-----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, QzLSK0rCv14VdE/96CziAC/Kx5iRVilU5V0no73scQpAaQjMZOE6BL5GQ6ZGmG7q QcsETZZySMftCCIJ2jfRHw== 0000950005-96-000623.txt : 19960816 0000950005-96-000623.hdr.sgml : 19960816 ACCESSION NUMBER: 0000950005-96-000623 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960630 FILED AS OF DATE: 19960814 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: 96613041 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 June 30, 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___ 11,180,805 shares of common stock of the Registrant were outstanding as of July 31, 1996. BOOLE & BABBAGE, INC. INDEX Part I FINANCIAL INFORMATION Page No. Item 1. FINANCIAL STATEMENTS Consolidated Balance Sheets June 30, 1996 and September 30, 1995 1 Consolidated Statements of Income Three and Nine Months Ended June 30, 1996 and 1995 2 Consolidated Statements of Cash Flows Nine Months Ended June 30, 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 Nine Months Ended June 30, 1996 and 1995 6-11 Part II OTHER INFORMATION Item 6. EXHIBITS AND REPORTS ON FORM 8-K 12 Signatures 13 Boole & Babbage, Inc. Consolidated Balance Sheets (Amounts in thousands except shares) (June 30, 1996 unaudited)
June 30, September 30, Assets 1996 1995 ------------ --------------- Current assets: Cash and cash equivalents $24,172 $22,340 Short-term investments 17,406 15,800 Accounts receivable, net 25,474 27,293 Installment and other receivables, net 42,862 28,066 Deferred tax asset 5,763 5,810 Prepaid expenses and other current assets 4,550 4,967 ----------- ----------- Total current assets 120,227 104,276 Purchased and internally developed software, net 11,730 12,278 Equipment, furniture and leasehold improvements, net 6,868 7,341 Long-term installment and other receivables 41,556 32,223 Long-term deferred tax asset 4,843 4,843 Costs in excess of net assets of purchased businesses, net 667 687 Other assets 3,036 2,260 ----------- ----------- Total assets $188,927 $163,908 =========== =========== Liabilities and Stockholders' Equity Current liabilities: Accounts payable $7,061 $6,595 Accrued payroll expense 7,362 7,149 Other accrued liabilities 17,499 18,133 Short-term borrowings 683 400 Notes payable due within one year 292 513 Capital lease obligations due within one year 760 1,348 Deferred maintenance revenue 44,764 40,180 ----------- ---------- Total current liabilities 78,421 74,318 Notes payable due after one year 384 663 Capital lease obligations due after one year 395 683 Deferred maintenance revenue due after one year 24,265 18,057 Stockholders' equity: Preferred stock, 2,000,000 shares authorized, $.001 par value, -- -- Common stock, $.001 par value, authorized--30,000,000 shares; issued--11,896,438 (11,476,050 at September 30, 1995) 12 11 Additional paid-in capital 34,501 30,844 Retained earnings 55,369 42,672 Unrealized gain on marketable securities 627 132 Foreign currency translation adjustment 607 1,013 Less treasury stock, 732,025 shares (683,325 at September 30, 1995), at cost (5,654) (4,485) ------------ ---------- Total stockholders' equity 85,462 70,187 ------------ ---------- Total liabilities and stockholders' equity $188,927 $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 Nine Months Ended June 30, June 30, --------------------------- --------------------------- 1996 1995(a) 1996 1995(a) ---------- ---------- ---------- ----------- Revenue: New product revenue $22,312 $18,924 $65,454 $58,450 Maintenance fees and other 18,605 18,444 56,247 54,744 ---------- ---------- --------- ---------- Total revenue 40,917 37,368 121,701 113,194 ---------- ---------- --------- ---------- Costs and expenses: Cost of revenue 8,566 7,110 23,978 21,456 Product development, net 4,650 3,748 13,563 11,748 Sales and marketing 19,570 20,145 59,066 57,431 General and administrative 3,987 3,006 11,690 10,975 ---------- ---------- --------- ---------- Total costs and expenses 36,773 34,009 108,297 101,610 ---------- ---------- --------- ---------- Operating income 4,144 3,359 13,404 11,584 Interest and other income, net 1,519 1,037 4,233 2,784 ---------- ---------- --------- ---------- Income before provision for income taxes 5,663 4,396 17,637 14,368 Provision for income taxes 1,585 1,230 4,940 4,320 ---------- ---------- --------- ---------- Net income $4,078 $3,166 $12,697 $10,048 ========== ========== ========= ========== Net income per share (b) $ 0.34 $ 0.27 $ 1.06 $ 0.88 ========== ========== ========= ========== Shares used in per share calculations(b) 12,120 11,650 11,995 11,475 ========== ========== ========= ========== (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)
