##### Table of Contents



UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
 WASHINGTON, DC 20549
 FORM 10-Q
 þ
    
    Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the quarterly period ended June 30, 2008
 OR
 o
    
    Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934
 For the transition period from  to
 Commission file number 0-16569
 CAM COMMERCE SOLUTIONS, INC.
 (Exact name of registrant as specified in its Charter)
 Delaware
(State or other jurisdiction 
of incorporation or organization)
    
    95-3866450
(IRS Employer
Identification No.)17075 Newhope Street 
Fountain Valley, California
(Address of principal Executive offices)
    
    92708
(Zip code)
 (714) 241-9241
  þ o
  Large accelerated filer o
Accelerated filer o
Non-accelerated filer þ(Do not check if a smaller reporting company)
Smaller reporting company o  o þ




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##### 



CAM COMMERCE SOLUTIONS, INC.
 INDEX
 Page NumberPART I  Financial InformationItem 1
    
    Financial Statements:a)
    
    Condensed Balance Sheets at June 30, 2008
(Unaudited) and September 30, 2007
    
    
    3b)
    
    Unaudited Condensed Statements of Income for the
three
months ended June 30, 2008 and 2007
    
    
    4c)
    
    Unaudited Condensed Statements of Income for the
nine
months ended June 30, 2008 and 2007
    
    
    5d)
    
    Unaudited Condensed Statements of Cash Flows for
the nine months ended June 30, 2008 and 2007
    
    
    6e)
    
    Notes to Unaudited Condensed Financial Statements
    
    
    7-14Item 2
    
    Managements Discussion and Analysis of Financial
Condition and Results of Operations
    
    
    15-24Item 3
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    25Item 4T
    
    Controls and Procedures
    
    
    25PART II  Other InformationItem 1
    
    Legal Proceedings
    
    
    26Item 1A
    
    Risk Factors
    
    
    26Item 2
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    26Item 3
    
    Defaults Upon Senior Securities
    
    
    26Item 4
    
    Submission of Matters to a Vote of Security Holders
    
    
    26Item 5
    
    Other Information
    
    
    27Item 6
    
    Exhibits
    
    
    27Signatures
    
    
    28EXHIBIT 31.(A)EXHBIIT 31.(B)EXHIBIT 32
  2




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##### Table of Contents



PART I. FINANCIAL INFORMATION
 
 Item 1. Financial Statements
 
 CAM COMMERCE SOLUTIONS, INC.
 CONDENSED BALANCE SHEETS
 (In thousands, except share and per share data)
 JUNE 30,
    
    
    SEPTEMBER 30,2008
    
    
    2007(Unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    22,742
    
    
    $
    22,047Marketable available-for-sale securities
    
    
    4,843
    
    
    
    6,388Accounts receivable, net
    
    
    3,266
    
    
    
    2,688Inventories
    
    
    272
    
    
    
    295Prepaid income taxes
    
    
    905
    
    
    
    Deferred income taxes
    
    
    607
    
    
    
    625Other current assets
    
    
    180
    
    
    
    182Total current assets
    
    
    32,815
    
    
    
    32,225Property and equipment, net
    
    
    724
    
    
    
    748Intangible assets, net
    
    
    1,375
    
    
    
    544Other assets
    
    
    40
    
    
    
    72Total assets
    
    $
    34,954
    
    
    $
    33,589LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    768
    
    
    $
    713Accrued compensation and related
expenses
    
    
    1,979
    
    
    
    1,877Deferred service revenue and customer
deposits
    
    
    1,569
    
    
    
    1,622Cash dividends payable
    
    
    1,287
    
    
    
    986Other accrued liabilities
    
    
    141
    
    
    
    372Total current liabilities
    
    
    5,744
    
    
    
    5,570Liability for uncertain tax positions
    
    
    110
    
    
    
    Total liabilities
    
    
    5,854
    
    
    
