analysts, programmers, systems support and administration specialists
experienced in networking, data communications, LAN/WAN, SQA/testing and
technical writing After the acquisition, the Company changed the name of
DataMosaic International to DataMosaic/Canterbury Corp.
In conjunction with the acquisition of DataMosaic, Canterbury formed
Canterbury Consulting Group, Inc. which offers technical recruitment and
contracting on a national basis both over the Internet and in conjunction
with existing Canterbury subsidiaries and affiliates.
Future Plans
------------
This division's expansion forecast includes increasing the number of
Business Development Managers in its existing locations and opening offices
within existing Canterbury facilities. To date, this division has begun
operations in Parsippany, New Jersey, Annapolis, Maryland and Houston, Texas.
The Company may also consider opening free-standing offices in other viable
markets in the United States, creating a regional and potentially national
recruiting operation.
MERGER/ACQUISITION PROGRAM
--------------------------
Canterbury is actively seeking acquisitions of other profitable
technology companies within our core competencies:
* Technical systems design, development, integration and consulting
* Hardware sales and support
* Technical recruitment and staff augmentation
* Internet and intranet consulting, development and implementation
* Technical online training
BUSINESS MODEL - INFORMATION TECHNOLOGY SERVICES
-----------------------------------------------------------------------------
| | Systems | | Internet and |
| Computer and | Integrators | Network and | Intranet |
| Software | --- | Systems Developers | Consultants, |
| Consulting | Hardware/ | and Installers | Developers and |
| CALC/Canterbury | Software Sales | CALC/Canterbury | Providers |
| USC/Canterbury | CALC/Canterbury | USC/Canterbury | CALC/Canterbury |
| ATM/Canterbury | USC/Canterbury | | USC/Canterbury |
| | ATM/Canterbury | | |
-----------------------------------------------------------------------------
-------------------------------------------------------------------------------
| | | Technical Staffing | Business to |
| Technical | Training | and Recruiting | Business Portal |
| Training | Companies | Canterbury Consulting | Global Online |
| Companies | MSI/Canterbury | Group | Training |
| CALC/Canterbury | CALC/Canterbury | DataMosaic/Canterbury | CALC Web |
| | | | University |
-------------------------------------------------------------------------------
CANTERBURY INFORMATION TECHNOLOGY, INC. - FORM 10-K 2000
EMPLOYEES
---------
As of November 30, 2000, the Company, including all subsidiaries, had 160
employees: 104 full-time employees and 56 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 $1,223,000 in
fiscal year 2001.
The following table sets forth the locations of the Company
including square footage:
Square
Location Footage
-------- -------
Canterbury Information Technology, Inc. 4,200
1600 Medford Plaza
Medford, New Jersey 08055
ATM/Canterbury Corp. 3,400
16840 Barker Springs, Suite C300
Houston, TX 77084
DataMosaic/Canterbury Corp. 600
2 Sun Court, Suite 300
Norcross, GA 30092
Canterbury Consulting Group, Inc. 500
500 Lanid Drive
Parsippany, New Jersey 07054
Canterbury Consulting Group, Inc. 300
16840 Barker Springs, Suite C300
Houston, TX 77084
Canterbury Consulting Group, Inc. 300
801 Compass Way, Suite 205
Annapolis, MD 21401
CALC/Canterbury Corp. 23,000
500 Lanid Drive
Parsippany, New Jersey 07054
CALC/Canterbury Corp. 4,200
780 Third Avenue, Concourse Level One
New York, New York 10017
CANTERBURY INFORMATION TECHNOLOGY, INC. - FORM 10-K 2000
CALC/Canterbury Corp. 6,000
Woodbridge Place, Gill Lane at Route 1
Iselin, New Jersey 08830
CALC/Canterbury Corp. 7,000
55 Broadway
New York, New York 10006
MSI/Canterbury Corp. 1,800
400 Lanid Drive
Parsippany, New Jersey 07054
USC/Canterbury Corp. 2,200
801 Compass Way, Suite 205
Annapolis, MD 21401
ITEM 3. LEGAL PROCEEDINGS
As previously disclosed in prior filings, the Company was a
defendant in litigation instituted by Mr. Thomas Arnold, a former
employee of CALC. The suit alleged breach of contract, various tort
claims and requested punitive damages of over $8 million. The Company
and its attorney had contended that Mr. Arnold's claim was without
merit.
The trial was held, and in January, 2000 the Court found in favor
of the Company on all counts and the Court did not find in favor of the
Company in its counterclaim. Mr. Arnold has filed an appeal. The Company
and its attorney contend that the appeal is without merit.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF STOCKHOLDERS
The Company's Annual Meeting was held on October 5, 2000, at which
time two 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 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.
At September 5, 2000, the shareholder of record date, the number of
shares outstanding was 10,457,768 and by October 5, 2000 7,512,156 votes
were cast. The proposal for the slate of directors was approved with 97%
of the votes. The proposal for the appointment of Ernst & Young LLP was
approved by 99.8% of the votes.
PART II
ITEM 5. MARKET FOR EQUITY AND RELATED STOCKHOLDER MATTERS
The Company trades on the Nasdaq National Market. As a result of
the one for three reverse stock split effective April 14, 1998, the Board
of Directors changed the trading symbol stock from XCEL to CITI. The high
and low bid prices (adjusted to reflect the 1 for 3 reverse stock split) of
CANTERBURY INFORMATION TECHNOLOGY, INC. - FORM 10-K 2000
the Company's common stock from December 1, 1998 through February 23, 2001
were as follows:
MARKET FOR EQUITY AND RELATED STOCKHOLDER MATTERS
-------------------------------------------------------------------------
1998 | 1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter
| ----------- | ----------- | ----------- | -----------
| High Low | High Low | High Low | High Low
Common | ---- --- | ---- --- | ---- --- | ---- ---
Stock | 3 3/8 1 25/32| 2 17/32 1 1/8|1 11/16 25/32 | 1 1/2
-------|----------------|----------------|---------------|----------------
1999 | 1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter
| ----------- | ----------- | ----------- | -----------
| High Low | High Low | High Low | High Low
Common | ---- --- | ---- --- | ---- --- | ---- ---
Stock | 1 1/2 1/2 | 2 3/16 7/8 | 2 1/4 1 1/32|4 3/16 1 1/2
-------|----------------|----------------|---------------|----------------
2000 | 1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter
| ----------- | ----------- | ----------- | -----------
| High Low | High Low | High Low | High Low
Common | ---- --- | ---- --- | ---- --- | ---- ---
Stock |5 11/16 2 13/16| 4 7/8 2 1/2| 4 1/6 1 15/16| 4 5/8 2 21/32
-------|----------------|----------------|---------------|----------------
2001 | 1st Quarter | 2nd Quarter | 3rd Quarter | 4th Quarter
| ----------- | ----------- | ----------- | -----------
| High Low | High Low | High Low | High Low
Common | ---- --- | ---- --- | ---- --- | ---- ---
Stock |4 7/16 1 1/2 | 4 7/8 2 1/2| 4 1/6 1 15/16| 4 5/8 2 21/32
-------------------------------------------------------------------------
The approximate number of record holders of the Company's common stock
as of November 30, 2001 as determined from the Company's transfer agent's
list of record holders was 353. 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.
CANTERBURY INFORMATION TECHNOLOGY, INC. - FORM 10-K 2000
ITEM 6. SELECTED FINANCIAL DATA
2000 1999 1998 1997 1996
---- ---- ---- ---- ----
Operating data:
Net revenues $29,734,589 $14,209,526 $12,112,879 $12,423,452 $12,717,692
Income (loss)
from
continuing
operations 1,058,215 620,768 581,503 (931,870) 423,157
Income (loss)
from and gain
on sale of
discontinued
operations - - - (1,536,047) 1,243,411
Basic per share data:
Income (loss)
from
continuing
operations $.11 $.08 $.10 $(.22) $.08
Discontinued
Operations - - - (.29) .26
----------- ----------- ----------- ----------- -----------
Net income
(loss) $.11 $.08 $.10 $(.51) $.34
=========== =========== =========== =========== ===========
Balance sheet data:
Total assets $31,184,412 $27,811,971 $25,700,415 $25,787,101 $27,400,539
Long-term debt 678,303 1,989,031 2,640,075 3,856,956 4,718,793
(1) In November, 1996, the Company sold Landscape Maintenance Services, Inc.,
a landscape maintenance and construction company. In November, 1997,
the Company closed its last two vocational schools. Prior year financial
statements have been restated to reflect the discontinuation of the
segments.
ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Cautionary Statement
--------------------
When used in this Report on Form 10-K and in other public
statements, both oral and written, by the Company and Company officers,
the word "estimates," "project," "intend," "believe," "anticipate," and
similar expressions, are intended to identify forward-looking statements
regarding events and financial trends that may affect the Company's
future operating results and financial position. Such statements are
subject to risks and uncertainties that could cause the Company's actual
results and financial position to differ materially. Such factors
include, among others: (1) the Company's success in attracting new
CANTERBURY INFORMATION TECHNOLOGY, INC. - FORM 10-K 2000
business and success of its mergers and acquisitions program; (2) the
competition in the industry in which the Company competes; (3) the
Company's ability to obtain financing on satisfactory terms; (4) the
sensitivity of the Company's business to general economic conditions;
and (5) other economic, competitive, governmental and technological
factors affecting the Company's operations, markets, products, services
and prices. The Company undertakes no obligations to publicly release
the result of any revision of these forward-looking statements to
reflect events or circumstances after the date they are made or to
reflect the occurrence of unanticipated events.
LIQUIDITY AND CAPITAL RESOURCES
Working capital at November 30, 2000, was $1,820,000. This was an
increase of $560,000 over the previous year. This increase is explained by
the following reasons: Accounts receivable increased by $2,187,000, due
primarily to an increase in revenues, while accounts payable increased only
by $1,132,000. Most of these increases were the result of increased sales
volume from USC/Canterbury, which was acquired in October, 1999. Also
contributing to the increase was the acquisition of DataMosaic/Canterbury
which occurred in August, 2000. Revenues attributable to this acquisition
totaled $729,000 in fiscal 2000.
The Company's outstanding amounts owed under the term loan and credit
line with Chase Bank were refinanced in December, 1999. Under the new
agreement, the Company paid off the remaining term debt of $200,436 and
agreed to term out the $2,774,620 credit line. Monthly payments began in
March of 2000, and continue until December of 2001 when the final balloon
payment of $620,000 is due and payable. Projected payments for fiscal 2001
total $1,240,000.
The long term debt is secured by substantially all of the assets of the
Company and requires compliance with covenants which include: limits on
capital expenditures, certain prepayments from excess cash flow as defined
and the maintenance of certain financial ratios and amounts. The Company is
restricted by its primary lender from paying cash dividends on its common
stock.
Subsequent to November 30, 2000 the Company has paid a total of $340,000
to reduce the total bank debt from $1,859,620 to $1,519,620. The outstanding
debt will accrue interest at prime plus 2.0% per annum.
During 1999, the Company successfully completed a series of private
placements with non-affiliates. From March, 1999 to October, 1999 a total of
four private placements occurred. A total of 2,320,589 restricted common
shares of stock were issued. The net proceeds totaled $1,471,222. The
Company also issued a total of 397,059 shares of restricted common stock as
finder fees associated with these placements. All private placements had
registration rights. The Company used the proceeds to repay amounts under
the term loan, for general corporate purposes and for working capital.
Management believes that positive cash flow contributions from the
Company's operating subsidiaries will be sufficient to cover cash flow
requirements for fiscal 2001. There was no material commitment for capital
expenditures as of November 30, 2000. Inflation was not a significant factor
CANTERBURY INFORMATION TECHNOLOGY, INC. - FORM 10-K 2000
in the Company's financial statements.
Cash flow from continuing operations for the year ended November 30,
2000 was $875,000. This represents an increase of $216,000 over the prior
year. Fiscal 2000 was the sixth consecutive year of positive cash from
continuing operations. During the year, the Company reduced its long term
bank debt excluding capital leases by $915,000. For the past five years,
this reduction in long term debt totals $7,567,000.
MARKET RISK
The Company is subject to market risk principally arising from the
potential change in the value of its investments.
The Company's investments in equity securities at November 30, 2000
of $3,300,000 is subject to changes in value based on changes in equity
prices in United States markets.
RESULTS OF OPERATIONS
Fiscal 2000 Compared to Fiscal 1999
Revenues
--------
Revenues increased by $15,525,000 (109%) in fiscal 2000 over fiscal
1999. The majority ($15,222,000) of this increase is attributable to the
revenues generated for a full fiscal year by USC/Canterbury, which was
acquired in October, 1999. The revenues for the other existing subsidiaries
remained fairly constant with technical services consulting revenues making
up the difference in revenue increase for fiscal 2000 over the pervious year.
The Company continues to develop alternative revenue streams such as on-line
learning, technical staffing, technical services and web development. It is
believed that these additional revenue streams will become more significant
in Fiscal 2001 and beyond.
Costs and Expenses
------------------
Costs and expenses increased by $13,360,000 (158%) in fiscal 2000 over
the previous year. Again, the most significant portion of this increase
($13,254,000) is attributable to costs associated with USC/Canterbury. While
gross profit increased from $5,741,000 in fiscal 1999 to $7,906,000 (38%),
gross profit percentage declined from 40% in fiscal 1999 to 27% in fiscal
2000. This was due to the change in product mix from year to year. Product
revenue, as a percent of total revenue, increased from 18% in 1999 to 57% in
fiscal 2000. Product revenue had an associated gross profit of 15%, while
service revenue gross profit for fiscal 2000 was 43%. The full year
contribution of USC/Canterbury, a value added reseller, again contributed to
this shift.
Selling expense increased by $569,000 (31%). The increase was a result
of the increase in selling expense for a full year of USC/Canterbury activity
($570,000), as compared to only one and a half months in fiscal 1999.
CANTERBURY INFORMATION TECHNOLOGY, INC. - FORM 10-K 2000
General and administrative expense increased by $841,000 (23%) in fiscal
2000 over fiscal 1999. $391,000 of the increase was due to the additional
expense of USC/Canterbury for a full year. $155,000 related to the expense
for DataMosaic/Canterbury and Canterbury Consulting Group, both of which were
added to the business during the third quarter of fiscal 2000.
Other income for fiscal 2000 increased by $327,000 over fiscal 1999. The
net increase was primarily due to recognized other income of $461,000 related to
the receipt of stock for assisting in raising capital for a related party offset
by a $165,000 charge for loss on impairment of an investment held by the Company
taken during the fourth quarter of fiscal 2000.
Fiscal 1999 Compared to Fiscal 1998
Revenues
--------
Revenues increased by $2,086,000 (17%) in fiscal 1999 over fiscal
1998. The majority ($1,990,000) of this increase is attributable to the
revenues generated by USC/Canterbury, which was acquired in October,
1999. The revenues for the other existing subsidiaries remained fairly
constant. The Company continues to develop alternative revenue streams
such as on-line learning, technical staffing, technical services and web
development. It is believed that these additional revenue streams will
become more significant in Fiscal 2000 and beyond.
Costs and Expenses
------------------
Costs and expenses increased by $1,773,000 (26%) in fiscal 1999
over the previous year. Again, the most significant portion of this
increase ($1,592,000) is attributable to costs associated with
USC/Canterbury for the fourth quarter of the year. The remaining
increase of $181,000 is due to increased labor and personnel costs in
the training segment.
Selling expense decreased by $176,000 (9%). There was a planned
reduction in marketing expense for CALC/Canterbury of $106,000. During
the year the Company continued to downsize the catalog and the mailing
list. More and more of the public registrations are coming through the
CALC/Canterbury web site, which has allowed for the reduction in
printing and postage expenses. The balance of the reduction is
primarily due to reduced costs associated with sales personnel.
General and administrative expense decreased by $153,000 (4%) in
fiscal 1999 over fiscal 1998. This reduction is due to reduced
personnel costs throughout the organization. As technology continues to
improve, the Company has been able to downsize several support
functions, relying more on information generated and processed by
in-house computer applications.
