-----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, CDSerKZQQbzszVPPFz/gPjxQZl4CvLYGsHpNi+/E2YKNZ0GPLbMFi7ZEix4Lm9u9 ZDClBB86MVF6RKA/x5Ga8A== 0000950137-99-000266.txt : 19990315 0000950137-99-000266.hdr.sgml : 19990315 ACCESSION NUMBER: 0000950137-99-000266 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19981231 ITEM INFORMATION: FILED AS OF DATE: 19990312 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: SEC FILE NUMBER: 000-22194 FILM NUMBER: 99564435 BUSINESS ADDRESS: STREET 1: 233 SOUTH WACKER DRIVE CITY: CHICAGO STATE: IL ZIP: 60606 BUSINESS PHONE: 3123292400 MAIL ADDRESS: STREET 1: 233 SOUTH WACKER DRIVE CITY: CHICAGO STATE: IL ZIP: 60606 8-K/A 1 FORM 8-K/A 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 DECEMBER 31, 1998 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)
233 S. WACKER DRIVE CHICAGO, ILLINOIS 60606 (Address of Principal Executive Offices, Including Zip Code) (312) 651-3000 (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 December 31, 1998 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: Integral Solutions Limited and Subsidiary for the year ended April 30, 1998 in Pound Stirlings Director's Report for the year ended April 30, 1998.....................F-1 Auditor's Report to the Shareholders of Integral Solutions Limited for the year ended April 30, 1998......................................F-2 Consolidated Profit and Loss Account for the year ended April 30, 1998..F-3 Statement of Total Recognised Gains and Losses for the year ended April 30, 1998.........................................................F-4 Consolidated Balance Sheet as at April 30, 1998.........................F-5 Company Balance Sheet as at April 30, 1998..............................F-6 Notes to Financial Statements for the year ended April 30, 1998.........F-7 Integral Solutions Limited and Subsidiary for the six months ended October 31, 1998 Unaudited Condensed Consolidated Balance Sheet as of October 31, 1998...F-13 Unaudited Condensed Consolidated Statements of Operations for the six months ended October 31, 1998 and 1997.................................F-14 Unaudited Condensed Consolidated Statements of Cash Flows for the six months ended October 31, 1998 and 1997.............................F-15 Notes to Unaudited Condensed Consolidated Financial Statements..........F-16
(b) Pro forma financial information: SPSS Inc. Unaudited Pro Forma Combined Condensed Consolidated Balance Sheet as of September 30, 1998......................................................F-17
2 3 Unaudited Pro Forma Combined Condensed Consolidated Statement of Operations for the year ended December 31, 1997 ..................................... F-18 Unaudited Pro Forma Combined Condensed Consolidated Statement of Operations for the nine months ended September 30, 1998 ............................. F-19 Notes to Unaudited Pro Forma Combined Condensed Consolidated Financial Statements ........................................ F-20 Exhibits - ------------------------------------------------------------------------------ Independent Auditors' Consent ............................................. Ex. 23.1
3 4 Integral Solutions Limited and Subsidiary Company Directors' Report For the Year Ended 30 April 1998 The directors present their report and the financial statements for the year ended 30 April 1998. Principal activities The principal activities of the group continue to be the sale of computer software products and associated services. Year 2000 The company has in place a project to assess the risks and uncertainties associated with the Year 2000. This project is staffed internally and is expected to be completed (all identified issues resolved) by 31 December 1998. The cost of the project has not been quantified as most of the non-compliant hardware and software will be replaced before the year 2000 through the ususal asset replacement cycle. No significant additional external costs are anticipated in relation to the project. Directors and their Interests The directors who served during the year and their interest in the company were as stated below.
