-----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, LiDdfT/rbD5v7fU1qPgjtWQMAm+WMp16CAFUafK7hhIqmkmLPSmBr2p7e5eg/lyh QqpGqRiICgmQTmOboc683g== 0000950152-00-001071.txt : 20000215 0000950152-00-001071.hdr.sgml : 20000215 ACCESSION NUMBER: 0000950152-00-001071 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 19991231 FILED AS OF DATE: 20000214 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: SEC FILE NUMBER: 000-19024 FILM NUMBER: 540899 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 SYMIX SYSTEMS INC. 10-Q 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 (MARK ONE) [x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended December 31, 1999 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 offices) (Zip Code) (614) 523-7000 -------------- (Registrant's telephone number, including area code) N/A --- (Former name, former address and former 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 reports), and (2) has been subject to such filing requirements for the past 90 days. YES X NO --- --- The number of common shares, without par value, of the registrant outstanding as of February 7, 2000 was 7,394,857. 2 INDEX PAGE NO. -------- PART I. FINANCIAL INFORMATION 3 Item 1. Financial Statements 3 Consolidated Balance Sheets December 31, 1999 (unaudited) June 30, 1999 3 Consolidated Statements of Operations (unaudited) Three Months and Six Months Ended December 31, 1999 and 1998 5 Consolidated Statements of Cash Flows (unaudited) Six Months Ended December 31, 1999 and 1998 6 Notes to Consolidated Financial Statements (unaudited) 8 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 13 Item 3. Quantitative and Qualitative Disclosures About Market Risk 17 PART II. OTHER INFORMATION 19 Item 1. Legal Proceedings 19 Item 2. Changes in Securities and Use of Proceeds 19 Item 3. Defaults Upon Senior Securities 19 Item 4. Submission of Matters to a Vote of Security Holders 19 Item 5. Other Information 20 Item 6. Exhibits and Reports on Form 8-K 21 SIGNATURES 22 EXHIBIT INDEX 23 2 3 PART I -- FINANCIAL INFORMATION ITEM 1. FINANCIAL STATEMENTS. SYMIX SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (In thousands)
December 31, June 30, 1999 1999 ------------ -------- (unaudited) ASSETS CURRENT ASSETS Cash and cash equivalents $ 4,651 $ 5,236 Trade accounts receivable, less allowance for doubtful accounts of $1,554 at December 31, 1999 and $1,500 at June 30, 1999 46,205 46,251 Inventories 801 767 Prepaid expenses 2,406 2,518 Other receivables 1,591 1,346 Deferred income taxes 833 811 ------- ------- TOTAL CURRENT ASSETS 56,487 56,929 OTHER ASSETS Purchased and developed software, net of accumulated amortization of $12,459 at December 31, 1999 and $10,833 at June 30, 1999 16,398 16,250 Intangibles, net 6,372 7,191 Deposits and other assets 2,227 2,033 ------- ------- 24,997 25,474 EQUIPMENT AND IMPROVEMENTS Furniture and fixtures 3,347 3,101 Computer and other equipment 16,703 15,767 Leasehold improvements 1,514 1,472 ------- ------- 21,564 20,340 Less allowance for depreciation and amortization 14,220 12,143 ------- ------- 7,344 8,197 ------- ------- TOTAL ASSETS $88,828 $90,600 ======= =======
See notes to consolidated financial statements 3 4 SYMIX SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (continued) (In thousands)
December 31, June 30, 1999 1999 ------------ -------- (unaudited) LIABILITIES AND SHAREHOLDERS' EQUITY CURRENT LIABILITIES Accounts payable and accrued expenses $ 10,700 $ 16,052 Customer deposits 118 148 Deferred revenue 17,974 17,209 Deferred tax liability 57 -- Income taxes payable 163 470 Current portion of long term obligations 431 1,124 -------- -------- TOTAL CURRENT LIABILITIES 29,443 35,003 LONG-TERM OBLIGATIONS 73 392 BANK CREDIT AGREEMENT 8,101 5,367 DEFERRED INCOME TAXES 5,267 5,417 MINORITY INTEREST 2,151 2,020 SHAREHOLDERS' EQUITY Common stock, authorized 20,000 shares; issued 7,661 shares at December 31, 1999, and 7,654 at June 30, 1999; at stated capital amounts of $.01 per share 76 76 Capital in excess of stated value 32,488 32,363 Retained earnings 14,680 13,496 Cumulative translation adjustment (2,131) (2,214) -------- -------- 45,113 43,721 Less: Cost of common shares in treasury, 304 shares at December 31, 1999 and June 30, 1999, at cost (1,320) (1,320) -------- -------- TOTAL SHAREHOLDERS' EQUITY 43,793 42,401 -------- -------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $ 88,828 $ 90,600 ======== ========
See notes to consolidated financial statements 4 5 SYMIX SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS (In thousands, except per share data) (unaudited)
Three Months Six Months Ended December 31, Ended December 31, -------------------- -------------------- 1999 1998 1999 1998 ------- ------- ------- ------- License fees $15,538 $19,018 $28,930 $33,498 Service, maintenance and support 18,842 14,083 37,521 26,494 ------- ------- ------- ------- Net revenue 34,380 33,101 66,451 59,992 License fees 4,791 4,689 9,029 8,554 Service, maintenance and support 10,863 8,030 20,993 14,362 ------- ------- ------- ------- Cost of revenue 15,654 12,719 30,022 22,916 ------- ------- ------- ------- Gross Margin 18,726 20,382 36,429 37,076 ------- ------- ------- ------- Selling, general and administrative 13,268 13,774 24,858 26,380 Research and product development 4,026 2,249 7,637 4,446 Amortization of intangibles from acquisitions 764 557 1,529 1,043 ------- ------- ------- ------- Total operating expenses 18,058 16,580 34,024 31,869 ------- ------- ------- ------- Operating income 668 3,802 2,405 5,207 Interest and other income (expense), net (196) 80 (466) 92 ------- ------- ------- ------- Income before income taxes 472 3,882 1,939 5,299 Provision for income taxes 184 1,553 756 2,112 ------- ------- ------- ------- Net income $ 288 $ 2,329 $ 1,183 $ 3,187 ======= ======= ======= ======= Basic EPS: Net income per share $ 0.04 $ 0.35 $ 0.16 $ 0.48 ======= ======= ======= ======= Diluted EPS: Net income per share $ 0.04 $ 0.32 $ 0.15 $ 0.44 ======= ======= ======= ======= Weighted average number of common shares outstanding 7,357 6,648 7,356 6,635 ======= ======= ======= ======= Weighted average number of common shares outstanding assuming dilution 7,836 7,281 7,778 7,270 ======= ======= ======= =======
