-----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, QP6TgAxULd1+KLA/Ch6UDkY6M2ByRStWkvy0QJV9Fa/1dJOpq8JuK8YEo6uOiecM +8vnvjcBEGeKOoZkWlyXVw== 0000950005-96-000588.txt : 19960830 0000950005-96-000588.hdr.sgml : 19960830 ACCESSION NUMBER: 0000950005-96-000588 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960813 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: INDUS GROUP INC CENTRAL INDEX KEY: 0001005127 STANDARD INDUSTRIAL CLASSIFICATION: 7372 IRS NUMBER: 943108025 STATE OF INCORPORATION: CA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-27806 FILM NUMBER: 96610493 BUSINESS ADDRESS: STREET 1: 60 SPEAR ST CITY: SAN FRANCISCO STATE: CA ZIP: 94105 BUSINESS PHONE: 4159045000 MAIL ADDRESS: STREET 2: 60 SPEAR STREET CITY: SAN FRANCISCO STATE: CA ZIP: 94105 10-Q 1 FORM 10-Q ================================================================================ UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ---------------- Form 10-Q (Mark One) ( X ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 1996 or ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission File Number: 0-27806 ---------------- THE INDUS GROUP, INC. (Exact name of Registrant issuer as specified in its charter) California 94-3108025 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 60 Spear Street, San Francisco, California 94105 (Address of principal executive offices) (Zip code) (415) 904-5000 (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 --- --- As of July 31, 1996, Registrant had outstanding 17,796,672 shares of Common Stock, $.001 par value. ================================================================================
TABLE OF CONTENTS Part I: Financial Information Page ---- Item 1. Financial Statements (unaudited) Condensed Consolidated Statements of Operations - three and six months ended June 30, 1996 and 1995............................................ 1 Condensed Consolidated Balance Sheets - June 30, 1996 and December 31, 1995................ 2 Condensed Consolidated Statement of Shareholders' Equity - year ended December 31, 1995 and six months ended June 30, 1996................................... 3 Condensed Consolidated Statements of Cash Flows - six months ended June 30, 1996 and 1995.................................................................. 4 Notes to Condensed Consolidated Financial Statements........................................ 5 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations...... 7 Part II: Other Information Item 1. Legal Proceedings........................................................................... 11 Item 2. Changes in Securities....................................................................... 11 Item 3. Defaults Upon Senior Securities............................................................. 11 Item 4. Submission of Matters to a Vote of Security Holders......................................... 11 Item 5. Other Information........................................................................... 11 Item 6. Exhibits and Reports on Form 8-K............................................................ 11 Signatures.................................................................................. 12
PART I: FINANCIAL INFORMATION - - ----------------------------- ITEM 1. FINANCIAL STATEMENTS THE INDUS GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts) (Unaudited)
Three Months Ended Six Months Ended June 30, June 30, --------------------------------------------- 1996 1995 1996 1995 ---------- ---------- --------- --------- Revenues: Software licensing fees ............................................. $ 3,793 $ 1,988 $ 7,751 $ 5,719 Services and maintenance ............................................ 13,806 10,580 26,707 19,574 -------- -------- -------- -------- Total revenues ................................................. 17,599 12,568 34,458 25,293 Cost of revenues ........................................................ 7,388 5,151 14,037 10,159 -------- -------- -------- -------- Gross margin ............................................................. 10,211 7,417 20,421 15,134 Operating expenses: Research and development ........................................... 3,293 2,080 6,708 3,673 Sales and marketing ................................................ 1,995 1,461 3,931 2,582 General and administrative .......................................... 1,846 854 3,689 1,954 -------- -------- -------- -------- Total operating expenses ....................................... 7,134 4,395 14,328 8,209 -------- -------- -------- -------- Income from operations ................................................... 3,077 3,022 6,093 6,925 Other income, net ........................................................ 381 - 428 87 -------- -------- -------- -------- Income before income taxes ............................................... 3,458 3,022 6,521 7,012 Provision for income taxes (state and foreign only in 1995) .............. 1,407 81 2,667 212 Cumulative effect of deferred income taxes provided upon January 1, 1996 conversion to C-Corporation status .................................... - - 6,700 - -------- -------- -------- -------- Net income (loss) ........................................................ $ 2,051 $ 2,941 $(2,846) $ 6,800 ======== ======== ======== ======== Pro forma statement of operations: Income before income taxes, as above ................................ $ 3,458 $ 3,022 $ 6,521 $ 7,012 Compensation charge - stock options ................................. - (1,000) - (1,000) -------- -------- -------- -------- Income before income taxes, as adjusted ............................. 3,458 2,022 6,521 6,012 Provision for income taxes (federal, state and foreign) ............. 1,407 850 2,667 2,529 -------- -------- -------- -------- Pro forma net income ................................................ $ 2,051 $ 1,172 $ 3,854 $ 3,483 ======== ======== ======== ======== Pro forma net income per share ...................................... $ 0.11 $ 0.07 $ 0.21 $ 0.20 ======== ======== ======== ======== Shares used in computing pro forma net income per share ............. 19,375 17,490 18,534 17,490 ======== ======== ======== ======== See accompanying notes.
