FORM 10-Q/A AMENDMENT NO. 1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
[ X ] QUARTERLY REPORT UNDER SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended June 30, 1997
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission File Number 0-15935
ALTRIS SOFTWARE, INC.
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(Exact name of registrant as specified in its charter)
CALIFORNIA 95-3634089
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
9339 CARROLL PARK DRIVE, SAN DIEGO, CA 92121
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(Address of principal executive offices and zip code)
(619) 625-3000
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(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
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Number of shares of Common Stock outstanding at July 31, 1997: 9,575,944
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In March 1998, Altris Software, Inc. (the "Company") announced that it
was conducting a review of its interim financial information and annual
financial statements for 1996 and the interim information for the first three
quarters of 1997 with a view to determining whether the revenue previously
reported for such periods was recognized in accordance with generally
accepted accounting principles. As a result of this review, the Company has
restated such financial statements. This Amendment to the Company's
Quarterly Report on Form 10-Q sets forth the restated financial statements of
the Company for the three and six months ended June 30, 1997.
Information in the Quarterly Report on Form 10-Q as originally filed was
presented as of the date of such original filing or earlier, as indicated
therein. Unless otherwise stated, such information has not been updated in this
Amendment. In particular, "Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations" as originally filed discussed the
Company's financial condition and results of operations based on the financial
statements in the Quarterly Report on Form 10-Q as originally filed, without
consideration of the restatement reflected herein, and therefore no reliance
should be placed thereon. Please refer to "Item 7. Management's Discussion and
Analysis of Financial Condition and Results of Operations" appearing in the
Company's Annual Report on Form 10-K for the year ended December 31, 1997.
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ALTRIS SOFTWARE, INC.
PART I. FINANCIAL INFORMATION
CONSOLIDATED BALANCE SHEET
(Restated)
June 30, 1997 December 31, 1996
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(Unaudited)
ASSETS
Current assets:
Cash and cash equivalents $6,696,000 $2,200,000
Short term investments - 90,000
Receivables, net 3,630,000 5,050,000
Inventory, net 411,000 472,000
Other current assets 814,000 683,000
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Total current assets 11,551,000 8,495,000
Property and equipment, net 2,121,000 2,156,000
Computer software, net 2,676,000 2,252,000
Goodwill, net 4,341,000 4,972,000
Other assets 708,000 385,000
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$21,397,000 $18,260,000
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current liabilities:
Accounts payable $3,966,000 $2,487,000
Accrued liabilities 1,613,000 1,686,000
Notes payable 1,218,000 710,000
Deferred revenue 1,338,000 1,548,000
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Total current liabilities 8,135,000 6,431,000
Long term notes payable 1,243,000 1,203,000
Other long term liabilities 256,000 763,000
Subordinated debt 2,415,000 -
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Total liabilities 12,049,000 8,397,000
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Commitments
Mandatorily, redeemable Preferred stock, $1,000 par
value, 3,000 shares authorized; 3,000 shares
issued and outstanding 2,686,000 -
Shareholders' equity:
Common stock, no par value, 20,000,000 shares
authorized; 9,575,944 and 9,559,944 issued and
outstanding, respectively 61,639,000 61,583,000
Common stock warrants 585,000 -
Foreign currency translation adjustment 25,000 3,000
Accumulated deficit (55,587,000) (51,723,000)
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Total shareholders' equity 6,662,000 9,863,000
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$21,397,000 $18,260,000
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See accompanying notes to the consolidated financial statements.
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ALTRIS SOFTWARE, INC.
