-----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, QFhVsWWwic42uzDXo+9LABw5XC4Z0bWrlBzLUxR9WXKVgGJZqFyelD7qT2vRBY8a OQ2MR4SZn6iKCwm5DVl7zw== 0000950137-96-002111.txt : 19961104 0000950137-96-002111.hdr.sgml : 19961104 ACCESSION NUMBER: 0000950137-96-002111 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960926 ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 19961101 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: SPSS INC CENTRAL INDEX KEY: 0000869570 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 362815480 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 000-22194 FILM NUMBER: 96652939 BUSINESS ADDRESS: STREET 1: 444 NORTH MICHIGAN AVE CITY: CHICAGO STATE: IL ZIP: 60611 BUSINESS PHONE: 3123292400 MAIL ADDRESS: STREET 1: 444 N MICHIGAN AVE CITY: CHICAGO STATE: IL ZIP: 60611 8-K/A 1 AMENDMENT NO. 1 TO FORM 8-K DATED 9/26/96 1 - -------------------------------------------------------------------------------- UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K/A AMENDMENT TO REPORT FILED PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 AMENDMENT NO. 1 SEPTEMBER 26, 1996 Date of report (date of earliest event reported) SPSS INC. (Exact name of registrant as specified in charter) DELAWARE 33-64732 36-2815480 (State or other jurisdiction (Commission File Number) (I.R.S. Employer of incorporation) Identification Number)
444 N. MICHIGAN AVENUE CHICAGO, ILLINOIS 60611 (Address of Principal Executive Offices, Including Zip Code) (312) 329-2400 (Registrant's Telephone Number, Including Area Code) NOT APPLICABLE (Former Name or Former Address, if Changed Since Last Report) - -------------------------------------------------------------------------------- 2 The undersigned registrant hereby amends the following items, financial statements, exhibits or other portions of its Report on Form 8-K dated September 26, 1996 as set forth in the pages attached hereto. Item 7. Financial Statements and Exhibits. The financial statements are amended by filing the following financial statements and pro forma financial information: (a) Financial statements of business acquired: FINANCIAL STATEMENTS AND EXHIBITS FINANCIAL STATEMENTS CLEAR SOFTWARE INC. Independent Auditors' Report F-1 Balance Sheet as of December 31, 1995 F-2 Statement of Income and Retained Earnings for the year ended December 31, 1995 F-3 Statement of Cash Flows for the year ended December 31, 1995 F-4 Notes to Financial Statements F-5 - F-7 Balance Sheet as of June 30, 1996 (unaudited) F-8 Statements of Income for the six months ended June 30, 1995 (unaudited) and 1996 (unaudited) F-9 Statements of Cash Flows for the six months ended June 30, 1995 (unaudited) and 1996 (unaudited) F-10 Notes to Unaudited Financial Statements F-11 UNAUDITED PRO FORMA CONDENSED CONSOLIDATED COMBINING FINANCIAL STATEMENTS Unaudited Pro Forma Condensed Consolidated Combining Balance Sheet as of June 30, 1996 F-12 Unaudited Pro Forma Condensed Consolidated Combining Statement of Income for the year ended December 31, 1995 F-13 Unaudited Pro Forma Condensed Consolidated Combining Statement of Income for the six months ended June 30, 1996. F-14 Notes to Unaudited Pro Forma Condensed Consolidated Combining Financial F-15 Statements EXHIBITS Independent Auditors' Consent 23.1
- 2 - 3 Independent Auditors' Report The Board of Directors Clear Software, Inc.: We have audited the accompanying balance sheet of Clear Software, Inc., as of December 31, 1995, and the related statements of income and retained earnings and cash flows for the year then ended. These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of Clear Software, Inc. at December 31, 1995, and the results of its operations and its cash flows for the year then ended in conformity with generally accepted accounting principles. KPMG PEAT MARWICK LLP Boston, Massachusetts August 9, 1996 F-1 4 CLEAR SOFTWARE, INC. Balance Sheet December 31, 1995 Assets (note 5) --------------- Current assets: Cash $145,566 Trade accounts receivable, net of allowance for doubtful accounts of $15,000 (note 9) 291,256 Inventory 24,340 -------- Total current assets 461,162 Property and equipment, net (notes 2 and 3) 5,083 -------- Total assets $466,245 ======== Liabilities and Stockholders' Equity ------------------------------------ Current liabilities: Accounts payable $271,083 Accrued expenses 1,967 -------- Total current liabilities 273,050 -------- Commitments (note 4) Stockholders' equity: Common stock, $.001 par value, authorized 300,000 shares, issued and outstanding 106,500 shares 107 Additional paid-in capital 16,193 Retained earnings 176,895 -------- Total stockholders' equity 193,195 -------- Total liabilities and stockholders' equity $466,245 ========
