-----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, PoTeE6YzukbcIdjFODOxsEr991heckbmyGvwpMS5Omqno9EJni7+RPYDSXNUxbrq 8J1et+sr44QL9FmSsJkv/A== 0000950005-96-000282.txt : 19960517 0000950005-96-000282.hdr.sgml : 19960517 ACCESSION NUMBER: 0000950005-96-000282 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960331 FILED AS OF DATE: 19960515 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: BOOLE & BABBAGE INC CENTRAL INDEX KEY: 0000734394 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 941651571 STATE OF INCORPORATION: DE FISCAL YEAR END: 0930 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-13258 FILM NUMBER: 96565037 BUSINESS ADDRESS: STREET 1: 3131 ZANKER ROAD CITY: SAN JOSE STATE: CA ZIP: 95134 BUSINESS PHONE: 4085263000 MAIL ADDRESS: STREET 1: 3131 ZANKER ROAD CITY: SAN JOSE STATE: CA ZIP: 95134 10-Q 1 FORM 10-Q UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q (Mark One) [ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended March 31, 1996 -------------- 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 0-132-58 ---------- BOOLE & BABBAGE, INC. ---------------------------------------------- (Exact name of Registrant as specified in its charter) Delaware 94- 1651571 ---------- ----------- (State or other jurisdiction of (I.R.S. Employer Incorporation or organization) Identification No.) 3131 Zanker Road, San Jose, California 95134-1933 ------------------------------------------------- (Address of principal executive offices) Registrant's Telephone number, including area code: 408-526-3000 --------------- 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___ 11,034,364 shares of common stock of the Registrant were outstanding as of April 30, 1996. BOOLE & BABBAGE, INC. INDEX
Page No. Part I FINANCIAL INFORMATION Item 1. FINANCIAL STATEMENTS Consolidated Balance Sheets March 31, 1996 and September 30, 1995 1 Consolidated Statements of Income Three and Six Months Ended March 31, 1996 and 1995 2 Consolidated Statements of Cash Flows Six Months Ended March 31, 1996 and 1995 3 Notes to Consolidated Financial Statements 4-5 Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Three and Six Months Ended March 31, 1996 and 1995 6-11 Part II OTHER INFORMATION Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS 12 Item 6. EXHIBITS AND REPORTS ON FORM 8-K 12 Signatures 13
Boole & Babbage, Inc. Consolidated Balance Sheets (Amounts in thousands except shares) (March 31, 1996 unaudited)
March 31, September 30, 1996 1995 -------- -------- Assets Current assets: Cash and cash equivalents $23,686 $22,340 Short-term investments 15,489 15,800 Accounts receivable, net 23,241 27,293 Installment and other receivables, net 40,369 28,066 Deferred tax asset 5,720 5,810 Prepaid expenses and other current assets 5,612 4,967 -------- -------- Total current assets 114,117 104,276 Purchased and internally developed software, net 11,823 12,278 Equipment, furniture and leasehold improvements, net 6,963 7,341 Long-term installment and other receivables 37,406 32,223 Long-term deferred tax asset 4,843 4,843 Costs in excess of net assets of purchased businesses, net 673 687 Other assets 3,120 2,260 -------- -------- Total assets $178,945 $163,908 ======== ======== Liabilities and Stockholders' Equity Current liabilities: Accounts payable $7,726 $6,595 Accrued payroll expense 7,278 7,149 Other accrued liabilities 17,209 18,133 Short-term borrowings 791 400 Notes payable due within one year 271 513 Capital lease obligations due within one year 977 1,348 Deferred maintenance revenue 42,772 40,180 -------- -------- Total current liabilities 77,024 74,318 Notes payable due after one year 635 663 Capital lease obligations due after one year 418 683 Deferred maintenance revenue due after one year 21,632 18,057 Stockholders' equity: Preferred stock, 2,000,000 shares authorized, $.001 par value, none issued -- -- Common stock, $.001 par value, authorized--15,000,000 shares; issued-- 11,683,397 (11,476,050 at September 30, 1995) 11 11 Additional paid-in capital 32,434 30,844 Retained earnings 51,290 42,672 Unrealized gain (loss) on marketable securities 244 132 Foreign currency translation adjustment 312 1,013 Less treasury stock, 708,325 shares (683,325 at September 30, 1995), at cost (5,055) (4,485) ------ ------ Total stockholders' equity 79,236 70,187 ------ ------ Total liabilities and stockholders' equity $178,945 $163,908 ======== ======== See accompanying notes.