See notes to consolidated financial statements 5 6 SYMIX SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (In thousands) (unaudited)
Six Months Ended December 31, -------------------- 1999 1998 ------- ------- Increase (decrease) in cash OPERATING ACTIVITIES Net income $ 1,183 $ 3,187 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 5,157 3,752 Provision for losses on accounts receivable 54 130 Provision for deferred income taxes (68) 542 Changes in operating assets and liabilities: Trade accounts receivable (41) (6,948) Prepaid expenses and other receivables (137) (1,046) Inventory (34) (182) Deposits (186) 71 Accounts payable and accrued expenses (5,382) (2,947) Customer deposits (18) (140) Deferred revenue 768 3,816 Income taxes payable/refundable (298) (646) ------- ------- NET CASH (USED)/PROVIDED BY OPERATING ACTIVITIES 998 (411)
See notes to consolidated financial statements 6 7 SYMIX SYSTEMS, INC. AND SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (continued) (In thousands) (unaudited)
Six Months Ended December 31, ----------------------- 1999 1998 ------- ------- Increase (decrease) in cash INVESTING ACTIVITIES Purchase of equipment and improvements (1,279) (1,807) Additions to purchased and developed software (2,242) (2,415) Purchase of subsidiaries, net of cash acquired -- (638) ------- ------- NET CASH USED BY INVESTING ACTIVITIES (3,521) (4,860) FINANCING ACTIVITIES Proceeds from issuance of common stock and exercise of stock options 39 395 Additions to long-term obligations, net of payments 1,853 1,573 ------- ------- NET CASH PROVIDED BY FINANCING ACTIVITIES 1,892 1,968 Effect of exchange rate changes on cash 46 211 ------- ------- Net change in cash (585) (3,092) Cash at beginning of period 5,236 6,115 ------- ------- CASH AT END OF PERIOD $ 4,651 $ 3,023 ======= =======
See notes to consolidated financial statements 7 8 SYMIX SYSTEMS, INC. AND SUBSIDIARIES NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED) 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, 1999 Annual Report to Shareholders should be read in conjunction with these financial statements. Certain reclassifications have been made to conform prior quarter amounts to the current quarter presentation. In the first quarter of fiscal 1999, the Company adopted Statement of Position ("SOP") 97-2, "Software Revenue Recognition," as amended by SOP 98-4, which provides guidance on applying generally accepted accounting principles in recognizing revenue on software transactions. The adoption of the SOPs, in certain circumstances, has resulted and may in the future result in the deferral of software license revenues that would have been recognized upon delivery of the related software under the preceding accounting standard, SOP 91-1. In December 1998, SOP 98-9 was issued which modified SOP 97-2 with respect to certain transactions. The Company adopted SOP 98-9 in the first quarter of fiscal 2000. Note B - Acquisitions On February 9, 2000, the Company acquired Profit Solutions, Incorporated, a Minnesota corporation and a provider of Web-centric customer relationship management applications with sales, marketing, service and business intelligence functionality, for approximately $2.0 million in cash paid at closing and $5.0 million in unsecured, subordinated promissory notes to be paid off by January 2, 2001. The acquisition will be accounted for using purchase accounting. 8 9 On June 10, 1999, the Company acquired Distribution Architects International, Inc., a provider of supply chain management applications for distribution organizations ("DAI"), for 619,000 common shares of the Company and $813,000 in cash. Pursuant to the acquisition agreement, DAI was merged with and into a wholly-owned subsidiary of the Company, and each share of DAI common stock was converted into the right to receive .1313 of a common share of the Company. Each DAI option outstanding immediately prior to the merger was canceled and terminated. The holder of each option was entitled to receive that number of Symix shares equal to $2.17 (the per share value of DAI stock as agreed to by DAI and Symix) less $1.242 (the stock option exercise price), multiplied by the number of shares of DAI covered by the option, and divided by $18.50. The transaction was accounted for as a purchase and resulted in a one-time, non-recurring charge of $835,000 relating to the write off of acquired in-process technology of DAI. The following proforma information shows revenue and net income assuming the Company and DAI had been combined at the beginning of the period indicated. The one time, non-recurring charge of approximately $835,000 is excluded from proforma net income.
