-----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, FutHJxu4yNyJbAfe2pw6764+fty70DjQi5iLZCiDswwBUFfOM2cv3X7CJDmqn3Ox 7MZrbFeDvNQzu8LVsVcgUA== 0000950152-02-005911.txt : 20020806 0000950152-02-005911.hdr.sgml : 20020806 20020805171143 ACCESSION NUMBER: 0000950152-02-005911 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 4 CONFORMED PERIOD OF REPORT: 20020805 ITEM INFORMATION: Other events ITEM INFORMATION: Financial statements and exhibits FILED AS OF DATE: 20020805 FILER: COMPANY DATA: COMPANY CONFORMED NAME: FRONTSTEP 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: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-19024 FILM NUMBER: 02719860 BUSINESS ADDRESS: STREET 1: 2800 CORPORATE EXCHANGE DR STREET 2: N/A CITY: COLUMBUS STATE: OH ZIP: 43231 BUSINESS PHONE: 6145237000 MAIL ADDRESS: STREET 1: 2800 CORPORATE EXCHANGE DR CITY: COLUMBUS STATE: OH ZIP: 43231 FORMER COMPANY: FORMER CONFORMED NAME: SYMIX SYSTEMS INC DATE OF NAME CHANGE: 19930328 8-K 1 l95715ae8vk.txt FRONTSTEP, INC. FORM 8-K ============================================================================== UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 8-K CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 August 5, 2002 Date of Report: (Date of earliest event reported) Commission File Number: 0-19024 FRONTSTEP, INC. (Exact name of registrant as specified in its charter) OHIO 31-1083175 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification Number) 2800 CORPORATE EXCHANGE DRIVE COLUMBUS, OHIO 43231 (Address of principal executive offices) (Zip Code) (614) 523-7000 (Registrant's telephone number, including area code) =============================================================================== ITEM 5. OTHER EVENTS. Frontstep, Inc. (the "Company" or "Frontstep") is 1) restating its Statements of Operations and its Balance Sheets for the year ended June 30, 2001 and for the nine months ended March 31, 2002 (the "Restatement"); and 2) reclassifying the presentation of certain costs in its Statement of Operations for the years ended June 30, 2000 and 2001 (the "Reclassification"). The Restatement is being made to correct the previously reported financial results due to an isolated error in third-party software used by the Company which affected the timing of recognition of revenue from renewals of the Company's maintenance and support contracts during those reported periods. The final fiscal quarter ended June 30, 2002 was not affected by the error. For the nine-month period of fiscal 2002, which ended March 31, 2002, the impact of this error was $312,000 on reported revenue of $70,457,000, or a net change of 0.4%. The Company believes that the impact of this restatement to future periods is positive since the balance of deferred revenue, revenue to be recorded in future periods, increased by $1,522,000 as of March 31, 2002. The Reclassification is being made to more appropriately present certain charges in the Statements of Operations in accordance with current accounting practice. This reclassification does affect the Year ended June 30, 2002 and does not change the amount of reported revenues, operating income or net income for either of the two prior years that were affected. THE RESTATEMENT: The Company uses certain third-party software to calculate and account for revenues from renewals of its maintenance and support services contracts. The error, which was isolated and occurred only in a certain specific process, caused affected billing records to accelerate the timing of recognition of revenue, and consequently understate the amount of deferred revenue to be recognized in subsequent periods. Due to the limited number of records affected, the error was difficult to detect. After detection by Company personnel in July 2002, the third-party software provider identified the nature of the error and assisted the Company in determining which maintenance and support records had been affected. The error was associated with a specific version of the software and affected only the period from July 2000 to March 2002. The Company had already installed a newer version of the software in which properly accounts for revenue recognition in the specific affected process. For the nine months ended March 31, 2002, this restatement will reduce revenue by $312,000 or 0.4% of the previously reported revenue of $70,457,000. This decrease in revenue will increase the reported net loss for the nine-month period by 312,000 or 8.9% of the previously reported net loss of $3,504,000. The balance sheet account entitled Deferred revenue will increase as of March 31, 2002 by $1,522,000 or 9.9% from the previously reported balance of $15,398,000. For the year ended June 30, 2001, this restatement will reduce revenue by $1,210,000 or 1.0% of the previously reported revenue of $118,286,000. This decrease in revenue will increase the reported net loss for the year by 1,210,000 or 4.9% of the previously reported net loss of $24,854,000. The balance sheet account entitled Deferred revenue will increase as of June 30, 2001 by $1,210,000 or 6.3% from the previously reported balance of $19,067,000. 2 The correction of the error by reporting period is presented in the table below (in thousands):