CONSOLIDATED STATEMENT OF OPERATIONS
(Unaudited)
(Restated)
For the three months For the six months
ended June 30, ended June 30,
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1997 1996 1997 1996
---- ---- ---- ----
Revenues $ 4,754,000 $ 5,971,000 $ 8,739,000 $ 10,132,000
Cost of revenues 2,803,000 2,368,000 4,945,000 4,775,000
----------- ----------- ----------- ------------
Gross profit 1,951,000 3,603,000 3,794,000 5,357,000
----------- ----------- ----------- ------------
Operating expenses:
Research and development 1,030,000 849,000 1,946,000 1,756,000
Marketing and sales 1,936,000 1,394,000 3,680,000 2,647,000
General and administrative 951,000 854,000 1,705,000 1,565,000
Write-off of certain offering costs 270,000 - 270,000 -
----------- ----------- ----------- ------------
Total operating expenses 4,187,000 3,097,000 7,601,000 5,968,000
----------- ----------- ----------- ------------
(Loss) income from operations (2,236,000) 506,000 (3,807,000) (611,000)
Interest and other income 30,000 20,000 52,000 46,000
Interest and other expense (58,000) (21,000) (109,000) (47,000)
----------- ----------- ----------- ------------
(Loss) income before income taxes (2,264,000) 505,000 (3,864,000) (612,000)
Provision for income taxes - - - -
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Net (loss) income $(2,264,000) $505,000 $(3,864,000) $(612,000)
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Net (loss) income per share $(0.24) $.05 $(0.40) $(.07)
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Weighted average shares 9,574,000 9,594,000 9,570,000 8,848,000
outstanding
See accompanying notes to the consolidated financial statements.
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ALTRIS SOFTWARE, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
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(Unaudited)
(Restated)
For the six months
ended June 30,
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1997 1996
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Cash flow from operating activities:
Net (loss) income $(3,864,000) $(612,000)
Adjustments to reconcile net (loss) income to
net cash used in operating activities:
Depreciation and amortization 1,137,000 956,000
Changes in assets and liabilities:
Receivables, net 1,420,000 (2,189,000)
Inventory 61,000 9,000
Other assets 60,000 84,000
Accounts payable 1,479,000 (691,000)
Accrued liabilities (73,000) (907,000)
Deferred revenue (210,000) (124,000)
Other long term liabilities (507,000) (171,000)
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Net cash used in operating activities (497,000) (3,645,000)
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Cash flows from investing activities:
Sale of short term investment 85,000 180,000
Purchases of property and equipment (303,000) (764,000)
Purchases of software (41,000) (15,000)
Computer software capitalized (746,000) (466,000)
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Net cash used in investing activities (1,005,000) (1,065,000)
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Cash flows from financing activities:
Principal payment under cash advanced by a bank related
to former Optigraphics shareholder notes payable - (1,634,000)
Repayments under notes payable (257,000) (78,000)
Net borrowings under revolving loan and bank 805,000 -
agreements
Proceeds from exercise of stock options 56,000 699,000
Net proceeds from issuance of preferred stock 2,686,000 1,908,000
Net proceeds from issuance of subordinated debt
and warrants 3,000,000 -
Cash payments for debt issuance costs (314,000) -
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Net cash provided by financing activities 5,976,000 895,000
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Effect of exchange rate changes on cash 22,000 60,000
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Net increase (decrease) in cash and cash equivalents 4,496,000 (3,755,000)
Cash and cash equivalents at beginning of period 2,200,000 4,656,000
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Cash and cash equivalents at end of period $6,696,000 $ 901,000
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Supplemental cash flow information:
Interest paid $ 85,000 $ 37,000
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Schedule of non-cash financing activities:
Conversion of preferred stock and note payable to
common stock $ - $5,003,000
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See accompanying notes to the consolidated financial statements.
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ALTRIS SOFTWARE, INC.
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 1 - BASIS OF PRESENTATION
The accompanying consolidated balance sheet of Altris Software, Inc. (the
"Company") as of June 30, 1997 and the consolidated statement of operations and
of cash flows for the three and six month periods ended June 30, 1997 and 1996
are unaudited. The consolidated financial statements and related notes have
been prepared in accordance with generally accepted accounting principles
applicable to interim periods. In the opinion of management, the consolidated
financial statements reflect all adjustments, consisting only of normal
recurring adjustments, necessary for a fair presentation of the consolidated
financial position, operating results and cash flows for the periods presented.
