-----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, WJYHsLdMTSvQ070Eskg+PWBg3DRvP5OjPAgw3MlUhb8OaaR3TKVwIiTYs+860FmT OnN/eT/mzkF4xPc8NwR+hw== 0000896463-96-000188.txt : 19961118 0000896463-96-000188.hdr.sgml : 19961118 ACCESSION NUMBER: 0000896463-96-000188 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19960930 FILED AS OF DATE: 19961114 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: SYMIX SYSTEMS INC CENTRAL INDEX KEY: 0000872443 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-PREPACKAGED SOFTWARE [7372] IRS NUMBER: 311083175 STATE OF INCORPORATION: OH FISCAL YEAR END: 0630 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 000-19024 FILM NUMBER: 96666257 BUSINESS ADDRESS: STREET 1: 2800 CORPORATE EXCHANGE DR CITY: COLUMBUS STATE: OH ZIP: 43231 BUSINESS PHONE: 6145237000 MAIL ADDRESS: STREET 1: 2800 CORPORATE EXCHANGE DR CITY: COLUMBUS STATE: OH ZIP: 43231 10-Q 1 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-Q QUARTERLY REPORT (x) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the period ended September 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 0-19024 Symix Systems, Inc. ------------------------------------------------------ (Exact name of registrant as specified in its charter) Ohio 31-1083175 - ------------------------------- ------------------------------------ (State or other jurisdiction of (IRS Employer Identification Number) incorporation or organization) 2800 Corporate Exchange Drive Columbus, Ohio 43231 ------------------------------------------------------------ (Address of principal executive officer, including zip code) (614) 523-7000 ---------------------------------------------------- (Registrant's telephone number, including area code) N/A ---------------------------------------------------------------------- (Former name, former address fiscal year, if changed since last report) 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 report(s), and (2) has been subject to such filing requirements for the past 90 days. YES __X__ NO _____ At November 8, 1996, there were 5,536,390 common shares of the Company with a stated value per share of $.01. Page 1 SYMIX SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands) September 30, June 30, 1996 1996 ------------ -------- (unaudited) ASSETS CURRENT ASSETS Cash and cash equivalents $ 4,717 $ 6,774 Trade accounts receivable, less allowance for doubtful accounts of $400 at September 30, 1996 and $450 at June 30, 1996 12,503 11,429 Inventories 342 312 Prepaid expenses 673 522 Other receivables 619 117 Deferred income taxes 273 230 ---------- ------- TOTAL CURRENT ASSETS 19,127 19,384 OTHER ASSETS Purchased and developed software, net of accumulated amortization of $4,736 at September 30, 1996 and $4,311 at June 30, 1996 4,974 4,660 Deferred income taxes 1,081 1,004 Intangibles, net 2,127 - Deposits and other assets 936 472 ---------- ------- 9,118 6,136 EQUIPMENT AND IMPROVEMENTS Furniture and fixtures 2,343 2,294 Computer and other equipment 9,035 8,078 Leasehold improvements 1,200 1,187 ---------- ------- 12,578 11,559 Less allowance for depreciation and amortization 7,160 6,616 ---------- ------- 5,418 4,943 ---------- ------- TOTAL ASSETS $ 33,663 $30,463 ========== =======
See notes to consolidated financial statements -2- SYMIX SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Continued) (In thousands) September 30, June 30, 1996 1996 ------------- -------- (unaudited) LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable and accrued expenses $ 5,928 $ 5,300 Customer deposits 226 242 Deferred revenue 7,601 5,786 Income taxes payable 129 518 -------- -------- TOTAL CURRENT LIABILITIES 13,884 11,846 LONG-TERM PAYABLE 640 - DEFERRED INCOME TAXES 1,646 1,515 SHAREHOLDERS' EQUITY Common stock, authorized 20,000 shares; issued 5,841 shares at September 30, 1996, and 5,826 at June 30, 1996; at stated capital amounts of $.01 per share 58 58 Capital in excess of stated value 11,043 10,985 Retained earnings 7,712 7,379 -------- -------- 18,813 18,422 Less: Cost of common shares in treasury, 304 shares at September 30, 1996 and June 30, 1996, at cost (1,320) (1,320) -------- -------- TOTAL SHAREHOLDERS' EQUITY 17,493 17,102 -------- -------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 33,663 $ 30,463 ======== ======== See notes to consolidated financial statements -3- SYMIX SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (unaudited) Three Months Ended September 30, ---------------------- 1996 1995 -------- -------- License fees $ 5,884 $ 4,752 Service, maintenance and support 6,806 5,068 ------- ------- Net revenue 12,690 9,820 License fees 1,952 1,742 Service, maintenance and support 2,591 2,057 ------- ------- Cost of revenue 4,543 3,799 ------- ------- Gross Margin 8,147 6,021 ------- ------- Selling, general and administrative 6,555 4,730 Research and product development 1,100 858 Restructuring and other unusual charges -- 506 ------- ------- Total operating expenses 7,655 6,094 ------- ------- Operating income (loss) 492 (73) Interest and other income, net 72 53 ------- ------- Income (loss) before income taxes 564 (20) Provision (benefit) for income taxes 217 (8) ------- ------- Net income (loss) $ 347 ($ 