-----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, K3Z6/EhXXyDoSCNeEcrcQXt+d1vyDH3ijz0nrboEA59Fvx3+eXYwejudnpBpw8n7 0Oeq0M52cqGQY8XUKwBXOQ== 0000707606-99-000003.txt : 19990517 0000707606-99-000003.hdr.sgml : 19990517 ACCESSION NUMBER: 0000707606-99-000003 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19990331 FILED AS OF DATE: 19990514 FILER: COMPANY DATA: COMPANY CONFORMED NAME: SYSTEMS & COMPUTER TECHNOLOGY CORP CENTRAL INDEX KEY: 0000707606 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-COMPUTER PROGRAMMING, DATA PROCESSING, ETC. [7370] IRS NUMBER: 231071520 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: SEC FILE NUMBER: 000-11521 FILM NUMBER: 99621381 BUSINESS ADDRESS: STREET 1: GREAT VALLEY CORPORATE CTR STREET 2: 4 COUNTRY VIEW RD CITY: MALVERN STATE: PA ZIP: 19355 BUSINESS PHONE: 6106475930 MAIL ADDRESS: STREET 1: GREAT VALLEY CORP CTR STREET 2: 4 COUNTRY VIEW RD CITY: MALVERN STATE: PA ZIP: 19355 10-Q 1 SECURITIES AND EXCHANGE COMMISSION Washington, DC 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 March 31, 1999 or / / Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 for the transition period from _______ to _______ . 0-11521 (Commission File Number) SYSTEMS & COMPUTER TECHNOLOGY CORPORATION (Exact name of registrant as specified in its charter) Delaware 23-1701520 (State or other jurisdiction (I.R.S. Employer of incorporation) Identification No.) Great Valley Corporate Center 4 Country View Road Malvern, Pennsylvania 19355 (Address of principal executive offices) Registrant's telephone number, including area code: (610) 647-5930 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 / / Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date. 31,750,382 Common shares, $.01 par value, as of May 10, 1999 Page 1 of 22 consecutively numbered pages (PAGE) SYSTEMS & COMPUTER TECHNOLOGY CORPORATION AND SUBSIDIARIES INDEX PART I. UNAUDITED FINANCIAL INFORMATION Item 1. Financial Statements Condensed Consolidated Balance Sheets - March 31, 1999 and September 30, 1998 Condensed Consolidated Statements of Operations - Three Months Ended March 31, 1999 and 1998 Condensed Consolidated Statements of Operations - Six Months Ended March 31, 1999 and 1998 Condensed Consolidated Statements of Cash Flows - Six Months Ended March 31, 1999 and 1998 Notes to Condensed Consolidated Financial Statements Item 2. Management's Discussion and Analysis of Operations and Financial Condition Item 3. Quantitative and Qualitative Disclosures About Market Risk PART II. OTHER INFORMATION Item 1. Legal Proceedings Item 4. Submission of Matters to a Vote of Security Holders Item 5. Other Information Item 6. Exhibits and Reports on Form 8-K SIGNATURES (PAGE) SYSTEMS & COMPUTER TECHNOLOGY CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except per share amounts) March 31, September 30, 1999 1998 (UNAUDITED) (NOTE) ASSETS CURRENT ASSETS Cash and cash equivalents $ 4,748 $ 18,942 Short-term investments, including accrued interest of $249 and $1,199 14,876 59,364 Receivables, including $76,442 and $66,158 of earned revenues in excess of billings, net of allowance for doubtful accounts of $4,238 and $4,033 147,029 130,457 Prepaid expenses and other receivables 25,685 13,861 -------- -------- TOTAL CURRENT ASSETS 192,338 222,624 PROPERTY AND EQUIPMENT--at cost, net of accumulated depreciation 67,027 55,862 CAPITALIZED COMPUTER SOFTWARE COSTS, net of accumulated amortization 19,961 18,257 COST IN EXCESS OF FAIR VALUE OF NET ASSETS ACQUIRED, net of accumulated amortization 19,616 17,763 OTHER ASSETS AND DEFERRED CHARGES 17,175 18,448 -------- -------- TOTAL ASSETS $316,117 $332,954 ======== ======== (PAGE) SYSTEMS & COMPUTER TECHNOLOGY CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED BALANCE SHEETS (in thousands, except per share amounts) March 31, September 30, 1999 1998 (UNAUDITED) (NOTE) LIABILITIES & STOCKHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable $ 15,317 $ 17,720 Current portion of long-term debt 2,623 1,100 Income taxes payable 764 1,444 Accrued expenses 32,869 33,659 Deferred revenue 16,367 17,684 -------- -------- TOTAL CURRENT LIABILITIES 67,940 71,607 LONG-TERM DEBT, less current portion 78,200 78,425 STOCKHOLDERS' EQUITY Preferred stock, par value $.10 per share--authorized 3,000 shares, none issued -- -- Common stock, par value $.01 per share-- authorized 100,000 shares, issued 36,372 and 36,275 shares 364 363 Capital in excess of par value 102,544 102,176 Retained earnings 92,590 83,952 -------- -------- 195,498 186,491 Less Held in treasury, 4,642 and 2,302 common shares--at cost (24,911) (2,959) Notes receivable from stockholders (610) (610) -------- -------- 169,977 182,922 -------- -------- TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $316,117 $332,954 ======== ======== Note: The condensed consolidated balance sheet at September 30, 1998 has been derived from the audited financial statements at that date. See notes to condensed consolidated financial statements. (PAGE) SYSTEMS & COMPUTER TECHNOLOGY CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (in thousands, except per share amounts) For the Three Months Ended March 31, 1999 1998 Revenues: Outsourcing services $ 34,364 $30,121 Software sales 17,092 22,449 Maintenance and enhancements 21,028 16,312 Software services 43,859 25,907 Other, primarily interest 735 1,295 -------- ------- 117,078 96,084 Expenses: Cost of outsourcing services 26,763 24,564 Cost of software sales and maintenance and enhancements 22,074 17,829 Cost of software services 30,662 18,223 Selling, general and administrative 28,784 22,091 Interest expense 1,210 1,055 -------- ------- 109,493 83,762 Income before income taxes 7,585 12,322 Provision for income taxes 3,413 5,021 -------- ------- Net income $ 4,172 $ 7,301 ======== ======= Net income per common share $ 0.13 $ 0.22 Net income per share - assuming dilution $ 0.13 $ 0.20 Common shares and equivalents outstanding: Average common shares 32,291 33,348 Average common shares - assuming dilution 32,921 35,833 See notes to condensed consolidated financial statements. (PAGE) SYSTEMS & COMPUTER TECHNOLOGY CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) (in thousands, except per share amounts) For the Six Months Ended March 31, 1999 1998 Revenues: Outsourcing services $ 67,876 $ 58,266 Software sales 38,561 44,300 Maintenance and enhancements 38,813 30,658 Software services 80,289 46,966 Other, primarily interest 1,308 3,175 -------- -------- 226,847 183,365 Expenses: Cost of outsourcing services 53,358 47,470 Cost of software sales and maintenance and enhancements 42,214 32,710 Cost of software services 58,701 34,125 Selling, general and administrative 55,190 43,937 Interest expense 2,355 1,875 -------- -------- 211,818 160,117 Income before income taxes 15,029 23,248 Provision for income taxes 6,391 9,502 -------- -------- Net income $ 8,638 $ 13,746 ======== ======== Net income per common share $ 0.26 $ 0.41 Net income per share - assuming dilution $ 0.26 $ 0.38 Common shares and equivalents outstanding: Average common shares 32,661 33,222 Average common shares - assuming dilution 33,767 35,867 See notes to condensed consolidated financial statements. (PAGE) SYSTEMS & COMPUTER TECHNOLOGY CORPORATION AND SUBSIDIARIES CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) (in thousands) For the Six Months Ended March 31, 1999 1998 OPERATING