Interest income for fiscal 1999 decreased by $155,000 (18%) over
fiscal 1998. This was due to the fact that in 1998 the Company
recognized interest income on the portion of the Company's revolving
credit facility with Chase Bank that was assumed by the owners of
CANTERBURY INFORMATION TECHNOLOGY, INC. - FORM 10-K 2000
Landscape Maintenance Services for both 1998 and 1997.
ITEM 8. FINANCIAL STATEMENTS & SUPPLEMENTARY DATA
The financial statements and supplementary data are as set forth in
the Index on page __.
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, 2000 were as follows:
Name Age Position Held with Company(1)
---- --- -----------------------------
Stanton M. Pikus 60 President, Chief Executive Officer,
Chairman of the Board of Directors
Kevin J. McAndrew, CPA 42 Chief Operating Officer, Executive Vice
President, Chief Financial Officer,
Treasurer, Director
Jean Zwerlein Pikus 47 Vice President - Operations, Secretary,
Director
Alan Manin 63 Director
Stephen M. Vineberg 59 Director
Paul L. Shapiro 49 Director
Frank A. Cappiello 75 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. From 1968 until 1981 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
CANTERBURY INFORMATION TECHNOLOGY, INC. - FORM 10-K 2000
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). He is currently the
President of Atlantis, a company which provides motivational training to
employees of Fortune 1000 companies.
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, a Director since 1995, 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 $800 million. Prior to that, he was the Research
Director of a major stock brokerage firm. He is a graduate of the
University of Notre Dame and Harvard University's Graduate School of
Business Administration.
CANTERBURY INFORMATION TECHNOLOGY, INC. - FORM 10-K 2000
ITEM 11. EXECUTIVE COMPENSATION
CASH COMPENSATION
The Company had 99 full-time employees as of November 30, 1999.
There were no cash directors' fees paid during this period.
Summary Compensation Table
Other Securities All
Annual Restricted Underlying Other
Name & Compen- Stock Options/ LTIP Compen-
Principal Salary Bonus sation Awards SAR Payouts sation
Position Year ($) ($) ($) ($) (#) ($) ($)
-----------------------------------------------------------------------------
Stanton M. 2000 $210,000 $ - $ - $ - 425,000 $ - $ -
Pikus 1999 $195,000 - - - 140,000 - -
President, 1998 202,500 - - - 150,000 - -
Chief
Executive
Officer
Kevin J. 2000 $149,000 $ - $ - $ - 270,000 $ - $ -
McAndrew 1999 $135,000 - - - 105,000 - -
Chief 1998 127,788 - - - 110,000 - -
Operating
Officer,
Chief
Financial
Officer
During fiscal 1999, the President's employment agreement was extended
two additional years, from 2001 to 2003, in exchange for the President
waiving his right to any performance bonus in fiscal 1999. For the years
ended November 30, 1998, November 1997 and November 30, 1996, the President
also waived his right to receive any performance bonus earned and his
employment agreement was extended one year on each occurrence. The terms of
the agreement was for five years and provided 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.
The President waived his right to any performance bonus for fiscal 2000. 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.
The Company also amended the employment agreement with its Executive
Vice President and Chief Operating Officer during fiscal 1999 by extending
the agreement two years, from 2001 to 2003, in exchange for the Executive
Vice President waiving his right to any performance bonus in fiscal 1999. For
the years ended November 30, 1998, November 1997 and November 30, 1996, the
Executive Vice President also waived his right to receive any performance
bonus earned and his employment agreement was extended one year on each
occurrence.
CANTERBURY INFORMATION TECHNOLOGY, INC. - FORM 10-K 1999
The term of the agreement was five years and provides 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 year of the contract. The
Executive Vice President waived his right to any performance bonus for fiscal
2000. In conjunction with this contract, the Executive Vice 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.
COMPENSATION PURSUANT TO PLAN AND OUTSIDE OF PLAN
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) as of February 23, 2001.
Date Exercise
Name of Individual Capacity in Which Served Options Granted Price
=============================================================================
Stanton M. Pikus President, Chairman of 16,667 10/29/96 $3.09
the Board of Directors 33,334 01/13/97 $2.25
50,000 05/18/98 $1.38
100,000 12/04/98 $ .53
40,000 08/27/99 $1.56
100,000 11/04/99 $2.40
100,000(1) 02/29/00(1) $4.06(1)
25,000 08/02/00 $3.00
75,000(1) 11/28/00(1) $2.78(1)
75,000(2) 11/28/00(2) $2.78(2)
75,000(1) 01/09/01(1) $1.50(1)
75,000(2) 01/09/01(2) $1.50(2)
----------------------------------------------------------------------------
Kevin J. McAndrew, Chief Operating Officer, 16,667 10/29/96 $3.09
CPA Executive Vice President, 16,667 01/13/97 $2.25
Chief Financial Officer, 8,334 10/16/97 $3.56
Treasurer, Director 35,000 05/18/98 $1.38
75,000 12/04/98 $ .53
30,000 08/27/99 $1.56
75,000 11/04/99 $2.40
50,000(1) 02/29/00(1) $4.06(1)
20,000 08/02/00 $3.00
50,000(1) 11/28/00(1) $2.78(1)
50,000(2) 11/28/00(2) $2.78(2)
50,000(1) 01/09/01(1) $1.50(1)
50,000(2) 01/09/01(2) $1.50(2)
CANTERBURY INFORMATION TECHNOLOGY, INC. - FORM 10-K 1999
Date Exercise
Name of Individual Capacity in Which Served Options Granted Price
============================================================================
Jean Zwerlein Pikus Vice President-Operations, 8,334 10/29/96 $3.09
Secretary, Director 8,334 01/13/97 $2.25
6,667 10/16/97 $3.56
20,000 05/18/98 $1.38
45,000 12/04/98 $ .53
18,000 08/27/99 $1.56
45,000 11/04/99 $2.40
25,000(1) 02/29/00(1) $4.06(1)
15,000 08/02/00 $3.00
25,000(1) 11/28/00(1) $2.78(1)
25,000(2) 11/28/00(2) $2.78(2)
25,000(1) 01/09/01(1) $1.50(1)
25,000(2) 01/09/01(2) $1.50(2)
----------------------------------------------------------------------------
Alan Manin Director 3,334 10/29/96 $3.09
3,334 01/13/97 $2.25
10,000 05/18/98 $1.38
17,500 12/04/98 $ .53
7,000 08/27/99 $1.56
17,500 11/04/99 $2.40
10,000 01/11/00 $3.67
5,000 08/02/00 $3.00
20,000(1) 11/28/00(1) $2.78(1)
20,000(1) 01/09/01(1) $1.50(1)
----------------------------------------------------------------------------
Stephen Vineberg Director 834 05/11/95 $8.25
3,334 07/24/95 $8.43
3,334 10/29/96 $3.09
8,334 01/13/97 $2.25
2,500 10/16/97 $3.56
10,000 05/18/98 $1.38
17,500 12/04/98 $ .53
7,000 08/27/99 $1.56
17,500 11/04/99 $2.40
10,000(1) 01/11/00(1) $3.67(1)
5,000 08/02/00 $3.00
20,000(1) 11/28/00(1) $2.78(1)
20,000(1) 01/09/01(1) $1.50(1)
----------------------------------------------------------------------------
Paul Shapiro Director 834 05/11/95 $8.25
3,334 07/24/95 $8.43
3,334 10/29/96 $3.09
8,334 01/13/97 $2.25
2,500 10/16/97 $3.56
10,000 05/18/98 $1.38
17,500 12/04/98 $ .53
7,000 08/27/99 $1.56
17,500 11/04/99 $2.40
10,000(1) 01/11/00(1) $3.67(1)
5,000 08/02/00 $3.00
20,000(1) 11/28/00(1) $2.78(1)
20,000(1) 01/09/01(1) $1.50(1)
CANTERBURY INFORMATION TECHNOLOGY, INC. - FORM 10-K 2000
Date Exercise
Name of Individual Capacity in Which Served Options Granted Price
============================================================================
Frank A. Cappiello Director 3,334 10/29/96 $3.09
33,334 01/13/97 $2.25
20,000 05/18/98 $1.38
35,000 12/04/98 $ .53
14,000 08/27/99 $1.56
35,000 11/04/99 $2.40
35,000(1) 01/11/00(1) $3.67(1)
12,500 08/02/00 $3.00
50,000(1) 11/28/00(1) $2.78(1)
50,000(1) 01/09/01(1) $1.50(1)
----------------------------------------------------------------------------
(1) These options are not part of the 1995 Stock Option Plan and convert
to restricted common stock. The individual has five years from the
date of grant to exercise these options.