    5,570CommitmentsStockholders equity:Common stock, $0.001 par value; 12,000,000
shares authorized, 4,148,000 shares
issued and outstanding at June 30, 2008
and 4,105,000 at September 30, 2007
    
    
    4
    
    
    
    4Capital in excess of par value
    
    
    24,654
    
    
    
    23,702Accumulated other comprehensive loss
    
    
    (2
    )
    
    
    (2
    )Retained earnings
    
    
    4,444
    
    
    
    4,315Total stockholders equity
    
    
    29,100
    
    
    
    28,019Total liabilities and stockholders equity
    
    $
    34,954
    
    
    $
    33,589
  3




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##### Table of Contents



CAM COMMERCE SOLUTIONS, INC.
 UNAUDITED CONDENSED STATEMENTS OF INCOME
 (In thousands, except per share data)
 THREE MONTHS ENDEDJUNE 30, 2008
    
    
    JUNE 30, 2007REVENUESNet payment processing revenues
    
    $
    6,530
    
    
    $
    4,322Net hardware, software and installation revenues
    
    
    2,504
    
    
    
    2,755Net service revenues
    
    
    1,455
    
    
    
    1,421Total net revenues
    
    
    10,489
    
    
    
    8,498COSTS AND EXPENSESCost of payment processing revenues
    
    
    274
    
    
    
    191Cost of hardware, software and installation revenues (1)
    
    
    1,305
    
    
    
    1,287Cost of service revenues (1)
    
    
    620
    
    
    
    643Total cost of revenues
    
    
    2,199
    
    
    
    2,121Selling, general and administrative expenses (1) (2)
    
    
    5,938
    
    
    
    4,288Research and development expenses (1)
    
    
    510
    
    
    
    398Interest income
    
    
    (219
    )
    
    
    (329
    )Total costs and expenses
    
    
    8,428
    
    
    
    6,478Income before provision for income taxes
    
    
    2,061
    
    
    
    2,020Provision for income taxes
    
    
    774
    
    
    
    753Net income
    
    $
    1,287
    
    
    $
    1,267Basic net income per share
    
    $
    0.31
    
    
    $
    0.31Diluted net income per share
    
    $
    0.30
    
    
    $
    0.30Shares used in computing basic net income per share
    
    
    4,139
    
    
    
    4,050Shares used in computing diluted net income per share
    
    
    4,295
    
    
    
    4,241Cash dividends declared per common share
    
    $
    0.31
    
    
    $
    0.20
 
 (1)
    
    Includes share-based employee compensation expense as follows: Cost of hardware, software and installation revenues
    
    $
    1
    
    
    $
    3Cost of service revenues
    
    
    2
    
    
    
    5Selling, general and administrative expenses
    
    
    7
    
    
    
    21Research and development expenses
    
    
    4
    
    
    
    7
 
 (2)
    
    Includes $81 and $73 for the three months ended June 30, 2008 and 2007 respectively,
for building rent to a related party, Geoff Knapp, officer and director of CAM Commerce.  4




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##### Table of Contents



CAM COMMERCE SOLUTIONS, INC.
 UNAUDITED CONDENSED STATEMENTS OF INCOME
 (In thousands, except per share data)
 NINE MONTHS ENDEDJUNE 30, 2008
    
    
    JUNE 30, 2007REVENUESNet payment processing revenues
    
    $
    17,738
    
    
    $
    11,129Net hardware, software and installation revenues
    
    
    7,229
    
    
    
    7,616Net service revenues
    
    
    4,412
    
    
    
    4,272Total net revenues
    
    
    29,379
    
    
    
    23,017COSTS AND EXPENSESCost of payment processing revenues
    
    
    745
    
    
    
    502Cost of hardware, software and installation revenues (1)
    
    
    3,857
    
    
    
    3,705Cost of service revenues (1)
    
    
    1,956
    
    
    
    1,919Total cost of revenues
    
    
    6,558
    
    
    