12) ======= ======= Earnings (loss) per share $ 0.06 $ 0.00 ======= ======= Weighted average number of common and common equivalent shares outstanding 5,989 5,450 ======= ======= See notes to consolidated financial statements -4- SYMIX SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS (In thousands) Three Months Ended September 30, (unaudited) 1996 1995 ---------------------------- Increase (decrease) in cash OPERATING ACTIVITIES Net income (loss) $ 347 $ (12) Adjustments to reconcile net income (loss) to net cash provided by operating activities: Depreciation and amortization 973 697 Provision for losses on accounts receivable (50) (100) Provision for deferred income taxes 10 107 Changes in operating assets and liabilities: Trade accounts receivable 301 1,922 Prepaid expenses and other receivables (278) (17) Inventory (30) (8) Deposits (472) (48) Accounts payable and accrued expenses (1,293) (1,003) Customer deposits (16) 81 Deferred revenue 1,123 (399) Income taxes payable/refundable (389) (136) ------- ------- NET CASH PROVIDED BY OPERATING ACTIVITIES 226 1,084 See notes to consolidated financial statements -5- SYMIX SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENT OF CASH FLOWS (continued) (In thousands) Three Months Ended September 30, (unaudited) 1996 1995 --------------------------- Increase (decrease) in cash INVESTING ACTIVITIES Purchase of equipment and improvements (987) (119) Additions to purchased and developed software (719) (901) Purchase of subsidiaries, net of cash acquired (1,028) - ------- ------- NET CASH USED BY INVESTING ACTIVITIES (2,734) (1,020) FINANCING ACTIVITIES Proceeds from issuance of common stock and exercise of stock options 58 73 Additions to long-term obligations 446 - ------- ------- NET CASH PROVIDED BY FINANCING ACTIVITIES 504 73 Effect of exchange rate changes on cash (53) 37 ------- ------- Net Change in Cash and Cash Equivalents (2,057) 174 Cash and Cash Equivalents at beginning of period 6,774 4,498 ------- ------- CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 4,717 $ 4,672 ======= ======= See notes to consolidated financial statements -6- SYMIX SYSTEMS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Note A -- Accounting Policies and Presentation The accompanying consolidated financial statements are unaudited; however, the information contained herein reflects all adjustments which are, in the opinion of management, necessary for a fair statement of the results of operations for the interim periods. All adjustments made were of a normal recurring nature. These interim results of operations are not necessarily indicative of the results to be expected for a full year. The notes to the consolidated financial statements contained in the Symix Systems, Inc. and Subsidiaries' (the Company) June 30, 1996 Annual Report to Shareholders should be read in conjunction with these financial statements. Note B -- Restructuring and Other Non-Recurring Charges The restructuring and other non-recurring charges of $506,000 shown for the quarter ended September 30, 1995 relate primarily to severance payments and reorganizing loss associated with the European sales channel. Note C -- Litigation The litigation involving the former president and former senior vice president of the Company has been settled. The settlement will not have a material adverse affect on the Company's financial condition or results of operations. Note D -- Acquisition During the first quarter, the Company acquired in two separate transactions companies in France and Australia for $1.86 million. $820,000 was paid in cash at closing with the remaining balance of $1.04 million being payable over three years. Both companies are manufacturing software specialists that will serve as sales, service and support operations for the Company in France and Australia. The acquisitions were accounted for using purchase accounting with results included since the beginning of the period. The price of the purchases exceeded the fair value of the net assets acquired by approximately $2.2 million which is being amortized over five years. -7- Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations The Company's revenues are derived from (i) licensing SYMIX software and (ii) providing product support and related services. Product support is provided pursuant to agreements that are generally renewed annually. Related services consist of installation, implementation, training, consulting, programming and systems integration services for SYMIX users. The Company's results of operations have fluctuated on a quarterly basis. However, the Company has not experienced significant seasonal fluctuations in net revenue over the past two years. Results of Operations Net revenue was $12,690,000 for the three months ended September 30, 1996, an increase of 29% from the same quarter of the previous year. License revenue increased 24% from $4,752,000 for the same quarter last year to $5,884,000 this year. Service and support revenue increased 34%; $6,806,000 for the quarter ended September 30, 1996, compared to $5,068,000 for the quarter ended September 30, 1995. These increases are primarily attributable to the Company's expansion in the international European