-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, V329faRZF6yjcTWAgKFoPBrp1kHVM8usyKX+os4+Kp+TC5niNJwHZHILEKTVuwsb DU3ibsQwV1r1PzcK72sHDw== 0000354797-94-000005.txt : 19940216 0000354797-94-000005.hdr.sgml : 19940216 ACCESSION NUMBER: 0000354797-94-000005 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19931231 FILED AS OF DATE: 19940214 FILER: COMPANY DATA: COMPANY CONFORMED NAME: ASK GROUP INC CENTRAL INDEX KEY: 0000354797 STANDARD INDUSTRIAL CLASSIFICATION: 7373 IRS NUMBER: 942250034 STATE OF INCORPORATION: DE FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 34 SEC FILE NUMBER: 000-10625 FILM NUMBER: 94507833 BUSINESS ADDRESS: STREET 1: 2880 SCOTT BLVD. CITY: SANTA CLARA STATE: CA ZIP: 95052-8013 BUSINESS PHONE: 408-562-8800 MAIL ADDRESS: STREET 1: P.O. BOX 58013 CITY: SANTA CLARA STATE: CA ZIP: 95052-8013 FORMER COMPANY: FORMER CONFORMED NAME: ASK COMPUTER SYSTEMS INC DATE OF NAME CHANGE: 19920703 10-Q 1 10-Q FOR QE 12/31/93 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 December 31, 1993 OR 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 0-10625 THE ASK GROUP, INC. (Exact name of registrant as specified in its charter) Delaware 94-2250034 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) identification no.) 2880 Scott Boulevard, Santa Clara , CA 95052-8013 (Address of principal executive offices) (Zip code) Registrant's telephone number, including area code: (408) 562-8800 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 The number of shares outstanding of the issuer's common stock as of February 4, 1994 was 23,285,663. THE ASK GROUP, INC. INDEX Page No. PART I. FINANCIAL INFORMATION Item 1. Financial Statements Condensed Consolidated Balance Sheets 3 Condensed Consolidated Statements of Operations 4 Condensed Consolidated Statements of Cash Flows 5 Notes to Condensed Consolidated Financial Statements 6 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 8 PART II. OTHER INFORMATION 12 PART I. FINANCIAL INFORMATION Item 1. Financial Statements THE ASK GROUP, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (In thousands - except shares)
December 31, June 30, 1993 1993 (unaudited) Assets Current assets: Cash and cash equivalents $ 10,671 $ 18,271 Accounts receivable, less allowances for doubtful accounts of $9,186 ($7,583 at June 30, 1993) 142,413 146,097 Inventory 1,121 1,184 Prepaid income taxes 3,187 2,067 Other current assets 18,090 15,966 ------- ------- Total current assets 175,482 183,585 Capitalized software development costs, net 14,497 11,950 Property, plant and equipment, at cost 100,361 92,895 Less: accumulated depreciation and amortization 55,173 46,906 ------- ------- Net property, plant and equipment 45,188 45,989 Goodwill, net 43,695 45,025 Purchased intangibles, net 23,559 25,022 Other long-term assets 2,849 4,200 ------- ------- $ 305,270 $ 315,771 ======= =======
Liabilities and stockholders' equity Current liabilities: Current portion of long-term debt $ 33,600 $ 3,121 Accounts payable 19,688 26,786 Accrued payroll and related items 19,015 25,637 Sales and value added taxes payable 5,314 6,670 Other accrued liabilities 22,471 17,218 Current portion of other liabilities 3,232 3,318 Customer deposits 665 849 Deferred revenue 61,910 66,160 ------- ------- Total current liabilities 165,895 149,759 Long-term debt, net of current portion - 9,697 Other liabilities, net of current portion 3,966 4,528 Deferred income tax 3,883 3,252 Stockholders' equity: Common stock, $0.01 par value, 40,000,000 shares authorized; 23,249,235 outstanding (22,917,022 at June 30, 1993) 232 229 Additional paid-in-capital 144,062 140,949 Retained earnings (accumulated deficit) (9,909) 10,541 Cumulative translation adjustment (2,859) (3,184) ------- ------- Total stockholders' equity 131,526 148,535 ------- ------- $ 305,270 $ 315,771 ======= ======= See accompanying notes.