    6,126Selling, general and administrative expenses (1) (2)
    
    
    15,633
    
    
    
    11,791Research and development expenses (1)
    
    
    1,455
    
    
    
    1,178Interest income
    
    
    (874
    )
    
    
    (944
    )Total costs and expenses
    
    
    22,772
    
    
    
    18,151Income before provision for income taxes
    
    
    6,607
    
    
    
    4,866Provision for income taxes
    
    
    2,260
    
    
    
    1,777Net income
    
    $
    4,347
    
    
    $
    3,089Basic net income per share
    
    $
    1.05
    
    
    $
    0.77Diluted net income per share
    
    $
    1.01
    
    
    $
    0.73Shares used in computing basic net income per share
    
    
    4,124
    
    
    
    4,017Shares used in computing diluted net income per share
    
    
    4,294
    
    
    
    4,217Cash dividends declared per common share
    
    $
    0.92
    
    
    $
    0.54
 
 (1)
    
    Includes share-based employee compensation expense as follows: Cost of hardware, software and installation revenues
    
    $
    7
    
    
    $
    9Cost of service revenues
    
    
    11
    
    
    
    15Selling, general and administrative expenses
    
    
    39
    
    
    
    65Research and development expenses
    
    
    12
    
    
    
    21
 
 (2)
    
    Includes $237 and $157 for the nine months ended June 30, 2008 and 2007 respectively,
for building rent to a related party, Geoff Knapp, officer and director of CAM Commerce.  5




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CAM COMMERCE SOLUTIONS, INC.
 UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
 (In thousands)
 NINE MONTHS ENDEDJUNE 30, 2008
    
    
    JUNE 30, 2007Operating activities:Net income
    
    $
    4,347
    
    
    $
    3,089Adjustments to reconcile net income to net
cash provided by operating activities:Depreciation and amortization
    
    
    500
    
    
    
    471Provision for doubtful accounts
    
    
    37
    
    
    
    (18
    )Change in deferred income taxes
    
    
    2,260
    
    
    
    1,778Share-based compensation
    
    
    69
    
    
    
    110Excess tax benefits from share-based payment
arrangements
    
    
    (528
    )
    
    
    (795
    )Changes in operating assets and liabilities:Accounts receivable
    
    
    (615
    )
    
    
    (650
    )Inventories
    
    
    23
    
    
    
    148Other assets
    
    
    12
    
    
    
    (73
    )Accounts payable
    
    
    55
    
    
    
    54Accrued compensation and related expenses
    
    
    102
    
    
    
    400Deferred service revenue and customer deposits
    
    
    (53
    )
    
    
    160Income taxes
    
    
    (3,076
    )
    
    
    (571
    )Other accrued liabilities
    
    
    30
    
    
    
    (9
    )Cash provided by operating activities
    
    
    3,163
    
    
    
    4,094Cash flows from investing activities:Purchase of property and equipment
    
    
    (220
    )
    
    
    (347
    )Capitalized software development costs
    
    
    (146
    )
    
    
    (300
    )Purchase of payment processing portfolio
    
    
    (941
    )
    
    
    Purchase of marketable securities
    
    
    (3,868
    )
    
    
    (3,014
    )Proceeds from maturity of marketable securities
    
    
    5,413
    
    
    
    3,320Cash provided (used) by investing activities
    
    
    238
    
    
    
    (341
    )Cash flows from financing activities:Proceeds from exercise of stock options
    
    
    269
    
    
    
    533Excess tax benefits from share-based payment
arrangements
    
    
    528
    
    
    
    795Dividends paid on common stock
    
    
    (3,503
    )
    
    
    (1,963
    )Cash used in financing activities
    
    
    (2,706
    )
    
    
    (635
    )Net increase in cash and cash equivalents
    
    
    695
    
    
    
    3,118Cash and cash equivalents at beginning of period
    
    
    22,047
    
    
    
