-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, EgThZr8hS6V/dpZZ0MsnTk7aHp9fmGUsClx2lsCJ2M7Fe39vET9GZajpDLobquQR hzLUGHvITClveMjDQRV+yQ== 0000950170-00-000240.txt : 20000216 0000950170-00-000240.hdr.sgml : 20000216 ACCESSION NUMBER: 0000950170-00-000240 CONFORMED SUBMISSION TYPE: 10QSB PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19991231 FILED AS OF DATE: 20000215 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SAZTEC INTERNATIONAL INC CENTRAL INDEX KEY: 0000801354 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROGRAMMING, DATA PROCESSING, ETC. [7370] IRS NUMBER: 330178457 STATE OF INCORPORATION: CA FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10QSB SEC ACT: SEC FILE NUMBER: 000-15353 FILM NUMBER: 545751 BUSINESS ADDRESS: STREET 1: 43 MANNING ROAD CITY: BILLERICA STATE: MA ZIP: 01821-3966 BUSINESS PHONE: 5082629600 MAIL ADDRESS: STREET 1: 43 MANNING ROAD CITY: BILLERICA STATE: MA ZIP: 01821-3966 10QSB 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB QUARTERLY REPORT UNDER SECTION 13 OR 15(D) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE QUARTER ENDED DECEMBER 31, 1999 COMMISSION FILE NUMBER 0-15353 ---------------------------- SAZTEC INTERNATIONAL, INC. CALIFORNIA 33-0178457 (State or Other Jurisdiction of (I.R.S. Employer Incorporation or Organization) Identification Number) 43 MANNING ROAD, BILLERICA, MASSACHUSETTS 01821 (Address of Principal Executive Office) 978-901-9600 (Registrant's Telephone Number) --------------- Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months and (2) has been subject to such filing requirements for the past 90 days. Yes X No ___ The number of shares outstanding of registrant's Common Stock at January 26, 2000, was 4,461,121 shares. SAZTEC INTERNATIONAL, INC. FORM 10-QSB/A FOR THE QUARTER ENDED DECEMBER 31, 1999
PAGE ---- PART I - FINANCIAL INFORMATION Item 1. Financial Statements: Consolidated Statements of Operations -- Three months ended December 31, 1999 and 1998 3 Consolidated Statements of Operations -- 4 Six months ended December 31, 1999 and 1998 Consolidated Balance Sheets -- December 31, 1999 and June 30, 1999 5 Consolidated Statement of Changes in Stockholders' Equity -- 6 December 31, 1999 Consolidated Statements of Cash Flows -- 7 - 8 Six months ended December 31, 1999 and 1998 Notes to Consolidated Financial Statements - December 31, 1999 9 - 10 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 11 - 12 PART II - OTHER INFORMATION Item 1. Legal Proceedings 13 Item 2. Changes in Securities 13 Item 3. Defaults Upon Senior Securities Not Applicable Item 4. Submission of Matters to a Vote of Security Holders Not Applicable Item 5. Other Information 13 Item 6. Exhibits and Reports on Form 8-K 13 Signatures 14 2
SAZTEC INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE THREE MONTHS ENDED DECEMBER 31, 1999 AND 1998 (Unaudited) 1999 1998 ---- ---- REVENUES $2,049,174 $1,835,031 Cost of services 1,670,133 1,519,303 --------------------------------------------------- GROSS PROFIT 379,041 315,728 Selling, general & administrative expense 649,413 543,493 --------------------------------------------------- LOSS FROM OPERATIONS (270,372) (227,765) Interest expense (income) 10,793 (4,258) --------------------------------------------------- LOSS BEFORE PROVISION FOR INCOME TAXES (281,165) (223,507) Provision for income taxes 3,867 403 --------------------------------------------------- NET LOSS APPLICABLE TO COMMON STOCKHOLDERS $(285,032) $ (223,910) =================================================== LOSS PER SHARE OF COMMON STOCK: Basic and diluted net loss applicable to common $(.06) $(.05) stockholders =================================================== Weighted average number of shares 4,461,121 4,461,121 =================================================== See accompanying notes.