1 Boole & Babbage, Inc. Consolidated Statements of Income (Amounts in thousands, except net income per share) (Unaudited)
Three Months Ended Six Months Ended March 31, March 31, ---------------------- ---------------------- 1996 1995 (a) 1996 1995(a) ------- ------- ------- ------- Revenue: New product revenue $21,668 $18,787 $43,142 $39,526 Maintenance fees and other 18,997 18,466 37,642 36,300 ------- ------- ------- ------- Total revenue 40,665 37,253 80,784 75,826 ------- ------- ------- ------- Costs and expenses: Cost of revenue 8,004 7,310 15,412 14,346 Product development, net 4,540 3,842 8,914 8,000 Sales and marketing 19,814 18,255 39,496 37,286 General and administrative 3,851 3,792 7,702 7,969 ------- ------- ------- ------- Total costs and expenses 36,209 33,199 71,524 67,601 ------- ------- ------- ------- Operating income 4,456 4,054 9,260 8,225 Interest and other income, net 1,408 1,116 2,714 1,747 ------- ------- ------- ------- Income before provision for income taxes 5,864 5,170 11,974 9,972 Provision for income taxes 1,530 1,600 3,355 3,090 Net income $4,334 $3,570 $8,619 $6,882 ====== ====== ====== ====== Net income per share (b) $ 0.36 $ 0.31 $ 0.72 $ 0.60 ====== ====== ====== ====== Shares used in per share calculations(b) 11,975 11,550 11,950 11,425 ====== ====== ====== ====== (a) Reflects reclassifications to conform to current year's presentation. (b) Per share data and number of shares reflect a 3-for-2 stock split which became effective on December 6, 1995.
-2- Boole & Babbage, Inc. Consolidated Statements of Cash Flows (Amounts in thousands) (Unaudited)
Six Months Ended March 31, ------------------------ 1996 1995 ------- ------- Cash flows from operating activities: Net income $8,619 $6,882 Adjustments to reconcile net income to net cash provided (used) by operating activities: Depreciation, amortization and write-off of capitalized software 4,693 4,804 Stock issued under compensatory stock plans 63 62 Minority interest -- (61) Changes in operating assets and liabilities excluding the effect of acquisitions: Accounts receivable and installment and other receivables (14,994) (5,164) Prepaid expenses and other assets (682) (735) Accounts payable and accrued expenses 911 (236) Deferred maintenance revenue 7,204 5,049 ------- ------- Net cash provided by operating activities 5,814 10,601 ------- ------- Cash flows from investing activities: Purchases of equipment, furniture and leasehold improvements (1,735) (1,796) Payments for capitalized software (1,980) (1,504) Net sales of short-term investments 311 -- Investment in equity securities (855) (29) ------- ------- Net cash used for investing activities (4,259) (3,329) ------- ------- Cash flows from financing activities: Proceeds from issuance of common stock 1,527 1,246 Treasury stock purchase (570) -- Payments on notes payable (262) (491) Borrowings under line of credit 390 -- Payments on capital leases (902) (1,010) ------- ------- Net cash provided by (used for) financing activities 183 (255) ------- ------- Effect of exchange rate changes on cash (392) 622 ------- ------- Net increase in cash and cash equivalents 1,346 7,639 Cash and cash equivalents at beginning of period 22,340 34,019 ------- ------- Cash and cash equivalents at end of period $23,686 $41,658 ======= ======= Supplemental disclosures of cash flow information: Cash paid during the year for: Interest $254 $588 Income taxes, net $3,030 $1,247 Supplemental disclosures of noncash investing and financing activities: A capital lease obligation of $265,000 was incurred in 1996 for the purchase of equipment. See accompanying notes
3 BOOLE & BABBAGE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 1. Basis of Presentation The accompanying consolidated financial statements include the accounts of all subsidiaries after the elimination of all significant inter-company items and transactions. A summary of the significant accounting policies of the Company is included in Note 1 of Notes to Consolidated Financial Statements in the Company's annual report on Form 10-K for the year ended September 30, 1995. These consolidated financial statements should be read in conjunction with those notes. The consolidated financial information at March 31, 1996 and for the three- and six- month periods ended March 31, 1996 and 1995 is unaudited. The statements in this report include all adjustments of a normal recurring nature. In the opinion of management, these adjustments are necessary for a fair statement of the interim results for the periods presented. The interim results are not necessarily indicative of the results for the full year. 2. Net Income Per Share Net income per common share is computed by adding to the weighted average number of common shares outstanding during the period the number of dilutive common shares that would be issuable upon the exercise of outstanding options using the treasury stock method of computation. Fully diluted net income per share is not disclosed because it is not materially different from primary net income per share.