(2) These options are part of the 1995 Stock Option Plan; however they are
incentive stock options. All other options issued as part of the 1995
Stock Option Plan are non-qualified stock 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 (but not consultants) 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 23, 2001 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:
CANTERBURY INFORMATION TECHNOLOGY, INC. - FORM 10-K 2000
Class Name of Beneficial Owner Shares Owned Percent of Class
------------------------------------------------------------------------
Common Stanton M. Pikus(2)(3) 611,248 5.71%
Common Kevin J. McAndrew(1)(3) 209,637 1.96%
Common Alan Manin(1)(3)(4) 139,054 1.30%
Common Jean Zwerlein Pikus(1)(2)(3) 136,473 1.27%
Common Stephen M. Vineberg(1)(3) 33,629 .31%
Common Paul L. Shapiro(1)(3) 25,667 .24%
Common Frank A. Cappiello(1)(3) 136,667 1.28%
All Officers, Directors as a group --------- -----
(7 in number) 1,292,375 12.07%
____________________________
(1) All of said individuals have given a Voting Agreement 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.
(4) 73,228 shares owned by Atlantis Family L.C. of which Mr. Manin is the
sole beneficiary, are included in his total.
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
The Company has secured key-person life insurance policies for
Officers of its subsidiaries. The amount and beneficiary of the key-
person life insurance policies are as follows:
Corporate Officers Amount of Policy Beneficiary
------------------ ---------------- -----------
Alan McGaffin $1,000,000 ATM/Canterbury Corp.
Glen Hukins $1,000,000 CALC/Canterbury Corp.
Patricia Bednarik $1,000,000 USC/Canterbury Corp.
The Company is in the process of securing a key-person life insurance
policy for the Presidents of MSI/Canterbury Corp., DataMosaic/Canterbury
Corp and Canterbury Consulting Group, Inc.
CANTERBURY INFORMATION TECHNOLOGY, INC. - FORM 10-K 2000
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, 1999 and 1998----------F- 1
Consolidated Statements of Operations - Years ended
November 30, 1999, 1998 and 1997---------------------------------F- 3
Consolidated Statements of Stockholders' Equity - Years ended
November 30, 1999, 1998 and 1997---------------------------------F- 5
Consolidated Statements of Cash Flows - Years ended
November 30, 1999, 1998 and 1997---------------------------------F- 6
Notes to Consolidated Financial Statements------------------------F- 8
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 1998 Annual
Shareholders Meeting ****
* Incorporated by reference from the like-numbered exhibit to Form S18
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 1998 Annual Shareholders Meeting for fiscal year ended
November 30, 1998 filed with the SEC on October 7, 2000.
Reports on Form 8-K filed during the last quarter of the period covered
by this report are as follows:
None.
CANTERBURY INFORMATION TECHNOLOGY, INC. - FORM 10-K 2000
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: 2/28/01 By /s/ Stanton M. Pikus
-----------------------
Stanton M. Pikus, President; Chief Executive Officer
Dated: 2/28/01 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: 2/28/01 By /s/ Stanton M. Pikus
-----------------------
Stanton M. Pikus, President; Director; Chairman of
the Board of Directors
Dated: 2/28/01 By /s/ Kevin J. McAndrew
------------------------
Kevin J. McAndrew, Chief Operating Officer;
Executive Vice President; Chief Financial Officer;
Director
Dated: 2/28/01 By /s/ Jean Zwerlein Pikus
--------------------------
Jean Zwerlein Pikus, Vice President Operations;
Secretary; Director
Dated: 2/28/01 By /s/ Alan Manin
-----------------
Alan Manin, Director
Dated: 2/28/01 By /s/ Stephen M. Vineberg
--------------------------
Stephen M. Vineberg, Director
CANTERBURY INFORMATION TECHNOLOGY, INC. - FORM 10-K 2000
Dated: 2/28/01 By /s/ Paul L. Shapiro
----------------------
Paul L. Shapiro, Director
Dated: 2/28/01 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, 2000 and
1999, and the related consolidated statements of operations,
stockholders' equity, and cash flows for each of the three years in the
period ended November 30, 2000. These financial statements are the
responsibility of the Company's management. Our responsibility is to
express an opinion on these financial statements based on our audits.
We conducted our audits in accordance with auditing standards generally
accepted in the United States. 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, 2000 and 1999,
and the consolidated results of its operations and its cash flows for
each of the three years in the period ended November 30, 2000, in
conformity with accounting principles generally accepted in the United
States.
Ernst & Young, LLP
Philadelphia, Pennsylvania
February 23, 2001
F
CANTERBURY INFORMATION TECHNOLOGY, INC. - FORM 10-K 2000
CONSOLIDATED BALANCE SHEETS
November 30, 2000 and 1999
ASSETS
------
2000 1999
---- ----
Current Assets:
Cash $ 885,479 $ 1,060,434
Accounts receivable, net 4,864,456 2,676,889
Notes receivable - current portion 393,597 363,805
Prepaid expenses and other assets 652,319 751,876
Inventory 202,032 198,764
Deferred income tax benefit 91,412 99,448
----------- -----------
Total Current Assets 7,089,295 5,151,216
Property and equipment at cost, net
of accumulated depreciation of
$5,886,000 and $5,148,000 1,989,650 2,383,829
Goodwill, net of accumulated
amortization of $2,816,000 and
$2,348,000 9,330,435 8,885,170
Deferred income tax benefit 1,508,251 2,706,888
Notes receivable 7,237,239 7,630,836
Investments 3,315,878 204,405
Other assets 713,664 849,628
----------- -----------
Total Assets $31,184,412 $27,811,972
=========== ===========
Continued
See Accompanying Notes
F-1
CANTERBURY INFORMATION TECHNOLOGY, INC. - FORM 10-K 1999
CONSOLIDATED BALANCE SHEETS
November 30, 2000 and 1999
Continued
LIABILITIES AND STOCKHOLDERS' EQUITY
------------------------------------
2000 1999
---- ----
Current Liabilities:
Accounts payable trade $ 2,277,446 $ 1,144,922
Accrued expenses 655,204 387,660
Unearned revenue 860,295 1,111,330
Income taxes payable 129,833 -
Current portion, long-term debt 1,346,112 1,246,997
----------- -----------
Total Current Liabilities 5,268,890 3,890,909
Long-term debt 678,303 1,989,031
Deferred income tax liability 3,157,118 3,059,219
----------- -----------
Total Liabilities 9,104,311 8,939,859
Commitments and contingencies
Stockholders' Equity:
Common stock, $.001 par value,
50,000,000 shares authorized;
9,508,000 and 6,421,000 issued 10,685 9,508
Additional paid-in capital 22,456,731 19,946,847
Accumulated other comprehensive income 779,244 (472,215)
Retained earnings/(accumulated deficit) 1,242,883 184,669
Notes receivable for capital stock (2,002,142) (388,696)
Less treasury shares, at cost (407,300) (407,300)
----------- -----------
Total Stockholders' Equity 22,080,101 18,872,813
----------- -----------
Total Liabilities and Stockholders'
Equity $31,184,412 $27,811,972
=========== ===========
See Accompanying Notes
F-2
CANTERBURY INFORMATION TECHNOLOGY, INC. - FORM 10-K 2000
CONSOLIDATED STATEMENTS OF OPERATIONS
Years ended November 30, 2000, 1999 and 1998
2000 1999 1998
---- ---- ----
Service revenue $12,587,921 $11,665,394 $11,400,199
Product revenue 17,146,668 2,544,132 722,680
----------- ----------- -----------
Total net revenue 29,734,589 14,209,526 12,122,879
Service costs and expenses 7,195,514 6,657,385 6,403,033
Product costs and expenses 14,633,006 1,810,926 292,243