Class of share Number of shares --------------- ---------------- 1998 1997 ------ ------ T.A. Montgomery Ordinary shares 586,083 586,083 L. Montgomery Ordinary shares 144,948 144,948 C. Morton Ordinary shares 52,784 52,784 C. Shearer Ordinary shares 52,784 52,784 Dr. D.J. Schafer Ordinary shares - -
Auditors In accordance with Section 385 of the Companies Act 1985, a resolution proposing that Brooking Knowles & Lawrence be reappointed as auditors of the company will be put to the Annual General Meeting. Directors Responsibilities Company law requires the directors to prepare financial statements for each financial year which give a true and fair view of the state of affairs of the group and of the profit or loss of the group for that period. In so doing, the directors are required to: - -- select suitable accounting policies and then apply them consistently; - -- make judgements and estimates that are reasonable and prudent; - -- state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements; - -- prepare the financial statements on the going concern basis unless it is inappropriate to presume that the group will continue in business. The directors are responsible for maintaining proper accounting records that disclose with reasonable accuracy at any time the financial position of the group and enable them to ensure that the financial statements comply with the Companies Act 1985. They are also responsible for safeguarding the assets of the group and hence for taking reasonable steps for the prevention and detection of fraud and other irregularities. This directors' report has been prepared in accordance with the special provisions of Part VII of the Companies Act relating to small companies and groups. This report was approved by the Board on September 7, 1998 . /s/ L.F. Montgomery L. Montgomery Secretary F-1 5 Integral Solutions Limited and Subsidiary Company Auditor's Report to the Shareholders of Integral Solutions Limited For the Year Ended 30 April 1998 We have audited the financial statements on pages 3 [F-3] to 13 [F-12] which have been prepared under the historical cost convention and the accounting policies set out on pages 7 [F-7] to 8 [F-8]. RESPECTIVE RESPONSIBILITIES OF DIRECTORS AND AUDITORS As described on page 1 [F-1] the company's directors are responsible for the preparation of financial statements. It is our responsibility as auditors to form an independent opinion, based on our audit, on those statements and to report our opinion to you. BASIS OF OPINION We conducted our audit in accordance with auditing standards issued by the Auditing Practices Board. An audit includes examination, on a test basis, of evidence relevant to the amounts and disclosures in the financial statements. It also includes an assessment of the significant estimates and judgements made by the directors in the preparation of the financial statements, and of whether the accounting policies are appropriate to the group's and company's circumstances, consistently supplied and adequately disclosed. We planned and performed our audit so as to obtain all the information and explanations which we considered necessary in order to provide us with sufficient evidence to give reasonable assurance that the financial statements are free from material misstatement, whether caused by fraud or other irregularity or error. In forming our opinion we also evaluated the overall adequacy of the presentation of information in the financial statements. OPINION In our opinion the financial statements give a true and fair view of the state of affairs of the company and the group as at 30 April 1998 and of the profit of the group for the year then ended and have been properly prepared in accordance with the Companies Act 1985. Dated 10 September 1998 ----------------------- Clifton House Bunnian Place Basingstoke Hampshire /s/ Brooking Knowles & Lawrence Brooking Knowles & Lawrence Chartered Accountants Registered Auditor F-2 6 Integral Solutions Limited and Subsidiary Company Consolidated Profit and Loss Account For the Year Ended 30 April 1998
Notes 1998 1997 ----- ---------- ----------- L. L. Turnover 2,047,780 1,414,465 Cost of Sales (142,121) (72,306) ---------- ---------- Gross profit 1,905,659 1,342,159 Administrative expenses (1,859,754) (1,501,036) Other operating income 3 - 604,844 ---------- ---------- Operating profit 4 45,905 445,967 Other interest receivable and similar income 5 4,697 4,776 Interest payable and similar charges (2,732) (15,336) ---------- ---------- Profit on ordinary activities before taxation 47,870 435,407 Tax on profit on ordinary activities 6 (34,225) (125,912) ---------- ---------- Profit for the year 15 13,645 309,495 ========== ==========
F-3 7 Integral Solutions Limited and Subsidiary Company Statement of Total Recognised Gains and Losses For the Year Ended 30 April 1998