ACTIVITIES Net income $ 8,638 $ 13,746 Adjustments to reconcile net income to net cash (used in) provided by operating activities: Depreciation and amortization 12,636 8,069 Provision for doubtful accounts 778 1,584 Changes in operating assets and liabilities: (Increase) in receivables (17,351) (17,414) Decrease (increase) in interest receivable 950 (1,083) (Increase) in other current assets (11,824) (2,536) (Decrease) in accounts payable (2,403) (233) (Decrease) increase in other accrued expenses and liabilities (790) 4,879 (Decrease) in deferred revenue (1,317) (2,085) Other, net (1,892) (1,670) --------- -------- NET CASH (USED IN) PROVIDED BY OPERATING ACTIVITIES (12,575) 3,257 INVESTING ACTIVITIES Purchase of property and equipment (17,367) (5,603) Capitalized computer software costs (4,550) (3,291) Purchase of investments available for sale (402) (128,039) Proceeds from sale or maturity of investments available for sale 43,715 55,724 Purchase of investment in Campus Pipeline, Inc. (2,831) -- --------- --------- NET CASH PROVIDED BY (USED IN) INVESTING ACTIVITIES 18,565 (81,209) FINANCING ACTIVITIES Principal payments on short-term debt (32,699) (1,250) Proceeds from borrowings, net of issuance costs 33,992 73,278 Repurchase and retirement of Company stock (21,952) -- Proceeds from exercise of stock options 475 2,947 --------- --------- NET CASH (USED IN) PROVIDED BY FINANCING ACTIVITIES (20,184) 74,975 (DECREASE) IN CASH & CASH EQUIVALENTS (14,194) (2,977) CASH & CASH EQUIVALENTS-BEGINNING OF PERIOD 18,942 29,809 --------- --------- CASH & CASH EQUIVALENTS-END OF PERIOD $ 4,748 $ 26,832 ========= ========= See notes to condensed consolidated financial statements. (PAGE) SYSTEMS & COMPUTER TECHNOLOGY CORPORATION AND SUBSIDIARIES NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) NOTE A--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 1O-Q and Rule 10-01 of 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 only of normal recurring accruals) considered necessary for a fair presentation have been included. For further information, refer to the consolidated financial statements and footnotes thereto included in the Company's Annual Report on Form 10-K for the year ended September 30, 1998. Operating results for the three and six-month periods ended March 31, 1999 are not necessarily indicative of the results that may be expected for the year ending September 30, 1999. NOTE B--RECLASSIFICATION Certain quarterly information has been reclassified to confirm with March 31, 1999 classification. NOTE C--CASH AND SHORT-TERM INVESTMENTS (in thousands) Cash Equivalents: Cash and equivalents are defined as highly liquid investments with a maturity of three months or less at the date of purchase. Short-Term Investments: Short-term investments consist of state and municipal securities and corporate debt securities. Management determines the appropriate classification of debt securities at the time of purchase. At March 31, 1999, the Company has classified all securities as available for sale. The available-for-sale portfolio, stated at fair value, is comprised of highly liquid investments available for current operations and general corporate purposes and, accordingly, is classified as short-term investments. Short-term investments at March 31, 1999 are comprised of: State and municipal securities $14,644 Corporate debt securities 232 ------- $14,876 The contractual maturities of short-term investments held at March 31, 1999 are: Due in one year or less $13,785 Due after one year or more 1,091 ------- $14,876 NOTE D--TREASURY STOCK PURCHASE In October 1998, the Company's Board of Directors authorized the purchase of up to 3 million of its common shares. The shares may be purchased from time to time in the open market or negotiated transactions and the timing of purchases will be based on a variety of factors including stock price, cash requirements, and market and economic factors. During the quarter ended December 31, 1998, the Company repurchased 1.1 million of its common shares for $10.3 million and during the quarter ended March 31, 1999 the Company repurchased 1.3 million shares for $11.6 million. NOTE E--CAMPUS PIPELINE INVESTMENT On December 4, 1998, the Company entered into an agreement in which it, at its option, could purchase up to $7.6 million of the common stock of Campus Pipeline, Inc. As of March 31, 1999, the Company had purchased a 20% equity interest in Campus Pipeline, Inc. for $2.8 million, which amount includes investment related expenditures of $300 thousand, and which was recorded under the equity method of accounting for investments. During April 1999, the Company purchased an additional 10% equity interest in Campus Pipeline, Inc. for $1.25 million. If the Company exercises all its options, the Company will hold approximately 60% of the outstanding common stock of Campus Pipeline, Inc. Campus Pipeline, Inc. incurred immaterial net losses during the six months ended March 31, 1999. NOTE F--EARNINGS PER SHARE (in thousands, except per share amounts) A reconciliation of the numerators and the denominators of the net income per common share and net income per share - assuming dilution calculations follow: For the Three Months Ended March 31, 1999 1998 Numerator: Net income available to common stockholders, used for net income per common share $ 4,172 $ 7,301 Effect of dilutive securities: -- -- ------- ------- Net income available to common stockholders after assumed conversions $ 4,172 $ 7,301 ======= ======= Denominator: Denominator for net income per common share-weighted average shares 32,291 33,348 Effect of dilutive securities: Employee stock options 630 2,485 ------- ------- Denominator for net income per share - assuming dilution 32,921 35,833 ======= ======= Net income per common share $0.13 $0.22 ===== ===== Net income per share - assuming dilution $0.13 $0.20 ===== ===== For the Six Months Ended March 31, 1999 1998 Numerator: Net income available to common stockholders, used for net income per common share $ 8,638 $13,746 Effect of dilutive securities: -- -- ------- ------- Net income available to common stockholders after assumed conversions $ 8,638 $13,746 ======= ======= Denominator: Denominator for net income per common share-weighted average shares 32,661 33,222 Effect of dilutive securities: Employee stock options 1,106 2,645 ------- ------- Denominator for net income per share - assuming dilution 33,767 35,867 ======= ======= Net income per common share $0.26 $0.41 ===== ===== Net income per share - assuming dilution $0.26 $0.38 ===== ===== NOTE G--PRODUCT DEVELOPMENT Product development expenditures, including software maintenance expenditures, for the six months ended March 31, 1999 and 1998, were approximately $26.8 million and $16.9 million, respectively. After capitalization these amounts were approximately $22.2 million and $13.6 million, respectively, and were charged to operations as incurred. For the same periods, amortization of capitalized software costs (not included in expenditures above) amounted to $2.8 million and $2.8 million, respectively. (PAGE) MANAGEMENT'S DISCUSSION AND ANALYSIS OF OPERATIONS AND FINANCIAL CONDITION The purpose of this section is to give interpretive guidance to the reader of the financial statements. RESULTS OF OPERATIONS The following table sets forth: (a) income statement items as a percentage of