-----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, BzgQhIBX6mDIbz/i9FUDGZUjQF9Ns5FUDK/5dwDonvmlsc8udARTZB4eyUs21Gx9 vfTaALCiOAP9mn3hdNUegA== 0000801529-97-000008.txt : 19971106 0000801529-97-000008.hdr.sgml : 19971106 ACCESSION NUMBER: 0000801529-97-000008 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19971004 FILED AS OF DATE: 19971105 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: SEC FILE NUMBER: 000-20729 FILM NUMBER: 97708563 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 October 4, 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 - 4,907,805 shares outstanding as of November 4, 1997. PART I - FINANCIAL INFORMATION ITEM 1. - FINANCIAL STATEMENTS PRINTWARE, INC. CONDENSED STATEMENTS OF OPERATIONS 3 AND 9 MONTHS ENDED OCTOBER 4, 1997 AND SEPTEMBER 28, 1996 DOLLARS IN THOUSANDS EXCEPT PER SHARE (UNAUDITED)
Three months ended Nine months ended Oct 4 Sep 28 Oct 4 Sep 28 _______ _______ _______ _______ 1997 1996 1997 1996 ______ ______ ______ ______ REVENUES FROM NON AFFILIATES $ 648 $ 421 $1,932 $2,466 REVENUES FROM AFFILIATES 975 1,255 3,463 2,939 ______ ______ ______ ______ TOTAL REVENUES 1,623 1,676 5,395 5,405 COST OF REVENUES 892 966 2,987 3,078 ______ ______ ______ ______ Gross margin 731 710 2,408 2,327 PERIOD COSTS: Research and development 215 220 678 573 Selling, general and administrative 322 228 972 746 ______ ______ ______ ______ Total 537 448 1,650 1,319 ______ ______ ______ ______ INCOME FROM OPERATIONS 194 262 758 1,008 Interest and other income 194 158 585 237 ______ ______ ______ ______ INCOME BEFORE INCOME TAXES 388 420 1,343 1,245 INCOME TAXES -- 15 -- 45 ______ ______ ______ ______ NET INCOME $ 388 $ 405 $1,343 $1,200 ====== ====== ====== ====== NET INCOME PER COMMON AND COMMON EQUIVALENT SHARE: $ .08 $ .08 $ .27 $ .29 ====== ====== ====== ====== WEIGHTED AVERAGE NUMBER OF COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING 4,929,840 4,848,808 4,905,218 4,071,601 ========= ========= ========= ========= See notes to condensed financial statements.
PRINTWARE, INC. CONDENSED BALANCE SHEETS DOLLARS IN THOUSANDS (UNAUDITED) ASSETS October 4, December 31, 1997 1996 __________ ____________ CURRENT ASSETS: Cash and cash equivalents $ 453 $ 524 Marketable securities available-for-sale 11,495 10,267 Receivables from non affiliates 503 693 Receivables from affiliates 461 467 Inventories 1,961 1,763 Deferred income taxes - current 562 551 Prepaid expenses 28 40 _______ _______ Total Current Assets 15,463 14,305 PROPERTY AND EQUIPMENT, net of accumulated depreciation and amortization 122 109 INSTALLMENT RECEIVABLE - long term 49 -- INTANGIBLE ASSETS, net of accumulated amortization 29 31 DEFERRED INCOME TAXES - long term 130 130 _______ _______ $15,793 $14,575 ======= ======= LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 432 $ 522 Accrued expenses 445 453 Deferred revenues 104 350 _______ _______ Total Current Liabilities 981 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 4,907,805 shares at October 4, 1997; 4,850,694 at December 31, 1996 22,154 21,984 Unrealized holding gain (loss) on securities available-for-sale 133 91 Unearned compensation on stock options (4) (11) Accumulated deficit (7,471) (8,814) _______ _______ Total shareholders' equity 14,812 13,250 _______ _______ $15,793 $14,575 ======= ======= See notes to condensed financial statements.
PRINTWARE, INC. CONDENSED STATEMENTS OF CASH FLOWS 9 MONTHS ENDED OCTOBER 4, 1997 AND SEPTEMBER 28, 1996 DOLLARS IN THOUSANDS (UNAUDITED) October 4, September 28, 1997 1996 ____________ ____________ OPERATING ACTIVITIES: Net income $1,343 $1,200 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 42 47 Common Stock issued for services 0 8 Stock option compensation earned 7 45 Deferred income taxes (11) 0 Changes in operating assets and liabilities: Receivables from non affiliates 190 347 Receivables from affiliates 6 (207) Inventories (198) (120) Prepaid expenses 12 (28) Installment receivable (49) -- Accounts payable (90) 6 Accrued expenses (8) (75) Deferred revenues (246) 365 ______ ______ Net cash provided by operating activities 998 1,588 INVESTING ACTIVITIES - Purchases of property and equipment (53) (34) Purchases of available-for-sale securities (1,186) (10,217) ______ ______ Net cash used in investing activities (1,239) (10,251) FINANCING ACTIVITIES - Proceeds from issuance of Common Stock 170 6,410 ______ ______ NET DECREASE IN CASH AND CASH EQUIVALENTS (71) (2,253) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 524 2,569 ______ ______ CASH AND CASH EQUIVALENTS, END OF PERIOD $ 453 $ 316 ====== ====== SUPPLEMENTAL CASH FLOW DISCLOSURE: Cash paid during the period for: Income taxes $ 2 $ 45 ====== ====== See notes to condensed financial statements.