3 mos. ended Mar. 31, 6 mos. ended Mar 31, (Amounts in thousands, except -------------------- -------------------- net income per share) 1996 1995 1996 1995 ---- ---- ---- ---- Primary: (a) Common shares outstanding 10,968 10,538 10,921 10,500 Employee stock option plans 1,007 1,012 1,029 925 ----- ----- ----- --- 11,975 11,550 11,950 11,425 ====== ====== ====== ====== Net income $4,334 $3,570 $8,619 $6,882 ====== ====== ====== ====== Net income per share $.36 $.31 $.72 $.60 ==== ==== ==== ==== (a) Reflects a 3-for-2 stock split effective December 6, 1995.
4 BOOLE & BABBAGE, INC. NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) 3. Contingencies The Company is involved in certain legal actions and claims arising in the ordinary course of business. Management believes that such litigation and claims will be resolved without material adverse effect on the Company's financial position or results of operations. 4. Reclassifications Beginning in the first quarter of 1996, changes have been made in the classification of revenue and operating expense in the Consolidated Statements of Income. 1995 has been reclassified to conform to these changes. "New Product Revenue" consists of licensing of core software products (net of the bundled maintenance) plus consulting and education services related to those products. "Maintenance Fees and Other" consists of revenue from maintenance, hardware sales, computer services and royalties from IBM related to the jointly developed CICS product now being sold by IBM. "Cost of Revenue" includes the cost of maintenance support as well as royalties paid to independent software authors, amortization of purchased and internally developed software, the cost of hardware associated with certain sales of client/server products and costs related to operating the computer services division. "Product Development, Net" consists of development costs less costs capitalized under FAS 86. 5 BOOLE & BABBAGE, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS RESULTS OF OPERATIONS: When used in this discussion, the words "anticipate," "estimate," "project" and similar expressions are intended to identify forward-looking statements. Such statements are subject to certain risks and uncertainties, including those discussed below and in the Company's Form 10-K for the year ended September 30, 1995, that could cause actual results to differ materially from those projected. Readers are cautioned not to place undue reliance on these forward looking statements, which speak only as of the date hereof. The Company undertakes no obligation to publicly release the result of any revisions to these forward-looking statements which may be made to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events. REVENUES: The Company derives its revenues primarily from the licensing of computer software programs, consulting and education services, and the sales of software maintenance services. Total revenue for the 3 and 6 months ended March 31, 1996 and 1995 increased over the same period in the prior year by 9.2% and 6.5%, respectively.