1998 1997 ------ ------- L. L. Profit for the current year 13,645 309,495 Currency translation differences on Foreign currency net investments 2,238 - ------ ------- Total recognized gains and losses relating to the year 15,883 309,495 ====== =======
F-4 8 Integral Solutions Limited and Subsidiary Company Consolidated Balance Sheet As at 30 April 1998
Notes 1998 1997 ------ ------------------ ------------------- L. L. L. L. Fixed Assets 8 113,173 102,004 Tangible assets 9 9,013 8,000 ------- ------- Investments 122,186 110,004 Current assets Stock and work in progress 60,702 109,953 Debtors - - amounts falling due after one year 10 98,684 186,430 - - amounts falling due within one year 10 698,830 422,445 Cash at bank and in hand 45,460 368,812 -------- --------- 903,676 1,087,640 Creditors: Amounts falling due within one year 11 (565,840) (844,164) -------- --------- Net current assets 337,836 243,476 ------- ------- Total assets less current liabilities 460,022 353,480 Creditors: Amounts falling due after more than one year 12 (90,659) - ------- ------- Net assets 369,363 353,480 ======= ======= Capital and reserves Called up share capital 14 9,300 9,300 Share premium account 24,939 24,939 Profit and loss account 15 335,124 319,241 -------- ------- Shareholders' Funds (equity interests) 16 369,363 353,480 ======= =======
These financial statements have been prepared in accordance with the special provision of Part VII of the Companies Act 1985 relating to small companies and groups. The financial statements on pages 3 [F-3] to 13 [F-12] were approved by the Board of Directors and signed on its behalf by: /s/ T.A. Montgomery - ------------------- T.A.Montgomery Dated September 7, 1998 /s/ L.F. Montgomery - ------------------- L. Montgomery Dated September 7, 1998 Directors F-5 9 Integral Solutions Limited and Subsidiary Company Company Balance Sheet As at 30 April 1998
Notes 1998 1997 ----- ------------------ ------------------- L. L. L. L. Fixed Assets 8 100,856 96,591 Tangible assets 9 9,629 8,616 ------- ------- Investments 110,485 105,207 Current assets Stock and work in progress 60,702 109,953 Debtors - - amounts falling due after one year 10 98,684 186,430 - - amounts falling due within one year 10 623,069 465,240 Cash at bank and in hand 43,146 309,980 -------- --------- 825,601 1,071,603 Creditors: Amounts falling due within one year 11 (507,817) (822,714) -------- --------- Net current assets 317,784 248,889 ------- ------- Total assets less current liabilities 428,269 354,096 Creditors: Amounts falling due after more than one year 12 (60,528) - ------- ------- Net assets 367,741 354,096 ======= ======= Capital and reserves Called up share capital 14 9,300 9,300 Share premium account 24,939 24,939 Profit and loss account 15 333,502 319,857 ------- ------- Shareholders' Funds (equity interests) 16 367,741 354,096 ======= =======
These financial statements have been prepared in accordance with the special provision of Part VII of the Companies Act 1985 relating to small companies and groups. The financial statements on pages 3 [F-3] to 13 [F-12] were approved by the Board of Directors and signed on its behalf by: /s/ T.A. Montgomery - ------------------- T.A.Montgomery Dated September 7, 1998 /s/ L.F. Montgomery - ------------------- L. Montgomery Dated September 7, 1998 Directors F-6 10 Integral Solutions Limited and Subsidiary Company Notes to the Financial Statements For the Year Ended 30 April 1998 1 ACCOUNTING POLICIES 1.1 Accounting convention The financial statements are prepared under the historical cost convention and include the results of the company's operations as indicated in the directors' report all of which are continuing. The company has taken advantage of the exemption in Financial Reporting Standard No. 1 from the requirement to produce a cash flow statement on the grounds that it is a small group. 1.2 Basis of consolidation The group accounts consolidate the accounts of the company and its subsidiary. All companies in the group have accounting years ending 30 April. All intra group profits are eliminated. The accounts are consolidated using the net investment method with the profit and loss being translated at the closing rate. Exchange differences arising on translation are taken directly to reserves. The investment in the associated company (Infermed Limited) is stated at cost as the company only commenced on 23rd March 1998. As at the year end the directors believe cost represents a close approximation of the groups interest in this company's net assets. As permitted by Section 230 of the Companies Act 1985, the holding company's profit and loss account has not been included in these financial statement. 