See accompanying notes to financial statements. F-2 5 CLEAR SOFTWARE, INC. Statement of Income and Retained Earnings Year ended December 31, 1995 Net revenues (note 9) $2,755,265 ---------- Operating expenses: Direct cost of revenues 206,136 Sales and marketing 1,772,201 Research and development 315,515 General and administrative 402,583 ---------- Total operating expenses 2,696,435 ---------- Operating income 58,830 ---------- Other income (expense): Interest income 1,066 Interest expense (note 5) (1,963) Payments to a related party (note 6) (45,000) ---------- Total other expense (45,897) ---------- Net income 12,933 Retained earnings, beginning of year 175,802 Less dividends (11,840) ---------- Retained earnings, end of year $176,895 ==========
See accompanying notes to financial statements. F-3 6 CLEAR SOFTWARE, INC. Statement of Cash Flows Year ended December 31, 1995 Cash flows from operating activities: Net income $12,933 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 21,455 Stock option compensation expense 15,300 Changes in operating asset/liability accounts: Accounts receivable (5,344) Inventory (21,362) Accounts payable 99,208 Accrued expenses (5,724) -------- Net cash provided by operating activities 116,466 -------- Cash flows from investing activities: Purchase of property and equipment (17,511) -------- Net cash used in investing activities (17,511) -------- Cash flows from financing activities: Repayment of notes payable (7,200) Dividends (11,840) -------- Net cash used in financing activities (19,040) -------- Net increase in cash 79,915 Cash at beginning of year 65,651 -------- Cash at end of year $145,566 ======== Supplemental disclosure of cash flow information: Cash paid for interest $181 ========
See accompanying notes to financial statements. F-4 7 CLEAR SOFTWARE, INC. Notes to Financial Statements December 31, 1995 (1) NATURE OF BUSINESS Clear Software, Inc. ("Clear" or the "Company") develops, markets, and sells diagramming and flowcharting applications designed for non-technical professionals. The Company, established in 1987, is located in Newton, Massachusetts. The primary product, all Clear, automatically draws charts or decision trees from text to help businesses document their critical procedures. (2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (a) Revenue Recognition The Company recognizes revenues from software sales upon shipment of the software. (b) Property and Equipment Property and equipment are stated at cost. Depreciation is calculated on the straight-line method over the estimated useful lives of the assets (three to seven years). (c) Research and Development Costs Research and development costs are charged to expense as incurred. (d) Income Taxes The Company is an S Corporation for income tax purposes; therefore, federal and state income taxes are borne by the stockholders. Distributions to shareholders are made to cover their additional personal tax liabilities due to corporate income. (e) Use of Estimates Management of the Company has made a number of estimates and assumptions relating to the reporting of assets and liabilities and the disclosure of contingent assets and liabilities to prepare these financial statements in conformity with generally accepted accounting principles. Actual results could differ from those estimates. (3) PROPERTY AND EQUIPMENT Property and equipment and the related accumulated depreciation consist of the following Computer equipment $101,535 Office furniture and equipment 7,293 -------- 108,828 Less accumulated depreciation 103,745 -------- $ 5,083 ======== (Continued) F-5