1 THE INDUS GROUP, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands, except share amounts) (Unaudited)
June 30, December 31, 1996 1995 -------------- ------------- (1) ASSETS Current assets: Cash and cash equivalents..................................................... $ 420 $ 45 Marketable securities......................................................... 15,655 - Billed accounts receivable, less allowance for doubtful accounts of $449 at June 30, 1996 and $652 at December 31, 1995............................ 16,162 17,661 Unbilled accounts receivable.................................................. 7,653 9,053 Other current assets.......................................................... 1,431 1,108 ------------- ------------- Total current assets...................................................... 41,321 27,867 Marketable securities - noncurrent................................................. 16,139 - Property and equipment, net........................................................ 4,198 3,128 Employee notes receivable.......................................................... 74 80 ------------- ------------- $ 61,732 $ 31,075 ============== ============= LIABILITIES AND SHAREHOLDERS' EQUITY Current liabilities: Borrowing under line of credit................................................ $ - $ 8,900 Accounts payable.............................................................. 1,577 1,331 Income taxes payable.......................................................... 538 218 Deferred income taxes......................................................... 5,357 326 Other accrued liabilities..................................................... 2,741 2,027 Deferred revenue.............................................................. 8,360 7,425 -------------- ------------- Total current liabilities................................................. 18,573 20,227 Commitments Shareholders' equity: Preferred Stock, $.001 par value at June 30, 1996 (no par value at December 31, 1995): Authorized shares - 5,000,000 Issued and outstanding shares - none..................................... - - Common Stock, $.001 par value at June 30, 1996 (no par value at December 31, 1995): Authorized shares - 50,000,000 Issued and outstanding shares -17,794,972 (15,102,222 at December 31, 1995) ..................................... 18 609 Additional capital............................................................ 39,697 18,900 Other......................................................................... (410) (438) Retained earnings (deficit)................................................... 3,854 (8,223) -------------- ------------- Total shareholders' equity................................................ 43,159 10,848 -------------- ------------- $ 61,732 $ 31,075 ============== ============= (1) Derived from audited financial statements. See accompanying notes.
2 THE INDUS GROUP, INC. CONDENSED CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY (In thousands, except share amounts) (Unaudited)
Retained Earnings Total Common Additional (Accumulated Shareholders' Stock Capital Other Deficit) Equity -------- -------- -------- -------- -------- Balance at December 31, 1994 ................ $ 129 $ - $ - $ 8,113 $ 8,242 Issuance of common stock as deferred compensation ............. 480 - (480) - - Cash distributions to shareholders ..... - - - (9,516) (9,516) Translation adjustment ................. - - (6) - (6) Stock options (2) ...................... - 18,900 - - 18,900 Amortization of deferred compensation .. - - 48 - 48 Net loss ............................... - - - (6,820) (6,820) -------- -------- -------- -------- -------- Balance at December 31, 1995 ................ 609 18,900 (438) (8,223) 10,848 Conversion to C Corporation effective January 1, 1996 .......... - (8,223) - 8,223 - Reincorporation and adoption of $.001 par value ................. (494) 494 - - - Issuance of common stock (1) ........... 3 34,428 - - 34,431 Tax benefit from exercise of stock options ....................... - 801 - - 801 Purchase of Indus International, Inc. net assets ..................... (100) (3) - - (103) Unrealized loss on marketable securities - - (82) - (82) Translation adjustment ................. - - 14 - 14 Amortization of deferred compensation .. - - 96 - 96 Net loss ............................... - (6,700) - 3,854 (2,846) -------- -------- -------- -------- -------- Balance at June 30, 1996 .................... $ 18 $ 39,697 $ (410) $ 3,854 $ 43,159 ======== ======== ======== ======== ======== (1) Consists of $33,864 received from February 29, 1996 initial public offering (2,500,000 common shares offered at $15 per share less underwriting commission and expenses), $500 received from June 30, 1996 issuance of 39,189 common shares under the Employee Stock Purchase Plan and $67 received from the issuance of 153,561 common shares upon exercise of options. (2) Value of unexercised stock options of The Indus Group, Inc. upon elimination of contingency feature, which had precluded exercise of these options. See accompanying notes.
3 THE INDUS GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (Unaudited)
Six Months Ended June 30, ------------------------------- 1996 1995 --------------- -------------- Cash flows from operating activities Net income (loss)............................................................ $ (2,846) $ 5,994 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization...................................................... 616 607 Amortization of deferred compensation.............................................. 96 - Loss (gain) on sale of fixed assets................................................ 2 (12) Deferred income taxes.............................................................. (1,669) - Cumulative effect of deferred income taxes provided January 1, 1996................ 6,700 - Tax benefit from exercised stock options........................................... 801 - Changes in operating assets and liabilities: Billed accounts receivable.................................................... 1,499 (509) Unbilled accounts receivable.................................................. 1,400 (2,720) Other current assets.......................................................... (323) 308 Employee notes receivable..................................................... 6 44 Accounts payable.............................................................. 246 6 Income taxes payable.......................................................... 320 - Other accrued liabilities..................................................... 714 1,733 Deferred revenue.............................................................. 935 (402) Other......................................................................... 14 8 --------------- -------------- Net cash provided by operating activities............................................... 8,511 5,057 --------------- -------------- Cash flows from investing activities Purchase of marketable securities....................................................... (34,176) - Sale of marketable securities........................................................... 2,300 - Acquisition of property and equipment................................................... (1,688) (641) Proceeds from sale of fixed assets...................................................... - 504 --------------- -------------- Net cash used in investing activities................................................... (33,564) (137) --------------- -------------- Cash flows from financing activities Net repayment of line of credit......................................................... (8,900) (985) Net proceeds from issuance of common stock.............................................. 34,431 - Distribution to shareholders............................................................ - (3,508) Purchase of Indus International, Inc. net assets........................................ (103) - --------------- -------------- Net cash provided by (used in) financing activities..................................... 25,428 (4,493) --------------- -------------- Net increase in cash and cash equivalents............................................... 375 427 Cash and cash equivalents at beginning of period........................................ 45 99 --------------- -------------- Cash and cash equivalents at end of period.............................................. $ 420 $ 526 =============== ============== Supplemental disclosures of cash flow information Interest paid........................................................................... $ 105 $ 6 =============== ============== Income taxes paid....................................................................... $ 3,176 $ 43 =============== ============== Supplemental schedule of noncash financing activities Issuance of common stock in exchange for notes receivable............................... $ - $ 110 =============== ============== See accompanying notes.
