-----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, am/x2hyZrUNXpSBzhNL8LkciGPsXm+sptdb0mTmQT9HdwhgeePAfTPoVx8A32rjm LXXtIj8VxjbTozexwJMMPw== 0000718976-95-000013.txt : 19950908 0000718976-95-000013.hdr.sgml : 19950908 ACCESSION NUMBER: 0000718976-95-000013 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 3 CONFORMED PERIOD OF REPORT: 19950731 FILED AS OF DATE: 19950907 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: BGS SYSTEMS INC CENTRAL INDEX KEY: 0000718976 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 042559993 STATE OF INCORPORATION: MA FISCAL YEAR END: 0131 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-12192 FILM NUMBER: 95570809 BUSINESS ADDRESS: STREET 1: 128 TECHNOLOGY CENTER CITY: WALTHAM STATE: MA ZIP: 02254 BUSINESS PHONE: 6178910000 MAIL ADDRESS: STREET 1: 128 TECHNOLOGY CENTER CITY: WALTHAM STATE: MA ZIP: 02254-9111 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 [X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended July 31, 1995 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 No. 0-12192 BGS SYSTEMS, INC. (Exact name of registrant as specified in its charter) Massachusetts 04-2559993 (State of Incorporation) (I.R.S. Employer Identification No.) 128 Technology Center Waltham, Massachusetts 02254 (Address of principal executive offices) Registrant's telephone number, including area code: (617) 891-0000 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 Number of shares outstanding of each of the issuer's classes of common stock. Common stock, $.10 par value Shares outstanding @ July 31, 1995..........................3,214,849 BGS Systems, Inc. Table of Contents Part I Financial Information: Item 1 - Financial Statements: Balance Sheets Statements of Income Statements of Cash Flows Notes to Financial Statements Item 2 - Management's Discussion and Analysis of Financial Condition and Results of Operations Part II Other Information: Item 4 - Submission of Matters to a Vote of Security Holders Item 6 - Exhibits and Reports on Form 8-K Signatures
Part I Financial Information Item 1. Financial Statements BGS SYSTEMS, INC. CONSOLIDATED BALANCE SHEETS (Unaudited) July 31, January 31, 1995 1995 ---------------------------------- ASSETS Current Assets: Cash and cash equivalents $13,660,605 $ 9,084,622 Marketable securities 5,645,000 6,440,000 Accounts receivable, less allowances of $365,000 at July 31, 1995 and January 31, 1995 for doubtful accounts 7,637,266 12,458,895 Prepaid expenses and other assets 1,034,756 768,125 Costs and estimated earnings in excess of billings on uncompleted contracts - 335,640 Deferred income taxes 201,031 201,031 Federal and state income taxes receivable Total current assets 28,178,658 29,288,313 Capitalized software 525,000 275,000 Equipment: Furniture and fixtures 1,593,512 1,537,295 Computer equipment 6,088,003 5,473,725 7,681,515 7,011,020 Less accumulated depreciation 5,939,168 5,481,522 1,742,347 1,529,498 Total Assets $30,446,005 $31,092,811 ============ ============
LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable $ 1,052,978 $ 1,247,818 Accrued expenses 414,048 1,005,153 Accrued compensation and employee benefits 975,887 1,542,835 Deferred revenue 11,661,374 13,129,025 Federal and state income taxes payable 263,242 429,380 Total current liabilities 14,367,529 17,354,211 Deferred income taxes 16,057 16,057 Stockholders' equity: Common stock, $.10 par value-authorized 10,000,000 shares; issued and outstanding 3,214,849 shares 321,486 321,486 Capital in excess of par value 14,366,949 14,441,965 Retained earnings 4,327,961 2,109,638 Equity adjustment from foreign currency translation (588,650) (511,907) 18,427,746 16,361,182 Less cost of 101,190 shares (83,264 shares in 1994) of common stock in treasury 2,365,327 2,638,639 Total stockholders' equity 16,062,419 13,722,543 Total liabilities and stockholders' equity $30,446,005 $31,092,811 ============ ============
BGS SYSTEMS, INC. CONSOLIDATED STATEMENTS OF INCOME (Unaudited) Three Months Ended Six Months Ended July 31, July 31, 1995 1994 1995 1994 REVENUES: License fees $ 5,087,888 $ 3,983,773 $ 9,196,818 $ 7,511,505 Maintenance fees 4,243,678 3,735,346 8,421,293 7,412,319 Other 375,818 450,942 1,010,255 970,729 ------------ ------------ ------------ ------------ 9,707,384 8,170,061 18,628,366 15,894,553 ------------ ------------ ------------ ------------- COSTS AND EXPENSES: Sales and marketing 3,065,767 2,274,620 5,807,723 4,560,233 General and administrative 883,698 842,125 1,725,950 1,585,444 Product development and maintenance 3,151,670 2,622,803 5,940,654 4,918,216 ------------ ------------ ------------ ------------ 7,101,135 5,739,548 13,474,327 11,063,893 ------------ ------------ ------------ ------------ OPERATING INCOME 2,606,249 2,430,513 5,154,039 4,830,660 Investment income: Interest income, net 215,302 184,208 414,777 309,889 Other income 92,352 25,825 174,055 116,157 ------------ ------------ ------------ ----------- 307,654 210,033 588,832 426,046 ------------ ------------ ------------ ----------- INCOME BEFORE TAXES 2,913,903 2,640,546 5,742,871 5,256,706 Income taxes 1,017,281 870,994 1,973,566 1,749,636 NET INCOME $ 1,896,622 $ 1,769,552 $ 3,769,305 $ 3,507,070 ============ ============ ============ ============ Net income per share $ .61 $ .57 $ 1.21 $ 1.12 ============ ============ ============ ============ Weighted average number of shares outstanding 3,123,413 3,108,176 3,119,817 3,126,498 ============ ============ ============ ============ Net income per share: The computations of income per share are based on the weighted average number of shares of Common Stock outstanding during the periods, including the dilutive effect of stock options.