    15,196Cash and cash equivalents at end of period
    
    $
    22,742
    
    
    $
    18,314
  6




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CAM COMMERCE SOLUTIONS, INC.
 NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
 JUNE 30, 2008
 (In thousands, except per share data)
 ORGANIZATION AND BUSINESS
  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 Presentation of Condensed Financial Statements
  Cash Equivalents
  Marketable Securities
  Accounts Receivable and Allowance For Doubtful Accounts
   7




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CAM COMMERCE SOLUTIONS, INC.
 NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
 JUNE 30, 2008
 (In thousands, except per share data)
 Concentrations of Credit Risk
  Inventories
  Comprehensive Income
  THREE MONTHS ENDEDJUNE 30, 2008
    
    
    JUNE 30, 2007Net income
    
    $
    1,287
    
    
    $
    1,267Unrealized gain (losses) on marketable
available-for- sale securities, net of
tax
    
    
    15
    
    
    
    3Comprehensive income
    
    $
    1,302
    
    
    $
    1,270
 NINE MONTHS ENDEDJUNE 30, 2008
    
    
    JUNE 30, 2007Net income
    
    $
    4,347
    
    
    $
    3,089Unrealized gain (losses) on marketable
available-for- sale securities, net of
tax
    
    
    
    
    
    
    15Comprehensive income
    
    $
    4,347
    
    
    $
    3,104
 Revenue Recognition Policy
   8




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##### Table of Contents



CAM COMMERCE SOLUTIONS, INC.
 NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
 JUNE 30, 2008
 (In thousands, except per share data)
   Segments
  Recently Issued Accounting Announcements
    9




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CAM COMMERCE SOLUTIONS, INC.
 NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
 JUNE 30, 2008
 (In thousands, except per share data)
 Intangible Assets
       Use of Estimates
  Advertising
  Shipping and Handling
  10




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CAM COMMERCE SOLUTIONS, INC.
 NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
 JUNE 30, 2008
 (In thousands, except per share data)
 Net Income Per Share
   THREE MONTHS ENDEDJUNE 30, 2008
    
    
    JUNE 30, 2007Numerator:Net income for basic and diluted net income per share
    
    $
    1,287
    
    
    $
    1,267Denominator:Weighted-average shares outstanding
    
    
    4,139
    
    
    
    4,050Denominator for basic net income per share:Weighted-average shares
    
    
    4,139
    
    
    
    4,050Effect of dilutive securities:Stock options
    
    
    156
    
    
    
    191Denominator for diluted net income per share:Weighted average shares and assumed conversions
    
    
    4,295
    
    
    
    4,241Basic net income per share
    
    $
    0.31
    
    
    $
    0.31Diluted net income per share
    
    $
    0.30
    
    
    $
    0.30
 NINE MONTHS ENDEDJUNE 30, 2008
    
    
    JUNE 30, 2007Numerator:Net income for basic and diluted net income per share
    
    $
    4,347
    
    
    $
    3,089Denominator:Weighted-average shares outstanding
    
    
    4,124
    
    
    
    4,017Denominator for basic net income per share:Weighted-average shares
    
    
    4,124
    
    
    
    4,017Effect of dilutive securities:Stock options
    
    
    170
    
    
    
    200Denominator for diluted net income per share:Weighted average shares and assumed conversions
    
    
    4,294
    
    
    
    4,217Basic net income per share
    
    $
    1.05
    
    
    $
    0.77Diluted net income per share
    
    $
    1.01
    
    
    $
    0.73
 11




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CAM COMMERCE SOLUTIONS, INC.
 NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
 JUNE 30, 2008
 (In thousands, except per share data)
 Dividends Declared
  Per ShareDeclaration Date
    
