-----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, VTr3tMNSYnL/AwFu5Tu4xYqyYjeXXlvxxr1ilGJNS30UEHMiC/v6HFmzzKvywlbc Unw5Op3e8RBzypaRdR/JKQ== 0000801529-97-000007.txt : 19970811 0000801529-97-000007.hdr.sgml : 19970811 ACCESSION NUMBER: 0000801529-97-000007 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19970705 FILED AS OF DATE: 19970808 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: PRINTWARE INC CENTRAL INDEX KEY: 0000801529 STANDARD INDUSTRIAL CLASSIFICATION: COMPUTER PERIPHERAL EQUIPMENT, NEC [3577] IRS NUMBER: 411522267 STATE OF INCORPORATION: MN FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-20729 FILM NUMBER: 97654661 BUSINESS ADDRESS: STREET 1: 1270 STREET 2: 1270 EAGAN INDUSTRIAL ROAD CITY: ST PAUL STATE: MN ZIP: 55121 BUSINESS PHONE: 6124561400 10-Q 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 For the quarterly period ended July 5, 1997 Commission file Number 000-20729 PRINTWARE, INC. (Exact name of registrant as specified in its charter.) Minnesota 41-1522267 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 1270 Eagan Industrial Road, St. Paul, MN 55121 (Address of principal executive offices) (Zip Code) (612) 456-1400 (Registrant's telephone number, including area code) Indicate by check mark whether the registrant(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. YES [X] NO [ ] Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practical date: Common Stock, no Par Value - 4,874,602 shares outstanding as of July 30, 1997. PART I - FINANCIAL INFORMATION ITEM 1. - FINANCIAL STATEMENTS PRINTWARE, INC. CONDENSED STATEMENTS OF OPERATIONS 3 AND 6 MONTHS ENDED JULY 5, 1997 AND JUNE 29, 1996 DOLLARS IN THOUSANDS EXCEPT PER SHARE (UNAUDITED)
Three months ended Six months ended July 5 June 29 July 5 June 29 ______ ______ ______ ______ 1997 1996 1997 1996 ______ ______ ______ ______ REVENUES FROM NON AFFILIATES $ 807 $ 920 $1,284 $2,045 REVENUES FROM AFFILIATES 1,118 977 2,488 1,684 ______ ______ ______ ______ TOTAL REVENUES 1,925 1,897 3,772 3,729 COST OF REVENUES 1,054 1,003 2,095 2,113 ______ ______ ______ ______ Gross margin 871 894 1,677 1,616 PERIOD COSTS: Research and development 250 174 463 353 Selling, general and administrative 322 280 650 519 ______ ______ ______ ______ Total 572 454 1,113 872 ______ ______ ______ ______ INCOME FROM OPERATIONS 299 440 564 744 Interest and other income 196 47 391 81 ______ ______ ______ ______ INCOME BEFORE INCOME TAXES 495 487 955 825 INCOME TAXES -- 23 -- 30 ______ ______ ______ ______ NET INCOME $ 495 $ 464 $ 955 $ 795 ====== ====== ====== ====== NET INCOME PER COMMON AND COMMON EQUIVALENT SHARE: $ .10 $ .13 $ .20 $ .21 ====== ====== ====== ====== WEIGHTED AVERAGE NUMBER OF COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING 4,873,664 3,701,346 4,879,259 3,701,346 ========= ========= ========= ========= See notes to condensed financial statements.
PRINTWARE, INC. CONDENSED BALANCE SHEETS DOLLARS IN THOUSANDS EXCEPT PER SHARE (UNAUDITED) ASSETS July 5, December 31, 1997 1996 ____________ ____________ CURRENT ASSETS: Cash and cash equivalents $ 214 $ 524 Marketable securities available-for-sale 11,162 10,267 Receivables from non affiliates 602 693 Receivables from affiliates 468 467 Inventories 1,781 1,763 Deferred income taxes - current 577 551 Prepaid expenses 63 40 _______ _______ Total Current Assets 14,867 14,305 PROPERTY AND EQUIPMENT, net of accumulated depreciation and amortization 111 109 INTANGIBLE ASSETS, net of accumulated amortization 30 31 DEFERRED INCOME TAXES - long-term 130 130 _______ _______ $15,138 $14,575 ======= ======= LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 396 $ 522 Accrued expenses 357 453 Deferred revenues 158 350 _______ _______ Total Current Liabilities 911 1,325 COMMITMENTS AND CONTINGENCIES SHAREHOLDERS' EQUITY: Preferred Stock, no specified par value; 1,000,000 shares authorized; none issued and outstanding -- -- Common Stock, no par value, authorized 15,000,000 shares: issued and outstanding 4,858,497 shares at July 5, 1997; 4,850,694 at December 31, 1996 22,009 21,984 Unrealized holding gain (loss) on securities available-for-sale 81 91 Unearned compensation on stock options (4) (11) Accumulated deficit (7,859) (8,814) _______ _______ Total shareholders' equity 14,227 13,250 _______ _______ $15,138 $14,575 ======= ======= See notes to condensed financial statements.