Nine Months Ended June 30, -------------------------- 1996 1995 ------------ ---------- Cash flows from operating activities: Net income $12,697 $10,048 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation, amortization and write-off of capitalized software 6,757 7,129 Gain on sale of equity securities (291) -- Stock issued under compensatory stock plans 85 96 Minority interest -- (61) Changes in operating assets and liabilities excluding the effect of acquisitions: Accounts receivable and installment and other receivables (23,085) (10,238) Prepaid expenses and other assets (744) (2,117) Accounts payable and accrued expenses 1,604 (2,958) Deferred maintenance revenue 11,392 6,970 ----------- ----------- Net cash provided by operating activities 8,415 8,869 ----------- ----------- Cash flows from investing activities: Purchases of equipment, furniture and leasehold improvements (2,595) (2,527) Payments for capitalized software (2,957) (2,314) Net purchases of short-term investments (1,606) -- Investment in equity securities (855) (344) Proceeds from sale of equity securities 717 -- ----------- ----------- Net cash used for investing activities (7,296) (5,185) ----------- ----------- Cash flows from financing activities: Proceeds from issuance of common stock 3,572 2,329 Treasury stock purchases (1,169) -- Borrowings under line of credit, net 282 -- Payments on notes payable (494) (936) Payments on capital leases (1,142) (1,480) ----------- ----------- Net cash provided by (used for) financing activities 1,049 (87) ----------- ----------- Effect of exchange rate changes on cash (336) 1,000 ----------- ----------- Net increase in cash and cash equivalents 1,832 4,597 Cash and cash equivalents at beginning of period 22,340 34,019 ----------- ----------- Cash and cash equivalents at end of period $24,172 $38,616 =========== =========== Supplemental disclosures of cash flow information: Cash paid during the year for: Interest $401 $900 Income taxes, net $3,730 $2,760 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 June 30, 1996 and for the three- and nine- month periods ended June 30, 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.
(Amounts in thousands, except 3 mos. ended June 30, 9 mos. ended June 30, net income per share) --------------------- --------------------- 1996 1995 1996 1995 ---- ---- ---- ---- Primary: (a) Common shares outstanding 11,113 10,673 10,969 10,525 Employee stock option plans 1,007 977 1,026 950 ------- ------- ------- ------- 12,120 11,650 11,995 11,475 ======= ======= ======= ======= Net income $4,078 $3,166 $12,697 $10,048 ======= ======= ======= ======= Net income per share $.34 $.27 $1.06 $.88 ======= ======= ======= ======= (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 engineering and 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 9 months ended June 30, 1996 increased over the same period in the prior year by 9.5% and 7.5%, respectively. Without the effect of currency rate changes, total revenue grew 16.4% and 8.7%, respectively.
% of Revenue % of Revenue ------------ ------------ 3 Mo. ended June 30, 9 Mo. ended June 30, -------------------- --------------------- 1996 1995 Y/Y chg 1996 1995 Y/Y chg -------------------------------- --------------------------------- New product revenue 54.5% 50.6% 17.9% 53.8% 51.6% 12.0% Maintenance fees and other 45.5% 49.4% 0.9% 46.2% 48.4% 2.7% -------------------------------- --------------------------------- Total 100.0% 100.0% 9.5% 100.0% 100.0% 7.5% -------------------------------- ---------------------------------
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 65.6% and 67.5% and accounted for 24.9% and 22.4% of new product revenue for the 3 and 9 months ended June 30, 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 begin to produce greater revenue. However, Ensign has 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. These same types of circumstances resulted in below-plan sales on the Stage3 LAN backup product which caused the Company to take a charge of about $1 million for the remaining royalty commitment in the third quarter of 1996. 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 new client/server products will achieve significant market acceptance or competitive success and thus contribute to revenue growth. Mainframe products grew 7.6% and 2.2% and accounted for 75.1% and 77.6% of new product revenue for the 3 and 9 months ended June 30, 1996, respectively. 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 June 30, 9 Mo. ended June 30, -------------------- -------------------- 1996 1995 Y/Y chg 1996 1995 Y/Y chg -------------------------------- -------------------------------- Domestic 33.2% 24.3% 61.0% 29.7% 28.8% 15.4% International 66.8% 75.7% 4.0% 70.3% 71.2% 10.6% -------------------------------- -------------------------------- Total 100.0% 100.0% 17.9% 100.0% 100.0% 12.0% --------------------- ---------- --------------------------------
Domestic: Field sales grew 76.9% and 28.2% for 3 and 9 months, respectively, but was offset by decreases in telesales of 4.6% and 28.6%. 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 14.2% and 16.5% for the 3 and 9 month periods, respectively. Without the effect of currency rate changes, international new product revenue grew 14.5% and 12.5% for 3 and 9 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 through the next quarter. As a result of this strategy, during the nine months ended June 30, 1996, the Company has recognized slightly less benefit from 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 maintenance services for an initial period ranging from six months to one year 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. As announced on July 15, 1996, the Company has finalized a long-term licensing agreement with IBM which replaces the prior agreement and could result in an estimated total royalty payments of $10 million from the fourth quarter of fiscal 1996 through the second quarter of fiscal 1999. Maintenance fees and other grew 0.9% and 2.7% for the quarter and year-to-date, respectively. Without the effect of currency rate changes, maintenance fees and other grew 6.6% and 3.7%. 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 June 30, 9 Mo. ended June 30, -------------------- -------------------- 1996 1995 Y/Y chg 1996 1995 Y/Y chg ------------------------------- ------------------------------- Cost of revenue 20.9% 19.0% 20.5% 19.7% 19.0% 11.8% Product development, net 11.4% 10.0% 24.1% 11.1% 10.4% 15.5% Sales and marketing 47.9% 53.9% (2.9%) 48.6% 50.7% 2.8% General and administrative 9.7% 8.1% 32.6% 9.6% 9.7% 6.5% --------------------------------- ------------------------------- Total 89.9% 91.0% 8.1% 89.0% 89.8% 6.6% --------------------------------- --------------------- ---------