total revenues and (b) the percentage change for each item from the prior year comparative period. % of Total Revenues % Change from Prior Year Three Mos. Six Mos. Three Mos. Six Mos. Ended Ended Ended Ended March 31, March 31, March 31 March 31 1999 1998 1999 1998 Revenues: Outsourcing services 29% 31% 30% 32% 14% 17% Software sales 15% 24% 17% 24% (24%) (13%) Maintenance and enhancements 18% 17% 17% 17% 29% 27% Software services 37% 27% 35% 25% 69% 71% Interest and other revenue 1% 1% 1% 2% (43%) (59%) ---- ---- ---- ---- Total 100% 100% 100% 100% 22% 24% Expenses: Cost of services, sales and maintenance and enhancements 68% 63% 68% 62% 31% 35% Selling, general and administrative 25% 23% 24% 24% 30% 26% Interest expense 1% 1% 1% 1% 15% 25% Income before income taxes 6% 13% 7% 13% (38%) (35%) The following table sets forth the gross profit for each of the following revenue categories as a percentage of revenue for each such category and the total gross profit as a percentage of total revenue (excluding interest and other revenue). The Company does not separately present the cost of maintenance and enhancements revenue as it is impracticable to separate such cost from the cost of software sales. Three Months Six Months Ended Ended March 31, March 31, 1999 1998 1999 1998 Gross Profit: Outsourcing services 22% 18% 21% 19% Software sales and maintenance and enhancements 42% 54% 45% 56% Software services 30% 30% 27% 27% --- --- --- --- Total 32% 36% 32% 37% Revenues Growth in outsourcing services revenue largely results from significant contract signings. The 14% and 17% increases in outsourcing services revenue in the second quarter and first six months of fiscal year 1999 are primarily the result of (1) contracts signed after the second quarter of fiscal year 1998 and (2) increases in outsourcing services provided to a number of existing significant clients. Software sales decreased 24% in the second quarter of fiscal year 1999 compared to the second quarter of fiscal year 1998 due primarily to decreased licenses of Banner Customer Information System (CIS) software to the domestic utility market and ADAGE Enterprise Resource Planning (ERP) software to the manufacturing market. These decreases were offset by increased licenses of Banner software to the higher education market and licenses of Banner Courts software to the local government market. Software sales decreased 13% in the first six months of fiscal year 1999 due primarily to the aforementioned reasons combined with decreased licenses of Banner software to the higher education market in the first quarter of fiscal year 1999. The decreases in the first six months of fiscal year 1999 were offset by increased licenses of Banner Courts software to the local government market and increased licenses of Banner CIS software to the international utility market. The 29% and 27% increases in maintenance and enhancements revenue in the second quarter and first six months of fiscal year 1999, respectively, were the result of the growing installed base of clients in the higher education, manufacturing & distribution, and utility marketplaces. The Company continues to experience a high annual renewal rate on existing maintenance contracts in these marketplaces. Software services revenue increased 69% and 71% in the second quarter and first six months of fiscal year 1999 compared to the prior year periods primarily as the result of increases in implementation and integration services in the manufacturing, utility and higher education markets. The decrease in other revenue in the second quarter and first six months of fiscal year 1999 is attributable to decreased interest revenue and to a one-time $695 thousand gain on the sale of an inactive product line in the first quarter of fiscal year 1998. The decrease in cash and short-term investments, the source of interest revenue, results primarily from the acquisition of Fygir Logistic Information Systems, B.V. (Fygir) in September 1998 and the purchase of $22 million in treasury stock in the first six months of fiscal year 1999. Gross Profit Gross profit decreased as a percentage of total revenue (excluding other revenue) from 36% in the second quarter of fiscal year 1998 to 32% for the second quarter of fiscal year 1999 and from 37% to 32% for the six month periods ending March 31, 1998 and 1999, respectively. The total gross profit percentages decreased primarily because of decreases in the software sales and maintenance and enhancements gross profit, which makes up the greatest percentage of the Company's total gross profit. These decreases were primarily the result of an increase, at a rate greater than the revenue rate increase, in non-capitalized product development expenditures, primarily in the manufacturing and utility businesses. The decreases in the software sales and maintenance and enhancements gross profits were partially offset by increases in the gross profits in the government business, and in the second quarter, the higher education business, attributable to increased software licenses. The Company is continuing to focus on installation and systems integration services in each of its markets. Since service margins have historically been lower than the margins derived from software sales and maintenance and enhancements, an increase in services revenue as a percentage of total revenue historically has resulted in a lower overall profit margin. Income Taxes The fiscal year 1999 second quarter provision for income taxes is approximately 5% higher than the Company's first quarter rate of 40%. The second quarter provision does not include a tax benefit for losses on the Company's foreign operations. The Company's current forecast suggests that foreign operations may improve during the second half of the fiscal year, which would result in a reduced tax rate. If foreign operations become profitable during the second half of the fiscal year, this may result in a reduced tax rate. LIQUIDITY, CAPITAL RESOURCES, AND FINANCIAL POSITION In October 1997, the Company issued $65 million of convertible subordinated debentures bearing interest at 5% and maturing on October 15, 2004. In November 1997, pursuant to an underwriters' option, the Company issued an additional $9.75 million of convertible debentures. The debentures are convertible into common stock of the Company at any time prior to redemption or maturity at a conversion price of $26.375 per share, subject to change as defined in the Trust Indenture. The debentures are redeemable at any time after October 15, 2000 at prices decreasing from 102.5% of the principal amount to par on October 15, 2003. Cash used in operating activities was $12.6 million for the first six months of fiscal year 1999 compared with cash provided by operating activities of $3.3 million for the first six months of fiscal year 1998. Income before depreciation and amortization had no significant increase when compared to the prior year period. Cash provided by operations was off set in the first six months of fiscal year 1999 by increases in accounts receivable balances and other current assets. The increases in accounts receivable balances at March 31, 1999 compared to September 30, 1998 are primarily the result of slow collections on some large outsourcing contracts and the timing of billings on software licenses. The increase in other current assets is primarily