Three Months Six Months Ended December 31, Ended December 31, 1999 1998 1999 1998 ---------------------------------------------------- (In thousands, except per share data) Revenue $34,380 $36,054 $66,451 $66,934 Net Income $ 288 $ 2,194 $ 1,183 $ 3,298 Earnings per Share $ 0.04 $ 0.28 $ 0.15 $ 0.42
Note C - Business Segment and Geographic Information The Company has adopted the provisions of Statement of Financial Accounting Standards ("SFAS") No. 131, "Disclosures about Segments of an Enterprise and Related Information." SFAS 131 establishes standards for the way that companies report information about operating segments, geographic areas and major customers. The Company designs, develops, markets and supports a fully integrated manufacturing, planning and financial software system. The software was developed for mid-market, discrete manufacturers. The Company operates exclusively in this market and therefore only reports on one primary segment. 9 10 The amount of net revenue, operating income (loss) and identifiable assets attributable to each of the Company's geographic areas for the quarter and six months ended December 31, 1999 and 1998, respectively, were as follows:
NORTH AMERICA ASIA/PACIFIC EUROPE ------------- ------------ ------ (In thousands) QUARTER ENDED DECEMBER 31, 1999 Net Revenue $27,425 80% $2,978 9% $ 3,977 11% Operating income (loss) $ 1,752 262% $ (227) (34)% $ (857) (128)% Identifiable assets $68,516 77% $8,831 10% $11,481 13% QUARTER ENDED DECEMBER 31, 1998 Net Revenue $24,809 75% $3,241 10% $ 5,051 15% Operating income $ 2,850 75% $ 570 15% $ 382 10% Identifiable assets $52,023 70% $8,443 11% $13,457 19% NORTH AMERICA ASIA/PACIFIC EUROPE ------------- ------------ ------ (In thousands) SIX MONTHS ENDED DECEMBER 31, 1999 Net Revenue $52,772 79% $6,385 10% $ 7,294 11% Operating income (loss) $ 3,847 160% $ 69 3% $(1,511) (63%) Identifiable assets $68,516 77% $8,831 10% $11,481 13% SIX MONTHS ENDED DECEMBER 31, 1998 Net Revenue $45,367 75% $5,793 10% $ 8,832 15% Operating income $ 4,013 77% $ 696 13% $ 498 10% Identifiable assets $52,023 70% $8,443 11% $13,457 19%
10 11 Note D - Earnings per Share The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share data):
Three Months Six Months Ended December 31, Ended December 31, -------------------- -------------------- 1999 1998 1999 1998 ------ ------ ------ ------ NUMERATOR: Net income for both basic and diluted earnings per share $ 288 $2,329 $1,183 $3,187 ====== ====== ====== ====== DENOMINATOR: Weighted-average shares outstanding 7,357 6,551 7,356 6,524 Contingently issuable shares -- 97 -- 111 ------ ------ ------ ------ Denominator for basic earnings per share 7,357 6,648 7,356 6,635 Effect of dilutive securities: Employee stock options 479 633 422 635 ------ ------ ------ ------ Denominator for diluted earnings per share 7,836 7,281 7,778 7,270 ====== ====== ====== ====== Basic earnings per share $ 0.04 $ 0.35 $ 0.16 $ 0.48 ====== ====== ====== ====== Diluted earnings per share $ 0.04 $ 0.32 $ 0.15 $ 0.44 ====== ====== ====== ======
11 12 Note E - Comprehensive Income The Company adopted SFAS No. 130, "Reporting Comprehensive Income" as of July 1, 1998. SFAS No. 130 requires disclosure of total non-stockholder changes in equity in interim periods and additional disclosures of the components of non-stockholder changes in equity on an annual basis. Total non-stockholder changes in equity include all changes in equity during the period except those resulting from investments by and distributions to stockholders.
Three Months Six Months Ended December 31, Ended December 31, (In thousands) (In thousands) 1999 1998 1999 1998 --------------------- -------------------- Net income $ 288 $2,329 $1,183 $3,187 Foreign currency translation adjustment (118) (188) 82 223 ----- ------ ------ ------ Total comprehensive income $ 170 $2,141 $1,265 $3,410 ===== ====== ====== ======
12 13 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS. REVENUE Symix's net revenue is derived primarily from (1) licensing Symix software and providing custom programming services; (2) providing installation, implementation, training, consulting and systems integration services; and (3) providing maintenance and support on a subscription basis. Revenue for all periods presented is accounted for in accordance with AICPA Statement of Position 97-2 on Software Revenue Recognition. Net revenue was $34.4 million for the three months ended December 31, 1999, an increase of 4% from the same quarter of the previous year. The overall increase is attributable to the growth of service, maintenance and support revenue for the quarter to $18.8 million, an increase of 34% from the same period last year; offset by an 18% decline in license fee revenue for the quarter. For the six months ended December 31, 1999, net revenue was $66.5 million, an increase of 11% from the same period of the previous year. The increase is attributable to the growth of service, maintenance and support revenue for the six months ended to $37.5 million, an increase of 42% from the same period last year; offset by a 14% decline in license fee revenue for the six months ended December 31, 1999. Symix continued to be impacted by the industry-wide trend of delays in new business system purchases due to the Year 2000 market dynamics. As a result of this trend, license fee revenue for the quarter declined 18%, from $19.0 million at December 31, 1998 to $15.5 million at December 31, 1999. The trend is similar for the six month comparison. License fee revenue for the six month period declined 14%, from $33.5 million at December 31, 1998 to $28.9 million at December 31, 1999. Service, maintenance and support revenue increased to $18.8 million, a 34% increase for the quarter-to-quarter comparison and to $37.5 million, a 42% increase, for the six month comparison. The significant increases in service, maintenance and support revenue for both the three and six month periods are the result of expansion of the services infrastructure to meet the increase in new software license customers which occurred during prior quarters, as well as the expanding product line. Additionally, the acquisition of Distribution Architects International, Inc. ("DAI"), which occurred late in the fourth quarter of last year, contributed to the increase in service, maintenance and support revenue for the current quarter. COST OF REVENUE Total cost of revenue as a percentage of net revenue was 46% for the quarter ended December 31, 1999, compared to 38% for the quarter ended December 31, 1998. The six month comparison was similar to the three month, with cost of revenue as a percentage of net revenue of 45% at December 31, 1999 compared to 38% at December 31, 1998. The increase is due to the higher mix of service, maintenance and support revenue as a percentage of total revenue. Higher costs are associated with producing service, maintenance and support revenue. During the quarter ended 13 14 December 31, 1999, service, maintenance and support revenue accounted for 55% of net revenue, compared to 43% for the quarter ended December 31, 1998. The composition of the service, maintenance and support revenue