----------- ----------- -----------
Total costs and expenses 21,828,520 8,468,311 6,695,276
Gross profit 7,906,069 5,741,215 5,427,603
Selling 2,337,340 1,808,601 1,984,836
General and administrative 4,486,552 3,645,673 3,798,612
---------- ----------- -----------
Total operating expenses 6,863,892 5,454,274 5,783,448
Other income (expenses)
Interest income 715,829 705,959 861,424
Interest expense (346,457) (390,453) (394,925)
Other 345,014 18,321 470,849
---------- ----------- -----------
Total other income (expense) 714,386 333,827 937,348
Income before income taxes 1,756,563 620,768 581,503
Provision for income taxes 698,348 - -
----------- ----------- -----------
Net income $ 1,058,215 $ 620,768 $ 581,503
=========== =========== ===========
Continued
See Accompanying Notes
F-3
CANTERBURY INFORMATION TECHNOLOGY, INC. - FORM 10-K 2000
CONSOLIDATED STATEMENTS OF OPERATIONS
Years ended November 30, 2000, 1999 and 1998
Continued
2000 1999 1998
---- ---- ----
Net income per share and
common share equivalents 1,058,215 620,768 581,503
Basic and diluted:
Basic net income per share $.11 $.08 $.10
==== ==== =====
Diluted net income per share $.10 $.08 $.10
==== ==== =====
Weighted average number of
common shares - basic 10,027,700 8,008,800 6,035,500
========== ========= =========
Weighted average number of
common shares - diluted 11,028,500 8,276,800 6,035,500
========== ========= =========
See Accompanying Notes
F-4
Canterbury Information Technology, Inc. - 10-K 2000
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
Years Ended November 30, 2000, 1999 and 1998
Class D Accumulated Notes Total
Convertible Common Common Additional Retained Other Receivable Stock-
Preferred Stock Stock Paid-in- Earnings Treasury Comprehensive for Capital holders'
Stock Shares Amount Capital (Deficit) Stock Income Stock Equity
Balance, ----------- --------- ------ ----------- ----------- -------- ------------- ----------- -----------
November 30, 1997 1,043,841 5,417,156 $5,417 $15,980,044 $(1,017,603)$(407,300) - (342,325) $15,262,074
Net income 581,503 581,503
Unrealized loss
on available for sale securities (143,757) (143,757)
-----------
Total comprehensive
income 437,746
Preferred stock
Conversion (1,043,841) 613,912 614 1,043,227 -
401(k) Company
match 35,201 35 62,271 62,306
Additional issuance
of common stock
for acquisitions 354,624 355 494,980 495,335
Notes receivable
for capital stock (28,193) (28,193)
Balance, -------- -----------
November 30, 1998 - 6,420,893 $6,421 $17,580,522 $ (436,100)$(407,300) (143,757) (370,518) $16,229,268
Net income 620,768 620,768
Unrealized loss
on available for
sale securities (328,458) (328,458)
----------
Total comprehensive
Income 292,310
401(k) Company
match 77,129 77 48,115 48,192
Additional issuance
of common stock
for acquisitions 292,468 292 849,707 849,999
Private Placements
of common stock,
net of expenses 2,717,648 2,718 1,468,504 1,471,222
Notes receivable
for capital stock (18,178) (18,178)
Balance, -------- -----------
November 30, 1999 - 9,508,138 $9,508 $19,946,848 $184,668 $(407,300) $(427,215) ($388,696) $18,872,813
Net income 1,058,215 1,058,215
Unrealized loss
on available for
sale securities 1,251,459 1,251,459
----------
Total comprehensive
Income 2,309,674
401(k) Company
match 16,149 16 59,482 59,498
Additional issuance
of common stock
for acquisitions 411,420 411 899,151 899,562
Issuance of common shares
to employees, directors
and consultants 800,000 800 1,551,200 (1,552,000) -
Retired common shares (50,000) (50) 50 -
Notes receivable
for capital stock (61,446) (61,446)
Balance, ------- ----------
November 30, 2000 - 10,685,707 $10,685 $22,456,731 $1,242,883 $(407,300) $ 779,244 ($2,002,142 $22,080,101
======== ========== ======= =========== ========== ========== ========== ========== ===========
See Accompanying Notes
F-5
CANTERBURY INFORMATION TECHNOLOGY, INC. - FORM 10-K 2000
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years ended November 30, 2000, 1999 and 1998
2000 1999 1998
---- ---- ----
Operating activities:
Net income (loss) $1,058,215 $ 620,768 $ 581,503
Adjustments to reconcile net income
(loss) to net cash provided by
operating activities from
continuing operations:
Depreciation and amortization 1,036,748 1,040,952 1,014,571
Provision for losses on accounts
receivable 75,409 89,773 118,534
Loss on writedown from notes
receivable - - 28,992
Deferred income taxes 1,304,572 - (95,618)
401(k) contributions 59,498 48,192 62,306
Receipt of stock for services (3,111,473) (240,000) (378,000)
Other assets 1,427,293 (561,067) (301,489)
Changes in operating assets, net
of acquisitions
Accounts receivable (2,053,971) (1,306,811) 72,440
Inventory (3,268) - -
Prepaid expenses and other
assets 152,965 5,945 (94,672)
Income taxes 129,833 - 63,217
Accounts payable 1,015,021 787,822 (110,755)
Accrued expenses 35,572 53,251 (680,563)
Unearned revenue (251,035) 120,495 125,659
---------- ---------- -----------
Net cash provided by operating
activities of continuing operations 875,379 659,320 406,125
---------- ---------- -----------
Investing activities:
Capital expenditures (110,969) (431,809) (213,740)
---------- ---------- -----------
Net cash used in investing activities
of continuing operations (110,969) (431,809) (213,740)
---------- ---------- -----------
Financing activities:
Principal payments on long term
debt (1,253,170) (1,256,532) (549,387)
Proceeds from payments on notes
Receivable 363,805 330,961 348,340
Proceeds from issuance of common
stock, net - 1,471,220 -
Deferred finance costs (50,000) - -
Net cash provided by/(used in)
financing activities from
continuing operations (939,365) 545,649 (201,047)
---------- ---------- -----------
Net increase/(decrease) in cash (174,955) 773,160 (8,662)
Cash, beginning of year $1,060,434 $ 287,274 $ 295,936
Cash, end of year $ 885,479 $1,060,434 $ 287,274
========== ========== ===========
Continued, See Accompanying Notes
F-6
CANTERBURY INFORMATION TECHNOLOGY, INC. - FORM 10-K 2000
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended November 30, 2000, 1999 and 1998
Continued
Supplemental schedule of noncash investing and financing activities:
In August, 2000 the Company issued 221,420 shares of its common stock
for the purchase of certain assets of DataMosaic International, Inc.
In July, 2000 the Company issued 800,000 shares of restricted common
stock to Officers, Directors and consultants of the Company for notes
receivable.
In March, 2000 the Company issued 20,000 shares of restricted common
stock as an adjustment to the purchase price of certain assets of USC
Communications, Inc. purchase.
During March, 2000 the Company issued 16,149 shares of restricted common
stock to its defined contribution plan to fulfill its matching contribution
requirement.
During 2000, the unrealized gain on investments increased by $1,251,000.
During 2000, the Company received 660,000 shares of common stock from an
affiliated third party valued at a market value of $1,257,750 for services
provided.
In October, 1999 the Company issued 292,468 shares of its common stock
for the purchase of certain assets of U.S. Communications, Inc.
During March, 1999 the Company issued 77,129 shares of restricted common
stock to its defined contribution plan to fulfill its matching contribution
requirement.
In October, 1998 the Company issued 278,925 shares of its common stock
to the previous shareholders of ATM Technologies, Inc. to complete the one
year earnout payment as final consideration under the purchase agreement.