4 THE INDUS GROUP, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. Significant Accounting Policies Interim Financial Statements The accompanying unaudited condensed consolidated financial statements have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six month periods ended June 30, 1996 are not necessarily indicative of the results that may be expected for the fiscal year ending December 31, 1996. For further information, refer to the audited financial statements and footnotes thereto for the fiscal year ended December 31, 1995 included in the Company's Registration Statement on Form S-1 (No. 33-80573) for its initial public offering of common shares on February 29, 1996. Cash Equivalents and Marketable Securities The Company considers all highly liquid, low risk debt instruments with a maturity of three months or less from the date of purchase to be cash equivalents. The Company generally invests its cash and cash equivalents in money market accounts and agency repurchase agreements which are secured by government agency securities. The Company presently classifies all marketable securities as available-for-sale investments and carries them at fair market value. Marketable securities represent U.S. government obligations and indirect investments in municipal obligations. Marketable securities classified as long-term represent U.S. government obligations maturing no later than November 1997. Unrealized holding gains and losses, net of taxes, are carried as a separate component of shareholders' equity. 2. Basis of Presentation On March 1, 1996, pursuant to an Asset Purchase Agreement, the Company purchased all of the assets and assumed all of the liabilities of Indus International, Inc., an entity which was related to The Indus Group, Inc. through common shareholders. The purchase price of the net assets, which equaled the net book value, was $103,252. Concurrent with this purchase, the Company established a new wholly-owned subsidiary to which the net assets were transferred. The financial statements include the accounts of the Company and Indus International, Inc., which was included on a combined basis prior to March 1, 1996. All significant intercompany accounts and transactions have been eliminated. 3. Issuance of Common Stock Initial Public Offering On February 29, 1996, the Company completed an initial public offering (the "Offering") in which it sold 2,500,000 shares of Common Stock at $15.00 per share. The Offering raised net proceeds of $33,863,764 (exclusive of underwriting discount and $1,011,236 in related expenses). Employee Stock Purchase Plan The Company received $499,700 from the issuance of 39,189 shares of Common Stock on June 30, 1996 under the 1995 Employee Stock Purchase Plan. Exercise of Stock Options During the six months ended June 30, 1996, the Company received $66,675 from the issuance of 153,561 shares of common stock upon exercise of options under the 1992 Stock Option Plan. 5 THE INDUS GROUP, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS - (Continued) (Unaudited) 4. Pro Forma Data The pro forma data reflects adjustments which would have been applicable had the Company been a C Corporation in all periods. Statements of Operations Effective upon its incorporation in 1990, the Company elected to have its United States income taxed under Subchapter S of the Code. Income tax provisions through December 31, 1995 have been principally attributable to state taxes and taxes imposed by foreign governments on the Company's foreign operations. The Company's S Corporation status terminated effective January 1, 1996, and the Company will be subject to federal income taxation at the corporate level thereafter. In connection with the termination of S Corporation status on January 1, 1996, a one-time charge representing a cumulative net federal and state deferred income tax liability of $6.7 million was recorded. For purposes of presenting comparative earnings and calculating earnings per share data, pro forma net income for the first quarter of 1996 reflects the elimination of the $6.7 million cumulative deferred income tax charge upon converting from an S Corporation to a C Corporation. Pro forma net income in 1995 reflects provisions for taxes assuming the Company was taxed as a C Corporation. In addition, pro forma net income data includes a $1 million nonrecurring compensation charge representing the fair value of the options granted in 1995. Per Share Data Pro forma net income per share is computed using pro forma net income and the weighted average number of common and dilutive common equivalent shares outstanding during each period. Dilutive common equivalent shares consist of incremental common shares issuable upon the assumed exercise of stock options (using the treasury stock method). Fully diluted per share amounts are not presented, as the effect is not material. The computation of the weighted average number of shares outstanding for the three and six month periods ended June 30, 1996 and 1995 is as follows (in thousands):
Three Months Ended Six Months Ended June 30, June 30, ------------------------- ------------------------ 1996 1995 1996 1995 ----------- ---------- ---------- ----------- Weighted average outstanding........................................... 17,752 15,021 16,868 15,021 Equivalent shares assumed to be outstanding had options granted prior to 1995 been exercised and used to repurchase shares at their then fair value........................................................... 1,623 1,315 1,666 1,315 Shares issued or shares reserved for options granted in 1995, which shares are assumed to be outstanding for all prior periods (as required by SEC Staff Accounting Bulletins Topic 4 D) ........................ - 519 - 519 Shares assumed to be outstanding equivalent to dividends paid in 1995 ($9,516,659) divided by expected offering price ($15 per share) (as required y SEC Staff Accounting Bulletins Topic 1B).............. - 635 - 635 ----------- ---------- ---------- ----------- 19,375 17,490 18,534 17,490 =========== ========== ========== ===========
6 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS This Form 10-Q contains forward-looking statements within the meaning of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Actual results could differ materially from those projected in the forward-looking statements located in the Research and Development (paragraph four), Sales and Marketing and Liquidity and Capital Resources (paragraphs four and six) sections as a result of the factors set forth below, among others. The Company has experienced, and may in the future experience, significant fluctuations in quarterly revenues and operating results. The Company's revenues and operating results in general, and in particular its revenues from new licenses, are relatively difficult to forecast for a number of reasons, including (i) the relatively long sales cycles for the Company's products, (ii) the variable size and timing of individual license transactions, (iii) changes in demand for the Company's products and services, (iv) competitive conditions in the industry, (v) changes in customer budgets, (vi) the timing of the introduction of new products or product enhancements by the Company