##### 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 March 31, 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
    
    Smaller reporting company o(Do not check if a smaller reporting company)
  o þ




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##### 



CAM COMMERCE SOLUTIONS, INC.
 INDEX
 Page NumberPART I  Financial InformationItem 1
    
    Financial Statements:a)
    
    Condensed Balance Sheets at March 31, 2008 (Unaudited)
and September 30, 2007
    
    
    3b)
    
    Unaudited Condensed Statements of Income for the three
months ended March 31, 2008 and 2007
    
    
    4c)
    
    Unaudited Condensed Statements of Income for the six
months ended March 31, 2008 and 2007
    
    
    5d)
    
    Unaudited Condensed Statements of Cash Flows for the
six months ended March 31, 2008 and 2007
    
    
    6e)
    
    Notes to Unaudited Condensed Financial Statements
    
    
    7-13Item 2
    
    Managements Discussion and Analysis of Financial
Condition and Results of Operations
    
    
    14-22Item 3
    
    Quantitative and Qualitative Disclosures About Market Risk
    
    
    23Item 4T
    
    Controls and Procedures
    
    
    23PART II  Other InformationItem 1
    
    Legal Proceedings
    
    
    24Item 1A
    
    Risk Factors
    
    
    24Item 2
    
    Unregistered Sales of Equity Securities and Use of Proceeds
    
    
    24Item 3
    
    Defaults Upon Senior Securities
    
    
    24Item 4
    
    Submission of Matters to a Vote of Security Holders
    
    
    24Item 5
    
    Other Information
    
    
    24Item 6
    
    Exhibits
    
    
    24-25Signatures
    
    
    
    
    26EXHIBIT 31.(a)EXHIBIT 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)
 MARCH 31,
    
    
    SEPTEMBER 30,2008
    
    
    2007(Unaudited)ASSETSCurrent assets:Cash and cash equivalents
    
    $
    21,460
    
    
    $
    22,047Marketable available-for-sale securities
    
    
    5,794
    
    
    
    6,388Accounts receivable, net
    
    
    2,793
    
    
    
    2,688Inventories
    
    
    347
    
    
    
    295Prepaid income taxes
    
    
    1,885
    
    
    
    Deferred income taxes
    
    
    76
    
    
    
    625Other current assets
    
    
    139
    
    
    
    182Total current assets
    
    
    32,494
    
    
    
    32,225Property and equipment, net
    
    
    770
    
    
    
    748Intangible assets, net
    
    
    485
    
    
    
    544Other assets
    
    
    66
    
    
    
    72Total assets
    
    $
    33,815
    
    
    $
    33,589LIABILITIES AND STOCKHOLDERS EQUITYCurrent liabilities:Accounts payable
    
    $
    525
    
    
    $
    713Accrued compensation and related expenses
    
    
    1,588
    
    
    
    1,877Deferred service revenue and customer deposits
    
    
    1,537
    
    
    
    1,622Cash dividends payable
    
    
    1,283
    
    
    
    986Other accrued liabilities
    
    
    110
    
    
    
    372Total current liabilities
    
    
    5,043
    
    
    
    5,570Liability for uncertain tax positions
    
    
    58
    
    
    
    Total liabilities
    
    
    5,101
    
    
    
    5,570CommitmentsStockholders equity:Common stock, $0.001 par value; 12,000,000
shares authorized, 4,134,000 shares issued and
outstanding at March 31, 2008 and
4,105,000 at September 30, 2007
    
    
    4
    
    
    
    4Capital in excess of par value
    
    
    24,284
    
    
    
    23,702Accumulated other comprehensive loss
    
    
    (17
    )
    
    
    (2
    )Retained earnings
    
    
    4,443
    
    
    
    4,315Total stockholders equity
    
    
    28,714
    
    
    
    28,019Total liabilities and stockholders equity
    
    $
    33,815
    
    
    $
    33,589
  3




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CAM COMMERCE SOLUTIONS, INC.
 