PRINTWARE, INC. CONDENSED STATEMENTS OF CASH FLOWS 6 MONTHS ENDED JULY 5, 1997 AND JUNE 29, 1996 DOLLARS IN THOUSANDS (UNAUDITED) July 5, June 29, 1997 1996 _______ ______ OPERATING ACTIVITIES: Net income $ 955 $ 795 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 32 61 Common Stock issued for services 0 8 Stock option compensation earned 6 0 Gain (loss) on sale of investments available-for-sale 109 0 Deferred income taxes (26) 0 Changes in operating assets and liabilities: Receivables from non affiliates 90 254 Receivables from affiliates (1) (1) Inventories (18) (78) Prepaid expenses (23) (90) Accounts payable (126) (103) Accrued expenses (96) (87) Deferred revenues (192) 9 ______ ______ Net cash provided by operating activities 712 768 INVESTING ACTIVITIES - Purchases of property and equipment (34) (17) Purchases of available-for-sale securities (1,012) -- ______ ______ Net cash used in investing activities (1,046) (17) FINANCING ACTIVITIES - Proceeds from issuance of Common Stock 24 3 ______ ______ NET (DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS (310) 754 CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 524 2,569 ______ ______ CASH AND CASH EQUIVALENTS, END OF PERIOD $ 214 $3,323 ====== ====== SUPPLEMENTAL CASH FLOW DISCLOSURE: Cash paid during the period for: Income taxes $ 27 $ 30 ====== ====== See notes to condensed financial statements.
PRINTWARE, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS 3 AND 6 MONTHS ENDED JULY 5, 1997 AND JUNE 29, 1996 1. INTERIM FINANCIAL INFORMATION The accompanying condensed balance sheets as of July 5, 1997 and December 31, 1996, the condensed statements of operations for the three and six months ended July 5, 1997 and June 29, 1996, the condensed statements of cash flows for the six months ended July 5, 1997 and June 29, 1996 and the interim information as of and for the six months ended July 5, 1997 appearing in the notes to condensed financial statements are unaudited. In the opinion of management, such unaudited financial statements include all adjustments, consisting of only normal, recurring accruals necessary for a fair presentation thereof. The results of operations for any interim period are not necessarily indicative of the results for the year.
July 5, December 31, 1997 1996 _________ ____________ 2. RECEIVABLES FROM NON AFFILIATES: Trade $ 633 $ 719 Employees -- 1 Allowance for doubtful accounts (31) (27) ______ ______ Total receivables from non affiliates $ 602 $ 693 ====== ====== 3. INVENTORIES: Raw materials $ 882 $ 847 Work-in-process 304 196 Finished goods 595 720 ______ ______ Total inventories $1,781 $1,763 ====== ====== 4. PROPERTY AND EQUIPMENT: Office equipment $ 425 $ 407 Software 103 103 Machinery and equipment 256 244 Leasehold improvements 76 75 Tooling and spares 334 335 Motor vehicles 10 10 ______ ______ Total property and equipment 1,204 1,174 Less accumulated depreciation and amortization 1,093 1,065 ______ ______ Net property and equipment $ 111 $ 109 ====== ======
PRINTWARE, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS 3 AND 6 MONTHS ENDED JULY 5, 1997 AND JUNE 29, 1996 (Continued)
July 5, December 31, 1997 1996 ______ ___________ 5. INTANGIBLE ASSETS: License rights $ 560 $ 560 Patents 54 54 ______ ______ Total intangible assets 614 614 Less accumulated amortization 584 583 ______ ______ Net intangible assets $ 30 $ 31 ====== ====== 6. ACCRUED EXPENSES: Accrued payroll and related $ 44 $ 89 Accrued vacation and benefits 144 147 Accrued professional services 116 158 Accrued warranty reserve 37 36 Accrued income taxes -- -- Accrued other 16 23 ______ ______ Total accrued expenses $ 357 $ 453 ====== ======