the result of increases in prepaid tax balances. The Company provides outsourcing services and software-related services, including systems implementation and integration services. Contract fees from outsourcing services are typically based on multi-year contracts ranging from three to 10 years in length, and provide a recurring revenue stream throughout the term of the contract. Software services contracts, including systems implementation and integration services, usually have shorter terms than outsourcing services contracts, and billings are sometimes milestone based. During the beginning of a typical outsourcing services contract, services are performed and expenses are incurred by the Company at a greater rate than in the later part of the contract. Billings usually remain constant during the term of the contract and, in some cases, when a contract term is extended, the billing period is also extended over the new life of the contract. In certain systems integration services contracts, payments are milestone based. In these particular systems integration contracts, services are performed by the Company but cannot be billed until the milestone is attained. Revenue is usually recognized as work is performed. The resulting excess of revenues over billings is reflected on the Company's Consolidated Balance Sheet as unbilled accounts receivable. As an outsourcing services contract proceeds, services are performed and expenses are incurred at a lesser rate, resulting in billings exceeding revenue recognized, which causes a decrease in the unbilled accounts receivable, as will the achievement of a milestone in a systems integration services contract. The remaining unbilled accounts receivable balance is comprised of software sales for which product has been shipped and revenue has been recognized but amounts have not been billed due to the payment terms established. These unbilled balances are generally billed within one year. Cash provided by investing activities was $18.6 million for the first six months of fiscal year 1999 compared with cash used in investing activities of $81.2 million for the first six months of fiscal year 1998. Proceeds from sales and maturities of available-for-sale investments of $43.7 million were slightly offset by the purchase of an investment in Campus Pipeline, Inc. for $2.8 million in the first quarter of fiscal year 1999. The Company's primary use of cash for investing purposes in the first six months of fiscal year 1999 was for the purchase of fixed assets, as described in the following paragraph. During the first six months of fiscal year 1998 the Company's primary use of cash for investing activities was the purchase of available-for-sale investments from the proceeds of the bond offering during the first quarter of fiscal year 1998. Property and equipment expenditures increased as the result of fit-up and remodeling costs for a new office building in the Company's Malvern campus and building construction costs for a new building adjacent to the Company's existing building in Columbia, SC. The construction and fit-up of the new Columbia building are expected to continue until sometime in the third quarter of fiscal year 1999. The Company signed a long-term lease agreement in October 1998 for a new office building near its Malvern campus. The Company began to incur fit-up and remodeling costs in the first quarter of fiscal year 1999 and rent payments began in the second quarter of fiscal year 1999. Cash used in financing activities was $20.2 million for the first six months of fiscal year 1999. Net proceeds from borrowings were offset by principal payments on short-term debt. The primary use of cash in financing activities was the purchase of $22.0 million in treasury stock in the first six months of fiscal year 1999. During the first six months of fiscal year 1998, cash provided by financing activities of $75.0 was primarily the result of the net proceeds of the bond offering of $73.3 million. The Company has a $30 million senior revolving credit facility available for general corporate purposes. The credit facility agreement expires in June 2000 with optional annual renewals. Borrowings outstanding under the credit facility were $2.0 million at March 31, 1999. There were no borrowings outstanding as of September 30, 1998. As long as borrowings are outstanding, and as a condition precedent to new borrowings, the Company must comply with certain covenants established in the agreement. Under the covenants, the Company is required to maintain certain financial ratios and other financial conditions. The covenants allow the Company to pay non-stock dividends, repurchase capital stock, make distributions of assets to shareholders (as long as the aggregate amount does not exceed $5 million in any fiscal year) and to pay stock dividends. In October 1998, the agreement covenants were amended to allow the Company to repurchase capital stock not to exceed $35 million and 3 million shares before April 15, 1999. The Company believes that its cash and cash equivalents, short-term investments, and borrowing arrangements should satisfy its financing needs for the foreseeable future. In October 1998, the Company's Board of Directors authorized the purchase of up to 3 million of its common shares. The shares may be purchased from time to time in the open market or negotiated transactions and the timing of purchases will be based on a variety of factors including stock price, cash requirements, and market and economic factors. During the six months ended March 31, 1999, the Company repurchased 2.3 million of its common shares for $22 million. On December 4, 1998, the Company entered into an agreement in which it, at its option, could purchase up to $7.6 million of the common stock of Campus Pipeline, Inc. As of March 31, 1999, the Company had purchased a 20% equity interest in Campus Pipeline, Inc. for $2.8 million, which amount includes investment related expenditures of $300 thousand, and which was recorded under the equity method of accounting for investments. During April 1999, the Company purchased an additional 10% equity interest in Campus Pipeline, Inc. for $1.25 million. If the Company exercises all its options, the Company will hold approximately 60% of the outstanding common stock of Campus Pipeline, Inc. On October 1, 1998, the Company adopted Statement of Position 97-2, "Software Revenue Recognition" (SOP 97-2). In December 1998, AcSEC issued Statement of Position SOP 98-9, Modification of SOP 97-2, Software Revenue Recognition, with Respect to Certain Transactions (SOP 98-9). SOP 97-2 introduces a framework whereby revenue would be recognized for each element in a software licensing arrangement when certain criteria are met. SOP 97-2 requires license fees to be allocated to the separate elements of multiple element arrangements based on "vendor-specific objective evidence of fair value" and provides guidance on postcontract customer support arrangements. SOP 98-9, which is effective for fiscal years beginning after March 15, 1999, requires recognition of revenue on undelivered elements of a contract using the residual method, as defined in SOP 98-9. The adoption of SOP 97-2 did not, and the adoption of SOP 98-9 is not expected to, have a significant impact on the results of operations. In June 1997, Statement of Financial Accounting Standards No. 