- -------------------------------------------------------------------------------------------------------------- TOTAL REVENUE ADJUSTMENT TOTAL NET INCOME NET INCOME AS PREVIOUSLY OF REVENUE REVENUE, AS (LOSS), AS (LOSS), AS REPORTED ADJUSTED PREVIOUSLY ADJUSTED REPORTING PERIOD REPORTED - -------------------------------------------------------------------------------------------------------------- Quarter ended September 30, 2000 $ 28,033 $ 32 $ 28,065 $ (3,549) $ (3,517) - -------------------------------------------------------------------------------------------------------------- Quarter ended December 31, 2000 $ 34,063 $ (207) $ 33,856 $ (957) $ (1,164) - -------------------------------------------------------------------------------------------------------------- Quarter ended March 31, 2001 $ 27,172 $ (838) $ 26,334 $(15,348) $(16,186) - -------------------------------------------------------------------------------------------------------------- Quarter ended June 30, 2001 $ 29,018 $ (197) $ 28,821 $ (5,000) $ (5,197) - -------------------------------------------------------------------------------------------------------------- Year ended June 30, 2001 $118,286 $(1,210) $ 117,076 $(24,854) $(26,064) - -------------------------------------------------------------------------------------------------------------- Quarter ended September 30, 2001 $ 24,918 $ 53 $ 24,971 $ 144 $ 197 - -------------------------------------------------------------------------------------------------------------- Quarter ended December 31, 2001 $ 23,515 $ (144) $ 23,371 $ (2,699) $ (2,843) - -------------------------------------------------------------------------------------------------------------- Quarter ended March 31, 2002 $ 22,024 $ (221) $ 21,803 $ (950) $ (1,171) - -------------------------------------------------------------------------------------------------------------- Nine-months ended March 31, 2002 $ 70,457 $ (312) $ 70,145 $ (3,505) $ (3,817) - --------------------------------------------------------------------------------------------------------------
THE RECLASSIFICATION: For the years ended June 30, 2000 and 2001, the Company reported certain restructuring charges of $3,649,000 and $15,156,000, respectively, for employee separation costs, exit costs for contract terminations, accounts receivable write-offs and asset write-offs. All of these one-time charges were incurred in connection with the Company's efforts to return the Company to profitability through reductions in its worldwide workforce, elimination of non-essential costs and activities and to focus the business activities of the Company on its core strategy. The Company has determined that certain of these costs presented as restructuring and other charges are more appropriately presented on other lines within the Statement of Operations. While there is no impact to previously reported revenue, operating income or net income, the following reclassifications are being made within the line items indicated below: 3 For the year ended June 30, 2000 (in thousands):
- ----------------------------------------------------------------------------------------------- AS PREVIOUSLY ADJUSTMENT AS LINE ITEM REPORTED ADJUSTED - ----------------------------------------------------------------------------------------------- Cost of revenue: Cost of license fees $19,636 $ 1,868 $21,504 - ----------------------------------------------------------------------------------------------- Operating expenses: Selling, general and $56,790 $ 714 $57,504 administrative - ----------------------------------------------------------------------------------------------- Operating expenses: Restructuring and other $ 3,649 $(2,582) $ 1,067 charges - -----------------------------------------------------------------------------------------------
For the year ended June 30, 2001 (in thousands):