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SAZTEC INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS FOR THE SIX MONTHS ENDED DECEMBER 31, 1999 AND 1998 (Unaudited) 1999 1998 ---- ---- REVENUES $4,230,956 $3,601,715 Cost of services 3,305,815 3,022,512 -------------------- ------------------- GROSS PROFIT 925,141 579,203 Selling and administrative expense 1,228,920 1,076,356 -------------------- ------------------- LOSS FROM OPERATIONS (303,779) (497,153) Interest expense (income) 21,659 (19,764) LOSS BEFORE PROVISION FOR INCOME TAXES (325,438) (477,389) Provision for income taxes 3,867 (76,198) -------------------- ------------------- NET LOSS APPLICABLE TO COMMON STOCKHOLDERS $(329,305) $(401,191) ==================== =================== LOSS PER SHARE OF COMMON STOCK: Basic and diluted net loss applicable to common $(.07) $(.09) stockholders ==================== =================== Weighted average number of shares 4,461,121 4,461,121 ==================== =================== See accompanying notes.
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SAZTEC INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS DECEMBER 31, 1999 AND JUNE 30, 1999 ASSETS DEC. 31, JUNE 30, 1999 1999 ---- ---- (Unaudited) CURRENT ASSETS Cash and cash equivalents $246,346 $338,088 Restricted cash 26,210 26,210 Accounts receivable, less allowance for doubtful accounts of $28,155 1,113,754 1,612,573 Costs and estimated earnings in excess of billings 43,392 Work in process 445,755 118,720 Prepaid expenses and other current assets 174,948 112,601 ----------------------------------- TOTAL CURRENT ASSETS 2,050,405 2,208,192 PROPERTY AND EQUIPMENT, NET 344,907 422,076 OTHER ASSETS Goodwill and other intangible assets, less accumulated amortization of 131,460 137,520 $87,842 in 1999 and $75,722 in 1998 Deposits and other assets 57,383 63,626 ----------------------------------- TOTAL ASSETS $2,584,155 $2,831,414 =================================== LIABILITIES AND STOCKHOLDERS' EQUITY CURRENT LIABILITIES Line of Credit $81,736 $0 Current portion long-term debt and capital lease obligations 153,183 172,375 Accounts payable 994,769 620,366 Accrued liabilities 527,769 728,230 Income Taxes Payable 2,469 0 Customer deposits 261,960 385,461 ----------------------------------- TOTAL CURRENT LIABILITIES 2,021,886 1,906,432 LONG-TERM DEBT AND CAPITAL LEASE OBLIGATIONS LESS CURRENT PORTION 70,836 104,039 ACCRUED EXPENSE 1,076 7,355 STOCKHOLDER'S EQUITY Preferred stock-no par value; 1,000,000 shares authorized; no shares issued Common stock-no par value, 10,000,000 shares authorized 4,461,121 shares issued at both December 31, 1999 and June 30, 1999 12,430,811 12,430,811 Contributed capital 14,498 14,498 Accumulated deficit (11,839,107) (11,509,802) Cumulative translation adjustment (115,845) (121,919) ----------------------------------- TOTAL STOCKHOLDERS' EQUITY 490,357 813,588 ----------------------------------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $2,584,155 $2,831,414 =================================== See accompanying notes.
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SAZTEC INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY DECEMBER 31, 1999 Common Stock Common Stock Subscribed CUMULATIVE NUMBER OF NUMBER OF CONTRIBUTED ACCUMULATED TRANSLATION SHARES AMOUNT SHARES AMOUNT CAPITAL DEFICIT ADJUSTMENT June 30, 1999 4,461,129 $ 12,430,811 $ 14,498 $(11,509,802) $ (121,919) Net loss (329,305) Translation 6,074 adjustment ------------ ------------ ------------ ------ ------------ ------------ ------------ 4,461,129 $ 12,430,811 $ 14,498 $(11,839,107) $ (115,845) See accompanying notes.
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SAZTEC INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED DECEMBER 31, 1999 AND 1998 (Unaudited) 1999 1998 ----------- ----------- CASH FLOWS FROM OPERATING ACTIVITIES Net loss $ (329,305) $ (401,191) Adjustments to reconcile net loss to net cash (used in) provided by operating activities: Depreciation and amortization 114,007 110,260 Provision for (recovery of) bad debts (21,791) Changes in assets and liabilities: Accounts receivable 498,819 (235,115) Cost in excess of billings (43,392) Work in process (327,035) (59,810) Prepaid expenses and other current assets (62,347) (22,229) Deposits and other assets 6,243 (16,539) Accounts payable 374,403 (110,503) Accrued liabilities (200,461) (137,023) Customer deposits and non-current accrued expenses (129,780) 337,734 ----------- ----------- NET CASH FROM (USED IN) OPERATING ACTIVITIES (98,848) 33,643 ----------- ----------- CASH FLOWS FROM INVESTING ACTIVITIES: Additions to property and equipment (30,042) (38,978) Payments received on notes receivable 35,540 Decrease in restricted cash 112,685 ----------- ----------- NET CASH (USED IN) PROVIDED BY INVESTING ACTIVITIES (30,042) 109,247 ----------- ----------- CASH FLOWS FROM FINANCING ACTIVITIES: Borrowings on notes payable 3,712,629 1,421,462 Payments on notes payable (3,630,894) (1,338,496) Principal payments on debt and capital lease (52,395) (52,889) obligations ----------- ----------- NET CASH PROVIDED BY FINANCING ACTIVITIES 29,340 30,077 ----------- ----------- EFFECT OF EXCHANGE RATE CHANGES ON CASH 7,807 (3,725) ----------- ----------- NET INCREASE (DECREASE) IN CASH (91,743) 169,242 CASH AND EQUIVALENTS AT BEGINNING OF PERIOD 338,089 513,194 ----------- ----------- CASH AND EQUIVALENTS AT END OF PERIOD $ 246,346 $ 682,436 =========== =========== See accompanying notes.