and Asia Pacific markets. Net revenue outside of North America accounted for more than 25% of total revenue, the highest percentage in the Company's history. The cost of license fees increased in the quarter ended September 30, 1996 from the quarter ended September 30, 1995 because software amortization increased following the general commercial release of the Symix SyteLine product for which costs had previously been capitalized. The cost of license fees decreased as a percentage of license fee revenue in the quarter ended September 30, 1996 compared to the quarter ended September 30, 1995 largely because license fee revenue increased more rapidly than the cost of the license fees sold. The cost of service, maintenance and support increased to $2,591,000 for the quarter ended September 30, 1996 from $2,057,000 for the same quarter last year primarily because the Company added personnel to provide the services that generated the corresponding increase in revenue from service, maintenance and support. The cost of service, maintenance and support, as a percentage of service, maintenance and support revenue, decreased for the quarter ended September 30, 1996 as compared to the quarter ended September 30, 1995 because a large portion of the increase in the corresponding revenue was generated by maintenance and product support, which can be provided more efficiently by serving a larger client base. Selling, general and administrative (SG&A) expense was $6,555,000 for the quarter ended September 30, 1996, compared to $4,730,000 for the same period last year, a 39% increase. For the current quarter, SG&A expense stated as a percentage of revenue was 52% compared to 48% for the same period last year. The increase is due to planned spending increases in marketing and promotional materials. -8- Research and product development (R&D) expenditures, including amounts capitalized for the three months ended September 30, 1996, were $1,819,000 compared to $1,758,000 for the same period last year. Capitalization of software development costs was $719,000 for the quarter ended September 30, 1996, compared to $901,000 for the comparable period last year. The increase in research and development expenditures is expected to continue as the Company devotes a significant percentage of its resources to developing and enhancing existing and new products. Liquidity and Capital Resources At September 30, 1996, the Company had working capital of $5,243,000, including cash and cash equivalents of $4,717,000, compared to $7,538,000, including cash and cash equivalents of $6,774,000, at June 30, 1996. Net accounts receivable increased from $11,429,000 at June 30, 1996, to $12,503,000 at September 30, 1996. At September 30, 1996, the accounts receivable days sales outstanding was 93 days compared to 76 days at June 30, 1996. The decrease in working capital is due to international expansion and first quarter capital expenditures. In addition to its present working capital, the Company has, with a bank, a $6.0 million unsecured revolving line of credit. To date, no amounts have been drawn under the line. It is expected that the Company's continued expansion of its operations and products will result in additional requirements for cash in the future. The Company, however, anticipates that existing sources of liquidity, cash flow from operations, and the bank credit line will be sufficient to satisfy anticipated cash needs for the next twelve months. -9- PART II--OTHER INFORMATION ITEM 1. Legal Proceedings The litigation involving the former president and the former senior vice president of the Company styled as Symix Systems, Inc. v. O. Kent LaRoque III, et al. (Case No. CP-95CVH06-4279) in the Court of Common Pleas of Franklin County, Ohio and O. Kent LaRoque, III, et al. v. Symix Systems, Inc. (Case No. 2:95-CV-632) in the United States District Court for the Southern District of Ohio, Eastern Division, has been settled. The settlement agreement between the parties requires that certain terms of the settlement be kept confidential. The settlement will not have a material adverse affect on the Company's financial condition or results of operations. This matter was first reported by the Company in a Form 8-K dated April 18, 1996 filed with the Securities and Exchange Commission. ITEM 2. Changes in Securities None ITEM 3. Defaults Upon Senior Securities None ITEM 4. Submission of Matters to a Vote of Security Holders None ITEM 5. Other Information None ITEM 6. Exhibits and Reports on Form 8-K None -10- 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. Symix Systems, Inc. Date: November 14, 1996 Lawrence W. DeLeon _______________________________________ Lawrence W. DeLeon Vice President, Chief Financial Officer and Secretary EX-27 2
5 This schedule contains summary financial information extracted from Symix Systems, Inc. Form 10-Q for the period ended September 30, 1996 and is qualified in its entirety by reference to such financial statements. 1000 3-MOS JUN-30-1997 SEP-30-1996 4,717 0 12,903 400 342 19,127 12,578 7,160 33,663 13,884 0 0 0 58 18,755 33,663 5,884 12,690 1,952 4,543 7,655 (50) 4 564 217 347 0 0 0 347 0.06 0.00
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