130, "Reporting Comprehensive Income" (SFAS 130), was effective for all fiscal years beginning after December 15, 1997. Comprehensive income includes changes in the balances of items that are reported directly in a separate component of stockholders' equity on the Consolidated Balance Sheets. There is not a significant difference between total comprehensive income and net income for the three and six-month periods ended March 31, 1999 and 1998. Statement of Financial Accounting Standards No. 131, "Disclosures about Segments of an Enterprise and Related Information" (SFAS 131), was issued in June 1997. SFAS 131 requires that a public business enterprise report financial and descriptive information about its reportable operating segments. Generally, financial information is required to be reported on the basis used internally for evaluating segment performance and resource allocation. SFAS 131 is effective for fiscal years beginning after December 31, 1997 however disclosure is not required in interim financial statements in the initial year of adoption. Accordingly, the Company will make the required disclosures for the fiscal year ending September 30, 1999, although the Company has not fully assessed the impact of SFAS 131 on its financial disclosures. Contingencies On October 4, 1995, John J. Wallace filed a purported class action lawsuit in the United States District Court for the Eastern District of Pennsylvania against the Company; Michael J. Emmi, Chairman of the Board, President and Chief Executive Officer of the Company; Michael D. Chamberlain, Senior Vice President and a director of the Company; and Eric Haskell, Senior Vice President, Finance & Administration, Treasurer, and Chief Financial Officer of the Company. The plaintiff filed an amended complaint on November 28, 1995, and a second amended complaint on February 3, 1997. The class period alleged is from June 5, 1995 through October 2, 1995. The second amended complaint sought damages in unspecified amounts as well as equitable relief. In April 1996, the Company's Motion to Dismiss the amended complaint was granted in part and denied in part. In September 1997, the Company's Motion to Dismiss the second amended complaint was granted in part and denied in part, and plaintiff was permitted to pursue a claim that defendants violated section 10(b) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder to the extent that it alleges a failure to make certain disclosures in the Company's Form 10-Q for the third quarter of fiscal 1995. On December 3, 1997, the Court approved a Stipulation of Dismissal and Entry of Final Judgment filed by the parties pursuant to which all remaining claims were dismissed with prejudice and the Court entered a final judgment in favor of the Company as to all remaining claims in the action. On December 30, 1997, the plaintiff filed a notice of appeal with respect to those claims which were dismissed pursuant to the Company's Motions to Dismiss. On October 28, 1998, the Company and counsel for the plaintiff reached an agreement in principle to settle the matter for $750,000. A settlement class must be determined by the United States District Court for the Eastern District of Pennsylvania and the overall settlement must be approved by the Court. Factors that may affect future results and market price of stock The matters discussed herein and elsewhere that are forward-looking statements, including statements concerning the Company's or management's forecasts, intentions, beliefs, expectations, or predictions for the future, are based on current management expectations that involve risks and uncertainties that could cause actual results to differ materially from those anticipated. The following discussion highlights some, but not all of the risks and uncertainties which may have a material adverse effect on the Company's business, financial condition, and/or results of operations. The Company's revenues and operating results can vary substantially from quarter to quarter based on a number of factors. Software sales revenues in any quarter are dependent on the execution of license agreements and shipment of product. The execution of license agreements is difficult to predict for a variety of reasons including the following: a significant portion of the Company's license agreements are typically signed in the last month of each quarter; the duration of the Company's sales cycle is relatively long; the size of transactions can vary widely; client projects may be postponed or canceled due to changes in the client's management, budgetary constraints, or strategic priorities; and clients often exhibit a seasonal pattern of capital spending. The Company has historically generated a greater portion of license fees in total revenue in the last two fiscal quarters, although there is no assurance that this will continue. Also, as the year 2000 approaches, many potential clients are focusing their efforts on remediating existing systems or implementing new systems to solve year 2000 issues. While the Company believes that such evaluations have favorably impacted demand for its software products and services in fiscal years 1997 and 1998, such demand has diminished as the year 2000 approaches since services to remediate year 2000 issues must be completed in a timely manner and lead times required to complete systems implementations preclude system replacement as a timely solution to the year 2000 issue as the millennium nears. Given the lack of precedent for an issue of this magnitude, the Company's ability to accurately forecast the impact of the year 2000 issue on quarter to quarter revenue achievement is limited. Additionally, as the year 2000 approaches, customers have been slowing down computer software purchases as they devote more time to preparing the testing of their systems for year 2000 readiness, rather than evaluating and implementing new systems. Since a significant part of the Company's business results from software licensing, the Company's business is characterized by a high degree of operating leverage. The Company's expense levels are based, in significant part, on the Company's expectations as to future revenues and are therefore relatively fixed in the short term. If software licensing revenues do not meet expectations, net income is likely to be disproportionately adversely affected. There can be no assurance that the Company will be able to increase or even maintain its current level of profitability on a quarterly or annual basis in the future. It is therefore possible that in one or more future quarters the Company's operating results will be below expectations. In such event, the price of the Company's common stock would likely be adversely affected. The success of the Company's business is dependent upon certain key management, sales, and technical personnel. In addition, the Company believes that to succeed in the future it will be required to continue to attract, retain, and motivate additional talented and qualified management, sales, and technical personnel. Competition for hiring such personnel in the information technology industry is intense and demand for such employees has, to date, exceeded supply. The Company from time to time experiences difficulty in locating candidates with appropriate qualifications. There can be no assurance that the Company will be able to retain its key employees