1.3 Turnover Turnover represents the amounts receivable for goods and services provided in the UK net of VAT and trade discounts. 1.4 Tangible fixed assets and depreciation Tangible fixed assets are stated at cost less depreciation. Depreciation is provided at rates calculated to write off the cost less estimated residual value of each asset over its expected useful life, as follows: Computer equipment -33 1/3% straight line Fixtures, fittings and equipment -10% straight line 1.5 Leasing Rentals payable under operating leases are charged against income on a straight line basis over the lease term. 1.6 Investments Fixed assets investments are stated at cost less provision for diminution in value. 1.7 Stock and work in progress Stock and work in progress are valued at the lower of cost and net realizable value. 1.8 Pension The company operates a defined contribution pension scheme. The assets of that scheme are held separately from those of the company in an independently administered fund. 1.9 Deferred taxation Provision is made for deferred taxation using the liability method to take account of timing differences between the incidence of income and expenditure for taxation and accounting purposes except to the extent that the directors consider that a liability to taxation is unlikely to crystallize. F-7 11 1.10 Foreign currency translation Monetary assets and liabilities denominated in foreign currencies and assets and liabilities of subsidiaries in foreign currencies are translated into sterling at the rates of exchange ruling at the accounting date. Transactions in foreign currencies are recorded at the rate ruling at the date of the transaction. All differences are taken to profit and loss account except differences arising on the retranslation of opening net investments in subsidiary companies which are taken reserves. 2 TURNOVER In the year to 30 April 1998 28% of the groups' turnover was to markets outside the United Kingdom. 3 OTHER OPERATING INCOME
1998 1997 -------- -------- L. L. Exceptional gain -- 604,844 ======== ========
Being the disposal of the business of the development and exploitation of the software and related products and applications under the name "ISS". 4 OPERATING PROFIT
1998 1997 -------- -------- L. L. Operating profit is stated after charging: Deprecation of tangible assets 57,226 39,914 Losses on foreign currencies 2,842 18,511 Operating lease rentals - Plant and machinery 24,163 17,369 - Land and buildings 45,000 45,000 Auditors' remuneration 5,250 3,675 Directors' emoluments 190,269 233,805 Directors' pension costs 7,111 27,410 Staff pension costs 21,829 14,307 ======== ======== Directors emoluments (including benefits in kind) 190,269 233,805 Payments to a defined contribution pension scheme 7,111 27,410 -------- -------- 197,380 261,215 ========= ========
Five directors have benefits accruing under a defined contribution scheme (1997: five). 5 OTHER INTEREST RECEIVABLE AND SIMILAR INCOME
1998 1997 -------- -------- L. L. Bank interest received 4,697 4,776 ======== ========
6 TAXATION
1998 1997 -------- -------- L. L. UK Current year taxation UK Corporation tax at 21% (1997-28.22%) 11,882 125,912 Prior years Corporation tax under provided 22,343 -- ======== -------- 34,225 125,912 ======== ========
7 PROFIT FOR THE FINANCIAL YEAR
1998 1997 -------- -------- L. L. Dealt with in the accounts of the holding company 13,645 310,111 ======== ========
F-8 12 8 TANGIBLE ASSETS Group
Fixtures Computer fittings & equipment equipment Total ---------- ----------- ---------- L. L. L. Cost At 1 May 1997 282,874 19,949 302,823 Additions 65,645 2,905 68,550 Foreign exchange (173) - (173) ---------- ----------- ---------- At 30 April 1998 348,346 22,854 371,200 ========== =========== ========== Depreciation At 1 May 1997 187,285 13,534 200,819 Charge for year 55,773 1,453 57,226 Foreign exchange (18) - (18) ---------- ----------- ---------- At 30 April 1998 243,040 14,987 258,027 ========== =========== ========== Net book values At 30 April 1998 105,306 7,867 113,173 ========== =========== ========== At 30 April 1997 95,589 6,415 102,004 ========== =========== ==========
Fixtures Computer fittings & equipment equipment Total ---------- ----------- ---------- L. L. L. Cost At 1 May 1997 276,885 19,949 296,834 Additions 55,335 2,905 58,240 ---------- ----------- ---------- At 30 April 1998 332,220 22,854 355,074 ========== =========== ========== Depreciation At 1 May 1997 186,709 13,534 200,243 Charge for year 52,522 1,453 53,975 ---------- ----------- ---------- At 30 April 1998 239,231 14,987 254,218 ========== =========== ========== Net book values At 30 April 1998 92,989 7,867 100,856 ========== =========== ========== At 30 April 1997 90,176 6,415 96,591 ========== =========== ==========