    Dividend
    
    Record Date
    
    Total Amount
    
    Payment DateNovember 19, 2007
    
    $
    0.30
    
    
    January 7, 2008
    
    $
    1,235
    
    
    January 17, 2008February 13, 2008
    
    $
    0.31
    
    
    April 4, 2008
    
    $
    1,283
    
    
    April 14, 2008April 30, 2008
    
    $
    0.31
    
    
    July 3, 2008
    
    $
    1,287
    
    
    July 14, 2008
 Share-Based Compensation
   (
   12




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CAM COMMERCE SOLUTIONS, INC.
 NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
 JUNE 30, 2008
 (In thousands, except per share data)
  WEIGHTED AVERAGEREMAINING
    
    AGGREGATENUMBER OF
    
    WEIGHTED AVERAGE
    
    CONTRACTUAL TERM
    
    INTRINSICOPTIONS
    
    EXERCISE PRICE
    
    (IN YEARS)
    
    VALUEOptions outstanding
at June 30, 2008
    
    
    317
    
    
    $
    7.24
    
    
    
    3.8
    
    
    $
    10,287Options expected to
vest at June 30,
2008
    
    
    316
    
    
    $
    7.23
    
    
    
    3.8
    
    
    $
    10,271Options exercisable
at June 30, 2008
    
    
    315
    
    
    $
    7.21
    
    
    
    3.8
    
    
    $
    10,237
 Income Taxes
      13




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##### Table of Contents



CAM COMMERCE SOLUTIONS, INC.
 NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
 JUNE 30, 2008
 (In thousands, except per share data)
   DEFINITIVE MERGER AGREEMENT
   14




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##### Table of Contents



CAM COMMERCE SOLUTIONS, INC.
 MANAGEMENTS DISCUSSION AND ANALYSIS OF
 FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 (All dollar amounts in thousands)
 
 Item 2. Managements Discussion and Analysis of Financial Condition and Results of Operations
 (All dollar amounts in thousands)
 CAUTIONARY STATEMENT
   OVERVIEW
   OFF BALANCE SHEET ARRANGEMENTS
  15




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##### Table of Contents



CAM COMMERCE SOLUTIONS, INC.
 MANAGEMENTS DISCUSSION AND ANALYSIS OF
 FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 (All dollar amounts in thousands)
 DEFINITIVE MERGER AGREEMENT
   CRITICAL ACCOUNTING POLICIES AND ESTIMATES
   Revenue Recognition
   16




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CAM COMMERCE SOLUTIONS, INC.
 MANAGEMENTS DISCUSSION AND ANALYSIS OF
 FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 (All dollar amounts in thousands)
   Receivables
   Capitalized Software and Payment Processing Portfolio Costs
    17




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##### Table of Contents



CAM COMMERCE SOLUTIONS, INC.
 MANAGEMENTS DISCUSSION AND ANALYSIS OF
 FINANCIAL CONDITION AND RESULTS OF OPERATIONS
 (All dollar amounts in thousands)
 Deferred Taxes
  Liability for Uncertain Tax Positions  FIN 48
   RESULTS OF OPERATIONS
  18




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CAM COMMERCE SOLUTIONS, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(All dollar amounts in thousands)
 Three months ended June 30,
    
    
    Variance2008
    
    
    2007
    
    
    Amount
    
    
    %Net payment processing revenues
    
    $
    6,530
    
    
    $
    4,322
    
    
    $
    2,208
    
    
    
    51
    %Net hardware, software and installation revenues
    
    
    2,504
    
    
    
    2,755
    
    
    
    (251
    )
    
    
    (9
    %)Net service revenues
    
    
    1,455
    
    
    
    1,421
    
    
    
    34
    
    
    
    2
    %Total net revenues
    
    
    10,489
    
    
    
    8,498
    
    
    
    1,991
    
    
    
    23
    %Cost of payment processing revenues
    
    
    274
    
    
    
    191
    
    
    
    83
    
    
    
    43
    %Cost of hardware, software and installation revenues
    
    
    1,305
    
    
    
    1,287
    
    
    
    18
    
    
    
    1
    %Cost of service revenues
    
    
    620
    
    
    