or that it will be able to continue to attract, assimilate, and retain other skilled management, sales, and technical personnel. The loss of certain of its existing key personnel or the inability to attract and retain additional qualified employees in the future could have a material adverse effect on the Company's business, operating results, and financial condition. The application software industry is characterized by intense competition, rapid technological advances, changes in customer requirements, product introductions, and evolving industry standards. The Company believes that its future success will depend on its ability to compete successfully and to continue to develop and market new products and enhancements cost-effectively, which will necessitate continued investment in research and development and sales and marketing. There can be no assurance that the Company's existing products will not be rendered obsolete or non-competitive by new industry standards or changing technology, that the Company will be able to develop and market new products successfully, or that the Company's new product offerings will be accepted by its markets. Furthermore, programs as complex as those offered by the Company may contain undetected errors or bugs when they are first introduced or as new versions are released. There can be no assurance that, despite testing by the Company and by third-party test sites, errors will not be found in new product offerings, with the possible result of unanticipated costs and delays in market acceptance of these products. Certain of the Company's contracts are subject to fiscal funding clauses, which provide that in the event of budgetary constraints, the client is entitled to reduce the level of services to be provided by the Company with a corresponding reduction in the fee to be paid by the client, or in certain circumstances, to terminate the services altogether. While the Company has not been impacted materially by early terminations or reductions in service from the use of fiscal funding provisions in the past, there can be no assurance that such provisions will not give rise to early terminations or reductions of service in the future. If clients of the Company representing a substantial portion of the Company's revenues were to invoke the fiscal funding provisions of their outsourcing services contracts, the Company's results of operations could be adversely affected. The Company provides software-related services, including systems implementation and integration services. Services are generally provided under time and materials contracts and revenue is recognized as the services are provided. In some circumstances, services are provided under fixed price arrangements in which revenue is recognized on the percentage-of-completion method. Revisions in estimates of costs to complete are reflected in operations in the period in which facts requiring those revisions become known. Other factors that could affect the Company's future operating results include the effect of publicity on demand for the Company's products and services; general economic and political conditions; continued market acceptance of the Company's products and services; the timing of services contracts and renewals; continued competitive and pricing pressures in the marketplace; new product introductions by the Company's competitors; and the Company's ability to complete fixed-price contracts profitably. Year 2000 In the past, many information technology systems were designed with two-digit year codes that did not recognize century fields. As a result, these technology systems may not function or may give incorrect results during the periods surrounding the year 2000. The Company has a company-wide year 2000 team to identify and resolve year 2000 issues associated with the Company's internal information technology (IT) systems, internal non-IT systems, material third party relationships, and the products and services sold by the Company. The Company's year 2000 readiness program includes: corporate awareness, adoption of year 2000 standards, inventory, assessment, remediation, validation testing, and contingency planning. The Company has identified its main internal IT systems and expects to complete remediation of needed year 2000 related modifications by September 1999 and plans to continue testing through the remainder of calendar 1999. The Company is assessing its internal non-IT systems and expects to complete needed modifications and testing of these systems by mid 1999. Also, the Company has completed its evaluation of third party relationships for year 2000 issues. The Company has designed the most current versions of its products to be year 2000 ready. The Company is communicating with its customers the status of the Company's products relating to year 2000. For products that were identified as needing updates to address year 2000 issues, the Company has completed the updates to most of these products, and has made the updates available to customers in 1998 and in early 1999. The Company expects to complete the few remaining minor product updates in May 1999. Some of the Company's customers are using product versions that the Company will not support for year 2000 issues; the Company is encouraging these customers to migrate to current product versions that are year 2000 ready. Also, in certain client outsourcing and services contracts, the Company is evaluating year 2000 issues for its clients' computing environments and implementing year 2000 related remediations. Some of this client remediation effort has been completed in 1998 with the remainder of the client remediation effort planned throughout 1999. The Company is currently in the process of developing contingency plans to deal with issues which may arise in 1999 and 2000. The focus of this effort is to identify the potential risks associated with mission critical functions and then to develop appropriate contingency plans. Such planning is complicated by the risk of multiple year 2000 problems and the fact that many of the Company's risks reside with outside parties who may not successfully address their own risks. The areas of planning include: expected increases in customer upgrade and support activities, problems caused by customer delays in implementing Company or third-party upgrades, possible disruptions in the Company's external support systems and internal systems, employee matters, identification of manual "work-arounds" for software and hardware failures, substitution of hardware and software systems, and test exercises of contingency planning elements. The Company expects to complete its year 2000 contingency plans by August 1999. The Company has funded its year 2000 program from operating cash flows and has not separately accounted for these costs in the past. The Company has and will continue to incur additional amounts related to the year 2000 program for administrative personnel to manage the project and for technical support for its products, services, and internal IT systems. The Company believes that the vast majority of these costs are not incremental to the Company but represent a reallocation of existing resources and does not believe that these costs have been or are expected to be material to the Company's financial position. The Company believes that necessary modifications to its products