-----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, RPn8SQcOFtfz5n3/qa9HHGeYJFG96JASJTi7OTsQyu9qpp0zHPPfwpiRQqp3p144 3z1caMk8xcx9IJoaQc/vTA== 0000801529-98-000003.txt : 19980430 0000801529-98-000003.hdr.sgml : 19980430 ACCESSION NUMBER: 0000801529-98-000003 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19980405 FILED AS OF DATE: 19980429 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: 98604392 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 April 4, 1998 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--4,921,566 shares as of April 29, 1998. PART I--FINANCIAL INFORMATION ITEM 1.--FINANCIAL STATEMENTS PRINTWARE, INC. CONDENSED STATEMENTS OF OPERATIONS QUARTER ENDED APRIL 4, 1998 AND APRIL 5, 1997 DOLLARS IN THOUSANDS EXCEPT PER SHARE (UNAUDITED)
Quarter ended April 4 April 5 _______ _______ 1998 1997 ______ ______ REVENUES FROM NONAFFILIATES $ 974 $ 477 REVENUES FROM AFFILIATES 701 1,370 ______ ______ TOTAL REVENUES 1,675 1,847 COST OF REVENUES 925 1,041 ______ ______ GROSS MARGIN 750 806 PERIOD COSTS: Research and development 179 213 Selling, general and administrative 405 328 ______ ______ Total 584 541 ______ ______ INCOME FROM OPERATIONS 166 265 OTHER INCOME (EXPENSE): Interest expense -- -- Interest and other income 200 195 ______ ______ INCOME BEFORE INCOME TAXES 366 460 INCOME TAXES -- -- ______ ______ NET INCOME $ 366 $ 460 ====== ====== NET INCOME PER COMMON: BASIC $ .07 $ .09 ====== ====== DILUTED $ .07 $ .09 ====== ====== WEIGHTED AVERAGE NUMBER OF COMMON SHARES OUTSTANDING--BASIC 4,915,218 4,852,297 ========= ========= WEIGHTED AVERAGE NUMBER OF COMMON AND COMMON EQUIVALENT SHARES OUTSTANDING--DILUTED 4,932,031 4,871,205 ========= ========= See notes to condensed financial statements.
PRINTWARE, INC. CONDENSED BALANCE SHEETS DOLLARS IN THOUSANDS EXCEPT SHARE INFORMATION (UNAUDITED) ASSETS April 4, December 31, 1998 1997 ____________ ____________ CURRENT ASSETS: Cash and cash equivalents $ 214 $ 348 Marketable securities available-for-sale 11,947 11,868 Receivables from nonaffiliates 727 564 Receivables from affiliates 230 359 Inventories 2,194 1,942 Deferred income taxes--current 273 264 Prepaid expenses 39 15 _______ _______ Total Current Assets 15,624 15,360 PROPERTY AND EQUIPMENT, net of accumulated depreciation and amortization 140 135 INTANGIBLE ASSETS, net of accumulated amortization 27 28 LEASE RECEIVABLES--long term 345 174 DEFERRED INCOME TAXES--long term 850 850 _______ _______ $16,986 $16,547 ======= ======= LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES: Accounts payable $ 526 $ 457 Accrued expenses 429 412 Deferred revenues 5 40 _______ _______ Total Current Liabilities 960 909 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 4,921,566 shares at April 4, 1998; 4,914,939 at December 31, 1997, respectively 22,193 22,175 Unrealized holding gain (loss) on securities available-for-sale 125 122 Unearned compensation on stock options (3) (4) Accumulated deficit (6,289) (6,655) _______ _______ Total shareholders' equity 16,026 15,638 _______ _______ $16,986 $16,547 ======= ======= See notes to condensed financial statements.