9 FIXED ASSET INVESTMENTS Shares in group undertakings and participating interests F-9 13
Integral Solutions ISL Infermed (Asia) PTE Group Decision Company Limited Limited Total Systems Inc. Total -------- ---------- ----- ------------ ------- L. L. L. L. L. Cost At 1 May 1997 - 8,000 8,000 616 8,616 Purchase of shares capital 1,013 - 1,013 - 1,013 -------- ---------- ----- ------------ ------- At 30 April 1998 1,013 8,000 9,013 616 9,629 ======== ========== ===== ============ ======= Net book values At 30 April 1998 1,013 8,000 9,013 616 9,629 ======== ========== ===== ============ ======= At 30 April 1997 - 8,000 8,000 616 8,616 ======== ========== ===== ============ =======
In the opinion of the directors the aggregate value of the company's investment in subsidiary undertakings is not less than the amount included in the balance sheet. Holdings of more than 10%. The company holds more than 10% of the share capital of the following companies
Country of registration Shares held Company Nature of business or incorporation Class % - ------- ------------------ ------------------------ ----------- ISL Decision Systems Inc. Software United States of America Ordinary 75 Integral Solutions (Asia) PTE Ltd. Distributor Republic of Singapore Ordinary 20 Infermed Limited Medical systems England and Wales Ordinary 35
The shares in Integral Solutions (Asia) PTE Limited are held in trust for the company by T.A. Montgomery, a director of this company. 10 DEBTORS
Group Company ---------------- ---------------- 1998 1997 1998 1997 ------- ------- ------- ------- L. L. L. L. Trade debtors 762,024 576,157 660,537 576,157 Amounts owed by groups undertakings - - 29,059 44,514 Other debtors 7,500 8,726 7,500 7,500 Prepayments and accrued income 27,990 23,992 24,657 23,499 ------- ------- ------- ------- 797,514 608,875 721,753 651,670 ======= ======= ======= =======
Amounts falling due after more than one year and included in the debtors above are:
Group Company ---------------- ---------------- 1998 1997 1998 1997 ------- ------- ------- ------- L. L. L. L. Trade debtors 98,684 186,430 98,684 186,430 ======= ======= ======= =======
F-10 14 11 CREDITORS: Amounts falling due within one year
Group Company ------------------ ------------------ 1998 1997 1998 1997 ------- ------- ------- ------- L. L. L. L. Bank loans and overdrafts 39,948 75,821 39,948 75,821 Payments on account 33,684 - 33,684 - Trade creditors 121,296 181,075 121,296 181,075 Corporation tax payable 43,219 125,949 43,219 125,949 Other tax and social security 65,553 27,542 65,553 27,542 Other creditors - 235,586 - 235,586 Accruals and deferred income 262,140 198,191 204,117 176,741 ------- ------- ------- ------- 565,840 844,164 507,817 822,714 ======= ======= ======= =======
12 CREDITORS: Amounts falling due after more than one year
Group Company ------------------ ------------------ 1998 1997 1998 1997 ------- ------- ------- ------- L. L. L. L. Accruals and deferred income 90,659 - 60,528 - ======= ======= ======= =======
13 SECURED CREDITORS The aggregate value of creditors for which security has been given amounted to L.39,948 (1997 L.75,821) 14 SHARE CAPITAL
1998 1997 ------- ------- L. L. Authorized 1,000,000 Ordinary shares of 1p each 10,000 10,000 ------ ------ Allotted called up and fully paid 930,000 Ordinary shares of 1p each 9,300 9,300 ------ ------
15 PROFIT AND LOSS ACCOUNT
Group Company ------------------ ------------------ 1998 1997 1998 1997 ------- ------- ------- ------- L. L. L. L. Retained profits at 1 May 1997 319,241 9,746 319,857 9,746 Profit for the year 13,645 309,495 13,645 310,111 Foreign exchange 2,238 - - - ------- ------- ------- ------- Retained profits as 30 April 1998 335,124 319,241 333,502 319,857 ======= ======= ======= =======
F-11 15 16 RECONCILIATION OF MOVEMENTS IN SHAREHOLDERS' FUNDS
Group Company ------------------ ------------------ 1998 1997 1998 1997 ------- ------- ------- ------- L. L. L. L. Profit for the financial year 15,883 309,495 13,645 310,111 Opening shareholders' funds 353,480 43,985 354,096 43,985 ------- ------- ------- ------- Closing shareholders' funds 369,363 353,480 367,741 354,096 ======= ======= ======= =======
17 FINANCIAL COMMITMENTS At 30 April 1998 the Group had annual commitments under non-cancellable operating leases as follows:
Group Company ------------------ ------------------ 1998 1997 1998 1997 ------- ------- ------- ------- L. L. L. L. Expiry date: Within one year - - 3,077 6,615 After one year but within five years 45,000 45,000 23,833 3,068 ------- ------- ------ ------- 45,000 45,000 26,910 9,683 ======= ======= ====== =======