BGS SYSTEMS, INC. CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) July 31, 1995 1994 ------------------------------- OPERATING ACTIVITIES: Net income $ 3,769,305 $ 3,507,073 Adjustment to reconcile net income to net cash provided by operating activities: Depreciation 442,930 383,823 Changes in operating assets and liabilities: Accounts receivable 5,155,630 2,299,870 Other current assets (216,516) (4,589,623) Accounts payable and accrued expenses (1,411,764) 112,894 Deferred revenue (1,564,918) (1,200,857) Federal and state income taxes (168,273) 535,244 Foreign currency transaction (107,235) 4,304 ------------ ------------ Net cash provided by operating activities 5,899,159 1,052,728 ------------ ------------ FINANCING ACTIVITIES: Purchases of common stock for treasury 273,312 (1,132,200) Proceeds from issuance of common stock (75,016) 4,700,461 Dividends paid (1,550,982) (1,087,865) ------------ ------------ Net cash used in financing activities (1,352,686) 2,480,396 ------------ ------------ INVESTING ACTIVITIES: Purchases of available-for-sale securities (1,210,000) - Proceeds from maturity of available-for-sale securities 2,005,000 - Additions to capitalized software costs (250,000) Additions to equipment (645,090) (490,687) (Increase) decrease in marketable securities - (449,597) Net cash provided by (used in) investing ------------ ------------ activities (100,090) (940,284) ------------ ------------ Effect of exchange rate changes on cash and cash equivalents 129,600 155,077 Net increase (decrease) in cash and cash equivalents 4,575,983 2,747,917 Cash and cash equivalents at beginning of year 9,084,622 7,109,425 ------------ ------------ Cash and cash equivalents at end of year $13,660,605 $ 9,857,342 ============ ============
BGS SYSTEMS, INC. NOTES TO FINANCIAL STATEMENTS I. Accounting Comments With respect to the unaudited statements for the interim periods included in this report, management of the Company believes that all adjustments necessary for fair presentation of the results for such interim periods have been included. Reference is made to the registrant's Form 10-K Annual Report, filed with the Securities and Exchange Commission on April 17, 1995, which incorporates the financial statements and notes thereto, including a summary of significant accounting policies, for the fiscal years ended January 31, 1995 and January 31, 1994. The results for the interim periods are not necessarily indicative of the results for the entire year. Part I-Item 2 BGS SYSTEMS, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Material Changes in Results of Operations Operating revenues for the first six months of fiscal year 1996 increased 17% over the prior year. Sales of the Company's newer UNIX products pushed license fee growth to 22% for the six-month period and 28% for the second quarter. Sales of the Company's Datacenter and Visualizer products kept pace with the prior year's demand. License fee revenue from the Company's international operations showed uneven improvement over the first quarters results. The Company's United Kingdom and Italian operations both posted strong results which were helped by several large orders, while our German operation continued to underperform. The frequency of large software purchases by the Company's customers continues to impact, either favorably or unfavorably, the performance of one or more of the Company's operating units each quarter, and continues to be of concern because of the increased potential for unevenness in the total revenue of the Company for the foreseeable future. Maintenance fee revenue grew approximately 14% for both periods. While the renewal rate for the Company's newer products exceeds 90%, the Company continues to experience a high degree of nonrenewal for its more mature products. The Company is unsure if the growth experienced in the first two quarters of the current fiscal year in maintenance fee revenue will continue through the balance of the current fiscal year. Several customers who accounted for large sales of new products over the past few years have recently failed to renew large maintenance contracts with the Company. If this were to become a trend, it could adversely impact maintenance revenue in the latter part of the year. An additional concern of the Company is the renewals of the newer UNIX products. The Company is unsure if the renewal of these newer products will follow the model of its more mature product lines. Other revenue for the six-month period was essentially even with the comparable period of the prior fiscal year. For the second quarter, other revenue declined 17% or $75,000 to $376,000 from $451,000 earned for the comparable period of the prior fiscal year. Usually, consulting revenue is earned at a comparable level from quarter to quarter as the Company does not seek to expand this business beyond the immediate requirements of its customers. The level of third party development contract revenue has reached a minimum maintenance level and is not expected to vary significantly over the next few quarters. Aggregate costs and expenses for both the second quarter and the six-month period increased over 20%. Sales and marketing expenses were higher for both