PRINTWARE, INC. CONDENSED STATEMENTS OF CASH FLOWS QUARTER ENDED APRIL 4, 1998 AND APRIL 5, 1997 DOLLARS IN THOUSANDS (UNAUDITED) April 4, April 5, 1998 1997 ____________ ____________ OPERATING ACTIVITIES: Net income $ 366 $ 460 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 16 15 Unearned compensation on stock options 1 5 Deferred income taxes (9) (49) Changes in operating assets and liabilities: Receivables from nonaffiliates (163) 385 Receivables from affiliates 129 (49) Lease receivables (171) -- Inventories (252) (127) Prepaid expenses (24) (13) Accounts payable 69 (60) Accrued expenses 17 (73) Deferred revenues (35) (119) ______ ______ Net cash (used) provided by operating activities (56) 375 INVESTING ACTIVITIES: Purchases of marketable securities available-for-sale (76) (467) Purchases of property and equipment (21) (27) Decrease in intangible assets 1 -- ______ ______ Net cash used in investing activities (96) (494) FINANCING ACTIVITIES: Proceeds from issuance of Common Stock 18 10 ______ ______ NET DECREASE IN CASH AND CASH EQUIVALENTS (134) (109) CASH AND CASH EQUIVALENTS, BEGINNING OF PERIOD 348 524 ______ ______ CASH AND CASH EQUIVALENTS, END OF PERIOD $ 214 $ 415 ====== ====== SUPPLEMENTAL CASH FLOW DISCLOSURE: Cash paid during the period for: Income taxes $ 2 $ -- ====== ====== See notes to condensed financial statements.
PRINTWARE, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS QUARTER ENDED APRIL 4, 1998 AND APRIL 5, 1997 1. INTERIM FINANCIAL INFORMATION The accompanying condensed balance sheet as of April 4, 1998 and the condensed statements of operations for the three months ended April 4, 1998 and April 5, 1997, and the condensed statements of cash flows for the three months ended April 4, 1998 and April 5, 1997 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.
April 4, December 31, 1998 1997 ____________ ____________ 2. RECEIVABLES FROM NONAFFILIATES: Trade $ 662 $ 556 Leases--current 104 37 Employees 2 4 Allowance for doubtful accounts (41) (33) ______ ______ Total receivables from nonaffiliates $ 727 $ 564 ====== ====== 3. INVENTORIES: Raw materials $1,132 $ 995 Work-in-process 294 260 Finished goods 768 687 ______ ______ Total inventories $2,194 $1,942 ====== ====== 4. PROPERTY AND EQUIPMENT: Office equipment $ 434 $ 430 Software 108 108 Machinery and equipment 298 281 Leasehold improvements 75 75 Tooling and spares 335 335 Motor vehicles 24 24 ______ ______ Total property and equipment 1,274 1,253 Less: accumulated depreciation and amortization 1,134 1,118 ______ ______ Net property and equipment $ 140 $ 135 ====== ======
PRINTWARE, INC. NOTES TO CONDENSED FINANCIAL STATEMENTS QUARTER ENDED APRIL 4, 1998 AND APRIL 5, 1997 (Continued)
April 4, December 31, 1998 1997 ____________ ____________ 5. INTANGIBLE ASSETS: License rights $ 560 $ 560 Patents 54 54 ______ ______ Total intangible assets 614 614 Less: accumulated amortization 587 586 ______ ______ Net intangible assets $ 27 $ 28 ====== ====== 6. ACCRUED EXPENSES: Accrued payroll and related $ 86 $ 44 Accrued vacation and benefits 169 158 Accrued professional services 97 143 Accrued warranty reserve 41 37 Accrued income taxes 24 15 Accrued other 12 15 ______ ______ Total accrued expenses $ 429 $ 412 ====== ======
7. MARKETABLE SECURITIES The Company classifies its marketable securities as available-for-sale. At April 4, 1998 and December 31, 1997, 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 three months ended April 4, 1998, the Company issued 6,627 shares of Common Stock in connection with the Employee Stock Purchase Plan at $2.7625 per share. 9. COMPREHENSIVE NET INCOME Effective January 1, 1998, the Company adopted Statement of Financial Accounting Standards (SFAS) No. 130, "Reporting Comprehensive Income." SFAS No. 130 requires the disclosure of comprehensive income and its components in the Company's financial statements. The Company had comprehensive income of $370,000 and $347,000 for the quarters ended April 4, 1998 and April 5, 1997, respectively, which consists of net income in addition to the net unrealized gain on available-for-sale securities and unearned compensation on stock options. 10. NEW ACCOUNTING PRONOUNCEMENT Effective January 1, 1998, the Company adopted SFAS No. 131, "Disclosure about Segments of an Enterprise and Related Information." SFAS No. 131 redefines how operating segments are determined and requires disclosure of certain financial and descriptive information about a company's operating segments. This statement does not have a material impact on results reported in the financial statements. ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS FOR THE QUARTER ENDED APRIL 4, 1998 AND APRIL 5, 1997 Total revenues for the 1998 quarter were $1.68 million, a decrease of 9% from those of first quarter 1997 which were $1.85 million. The decrease was due to a reduction in affiliate supplies sales largely offset by an increase in PlateStream Platesetter sales in the 1998 quarter compared to 1997. The decrease in revenues from the Company's affiliate in the 1998 quarter was due primarily to reduced purchases of digital plate material used in the Company's older Platesetter models. The Company believes this will continue for the remainder of 1998. The Company's gross margin was $750,000 in the first quarter 1998 versus $806,000 in the comparable quarter in 1997. Gross margin as a percentage of revenue increased from 44% in the first quarter 1997 to 45% in first quarter 1998. The increased percentage margin in 1997 was due primarily to a change in product mix from lower margin supplies to higher margin Platesetters. Research and development expenses decreased to $179,000 in the first quarter 1998 from $213,000 in the first quarter in 1997. The decrease was largely due to the completion of the development of the new PlateStream product in 1997. Selling, general and administrative expenses increased to $405,000 in the first quarter of 1998 from $328,000 in the first quarter of 1997. Selling expenses increased by approximately $60,000 in the first quarter 1998 due to investment spending on the new PlateStream model and higher commissions due to increased equipment sales. General and administrative expenses were up approximately $20,000 in the 1998 quarter due primarily to increased management compensation, annual report expenses, and Nasdaq expenses. Interest, other income and income taxes were $200,000 in the 1998 quarter compared to $195,000 in the 1997 quarter. This increase in interest income in 1998 is due primarily to an increase in cash and investments of over $1.1 million from the 1997 quarter compared to the 1998 quarter. This is largely due to the Company's profit from operations. The Company's income tax expense primarily consists of minimum taxes due, offset by the net operation loss carryforwards. Net income for the first quarter of 1998 was $366,000, or $.07 per common share, down from $460,000 or $.09 per share in 1997 due to increased expenses partially offset by higher margins and investment income. LIQUIDITY AND CAPITAL RESOURCES Working capital was $14.7 million on April 4, 1998 compared to $14.5 at December 31, 1997. Cash, cash equivalents and investments decreased by approximately $55,000 at April 4, 1998 compared to December 31, 1997. The decrease was primarily due to an increase in sales-type leases financed by the Company partially offset by net income from operating activities. As of April 4, 1998 the Company has no material commitments which would result in a significant cash outflow other than purchases of inventory in the normal course of business, and the financing of additional Platesetter leases. MILLENNIUM CHANGE The Company has conducted a review of its computer systems to identify those areas that could be affected by the "Year 2000" issue. The Company presently believes, with modification to existing software, the Year 2000 problem will not pose significant operational problems, and the costs are not anticipated to be material to its financial position or results of operations in any given year. 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 cause this report to be signed on its behalf by the undersigned thereunto duly authorized. PRINTWARE, INC. Registrant Date: April 29, 1998 /s/ THOMAS W. PETSCHAUER ________________________ Thomas W. Petschauer EXECUTIVE VICE PRESIDENT & CHIEF FINANCIAL OFFICER (Principal Financial Officer) Date: April 29, 1998 /s/ DANIEL A. BAKER ________________________ Daniel A. Baker, Ph.D., PRESIDENT & CHIEF EXECUTIVE OFFICER (Principal Executive Officer) EX-11 2 EXHIBIT 11 STATEMENT RE COMPUTATION PER SHARE EARNINGS PRINTWARE, INC. EXHIBIT 11 STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
Quarter ended April 4, April 5, 1998 1997 __________ __________ BASIC EPS: Weighted average number of common shares outstanding 4,915,218 4,852,297 __________ __________ Total shares 4,915,218 4,852,297 ========== ========== Net income (000's) $ 366 $ 460 __________ __________ Earnings per share $ .07 $ .09 ========== ========== DILUTED: Weighted average number of common shares outstanding 4,915,218 4,852,297 Common share equivalents from assumed exercise of options and warrants 16,813 18,908 __________ __________ Total shares 4,932,031 4,871,205 ========== ========== Net income (000's) $ 366 $ 460 __________ __________ Earnings per share $ .07 $ .09 ========== ==========
EX-27 3 ARTICLE 5 FIN. DATA SCHEDULE FOR 1ST QTR. 10-Q WARNING: THE EDGAR SYSTEM ENCOUNTERED ERROR(S) WHILE PROCESSING THIS SCHEDULE.
5 1,000 3-MOS Dec-31-1998 Jan-01-1998 Apr-04-1998 214 11947 998 (41) 2194 15626 1274 1134 16986 960 0 22315 0 0 (6289) 16986 1675 1675 925 925 584 0 (200) 366 0 366 0 0 0 366 .07 .07
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