18 TRANSACTIONS WITH DIRECTORS Integral Solutions Limited has an interest in transactions with Integral Solutions (Asia) PTE Limited due to its shareholding in this company. Sales of L.50,925 (1997: L.33,509) and purchases of Nil (1997: L.660) were made to this company during the year. At the year end the debtor and creditor balances stood at L.15,305 (1997: L.26,970) and Nil (1997: L.660) respectively. T.A. Montgomery, L. Montgomery, C. Morton, C. Shearer and Dr. D.J. Schafer who are directors of this company are also minority shareholders of ISL Decision Systems Inc. a company incorporated in the United States. Loans were made to this company of L.133,905 during 1997. Royalty sales during the year, and the year end debtor stood at L.98,831 (1997: Nil). Against these debts is a provision of L.201,708 (1997: L.77,539). T.A. Montgomery and L. Montgomery have provided a personal guarantee in favour of the bank overdraft of L.100,000. T.A. Montgomery and L. Montgomery have been paid interest on loans made in previous years amounting to L.1,753 (1997: L.11,012). 19 CONTINGENT LIABILITIES The company and the group have no material contingent liabilities at 30 April 1998 (1997: Nil). 20 ULTIMATE CONTROLLING PARTY The ultimate controlling parties are T.A. Montgomery and L. Montgomery by virtue of their 78.6% holding in the company. F-12 16 Integral Solutions Limited and Subsidiary Company Unaudited Condensed Consolidated Balance Sheet (in thousands)
October 31, 1998 ----------------- CURRENT ASSETS: Cash and cash equivalents $ 36 Accounts receivable, net of allowances 1,225 Inventories 229 Prepaid expenses and other current assets 55 ---------------- Total current assets 1,545 ---------------- EQUIPMENT AND LEASEHOLD IMPROVEMENTS, at cost: Furniture, fixtures and office equipment 39 Computer equipment and software 592 ---------------- 631 Less accumulated depreciation and amortization 483 ---------------- Net equipment and leasehold improvements 148 ---------------- $1,693 ================ CURRENT LIABILITIES: Notes payable $ 45 Accounts payable 330 Other accrued liabilities 53 Income taxes and value added taxes payable 90 Customer advances 70 Deferred revenues 500 ---------------- Total current liabilities 1,088 ---------------- Total stockholders' equity 605 ---------------- $1,693 ================
See accompanying notes to unaudited condensed consolidated financial statements. F-13 17 Integral Solutions Limited and Subsidiary Company Unaudited Condensed Consolidated Statements of Operations (in thousands)
For the six months ended October 31, -------------------------------------- 1998 1997 ------------------ ------------------ Net revenue $1,682 $1,530 Cost of revenues 58 95 ----------------- ------------------ Gross profit 1,624 1,435 Operating expenses 1,625 1,376 ----------------- ------------------ Operating Income (loss) (1) 59 ----------------- ------------------ Other Income 1 5 ----------------- ------------------ Income before income taxes - 64 Income tax expense - 13 ----------------- ------------------ Net income $ - $ 51 ================= ==================
See accompanying notes to unaudited condensed consolidated financial statements. F-14 18 Integral Solutions Limited and Subsidiary Company Unaudited Condensed Consolidated Statements of Cash Flows (in thousands)
For the six months ended October 31, ------------------------------------ 1998 1997 ---------------- ----------------- Cash flows from operating activities: Net income $ - $ 51 Adjustments to reconcile net income to net cash used in operating activities: Depreciation and amortization 50 41 Changes in assets and liabilities: Accounts receivable 75 (143) Inventories (126) 44 Prepaid expenses and other current assets (6) (7) Customer advances 14 140 Accounts payable 13 (460) Other accrued expenses (33) (161) Income taxes and value added taxes Payable (45) 36 Deferred revenues 28 (35) ---------------- ---------------- Net cash used in operating activities (30) (494) ---------------- ---------------- Cash flows from investing activities: Capital expenditures (9) (51) Cash flows from financing activities: Net borrowings on notes payable - 50 Net change in cash and cash equivalents (39) (495) Cash and cash equivalents at beginning of period 75 601 ---------------- ---------------- Cash and cash equivalents at end of period $ 36 $ 106 ================ ================
See accompanying notes to unaudited condensed consolidated financial statements. F-15 19 Notes to Unaudited Condensed Consolidated Financial Statements Note A - Basis of Presentation The accompanying unaudited condensed consolidated 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 condensed consolidated financial statements should be read in conjunction with the Integral Solutions Limited audited consolidated financial statements and notes thereto for the year ended April 30, 1998, included elsewhere herein. F-16 20 SPSS Inc. Unaudited Pro Forma Combined Condensed Consolidated Balance Sheet As of September 30, 1998 (In Thousands)