 UNAUDITED CONDENSED STATEMENTS OF INCOME
 (In thousands, except per share data)
 THREE MONTHS ENDEDMARCH 31, 2008
    
    
    MARCH 31, 2007REVENUESNet payment processing revenues
    
    $
    5,423
    
    
    $
    3,342Net hardware, software and installation revenues
    
    
    2,144
    
    
    
    2,576Net service revenues
    
    
    1,478
    
    
    
    1,429Total net revenues
    
    
    9,045
    
    
    
    7,347COSTS AND EXPENSESCost of payment processing revenues
    
    
    232
    
    
    
    181Cost of hardware, software and installation revenues (1)
    
    
    1,221
    
    
    
    1,234Cost of service revenues (1)
    
    
    665
    
    
    
    639Total cost of revenues
    
    
    2,118
    
    
    
    2,054Selling, general and administrative expenses (1) (2)
    
    
    4,928
    
    
    
    3,840Research and development expenses (1)
    
    
    481
    
    
    
    397Interest income
    
    
    (294
    )
    
    
    (310
    )Total costs and expenses
    
    
    7,233
    
    
    
    5,981Income before provision for income taxes
    
    
    1,812
    
    
    
    1,366Provision for income taxes
    
    
    446
    
    
    
    512Net income
    
    $
    1,366
    
    
    $
    854Basic net income per share
    
    $
    0.33
    
    
    $
    0.21Diluted net income per share
    
    $
    0.32
    
    
    $
    0.20Shares used in computing basic net income per share
    
    
    4,124
    
    
    
    4,022Shares used in computing diluted net income per share
    
    
    4,297
    
    
    
    4,220Cash dividends declared per common share
    
    $
    0.31
    
    
    $
    0.18
 
 (1)
    
    Includes share-based employee compensation expense as follows: Cost of hardware, software and installation revenues
    
    $
    3
    
    
    $
    3Cost of service revenues
    
    
    5
    
    
    
    5Selling, general and administrative expenses
    
    
    14
    
    
    
    21Research and development expenses
    
    
    4
    
    
    
    7
 (2)
    
    Includes $78 and $42 for the three months ended March 31, 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)
 SIX MONTHS ENDEDMARCH 31, 2008
    
    
    MARCH 31, 2007REVENUESNet payment processing revenues
    
    $
    11,208
    
    
    $
    6,807Net hardware, software and installation revenues
    
    
    4,725
    
    
    
    4,861Net service revenues
    
    
    2,957
    
    
    
    2,851Total net revenues
    
    
    18,890
    
    
    
    14,519COSTS AND EXPENSESCost of payment processing revenues
    
    
    471
    
    
    
    311Cost of hardware, software and installation revenues (1)
    
    
    2,552
    
    
    
    2,418Cost of service revenues (1)
    
    
    1,336
    
    
    
    1,276Total cost of revenues
    
    
    4,359
    
    
    
    4,005Selling, general and administrative expenses (1) (2)
    
    
    9,695
    
    
    
    7,503Research and development expenses (1)
    
    
    945
    
    
    
    780Interest income
    
    
    (655
    )
    
    
    (615
    )Total costs and expenses
    
    
    14,344
    
    
    
    11,673Income before provision for income taxes
    
    
    4,546
    
    
    
    2,846Provision for income taxes
    
    
    1,486
    
    
    
    1,024Net income
    
    $
    3,060
    
    
    $
    1,822Basic net income per share
    
    $
    0.74
    
    
    $
    0.46Diluted net income per share
    
    $
    0.71
    
    
    $
    0.43Shares used in computing basic net income per share
    
    
    4,117
    
    
    
    4,001Shares used in computing diluted net income per share
    
    
    4,293
    
    
    
    4,206Cash dividends declared per common share
    
    $
    0.61
    
    
    $
    0.34
 
 (1)
    