or its competitors, (vii) the Company's success in and costs associated with developing and introducing new products, (viii) product life cycles, (ix) the timing of revenue recognition under the percentage-of-completion method, (x) changes in the proportion of revenues attributable to license fees versus services, (xi) changes in the level of operating expenses, (xii) delay or deferral of customer implementations of the Company's software, (xiii) software defects and other product quality problems, and (xiv) other economic conditions generally or in specific process industry segments. Further, the purchase of the Company's products generally involves a significant commitment of capital, with the attendant delays frequently associated with large capital expenditures and authorization procedures within large organizations. For these and other reasons, the sales cycles for the Company's products are typically lengthy and subject to a number of significant risks over which the Company has little or no control, including customers' budget constraints and internal authorization reviews. In addition, delays in the completion of a product implementation may require that the revenues associated with such implementation be recognized over a longer period than originally anticipated. Such delays in the implementation or execution of orders has caused, and may in the future cause, material fluctuations in the Company's operating results. Similarly, customers may cancel implementation projects at any time without penalty, and such cancellation could have a material adverse effect on the Company's business or results of operations. Because the Company's expenses are relatively fixed, a small variation in the timing of recognition of specific revenues can cause significant variations in operating results from quarter to quarter and may in some future quarter result in losses or have a material adverse effect on the Company's business or results of operations. Results of Operations Overview. The Indus Group, Inc. develops, markets, and supports a proprietary line of enterprise management software and implementation services for process industry customers worldwide. Taking advantage of the client/server model of networked computing, PASSPORT Software Solutions contain "best business practices" which serve as the catalyst for improving core business functions for electric utilities, oil and gas, chemical refining, forest products, and steel producing industries. ABACUS, The Indus Group's proprietary methodology, accelerates the realization of benefits by delivering a reliable cost and time-efficient approach to implementation across the enterprise. The Company derives its revenues primarily from software licenses, implementation and training services and maintenance fees. While the Company has derived the majority of its revenues from electric utilities, it also derives revenues from customers in other process industries, such as the oil and gas, petrochemical, steel and forest product industries. Subsequent to June 30, 1996, the Company announced it was awarded a software and services contract to provide facility management at one of the nation's largest consumer insurance companies. There can be no assurance that this contract will lead to other significant revenue opportunities. The Company provides its software to customers under contracts which provide for software license fees, system implementation services and the first year of software maintenance. Revenues from software license fees, which typically have ranged from approximately $1 million to $5 million per enterprise license, are recognized as earned revenue over the estimated time period to complete the implementation of the software, which generally is twelve to fourteen months. Revenues from system implementation services, which typically are time- and material-based, are recognized as direct contract costs are incurred and typically range from one to three times the license fees. Accordingly, revenues for each quarter depend in part on revenues from the closing of new contracts during the quarter as well as revenue from contracts under implementation that were executed in prior quarters. A portion of license fees is deferred initially and subsequently recognized over the one-year period during which continuing maintenance and support services are provided to customers under the contracts. After an initial contract period, additional maintenance and support services, for which the Company typically charges 15-18% of the original license fee per year, are subject to separate contracts whereby revenue is recognized ratably over the contract period. 7 Results of Operations (continued) The following table sets forth for the periods indicated the percentage of total revenues represented by certain line items in the Company's statements of operations:
Percent of Total Revenues -------------------------- Three Months Ended Six Months Ended June 30, June 30, -------------------- ---------------- 1996 1995 1996 1995 --------- --------- ------- ------- Revenues: Software licensing fees ............................... 21.6% 15.8% 22.5% 22.6% Services and maintenance .............................. 78.4 84.2 77.5 77.4 --------- --------- ------- ------- Total revenues ................................... 100.0 100.0 100.0 100.0 Cost of revenues ........................................... 42.0 41.0 40.7 40.2 --------- --------- ------- ------- Gross margin ............................................... 58.0 59.0 59.3 59.8 Operating expenses: Research and development .............................. 18.7 16.6 19.5 14.5 Sales and marketing ................................... 11.3 11.6 11.4 10.2 General and administrative ............................ 10.5 6.8 10.7 7.7 --------- --------- ------- ------- Total operating expenses ......................... 40.5 35.0 41.6 32.4 --------- --------- ------- ------- Income from operations ..................................... 17.5 24.0 17.7 27.4 Other income, net .......................................... 2.2 - 1.2 .3 --------- --------- ------- ------- Income before income taxes ................................. 19.7 24.0 18.9 27.7 Provision for income taxes (state and foreign only in 1995) 8.0 0.6 7.7 0.8 Cumulative effect of deferred income taxes provided upon January 1, 1996 conversion to C-Corporation status ...... - - 19.4 - --------- --------- ------- ------- Net income (loss) ......................................... 11.7% 23.4% (8.2)% 26.9% ========= ========= ======= ======= Pro forma statement of operations: Income before income taxes, as above .................. 19.7% 24.0% 18.9% 27.7% Compensation charge - stock options ................... - (7.9) - (3.9) --------- --------- ------- ------- Income before taxes, as adjusted ...................... 19.7 16.1 18.9 23.8 Provision for income taxes (federal, state and foreign) 8.0 6.8 7.7 10.0 --------- --------- ------- ------- Pro forma net income per share ........................ 11.7% 9.3% 11.2% 13.8% ========= ========= ======= =======