Pro Forma Pro-Forma SPSS ISL Adjustments Combined ------- ------ --------------- --------- CURRENT ASSETS: Cash and cash equivalents $12,930 $ 36 ($2,032)B $10,934 Accounts receivable, net of allowances 28,160 1,225 - 29,385 Inventories 2,769 229 - 2,998 Prepaid expenses and other current assets 2,589 55 - 2,644 ------- ------ -------------- --------- Total current assets 46,448 1,545 (2,032) 45,961 ------- ------ -------------- --------- EQUIPMENT AND LEASEHOLD IMPROVEMENTS, at cost Land and building 1,758 - - 1,758 Furniture, fixtures and office equipment 7,162 39 - 7,201 Computer equipment and software 21,243 592 - 21,835 Leasehold improvements 6,092 - - 6,092 ------- ------ -------------- --------- 36,255 631 - 36,886 Lease accumulated depreciation and amortization 21,991 483 - 22,474 ------- ------ -------------- --------- Net equipment and leasehold improvements 14,264 148 - 14,412 ------- ------ -------------- --------- Capitalized software developments costs, net of accumulated amortization 8,148 - 1,313 B 9,461 Goodwill, net of accumulated amortization 938 - 1,324 B 2,262 Deferred income taxes 2,586 - - 2,586 Other assets 1,578 - 1,259 B 2,837 ------- ------ -------------- --------- $73,962 $1,693 $ 1,864 $77,519 ======= ====== ============== ========= CURRENT LIABILITIES: Notes payable $ - $ 45 6,776 B $ 6,821 Accounts payable 5,201 330 - 5,531 Accrued royalties 450 - - 450 Accrued rent 523 - - 523 Other accrued liabilities 8,648 53 - 8,701 Income taxes and value added taxes payable 3,521 90 (343)B 3,268 Customer advances 353 70 - 423 Deferred revenues 8,635 500 - 9,135 ------- ------ -------------- ---------- Total current liabilities 27,331 1,088 6,433 34,852 ------- ------ -------------- ---------- Deferred income taxes 1,936 - 998 B 2,934 Other noncurrent liabilities 1,182 - - 1,182 Stockholders' equity 43,513 605 (5,567)B 38,551 ------- ------ -------------- ---------- $73,962 $1,693 $1,864 $77,519 ======= ====== ============== ==========
See accompanying notes to unaudited pro forma combined condensed consolidated financial statements. F-17 21 SPSS Inc. Unaudited Pro Forma Combined Condensed Consolidated Statement of Operations Year Ended December 31, 1997 (In thousands, except share and per share data)
Pro Forma Pro Forma SPSS ISL Adjustments Combined ---------- --------- ----------- ----------- Net revenues $ 110,644 $3,369 $ - $ 114,013 Cost of revenues 9,835 234 404 C1 10,473 --------- --------- ----------- ----------- Gross profit 100,809 3,135 (404) 103,540 Operating expenses 93,823 3,060 453 C1 97,336 --------- --------- ----------- ----------- Operating income 6,986 75 (857) 6,204 --------- --------- ----------- ----------- Other income (expense) (162) 3 (569)C2 (728) --------- --------- ----------- ----------- Income before income taxes 6,824 78 (1,426) 5,476 Income tax expense (benefit) 3,242 56 (442)C3 2,856 --------- --------- ----------- ----------- Net income $ 3,582 $ 22 ($984) $ 2,620 ========= ========= =========== =========== Basic earnings per share $0.41 $ 0.30 Shares used in computing basic earnings per share 8,787,403 8,787,403 Diluted earnings per share $0.37 $ 0.27 Shares used in computing diluted earnings per share 9,626,114 9,626,114
See accompanying notes to unaudited pro forma combined condensed consolidated financial statements. F-18 22 SPSS Inc. Unaudited Pro Forma Combined Condensed Consolidated Statement of Operations Nine Months Ended September 30, 1998 (In thousands, except share and per share data)
Pro Forma SPSS ISL Adjustments Pro Forma Combined --------- --------- -------------------- ------------------ Net revenues $ 87,269 $2,652 $ - $ 89,921 Cost of revenues 7,525 84 303 7,912 --------- --------- ------------------- ----------------- Gross profit 79,744 2,568 (303) 82,009 Operating expenses 65,348 2,466 340 68,154 --------- --------- ------------------- ----------------- Operating income 14,396 102 (643) 13,855 --------- --------- ------------------- ----------------- Other income (expense) 125 1 (427) (301) --------- --------- ------------------- ----------------- Income before income taxes 14,521 103 (1,070) 13,554 Income tax expense (benefit) 4,980 22 (332) 4,670 --------- --------- ------------------- ----------------- Net income $ 9,541 $ 81 ($738) $ 8,884 ========= ========= =================== ================= Basic earnings per share $1.07 $ 0.99 Shares used in computing basic earnings per share 8,949,088 8,949,088 Diluted earnings per share $1.00 $ 0.93 Shares used in computing diluted earnings per share 9,565,561 9,565,561