    Includes share-based employee compensation expense as follows: Cost of hardware, software and installation revenues
    
    $
    6
    
    
    $
    6Cost of service revenues
    
    
    9
    
    
    
    10Selling, general and administrative expenses
    
    
    32
    
    
    
    44Research and development expenses
    
    
    8
    
    
    
    14
 (2)
    
    Includes $156 and $84 for the six months ended March 31, 2008 and 2007 respectively,
for building rent to a related party, Geoff Knapp, officer and director of CAM Commerce.  5




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##### Table of Contents



CAM COMMERCE SOLUTIONS, INC.
 
 UNAUDITED CONDENSED STATEMENTS OF CASH FLOWS
 (In thousands)
 SIX MONTHS ENDEDMARCH 31, 2008
    
    
    MARCH 31, 2007Operating activities:Net income
    
    $
    3,060
    
    
    $
    1,822Adjustments to reconcile net income to net
cash provided by operating activities:Depreciation and amortization
    
    
    319
    
    
    
    325Provision for doubtful accounts
    
    
    (8
    )
    
    
    9Change in deferred income taxes
    
    
    1,498
    
    
    
    1,024Share-based compensation
    
    
    55
    
    
    
    74Excess tax benefits from share-based payment
arrangements
    
    
    (397
    )
    
    
    (496
    )Changes in operating assets and liabilities:Accounts receivable
    
    
    (97
    )
    
    
    (271
    )Inventories
    
    
    (52
    )
    
    
    83Other assets
    
    
    50
    
    
    
    (172
    )Accounts payable
    
    
    (188
    )
    
    
    69Accrued compensation and related expenses
    
    
    (289
    )
    
    
    (5
    )Deferred service revenue and customer deposits
    
    
    (85
    )
    
    
    237Income taxes
    
    
    (3,034
    )
    
    
    (376
    )Other accrued liabilities
    
    
    (1
    )
    
    
    (25
    )Cash provided by operating activities
    
    
    831
    
    
    
    2,298Cash flows from investing activities:Purchase of property and equipment
    
    
    (187
    )
    
    
    (108
    )Capitalized software development costs
    
    
    (95
    )
    
    
    (159
    )Purchase of marketable securities
    
    
    (3,407
    )
    
    
    (1,744
    )Proceeds from maturity of marketable securities
    
    
    3,965
    
    
    
    2,035Cash provided by investing activities
    
    
    276
    
    
    
    24Cash flows from financing activities:Proceeds from exercise of stock options
    
    
    130
    
    
    
    390Excess tax benefits from share-based payment
arrangements
    
    
    397
    
    
    
    496Dividends paid on common stock
    
    
    (2,221
    )
    
    
    (1,237
    )Cash used in financing activities
    
    
    (1,694
    )
    
    
    (351
    )Net increase (decrease) in cash and cash equivalents
    
    
    (587
    )
    
    
    1,971Cash and cash equivalents at beginning of period
    
    
    22,047
    
    
    
    15,196Cash and cash equivalents at end of period
    
    $
    21,460
    
    
    $
    17,167
  6




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CAM COMMERCE SOLUTIONS, INC.
 
 NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
 MARCH 31, 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
 MARCH 31, 2008
 (In thousands, except per share data)
 Concentrations of Credit Risk
  Inventories
  Comprehensive Income
  THREE MONTHS ENDEDMARCH 31, 2008
    
    
    MARCH 31, 2007Net income
    
    $
    1,366
    
    
    $
    854Unrealized gain (losses) on marketable
available-for- sale securities, net of
tax
    
    
    (14
    )
    
    
    6Comprehensive income
    
    $
    1,352
    
    
    $
    860
 SIX MONTHS ENDEDMARCH 31, 2008
    
    
    MARCH 31, 2007Net income
    
    $
    3,060
    
    
    $
    1,822Unrealized gain (losses) on marketable
available-for- sale securities, net of
tax
    