periods as a result of increased marketing activity relating to the Company's new products, especially introductory marketing expenses for the UNIX products, and the higher level of commissionable revenue. Product development and maintenance expenses increased approximately 20% for both periods primarily as a result of an increased investment in the development of both new products for distributed systems and the continued porting of the Company's UNIX based products to additional UNIX platforms. This level of expenditure is expected to continue through at least the end of the current fiscal year. Interest income improved in both periods as a result of an increase in both interest rates and in the amount of funds invested. Other income improved as a result of currency exchange gains in the normal course of business. The Company does not enter into any forward exchange contracts. Net income grew approximately 7% for both periods and earnings per share grew 8% for the six-month period and 7% for the second quarter. The effective tax rate for the second quarter and first six months increased slightly to 34% in the current fiscal year from 33% last fiscal year. Material Changes in Financial Condition/Liquidity Cash and marketable securities increased $3,780,000 primarily as a result of the collections of fiscal year 1995 fourth quarter sales and current year earnings. The decrease in accounts receivable from January 31 is primarily due to the collection of outstanding accounts and the lower sales levels in the first and second quarters of the current fiscal year versus the normal increased sales activity during the fourth quarter. The Company's cash resources are considered sufficient to finance the Company's growth in the foreseeable future. BGS SYSTEMS, INC. Part II. OTHER INFORMATION ITEM 4. Submission of Matters to a Vote of Security Holders (a), (c) At the Annual Meeting of Stockholders held on June 13, 1995, the stockholders of the Company voted to fix the number of directors at four and elected Harold S. Schwenk, Jr. to serve as the Class III director for a term of three years. The other directors whose terms continued after the meeting are Jeffrey P. Buzen and Paul R. Duncan (Class I directors whose terms expire at the Annual Meeting of Stockholders in 1996) and Judith N. Goldberg (Class II director whose term expires at the Annual Meeting of Stockholders in 1997). A total of 2,891,809 shares were voted in favor of the election of Dr. Schwenk, with 1,404 votes withheld. In addition, the stockholders of the Company approved the adoption of the 1995 Employee Stock Purchase Plan (the "Employee Stock Purchase Plan") as described in the Company's Proxy Statement (the "Proxy Statement") filed with the Commission on May 8, 1995. A complete description of the Employee Stock Purchase Plan is set forth on Exhibit A to the Proxy Statement which is hereby incorporated by reference. A total of 2,657,050 shares voted in favor of such proposal with 190,344 shares opposed and 45,819 shares abstaining. BGS SYSTEMS, INC. ITEM 6. Exhibits and Reports on Form 8-K (a) Exhibits. The exhibits filed as part of this Form 10-Q are listed on the Exhibit Index immediately preceding such exhibits and are incorporated herein by reference. (b) Form 8-K. The Registrant did not file any reports on Form 8-K during the quarter for which this report is filed. INDEX TO EXHIBITS Exhibits 11 Statement regarding Computation of per share earnings 27 Financial Data Schedule BGS SYSTEMS, INC. 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. BGS Systems, Inc. 128 Technology Center Waltham, Massachusetts 02254 Date: September 7, 1995 By: /s/ Harold S. Schwenk, Jr. --------------------------------- Harold S. Schwenk, Jr. President and Chief Executive Officer Date: September 7, 1995 By: /s/ Normand Bilodeau --------------------------------- Normand Bilodeau Chief Financial Officer EX-11 2
STATEMENT REGARDING COMPUTATIONS OF PER SHARE EARNINGS BGS SYSTEMS, INC. For the quarter ended July 31, 1995 1994 -------------------------- PRIMARY Average shares outstanding 3,107,312 3,092,382 Net effect of stock options, if dilutive, based on the treasury stock method using the average market price 16,101 15,794 ----------- ----------- Total 3,123,413 3,108,176 ----------- ----------- Net income $ 1,896,622 $ 1,769,552 =========== =========== Net income per share $ .61 $ .57 =========== ===========
For the six months ended July 31, 1995 1994 -------------------------- PRIMARY Average shares outstanding 3,104,638 3,110,484 Net effect of stock options, if dilutive, based on the treasury stock method using the average market price 15,179 16,014 ----------- ----------- Total 3,119,817 3,126,498 ----------- ----------- Net income $ 3,769,305 $ 3,507,070 =========== =========== Net income per share $ 1.21 $ 1.12 =========== ===========
EX-27 3
5 0000718976 BGS SYSTEMS, INC. 1 U.S. DOLLARS 6-MOS JAN-31-1996 FEB-01-1995 JUL-31-1995 1 13,660,605 5,645,000 7,637,266 365,000 0 28,178,658 7,681,515 5,939,168 30,446,005 14,367,529 0 321,486 0 0 15,740,933 30,446,005 9,196,818 18,628,366 12,687,712 13,474,327 0 0 0 5,742,871 1,973,566 3,769,305 0 0 0 3,769,305 1.21 1.21
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