See accompanying notes to unaudited pro forma combined condensed consolidated financial statements. F-19 23 Notes to Unaudited Pro Forma Combined Condensed Consolidated Financial Statements Note A - Description of Business Combination On December 31, 1998, SPSS Inc. (SPSS) acquired all of the outstanding shares of capital stock of Integral Solutions Limited (ISL) for an aggregate purchase price of approximately $7 million. SPSS may be required to make additional payments up to approximately $7 million in future years to the former owners of ISL based upon the attainment of certain operating results by ISL. The amount of these payments was not determinable at December 31, 1998. Additional payments will be recorded as an adjustment to purchase price in the periods in which such payments are determinable. The unaudited pro forma combined condensed consolidated financial statements combine the balance sheets of SPSS as of September 30, 1998 and ISL as of October 31, 1998 and the results of operations of SPSS for the year ended December 31, 1997 with ISL's results for the fiscal year ended April 30, 1998. Although the periods used to combine the annual period exceed 90 days, the impact of adjusting ISL's results to include an annual period within 90 days of SPSS' year end is not material to the pro forma results. In addition, the pro forma results for the interim period combine SPSS for the nine months ended September 30, 1998 with ISL for the nine months ended October 31, 1998. ISL's results for the three months ended April 30, 1998 are included in both the annual and interim pro forma results. The results of ISL included in both the annual and interim results are net revenues of $996,000 and net income of $102,000. Note B - Purchase Price Allocation The expected purchase price allocation includes approximately $3.2 million of acquired in-process technology, $2.0 million of capitalized purchased and developed software, $1.7 million of other intangible assets and $1.7 million of goodwill. The allocation of purchase price represents an estimate of the fair values of assets acquired and liabilities assumed, including estimated investment advisory, professional fees and other acquisition expenses expected to be incurred. The allocation is subject to change and is not necessarily indicative of the ultimate purchase price allocation. The estimated charge for acquired in-process technology is reflected as a reduction of retained earnings in the accompanying unaudited pro forma combined condensed consolidated balance sheet as of September 30, 1998. Such charge has not been reflected in the unaudited pro forma combined condensed consolidated statements of operations. The unaudited pro forma combined condensed consolidated balance sheet as of September 30, 1998 includes pro forma adjustments for the purchase price allocation noted above, as well as the impact of the items in Note C below since the assumed date of the acquisition of January 1, 1997. Note C - Pro Forma Adjustments The following adjustments are reflected in the unaudited pro forma combined condensed consolidated statements of operations under the columns headed "Pro Forma Adjustments." (1) Amortization of Intangibles The unaudited pro forma combined condensed consolidated statements of operations includes pro forma adjustments for the amortization of the excess cost over net assets acquired using the straight-line method over F-20 24 10 years, purchased and developed software using the straight-line method over 5 years, and other intangible assets using the straight-line method over 5 to 10 years. (2) Interest The unaudited pro forma combined condensed consolidated statements of operations include adjustments to reduce interest income related to cash payments and increase interest expense related to increased borrowings from the acquisition. (3) Income Taxes The related tax effect of the adjustments discussed above, other than the amortization of the excess cost over net assets acquired, has been reflected using an effective income tax rate of 34.5%. F-21 25 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 -------------------- Robert Brinkmann, Controller Date: March 12, 1999 EX-23.1 2 INDEPENDENT AUDITORS' CONSENT 1 Exhibit 23.1 Independent Auditors' Consent The Board of Directors Integral Solutions Limited: We consent to the incorporation by reference in the registration statements (Nos. 333-41207, 333-21025, and 333-10423) on Form S-3, the registration statements (Nos. 33-73120, 33-73130, 33-74402, 33-80799, 333-63167, and 333-25869) on Form S-8, and the registration statement (No. 333-15427) on Form S-4 of SPSS Inc. of our report dated September 10, 1998, with respect to the consolidated financial statements of Integral Solutions Limited and Subsidiary Company, which report appears in the Form 8-K/A of SPSS Inc. dated December 31, 1998. /s/ BKL Weeks Green - ------------------- BKL Weeks Green 12 March 1999 -----END PRIVACY-ENHANCED MESSAGE-----