- ----------------------------------------------------------------------------------------------- AS PREVIOUSLY ADJUSTMENT AS LINE ITEM REPORTED ADJUSTED - ----------------------------------------------------------------------------------------------- Cost of revenue: Cost of license fees $19,972 $ 1,913 $21,885 - ----------------------------------------------------------------------------------------------- Operating expenses: Selling, general and $56,007 $ 6,840 $62,847 administrative - ----------------------------------------------------------------------------------------------- Operating expenses: Restructuring and other $15,156 $(8,753) $ 6,403 charges - -----------------------------------------------------------------------------------------------
As part of this reclassification, The Company is also providing additional breakout of its reported revenues for each of the years ended June 30, 2000 and 2001 to be consistent with the manner in which it currently reports such revenues. Commencing with the quarter ended December 31, 2001, the Company began to separately report its revenues from maintenance and support activities from its services activities. This additional revenue breakout does not change the amount of total revenue reported for either of these two periods, nor does it change reported operating or net income. The Company has included schedules as exhibits to this current report on Form 8-K showing the adjusted Statements of Operations for each of the years ended June 30, 2000 and 2001 and for the nine-months ended March 31, 2002. ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS. (a) Not applicable. (b) Not applicable. (c) Exhibits. 4 The following exhibits are filed with this Form 8-K: 99(a) Statements of Operations for the quarters included in and for the year ended June 30, 2000, as adjusted. 99(b) Statements of Operations for the quarters included in and for the year ended June 30, 2001, as adjusted. 99(c) Statements of Operations for the quarters included in and for the nine-months ended March 31, 2002, as adjusted 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 hereunto duly authorized. FRONTSTEP, INC. Dated: July 12, 2002 By: /s/ Daniel P. Buettin ------------------------------------- Daniel P. Buettin Vice President and Chief Financial Officer (on behalf of the Registrant and as Principal Financial Officer) 5 INDEX TO EXHIBITS 99(a) Statements of Operations for the quarters included in and for the year ended June 30, 2000, as adjusted. 99(b) Statements of Operations for the quarters included in and for the year ended June 30, 2001, as adjusted. 99(c) Statements of Operations for the quarters included in and for the nine-months ended March 31, 2002, as adjusted 6 EX-99.A 3 l95715aexv99wa.txt EX-99(A) STATEMENT OF OPERATIONS FOR 6/30/2000 EXHIBIT 99(A) STATEMENTS OF OPERATIONS FOR THE QUARTERS INCLUDED IN AND FOR THE YEAR ENDED JUNE 30, 2000 FRONTSTEP, INC. CONSOLIDATED STATEMENTS OF OPERATIONS As adjusted (IN THOUSANDS, EXCEPT PER SHARE DATA)
TWELVE MONTHS THREE MONTHS ENDED ENDED SEPTEMBER 30, DECEMBER 31, MARCH 31, JUNE 30, JUNE 30, ------------------------------------------------------------------------- 1999 1999 2000 2000 2000 --------- --------- --------- --------- --------- Revenue: License fees 13,392 15,538 14,043 14,885 57,858 Services 11,039 10,733 9,822 8,032 39,626 Maintenance and support 7,640 8,109 7,603 8,072 31,424 --------- --------- --------- --------- --------- Total revenue 32,071 34,380 31,468 30,989 128,908 Cost of revenue: License fees 4,238 4,791 4,644 7,831 21,504 Service, maintenance and support 10,130 10,863 9,484 9,875 40,352 --------- --------- --------- --------- --------- Cost of revenue 14,368 15,654 14,128 17,706 61,856 --------- --------- --------- --------- --------- Gross margin 17,703 18,726 17,340 13,283 67,052 Operating expenses: Selling, general and administrative 11,590 13,268 14,203 18,443 57,504 Research and product development 3,611 4,026 3,944 4,103 15,684 Amortization of intangibles 765 764 934 1,130 3,593 Restructuring and other charges -- -- 638 429 1,067 --------- --------- --------- --------- --------- Total operating expenses 15,966 18,058 19,719 24,105 77,848 --------- --------- --------- --------- --------- Operating income (loss) 1,737 668 (2,379) (10,822) (10,796) Other income (expense), net (270) (196) (252) (248) (966) --------- --------- --------- --------- --------- Income (loss) before income taxes 1,467 472 (2,631) (11,070) (11,762) Provision for income taxes 572 184 (777) (1,536) (1,557) --------- --------- --------- --------- --------- Net income (loss) $ 895 $ 288 $ (1,854) $ (9,534) $ (10,205) ========= ========= ========= ========= ========= Net income (loss) per share $ 0.12 $ 0.04 $ (0.25) $ (1.27) $ (1.38) ========= ========= ========= ========= ========= Net income (loss) per share, assuming dilution $ 0.12 $ 0.04 $ (0.25) $ (1.27) $ (1.38) ========= ========= ========= ========= ========= Weighted average shares outstanding 7,354 7,357 7,428 7,503 7,411 Weighted average shares outstanding, assuming dilution 7,720 7,836 7,428 7,503 7,411