THE ASK GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share amounts - unaudited)
Three Months Ended Six Months Ended December 31, December 31, 1993 1992 1993 1992 Net revenue: Systems $ 56,639 $ 71,529 $ 99,862 $ 116,185 Service 43,964 42,019 84,596 81,095 ------- ------- ------- ------- 100,603 113,548 184,458 197,280 Costs and expenses: Cost of systems 10,701 23,517 23,545 39,862 Cost of services 19,995 20,477 38,429 38,706 Product development 12,205 11,691 22,516 22,184 Selling, general and administrative 60,981 49,026 112,207 98,351 Restructuring charge 4,000 - 4,000 - Amortization of goodwill and other purchased intangibles 2,047 2,083 4,036 4,166 ------- ------- ------- ------- Total costs and expenses 109,929 106,794 204,733 203,269 ------- ------- ------- ------- Income (loss) from operations (9,326) 6,754 (20,275) (5,989) Interest and other income, net 288 42 142 794 Interest expense (900) (753) (1,415) (1,390) ------- ------- ------- ------- Income (loss) before income taxes (9,938) 6,043 (21,548) (6,585) Provision for (benefit from) income taxes 3,778 2,417 (1,098) (2,634) ------- ------- ------- ------- Net income (loss) $ (13,716) $ 3,626 $ (20,450) $ (3,951) ======= ======= ======= ======= Income (loss) per share $ (0.59) $ 0.16 $ (0.89) $ (0.18) ======= ======= ======= ======= Shares used in per share calculation 23,067 23,251 23,004 21,474 ======= ======= ======= ======= See accompanying notes.
THE ASK GROUP, INC. CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands - unaudited)
Six Months Ended December 31, 1993 1992 Cash flows from operating activities: Net loss $ (20,450) $ (3,951) Adjustments to reconcile net loss to net cash provided by operating activities: Depreciation and amortization 16,899 15,731 Restructuring charge 4,000 - Changes in assets and liabilities: Accounts receivable 4,242 16,681 Inventory 61 652 Prepaid income tax (552) - Accounts payable (7,160) (6,446) Accrued payroll and related items (6,689) (5,671) Income taxes payable - 1,261 Sales and valued added taxes payable (1,244) (2,094) Other accrued liabilities 1,025 (8,790) Customer deposits (184) 575 Deferred income taxes - (1,148) Deferred revenue (4,482) (270) Other, net (847) (1,486) ------- ------- Net cash provided by (used for) operating activities (15,381) 5,044 Cash flows from investing activities: Capitalized software development costs (7,146) (3,905) Purchase of intangible assets (1,243) - Capital expenditures, net of retirements (5,633) (8,884) ------- ------- Net cash used for investing activities (14,022) (12,789) Cash flows from financing activities: Principal payments on bank borrowings and capital lease obligations (3,079) (6,838) Bank borrowings 21,700 - Issuance of stock, net 3,115 5,454 ------- ------- Net cash provided by (used for) financing activities 21,736 (1,384) Effect of exchange rates on cash 67 (2,084) ------- ------- Net decrease in cash and cash equivalents (7,600) (11,213) Cash and cash equivalents at beginning of period 18,271 27,743 ------- ------- Cash and cash equivalents at end of period $ 10,671 $ 16,530 ======= ======= See accompanying notes.
THE ASK GROUP, INC. NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) December 31, 1993 1. The condensed consolidated financial statements for the three months and six months ended December 31, 1993 and 1992 are unaudited, but include all adjustments, which, in the opinion of management, are necessary for a fair statement of the results of operations for the interim periods presented. The interim results are not necessarily indicative of the results for the full year. Certain prior period amounts have been reclassified to conform with the current period's presentation. 2. A summary of the significant accounting policies of the Company is included in the consolidated financial statements listed in Item 8 of the Company's Form 10-K for the fiscal year ended June 30, 1993. 3. The condensed consolidated financial statements include the accounts of The ASK Group, Inc. and all of its wholly- owned subsidiaries, after the elimination of intercompany accounts and transactions. 4. The Company capitalizes software development costs in accordance with Statement of Financial Accounting Standards No. 86. Such costs are amortized on a straight-line basis over the estimated useful life which ranges from one to three years or the ratio of current revenue to the total current and anticipated future revenue, whichever is greater. The capitalization and amortization of software development costs for the three months and six months ended December 31, 1993 and 1992 follow (in thousands):
Three Months Six Months Ended Ended December 31, December 31, 1993 1992 1993 1992 Balance, beginning of period $13,352 $ 9,654 $11,950 $ 9,383 Software development costs capitalized 3,470 1,945 7,146 3,905 Amortization of capitalized costs 2,325 2,183 4,599 3,872 ------ ------ ------ ------ Balance, end of period $14,497 $ 9,416 $14,497 $ 9,416 ====== ====== ====== ======