Revenues. Total revenues increased 40% to $17.6 million in the quarter ended June 30, 1996 from $12.6 million in 1995. In the first six months of 1996, total revenues increased by 36% to $34.5 million from $25.3 million in 1995. Revenue from international customers (excluding Canada and Mexico) accounted for 20% of revenues for both the quarter and six months ended June 30, 1996 and 6% and 10% for the quarter and six months ended June 30, 1995, respectively. As most of the Company's contracts are denominated in U.S. dollars, foreign currency fluctuations have not impacted the results of operations. The top five customers of the Company have accounted for approximately 50% of revenues for all periods presented. The composition of the top five customers has changed from year to year, with the exception of one customer which generated revenues ranging from 9% of revenue for the quarter ended June 30, 1996 to 11% of revenue for the quarter ended June 30, 1995. Revenues from licensing fees increased by 91% to $3.8 million in the quarter ended June 30, 1996 from $2.0 million in 1995. In the first six months of 1996, licensing fees increased by 36% to $7.8 million from $5.7 million in 1995. The license fee growth from 1995 to 1996 resulted primarily from new international contracts and several new significant domestic contracts. License fees as a percentage of revenue were 21.6% and 15.8% for the three months ended June 30, 1996 and 1995, and 22.5% and 22.6% for the six months ended June 30, 1996 and 1995. Since license fees are recognized over the term of initial expected implementation, the date on which a contract is signed and the number of contracts signed within the same quarter can have an impact on the amount of revenue recognized in a particular quarter. 8 Results of Operations (continued) Revenues from services and maintenance increased by 30% to $13.8 million in the quarter ended June 30, 1996 from $10.6 million in 1995. In the first six months of 1996, services and maintenance revenue increased 36% to $26.7 million from $19.6 million in 1995. The service and maintenance growth from 1995 to 1996 resulted primarily from implementation services generated by new international customers, several new significant domestic contracts, and additional implementation projects with existing customers. The Company does not believe that the revenue growth experienced in the first six months of 1996 is necessarily indicative of any revenue growth that may occur in future periods. Cost of Revenues. Cost of revenues consists primarily of: (i) personnel and related costs for implementation (including account executive personnel), and (ii) training and customer support services. Substantially all of the cost of revenues is attributable to providing services and maintenance; costs of software license fees, which consist primarily of packaging and production costs, are not significant and are not segregated in the Company's accounting records. All software development costs are expensed to research and development as incurred. Cost of revenues increased 43% to $7.4 million in the quarter ended June 30, 1996 from $5.1 million in 1995. In the first six months of 1996, cost of revenues increased by 38% to $14.0 million from $10.2 million in 1995. The 1996 increase in absolute dollars in cost of revenues was due principally to the need for additional personnel to service the Company's customers. As a percent of total revenue, cost of revenues was 42% and 41% for the quarters ended June 30, 1996 and 1995, respectively. The slight increase in the percentage was due to growth in low-margin reimbursable expenses. The Company's accounting policy is to record direct reimbursable costs as revenue when billed to the customer, which is then offset by the related cost of revenues. Since the direct reimbursable costs have little or no margin, they reduce the overall gross margin as a percent of revenues. For the first six months of 1996 and 1995, the cost of revenues as a percent of total revenue remained fairly consistent at 40.7% and 40.2%, respectively. Research and Development (R&D). Research and development expenses consist primarily of: (i) personnel and related costs and (ii) computer timeshare costs directly attributable to the development of new software application products, enhancements to existing products and the costs of porting the Company's products to different platforms. Research and development expenses increased 58% to $3.3 million in the quarter ended June 30, 1996 from $2.1 million in 1995. In the first six months of 1996, research and development expenses increased by 83% to $6.7 million from $3.7 million in 1995. As a percent of total revenue, research and development expenses were 18.7% and 16.6% for the quarters ended June 30, 1996 and 1995, respectively. For the first six months of 1996 and 1995, research and development expenses as a percent of total revenue were 19.5% and 14.5%, respectively. R&D investment growth in 1996 as compared to 1995 relates to the Company devoting substantial development resources towards incorporating new technologies into PASSPORT and designing additional PASSPORT applications. For example, work continues to define specific industry views such as a project to develop a work management and materials "view" specific to the Utility Transmission and Distribution (T & D) business. In addition, the Company is continually improving the capability to support additional platforms, databases, graphical user interfaces, toolsets and emerging technologies. Furthermore, the Company continues to enhance and develop corporate financial systems applications, as well as enhance versions of its PORTAL client workstation software to provide a "look and feel" based on the Windows95/NT operating system to all of its PASSPORT applications (PORTAL95). Moreover, the R&D growth in the first quarter of 1996 as compared to 1995 was partially due to the timing of PASSPORT Release 4.0. Unlike PASSPORT Release 5.0 which was completed in the first quarter of 1996, PASSPORT Release 4.0 was completed in the last quarter of 1994, resulting in a minimal R&D cost impact in the first quarter of 1995. The Company believes that a significant level of investment in R&D is essential to remain competitive. The amount of R&D in absolute dollars for a particular period may vary depending on the projects in progress. In accordance with Statement of Financial Accounting Standards No. 86, software development costs are expensed as incurred until technological feasibility of the software is established, after which any additional costs are capitalized. To date, the Company has expensed all software development costs because development costs incurred subsequent to the establishment of technological feasibility have not been material. 