7 SAZTEC INTERNATIONAL, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS FOR THE SIX MONTHS ENDED DECEMBER 31, 1999 AND 1998 (Unaudited) 1999 1998 ---- ---- SUPPLEMENTAL SCHEDULE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION: Cash paid during the period for: Interest $31,788 $12,210 ======== ========= Income taxes $3,867 $5,283 ======== ========= See accompanying notes. 8 SAZTEC INTERNATIONAL, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS DECEMBER 31, 1999 AND 1998 NOTE 1. ACCOUNTING POLICIES The accompanying unaudited consolidated financial statements include all adjustments (consisting only of normal recurring accruals) which, in the opinion of management, are necessary for a fair presentation of financial position, results of operations and cash flows. Results of operations for interim periods are not necessarily indicative of results to be expected for a full year. NOTE 2. FOREIGN OPERATIONS AND MAJOR CUSTOMERS- SEGMENTS Revenues, loss before taxes, and identifiable assets by geographic area are shown below. United Kingdom amounts relate solely to Saztec Europe, Ltd. and its subsidiaries, whose customers are located in England, Scotland, Germany, Italy, Spain, and Belgium. Identifiable assets of Saztec Europe Ltd. located outside of Ardrossan, Scotland are immaterial.
6 MONTHS ENDED DECEMBER 31, 1999 1998 ---- ---- Revenue United States $3,252,351 $2,412,924 United Kingdom/Western Europe 978,605 1,188,791 -------------------------------------------------- $4,230,956 $3,601,715 ================================================== Loss before income taxes United States $(84.640) $(26,525) United Kingdom/Western Europe (240,798) (450,864) -------------------------------------------------- $(325,438) $(477,389) ================================================== Depreciation United States $73,392 $47,989 United Kingdom/Western Europe 40,615 56,211 Amortization-U.S. only 6,060 6,060 -------------------------------------------------- $120,067 $110,260 ================================================== Identifiable Assets DECEMBER 31 1999 JUNE 30, 1999 ---------------- ------------- United States $2,578,443 $1,746,463 United Kingdom 1,136,547 1,084,951 -------------------------------------------------- $3,714,990 $2,831,414 ==================================================
9 NOTE 3. LOSS PER SHARE Loss per common share is computed by dividing net loss applicable to common stockholders by the weighted average number of shares of common stock outstanding during each year which totaled 4,461,121 for the quarters ended December 31, 1999, and 1998. 10 MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS Revenue for the six months ended December 31, 1999, increased to $4,230,956 from $3,601,715 for the six months ended December 31, 1998, an increase of $629,241 or (17.5%). Revenue for the Quarter ended December 31, 1999 at $2,049,174 was up $214,143 from the $1,835,031 earned for the quarter ended December 31, 1998. U.S. revenue for the six months ended December 31, 1999 of $3,252,351, increased $839,427 compared with the six-month period the prior year of $2,412,924. U.S. revenue for the second quarter of the current year $1,547,835 was $342,822 higher compared to $1,205,013 for the quarter ended December 31, 1998. European revenue for the six months ended December 31, 1999 of $978,605 decreased $210,186 compared with the six-month period in the prior year of $1,188,791. European revenue for the second quarter of the current year at $501,457 was $128,562 less compared to $630,019 for the quarter ended December 31, 1998. U.S. revenue continues to increase as a result of growth in scanning services revenue and the improved growth in data entry conversion revenue. Management expects this positive trend to continue in the U.S. during the second half of the year. European revenue is down compared to last year as a result in the decline in library retrospective conversion project revenue. Gross profit for the six months ended December 31, 1999 increased $345,938 from the prior year period to 21.9% of sales, compared to 16.1% of sales for the same period. Gross profit for the quarter ended December 31, 1998 was 18.5% of sales compared to 17.2% in the same period of 1998. Gross profit for U.S. operations increased $346,150 for the six months ended December 31, 1999 to 26.2% of sales compared to 21% for the same period last year. European gross profit decreased $212 for the 6-month period ended December 31, 1999 and was 7.4% of