PRINTWARE, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS 3 AND 9 MONTHS ENDED OCTOBER 4, 1997 AND SEPTEMBER 28, 1996 (UNAUDITED) 1. INTERIM FINANCIAL INFORMATION The accompanying condensed balance sheet as of October 4, 1997 and December 31, 1996, the condensed statements of operations for the three and nine months ended October 4, 1997 and September 28, 1996, the condensed statements of cash flows for the nine months ended October 4, 1997 and September 28, 1996 and the interim information as of and for the nine months ended October 4, 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.
October 4, December 31, 1997 1996 __________ ____________ 2. RECEIVABLES FROM NON AFFILIATES: Trade $ 534 $ 719 Employees 1 1 Allowance for doubtful accounts (32) (27) ______ ______ Total receivables from non affiliates $ 503 $ 693 ====== ====== 3. INVENTORIES: Raw materials $1,040 $ 847 Work-in-process 197 196 Finished goods 724 720 ______ ______ Total inventories $1,961 $1,763 ====== ====== 4. PROPERTY AND EQUIPMENT: Office equipment $ 430 $ 407 Software 106 103 Machinery and equipment 270 244 Leasehold improvements 76 75 Tooling and spares 335 335 Motor vehicles 10 10 ______ ______ Total property and equipment 1,227 1,174 Less accumulated depreciation and amortization 1,105 1,065 ______ ______ Net property and equipment $ 122 $ 109 ====== ======
PRINTWARE, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS 3 and 9 MONTHS ENDED OCTOBER 4, 1997 AND SEPTEMBER 28, 1996 (Continued)
October 4, December 31, 1997 1996 __________ ____________ 5. INTANGIBLE ASSETS: License rights $ 560 $ 560 Patents 54 54 ______ ______ Total intangible assets 614 614 Less accumulated amortization 585 583 ______ ______ Net intangible assets $ 29 $ 31 ====== ====== 6. ACCRUED EXPENSES: Accrued payroll and related $ 77 $ 89 Accrued vacation and benefits 171 147 Accrued professional services 130 158 Accrued warranty reserve 39 36 Accrued income taxes -- -- Accrued other 28 23 ______ ______ Total accrued expenses $ 445 $ 453 ====== ======
7. MARKETABLE SECURITIES The Company classifies its marketable securities as available-for-sale. At October 4, 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 nine months ended October 4, 1997, the Company issued 40,178 shares of Common Stock to certain employees exercising their stock options at $3.00 per share. An additional 5,391 shares and 6,542 shares were issued to employees as part of the Company's Employee Stock Purchase Plan at $2.66 and $2.76 per share; respectively. In August 1997 a customer and affiliate was issued 5,000 shares of Common Stock upon the exercise of warrants at $3.00 per share. 9. NEW ACCOUNTING STANDARDS 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 revised 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 nine months ended and the third quarter ended October 4, 1997 under SFAS 128 under the basic and diluted earnings methods is not materially different than the calculations of EPS under APB 15. In June 1997, the Financial Accounting Standards Board issued SFAS No. 131, "Disclosures about Segments of an Enterprise and Related Information," which will be effective for the Company beginning January 1, 1998. SFAS No. 131 redefines how operating segments are determined and requires disclosure of certain financial and descriptive information about a company's operating segments. The Company believes that this statement will not have a material impact on results reported in its financial statements. In June 1997, the Financial Accounting Standards Board issued SFAS No. 130, "Reporting Comprehensive Income," which will be effective for the Company beginning January 1, 1998. SFAS No. 130 requires the disclosure of comprehensive income and its components in the Company's financial statements. The Company anticipates the effect of SFAS No. 130 will result in disclosure of the net unrealized gain on available-for-sale securities and unearned compensation on stock options on the face of the comprehensive income statement. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS FOR THE QUARTER ENDED OCTOBER 4, 1997 AND SEPTEMBER 28, 1996 Total revenues for the 1997 quarter were $1.62 million, a decrease of 3% from $1.68 million from the third quarter 1996. The decrease was due to a decline of supplies sales which were partially offset by an increase in Model 3240 Platesetter sales in the 1997 quarter compared to 1996. Model 3240 Platesetter sales included PlateStream sales to the Company's dealers and end-user customers. The decline in supplies sales was due primarily to consolidation in the check-printing industry. The Company's gross margin was $731,000 in the 1997 quarter versus $710,000 in the comparable quarter in 1996. Gross margin as a percentage of revenue increased to 45% in the third quarter 1997 from 42% in third quarter 1996. The increased margin in 1997 was due primarily to a change in product mix from supplies to the higher margin PlateStream and model 1440 Platesetter hardware sales. Research and development expenses decreased slightly to $215,000 in the third quarter 1997 from $220,000 in the third quarter in 1996. The decrease was primarily due to decreased expenses caused by completion of the development of the new PlateStream