    643
    
    
    
    (23
    )
    
    
    (4
    %)Total cost of revenues
    
    
    2,199
    
    
    
    2,121
    
    
    
    78
    
    
    
    4
    %Selling, general and administrative expenses
    
    
    5,938
    
    
    
    4,288
    
    
    
    1,650
    
    
    
    38
    %Research and development expenses
    
    
    510
    
    
    
    398
    
    
    
    112
    
    
    
    28
    %Interest income
    
    
    (219
    )
    
    
    (329
    )
    
    
    (110
    )
    
    
    (33
    %)Total costs and expenses
    
    
    8,428
    
    
    
    6,478
    
    
    
    1,950
    
    
    
    30
    %Income before provision for income taxes
    
    
    2,061
    
    
    
    2,020
    
    
    
    41
    
    
    
    2
    %Provision for income taxes
    
    
    774
    
    
    
    753
    
    
    
    21
    
    
    
    3
    %Net income
    
    $
    1,287
    
    
    $
    1,267
    
    
    $
    20
    
    
    
    2
    %Gross profit on net payment processing revenues
    
    $
    6,256
    
    
    $
    4,131
    
    
    $
    2,125
    
    
    
    51
    %Gross profit on net hardware, software and
installation revenues
    
    
    1,199
    
    
    
    1,468
    
    
    
    (269
    )
    
    
    (18
    %)Gross profit on net service revenues
    
    
    835
    
    
    
    778
    
    
    
    57
    
    
    
    7
    %Total gross profit
    
    $
    8,290
    
    
    $
    6,377
    
    
    $
    1,913
    
    
    
    30
    %Gross margin on net payment processing revenues
    
    
    96
    %
    
    
    96
    %Gross margin on net hardware, software and
installation revenues
    
    
    48
    %
    
    
    53
    %Gross margin on net service revenues
    
    
    57
    %
    
    
    55
    %Gross margin on total net revenues
    
    
    79
    %
    
    
    75
    %
 19




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CAM COMMERCE SOLUTIONS, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(All dollar amounts in thousands)
 Nine months ended June 30,
    
    
    Variance2008
    
    
    2007
    
    
    Amount
    
    
    %Net payment processing revenues
    
    $
    17,738
    
    
    $
    11,129
    
    
    $
    6,609
    
    
    
    59
    %Net hardware, software and installation revenues
    
    
    7,229
    
    
    
    7,616
    
    
    
    (387
    )
    
    
    (5
    %)Net service revenues
    
    
    4,412
    
    
    
    4,272
    
    
    
    140
    
    
    
    3
    %Total net revenues
    
    
    29,379
    
    
    
    23,017
    
    
    
    6,362
    
    
    
    28
    %Cost of payment processing revenues
    
    
    745
    
    
    
    502
    
    
    
    243
    
    
    
    48
    %Cost of hardware, software and installation
revenues
    
    
    3,857
    
    
    
    3,705
    
    
    
    152
    
    
    
    4
    %Cost of service revenues
    
    
    1,956
    
    
    
    1,919
    
    
    
    37
    
    
    
    2
    %Total cost of revenues
    
    
    6,558
    
    
    
    6,126
    
    
    
    432
    
    
    
    7
    %Selling, general and administrative expenses
    
    
    15,633
    
    
    
    11,791
    
    
    
    3,842
    
    
    
    33
    %Research and development expenses
    
    
    1,455
    
    
    
    1,178
    
    
    
    277
    
    
    
    24
    %Interest income
    
    
    (874
    )
    
    
    (944
    )
    
    
    (70
    )
    
    
    (7
    %)Total costs and expenses
    
    
    22,772
    
    
    
    18,151
    
    
    
    4,621
    
    
    
    25
    %Income before provision for income taxes
    
    
    6,607
    
    
    
    4,866
    
    
    
    1,741
    
    
    
    36
    %Provision for income taxes
    
    
    2,260
    
    
    