In July, 1998 the Company issued 75,700 shares of its common stock to
the two previous owners of ProSoft, LLC to satisfy a price guarantee
associated with the original purchase of the business.
In June, 1998 the Company issued 35,201 shares of restricted common
stock to its defined contribution plan to fulfill its matching contribution
requirement.
The Company incurred capital lease obligations of $ 41,557 in 2000;
$106,060 in 1999; and $198,455 in 1998 when the Company entered into leases
for equipment.
In December, 1997 the Company received 600,000 shares of common stock
from an affiliated third party valued at an estimated market value of
$378,000 as compensation for services rendered in the overview and start-up
of their business.
CANTERBURY INFORMATION TECHNOLOGY, INC. - FORM 10-K 2000
CONSOLIDATED STATEMENTS OF CASH FLOWS
Years Ended November 30, 2000, 1999 and 1998
Continued
The taxes paid for fiscal 2000, 1999, and 1998 were as follows: $35,700,
$38,900, and $32,400 respectively.
Interest paid during fiscal 2000, 1999, and 1998 were as follows:
$346,457, $390,453, and $394,925 respectively.
The taxes paid for fiscal 1999, 1998 and 1997 were as follows: and
$38,900, $32,400, and $40,600 respectively.
Interest paid during fiscal 1999, 1998 and 1997 were as follows:
$390,453, $394,925 and $490,552 respectively.
F-7
CANTERBURY INFORMATION TECHNOLOGY, INC. - FORM 10-K 1999
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOVEMBER 30, 1999
1. Operations and Summary of Significant Accounting Policies
---------------------------------------------------------
Description of Business
-----------------------
Canterbury Information Technology, Inc. (hereinafter referred to as
"the Registrant" or "the Company") is engaged in the business of providing
information technology products and services to both commercial and
government clients. Canterbury is comprised of six operating subsidiaries
with offices located in New Jersey, New York, Maryland, Georgia and Texas.
The focus of the Canterbury companies is to become an integral part of our
clients IT solution, designing and applying the best products and services to
help them achieve a competitive advantage and helping their employees to
succeed. Our subsidiaries offer the following technology solutions:
* systems engineering and consulting * technical and desktop
* IT contractors and permanent staffing applications training
* management training programs * records and asset management
* hardware sales and support systems
* software development * distance learning portals
* web development * specific portals.
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.
F-8
CANTERBURY INFORMATION TECHNOLOGY, INC. - FORM 10-K 2000
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOVEMBER 30, 2000
Stock Based Compensation
------------------------
The Company accounts for stock options under Accounting Principles
Board (APB) Opinion No. 25- Accounting for Stock Issued to Employees. The
Company discloses the pro forma net income and earnings per share effect as
if the Company had used the fair value method prescribed under SFAS No.123-
Accounting for Stock Based Compensation (see Note 12).
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.
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.
The following estimated useful lives are used:
Building and improvements 7 years
Equipment 5 years
Furniture and fixture 5 to 7 years
Intangible Assets
-----------------
Goodwill is being amortized over periods ranging from twenty to
twenty-five years using the straight-line method.
The Company periodically evaluates whether the remaining estimated
useful life of intangibles may warrant revision or the remaining balance
of intangibles may require adjustment generally based upon expectations
of nondiscounted cash flows and operating income.
Inventories
-----------
Inventories are stated at the lower of cost or market utilizing a
first-in, first-out method of determining cost.
Earnings Per Share
------------------
Basic earnings per share is computed using the weighted average
common shares outstanding during the year. Diluted earnings per share
considers the dilutive effect, if any, of common stock equivalents
(options).
Recent Accounting Pronouncements
--------------------------------
The Company plans to adopt Statement of Financial Accounting Standards
"(SFAS)" No. 133, Accounting for Derivative Instruments and Hedging Activities,
as amended, effective at the beginning of fiscal 2001. This statement will
require derivative positions to be recognized in the balance sheet at fair
value. The Company is in the process of reviewing the Statement, and has not
yet determined the effect of adoption on results of operations or financial
position.
F-9
CANTERBURY INFORMATION TECHNOLOGY, INC. - FORM 10-K 2000
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOVEMBER 30, 2000
Concentration of Risk
---------------------
As previously discussed, the Company is in the business of
providing information technology services. These services are provided
to a large number of customers in various industries in the United
States. The Company's trade accounts receivable are exposed to credit
risk, but the risk is limited due to the diversity of the customer base
and the customers wide geographic dispersion. The Company performs
ongoing credit evaluations of its customer's financial condition. The
Company maintains reserves for potential bad debt losses and such bad
debt losses have been within the Company's expectations.
The Company maintains cash balances at several large creditworthy
banks located in the United States. Accounts at each institution are
insured by the Federal Deposit Insurance Corporation up to $100,000.
The Company does not believe that it has significant credit risk related
to its cash balance.
Reclassifications
-----------------
Certain reclassifications have been made to prior years balances in
order to conform to current presentations.
2. Acquisitions
------------
On August 1, 2000 the Company purchased all of the outstanding common
stock of DataMosaic International, Inc. ("DataMosaic") for 221,420 restricted
shares of Canterbury common stock valued at $862,000. DataMosaic, an
Atlanta, Georgia company, is a management and systems consulting business
which provides staffing augmentation solutions and consulting services to the
information technology industry. The acquisition was recorded under the
purchase method of accounting. The consolidated results of operations include
DataMosaic since the date of acquisition. Proforma results of operations for
2000 and 1999 are deemed immaterial, and are not presented.
After the acquisition DataMosaic changed its name to DataMosaic/
Canterbury Corp. The purchase price was preliminarily allocated as follows:
Cash - $114,000; receivables - $209,000; other assets - $23,000; liabilities -
$349,000. The excess cost over the fair value of net assets acquired was
approximately $865,000.
3. Segment Reporting
-----------------
The Company is organized into three operating segments and the
corporate office. The operating segments are: training and consulting,
hardware sales and software sales. Summarized financial information for
each segment is as follows:
F-10
CANTERBURY INFORMATION TECHNOLOGY, INC. - FORM 10-K 2000
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOVEMBER 30, 2000
Training
and
2000 Staffing Consulting Hardware Software Corporate Total
---- -------- ---------- -------- -------- --------- -----
Revenues &952,353 $11,635,568 $16,636,659 $235,268 $ - $29,734,589
Income before 53,291
taxes (778,274)
Assets
Interest income
Interest expense
Depreciation and
amortization 459,847
Training
and
1999 Staffing Consulting Hardware Software Corporate Total
---- -------- ---------- -------- -------- --------- -----
Revenues - $11,665,394 $2,058,870 $485,262 $ - $14,209,526
Income before
taxes 1,404,468 317,843 104,339 (1,205,882) 620,768
Assets - 2,931,754 1,426,207 261,225 23,192,786 27,811,972
Interest income - - - 705,959 705,959
Interest expense - 30,384 - - 360,069 390,453
Depreciation and
amortization - 555,339 36,845 15,534 432,478 1,040,196
Training
and
1998 Staffing Consulting Hardware Software Corporate Total
---- -------- ---------- -------- -------- --------- -----
Revenues - $11,400,199 $ 376,300 $346,380 $ - $12,122,879
Income before
taxes - 957,095 112,872 103,897 (592,360) 581,503
Assets 3,089,105 171,734 158,079 21,910,979 25,329,897
Interest income - 2,145 - - 859,279 861,424
Interest expense - 163,820 - - 231,105 394,925
Depreciation and
amortization - 547,809 10,876 10,011 445,875 1,014,571
F-11
CANTERBURY INFORMATION TECHNOLOGY, INC. - FORM 10-K 2000
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOVEMBER 30, 2000
4. Property and Equipment
----------------------
Property and equipment, which is recorded at cost, consists of the
following:
2000 1999
---- ----
Land, buildings and improvements $ 725,910 $ 725,910
Machinery and equipment 5,085,176 4,745,362
Furniture and fixtures 1,413,289 1,412,581
Leased property under capital
leases and leasehold improvements 651,089 648,046
---------- ---------
7,875,464 7,531,899
Less: Accumulated depreciation (5,885,814) (5,148,070)
---------- ----------
Net property and equipment $1,989,650 $2,383,829
========== ==========
Accumulated depreciation of leased property under capital leases totaled
$244,000 in 2000. Depreciation expense for 2000, 1999, and 1998 was $565,000,
$603,000, and $ 591,000, respectively.