9 Results of Operations (continued) Sales and Marketing. Sales and marketing expenses increased 36% to $2.0 million in the quarter ended June 30, 1996 from $1.5 million in 1995. In the first six months of 1996, sales and marketing expenses increased by 52% to $3.9 million from $2.6 million in 1995. As a percent of total revenue, sales and marketing expenses remained fairly consistent at 11.3%, 11.6%, 11.4% and 10.2% for the quarters ended June 30, 1996 and 1995 and for the first six months of 1996 and 1995, respectively. The growth in sales and marketing expenses in absolute dollars is primarily due to: (i) the addition of personnel, (ii) expansion into new international sectors and (iii) changes in the mix of the revenue base on which commission expense is generated. The Company believes that sales and marketing expenses as a percentage of total revenues may increase as (i) a larger portion of sales become fully commissioned, (ii) the Company initiates operations in additional international markets and (iii) new marketing and product strategic alliances are developed. General and Administrative. General and administrative expenses increased 116% to $1.8 million in the quarter ended June 30, 1996 from $.9 million in 1995. In the first six months of 1996, general and administrative expenses increased by 89% to $3.7 million from $1.9 million in 1995. As a percent of total revenue, general and administrative expenses were 10.5% and 6.8% for the quarters ended June 30, 1996 and 1995, respectively. For the first six months of 1996 and 1995, the general and administrative expenses as a percent of total revenue was 10.7% and 7.7%, respectively. The growth in general and administrative expenses is primarily a result of: (i) an expansion in staffing to support the Company's growth, and (ii) additional expenditures related to being a public company. Provision for Income Taxes. Effective upon its incorporation in 1990, the Company elected to have its United States income taxed under Subchapter S of the Code. Accordingly, income tax provisions prior to 1996 were principally attributable to state taxes and taxes imposed by foreign governments on the Company's foreign operations. The Company's S Corporation status terminated effective January 1, 1996, and the Company will be subject to federal income taxation at the corporate level thereafter. In relation to the termination of S Corporation status as of January 1, 1996, a one-time charge representing a cumulative net federal and state deferred income tax liability of $6.7 million was recorded. Net Income (Loss). The net loss for the six months ended June 30, 1996 was the result of the $6.7 million cumulative deferred income tax liability charge upon elimination of the S Corporation status. Pro Forma Net Income. For purposes of presenting comparative earnings and calculating earnings per share data, pro forma net income for the six months ended June 30, 1996 reflects the elimination of the $6.7 million nonrecurring cumulative deferred income tax charge upon converting from an S Corporation to a C Corporation. Pro forma net income in 1995 also reflects provisions for taxes assuming the Company was taxed as a C Corporation. In addition, pro forma net income data for 1995 includes a $1 million nonrecurring compensation charge representing the fair value of the options granted in 1995. Liquidity and Capital Resources The Company had total assets of $61.7 million and $31.1 million at June 30, 1996 and December 31, 1995, respectively. Historically, the Company has financed its operations primarily through cash provided by operations, borrowings under its line of credit and, to lesser extent, through borrowings from its Chief Executive Officer and principal shareholder. In March 1996, the Company received $33.9 million, representing the proceeds (net of underwriting commissions and offering costs) from an initial public offering of 2,500,000 shares of its Common Stock. These proceeds were used to purchase marketable securities (comprised of municipal and U.S. government obligations) and certain cash equivalent instruments. As of June 30, 1996, the Company's principal sources of liquidity consisted of approximately $420,000 in cash and cash equivalents and $31.8 million in marketable securities. In addition, the Company has an unsecured revolving bank line of credit agreement which permits borrowings, including stand-by letters of credit, of up to $15 million. The facility expires in May 1997, however, the Company believes it will be able to renew this agreement or replace it on terms acceptable to the Company. No borrowings were outstanding under this line at June 30, 1996. In the six months ended June 30, 1996, cash, cash equivalents and marketable securities increased substantially as a result of cash generated from operations ($8.5 million) and cash proceeds from the issuance of shares through an initial public offering and employee stock purchase and option programs ($34.4 million). The principal uses of operating cash were the purchase of property and equipment and the repayment of the line of credit. The reduction in the line of credit was fully funded by operations. The Company utilized approximately $2.3 million of initial public offering proceeds to pay for offering costs and estimated income taxes. Cash paid for income taxes for the six months ended June 30, 1996 and 1995 was $3.2 million and $43,000, respectively. 10 Liquidity and Capital Resources (continued) Cash requirements are expected to continue to increase in order to fund: (i) personnel and salary costs, (ii) research and development costs, (iii) investment in additional technical equipment, and (iv) working capital requirements. The Company presently anticipates additional capital expenditures for the remainder of 1996 of approximately $1.3 million, primarily for equipment and furniture. The Company's principal commitments at June 30, 1996, consisted of obligations under operating leases for facilities and computer equipment. The Company believes that its existing cash and marketable securities, together with anticipated cash flow from operations and available bank borrowings, will be sufficient to meet its cash requirements during the next 24 months. The foregoing statement regarding the Company's expectations for continued liquidity is a forward-looking statement, and actual results may differ materially depending on a variety of factors, including variable operating results or presently unexpected usages of cash, such as acquisitions. PART II: OTHER INFORMATION - - -------------------------- ITEM 1. LEGAL PROCEEDINGS There are no pending legal proceedings to which the Company is a party or of which any of its property is subject. ITEM 2. CHANGES IN SECURITIES None. ITEM 3. DEFAULTS UPON SENIOR SECURITIES None. ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS None. ITEM 5. OTHER INFORMATION None. ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K (a) Exhibits. 10.01 Third Amendment to Commercial Loan Agreement dated May 29, 1996 with Sumitomo Bank of California. 11.01 Statement of Computation of Pro Forma Net Income Per Share. 27.01 Financial Data Schedule. (b) Reports on Forms 8-K. No reports on Form 8-K were filed during the Quarter covered by this report. 11 SIGNATURES 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. THE INDUS GROUP, INC. (Registrant) Date: August 13, 1996 /s/ Robert W. Felton ---------------------------------------- Robert W. Felton President and Chief Executive Officer Date: August 13, 1996 /s/ Anna Ng-Borden --------------------------------------- Anna Ng-Borden Vice President of Finance (Principal Financial and Accounting Officer) 12 INDEX TO EXHIBITS
Sequentially Numbered Exhibit Description Page ------- ----------- ------------- 10.01 Third Amendment to Commercial Loan Agreement dated May 29, 1996 with Sumitomo Bank of California 11.01 Statement of Computation of Pro Forma Net Income Per Share 27.01 Financial Data Schedule