8 CLEAR SOFTWARE, INC. Notes to Financial Statements (4) LEASES The Company leases office facilities and certain equipment under noncancelable operating leases expiring in 1998. The future minimum lease payments under these leases are as follows:
Year ---- 1996 $ 102,774 1997 100,023 1998 3,180 --------- Total future minimum lease payments $ 205,977 =========
Rent expense amounted to $80,477 for the year ended December 31, 1995. (5) NOTE PAYABLE TO BANK Note payable to bank consists of borrowings under a $100,000 line-of-credit agreement. Interest is payable monthly at an annual rate equal to 2% above the Bank's lending rate (9% at December 31, 1995). The line-of-credit is secured by the assets of the Company and is guaranteed by certain shareholders. At December 31, 1995, there were no outstanding borrowings under this agreement. (6) RELATED PARTY TRANSACTIONS The Company is related by common ownership to BZIX Development, Inc. ("BZIX") which developed the programming code for the Company's original products. These products are no longer sold by the Company. During 1995, the Company entered into a settlement agreement with BZIX granting the Company the license to BZIX's programming code. The settlement agreement requires a payment of $22,500 at execution and a maximum monthly payment of $7,500 to BZIX for two years. The license is considered fully paid upon the sale of the Company. During 1995, the Company incurred expenses of $45,000 in accordance with the agreement. (7) STOCK OPTIONS During 1995, the Company granted 10,500 non-qualified stock options to three key employees at an exercise price of $.20. The options may be exercised at various dates as specified at the time of the grant and vest over a five month period. All options vest 100% in the event of a change in control of ownership. If the employee's term of employment ends, any outstanding options are canceled. At December 31, 1995, 8,500 shares were exercisable. (Continued) F-6 9 CLEAR SOFTWARE, INC. Notes to Financial Statements (8) BENEFIT PLAN In January 1996, the Company established a 401(K) plan (the "Plan") covering all eligible employees who qualify based on age and length of service requirements. The Plan allows employees to defer a percentage of their annual salary. The Company may also match a percentage of employee contributions. (9) SIGNIFICANT CUSTOMER One customer accounted for 22% of net sales in 1995. Included in accounts receivable as of December 31, 1995 are amounts due from this customer of approximately $135,000. (10) SALE OF COMPANY The Company is in the process of finalizing an agreement to sell all of its outstanding common stock to SPSS, Inc. A definitive agreement is expected to be signed in September 1996. F-7 10 CLEAR SOFTWARE INC. Balance Sheet June 30, 1996 (Unaudited)
ASSETS Current assets: Cash $ 133,696 Accounts receivable, net of allowances of $15,000 410,832 Inventory 21,270 Other assets 22,710 --------- Total current assets 588,508 Property and equipment, net 11,033 --------- $ 599,541 ========= LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable 187,108 Accrued expenses 1,511 --------- Total current liabilities 188,619 --------- Stockholders' equity: Common stock, $.001 par value, authorized 300,000 shares, issued and outstanding 106,500 shares 107 Additional paid-in capital 16,193 Retained earnings 394,622 --------- Total stockholders' equity 410,922 --------- $ 599,541 =========
See accompanying notes to unaudited financial statements. F-8 11 CLEAR SOFTWARE INC. Statements of Income Six months ended June 30, 1995 and 1996 (Unaudited)
1995 1996 Net revenues $1,442,280 $1,659,858 Cost of revenues 87,561 93,143 ---------- ---------- Gross profit 1,354,719 1,566,715 ---------- ---------- Operating expenses: Sales and marketing 836,307 972,757 Product development 139,794 176,650 General and administrative 149,988 161,582 ---------- ---------- Operating expenses 1,126,089 1,310,989 ---------- ---------- Operating income 228,630 255,726 ---------- ---------- Other income (expense): Interest income 802 149 Interest expense (988) (648) Other - (37,500) ---------- ---------- Other income (expense) (187) (37,999) ---------- ---------- Income before income taxes 228,444 217,727 Income tax expense - - ---------- ---------- Net income $ 228,444 $ 217,727 ========== ==========