5. The Company's results for the quarter ended December 31, 1993, caused the Company to be in violation of several covenants under the credit agreement which covers its $40 million revolving credit line and $10 million term loan (reduced to $8.5 million on January 15, 1994). The covenants violated include the net income, tangible net worth and other financial ratio requirements. As a result of this and the fact that the Company and the banks have not reached agreement on an amendment of the underlying agreement or to a waiver of such violations, the Company is in default under the Agreement. Accordingly, the banks have the right to demand immediate repayment of all amounts outstanding under the agreement. All debt under the credit agreement has been classified as current debt on the Condensed Consolidated Balance Sheet as of December 31, 1993. The Company will continue negotiations with the banks for an acceptable arrangement going forward. If the Company is unable to negotiate such an arrangement, its operations will be severely impaired, which in turn will adversely affect revenue and profitability. In addition, because the Company is in default under the credit agreement, it cannot borrow further funds under that facility without the banks' consent. 6. Effective July 1, 1992, the Company changed its method of accounting for income taxes to the liability method required by Statement of Financial Accounting Standards No. 109, "Accounting for Income Taxes." A tax provision of $3,778,000 and a tax benefit of $1,098,000 were recorded for the three and six month periods ended December 31, 1993, respectively. These amounts consist of a provision for taxes on foreign earnings with no offsetting benefit for U.S. losses in the quarter. 7. In the three months ended December 31, 1993, the Company recorded a restructuring charge of $4,000,000. The Company intends to restructure its organization to reduce costs. The restructuring charge is principally related to headcount reductions, primarily in North America, which will affect approximately 200 employees during the first half of the Company's third fiscal quarter. Provision has also been made in the restructuring charge for closing or consolidating certain of the Company's facilities. Additional cost containment measures undertaken include salary reductions for executive management. It is expected that these measures will result in expense reductions of approximately $4,000,000 to $5,000,000 on a quarterly basis. While these actions will begin to reduce expenses in the third quarter of fiscal 1994, their full impact is not expected to be realized until the fourth quarter of fiscal 1994. Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations The ASK Group, Inc. (the Company) develops, markets and sells computer-based relational database management systems (RDBMS), data access and connectivity products, manufacturing and financial applications software and application development tools and provides related consulting and support services. The Company is organized by business units which are both independent and interdependent to take advantage of the synergy among them. The business units include: Worldwide Distribution, Knowledge Services and Support, Product Business Units and the infrastructure to support them. The Company's products are marketed and sold by its Worldwide Distribution Business Unit on a regional basis, typically divided by country. Each regional operation sells and installs all of the Company's products and trains and supports the end users and resellers of the Company's products and services in their territory. This business unit also creates and implements territory-specific marketing programs. This business unit is in turn supported by the worldwide Knowledge Services and Support Business Unit, whose principal functions include developing service products and internal training of customer support staff. The Product Business Units are responsible for designing and developing products as well as designing programs to position products and creating marketing programs with the Worldwide Distribution Business Unit. The Product Business Units are: Database and Connectivity (Database), focused on the ASK INGRES family of products; Manufacturing Systems, which develops and markets integrated manufacturing systems software; and Development Tools (Tools), responsible for application development and decision support tools software. RESULTS OF OPERATIONS The Company's revenue is derived from computer systems sales and a full range of services. Computer systems sales include licensing proprietary software and reselling/licensing of third party computer hardware and software products on a turnkey basis. Service revenue includes maintenance contracts (including updates to software products), education, technical support and application integration and implementation consulting. The Company had both an operating and an after-tax loss for the quarter ended December 31, 1993. Lower-than-expected revenue, due primarily to software license sales which were expected to occur but which did not close, combined with increased selling, general and administrative expenses were the key factors in the Company's net loss for the quarter. In addition, the Company recorded a restructuring charge of $4,000,000 in the quarter. The Company intends to restructure its organization to reduce costs. The restructuring charge is principally related to headcount reductions, primarily in North America, which will affect approximately 200 employees during the first half of the Company's third fiscal quarter. Provision has also been made in the restructuring charge for closing or consolidating certain of the Company's facilities. Additional cost containment measures undertaken include