    
    (15
    )
    
    
    12Comprehensive income
    
    $
    3,045
    
    
    $
    1,834
 Revenue Recognition Policy
   8




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CAM COMMERCE SOLUTIONS, INC.
 NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
 MARCH 31, 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
 MARCH 31, 2008
 (In thousands, except per share data)
 Intangible Assets
     Use of Estimates
  Advertising
  Shipping and Handling
  Net Income Per Share
  10




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CAM COMMERCE SOLUTIONS, INC.
 NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
 MARCH 31, 2008
 (In thousands, except per share data)
  THREE MONTHS ENDEDMARCH 31, 2008
    
    
    MARCH 31, 2007Numerator:Net income for basic and diluted net income per share
    
    $
    1,366
    
    
    $
    854Denominator:Weighted-average shares outstanding
    
    
    4,124
    
    
    
    4,022Denominator for basic net income per share:Weighted-average shares
    
    
    4,124
    
    
    
    4,022Effect of dilutive securities:Stock options
    
    
    173
    
    
    
    198Denominator for diluted net income per share:Weighted average shares and assumed conversions
    
    
    4,297
    
    
    
    4,220Basic net income per share
    
    $
    0.33
    
    
    $
    0.21Diluted net income per share
    
    $
    0.32
    
    
    $
    0.20
 SIX MONTHS ENDEDMARCH 31, 2008
    
    
    MARCH 31, 2007Numerator:Net income for basic and diluted net income per share
    
    $
    3,060
    
    
    $
    1,822Denominator:Weighted-average shares outstanding
    
    
    4,117
    
    
    
    4,001Denominator for basic net income per share:Weighted-average shares
    
    
    4,117
    
    
    
    4,001Effect of dilutive securities:Stock options
    
    
    176
    
    
    
    205Denominator for diluted net income per share:Weighted average shares and assumed conversions
    
    
    4,293
    
    
    
    4,206Basic net income per share
    
    $
    0.74
    
    
    $
    0.46Diluted net income per share
    
    $
    0.71
    
    
    $
    0.43
 Dividends Declared
  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, 2008
 Share-Based Compensation
  11




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##### Table of Contents



CAM COMMERCE SOLUTIONS, INC.
 NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
 MARCH 31, 2008
 (In thousands, except per share data)
   (
    WEIGHTEDWEIGHTED
    
    AVERAGENUMBER
    
    AVERAGE
    
    REMAINING
    
    AGGREGATEOF
    
    EXERCISE
    
    CONTRACTUAL
    
    INTRINSICOPTIONS
    
    PRICE
    
    TERM (IN YEARS)
    
    VALUEOptions outstanding
at March 31, 2008
    
    
    330
    
    
    $
    7.35
    
    
    
    4.1
    
    
    $
    9,846Options expected to
vest at March 31,
2008
    
    
    329
    
    
    $
    7.33
    
    
    
    4.1
    
    
    $
    9,810Options exercisable
at March 31, 2008
    
    
    326
    
    
    $
    7.28
    
    
    
    4.1
    
    
    $
    9,737
 Income Taxes
  12




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CAM COMMERCE SOLUTIONS, INC.
 NOTES TO UNAUDITED CONDENSED FINANCIAL STATEMENTS
 MARCH 31, 2008
 (In thousands, except per share data)
        13




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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
  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)
 CRITICAL ACCOUNTING POLICIES AND ESTIMATES
   Revenue Recognition
    Receivables
  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)
  Capitalized Software
   Deferred Taxes
  Liability for Uncertain Tax Positions  FIN 48
   16




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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)
  RESULTS OF OPERATIONS
  Three months ended March 31,
    
    
    Variance2008
    
    
    2007
    
    
    Amount
    
    
    %Net payment processing revenues
    
    $
    5,423
    
    
    $
    3,342
    
    
    $
    2,081
    
    
    