EX-99.B 4 l95715aexv99wb.txt EX-99(B) STATEMENT OF OPERATIONS FOR 6/30/2001 EXHIBIT 99(B) STATEMENTS OF OPERATIONS FOR THE QUARTERS INCLUDED IN AND FOR THE YEAR ENDED JUNE 30, 2001 FRONTSTEP, INC. CONSOLIDATED STATEMENTS OF OPERATIONS as adjusted (IN THOUSANDS, EXCEPT PER SHARE DATA)
TWELVE MONTHS THREE MONTHS ENDED ENDED SEPTEMBER 30, DECEMBER 31, MARCH 31, JUNE 30, JUNE 30, ------------------------------------------------------------------------- 2000 2000 2001 2001 2001 --------- --------- --------- --------- --------- Revenue: License fees 11,881 17,185 10,724 11,519 51,309 Services 7,953 8,041 7,154 7,773 30,921 Maintenance and support 8,231 8,630 8,456 9,529 34,846 --------- --------- --------- --------- --------- Total revenue 28,065 33,856 26,334 28,821 117,076 Cost of revenue: License fees 4,445 5,489 6,537 5,414 21,885 Service, maintenance and support 9,842 9,566 10,192 7,341 36,941 --------- --------- --------- --------- --------- Cost of revenue 14,287 15,055 16,729 12,755 58,826 --------- --------- --------- --------- --------- Gross margin 13,778 18,801 9,605 16,066 58,250 Operating expenses: Selling, general and administrative 12,263 15,991 20,388 14,205 62,847 Research and product development 3,718 3,471 3,737 2,406 13,332 Amortization of intangibles 837 831 828 789 3,285 Restructuring and other charges 2,163 -- 580 3,660 6,403 --------- --------- --------- --------- --------- Total operating expenses 18,981 20,293 25,533 21,060 85,867 --------- --------- --------- --------- --------- Operating income (loss) (5,203) (1,492) (15,928) (4,994) (27,617) Other income (expense), net 73 (122) (258) (203) (510) --------- --------- --------- --------- --------- Income (loss) before income taxes (5,130) (1,614) (16,186) (5,197) (28,127) Provision for income taxes (1,613) (450) -- -- (2,063) --------- --------- --------- --------- --------- Net income (loss) $ (3,517) $ (1,164) $ (16,186) $ (5,197) $ (26,064) ========= ========= ========= ========= ========= Net income (loss) per share $ (0.47) $ (0.16) $ (2.14) $ (0.69) $ (3.46) ========= ========= ========= ========= ========= Net income (loss) per share, assuming dilution $ (0.47) $ (0.16) $ (2.14) $ (0.69) $ (3.46) ========= ========= ========= ========= ========= Weighted average shares outstanding 7,504 7,505 7,563 7,568 7,535 Weighted average shares outstanding, assuming dilution 7,504 7,505 7,563 7,568 7,535
ii EX-99.C 5 l95715aexv99wc.txt EX-99(C) STATEMENT OF OPERATIONS FOR 6/30/2002 EXHIBIT 99(C) STATEMENTS OF OPERATIONS FOR THE QUARTERS INCLUDED IN AND FOR THE NINE-MONTHS ENDED MARCH 31, 2002 FRONTSTEP, INC. CONSOLIDATED STATEMENTS OF OPERATIONS as adjusted (IN THOUSANDS, EXCEPT PER SHARE DATA)
NINE MONTHS THREE MONTHS ENDED ENDED SEPTEMBER 30, DECEMBER 31, MARCH 31, MARCH 31, 2001 2001 2002 2002 ------- ------- ------- ------- Revenue: License fees 9,329 9,366 7,482 26,177 Services 6,186 5,197 5,589 16,972 Maintenance and support 9,456 8,808 8,732 26,996 ------- ------- ------- ------- Total revenue 24,971 23,371 21,803 70,145 Cost of revenue: License fees 4,250 4,421 4,125 12,796 Service, maintenance and support 6,926 7,326 6,745 20,997 ------- ------- ------- ------- Cost of revenue 11,176 11,747 10,870 33,793 ------- ------- ------- ------- Gross margin 13,795 11,624 10,933 36,393 Operating expenses: Selling, general and administrative 10,823 11,995 10,050 32,868 Research and product development 1,691 1,712 1,657 5,060 Amortization of intangibles 530 380 433 1,343 Restructuring and other charges -- -- -- -- ------- ------- ------- ------- Total operating expenses 13,044 14,087 12,140 39,271 ------- ------- ------- ------- Operating income (loss) 751 (2,463) (1,207) (2,878) Other income (expense), net (528) (380) (683) (1,591) ------- ------- ------- ------- Income (loss) before income taxes 223 (2,843) (1,890) (4,469) Provision for income taxes 26 -- (719) (693) ------- ------- ------- ------- Net income (loss) 197 (2,843) (1,171) (3,776) ======= ======= ======= ======= Net income (loss) per share $ 0.03 $ (0.38) $ (0.15) $ (0.50) ======= ======= ======= ======= Net income (loss) per share, assuming dilution $ 0.03 $ (0.38) $ (0.15) $ (0.50) ======= ======= ======= ======= Weighted average shares outstanding 7,568 7,568 7,568 7,568 Weighted average shares outstanding, assuming dilution 7,661 7,568 7,568 7,568
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