sales compared to 6.2% for the same period last year. Selling, and administrative expenses (S&A) for the six month period increased $152,564 to $1,228,920 (29% of sales) from $1,076,356 (30% of sales) for the same period in the prior year. For the quarter ended December 31, 1999 S&A increased to $649,413 (31.7% of sales) from $543,493 (29.6% of sales) in the prior year quarter. During the three-month period ending December 31, 1999, the company invested $78,871 in new technology development compared to $0 for the same period last year. This investment is the beginning of a plan to upgrade Saztec's offering to higher value added services, dedicated to building and managing content. Loss from operations was $303,779 for the six months ended December 31, 1999 compared to $497,153 for the six months ended December 31, 1998. Loss form operations for the three months ended December 31, 1999 was $270,372 compared to $227,765 for the same period the prior year. Cash Flow decreased $91,743 for the six months ended December 31, 1999 compared to an increase of $169,242 for the same period the prior year. Net cash from operating activities decreased $98,848, and net cash from investing activities decreased $30,042. Cash flow from financing activities of $29,304 and effect of exchange rate changes of $7,807 make up the balance of the change. 11 CAPITAL RESOURCES AND LIQUIDITY The Company renegotiated its revolving credit agreement with a U.S. finance company, which is secured by substantially all the assets of the Company, effective December 10, 1999. The agreement bears interest at the lender's prime rate plus 2.5% (11% at December 31, 1999). Available borrowings are 80% of domestic trade accounts receivable less than 90 days old and are subject to a maximum borrowing ceiling of $800,000. The line of credit is repaid directly from a collateral account established by the lender, through a lockbox at the Company's bank. At December 31, 1999 the Company had total available borrowings of $800,000 and had borrowed $81,736. At December 31, 1998 the Company had total available borrowings of $120,000 against a previous line of credit, and had borrowed $0. The Company was in compliance with the covenants contained in each of the credit agreements at December 31, 1999 and 1998. The existing revolving credit agreement is intended to be a continuing agreement and shall remain in full effect for an initial term of one year and for any renewal term of one year unless terminated by either party within 30 days prior to the end of any such period. The initial term of the revolving credit agreement is from June 22, 1999 to June 21, 2000. The foregoing information may contain forward-looking statements under the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to known and unknown risks, uncertainties, and other factors that may cause actual results to be materially different from those contemplated by the forward-looking statements. Readers are cautioned not to place undo reliance on these forward-looking statements, which speak only as of the date of this report. The Company undertakes no obligation to publicly release any revision to these forward-looking statements to reflect events or circumstances after the date of this report. 12 SAZTEC INTERNATIONAL, INC. DECEMBER 31, 1999 FORM 10-QSB/A PART II - OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS None. ITEM 2. CHANGES IN SECURITIES None. ITEM 5. OTHER INFORMATION None. ITEM 6. EXHIBITS AND REPORTS OF FORM 8-K (A) EXHIBITS The following Exhibit is filed by attachment to this Form 10-QSB/A: EXHIBIT NUMBER DESCRIPTION OF EXHIBIT PAGE - ------- ---------------------- ---- 27 Financial Data Schedule 16 (B) REPORTS ON FORM 8-K: None. 13 SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. Dated: FEBRUARY 10, 2000 SAZTEC INTERNATIONAL, INC. (Registrant) By: /s/ PAUL F. PARSHLEY ------------------------------------------ Paul F. Parshley Vice President, Finance and Administration 14 EXHIBIT INDEX EXHIBIT DESCRIPTION - ------- ----------- 27 Financial Data Schedule 15 EX-27 2 FDS --
5 SAZTEC INTERNATIONAL, INC. FORM 10-QSB/A FOR DECEMBER 31, 1999 - EXHIBIT 27 FINANCIAL DATA SCHEDULE under Article 5 of Regulation S-X 6-MOS JUN-30-1999 DEC-31-1999 272,556 0 1,141,909 28,155 445,755 2,050,405 3,714,990 3,370,083 2,584,155 2,021,886 0 0 0 12,430,811 (11,839,107) 2,584,155 0 4,230,956 0 3,305,815 0 0 21,659 (325,438) 3,867 (329,305) 0 0 0 (329,305) (.07) (.07) 16
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