See accompanying notes to unaudited financial statements. F-9 12 CLEAR SOFTWARE INC. Statements of Cash Flows Six months ended June 30, 1995 and 1996 (Unaudited)
1995 1996 Cash flows from operating activities: Net income $ 228,444 $217,727 Adjustments to reconcile net income to net cash provided by operating activities: Changes in operating asset/liability accounts: Accounts receivable (48,769) (119,576) Inventories (18,504) 3,070 Accounts payable (58,774) (83,975) Accrued expenses (6,120) (455) Other - (22,710) --------- -------- Net cash provided by (used in) operating activities 96,277 (5,919) --------- -------- Cash flows from investing activities: Purchase of property and equipment (5,243) (5,951) --------- -------- Net cash used in investing activities (5,243) (5,951) --------- -------- Cash flows from financing activities: Repayment of notes payable (7,200) - Dividends (11,840) - --------- -------- Net cash used in financing activities (19,040) - --------- -------- Net change in cash and cash equivalents 71,994 (11,870) Cash and cash equivalents at beginning of period 65,651 145,566 --------- -------- Cash and cash equivalents at end of period $ 137,645 $133,696 ========= ======== Supplemental disclosures of cash flow information: Interest Paid $ 1,660 $ 648 ========= ========
See accompanying notes to unaudited financial statements. F-10 13 CLEAR SOFTWARE INC. Notes to Unaudited Financial Statements - -------------------------------------------------------------------------------- (1) BASIS OF PRESENTATION The accompanying unaudited interim financial statements reflect all adjustments which, in the opinion of management, are necessary for a fair presentation of the results of the interim periods presented. All such adjustments are of a normal recurring nature. These financial statements should be read in conjunction with the Company's audited financial statements and notes thereto for the year ended December 31, 1995 included elsewhere herein. F-11 14 UNAUDITED PRO FORMA CONDENSED CONSOLIDATED COMBINING BALANCE SHEET JUNE 30, 1996 (in thousands)
Clear Pro Forma SPSS Inc. SPSS Inc. Software Adjustments Pro Forma --------- -------- ----------- --------- ASSETS Current assets: Cash & cash equivalents $ 11,511 $ 134 $ - $ 11,645 Accounts receivable, net 12,083 411 - 12,494 Other current assets 3,301 44 - 3,345 --------- ------- ---- -------- Total current assets 26,895 589 - 27,484 --------- ------- ---- -------- Net equipment and leasehold improvements 4,977 11 - 4,988 Capitalized software development costs, net 6,748 - - 6,748 Other assets 3,878 - - 3,878 --------- ------- ---- -------- Total assets $ 42,498 $ 600 $ - $ 43,098 ========= ======= ==== ======== LIABILITIES AND STOCKHOLDERS' EQUITY Current liabilities: Accounts payable and accruals $ 13,628 $ 189 $ - $ 13,817 Deferred revenues 5,348 - - 5,348 --------- ------- ---- -------- Total current liabilities 18,976 189 - 19,165 --------- ------- ---- -------- Other non-current liabilities 2,177 - - 2,177 Stockholders' equity 21,345 411 - 21,756 --------- ------- ---- -------- Total liabilities and stockholders' equity $ 42,498 $ 600 $ - $ 43,098 ========= ======= ==== ========
See notes to unaudited pro forma condensed consolidated combining financial statements. F-12 15 UNAUDITED PRO FORMA CONDENSED CONSOLIDATED COMBINING STATEMENT OF INCOME Year Ended December 31, 1995 (in thousands, except share data)