salary reductions for executive management. It is expected that these measures will have an impact of approximately $4,000,000 to $5,000,000 on a quarterly basis. While these actions will begin to reduce expenses in the third quarter of fiscal 1994, their full impactis not expected to be realized until the fourth quarter of fiscal 1994. Total revenue for the three and six months ended December 31, 1993 decreased $12,945,000 (11%) and $12,822,000 (6%), respectively, from the same periods ended December 31, 1992. A stronger U.S. dollar in the fiscal 1994 periods compared to the fiscal 1993 periods had a negative impact on revenue growth rates in Europe when the revenue denominated in European currencies was translated to the equivalent amount in U.S. dollars. In addition, hardware revenue decreased $8,964,000 (66%) and $12,208,000 (50%) in the three and six month periods, respectively, as the Company continues to de-emphasize the amount of third-party hardware resold with applications software due to the continued trend toward open UNIX-based software applications. Software license revenue in fiscal 1994 decreased $5,926,000 (10%) in the quarter and $4,115,000 (4%) for the year-to-date period compared to the same periods of fiscal 1993. In North America, software license revenue declined 12% in the current quarter compared to the same quarter in the prior year while showing revenue growth of 14% in the year-to-date period. The year-to-date increase reflects the impact of newer products and additional resources focused on this region. The unanticipated decrease in the quarter is primarily due to software license sales which were expected to occur in the quarter, but which did not close. The Asia-Pacific region continues to show strong growth in software license revenue (39% and 28% increases for the three- and six-month periods, respectively, compared to the same periods of the prior year), principally due to the Company's increased presence in the region, including a Japanese subsidiary which was established in fiscal 1994. European software license revenue declined 16% and 20%, respectively, in the fiscal 1994 periods from the fiscal 1993 periods. European revenue continues to be negatively affected by the impact of currency exchange rates as well as by general economic conditions within Europe. In order to generate growth and momentum, the Company must continue to capitalize on the trend toward open or UNIX-oriented software products including those that run on smaller desktop workstations or personal computers. If the Company is not successful in expanding its UNIX-based revenue and product line over the next several quarters, it could adversely impact the Company's ability to grow and sustain its business. Additionally, the Company must continue to expand its range of product offerings, gain more productivity from its sales organization and improve visibility into its short-term business trends. For the three- and six-month periods in fiscal 1994, service revenue grew by $1,945,000 (5%) and $3,501,000 (4%), respectively, compared to the same periods of fiscal 1993. Again, the relative strength of the U.S. dollar against European currencies negatively impacted the service revenue trends. Approximately 51% of revenue in the first half of fiscal 1994 was generated from outside North America compared to 52% in the same period of fiscal 1993 and 51% for the full year of fiscal 1993. Because a substantial portion of the Company's international operations are denominated in foreign currencies (principally the Pound Sterling), the Company engages in a foreign currency management program to minimize the effects of exchange rate fluctuations on foreign cash flows which are converted to U.S. dollars. This program includes the use of foreign exchange forward contracts and swaps to hedge its intercompany balances. The program is not intended to protect any specific area (i.e., revenue) as reported in the Condensed Consolidated Statements of Operations. Instead it is intended to minimize the overall impact of exchange rate fluctuations on the Company's foreign currency cash flows converted to U.S. dollars. The effect of this program is included in interest and other income, net, in the Condensed Consolidated Statements of Operations. Cost of systems consists primarily of the cost of resold hardware, royalties to third parties and amortization of software development costs capitalized under the provisions of Statement of Financial Accounting Standards No. 86 (FAS 86). As a percentage of the related revenue, cost of systems decreased from 33% and 34%, respectively, in the three- and six-month periods of fiscal 1993 to 19% and 24%, respectively, in the same periods of fiscal 1994. A substantial portion of this decrease is due to the lower levels of resold third party hardware. Cost of service consists of the direct costs of training and consulting as well as costs of customer support. Cost of service remained relatively constant in amount for the three- and six- month periods of fiscal 1993 and 1994. When presented as a percentage of the related revenue, cost of service declined in both fiscal 1994 periods from the fiscal 1993 periods due primarily to the increase in service revenue in fiscal 1994. Product development expenses, net of software development costs capitalized under the provisions of FAS 86, were virtually