% of Revenue % of Revenue ------------ ------------ 3 Mo. ended Mar. 31, 6 Mo. ended Mar. 31, -------------------- -------------------- 1996 1995 Y/Y chg 1996 1995 Y/Y chg ----------- ----------- ----------- ----------- ----------- ----------- New product revenue 53.3% 50.4% 15.3% 53.4% 52.1% 9.1% Maintenance fees and other 46.7% 49.6% 2.9% 46.6% 47.9% 3.7% ----------- ----------- ----------- ----------- ----------- ----------- Total 100.0% 100.0% 9.2% 100.0% 100.0% 6.5% ----------- ----------- ----------- ----------- ----------- -----------
New Product Revenue: The Company licenses its products to customers for use on their computer systems and performs consulting and educational services related to those products. As is common in the industry, more than 50% of the Company's license revenue is derived from transactions that close in the last month of a quarter, which can make quarterly revenues difficult to forecast. And, since operating expenses are relatively fixed, failure to achieve projected revenues could materially and adversely affect the Company's operating results. This, in turn, could result in an immediate and adverse effect on the market price of the Company's stock. 6 BOOLE & BABBAGE, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Products: Client/Server products grew 85.3% and 68.7% and accounted for 23.3% and 21.1% of new product revenue for the 3 and 6 months ended March 31, 1996, respectively. The Company anticipates that this group will continue to show high growth rates for the remainder of fiscal 1996 as new products such as Ensign and Stage3 begin to produce greater revenue. However, these two new products have taken longer to rollout than originally planned and the Company competes with certain firms who have greater resources along with products already in the marketplace. In addition, the Company is dependent on the client/server market developing at a rapid rate despite recent reports by industry analysts that implementation of client/server networks may be more expensive and time-consuming than users had anticipated, which could potentially slow the growth of the market. Due to these factors, there can be no assurances that these new products will achieve significant market acceptance or competitive success and thus contribute to revenue growth. Mainframe products grew 3.4% for the quarter, but decreased 0.3% for the 6 month period as a result of several large sales in Q195. Mainframe products include Plex products, which enable customers to handle large groups of computer processors, particularly the new parallel processing machines by IBM. The Company's new product growth rates could be materially and adversely impacted if the new parallel processors do not gain significant market acceptance and customer spending shifts away from traditional mainframes to technology platforms where the Company does not have significant product acceptance. Markets:
% of New Revenue % of New Revenue ---------------- ---------------- 3 Mo. ended Mar. 31, 6 Mo. ended Mar. 31, --------------------- -------------------- 1996 1995 Y/Y chg 1996 1995 Y/Y chg ----------- ----------- ----------- ----------- ----------- ----------- Domestic 24.3% 27.3% 2.5% 27.8% 30.9% (1.8%) International 75.7% 72.7% 20.1% 72.2% 69.1% 14.0% ----------- ----------- ----------- ----------- ----------- ----------- Total 100.0% 100.0% 15.3% 100.0% 100.0% 9.1% ----------- ----------- ----------- ----------- ----------- -----------
Domestic: Field sales grew 3.9% and 8.8% for 3 and 6 months, respectively, but was offset by decreases in telesales of 3.8% and 36.1%. The telesales group decreases were due to ineffective sales execution as well as a change in sales year from a calendar year to a fiscal year to conform with the rest of the Company's sales force which had the effect of shifting momentum away from the traditional final quarter. For growth to return in this geographic market, the Company is dependent on increased productivity from the telesales group, continued increases from the field sales force, and the ability to generate larger size transactions. The Company has recently made several changes to sales management in an effort to improve the overall effectiveness of this channel. 7 BOOLE & BABBAGE, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS International: The increase in the Company's new product revenues from its international operations, comprised of foreign subsidiaries and marketing agents, is primarily a result of strong growth in Europe of 21.5% and 17.6% for the 3 and 6 month periods, respectively. Without the effect of currency rate changes, international new product revenue grew 21.9% and 11.3% for 3 and 6 months, respectively.. Since the majority of new revenue is derived from international markets, the Company's operations and financial results could be significantly and adversely affected by international factors such as changes in currency exchange rates and specific countries' political and economic circumstances. The Company has implemented an economic hedging program to attempt to reduce its exposure to currency fluctuations for a portion of its anticipated intercompany royalty transactions through the next quarter. As a result of this strategy, during the six months ended March 31, 1996, the Company has recognized less benefit from continued weakness in the U.S. dollar