will be made on a timely basis. However, there can be no guarantee that one or more of the Company's current products do not contain year 2000 date issues that may result in material costs to the Company. Additionally, where the Company is evaluating year 2000 issues for client outsourcing and services contracts, there can be no assurances that all year 2000 issues will be identified and remediated and it is possible that the Company may experience increased expenses in addressing these issues. The most reasonably likely worst case scenarios would include: issues originating from clients who do not migrate to current product releases or who experience other year 2000 related problems, corruption of data contained in the Company's internal IT systems, and failure of infrastructure services provided by government agencies and other third parties (electricity, banking services, phone service, water systems, internet services, etc.). It is possible that any such issue could have a material adverse impact on the Company's operations and financial results. Some commentators have stated that a significant amount of litigation will arise out of year 2000 compliance issues. Because of the unprecedented nature of such litigation, it is uncertain whether or to what extent the Company may be affected by it. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK There have been no material changes in quantitative or qualitative disclosures for fiscal year 1999. Reference is made to Item 7A in the Annual Report on Form 10-K for the year ended September 30, 1998. (PAGE) SYSTEMS & COMPUTER TECHNOLOGY CORPORATION AND SUBSIDIARIES PART II Item 1. Legal Proceedings On October 4, 1995, John J. Wallace filed a purported class action lawsuit in the United States District Court for the Eastern District of Pennsylvania against the Company; Michael J. Emmi, Chairman of the Board, President and Chief Executive Officer of the Company; Michael D. Chamberlain, Senior Vice President and a director of the Company; and Eric Haskell, Senior Vice President, Finance & Administration, Treasurer, and Chief Financial Officer of the Company. The plaintiff filed an amended complaint on November 28, 1995, and a second amended complaint on February 3, 1997. The class period alleged is from June 5, 1995 through October 2, 1995. The second amended complaint sought damages in unspecified amounts as well as equitable relief. In April 1996, the Company's Motion to Dismiss the amended complaint was granted in part and denied in part. In September 1997, the Company's Motion to Dismiss the second amended complaint was granted in part and denied in part, and plaintiff was permitted to pursue a claim that defendants violated section 10(b)of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder to the extent that it alleges a failure to make certain disclosures in the Company's Form 10-Q for the third quarter of fiscal 1995. On December 3, 1997, the Court approved a Stipulation of Dismissal and Entry of Final Judgment filed by the parties pursuant to which all remaining claims were dismissed with prejudice and the Court entered a final judgment in favor of the Company as to all remaining claims in the action. On December 30, 1997, the plaintiff filed a notice of appeal with respect to those claims which were dismissed pursuant to the Company's Motions to Dismiss. On October 28, 1998, the Company and counsel for the plaintiff reached an agreement in principle to settle the matter for $750,000. A settlement class must be determined by the United States District Court for the Eastern District of Pennsylvania and the overall settlement must be approved by the Court. Item 4. Submission of Matters to a Vote of Security Holders At the Company's Annual Meeting of Shareholders held on February 26, 1999, Michael J. Emmi and Allen R. Freedman were reelected as directors of the Company for a term expiring at the Company's 2002 Annual Meeting of Shareholders. There were 26,350,738 votes cast in favor of the election of Mr. Emmi and 667,597 votes withheld from his election, and there were 26,402,417 votes cast in favor of the election of Mr. Freedman and 615,918 votes withheld from his election. The amendment to the Company's 1994 Non-Employee Director Stock Option Plan was approved, and it was filed as Exhibit 10.1 of the Company's Form 10Q for the quarterly period ended December 31, 1998. There were 25,277,926 votes cast in favor of approval of the amendment, 1,618,296 votes against, 122,113 abstained. Item 5. Other Information On March 18, 1999, the Company's Board of Directors adopted amendments to the Company's By-laws which added an advance notice provision for stockholder nominations of candidates for the Board of Directors and for the proposal by a stockholder of any other matter to be voted upon at a stockholders meeting. Pursuant to the advance notice provision, in order for nominations for director candidates or other business to properly be presented at the annual meeting, notice must be received by the Company generally between 90 days and 60 days before the anniversary of the prior year's annual meeting of stockholders, and the notice must contain the information required in accordance with the advance notice provision in the By-laws. For the Company's annual meeting of stockholders to be held in 2000, notice of a stockholder nomination for candidates for the Board of Directors or a stockholder proposal must be received by the Company between October 28, 1999 and November 27, 1999. Item 6 (a). Exhibits Exhibit 3.3 - Amendment to Bylaws adopted March 18, 1999 Exhibit 27 - Financial Data Schedule Item 6 (b). Reports on Form 8-K The registrant did not file any current reports on Form 8-K during the three months ended March 31, 1999. (PAGE) SYSTEMS & COMPUTER TECHNOLOGY CORPORATION AND SUBSIDIARIES 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. SYSTEMS & COMPUTER TECHNOLOGY CORPORATION (Registrant) Date: 05/14/99 /s/ Eric Haskell ________________________________ Eric Haskell Senior Vice President, Finance and Administration, Treasurer and Chief Financial Officer EX-3 2 SYSTEMS & COMPUTER TECHNOLOGY CORPORATION AMENDMENTS TO THE BYLAWS ADOPTED MARCH 18, 1999 (to adopt advance notice procedures for shareholder nominations and proposals) Section 7 of Article II of the bylaws of the Corporation is amended and restated so as to read in its entirety as follows: "Section 7. Notice of Stockholder Business and Nominations. (a) Annual Meetings of Stockholders. (i) Nominations of persons for election to the Board of Directors of the Corporation and the proposal of business to be considered by the stockholders at an annual meeting of stockholders may be made (A) pursuant to the Corporation's notice of meeting, (B) by or at the direction of the Board of Directors or (C) by any stockholder of the Corporation who was a stockholder of record at the time of giving of notice provided for in this Section 7, who is entitled to vote at the meeting and who complies with the notice procedures set forth in this Section 7. (ii) For nominations or other business to be properly brought before an annual meeting by a stockholder pursuant to clause (C) of paragraph (a)(i) of this Section 7, the stockholder must have given timely notice thereof in writing to the Secretary of the Corporation and such other business must otherwise be a proper matter for stockholder