unchanged in the fiscal 1994 periods from the fiscal 1993 periods. Software development costs capitalized in the three- and six-month periods of fiscal 1994 were $3,470,000 and $7,146,000, respectively, compared to $1,945,000 and $3,905,000, respectively, for the same periods of fiscal 1993. Costs capitalized under FAS 86 will vary from period to period depending on the timing and duration of testing of software products. Before the adjustment related to FAS 86, product development costs were $15,675,000 and $29,662,000, respectively, for the periods ended December 31, 1993, compared to $13,636,000 and $26,089,000, respectively, for the same periods ended December 31, 1992. The increase reflects the Company's continuing emphasis on investment in both new and existing products and is due primarily to increased headcount and general increases in salaries. Selling, general and administrative expenses increased $11,955,000 (24%) for the three month period and $13,856,000 (14%) for the six month period in fiscal 1994 compared to the same period of fiscal 1993. Personnel-related items, including higher headcount in international locations and general increases in salaries, account for a substantial portion of these increases. Increased provisions for bad debts were also a factor. Interest and other income, net, consists of interest income, foreign exchange gains and losses, foreign exchange hedging costs and miscellaneous income. For the six month periods ended December 31, 1993 and 1992, the decrease is due primarily to lower interest income as a result of lower average cash balances and lower interest rates. The increase in interest expense in the fiscal 1994 periods when compared to the fiscal 1993 periods is due to higher average levels of debt in fiscal 1994 partially offset by lower interest rates. The second quarter of fiscal 1994 includes a tax provision of $3,778,000 despite the pre-tax loss. The charge consists of a provision for taxes on foreign earnings with no offsetting benefit for U.S. tax losses. The Company will take the benefit of these U.S. tax losses against future U. S. earnings. This compares to a tax provision of $2,417,000 in the same quarter of fiscal 1993 which provided taxes on both U.S. and foreign income at an estimated annualized tax rate of 40%. The Company's future revenue and earnings may be subject to significant volatility, especially on a quarterly basis. A substantial amount of the Company's quarterly revenue has typically been recorded in the third month of any fiscal quarter, with a concentration of such revenue in the last half of that month. In addition, the timing of the closing of large license agreements increases the risk of quarter-to-quarter revenue fluctuations. The Company's operating expenses are based on anticipated revenue, are relatively fixed in the short term and are incurred approximately evenly during a quarter. As a result, if revenue is not realized as expected, the Company's operating results will be adversely affected. Any shortfall in revenue or operating results from levels expected by securities analysts and the timing of the announcement of such shortfall could have an immediate and significant effect on the trading price of the Company's stock in any given period. In addition, the Company participates in a highly dynamic industry, which often results in significant volatility in the Company's common stock price. FINANCIAL CONDITION Cash and cash equivalents decreased $7.6 million during the first six months of fiscal 1994. The major source of cash for the period was bank borrowings of $21.7 million. Funding of operations ($15.4 million), acquisitions of capital equipment ($5.6 million) and capitalized software costs ($7.1 million) were the primary uses of cash. The Company has financed its continuing operations through cash generated from operations, existing cash balances and available credit facilities. At December 31, 1993, approximately $11.3 million remained available for future borrowings under a $40 million revolving credit line with two banks. Because of borrowing base limitations under the related credit agreement, only $5.4 million was available for borrowing at December 31, 1993 and only $1.4 million was available for borrowing at February 14, 1994. The Company's results for the quarter ended December 31, 1993, caused the Company to be in violation of several covenants under the credit agreement which covers the revolving credit line and an $8.5 million term loan. The covenants violated include the net income, tangible net worth and other financial ratio requirements. As a result of this and the fact that the Company and the banks have not reached agreement on an amendment of the underlying agreement or to a waiver of such violations, the Company is in default under the Agreement. Accordingly, the banks have the right to demand immediate repayment of all amounts outstanding under the agreement. All debt under the credit agreement has been classified as current debt on the Condensed Consolidated Balance Sheet as of December 31, 1993. The Company will continue negotiations with the banks for an acceptable arrangement going forward. If the Company is unable to negotiate such an arrangement, its operations will be severely impaired, which in turn will adversely affect revenue and profitability. In addition, because the Company is in default under the