than if no hedging programs were undertaken. Maintenance fees and other: Maintenance revenue is generated from services the Company provides including technical support, product enhancements, system updates and user documentation. Maintenance revenue also includes the first year of maintenance services which is included in the initial charge when the Company licenses its software products under a long-term agreement. Thereafter on each anniversary date of the license, the customer may elect to renew its maintenance contract with the Company. Customers may also elect to purchase advance maintenance at the time of product licensing for maintenance periods beyond the first year. Included in maintenance fees and other is revenue from computer services, hardware sales and royalties from IBM for the jointly developed CICS product. Maintenance fees and other grew 2.9% and 3.7% for the quarter and year-to-date, respectively. Without the effect of currency rate changes, maintenance fees and other grew 3.7% and 2.2%. This increase is mainly the result of increased product licensing in the previous year combined with high renewal rates but reduced by higher discounts granted on multiple-year maintenance packages purchased by customers. The Company anticipates that maintenance revenues in fiscal 1996 will continue to increase due to the higher license revenue growth in 1995, although it will be negatively impacted by reduced revenue associated with site consolidations, non-CPU specific pricing and multiple-year maintenance package discounts. In addition, to produce maintenance revenue increases, the Company must continue to generate new product licensing revenues and continue to provide high quality maintenance support and upgrades. 8 BOOLE & BABBAGE, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS COSTS AND EXPENSES:
% of Revenue % of Revenue ------------ ------------ 3 Mo. ended Mar. 31, 6 Mo. ended Mar. 31, -------------------- -------------------- 1996 1995 Y/Y chg 1996 1995 Y/Y chg ----------- ----------- ----------- ----------- ----------- ----------- Cost of revenue 19.7% 19.6% 9.5% 19.1% 18.9% 7.4% Product development, net 11.1% 10.3% 18.2% 11.0% 10.6% 11.4% Sales and marketing 48.7% 49.0% 8.5% 48.9% 49.2% 5.9% General and administrative 9.5% 10.2% 1.6% 9.5% 10.5% (3.4%) ----------- ----------- ----------- ----------- ----------- ----------- Total 89.0% 89.1% 9.1% 88.5% 89.2% 5.8% ----------- ----------- ----------- ----------- ----------- -----------
Cost of revenue: Cost of revenue consists primarily of the cost of product maintenance support, royalties paid to independent software authors, amortization of purchased and internally developed software, the cost of hardware associated with certain sales of client/server products and costs related to operating the computer services division. Cost of revenue increased by 9.5% for the quarter and 7.4% for the 6 month period in 1996. Without the effect of currency rate changes, the increases were 8.9% and 5.2%, respectively. The increases in 1996 are primarily attributable to increased royalties on higher third-party revenue in Europe and Japan. A new contract with a third-party vendor in Europe has significantly reduced the royalties on maintenance from Q295 through Q496. Since this reduction was in effect for both years, there was no material impact on the comparability between these periods. In general, the relationship of cost of revenue to revenue will fluctuate due primarily to changes in revenue mix, maintenance support, royalty agreements and amortization of capitalized software. Product development, net: Net product development costs increased by 18.2% for the quarter and 11.4% for the 6 month period in 1996. Without the effect of currency rate changes, the increases were 17.9% and 10.9%, respectively. The increases in 1996 are primarily attributable to higher R&D personnel costs due to increased headcount. R&D expenditures were approximately 16% of revenue (excluding third party) in both years with the amount of R&D capitalized in both years at approximately 16% of gross R&D costs. The Company capitalizes certain development costs in accordance with Statement of Financial Accounting Standard No. 86 ("FAS 86"). To the extent the Company capitalizes its product development costs, the effect is to defer such costs to future periods and match them to the revenue generated by the products. Product development and support expenses may fluctuate annually depending in part upon the number and status of internal software development projects. 9 BOOLE & BABBAGE, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Sales and marketing: Sales and marketing expenses increased by 8.5% for the quarter and 5.9% for the 6 month period in 1996. Without the effect of currency rate changes, the increases were 8.2% and 4.0%, respectively. The increases are primarily a result of commissions in international markets and higher headcount in Europe partially offset by a decrease in certain marketing campaigns. General and Administrative: General and administrative expenses increased by 1.6% for the quarter and decreased 3.4% for the 6 month period.. Without the effect of currency rate changes, the increase was 1.4% for the quarter and the decrease was 4.9% for the six month period. The increase for the quarter is a result of increased consulting. The decrease