for the six month period is similar as well (56% versus 44%). Cost of license fees includes royalties, amortization of capitalized software development costs and software delivery expenses. Cost of license fees increased to 31% of license fee revenue for the quarter ended December 31, 1999 from 25% for the same period last year. The percentage increase is attributable to the increase in the rate of amortization on capitalized software expenses relative to license fee revenue. Symix began amortizing capitalized software costs related to the new product initiative, SyteCentre, during the end of the 1999 fiscal year. The six month comparisons are consistent with the three month comparisons for the quarters ended December 31, 1999 and 1998, respectively. Cost of service, maintenance and support includes the personnel and related overhead costs for implementation, training, and customer support services, together with fees paid to third parties for subcontracted services. Cost of service, maintenance and support increased slightly to 58% of service, maintenance and support revenue from 57% for the same period last year. The increase in costs is due to the increase in use of subcontractors to supplement the work performed by Symix employees during the quarter ended December 31, 1999 compared to the same quarter last year. In general, the use of subcontractors results in lower margins than the use of employees but provides to Symix increased flexibility in meeting customer demands. The six month comparisons are consistent with the three month comparisons for the quarters ended December 31, 1999 and 1998, respectively. SELLING, GENERAL AND ADMINISTRATIVE EXPENSES Selling, general and administrative expenses consist of personnel and related overhead costs, including commissions for the sales, marketing, general and administrative activities of Symix, together with advertising and promotional costs. Selling, general and administrative expenses decreased 4% for the quarter ended December 31, 1999 compared to the same period last year and, as a percentage of net revenue, decreased from 42% at December 31, 1998 to 39% at December 31, 1999. The decrease in selling, general and administrative expenses is related to the increase in percentage of service, maintenance and support revenue versus license fees revenue in the net revenue mix as well as a reduction of expenses in the sales distribution channels in response to difficult market conditions. The six month comparisons are consistent with the three month comparisons for the quarters ended December 31, 1999 and 1998, respectively. 14 15 RESEARCH AND DEVELOPMENT Research and product development expenses include personnel and related overhead costs for product development, enhancement, upgrades, quality assurance and testing. Research and product development expenditures, including amounts capitalized, were $5.0 million for the three months ended December 31, 1999, compared to $3.4 million for the same period last year. For the six months ended December 31, 1999, research and product development expenditures, including amounts capitalized, were $9.8 million compared to $6.8 million for the same period last year. Capitalization of software development costs was $1.0 million for the quarter ended December 31, 1999, compared to $1.2 million for the comparable period last year. For the six month period ended December 31, 1999, $2.1 million was capitalized compared to $2.3 million for the same period last year. As a percentage of net revenue, net of software capitalized, research and product development expense increased to 12% for the quarter ended December 31, 1999 from 7% for the quarter ended December 31, 1998. In terms of actual dollars, research and product development expense increased 79% for the quarter ended December 31, 1999 compared to the same period last year. For the six month comparison, as a percentage of net revenue, net of software capitalized, research and development expense increased to 11% for the period ended December 31, 1999 from 7% for the period ended December 31, 1998. In terms of actual dollars, research and product development expense increased 72% from the same six month period in the prior year. The increase in research and product development expenditures is the result of investments in the Company's expanding product offerings, including new ecommerce products and the integration of DAI's product line into the Symix product suite. PROVISION FOR INCOME TAXES The effective tax rate for the quarter as well as the six months ended December 31, 1999 was 39%, compared to 40%, for the quarter as well as the six months ended December 31, 1998. Historically, the increase in the effective tax rate has been due to the amount of foreign taxable earnings in countries with higher effective rates and the non-deductibility of the amortization of intangibles, resulting in an increase of Symix's overall tax rate. Symix recently has implemented a tax restructuring plan to lower state income tax rates which has slightly lowered the overall effective tax rate. LIQUIDITY AND CAPITAL RESOURCES Symix's operating activities provided net cash of $998,000 during the six month period ended December 31, 1999, compared to net cash used of $412,000 during the same period in 1998. In both periods, cash provided by operating activities was due principally to earnings and increases in deferred revenues and non-cash charges, offset by the decrease in trade and tax payables related to year end. The accounts receivable days sales outstanding was 106 days at December 31, 1998 compared to 116 days at December 31, 1999. An increase in installment payments on software license fees from new customers (particularly on large deals) contributed to the increase in days sales outstanding. For both periods presented, cash provided by financing activities was used to fund software development costs and to purchase computer equipment. 15 16 As of December 31, 1999, the Company had $27.0 million in working capital, including $4.7 million in cash and cash equivalents. The Company had accessed its $15.0 million unsecured revolving line of credit for $8.1 million as of December 31, 1999. It is expected that the continued expansion of the Company's operations and product line will result in additional requirements for cash in the future, which will be met through operations and the existing line of credit. YEAR 2000 COMPLIANCE Prior to and during the quarter ended December 31, 1999, the Company devoted efforts to ensure that its products are Year 2000 ready and its operations will not be adversely affected by Year 2000 system failures. Year 2000 compliance issues typically arise with respect to computer software systems and programs that use only two digits, rather than four digits, to represent a particular year. Consequently, these systems and programs may not process dates beyond the year 1999 and may result in miscalculations or system failures. Year 2000 compliance problems also may arise in embedded systems, such as environmental system controls, elevators and other products that use microprocessors or computer chips. The Company has not encountered