5. Income Taxes
------------
The provision/(benefit) for income taxes for the years ended
November 30, 2000, 1999 and 1998 is as follows:
2000 1999 1998
---- ---- ----
Current:
Federal $ 26,000 $ - $ -
State 84,000 - 63,000
-------- -------- --------
110,000 - 63,000
Deferred:
Federal 443,000 (59,000) (63,000)
State 145,000 59,000 -
-------- -------- --------
Total $698,000 $ - $ -
======== ======== ========
The reconciliation of the expected provision/(benefit) for the years ended
November 30, 2000, 1999 and 1998 is as follows:
F-12
CANTERBURY INFORMATION TECHNOLOGY, INC. - FORM 10-K 2000
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOVEMBER 30, 2000
2000 1999 1998
---- ---- ----
Expected tax (benefit) at
statutory rates $597,000 $211,000 $197,000
Effect of state taxes, net 151,000 39,000 38,000
Permanent differences 10,000 2,000 6,000
Increase in valuation allowance - - -
Utilization of net operating
losses (60,000) (252,000) (241,000)
-------- -------- ----------
Total $(698,000) - $ -
========= ======== ==========
Significant components of the Company's tax liabilities and assets
as of November 30, 2000 and 1999 are as follows:
November 30,
-----------
2000 1999
---- ----
Deferred tax liabilities:
Gain recognized in financial statements
deferred for income tax purposes $1,686,000 $1,814,000
Tax depreciation in excess of book
depreciation 103,000 313,000
Tax amortization in excess of book
amortization 660,000 558,000
Unrealized gain 609,000 -
Other 99,000 374,219
---------- ----------
Total deferred tax liabilities $3,157,000 $3,059,219
========== ==========
November 30,
-----------
2000 1999
---- ----
Deferred tax assets:
Allowance for doubtful accounts $ 78,000 76,000
Expenses deductible for financial
reporting purposes but deferred
for tax reporting purposes 13,000 24,000
Unrealized impairment loss 67,000 -
Net operating loss carryover 1,442,000 2,706,336
---------- ----------
Total deferred tax assets $1,600,000 $2,806,336
========== ==========
F-13
CANTERBURY INFORMATION TECHNOLOGY, INC. - FORM 10-K 2000
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOVEMBER 30, 2000
At November 30, 2000, the Company had a tax loss carryforward for
federal income tax reporting purposes of $3,093,000 and $3,922,000 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 2005.
6. Long-Term Debt
--------------
November 30,
-----------
2000 1999
---- ----
Long-term obligations consist of:
Term loan $ - $ 200,436
Revolving credit line 1,859,620 2,774,620
Capital lease obligations 164,795 260,973
---------- ----------
2,024,415 3,236,029
Less: Current maturities (1,346,112) (1,246,997)
---------- ----------
$ 678,303 $1,989,032
========== ==========
The Company's outstanding amounts owed under the term loan and credit
line with Chase Bank were refinanced in December, 1999. Under the new
agreement, the Company paid off the remaining term debt of $200,436 and
agreed to term out the $2,774,620 credit line. Monthly payments began in
March of 2000, and continue until December of 2001 when the final balloon
payment of $619,620 is due and payable. Scheduled payments for fiscal 2001
total $1,240,000.
The long term debt is secured by substantially all of the assets of the
Company and requires compliance with covenants which include: limits on
capital expenditures, certain prepayments from excess cash flow as defined
and the maintenance of certain financial ratios and amounts. The Company is
restricted by its primary lender from paying cash dividends on its common
stock.
Subsequent to November 30, 2000 the Company has paid a total of $340,000
to reduce the total bank debt from $1,859,620 to $1,519,620. The outstanding
debt will accrue interest at prime plus 2.0% per annum.
Aggregate maturities on long-term debt, exclusive of obligations under
capital leases, are approximately $1,240,000 in 2001, $619,620 in 2002, and
$0 thereafter.
The carrying value of the long-term debt approximates its fair value.
F-14
CANTERBURY INFORMATION TECHNOLOGY, INC. - FORM 10-K 2000
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOVEMBER 30, 2000
7. Capital Leases
--------------
Capital lease obligations are for certain equipment leases which
expire through fiscal year 2003. Future required 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.
Year ending November 30, 2001 101,846
Year ending November 30, 2002 64,630
Year ending November 30, 2003 and thereafter 20,825
--------
Total minimum lease payments 187,301
Less amount representing interest (22,506)
--------
Present value of long-term obligations under
capital leases $164,795
========
8. Leases
------
The Company leases office space for training center locations and
administration purposes under various noncancelable operating leases at
nine different locations. All of the leases have options to renew. Future
minimum rental payments under the leases are $1,223,000 in 2001; $1,099,000
in 2002; $1,045,000 in 2003 and $1,014,000 in 2004; $1,002,000 in 2005;
$751,000 in 2006; $462,000 in 2007; $116,000 in 2008. Rent expense for the
years ended November 30, 2000, 1999 and 1998 was $1,276,000, $1,266,000,
and $1,051,000, respectively.
9. Commitments and Contingencies
-----------------------------
During fiscal 1999, the President's employment agreement was extended
two additional years, from 2001 to 2003, in exchange for the President
waiving his right to any performance bonus in fiscal 1999. For the years
ended November 30, 1998, November 1997 and November 30, 1996, the President
also waived his right to receive any performance bonus earned and his
employment agreement was extended one year on each occurrence. The terms of
the agreement was for five years and provided 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.
The President waived his right to any performance bonus for fiscal 2000. 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.
F-15
CANTERBURY INFORMATION TECHNOLOGY, INC. - FORM 10-K 2000
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOVEMBER 30, 2000
The Company also amended the employment agreement with its Executive
Vice President and Chief Operating Officer during fiscal 1999 by extending
the agreement two years, from 2001 to 2003, in exchange for the Executive
Vice President waiving his right to any performance bonus in fiscal 1999.
For the years ended November 30, 1998, November 1997 and November 30, 1996,
the Executive Vice President also waived his right to receive any performance
bonus earned and his employment agreement was extended one year on each
occurrence. The term of the agreement was five years and provides 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 year of the contract. The
Executive Vice President waived his right to any performance bonus for fiscal
2000. In conjunction with this contract, the Executive Vice 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.
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 2000, 1999, and 1998 was: $59,498,
$48,192, and $62,306, respectively.
11. Stock Options and Awards
------------------------
The Company has one stock option plan, the 1995 Non-Qualified Stock
Option Plan, covering 1,583,334 shares of common stock ("1995 Plan"). As
of November 30, 2000, the Company had issued 1,688,853 shares under the 1995
Plan. Effective December 1, 2000, the Board approved an additional 500,000
shares for issuance. There are 394,481 shares remaining for issuance in
connection with future stock options that may be granted. The Company has
also issued 490,000 options that are not part of this plan, which are
exercisable at November 30, 2000. Option granted are exercisable immediately
and are issued at market price.