for the 6 months is primarily attributable to lower personnel costs and legal expense. Interest and other income, net: Interest and other income consists principally of interest income, interest expense, currency gain or loss, and gain or loss on disposal of assets. The 55.4% increase over 1995 is mainly due to higher interest income as installment receivables increased approximately 75% over a year ago. In addition, Q195 included an investment write-off of approximately $300,000. Income Taxes: The effective tax rates for 1996 were 26.1% and 28% for the quarter and six month period, compared with a 31% rate in 1995. The change is primarily due to the utilization of certain foreign net operating loss carryforwards previously included in the deferred tax asset valuation allowance. The Company's effective tax rate differs from the federal statuary rate due primarily to permanently invested earnings of foreign subsidiaries being taxed at rates lower than the federal statutory rate. Management believes future taxable income will be sufficient to realize the tax benefit of the net deferred tax asset of $10,563,000. The Company is currently under audit for federal tax purposes for fiscal year 1993. Management believes that the audit will be resolved without material adverse effect on the Company's financial position or results of operations. 10 BOOLE & BABBAGE, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES: The significant sources of cash during 1996 include $5,814,000 provided from operations; the exercise of employee stock options of $1,034,000; stock purchases through the Employee Stock Purchase Plan of $493,000; net proceeds under a line of credit of $390,000; and net proceeds from the sale of short-term investments of $311,000;. The significant uses of cash during 1996 include $1,735,000 for purchases of furniture, equipment and leasehold improvements; $1,655,000 for internally developed capitalized software; $855,000 for investment in long-term equity securities; $902,000 for payments on capital leases; $570,000 for purchase of treasury stock; $262,000 for payments on notes payable; and $325,000 for purchased capitalized software. Included in short-term investments is a $1,400,000 certificate of deposit pledged as collateral for the lease financing of certain computer equipment. Management believes cash flows from operations and existing cash resources will be adequate to meet its working capital requirements for the foreseeable future. 11 BOOLE & BABBAGE, INC. PART II. OTHER INFORMATION ITEM 4. Submission of Matters to a Vote of Security Holders The Annual Meeting of Stockholders of Boole & Babbage, Inc. was held February 22, 1996, for the purpose of electing two people to the Company's Board of Directors to serve a three-year term expiring on the date of the Company's 1999 annual meeting of stockholders, to approve an amendment to the Company's Restated Certificate of Incorporation to increase the authorized number of shares of Common Stock, to adopt the Company's 1995 Stock Option Plan and to ratify the selection of Ernst & Young LLP as the Company' independent auditors for the next fiscal year. Proxies were solicited pursuant to Section 14(a) of the Securities Exchange Act of 1934 and there was no solicitation in opposition to management's solicitations. Paul E. Newton was elected to the board of directors for a three-year term with 9,806,629 votes "FOR" and 12,180 votes "WITHHELD". Raymond E. Cairns was elected to the board of directors for a three-year term with 9,807,604 votes "FOR" and 11,205 votes "WITHHELD". The amendment to the Company's Restated Certificate of Incorporation to increase the number of authorized number of shares of Common Stock from 15,000,000 to 30,000,000 was approved by the following vote: Broker "FOR" "AGAINST" "ABSTAIN" Nonvotes ----- --------- --------- ---------- 9,112,099 643,060 11,255 52,395 The Company's 1995 Stock Option Plan, which is intended to replace the expiring 1986 Stock Option Plans, and the reservation of 750,000 shares under the 1995 Stock Option Plan was approved by the following vote: Broker "FOR" "AGAINST" "ABSTAIN" Nonvotes ----- --------- --------- ---------- 5,919,285 2,184,079 43,703 1,671,742 The selection of Ernst & Young LLP as the Company's independent auditors for the fiscal year ending September 30, 1996 was ratified by the following vote: Broker "FOR" "AGAINST" "ABSTAIN" Nonvotes ----- --------- --------- ---------- 9,794,174 11,233 13,402 NONE ITEM 6. Exhibits and Reports on Form 8-K (a) Exhibits - None (b) Reports on Form 8-K - None 12 BOOLE & BABBAGE, 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. BOOLE & BABBAGE, INC. May 14, 1996 \Paul E. Newton\ -------------------------- Paul E. Newton President and Director (Principal Executive Officer) May 14, 1996 \Arthur F. Knapp, Jr.\ -------------------------- Arthur F. Knapp, Jr. Senior Vice President Chief Financial Officer (Principal Financial Officer) May 14, 1996 \Carla J. Dorow\ -------------------------- Carla J. Dorow Controller (Principal Accounting Officer) 13 EX-27 2 FINANCIAL DATA SCHEDULE
5 1,000 6-MOS SEP-30-1996 OCT-01-1995 MAR-31-1996 23,686 15,489 102,990 1,974 0 114,117 36,067 29,104 178,945 77,024 0 11 0 0 79,225 178,945 80,784 80,784 0 15,412 55,769 343 258 11,974 3,355 8,619 0 0 0 8,619 .72 .72
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