    62
    %Net hardware, software and installation revenues
    
    
    2,144
    
    
    
    2,576
    
    
    
    (432
    )
    
    
    (17
    %)Net service revenues
    
    
    1,478
    
    
    
    1,429
    
    
    
    49
    
    
    
    3
    %Total net revenues
    
    
    9,045
    
    
    
    7,347
    
    
    
    1,698
    
    
    
    23
    %Cost of payment processing revenues
    
    
    232
    
    
    
    181
    
    
    
    51
    
    
    
    28
    %Cost of hardware, software and installation
revenues
    
    
    1,221
    
    
    
    1,234
    
    
    
    (13
    )
    
    
    (1
    %)Cost of service revenues
    
    
    665
    
    
    
    639
    
    
    
    26
    
    
    
    4
    %Total cost of revenues
    
    
    2,118
    
    
    
    2,054
    
    
    
    64
    
    
    
    3
    %Selling, general and administrative expenses
    
    
    4,928
    
    
    
    3,840
    
    
    
    1,088
    
    
    
    28
    %Research and development expenses
    
    
    481
    
    
    
    397
    
    
    
    84
    
    
    
    21
    %Interest income
    
    
    (294
    )
    
    
    (310
    )
    
    
    (16
    )
    
    
    (5
    %)Total costs and expenses
    
    
    7,233
    
    
    
    5,981
    
    
    
    1,252
    
    
    
    21
    %Income before provision for income taxes
    
    
    1,812
    
    
    
    1,366
    
    
    
    446
    
    
    
    33
    %Provision for income taxes
    
    
    446
    
    
    
    512
    
    
    
    (66
    )
    
    
    (13
    %)Net income
    
    $
    1,366
    
    
    $
    854
    
    
    $
    512
    
    
    
    60
    %Gross profit on net payment processing revenues
    
    $
    5,191
    
    
    $
    3,161
    
    
    $
    2,030
    
    
    
    64
    %Gross profit on net hardware, software and
installation revenues
    
    
    923
    
    
    
    1,342
    
    
    
    (419
    )
    
    
    (31
    %)Gross profit on net service revenues
    
    
    813
    
    
    
    790
    
    
    
    23
    
    
    
    3
    %Total gross profit
    
    $
    6,927
    
    
    $
    5,293
    
    
    $
    1,634
    
    
    
    31
    %Gross margin on net payment processing revenues
    
    
    96
    %
    
    
    95
    %Gross margin on net hardware, software and
installation revenues
    
    
    43
    %
    
    
    52
    %Gross margin on net service revenues
    
    
    55
    %
    
    
    55
    %Gross margin on total net revenues
    
    
    77
    %
    
    
    72
    %
 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)
 Six months ended March 31,
    
    
    Variance2008
    
    
    2007
    
    
    Amount
    
    
    %Net payment processing revenues
    
    $
    11,208
    
    
    $
    6,807
    
    
    $
    4,401
    
    
    
    65
    %Net hardware, software and installation revenues
    
    
    4,725
    
    
    
    4,861
    
    
    
    (136
    )
    
    
    (3
    %)Net service revenues
    
    
    2,957
    
    
    
    2,851
    
    
    
    106
    
    
    
    4
    %Total net revenues
    
    
    18,890
    
    
    
    14,519
    
    
    
    4,371
    
    
    
    30
    %Cost of payment processing revenues
    
    
    471
    
    
    
    311
    
    
    
    160
    
    
    
    51
    %Cost of hardware, software and installation
revenues
    
    
    2,552
    
    
    
    2,418
    
    
    
    134
    
    
    
    6
    %Cost of service revenues
    
    
    1,336
    
    
    
    1,276
    
    
    
    60
    
    
    
    5
    %Total cost of revenues
    
    
    4,359
    
    
    
    4,005
    
    
    
    354
    
    
    
    9
    %Selling, general and administrative expenses
    
    
    9,695
    
    
    