The consolidated financial statements include the accounts of the Company
and its wholly owned subsidiaries. All significant intercompany balances and
transactions have been eliminated.
The financial statements included herein have been restated from those
previously published to reflect corrections of misapplications of the
Company's for revenue recognition policies. The results for the three months
and six months ended June 30, 1997 and 1996 have been amended to reflect
changes in the timing and amount of revenue recognition for those contracts
where subsequently discovered facts indicate that revenue had initially been
recognized before: (a) there was persuasive evidence of an agreement between
the Company and the customer; (b) the amount of the fee had become fixed; (c)
there was sufficient evidence of the delivery of the product or services; (d)
customer cancellation rights had expired; or (e) a reasonable estimate could
be made of returns from those customers (primarily Value Added Resellers)
having exchange rights.
The reconciliation of previously reported results to restated results for
the three and six months ended June 30, 1997 and 1996 are as follows:
For the three months For the three months
ended June 30, 1997 ended June 30, 1996
-------------------------------- -----------------------------------
(In thousands except per share data)
Previously As Previously As
Reported Adjustment Restated Reported Adjustment Restated
---------- ---------- --------- ---------- ---------- ---------
Revenues $7,076 $(2,322) $4,754 $6,106 $(135) $5,971
Gross profit 4,396 (2,445) 1,951 3,973 (370) 3,603
Net income (loss) 1,354 (3,618) (2,264) 875 (370) 505
Net income (loss) per share .14 (.38) (.24) .09 (.04) .05
For the six months For the six months
ended June 30, 1997 ended June 30, 1996
-------------------------------- -----------------------------------
(In thousands except per share data)
Previously As Previously As
Reported Adjustment Restated Reported Adjustment Restated
---------- ---------- --------- ---------- ---------- ---------
Revenues $13,691 $(4,952) $8,739 $12,167 $(2,035) $10,132
Gross profit 8,140 (4,346) (3,794) 7,521 (2,164) 5,357
Net income (loss) 1,084 (4,948) (3,864) 1,552 (2,164) (612)
Net income (loss) per share .11 (.51) (.40) .17 (.24) (.07)
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NOTE 2 - NET INCOME (LOSS) PER SHARE
Net income (loss) per share is computed on the basis of weighted average
shares and common stock equivalent shares outstanding for each period presented,
if dilutive.
In February 1997, the Financial Accounting Standards Board issued SFAS No.
128, "Earnings per Share," which establishes standards for computing and
presenting earnings per share ("EPS"). SFAS No. 128 will be adopted by the
Company as required for the interim period and fiscal year ending December 31,
1997. Upon adoption of SFAS No. 128, the Company will present basic EPS as well
as diluted EPS in the period of adoption and restate all prior-period EPS data
presented for comparative purposes. Basic EPS will be computed by dividing
income available to common shareholders by the weighted average number of shares
of common stock outstanding. Diluted EPS will be computed similar to basic EPS
except that the weighted average number of shares of common stock outstanding
will be increased to include the number of additional common shares that would
have been outstanding if the dilutive potential common shares had been issued.
The pro forma EPS calculations based upon SFAS No. 128 are indicated below:
For the three months For the six months
ended June 30, ended June 30,
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1997 1996 1997 1996
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(Restated)
BASIC EARNINGS PER COMMON SHARE
Net (loss) income per share $ (.24) $ .06 $ (.40) $ (.07)
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Weighted average shares 9,574,000 9,202,000 9,570,000 8,848,000
DILUTED EARNINGS PER COMMON SHARE
Net (loss) income per share $ (.24) $ .05 $ (.40) $ (.07)
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Weighted average shares 9,574,000 9,594,000 9,570,000 8,848,000
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SIGNATURE
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.
ALTRIS SOFTWARE, INC.
By: /s/John W. Low
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John W. Low
Chief Financial Officer
Dated: May 19, 1998
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