A summary of Canterbury's stock option activity and related information
for the years ended November 30 is as follows:
F-16
CANTERBURY INFORMATION TECHNOLOGY, INC. - FORM 10-K 2000
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOVEMBER 30, 2000
2000 1999 1998
---- ---- ----
Number of shares under stock options:
Outstanding at beginning of year 1,488,721 710,866 539,538
Granted 748,250 927,650 188,266
Exercised - - -
Canceled (58,118) (149,795) (16,940)
Outstanding and exercisable at
end of year 2,178,853 1,488,721 710,866
Weighted average exercise price:
Granted $3.20 $1.50 $ 1.42
Exercised $ - $ - $ -
Canceled $8.87 $9.13 $10.33
Outstanding and exercisable at
end of year $2.27 $2.04 $ 4.25
Information with respect to stock options outstanding and
exercisable at November 30, 2000, is as follows:
Options Outstanding and Exercisable
Range of Number Weighted Average
Exercise Outstanding Remaining Life Weighted Average
Price at 11/30/00 in Years Exercise Price
----- ----------- -------- --------------
$0.53 - $2.90 1,682,091 3.54 $1.88
$3.00 - $5.63 496,762 3.29 $3.58
FASB Statement No. 123 requires pro forma disclosure under the fair
value method of net income and income per share for stock options
granted. The fair value for options was estimated at the date of grant
using the Black-Scholes option pricing model. The Black-Scholes option
valuation model was developed for use in estimating the fair value of
traded options that have no vesting restrictions and are fully
transferable. In addition, option valuation models require the input of
highly subjective assumptions, including the expected stock price
volatility. Because Canterbury's stock options have characteristics
significantly different from those of traded options, and because
changes in the subjective input assumptions can materially affect the
fair value estimate, in management's opinion, the existing models do not
necessarily provide a reliable single measure of the fair value of its
stock options. The fair weighted average value of options granted in
each year and assumptions used in estimating fair value under
the Black-Scholes model are as follows:
F-17
CANTERBURY INFORMATION TECHNOLOGY, INC. - FORM 10-K 2000
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOVEMBER 30, 2000
2000 1999 1998
---- ---- ----
Estimated fair value of options
Granted $1,094,385 $359,644 $59,433
========= ======= =======
Principal assumptions in applying
the Black-Scholes valuation model:
Expected life, in years 2.50 2.50 2.50
Risk-free interest rate 5.80% 6.50% 4.50%
Expected volatility .693 .647 .476
Expected dividend yield 0.00% 0.00% 0.00%
For purposes of pro forma disclosures, the estimated fair value of
the options is amortized to expense over the options' vesting period.
Had compensation cost been determined based upon the fair value of stock
options at grant date consistent with FASB Statement No. 123,
Canterbury's net income and income per share would have been reduced to
the pro forma amounts indicated below (in thousands, except income per
share information):
2000 1999 1998
---- ---- ----
Pro forma net income (loss) from
continuing operations $401,584 $261,124 $522,070
Pro forma income (loss) per share
from continuing operations basic
and diluted .04 .03 .09
12. Stockholders' Equity
--------------------
During 1999, the Company successfully completed a series of private
placements with non-affiliates. From March, 1999 to October, 1999 a total
of four private placements occurred. A total of 2,320,589 restricted common
shares of stock were issued. Total net proceeds totaled $1,471,220. The
Company also issued a total of 397,059 shares of restricted common stock as
finder fees associated with these placements. All private placements had
registration rights. The Company used the proceeds to repay amounts under
the term loan, for general corporate purposes and for working capital.
13. Related Party Transactions
--------------------------
During 2000, the Company continued to perform consulting and web
development services for the same publicly traded organization. The value
of the services provided during the year totaled $1,108,250. These services
were paid for with stock of the public company. As of November 30, 2000 the
Company owned 1,013,617 shares of this organization. During the first quarter
of fiscal 2001, the Company received an additional 233,962 shares in
satisfaction of a $372,000 receivable at November 30, 2000.
F-18
CANTERBURY INFORMATION TECHNOLOGY, INC. - FORM 10-K 2000
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOVEMBER 30, 2000
During 1999, the Company performed consulting and web development
services for a start-up, non-public company in which certain officers are
members of the Board of Directors and shareholders. The services billed
during the year totaled $521,500. The receivable for these services is
included in other assets on the accompanying balance sheet. In March, 2000
the company went public through a reverse merger. Settlement of this
receivable was subsequently paid during fiscal 2000 with stock of the public
company.
During fiscal 1998, an additional 600,000 shares were received for
services rendered by Canterbury to this public company and $375,000 has been
reflected in other income in the Statement of Operations representing the
estimated fair value of the shares received. See also Note 16 - Securities
Available for Sale.
At November 30, 2000 and 1999, the total notes receivable plus accrued
interest for corporate officers, corporate counsel and certain consultants
totaled $2,002,000 and $389,000, respectively. The notes are collateralized
by the common stock and are reported as a contra-equity account. Interest
rates range from 6% to 7%.
14. Advertising
-----------
The Company expenses advertising as incurred. Total advertising expenses
included in the results of operations were $301,000, $347,000, and $511,000
for 2000, 1999, and 1998, respectively.
15. Securities Available for Sale
-----------------------------
At November 30, 2000 and 1999, the Company held investment securities
in public companies. For one of the public companies certain officers and
directors of the Company have an ownership interest in the aggregate of
approximately 18%. Management has estimated the fair value of this
investment at November 30, 2000 and 1999 at $3,294,000 and $26,000,
respectively, based on discounted market values due to the stock being
thinly traded and volatile and costs at November 30, 2000 of $1,745,000.
Other equity securities have a fair value of $22,000 and cost of $75,000
at November 30, 2000. Management has classified these investments as
available for sale and are included in non-current other assets in the
accompanying balance sheet. The Company did not sell any available for
sale securities during 2000 or 1999.
F-19
CANTERBURY INFORMATION TECHNOLOGY, INC. - FORM 10-K 2000
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOVEMBER 30, 2000
16. Unaudited Quarterly Financial Information
-----------------------------------------
2000
First Second Third Fourth Total
----- ------ ----- ------ -----
Revenues $5,953,591 $6,009,134 $9,512,377 $8,259,487 $29,734,589
Gross profit 1,637,082 1,655,629 2,407,905 1,6127,904 7,906,069
Net income (loss) 156,601 371,247 426,100 104,267 1,058,215
Basic net income
(loss) per share 0.02 0.04 0.04 0.02 0.11
Diluted net income
(loss) per share 0.02 0.04 0.04 0.01 0.11
1999
First Second Third Fourth Total
----- ------ ----- ------ -----
Revenues $2,802,130 $3,518,806 $3,227,030 $4,661,560 $14,209,526
Gross profit 1,281,818 1,620,936 1,467,324 1,371,137 5,741,215
Net income (loss) 42,878 226,530 249,171 102,189 620,768
Basic net income
(loss) per share 0.01 0.03 0.03 0.01 0.08
Diluted net income
(loss) per share 0.01 0.03 0.03 0.01 0.08
CANTERBURY INFORMATION TECHNOLOGY, INC. -- 10K 2000
EXHIBIT
LIST OF SUBSIDIARIES
OF CANTERBURY INFORMATION TECHNOLOGY, INC.
Canterbury Career Schools, Inc. (inactive)
Canterbury Management Group, Inc.
Star Label Products, Inc. (shell)
MSI/Canterbury Corp.
CALC/Canterbury Corp.
Prosoft/Canterbury Corp. (inactive)
ATM/Canterbury Corp.
USC/Canterbury Corp.
DataMosaic/Canterbury Corp.
Canterbury Consulting Group, Inc.
Corporate Information
Corporate Headquarters Securities Counsel
1600 Medford Plaza Levy & Levy, P.A.
128 Route 70 Suite 309, Plaza 1000
Medford, NJ 08055 Main Street
(609) 953-0044 Voorhees, NJ 08043
Fax (609) 953-0062 (856) 751-9494
Fax (856) 751-9779
Board of Directors
------------------ Transfer Agent
Stanton M. Pikus
Kevin J. McAndrew American Stock Transfer and
Jean Z. Pikus Trust Company
Alan Manin 59 Maiden Lane
Stephen Vineberg New York, NY 10038
Paul Shapiro (800) 937-5449
Frank Cappiello
Independent Auditors
Officers
-------- Baratz & Associates
Kevin J. McAndrew 4A Eves Drive, Suite 106
Jean Z. Pikus Marlton, NJ 08053
(856) 985-5688
Website
www.canterburyciti.com
Canterbury Consulting Group
Canterbury Consulting Group, Inc.
1600 Medford Plaza, 128 Route 70, Medford, NJ 08055
(609) 953-0044 (800) 873-2040 Fax (609) 953-0062
www.canterburyciti.com
Canterbury Consulting Group, Inc. common stock trades on The Nasdaq Stock
Market(R) under the symbol CITI.