any Year 2000 compliance problems relating to its current product and service offerings, including those products developed and supported by third party software vendors, or with its internal computer information system and non-computer systems. The Company's current product and service offerings have been designed to be Year 2000 compliant. However, Year 2000 compliance issues have many elements and consequences, some of which are not readily detectable or foreseeable. The Company will continue to monitor its operations for Year 2000 problems. Any failure of the Company's software product and service offerings, including those developed and supported by third party vendors, or the Company's internal computer information system or non-computer systems, to properly process dates beyond the Year 2000 could have a material adverse effect on the Company's business, operating results and financial condition. The Company has not incurred any material costs related to Year 2000 compliance issues, and all costs related to Year 2000 compliance issues are being expensed as incurred by the Company. SAFE HARBOR STATEMENT UNDER THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 IN ADDITION TO HISTORICAL INFORMATION, THIS QUARTERLY REPORT ON FORM 10-Q CONTAINS "FORWARD-LOOKING STATEMENTS," INCLUDING INFORMATION REGARDING FUTURE ECONOMIC PERFORMANCE AND PLANS AND OBJECTIVES OF MANAGEMENT, WHICH ARE SUBJECT TO CERTAIN RISKS AND UNCERTAINTIES THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM THOSE REFLECTED IN THE FORWARD-LOOKING STATEMENTS. IN SOME CASES, INFORMATION REGARDING CERTAIN IMPORTANT FACTORS THAT COULD CAUSE ACTUAL RESULTS TO DIFFER MATERIALLY FROM A FORWARD-LOOKING STATEMENT APPEAR TOGETHER WITH SUCH STATEMENT. OTHER UNCERTAINTIES AND RISKS INCLUDE, BUT ARE NOT LIMITED TO, DEMAND FOR AND MARKET ACCEPTANCE OF THE COMPANY'S PRODUCTS; THE 16 17 IMPACT OF COMPETITIVE PRODUCTS; THE COMPANY'S ABILITY TO MAINTAIN EFFICIENT MARKETING AND DISTRIBUTION OPERATIONS DOMESTICALLY AND INTERNATIONALLY; FUTURE WORLDWIDE ECONOMIC, COMPETITIVE AND MARKET CONDITIONS; THE COMPANY'S ABILITY TO ATTRACT AND RETAIN HIGHLY SKILLED TECHNICAL, MANAGERIAL, SALES, MARKETING, SERVICE AND SUPPORT STAFF AND TO RETAIN KEY TECHNICAL AND MANAGEMENT PERSONNEL; TIMING OF PRODUCT DEVELOPMENT AND GENERAL RELEASE; THE COMPANY'S ABILITY TO SUCCESSFULLY RESOLVE ANY YEAR 2000 ISSUES; PRODUCT PRICING AND OTHER FACTORS DETAILED IN THIS QUARTERLY REPORT ON FORM 10-Q AND IN OTHER FILINGS MADE BY THE COMPANY WITH THE SECURITIES AND EXCHANGE COMMISSION. THE COMPANY IS NOT OBLIGATED TO UPDATE OR REVISE THESE FORWARD-LOOKING STATEMENTS TO REFLECT NEW EVENTS OR CIRCUMSTANCES. ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK. The following discussion and analysis of foreign exchange risks relating to the Company is provided as of the fiscal year ended June 30, 1999. No material changes in the information provided have occurred since that time. The Company's revenue originating outside the United States was 22% and 21% of total revenues in fiscal 1999 and fiscal 1998, respectively. In fiscal 1999, international revenues from each geographic region were: Europe 13% of total revenues and Asia Pacific 9% of total revenues. In fiscal 1998, the respective percentages were 12% and 9%. International sales are made mostly from the Company's foreign sales subsidiaries in the local countries and are typically denominated in the local currency of each country. These subsidiaries also incur most of their expenses in the local currency. Accordingly, all foreign subsidiaries use the local currency as their functional currency. The Company's international business is subject to risks typical of an international business, including, but not limited to: o differing economic conditions; o changes in political climate; o differing tax structures; o other regulations and restrictions; and o foreign exchange rate volatility. Accordingly, the Company's future results could be materially adversely impacted by changes in these or other factors. The Company's exposure to foreign exchange rate fluctuations arises in part from intercompany accounts in which cost of software, including certain development costs, incurred 17 18 in the United States is charged to the Company's foreign sales subsidiaries. These intercompany accounts are typically denominated in the functional currency of the foreign subsidiary in order to centralize foreign exchange risk with the parent company in the United States. The Company is also exposed to foreign exchange rate fluctuations as the financial results of foreign subsidiaries are translated into U.S. dollars in consolidation. As exchange rates vary, these results, when translated, may vary from expectations and adversely impact overall profitability. To date, the Company has not realized material fluctuations due to foreign exchange rates. However, due to the growth of the international business, management is reviewing a foreign exchange hedge program in order to minimize this particular exposure. 18 19 PART II -- OTHER INFORMATION ITEM 1. LEGAL PROCEEDINGS. The Company is subject to legal proceedings and claims which arise in the normal course of business. While the outcome of these matters cannot be predicted with certainty, management does not believe the outcome of any of these legal matters will have a material adverse effect on the Company's business, financial condition or results of operations. ITEM 2. CHANGES IN SECURITIES AND USE OF PROCEEDS. None ITEM 3. DEFAULTS UPON SENIOR SECURITIES. None ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS. (a) The Annual Meeting of Shareholders of Registrant was held on November 17, 1999 (the "Meeting"). (b) No response required. (c) The only matters voted on at the Meeting were (i) the uncontested election of Lawrence J. Fox, Stephen A. Sasser, Duke W. Thomas, Larry L. Liebert, John T. Tait and James A. Rutherford as directors of the Company; and (ii) the adoption of the Symix Systems, Inc. 1999 Non-Qualified Stock Option Plan for Key Employees. There were 5,780,319 common shares of the Company represented in person or by proxy at the Meeting. 