7. MARKETABLE SECURITIES The Company classifies its marketable securities as available-for-sale. At July 5, 1997 and December 31, 1996, securities available-for-sale are carried at fair value with the net unrealized holding gain or loss included in shareholders' equity. 8. SHAREHOLDERS' EQUITY During the six months ended July 5, 1997, the Company issued 2,412 shares of Common Stock to certain employees exercising their stock options at $3.00 per share and an additional 5,391 shares to employees as part of the Company's Stock Purchase Plan at $2.66 per share. 9. EARNINGS PER SHARE In February 1997, the Financial Accounting Standards Board issued Statement of Financial Accounting Standards No. 128 (SFAS 128) "Earnings per Share," which is effective for periods ending after December 15, 1997. SFAS 128 revises the standards for computing and presenting earnings per share (EPS). The Company will continue to apply APB Opinion No. 15 to compute the EPS through the effective date. The calculation EPS for the six months ended and the second quarter ended July 5, 1997 under SFAS 128 under the basic and diluted earnings methods is not materially different than the calculations of EPS under APB 15. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS FOR THE QUARTER ENDED JULY 5, 1997 AND JUNE 29, 1996 Total revenues for the 1997 quarter were $1.93 million, an increase of 1% over those of second quarter 1996 which were $1.90 million. The increase was due to an increase in Model 3240 Platesetter sales which was essentially offset by a decline of supplies sales in the 1997 quarter compared to 1996. Model 3240 Platesetter sales included sales to the Company's OEM customer and sales of the new PlateStream model. The decline in supplies sales was due to consolidation in the check printing industry. The Company's gross margin was $871,000 in the second quarter 1997 versus $894,000 in the comparable quarter in 1996. Gross margin as a percentage of revenue decreased from 47% in the second quarter 1996 to 45% in second quarter 1997. The decreased margin in 1997 was due primarily to a change in product mix from supplies to the lower margin Model 3240 Platesetter. Research and development expenses increased to $250,000 in the second quarter 1997 from $174,000 in the second quarter in 1996. The increase was primarily due to increased expenses associated with the development of the new PlateStream product. Selling, general and administrative expenses were $322,000 in the second quarter of 1997 up from $280,000 in the second quarter of 1996. Marketing and sales expenses increased by approximately $57,000 in the second quarter 1997 primarily due to the hiring of a new sales manager for the PlateStream product, and to increased advertising and exhibition participation. General and administrative expenses were down slightly in the 1997 quarter due primarily to costs associated with preparation of going public in 1996. Operating income in the 1997 period was $299,000 or 16% of revenues, compared to $440,000 or 23% of revenues in the 1996 period. The decrease was due to higher period costs from investment spending on the new PlateStream program in 1997, more than offsetting the slightly higher revenues. Interest and other income were $196,000 in the 1997 quarter compared to $23,000 in the 1996 quarter. The increase in 1997 was due primarily to the 1997 quarter's increase in cash and investments of over $8.1 million compared to the 1996 quarter. This was largely due to the $6.4 million from the Company's initial public offering, with the remainder from the Company's positive cash flow from operations. The Company's income tax expense primarily consists of minimum taxes due, offset by net operating loss carryforwards. Net income for the second quarter of 1997 was $495,000, or $.10 per common and common equivalent share, up from $464,000 or $.13 per share in 1996 as higher margins and investment income offset increased expenses. The income per share decreased due to the increased shares outstanding due to the initial public offering of 1.2 million shares on July 2, 1996. RESULTS OF OPERATIONS FOR THE 6 MONTHS ENDED JULY 5, 1997 and JUNE 29, 1996 Total revenues for the first half of 1997 were $3.77 million or an increase of 1% from 1996. The increase in 1997 revenues versus the year-ago period was because the Company had stronger sales of the Company's Model 3240 Platesetter and PlateStream model, which were essentially offset by decreased supplies sales due to consolidation in the check-printing industry. The Company's gross margin as a percentage of revenue in the 1997 period was 44%, essentially unchanged from 43% in the 1996 period. Research and development expenses for the 1997 period increased 31% over the same period in 