credit agreement, it cannot borrow further funds under that facility without the banks' consent. At December 31, 1993, the Company's accounts receivable total $142.4 million, net of allowances for doubtful accounts. The days sales outstanding (DSO) for these receivables is 127 days compared to 116 days at December 31, 1992. Because of the situation with the credit facility and the extended DSO on receivables, the Company is facing a liquidity problem. To improve cash flow, the Company has been taking several actions, including increased collection effort by adding temporary collection personnel, factoring long-term receivables, sale of certain real property and the sale and leaseback of certain assets. The Company is also actively working with its investment bankers to establish plans to increase the Company's working capital through possible debt and/or equity offerings as well as evaluating other strategic alternatives. However, there can be no assurance that any of these efforts will be successful. If the Company does not quickly improve its cash flow, it could cause further delays in payments to suppliers and employees and, accordingly, delays in the supply of goods and services to the Company. Delays in the supply of goods and services to the Company would adversely impact the Company's ability to deliver its products and services, which in turn would negatively impact revenue, margins and profitability. PART II. OTHER INFORMATION Item 1. Legal Procedings. Not Applicable Item 2. Changes in Securities. Not Applicable Item 3. Defaults upon Senior Securities. Not Applicable Item 4. Submission of Matters to a Vote of Security Holders. The Company held its Annual Meeting of Stockholders on November 22, 1993. The stockholders voted on proposals to: 1. Elect Directors of the Company. 2. Adopt the 1993 Employee Stock Purchase Plan. 3. Approve a 1,200,000 share increase to the reserve established under the 1991 Stock Plan. 4. Approve an amendment to the 1991 Stock Plan to provide for automatic annual increases to the share reserve starting July 1, 1996. 5. Ratify the appointment of Ernst & Young as the Company's auditors for the fiscal year ending June 30, 1994. The proposals were approved by the following votes: 1. Election of Directors Director For Withheld Paul C. Ely, Jr. 18,944,929 209,511 Pier Carlo Falotti 18,945,620 208,820 Robert N. Sharpe 18,944,779 209,661 Thomas I. Unterberg 18,943,962 210,478 Robert H. Waterman 18,944,829 209,611 2. Adoption of 1993 Employee Stock Purchase Plan For Against Abstain No Vote 15,478,606 752,589 105,519 2,817,726 3. 1991 Stock Plan - 1,200,000 share reserve increase For Against Abstain No Vote 11,650,400 4,567,108 67,403 2,869,529 4. 1991 Stock Plan - Automatic Annual Share Reserve Increase For Against Abstain No Vote 11,596,690 4,669,939 70,085 2,817,726 5. Ratify appointment of Ernst & Young For Against Abstain No Vote 19,093,135 30,607 26,039 4,659 Item 5. Other Information. On February 9, 1994, the Company's Board of Directors accepted the resignation of Pier Carlo Falotti, a director of the Company and the Company's president and chief executive officer. Mr. Falotti's resignation was for personal reasons. The Board of Directors has begun a search for Mr. Falotti's replacement. Until a successor chief executive officer is named, the Board has designated Leslie E. Wright, executive vice president and chief financial officer, as acting operating officer to manage the Company's operating plan and strategy. Item 6. Exhibits and Reports on Form 8-K (a) List of Exhibits Exhibit Number Description 11.1 Computation of Net Income (Loss) per Common and Common Equivalent Share (b) Reports on Form 8-K None 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 ASK GROUP, INC. Registrant February 14, 1994 Date LESLIE E. WRIGHT Leslie E. Wright Executive Vice President and Chief Financial and Administrative Officer, (Principal Financial and Accounting Officer) EX-11 2 EPS COMPUTATION EXHIBIT 11.1 THE ASK GROUP, INC. COMPUTATION OF NET INCOME (LOSS) PER COMMON AND COMMON EQUIVALENT SHARE (In thousands, except per share amount)
Three Months Ended Six Months Ended December 31, December 31, 1993 1992 1993 1992 Primary Weighted average number of common shares outstanding 23,067 21,747 23,004 21,474 Incremental common shares attributable to shares issuable under employee stock plans * 1,504 * * ------- ------- ------- ------- Total shares 23,067 23,251 23,004 21,474 ======= ======= ======= ======= Net income (loss): Amount $(13,716) $ 3,626 $(20,450) $ (3,951) ======= ======= ======= ======= Per share $ (0.59) $ 0.16 $ (0.89) $ (0.18) ======= ======= ======= ======= Fully Diluted Weighted average number of common shares oustanding 23,067 21,747 23,004 21,474 Incremental common shares attributable to shares issuable under employee stock plans * 1,773 * * ------- ------- ------- ------- Total shares 23,067 23,520 23,004 21,474 ======= ======= ======= ======= Net income (loss): Amount $(13,716) $ 3,626 $(20,450) $ (3,951) ======= ======= ======= ======= Per share $ (0.59) $ 0.15** $ (0.89) $ (0.18) ======= ======= ======= ======= * Common equivalent shares relating to shares issuable under employee stock plans are not included due to their antidilutive effect on the loss per share. **Before rounding to whole cents, dilution is less than 3%.
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