19 20 The manner in which the votes were cast with respect to the election of directors was as follows: NOMINEE SHARES VOTED "FOR" SHARES WITHHELD ------- ------------------ --------------- Lawrence J. Fox 5,760,643 19,676 Stephen A. Sasser 5,760,643 19,676 Duke W. Thomas 5,763,143 17,176 Larry L. Leibert 5,762,014 18,305 John T. Tait 5,757,243 23,076 James A. Rutherford 5,763,914 16,405 The manner in which the votes were cast with respect to the adoption of the Symix Systems, Inc. 1999 Non-Qualified Stock Option Plan for Key Employees was as follows: SHARES VOTED "FOR" SHARES VOTED "AGAINST" ABSTENTIONS BROKER NONVOTES 3,193,896 353,085 17,252 2,216,086 (d) Not applicable ITEM 5. OTHER INFORMATION. On February 9, 2000, the Company acquired Profit Solutions, Incorporated, a Minnesota corporation and a provider of Web-centric customer relationship management applications with sales, marketing, service and business intelligence functionality ("PSI"), for approximately $2.0 million in cash paid at closing and $5.0 million in unsecured, subordinated promissory notes to be paid off by January 2, 2001. Pursuant to the acquisition agreement, a subsidiary of the Company was merged into PSI, each share of PSI was canceled and each share of the Company's subsidiary was converted into a share of the surviving corporation. All of the outstanding shares of the surviving corporation are held by the Company. Each PSI option and warrant outstanding immediately prior to the merger was cancelled and terminated. As a result of the merger, each holder of a PSI option or warrant immediately prior to the merger received cash equal to the net value of each option or warrant held. In addition, the name of the surviving corporation was changed to "Front Step, Inc." As a result of the acquisition, all of the business of PSI was acquired by the Company. The acquisition will be accounted for using purchase accounting. The acquisition was announced publicly in press releases issued by the Company on January 20, 2000 and February 10, 2000, copies of which are included as exhibits to this report. 20 21 ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K. a) See Index to Exhibits filed with this Quarterly Report on Form 10-Q following the Signature Page. b) Reports on Form 8-K: None. 21 22 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. SYMIX SYSTEMS, INC. Date: February 14, 2000 /s/ Lawrence W. DeLeon ---------------------------- Lawrence W. DeLeon (Duly Authorized Officer and Principal Financial Officer) 22 23 INDEX TO EXHIBITS
Exhibit No. Description Page - ----------- ----------- ---- 3(a)(1) Amended Articles of Incorporation of Incorporated herein by reference to Symix Systems, Inc. (as filed with the Exhibit 3(a)(1) to the Annual Report on Ohio Secretary of State on February 8, Form 10-K for the fiscal year ended June 1991) 30, 1997 3(a)(2) Certificate of Amendment to the Amended Incorporated herein by reference to Articles of Incorporation of Symix Exhibit 3(a)(2) to the Annual Report on Systems, Inc. (as filed with the Ohio Form 10-K for the fiscal year ended June Secretary of State on July 16, 1996) 30, 1997 3(a)(3) Amended Articles of Incorporation of Incorporated herein by reference to Symix Systems, Inc. (reflecting Exhibit 3(a)(3) to the Annual Report on amendments through July 16, 1996, for Form 10-K for the fiscal year ended June purposes of SEC reporting compliance 30, 1997 only) 3(b) Amended Regulations of Symix Systems, Incorporated herein by reference to Inc. Exhibit 3(b) to the Registration Statement on Form S-1 of Registrant filed on February 12, 1991 (Registration No. 33-38878) 4(a)(1) Amended Articles of Incorporation of Incorporated herein by reference to Symix Systems, Inc. (as filed with the Exhibit 3(a)(1) to the Annual Report on Ohio Secretary of State on February 8, Form 10-K for the fiscal year ended June 1991) 30, 1997 4(a)(2) Certificate of Amendment to the Amended Incorporated herein by reference to Articles of Incorporation of Symix Exhibit 3(a)(2) to the Annual Report on Systems, Inc. (as filed with the Ohio Form 10-K for the fiscal year ended June Secretary of State on July 16, 1996) 30, 1997
23 24
Exhibit No. Description Page - ----------- ----------- ---- 4(a)(3) Amended Articles of Incorporation of Incorporated herein by reference to Symix Systems, Inc. (reflecting Exhibit 3(a)(3) to the Annual Report on amendments through July 16, 1996, for Form 10-K for the fiscal year ended June purposes of SEC reporting compliance 30, 1997 only) 4(b) Amended Regulations of Symix Systems, Incorporated herein by reference to Inc. Exhibit 3(b) to the Registration Statement on Form S-1 of Registrant filed February 12, 1991 (Registration No. 33-38878) 10(a) Sixth Amendment to Loan Agreement Among Filed herein Symix Systems, Inc. and Symix Computer Systems, Inc. and Bank One, NA 10(b) Symix Systems, Inc. 1999 Non-Qualified Incorporated herein by reference to Stock Option Plan for Key Employees Exhibit 10(n) to the Annual Report on Form 10-K for the fiscal year ended June 30, 1999 27 Financial Data Schedule Filed herein 99(a) Press Release: Symix and Front Step Filed herein Announce Agreement to Acquire "eCRM" Applications Vendor Profit Solutions, Inc. 99(b) Press Release: Symix and Front Step Complete Filed herein Acquisition of eCRM Vendor Profit Solutions, Inc.
24 EX-10 2 EXHIBIT 10 1 EXHIBIT 10 SIXTH AMENDMENT TO LOAN AGREEMENT AMONG SYMIX SYSTEMS, INC. and SYMIX COMPUTER SYSTEMS, INC. AND BANK ONE, NA THIS SIXTH AMENDMENT ("Sixth Amendment") is executed November 19 , 1999, effective as of June 29, 1999, between SYMIX SYSTEMS, INC., an Ohio corporation ("SSI") and SYMIX COMPUTER SYSTEMS, INC., an Ohio corporation ("SCSI" and, collectively with SSI, the "Companies") and BANK ONE, NA, a national association ("Bank One"). WITNESSETH: WHEREAS, the Companies and Bank One, parties to that certain Loan Agreement dated as of May 20, 1996, amended by First Amendment dated as of August 13, 1997, Second Amendment dated as of March 4, 1998, Third Amendment dated as of June 1, 1998, further amended by Fourth Amendment dated as of December 24, 1998 and further amended by Fifth Amendment dated as of June 10, 1999 (the "Agreement"), have agreed to amend the Agreement on the terms and conditions hereinafter set forth. Terms not otherwise defined herein are used as defined in the Agreement as amended hereby; WHEREAS, the Companies desire to create a new subsidiary, Symix Computer Systems Delaware, Inc. NOW, THEREFORE, the Companies and Bank One hereby agree as follows: SECTION 1. AMENDMENT OF THE AGREEMENT. The Agreement is, effective the date hereof, hereby amended as follows: 1.1. Section 5.10 shall be amended and restated in its entirety as follows: 5.10. Leverage Ratio. Companies shall not permit the Consolidated Leverage Ratio to exceed the ratio of: (a) 3.00 to 1.00 from the date of the Third Amendment to June 29, 1998; (b) 2.50 to 1.00 from June 30, 1998 until June 29, 2000; and (c) 2.00 to 1.00 from June 30, 2000 and thereafter. 1.2. The definition of "Guarantors" in Section 8 shall be amended and restated in its entirety as follows: 2 "Guarantors" shall mean Pritsker Corporation, Symix distribution.com, Inc., Symix Computer Systems (Canada), Inc., Symix (UK) Ltd., Symix Computer Systems (UK) Ltd., Symix Systems B.V., Symix Computer Systems Delaware, Inc., e-Mongoose, Inc. and Symix Computer Systems (Mexico) S. De R.L. De C.V. SECTION 2. GOVERNING LAW. This Sixth Amendment shall be governed by and construed in accordance with the laws of the State of Ohio. SECTION 3. COSTS AND EXPENSES. All fees, costs or expenses, including reasonable fees and expenses of outside legal counsel, incurred by Bank One in connection with either the preparation, administration, amendment, modification or enforcement of this Sixth Amendment shall be paid by the Companies on request. SECTION 4. COUNTERPARTS. This Sixth Amendment may be executed in any number of counterparts and by different parties hereto in separate counterparts, each of which when so executed shall be deemed to be an original and all of which when taken together shall constitute one and the same agreement. SECTION 5. CONFESSION OF