product. Selling, general and administrative expenses increased to $322,000 in the third quarter of 1997, up from $228,000 in the third quarter of 1996. Marketing and sales expenses increased by approximately $112,000 in the third quarter 1997 primarily due increased advertising and exhibition participation. General and administrative expenses were down slightly in the 1997 quarter due primarily to lower professional services costs in 1997. Operating income in the 1997 period was $194,000 or 12% of revenues, compared to $262,000 or 16% of revenues in the 1996 period. The decrease was due primarily to higher period costs from investment spending on the new PlateStream programs. Interest and other income were $194,000 in the 1997 quarter compared to $158,000 in the 1996 quarter. The increase in 1997 was due primarily to the increase in cash and investments of over $1.3 million compared to the 1996 quarter. This increase was due to the Company's positive cash flow from operations. The Company's income tax expense consists of minimum taxes due, as the majority of the Company's taxable income is offset by net operating loss carryforwards. Net income for the third quarter of 1997 was $388,000, or $.08 per common and common equivalent share, down from $405,000 or $.08 per share in 1996 as higher margins and investment income partially offset increased expenses. The income per share remained the same as shares outstanding remained about the same. RESULTS OF OPERATIONS FOR THE 9 MONTHS ENDED OCTOBER 4, 1997 and SEPTEMBER 28, 1996 Total revenues for the three quarters of 1997 were $5.40 million or slightly less than period in 1996. The Company had stronger sales of the Company's Model 3240 Platesetter and PlateStream model, which were 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 45%, slightly above the 43% in the 1996 period. The increase was due to higher margins on the new PlateStream sales than the reduced supplies sales. Research and development expenses for the 1997 period increased 18% over the same period in 1996 due primarily to costs incurred to develop the new PlateStream, the PunchStream, the PlateStream 46 and new raster image processors. Selling, general and administrative expenses were 30% higher in 1997 compared to 1996 primarily due to higher marketing and sales investment spending associated with the new PlateStream products. Operating income in the 1997 period was $758,000 or 14% of revenues, compared to $1,008,000 or 19% 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 programs in 1997. Interest and other income were $585,000 in the 1997 period compared to $237,000 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 continued profitable operations. The Company's income tax expense consists of minimum taxes due, as the majority of the Company's taxable income is offset by the net operating loss carryforwards. Net income for the 1997 period was $1,343,000 or 25% of revenues, up 12% from $1,200,000 or 22% of revenues in 1996. Earnings per share were $.27 in the 1997 period versus $.29 per share for the 1996 period. The slight earnings per share 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 October 4, 1997 compared to over 10 to 1 on December 31, 1996. Working capital was $14.0 million on October 4, 1997 compared to $13.0 at December 31, 1996. Cash, cash equivalents and investments increased by approximately $1.16 million at October 4, 1997 compared to December 31, 1996, due to the past nine months of profitable operations. As of October 4, 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: November 4, 1997 /s/ THOMAS W. PETSCHAUER ________________________ Thomas W. Petschauer EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER (Principal Financial Officer) Date: November 4, 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 Nine months ended Oct 4, Sep 28, Oct 4, Sep 28, 1997 1996 1997 1996 _________ _________ _________ _________ PRIMARY EPS: Weighted average number of common shares outstanding 4,888,651 4,800,924 4,864,600 4,023,617 Common share equivalents from assumed exercise of options and warrants 41,189 47,984 40,618 47,984 _________ _________ _________ _________ Total shares 4,929,840 4,848,908 4,905,218 4,071,601 ========= ========= ========= ========= Net income (000's) $ 388 $ 405 $ 1,343 $ 1,200 ========= ========= ========= ========= Earnings per share $ .08 $ .08 $ .27 $ .29 ========= ========= ========= ========= FULLY DILUTED: Weighted average number of common shares outstanding 4,888,651 4,800,924 4,864,600 4,023,617 Common share equivalents from assumed exercise of options and warrants 37,898 52,134 37,898 52,133 _________ _________ _________ _________ Total shares 4,926,549 4,853,058 4,902,498 4,075,750 ========= ========= ========= ========= Net income (000's) $ 388 $ 405 $ 1,343 $ 1,200 ========= ========= ========= ========= Earnings per share $ .08 $ .08 $ .27 $ .29 ========= ========= ========= ========= 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 3RD QTR 10-Q
5 1,000 9-MOS Dec-31-1996 Jul-06-1997 Oct-04-1997 453 11495 535 (32) 1961 15463 1227 1105 15793 987 0 22154 0 0 (7471) 15793 1623 1623 892 872 537 0 (194) 388 0 388 0 0 0 388 .08 .08
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