    1,777
    
    
    
    483
    
    
    
    27
    %Net income
    
    $
    4,347
    
    
    $
    3,089
    
    
    $
    1,258
    
    
    
    41
    %Gross profit on net payment processing revenues
    
    $
    16,993
    
    
    $
    10,627
    
    
    $
    6,366
    
    
    
    60
    %Gross profit on net hardware, software and
installation revenues
    
    
    3,372
    
    
    
    3,911
    
    
    
    (539
    )
    
    
    (14
    %)Gross profit on net service revenues
    
    
    2,456
    
    
    
    2,353
    
    
    
    103
    
    
    
    4
    %Total gross profit
    
    $
    22,821
    
    
    $
    16,891
    
    
    $
    5,930
    
    
    
    35
    %Gross margin on net payment processing revenues
    
    
    96
    %
    
    
    95
    %Gross margin on net hardware, software and
installation revenues
    
    
    47
    %
    
    
    51
    %Gross margin on net service revenues
    
    
    56
    %
    
    
    55
    %Gross margin on total net revenues
    
    
    78
    %
    
    
    73
    %
 Significant Trends
   Revenues
  20




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CAM COMMERCE SOLUTIONS, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(All dollar amounts in thousands)
     Gross Margin
   Selling, General and Administrative Expenses
  21




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CAM COMMERCE SOLUTIONS, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(All dollar amounts in thousands)
 Research and Development Expenses
  Income Taxes
  Net Income
  LIQUIDITY AND CAPITAL RESOURCES
  22




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CAM COMMERCE SOLUTIONS, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(All dollar amounts in thousands)
  Declaration Date
    
    Per Share Dividend
    
    Record Date
    
    Total Amount
    
    Payment DateNovember 19, 2007
    
    $
    0.30
    
    
    January 7, 2008
    
    $
    1,235
    
    
    January 17, 2008February 13, 2008
    
    $
    0.31
    
    
    April 4, 2008
    
    $
    1,283
    
    
    April 14, 2008April 30, 2008
    
    $
    0.31
    
    
    July 3, 2008
    
    $
    1,287
    
    
    July 14, 2008
  Inflation
  Contracts and Commitments
   PAYMENTS DUE BY PERIODLESS THAN
    
    
    1-3
    
    
    3-5
    
    
    MORE THANTOTAL
    
    
    1 YEAR
    
    
    YEARS
    
    
    YEARS
    
    
    5 YEARSLong-term debt
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Capital lease obligations
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Operating leases
    
    $
    3,906
    
    
    $
    196
    
    
    $
    1,713
    
    
    $
    1,063
    
    
    $
    934Purchase obligations
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Other long-term
obligations
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
 FORWARD LOOKING STATEMENTS
  23




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CAM COMMERCE SOLUTIONS, INC.
MANAGEMENTS DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
(All dollar amounts in thousands)
   24




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CAM COMMERCE SOLUTIONS, INC.
 
 ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
 (All dollar amounts in thousands)
  Interest Rate Risk
  Credit Risk
  Foreign Exchange Rate Risk
  
 ITEM 4T. CONTROLS AND PROCEDURES
  25




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PART II . OTHER INFORMATION
 
 Item 1 Legal Proceedings
   
 Item 1A Risk Factors
  
 Item 2 Unregistered Sales of Equity Securities and Use of Proceeds
  
 Item 3 Defaults upon Senior Securities
  
 Item 4 Submission of Matters to a Vote of Security Holders
  26




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Item 5 Other Information
  
 Item 6 Exhibits
                   27




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SIGNATURES
  CAM COMMERCE SOLUTIONS, INC.(Registrant)Date: August 14, 2008
    By
    /s/ Geoffrey D. KnappGeoffrey D. KnappChief Executive OfficerDate: August 14, 2008
    By
    /s/ Paul Caceres Jr.Paul Caceres Jr.Chief Financial and Accounting Officer 28




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