    7,503
    
    
    
    2,192
    
    
    
    29
    %Research and development expenses
    
    
    945
    
    
    
    780
    
    
    
    165
    
    
    
    21
    %Interest income
    
    
    (655
    )
    
    
    (615
    )
    
    
    40
    
    
    
    7
    %Total costs and expenses
    
    
    14,344
    
    
    
    11,673
    
    
    
    2,671
    
    
    
    23
    %Income before provision for income taxes
    
    
    4,546
    
    
    
    2,846
    
    
    
    1,700
    
    
    
    60
    %Provision for income taxes
    
    
    1,486
    
    
    
    1,024
    
    
    
    462
    
    
    
    45
    %Net income
    
    $
    3,060
    
    
    $
    1,822
    
    
    $
    1,238
    
    
    
    68
    %Gross profit on net payment processing revenues
    
    $
    10,737
    
    
    $
    6,496
    
    
    $
    4,241
    
    
    
    65
    %Gross profit on net hardware, software and
installation revenues
    
    
    2,173
    
    
    
    2,443
    
    
    
    (270
    )
    
    
    (11
    %)Gross profit on net service revenues
    
    
    1,621
    
    
    
    1,575
    
    
    
    46
    
    
    
    3
    %Total gross profit
    
    $
    14,531
    
    
    $
    10,514
    
    
    $
    4,017
    
    
    
    38
    %Gross margin on net payment processing revenues
    
    
    96
    %
    
    
    95
    %Gross margin on net hardware, software and
installation revenues
    
    
    46
    %
    
    
    50
    %Gross margin on net service revenues
    
    
    55
    %
    
    
    55
    %Gross margin on total net revenues
    
    
    77
    %
    
    
    72
    %
 Significant Trends
    18




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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)
  Revenues
     Gross Margin
   Selling, General and Administrative Expenses
  19




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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)
  Research and Development Expenses
  Income Taxes
  Net Income
  LIQUIDITY AND CAPITAL RESOURCES
   20




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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)
 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, 2008
   Inflation
  Contracts and Commitments
   PAYMENTS DUE BY PERIODTOTAL
    
    LESS THAN 1 YEAR
    
    1-3 YEARS
    
    3-5 YEARS
    
    MORE THAN 5 YEARSLong-term debt
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Capital lease obligations
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Operating leases
    
    $
    4,051
    
    
    $
    391
    
    
    $
    1,701
    
    
    $
    1,043
    
    
    $
    916Purchase obligations
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    Other
long-term obligations
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
    
    
    $
    
 FORWARD LOOKING STATEMENTS
  21




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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)
   22




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##### Table of Contents



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
  23




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##### Table of Contents



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
  
 Item 5 Other Information
  
 Item 6 Exhibits
 3(a)
    
    Certification of Incorporation of the Company, as amended (incorporated by reference to
Exhibit 3(a) to the 1988 Annual Report on Form 10-K filed on January 12, 1989).3(b)
    
    Bylaws of the Company, as amended (incorporated by reference to Exhibit 3(b) to the Form 10-Q
for the period ended March 31, 2004, filed on May 13, 2004).10(a)
    
    1993 Stock Option Plan (incorporated by reference to the exhibits on Form S-8 Registration
Statement filed on June 21, 1993).10(b)
    
    Employment Agreement and Change in Control Agreement for Geoffrey D. Knapp, amended on
December 20, 2006, (incorporated by reference to the Form 8-K, filed on December 20, 2006).10(c)
    
    Employment Agreement and Change in Control Agreement for Paul Caceres, amended on December
20, 2006, (incorporated by reference to the Form 8-K, filed on December 20, 2006).10(d)
    
    Amendment to 1993 Stock Option Plan (incorporated by reference to the exhibits on Form S-8
Registration Statement filed on June 26, 1998, File No. 333-57907).10(e)
    