JUDGMENT. Each Company hereby authorizes any attorney at law to appear for the Company, in an action on this Sixth Amendment, at any time after the same becomes due, as herein provided, in any court of record in or of the State of Ohio, or elsewhere, to waive the issuing and service of process against the Company and to confess judgment in favor of the holder of this Sixth Amendment or the party entitled to the benefits of this Sixth Amendment against the Company for the amount that may be due, with interest at the rate herein mentioned and costs of suit, and to waive and release all errors in said proceedings and judgment, and all petitions in error, and right of appeal from the judgment rendered. No judgment against one Company shall preclude Bank One from taking a confessed judgment against the other Company. SECTION 6. CONDITIONS PRECEDENT. Simultaneously with the execution hereof, Bank One shall receive all of the following, each dated the date hereof, in form and substance satisfactory to Bank One: 6.1. Certified copies of (a) the resolutions of the board of directors of each Company evidencing authorization of the execution, delivery, and performance of this Sixth Amendment and such other instruments and agreements contemplated thereby; and (b) all documents evidencing other necessary corporate action and governmental approvals, if any, with respect to this Sixth Amendment or the transactions contemplated hereby. 6.2. Unconditional Continuing Guaranty of (a) Symix Computer Systems Delaware, Inc., a Delaware corporation; (b) e-Mongoose, Inc., an Ohio corporation; and (c) Symix distribution.com, Inc., an Ohio corporation, each accompanied by (i) certified copies of the resolutions of such corporation's board of directors evidencing the authorization of the execution, delivery and performance of such guaranty, (ii) certified articles (or certificate) of 2 3 incorporation of such corporation from the state of its organization, (iii) good standing certificates from Ohio and (if different) the state of such corporation's organization and (iv) an incumbency certificate of such corporation. 6.3. Such other documents as Bank One may, in its reasonable discretion, so require. SECTION 7. REAFFIRMATION OF REPRESENTATIONS AND WARRANTIES; NO DEFAULTS. The Companies hereby expressly acknowledge and confirm that the representations and warranties of the Company set forth in Section 3 of the Agreement are true and accurate on this date with the same effect as if made on and as of this date; that no financial condition or circumstance exists which would inevitably result in the occurrence of an Event of Default under Section 6 of the Agreement; and that no event has occurred or no condition exists which constitutes, or with the running of time or the giving of notice would constitute an Event of Default under Section 6 of the Agreement. SECTION 8. REAFFIRMATION OF DOCUMENTS. Except as herein expressly modified, the parties hereto ratify and confirm all of the terms, conditions, warranties and covenants of the Agreement, and all security agreements, pledge agreements, mortgage deeds, assignments, subordination agreements, or other instruments or documents executed in connection with the Agreement, including provisions for the payment of the Notes pursuant to the terms of the Agreement. This Sixth Amendment does not constitute the extinguishment of any obligation or indebtedness previously incurred, nor does it in any manner affect or impair any security interest granted to Bank One, all of such security interests to be continued in full force and effect until the indebtedness described herein is fully satisfied. The Companies have executed this Sixth Amendment as of the date first above written. SYMIX SYSTEMS, INC. SYMIX COMPUTER SYSTEMS, INC. By: /s/ Lawrence W. DeLeon By: /s/ Lawrence W. DeLeon --------------------------- --------------------------- Name: Lawrence W. DeLeon Name: Lawrence W. DeLeon Its: Vice President, Chief Financial Its: Vice President, Chief Financial Officer and Secretary Officer and Secretary - -------------------------------------------------------------------------------- WARNING - BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND COURT TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR RETURNED GOODS FAULTY GOOD FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT OR ANY OTHER CAUSE. - -------------------------------------------------------------------------------- BANK ONE, NA By: /s/ Michael R. Zaksheske --------------------------- Name: Michael R. Zaksheske Its: Vice President 3 EX-27 3 EXHIBIT 27
5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE CONSOLIDATED BALANCE SHEETS AND CONSOLIDATED STATEMENTS OF OPERATIONS IN THE QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED DECEMBER 31, 1999 FOR SYMIX SYSTEMS, INC. AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 6-MOS JUN-30-2000 JUL-01-1999 DEC-31-1999 4,651 0 47,759 1,554 801 56,487 21,564 14,220 88,828 29,443 0 0 0 76 43,717 88,828 28,930 66,451 9,029 30,022 34,024 54 269 1,939 756 1,183 0 0 0 1,183 0.16 0.15
EX-99.A 4 EXHIBIT 99(A) 1 EXHIBIT 99(a) SYMIX AND FRONT STEP ANNOUNCE AGREEMENT TO ACQUIRE "ECRM" APPLICATIONS VENDOR PROFIT SOLUTIONS, INC. - FRONT STEP TO GAIN PURE WEB-BASED CRM SOLUTION - COLUMBUS, OHIO, January 20, 2000 - Symix Systems, Inc. (Nasdaq: SYMX), today announced that it has entered into a definitive agreement to acquire Profit Solutions, Inc. ("PSI"), a provider of Web-centric customer relationship management (CRM) applications. PSI and its eCRM products will be an important component of Front Step, Symix's newly announced eBusiness subsidiary. PSI delivered one of the industry's first completely Web-based CRM solution, e-CRM Front Office(TM). PSI's e-CRM applications enable its customers to closely incorporate customer service, marketing and sales functions into their overall eBusiness strategy, delivering Web-based marketing automation, sales management, service management and business intelligence. The PSI product suite is built entirely upon Microsoft Web-technology standards. "The online world demands different interaction processes, most emphatically in the areas of sales and marketing," said Stephen A. Sasser, Symix President and Chief Executive Officer. "To successfully capitalize on eBusiness opportunities, businesses must change their traditional channel models and sales processes to meet the new expectations of the Internet economy. As a part of Front Step, PSI's eCRM solutions will help accelerate the selling process by automating and personalizing the exchange of information between buyer and seller. With the pending acquisition of PSI, Front Step will deliver a complete Internet-driven customer management system, supported by a comprehensive eBusiness service and deployment offering. Our customers will have the capabilities to market to their customers' specific preferences." "The Internet has fueled a customer revolution requiring sellers to provide instantaneous access to accurate and up-to-date information," said Susan Woelfel, PSI President. "As a result, companies are investing heavily in technology that enables them to integrate