EX-10.01 2 LOAN AGREEMENT DATED MAY 29, 1996 THIRD AMENDMENT TO COMMERCIAL LOAN AGREEMENT THIS THIRD AMENDMENT (the "Third Amendment"), dated as of May 29, 1996, is entered into by and between THE INDUS GROUP, INC., a California corporation ("Borrower"), and the SUMITOMO BANK OF CALIFORNIA, a California banking corporation ("Bank"). RECITALS: A. Borrower and Bank entered into an Amended and Restated Commercial Loan Agreement dated June 30, 1995 as amended by the amendments dated November 27, 1995 and December 26, 1995 (the "First and Second Amendments") (collectively, the "Agreement"). B. Borrower and Bank desire to amend certain terms of the Agreement. AGREEMENTS: NOW, THEREFORE, Borrower and Bank hereby agree as follows: 1. Each of the terms defined in the Agreement, unless otherwise defined herein, shall have the same meaning when used herein. 2. The Agreement is amended as follows: (a) 1.1(a) is hereby amended in its entirety to read as follows: Unsecured Line of Credit. During the Availability Period, Bank will provide an Unsecured Line of Credit to Borrower. The maximum amount of this Line of Credit (the "Commitment") is Fifteen Million Dollars ($15,000,000). Borrower's obligation to repay this Unsecured Line of Credit is evidenced by a promissory note substantially in the form of Exhibit A attached hereto (the "Revolving Line Note"). (b) 1.2 is hereby amended in its entirety to read as follows: Availability Period. The period under which Borrower may draw on the Unsecured Line of Credit ("Availability Period") is between the date of this Agreement and May 31, 1997 (the "Maturity Date") unless Borrower is in default, in which event Bank need not make any advances. (c) 1.4(b) is hereby amended its entirety to read as follows: Repayment Terms/Unsecured Line of Credit. Borrower will repay in full, all principal, interest and other charges outstanding under the Unsecured Line of Credit no later than the Maturity Date. 1 (d) 2.1(a) is hereby amended in its entirety to read as follows: Unused Commitment Fee. Borrower agrees to pay a fee on any difference between the Unsecured Line of Credit Commitment and the amount of credit it actually uses, determined by the weighted average Loan Balance maintained during the specific period. The fee will be calculated at one-eighth of one percent (0.125%) per annum. This fee is due on October 1, 1996, and on the first day of the month following each calendar quarter-end thereafter until the expiration of the Availability Period. (e) Section 3. COLLATERAL is hereby deleted in its entirety. (f) 4.12 is hereby amended in its entirety to read as follows: Overadvances. If at any time the principal outstanding balance of the Unsecured Line of Credit plus any issued and undrawn standby letters of credit, exceeds the Commitment, at Bank's option that amount shall be immediately due and payable on demand. (g) 5.1(c) Security Agreements, and (d) Evidence of Priority are hereby deleted. (h) 6.8 Collateral is hereby deleted. (i) 7.1 is hereby amended in its entirety to read as follows: Use of Proceeds. To use the proceeds of the Unsecured Line of Credit only for general corporate purposes. (j) 7.2 Financial Information shall be amended as follows: (b) Within 45 days of the period's end, Borrower's quarterly financial statements and 10-Qs. These statements shall be prepared on a consolidated basis. (c) is hereby deleted. (e) is hereby deleted and replaced with the following: Copies of any and all documents filed with the Securities and Exchange Commission, within five (5) days of filing. (k) 7.3 Quick Ratio is hereby amended in its entirety to read as follows: To maintain on a consolidated basis at all times, a ratio of quick assets to current liabilities of at least 1.50 to 1.00. "Quick Assets" means cash, short-term cash investments, net trade receivables and marketable securities not classified as long-term investments. 2 (l) 7.4 is hereby amended in its entirety to read as follows: Working Capital. To maintain on a consolidated basis at all times, current assets in excess of current liabilities by at least Ten Million Dollars ($10,000,000). (m) 7.5 is hereby amended in its entirety to read as follows: Tangible Net Worth. To maintain on a consolidated basis at all times, Tangible Net Worth equal to at least Thirty-nine Million Dollars ($39,000,000). "Tangible Net Worth" means the gross book value of Borrower's assets (excluding goodwill, patents, trademarks, trade names, organization expense, treasury stock, unamortized debt discount and expense, deferred research and development costs, deferred marketing expenses, and other like intangibles, and monies due from affiliates, officers, directors or shareholders of Borrower) less total liabilities, including, without limitation, accrued and deferred income taxes and any reserve against assets. (n) 7.6 is hereby amended in its entirety to read as follows: Total Liabilities to Tangible Net Worth. To maintain on a consolidated basis at all times, a ratio of Total Liabilities to Tangible Net Worth not exceeding 1.0 to 1.0. (o) 7.7 is hereby amended in its entirety to read as follows: Profitability. To maintain on a consolidated basis a positive net income before taxes and extraordinary items and a positive net income after taxes and extraordinary items for each quarterly accounting period. During Borrower's fiscal quarter ended March 31, 1996, net income after taxes will be measured based on pro forma net income as defined in Borrower's 10-Q filed with the Securities and Exchange Commission for the quarter ended March 31, 1996. (p) 7.11 is hereby amended in its entirety to read as follows: Dividends/Distributions. Not to declare or pay any dividends or distributions on any of its shares. (q) 7.14 is hereby amended in its entirety to read as follows: Out of Debt Period. To repay any advances in full, and not to draw any additional advances on any Revolving Line of Credit, for a period of at least 30 consecutive days in each line-year. "Line-year" means the period between the date of this Agreement and the Maturity. For the purposes of this paragraph, "advances" does not include undrawn amounts of outstanding letters of credit. 3. (a) Except as specifically amended above, the Agreement and all other documents executed in connection with the Agreement shall remain in full force and effect and are hereby ratified and confirmed; and (b) Upon the effectiveness of this Second Amendment, each reference in the Agreement to "this Agreement", "hereunder", "herein", "hereof", or words of like import referring to the Agreement shall mean and be a reference to the Agreement as amended by this Second Amendment. 