    2000 Stock Option Plan (incorporated by reference to Exhibit 10(i) to the 2000 Annual Report
on Form 10-K filed on December 21, 2000).
 24




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##### Table of Contents



10(f)
    
    Fountain Valley Office Lease Agreement (incorporated by reference to Exhibit 10(j) to the
2001 Annual Report on Form 10-K filed on December 20, 2001)10(g)
    
    Indemnification Agreements (incorporated by reference to Form 8-K, filed on November 18,
2004)10(h)
    
    Form of the Stock Option Agreement for the 2000 Plan (incorporated by reference to Exhibit 10(h) to the 2004 Annual Report on Form 10-K filed on December 21, 2004)10(i)
    
    Fountain Valley Office Lease Extension Agreement Letter, dated May 26, 2005 (incorporated by
reference to Exhibit 10(i) to the Form 10-Q filed on August 12, 2005)10(j)
    
    Henderson, Nevada Office Lease Agreement (incorporated by reference to the Form 8-K filed on
December 20, 2006)31(a)
    
    Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act31(b)
    
    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act32
    
    Certification Pursuant to Section 906 of the Sarbanes-Oxley Act
  25




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##### Table of Contents



SIGNATURES
  CAM COMMERCE SOLUTIONS, INC.(Registrant)Date: May 12, 2008
    By  /s/ Geoffrey D. KnappGeoffrey D. KnappChief Executive OfficerDate: May 12, 2008
    By  /s/ Paul Caceres Jr.Paul Caceres Jr.Chief Financial and Accounting Officer 26




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##### Table of Contents



3(a)
    
    Certification of Incorporation of the Company, as amended (incorporated by reference to
Exhibit 3(a) to the 1988 Annual Report on Form 10-K filed on January 12, 1989).3(b)
    
    Bylaws of the Company, as amended (incorporated by reference to Exhibit 3(b) to the Form 10-Q
for the period ended March 31, 2004, filed on May 13, 2004).10(a)
    
    1993 Stock Option Plan (incorporated by reference to the exhibits on Form S-8 Registration
Statement filed on June 21, 1993).10(b)
    
    Employment Agreement and Change in Control Agreement for Geoffrey D. Knapp, amended on
December 20, 2006, (incorporated by reference to the Form 8-K, filed on December 20, 2006).10(c)
    
    Employment Agreement and Change in Control Agreement for Paul Caceres, amended on December
20, 2006, (incorporated by reference to the Form 8-K, filed on December 20, 2006).10(d)
    
    Amendment to 1993 Stock Option Plan (incorporated by reference to the exhibits on Form S-8
Registration Statement filed on June 26, 1998, File No. 333-57907).10(e)
    
    2000 Stock Option Plan (incorporated by reference to Exhibit 10(i) to the 2000 Annual Report
on Form 10-K filed on December 21, 2000).10(f)
    
    Fountain Valley Office Lease Agreement (incorporated by reference to Exhibit 10(j) to the
2001 Annual Report on Form 10-K filed on December 20, 2001)10(g)
    
    Indemnification Agreements (incorporated by reference to Form 8-K, filed on November 18,
2004)10(h)
    
    Form of the Stock Option Agreement for the 2000 Plan (incorporated by reference to Exhibit 10(h) to the 2004 Annual Report on Form 10-K filed on December 21, 2004)10(i)
    
    Fountain Valley Office Lease Extension Agreement Letter, dated May 26, 2005 (incorporated by
reference to Exhibit 10(i) to the Form 10-Q filed on August 12, 2005)10(j)
    
    Henderson, Nevada Office Lease Agreement (incorporated by reference to the Form 8-K filed on
December 20, 2006)31(a)
    
    Certification of Chief Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act31(b)
    
    Certification of Chief Financial Officer pursuant to Section 302 of the Sarbanes-Oxley Act32
    
    Certification Pursuant to Section 906 of the Sarbanes-Oxley Act