1996 due primarily to costs incurred to develop the new PlateStream product. Selling, general and administrative expenses were 25% higher in 1997 compared to 1996 primarily due to higher marketing and sales costs associated with the new PlateStream product. Operating income in the 1997 period was $564,000 or 15% of revenues, compared to $744,000 or 20% of revenues in the 1996 period. The decrease was due primarily to investment spending on research and development and in marketing and sales on the PlateStream program in 1997. Interest and other income were $391,000 in the 1997 period compared to $81,000 in the 1996 period. The increase in 1997 is due primarily to an increase in cash and investments from the initial public offering in July, 1996 and to profitable operations. The Company's income tax expense consists of minimum taxes due, offset by the net operating loss carryforwards. Net income for the 1997 period was $955,000 or 25% of revenues, up 4% from $795,000 or 21% of revenues in 1996. Earnings per share were $.20 in the 1997 period versus $.21 per share for the 1996 period. The slight decrease is due to the increased outstanding shares from the initial public offering in July, 1996. LIQUIDITY AND CAPITAL RESOURCES The current ratio was over 16 to 1 on July 5, 1997 compared to over 10 to 1 on December 31, 1996. Working capital was $14.0 million on July 5, 1997 compared to $13.0 at December 31, 1996. Cash, cash equivalents and investments increased by approximately $600,000 at July 5, 1997 compared to December 31, 1996, due to the past six months of profitable operations. As of July 5, 1997 the Company has no material commitments which would result in a significant cash outflows other than purchases of inventory in the normal course of business. PART II - OTHER INFORMATION Item #6 Exhibits and Reports on Form 8-K a. Exhibits Exhibit 11. Statement re computation of per share earnings Exhibit 27. Financial Data Schedule b. Reports on Form 8-K No reports have been filed on Form 8-K during this quarter. PRINTWARE, INC. SIGNATURES Pursuant to the requirement 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. PRINTWARE, INC. Registrant Date: July 30, 1997 /s/ THOMAS W. PETSCHAUER ________________________ Thomas W. Petschauer EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER (Principal Financial Officer) Date: July 30, 1997 /s/ DANIEL A. BAKER ________________________ Daniel A. Baker, Ph.D., PRESIDENT AND CHIEF EXECUTIVE OFFICER (Principal Executive Officer) EX-11 2 EXHIBIT 11 STATEMENT RE COMPUTATION OF PER SHARE EARNINGS PRINTWARE, INC. EXHIBIT 11 STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
Three months ended Six months ended July 5, June 29, July 5, June 29, 1997 1996 1997 1996 _________ _________ _________ _________ PRIMARY EPS: Weighted average number of common shares outstanding 4,853,393 3,630,683 4,852,984 3,630,683 Common share equivalents from assumed exercise of options and warrants 20,271 70,663 26,275 70,663 _________ _________ _________ _________ Total shares 4,873,664 3,701,346 4,879,259 3,701,346 _________ _________ _________ _________ Net income (000's) $ 495 $ 464 $ 955 $ 795 ========= ========= ========= ========= Earnings per share $ .10 $ .13 $ .20 $ .21 ========= ========= ========= ========= FULLY DILUTED: Weighted average number of common shares outstanding 4,853,393 3,630,683 4,852,984 3,630,683 Common share equivalents from assumed exercise of options and warrants 13,856 70,663 13,856 70,663 _________ _________ _________ _________ Total shares 4,867,249 3,701,346 4,866,840 3,701,346 _________ _________ _________ _________ Net income (000's) $ 495 $ 464 $ 955 $ 795 ========= ========= ========= ========= Earnings per share $ .10 $ .13 $ .20 $ .21 ========= ========= ========= ========= Note: Fully diluted net income per share is not reported separately because it is substantially the same as primary net income per share.
EX-27 3 ARTICLE 5 FIN. DATA SCHEDULE FOR 2ND QTR 10-Q
5 1,000 6-MOS Dec-31-1996 Apr-06-1997 Jul-05-1997 214 11162 633 (31) 1781 14867 1204 1093 15138 911 0 22009 0 0 (7858) 15138 1925 1925 1054 1054 572 0 (196) 495 0 495 0 0 0 495 .10 .10
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