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 20.5% for the quarter and 11.8% for the 9 month period in 1996. Without the effect of currency rate changes, the increases were 28.2% and 12.8%, respectively. The increases in 1996 are primarily attributable to a charge in the third quarter of approximately $1 million on the remaining royalty commitments on the Stage3 product and 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 24.1% for the quarter and 15.5% for the 9 month period in 1996. Without the effect of currency rate changes, the increases were 25.6% and 15.6%, respectively. The increases in 1996 are primarily attributable to higher R&D personnel costs due to increased headcount and use of outside consultants for certain porting projects. 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 18% 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 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 decreased by 2.9% for the quarter but increased 2.8% for the 9 month period in 1996. Without the effect of currency rate changes, the changes were increases of 3.1% and 3.7%, respectively. The increases are primarily a result of higher commission expense in the domestic and European markets and higher headcount in Europe partially offset by decreases in agent commissions and marketing programs. General and Administrative: General and administrative expenses increased by 32.6% for the quarter and 6.5% for the 9 month period. Without the effect of currency rate changes, the increases were 39.3% and 7.2%, respectively. The increase for the quarter is primarily due to relatively lower expense levels in 1995 as the Company negotiated a lease termination in the third quarter of 1995 which resulted in the recovery of approximately $350,000 of accrued leases payments on an idle facility. In addition, Q396 had higher costs as a result of a move to new premises in Ireland. These increases in the third quarter of 1996 offset decreases for 9 months from lower personnel costs and legal expense. Interest and other income, net: Interest and other income consists principally of interest income, interest expense, gain or loss on sales of investments, currency gain or loss, and gain or loss on disposal of assets. Interest and other income increased 52.0% for the 9 month period and is mainly due to higher interest income as installment receivables increased approximately 70% over a year ago. Other factors were a gain on sale of equity investments netted against increased currency losses in the third quarter of 1996 as the Irish pound strengthened against other European currencies. In addition, Q195 included an investment write-off of approximately $300,000. Income Taxes: The effective tax rate for 1996 was 28% compared with a 30% 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 approximately $10,600,000. 10 BOOLE & BABBAGE, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Income Taxes: (continued) 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. LIQUIDITY AND CAPITAL RESOURCES: The significant sources of cash during 1996 include $8,415,000 provided from operations; the exercise of employee stock options of $2,290,000; stock purchases through the Employee Stock Purchase Plan of $1,282,000; proceeds from the sale of long-term equity securities of $717,000; and net proceeds under a line of credit of $282,000. The significant uses of cash during 1996 include $2,595,000 for purchases of furniture, equipment and leasehold improvements; $2,632,000 for internally developed capitalized software; $1,606,000 for net purchases of short-term investments; $1,142,000 for payments on capital leases; $1,169,000 for purchase of treasury stock; $855,000 for investment in long-term equity securities; $494,000 for payments on notes payable; and $325,000 for purchased capitalized software. 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 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. August 8, 1996 \Paul E. Newton\ -------------------------- Paul E. Newton President and Director (Principal Executive Officer) August 8, 1996 \Arthur F. Knapp, Jr.\ -------------------------- Arthur F. Knapp, Jr. Senior Vice President Chief Financial Officer (Principal Financial Officer) August 8, 1996 \Carla J. Dorow\ -------------------------- Carla J. Dorow Controller (Principal Accounting Officer) 13 EX-27 2 FINANCIAL DATA SCHEDULE
5 1,000 9-MOS SEP-30-1996 OCT-01-1995 JUN-30-1996 24,172 17,406 111,863 1,971 0 120,227 36,672 29,804 188,927 78,421 0 12 0 0 85,450 188,927 121,701 121,701 0 23,978 83,950 369 348 17,637 4,940 12,697 0 0 0 12,697 1.06 1.06
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