Clear Pro Forma SPSS Inc. SPSS Inc. Software Adjustments Pro Forma --------- -------- ----------- --------- Net revenues: Desktop products $ 46,101 $ 2,755 $ - $ 48,856 Large System products 10,694 - - 10,694 Other products and service 6,234 - - 6,234 ------------ ------- ------ --------- Net revenues 63,029 2,755 - 65,784 Cost of revenues 6,177 206 - 6,383 ------------ ------- ------ --------- Gross profit 56,852 2,549 - 59,401 ------------ ------- ------ --------- Operating expenses: Sales and marketing 33,287 1,772 - 35,059 Product development 8,614 315 - 8,929 General and administrative 4,446 403 - 4,849 Nonrecurring items 2,466 - - 2,466 Acquisition-related charges 1,051 - - 1,051 ------------ ------- ------ --------- Operating expenses 49,864 2,490 - 52,354 ------------ ------- ------ --------- Operating income 6,988 59 - 7,047 ------------ ------- ------ --------- Other income (expense): Net interest income (expense) 172 (1) - 171 Other 177 (45) - 132 ------------ ------- ------ --------- Other income (expense) 349 (46) - 303 ------------ ------- ------ --------- Income before income taxes 7,337 13 - 7,350 Income tax expense 2,968 - - 2,968 ------------ ------- ------ --------- Net income $ 4,369 $ 13 $ - $ 4,382 ============ ======= ====== ========= Net income per share $ 0.57 $ 0.12 $ - $ 0.56 ============ ======= ====== ========= Shares used in computing net income per share 7,598,739 107,984 - 7,768,740 ============ ======= ====== =========
See notes to unaudited pro forma condensed consolidated combining financial statements. F-13 16 UNAUDITED PRO FORMA CONDENSED CONSOLIDATED COMBINING STATEMENT OF INCOME Six Months Ended June 30, 1996 (in thousands, except share data)
Clear Pro Forma SPSS Inc. SPSS Inc. Software Adjustments Pro Forma --------- -------- ----------- --------- Net revenues: Desktop products $ 25,619 $ 1,660 $ - $ 27,279 Large System products 5,467 - - 5,467 Other products and service 3,130 - - 3,130 ---------- -------- ------ ---------- Net revenues 34,216 1,660 - 35,876 Cost of revenues 3,303 93 - 3,396 ---------- -------- ------ ---------- Gross profit 30,913 1,567 - 32,480 ---------- -------- ------ ---------- Operating expenses: Sales and marketing 17,613 973 - 18,586 Product development 5,283 177 - 5,460 General and administrative 2,521 162 - 2,683 ---------- -------- ------ ---------- Operating expenses 25,417 1,312 - 26,729 ---------- -------- ------ ---------- Operating income 5,496 255 - 5,751 ---------- -------- ------ ---------- Other income (expense): Net interest income 225 (1) - 224 Other (69) (37) - (106) ---------- -------- ------ ---------- Other income (expense) 156 (38) - 118 ---------- -------- ------ ---------- Income before income taxes 5,652 217 - 5,869 Income tax expense 1,929 - - 1,929 ---------- -------- ------ ---------- Net income $ 3,723 $ 217 $ - $ 3,940 ========== ======== ====== ========== Net income per share $ 0.48 $ 1.88 $ - $ 0.49 ========== ======== ====== ========== Shares used in computing net income per share 7,818,397 115,950 - 8,001,963 ========== ======== ====== ==========
See notes to unaudited pro forma condensed consolidated combining financial statements. F-14 17 SPSS INC. AND SUBSIDIARIES Notes to Unaudited Pro Forma Condensed Consolidated Combining Financial Statements - ------------------------------------------------------------------------------- NOTE A - DESCRIPTION OF BUSINESS COMBINATION On September 26, 1996, SPSS acquired all of the outstanding common stock of Clear Software Inc., for 183,833 shares of SPSS Inc. common stock. The accompanying pro forma financial statements give effect to the merger applying the pooling-of-interests method of accounting. NOTE B - COSTS OF THE BUSINESS COMBINATION The unaudited pro forma condensed consolidated combining financial statements do not include any adjustments relating to costs associated with the business combination. F-15 18 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this amendment to be signed on its behalf by the undersigned, thereunto duly authorized. SPSS INC. (Registrant) By: /s/ Robert Brinkmann -------------------- Controller Date: October 31, 1996 EX-23.1 2 INDEPENDENT AUDITORS' CONSENT 1 EXHIBIT 23.1 INDEPENDENT AUDITORS' CONSENT We consent to the inclusion of our report dated August 9, 1996 relating to the balance sheet of Clear Software, Inc. as of December 31, 1995 and the related statements of income and retained earnings, and cash flows for the year then ended, which report appears in the Form 8-K of SPSS Inc. dated September 26, 1996. KPMG PEAT MARWICK LLP Boston, Massachusetts October 31, 1996 -----END PRIVACY-ENHANCED MESSAGE-----