the Internet into their business model in order to embrace eCustomers. Front Step offers PSI a unique opportunity 2 to help companies evolve their business model from one that embraces eCustomers into a comprehensive eBusiness strategy." PSI will maintain its offices in Minneapolis, Minn., and will operate as a business unit within Symix's Front Step eBusiness subsidiary. Symix intends to purchase all of the outstanding common stock of PSI in exchange for cash and promissory notes through a merger of Front Step and PSI. The acquisition, expected to close within 45 days, is subject to PSI stockholders' approval and other conditions of closing. Other terms of the agreement have not been disclosed. ABOUT PROFIT SOLUTIONS Headquartered in Minneapolis, Minn., Profit Solutions, Inc. is the leading developer of award-winning Microsoft-based customer relationship management (CRM) solutions for the midmarket. PSI's eCRM Front Office product provides 100 percent Web-based sales, marketing, service and business intelligence functionality. For more information about the company and its products visit http://www.profitsolutions.com. ABOUT FRONT STEP Front Step, Inc. offers companies the products, expertise and access to eBusiness communities to rapidly create new eBusiness opportunities. Front Step, a subsidiary of Symix Systems, Inc., delivers the eBusiness applications, design and deployment services and ASP offerings required by companies to strategically plan, build, launch and advance an eBusiness strategy. ABOUT SYMIX Symix Systems, Inc. and its subsidiaries develop and market software and services that enable companies worldwide to quickly identify and deploy eBusiness opportunities, and build the supporting business and technology infrastructure. Symix's comprehensive suite of products include the eSyte suite of eBusiness applications and deployment services, the SyteLine, SyteCentre and SyteDistribution ERP and supply chain application suites. Symix is helping its 2 3 customers take their talents and services to the Internet, today's "digital marketplace." Headquartered in Columbus, Ohio, Symix has helped over 3,900 customers build their business systems and better serve their customers. Symix markets its products through sales and service offices worldwide, as well as through independent business partners. Symix company and product information is available at http://www.symix.com. ### The statements made in this press release which are not historical fact are "forward looking statements" that involve risks and uncertainties, including, but not limited to, product demand and market acceptance, customer-specific enterprise software requirements, the effect of economic conditions, new product development, the impact of Year 2000 issues, the impact of competitive products and other factors detailed in Symix's filings with the Securities and Exchange Commission. SyteLine is a registered trademark and SyteCentre, SyteDistribution and eSyte are trademarks of Symix Systems, Inc. All other products mentioned are trademarks or registered trademarks of their respective companies. 3 EX-99.B 5 EXHIBIT 99(B) 1 EXHIBIT 99(b) SYMIX AND FRONT STEP COMPLETE ACQUISITION OF ECRM VENDOR PROFIT SOLUTIONS, INC. COLUMBUS, OHIO, February 10, 2000 - Symix Systems, Inc. (Nasdaq: SYMX) today announced that it has completed the acquisition of Profit Solutions, Inc. ("PSI"), a provider of Web-based customer relationship management (CRM) software. PSI will merge with Front Step Inc., Symix's eBusiness subsidiary. The proposed acquisition was first publicly announced January 20, 2000. PSI's eCRM Front Office(TM) is one of the industry's first completely Web-based CRM solutions, delivering marketing automation, sales management, service management and business intelligence. The eCRM Front Office applications will be integrated with Front Step's eBusiness software suite to provide a complete, Internet-based customer service, customer intelligence and customer relationship and response solution. As an eCRM business unit within Front Step, PSI will independently market to midsize companies in the manufacturing, hospitality/service, financial service and healthcare industries. The new Front Step eCRM business unit will be led by PSI President Susan Woelfel, and will maintain its headquarters in Minneapolis, Minn. "The Internet has delivered true one-to-one marketing capabilities," said Stephen A. Sasser, Symix President and Chief Executive Officer. "Today's eCustomer, be it consumer or business, has grown to expect these Internet-driven levels of personalization. With the acquisition of PSI, Front Step will enable its customers to build and automate new sales and marketing processes as a part of their overall eBusiness strategy. Front Step will immediately 2 market and deliver PSI's innovative approach to managing eBusiness-critical marketing, sales and customer service functions." Symix has purchased all of the outstanding common stock of PSI in exchange for cash and promissory notes through a merger of Front Step and PSI. Other terms of the agreement have not been disclosed. ABOUT FRONT STEP Front Step, Inc. offers companies the products, expertise and access to eBusiness communities to rapidly create new eBusiness opportunities. Front Step, a subsidiary of Symix Systems, Inc., delivers the eBusiness applications, design and deployment services and ASP offerings required by companies to strategically plan, build, launch and advance an eBusiness strategy. ABOUT SYMIX Symix Systems, Inc. and its subsidiaries develop and market software and services that enable companies worldwide to quickly identify and deploy eBusiness opportunities, and build the supporting business and technology infrastructure. Symix's comprehensive suite of products include the eSyte suite of eBusiness applications and deployment services, the SyteLine, SyteCentre and SyteDistribution ERP and supply chain application suites. Through its eBusiness subsidiary, Front Step, Inc., Symix is helping its customers take their talents and services to the Internet, today's "digital marketplace." Headquartered in Columbus, Ohio, Symix has helped over 3,900 customers build their business systems and better serve their customers. Symix markets its products through sales and service offices worldwide, as well as through independent business partners. Symix company and product information is available at http://www.symix.com. 2 3 ### The statements made in this press release which are not historical fact are "forward looking statements" that involve risks and uncertainties, including, but not limited to, product demand and market acceptance, customer-specific enterprise software requirements, the effect of economic conditions, new product development, the impact of competitive products, and other factors detailed in Symix's filings with the Securities and Exchange Commission. SyteLine is a registered trademark and SyteCentre, SyteDistribution and eSyte are trademarks of Symix Systems, Inc. and/or its subsidiaries. All other products mentioned are trademarks or registered trademarks of their respective companies. 3 -----END PRIVACY-ENHANCED MESSAGE-----