action. To be timely, a stockholder's notice must be received by the Secretary at the principal executive offices of the Corporation not later than the 60th day nor earlier than the 90th day prior to the first anniversary of the preceding year's annual meeting; provided, however, that in the event that the date of the annual meeting is more than 30 days before or more than 60 days after such anniversary date, notice by the stockholder must be so received not earlier than the 90th day prior to the annual meeting and not later than the later of the 60th day prior to the annual meeting or the 15th day following the day on which public announcement of the date of the meeting is first made by the Corporation. In no event shall the public announcement of an adjournment or postponement of an annual meeting commence a new time period for the giving of a stockholder's notice as described above. Notwithstanding the foregoing, if the Corporation is required under Rule 14a-8 under the Securities Exchange Act of 1934 ("Exchange Act") to include a stockholder's proposal in its proxy statement, such stockholder shall be deemed to have given timely notice for purposes of this paragraph (a)(ii) with respect to such proposal. A stockholder's notice shall set forth (A) as to each person whom the stockholder proposes to nominate for election or reelection as a director, all information relating to such person that is required to be disclosed in solicitations of proxies for election of directors in an election contest, or is otherwise required, in each case pursuant to Regulation 14A under the Exchange Act and Rule 14a-11 thereunder (including such person's written consent to being named in the proxy statement as a nominee and to serving as a director if elected); (B) as to any other business that the stockholder proposes to bring before the meeting, a brief description of the business desired to be brought before the meeting, the reasons for conducting such business at the meeting and any material interest in such business of such stockholder and the beneficial owner, if any, on whose behalf the proposal is made; and (C) as to the stockholder giving the notice and the beneficial owner, if any, on whose behalf the nomination or proposal is made (1) the name and address of such stockholder, as they appear on the Corporation's books, and of such beneficial owner; (2) the class and number of shares of the Corporation which are owned beneficially and of record by such stockholder and such beneficial owner; and (3) a representation that such stockholder and beneficial owner intend to appear in person or by proxy at the meeting. (iii) Notwithstanding anything in paragraph (a)(ii) of this Section 7 to the contrary, in the event that the number of directors to be elected to the Board of Directors of the Corporation at the annual meeting is increased pursuant to an act of the Board of Directors of the Corporation and there is no public announcement by the Corporation naming all of the nominees for director or specifying the size of the increased Board of Directors on or before the date which is 15 days before the latest date by which a stockholder may timely notify the Corporation of nominations or other business to be brought by a stockholder in accordance with paragraph (a)(ii) of this Section 7, a stockholder's notice required by this Section 7 shall also be considered timely, but only with respect to nominees for any new positions created by such increase, if it shall be received by the Secretary at the principal executive offices of the Corporation not later than the 15th day following the day on which such public announcement is first made by the Corporation. (b) Special Meetings of Stockholders. Only such business shall be conducted at a special meeting of stockholders as shall have been brought before the meeting pursuant to the Corporation's notice of meeting. Nominations of persons for election to the Board of Directors may be made at a special meeting of stockholders at which directors are to be elected pursuant to the Corporation's notice of meeting (i) by or at the direction of the Board of Directors or (ii) provided that the Board of Directors has determined that directors shall be elected at such meeting, by any stockholder of the Corporation who is a stockholder of record at the time of giving of notice provided for in this paragraph (b), who shall be entitled to vote at the meeting and who complies with the notice procedures set forth in this paragraph (b). In the event the Corporation calls a special meeting of stockholders for the purpose of electing one or more directors to the Board of Directors, any such stockholder may nominate a person or persons (as the case may be), for election to such position(s) as specified in the Corporation's notice of meeting, if the stockholder's notice required by paragraph (a)(ii) of this Section 7 shall be received by the Secretary at the principal executive offices of the Corporation not earlier than the 90th day prior to such special meeting and not later than the later of the 60th day prior to such special meeting or the 15th day following the day on which public announcement is first made of the date of the special meeting and of the nominees proposed by the Board of Directors to be elected at such meeting. In no event shall the public announcement of an adjournment or postponement of a special meeting commence a new time period for the giving of a stockholder's notice as described above. (c) General. (i) Only such persons who are nominated in accordance with the procedures set forth in this Section 7 shall be eligible to serve as directors and only such business shall be conducted at a meeting of stockholders as shall have been brought before the meeting in accordance with the procedures set forth in this Section 7. Except as otherwise provided by law, the Certificate of Incorporation or these bylaws, the Chairman of the meeting shall have the power and duty to determine whether a nomination or any business proposed to be brought before the meeting was made or proposed, as the case may be, in accordance with the procedures set forth in this Section 7 and, if any proposed nomination or business is not in compliance with this Section 7, to declare that such defective proposal or nomination shall be disregarded. (ii) For purposes of this Section 7, "public announcement" shall mean disclosure in a press release reported by the Dow Jones News Service, Associated Press or comparable national news service or in a document publicly filed by the Corporation with the Securities and Exchange Commission pursuant to Section 13, 14 or 15(d) of the Exchange Act. Nothing in this Section 7 shall be deemed to affect any rights of the holders of any series of Preferred Stock to elect directors." EX-27 3
5 The schedule contains summary financial information extracted from the March 31, 1999 financial statements and is qualified in its entirety by reference to such financial statements. 0000707606 SYSTEMS & COMPUTER TECHNOLOGY CORP. 6-MOS SEP-30-1999 MAR-31-1999 4,748,000 0 151,267,000 4,238,000 0 192,338,000 105,851,0000 38,824,000 316,117,000 67,940,000 78,200,000 0 0 364,000 169,613,000 316,117,000 225,539,000 226,847,000 154,273,000 209,463,000 0 0 2,355,000 15,029,000 6,391,000 8,638,000 0 0 0 8,638,000 0.26 0.26
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