3 4. Borrower represents and warrants as follows: (a) Each of the representations and warranties contained in the Agreement, as amended hereby, is true and correct on and as of the date hereof to the same extent as though made on and as of the date hereof, except to the extent that a representation or warranty specifically related to an earlier date, in which case such representation and warranty is true as of such date and is hereby reaffirmed as of the date hereof, each as if set forth herein; 5. The execution, delivery and performance of this Second Amendment is within Borrower's powers, has been duly authorized by all necessary action, has received all necessary governmental approvals, if any, and does not contravene any law or any contractual restrictions binding on Borrower; 6. Release and Waiver. (a) Borrower hereby acknowledges and agrees that: (1) it has no claim or cause of action against Bank or any parent, subsidiary or affiliate of Bank, or any of Bank's officers, directors, employees, attorneys or other representatives or agents (all of which parties other than Bank being, collectively, "Bank's Agents") in connection with the Agreement, any letter of credit or the other loan documents or the transactions contemplated therein and herein; (2) it has no offset or defense against any of its obligations, indebtedness or contracts in favor of Bank; and (3) it recognizes that Bank has heretofore properly performed and satisfied in a timely manner all of its obligations to and contracts with Borrower. (b) Although Bank regards its conduct as proper and does not believe Borrower to have any claim, cause of action, offset or defense against Bank or any of Bank's Agents in connection with the Agreement, any letter of credit or the other loan documents or the transactions contemplated therein, Bank wishes, and Borrower agrees, to eliminate any possibility that any past conditions, acts, omissions, events, circumstances or matters could impair or otherwise affect any rights, interests, contracts or remedies of Bank. Therefore, Borrower unconditionally releases and waives (1) any and all liabilities, indebtedness and obligations, whether known or unknown, of any kind of Bank or of any of Bank's Agents to Borrower, except the obligations remaining to be performed by Bank as expressly stated in the Agreement, this Second Amendment and the other loan documents executed by Bank; (2) any legal, equitable or other obligations or duties, whether known or unknown, of Bank or of any of Bank's Agents to Borrower (and any rights of Borrower against Bank or Bank's Agents) besides those expressly stated in the Agreement, this Second Amendment and the other loan documents; (3) any and all claims under any oral or implied agreement, obligation or understanding with Bank or any of Bank's Agents, on account of any condition, act, omission, event, contract, liability, obligation, indebtedness, claim, cause of action, defense, circumstance or matter of any kind whatsoever which existed, arose or occurred at any time prior to the execution and delivery of this Second Amendment or which could arise concurrently with the effectiveness of this Second Amendment. (c) Borrower agrees that is understands the meaning and effect of Section 1542 of the California Civil Code, which provides: Section 1542. Certain Claims Not Affected by General Release. A general release does not extend to claims which the creditor does not know or suspect to exist in his favor at the time of executing this release, which if known by him must have materially affected his settlement with the debtor. 4 BORROWER AGREES TO ASSUME THE RISK OF ANY AND ALL UNKNOWN, UNANTICIPATED OR MISUNDERSTOOD DEFENSES, CLAIMS, CAUSES OF ACTION, CONTRACTS, LIABILITIES, INDEBTEDNESS AND OBLIGATIONS WHICH ARE RELEASED BY THIS SECOND AMENDMENT IN FAVOR OF BANK AND BANK'S AGENTS, AND BORROWER WAIVES AND RELEASES ALL RIGHTS AND BENEFITS WHICH IT MIGHT OTHERWISE HAVE UNDER THE AFOREMENTIONED SECTION 1542 OF THE CALIFORNIA CIVIL CODE WITH REGARD TO THE RELEASE OF SUCH UNKNOWN, UNANTICIPATED OR MISUNDERSTOOD DEFENSES, CLAIMS, CAUSES OF ACTION, CONTRACTS, LIABILITIES, INDEBTEDNESS AND OBLIGATIONS. BORROWER WAIVES AND RELEASES (TO THE MAXIMUM EXTENT PERMITTED BY LAW) ANY RIGHT OR DEFENSE WHICH IT MIGHT OTHERWISE HAVE UNDER ANY OTHER LAW OF ANY APPLICABLE JURISDICTION WHICH MIGHT LIMIT OR RESTRICT THE EFFECTIVENESS OR SCOPE OF ANY OF ITS WAIVERS OR RELEASES UNDER THIS SECOND AMENDMENT. 7. This Second Amendment is the legal, valid and binding obligation of Borrower, enforceable against Borrower in accordance with its terms; and 8. No event has occurred and is continuing or would result from this Second Amendment which constitutes an Event of Default under the Agreement, or would constitute an Event of Default but for the requirements that notice be given or time elapse or both. 9. This Second Amendment shall be deemed to be a contract under and subject to, and shall be construed for all purposes and in accordance with, the laws of the State of California. 10. This Second Amendment may be executed in two or more counterparts, each of which shall be deemed an original and all of which together shall constitute one and the same instrument. IN WITNESS WHEREOF, Bank and Borrower have duly executed this Second Amendment as of the day and year first hereinabove written. The Indus Group, Inc., Sumitomo Bank of California, a California corporation a California banking corporation By /s/ Robert W. Felton By /s/ Betsy O. Beros --------------------------- --------------------------- Its President & CEO Its Vice President --------------------------- --------------------------- By /s/ Stephen C. Bellicini --------------------------- Its Vice President --------------------------- EX-11.01 3 STATEMENT OF COMPUTATION EXHIBIT 11.01 THE INDUS GROUP, INC. STATEMENT OF COMPUTATION OF PRO FORMA NET INCOME PER SHARE (In thousands, except share amounts) (Unaudited)
Three Months Ended Six Months Ended June 30, June 30, ---------------------------- -------------------------- 1996 1995 1996 1995 ------------- ----------- ----------- ----------- Pro forma net income ................................................ $ 2,051 $ 1,172 $ 3,854 $ 3,483 ============= ========== ============ ========== Shares used in per share computation: Weighted average outstanding ................................... 17,752 15,021 16,868 15,021 Equivalent shares assumed to be outstanding had options granted prior to 1995 been exercised and used to repurchase shares at their then fair value ........................................ 1,623 1,315 1,666 1,315 Shares issued or shares reserved for options granted in 1995, which shares are assumed to be outstanding for all prior periods (as required by SEC Staff Accounting Bulletins Topic 4 D) .... - 519 - 519 Shares assumed to be outstanding equivalent to dividends in 1995 ($9,516,659) divided by expected offering price ($15 per share) (as required by SEC Staff Accounting Bulletins Topic 1B) .......................................... - 635 - 635 ------------- ---------- ------------ ---------- 19,375 17,490 18,534 17,490 ============= ========== ============ ========== Pro forma net income per share ...................................... $ 0.11 $ 0.07 $ 0.21 $ 0.20 ============= ========== ============ ==========
EX-27.01 4 FINANCIAL DATA SCHEDULE
5 CONDENSED CONSOLIDATED BALANCE SHEET AND THE CONDENSED CONSOLIDATED STATEMENT OF OPERATIONS 0001005127 THE INDUS GROUP, INC. 6-MOS DEC-31-1996 JAN-01-1996 JUN-30-1996 420 31,794 24,264 449 0 41,321 8,771 4,573 61,732 18,573 0 18 0 0 43,141 61,732 0 34,458 0 14,037 14,328 0 0 6,521 2,667 3,854 0 0 6,700 (2,846) 0.21 0.21
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