-----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, HC63YNmc+jF5WlKGjO9rynlistJ4TX0idoJhSL4yAfib533s54f/CkEt95s+TMKN sanXvjlkhUJSFtOM6jRIew== 0000893816-98-000009.txt : 19980928 0000893816-98-000009.hdr.sgml : 19980928 ACCESSION NUMBER: 0000893816-98-000009 CONFORMED SUBMISSION TYPE: 10QSB/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19980731 FILED AS OF DATE: 19980925 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: COMPUTER OUTSOURCING SERVICES INC CENTRAL INDEX KEY: 0000893816 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROCESSING & DATA PREPARATION [7374] IRS NUMBER: 133252333 STATE OF INCORPORATION: NY FISCAL YEAR END: 1031 FILING VALUES: FORM TYPE: 10QSB/A SEC ACT: SEC FILE NUMBER: 000-20824 FILM NUMBER: 98715297 BUSINESS ADDRESS: STREET 1: 360 WEST 31ST ST STREET 2: 11TH FLOOR CITY: NEW YORK STATE: NY ZIP: 10001 BUSINESS PHONE: 2125643730 10QSB/A 1 U. S. SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-QSB/A QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended: July 31, 1998 Commission file number: 0-20824 COMPUTER OUTSOURCING SERVICES, INC. (Exact name of small business issuer as specified in its charter) New York 13-3252333 (State or other jurisdiction of (IRS Employer incorporation or organization) Identification No.) 360 West 31st Street New York, New York 10001 (Address of principal executive offices) (212) 564-3730 (Issuer's telephone number) Check whether the registrant (1) 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 [ ] There were 4,255,115 shares of the registrant's Common Stock, $0.01 par value, outstanding as of September 1, 1998. Transitional Small Business Disclosure Form (check one); Yes [ ] No [X] Page 1 of 4 PART I - FINANCIAL INFORMATION ITEM 1. Financial Statements COMPUTER OUTSOURCING SERVICES, INC. AND SUBSIDIARIES AMENDED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) Nine Months Ended July 31, ------------------------------ 1998 1997 ------------- ------------- CASH FLOWS FROM OPERATING ACTIVITIES: Income from continuing operations ............. $ 1,573,496 $ 486,048 Adjustments to reconcile income from continuing operations to cash (used in)/provided by operating activities: Depreciation and amortization ............... 1,010,635 1,098,900 Increase/(reduction) in deferred income taxes (35,355) 175,545 Decrease/(increase) in: Trade accounts receivable ................. (714,865) (730,271) Prepaid expenses and other current assets . (369,889) (289,759) Security deposits and other noncurrent assets .................................. (48,992) (184,453) Increase/(decrease) in: Accounts payable .......................... (162,218) 96,767 Income taxes payable ...................... 120,092 (27,939) Accrued expenses .......................... (36,198) 34,853 Customer deposits and other current liabilities ............................. (78,295) (58,152) Deferred lease credits ...................... (53,965) - ---------- ---------- Net cash provided by operating activities . 1,204,448 601,539 ---------- ---------- CASH FLOWS FROM INVESTING ACTIVITIES: Purchase of property and equipment .......... (1,227,425) (281,976) Disposal of equipment ....................... 14,960 2,074 Proceeds from the sale of the Payroll Division .................................. 12,210,000 - Payment of expenses related to the sale of the Payroll Division ...................... (1,795,898) - Proceeds from a covenant not to compete ..... 1,440,000 - Settlement of contingencies relating to acquisitions .............................. - (423,938) Increase in deferred software costs ......... (603,311) (353,772) ----------- ----------- Net cash provided by/(used in) investing activities .............................. $ 10,038,326 $ (1,057,612) ----------- ----------- Continued on Next Page See Notes to Consolidated Interim Financial Statements Page 2 of 4 COMPUTER OUTSOURCING SERVICES, INC. AND SUBSIDIARIES AMENDED CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited - Continued) Nine Months Ended July 31, ------------------------------ 1998 1997 ------------- ------------- CASH FLOWS FROM FINANCING ACTIVITIES: Repayment of long-term debt ................. $ (2,080,188) $ (789,928) Proceeds from the exercise of options and warrants .................................. 1,662,186 - Proceeds from longterm debt ................. - 500,000 Repayments from/(borrowings by) related parties, net .............................. (47,218) 22,735 Repayments of capital leases ................ (17,047) (77,935) ----------- ---------- Net cash used in financing activities ..... (482,267) (345,128) ----------- ---------- CASH FLOWS FROM DISCONTINUED OPERATIONS: Income/(loss) from discontinued operations .. (60,509) 27,452 Adjustments to reconcile income/(loss) from discontinued operations to cash (used in)/ provided by discontinued operations: Depreciation and amortization ............. 151,118 627,380 Increase in net assets of discontinued operations .............................. (307,813) (459,701) ----------- ----------- Net cash (used in)/provided by discontinued operations .............................. $ (217,204) $ 195,131 ----------- ----------- Net increase/(decrease) in cash and cash equivalents ............................. 10,543,303 (606,070) Cash and cash equivalents at the beginning of the period ........................... 972,459 857,204 ----------- ----------- Cash and cash equivalents at the end of the period .................................. $ 11,515,762 $ 251,134 =========== =========== SUPPLEMENTAL CASH FLOW INFORMATION: Cash paid during the period for: Interest .................................. $ 110,622 $ 205,906 =========== =========== Income taxes .............................. $ 1,013,106 $ 91,958 =========== =========== SUPPLEMENTAL DISCLOSURE OF NON-CASH INVESTING AND FINANCING ACTIVITIES: Capitalized leases for data processing equipment ................................. - 81,312 ========== =========== Note received in connection with the sale of the Payroll Division (Note 2) .......... $ 750,000 $ - ========== =========== For the nine months ended July 31, 1997, $19,594 (net of tax benefits) was accreted through a charge to retained earnings in connection with a stock option. See Notes to Consolidated Interim Financial Statements Page 3 of 4 COMPUTER OUTSOURCING SERVICES, INC. AND SUBSIDIARIES SIGNATURES In accordance with the requirements of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized. COMPUTER OUTSOURCING SERVICES, INC. /s/ ----------------------------------- September 25, 1998 Zach Lonstein Principal Executive Officer /s/ ----------------------------------- September 25, 1998 Laurence L. Carpenter Acting Principal Accounting Officer Page 4 of 4 -----END PRIVACY-ENHANCED MESSAGE-----